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State Department Confirms Breach of Barack Obama's Passport File; No Do-Over Primary in Michigan?; New Race Problem For Obama?

Aired March 20, 2008 - 22:00   ET


Tonight, we begin with breaking news, a story with explosive political implications unfolding right this minute. Barack Obama's passport records at the State Department breached, improperly accessed not once, not twice, but three times by three separate contract employees, three incidents starting in January.

The most recent breach was just last week. Now, according to the State Department, two of the employees were fired immediately. One was disciplined by the contractor, but we have just learned moments ago no high-level investigation has yet been done by the State Department into the incidents.

The Obama campaign did not learn about this until today. Just minutes ago, a State Department spokesman said the department's inspector general is now launching a probe.

He also said that senior management only found out about the breaches this afternoon, even though lower management knew about the early breaches immediately. Our correspondents are working the story.

CNN's Candy Crowley is on the trail with the Obama campaign. CNN's Zain Verjee has just been on the conference call with State Department officials. Also with us by phone, former federal prosecutor Joe diGenova. He investigated the security breach of Bill Clinton's passport records.

Zain, you just got off the conference call. What have you learned about this breach?

ZAIN VERJEE, CNN STATE DEPARTMENT CORRESPONDENT: Well, State Department officials are you're just trying to get on top of this. They're scrambling.

And what they told us was this. On three separate occasions, Anderson, Senator Obama's passport records were accessed, and it was not authorized. It happened on January the 9th, February the 21st, and March 14. Now, three separate contractors accessed those records. The State Department is saying that they were not linked to one another.

Now, the office of the supervisor detected this immediately. Two of the contractors were fired. One was disciplined, we learned, by their contractor. The State Department, Anderson, has told us that they're treating us this initially as imprudent curiosity among these individuals, but they're not ruling anything out. As you said, senior management at the State Department really only found out about this, this afternoon.

Once they found out, a senior official there called the Obama campaign.

COOPER: So, wait a minute. Zain -- Zain -- wait.

Zain, how is it possible that senior officials at the State Department only found out this, this afternoon? I mean, this is a major presidential candidate. The first breach was in January. Was there no investigation?

VERJEE: Well, they said it was a total failure, Anderson. They say they just didn't know about it. Someone in a lower level just failed to pass it up the food chain, and they didn't know. And once they found out -- and they say that was this afternoon -- they checked it out, confirmed the facts, picked up the phone, and called Senator Obama's campaign.

And what they told us, too, was that a senior official will go to meet Obama's staff tomorrow and brief them in more detail.

COOPER: Candy, the Obama campaign has released a statement after being notified which said -- quote -- ""This is an outrageous breach of security and privacy, even from an administration that's shown little regard for either over the last eight years. This is a serious matter that merits a complete investigation, and we demand to know who looked at Senator Obama's passport file, for what purpose and why it took so long for them to reveal this security breach."

Do we know, Candy, how the Obama folks were notified?


Someone at the State Department called them and said, listen, you should know this. As Zain said, they will get a more thorough briefing tomorrow about what when on.

COOPER: But just today -- just today, they were called?

CROWLEY: Yes, yes, just today, they were called and told about this. His Senate office, in fact, was told about this.

Obviously, as you saw in that statement, they believe that there's a high possibility that there was political implication to this. You know, obviously, the State Department, as Zain said, isn't quite sure at this point.

They think it was curiosity, but, you know, let's face it. This is a presidential candidate. Obviously, some people could be curious. Or some people -- people could be looking to try to do him harm with whatever information they could get out of those files.

COOPER: Joe, you investigated, back in the early '90s, when Bill Clinton's passport file was -- was looked at. That had real political implications. What do you make of this?

JOE DIGENOVA, FORMER FEDERAL PROSECUTOR: Well, this looks like, for the moment, big government gone wild at the lower levels.

I -- I -- you know, the really disturbing part of this is that the information from January and February never got to senior levels of the department until today. That is such a gross management failure, that the civil servants responsible for this -- and it is civil servants at the lower levels who are responsible for this -- there needs to be a thorough investigation by the inspector general to determine what went on.

Now, two of these people have already been fired. And, so, therefore, the inspector general doesn't have any authority to talk to them. I hope some of these people were interviewed before they were fired.

COOPER: Joe, does it make sense to you, though, that there wasn't an inspector general investigation already? I mean, the first incident is January. And, again, I mean, this is -- this is a guy who has Secret Service protection. You would think there would be even some security implications just for someone checking his -- his travel documents.

DIGENOVA: That is exactly right, Anderson.

And that is why the failure of lower-level managers to pass this information on to higher authority is so serious, for the very reason you have just given, the security aspects of this, and his personal security. And, so, that's why this investigation has to be deep and wide.

And, although it doesn't happen very often in government, it's one thing to fire a contract employee. It's another thing to fire a civil servant. And, if that's -- if these civil servants didn't do their job and pass this information along, they should be fired.

COOPER: And some people are going to be saying this -- legal at this, Joe, and saying, look, is a whole lot of ado about nothing.

But, just to remind people, back in -- I think it was '91, was it, you investigated the breach on Bill Clinton's files, that was a high-level breach, a political breach.

DIGENOVA: That's exactly right.

And it's very important for people to know that these records are protected by federal law for a very important reason. It's because the information that is in there, people give to the government, so that they can get a passport. There's all kinds of personal information in there, Social Security numbers, other family members' information.

It's very, very serious. And that's why it is a violation of the Privacy Act even to look at these records without authority. Even if they're not disseminated further, if these people went home and talked about these records, that's a violation of the Privacy Act. So, in truth, this is a very serious matter.

COOPER: Candy, politically, is this beneficial for the Obama campaign? I mean, I don't want to be cynical, but it certainly does focus the media and people's attention on something other than Reverend Wright.

CROWLEY: Well, absolutely.

And any time you can get a different story out there -- obviously, the Reverend Wright story has been very hard on the Obama campaign. Certainly, he's going to be asked about this. It's not something I think that is going to -- I mean, until we see where this goes, it's not something that's going to dominate.

But, obviously, at the Obama campaign, they think it's political. They believe he has been under the klieg lights, really, over the past two or three weeks. And this is something else that says, you know, who is out there?

As we know, Barack Obama has what is to most Americans a fairly exotic life. He has traveled. He's lived overseas. His father was Kenyan. There are any number of things out there that would be the subject of curiosity.

But, as Joe points out, really could -- there could be some information in there that could hurt him or a family member, for that matter. So, obviously, this is a story that -- that sort of clears out the other stories for the moment. We will see what kind of legs it has.

COOPER: Zain, based on the investigation that Joe had done back in the early '90s with the Clinton mess, they now have the system in place where, if someone tries to access, I guess, high-profile people's files, somehow, a record of that is -- is made. Do you know how these people, how these breaches were actually detected?

VERJEE: Well, yes. They said that they have got a sophisticated system in place that basically alerts them that an unauthorized access of the file has occurred.

The thing to note here is that there are several thousand contractors employed by the State Department. Anderson, what they do is, basically, they design some of these systems. They build it. They maintain it. They help print some of the books. They help employees do searches and all sorts of things.

So, they do have access to these -- this kind of information. But they definitely don't have the authority to be able to do it.

COOPER: Zain Verjee, appreciate the reporting.

Candy Crowley, as well. We will talk to you later.

And, Joe diGenova, appreciate your expertise on this, Joe. Thank you very much. With us now on the phone, Obama national co-chair Eric Holder. He's also a former Justice Department official in the Clinton administration, as well as a former federal judge.

The first breach occurred January 9. Has Senator Obama been told why it took so long to inform him?

ERIC HOLDER, OBAMA NATIONAL CAMPAIGN CO-CHAIR: No, we have not been told exactly what happened and why it took so long for anybody to tell anybody either in the campaign or in the senator's office in Washington why -- why -- when this happened or why it took so long to get back to us.

COOPER: It's also interesting that, basically -- I mean, do you know how the senator was informed? Was it just a call to his campaign office? That seems kind of odd.

HOLDER: It's my understanding that that is the way the notification occurred. And that strikes me as exceedingly strange.

Given the magnitude of what certainly happened here and the possibilities of what happened here, it would seem to me that a call in a much more timely fashion and at a much higher level should have occurred.

COOPER: You know, it's easier -- there's been a lot of breathless reporting on this elsewhere throughout this evening. And I don't want to go down the road of speculation, as a lot of others have.

But what is it that concerns you the most, based on what you know right now?

HOLDER: Well, the reality is that you have a violation of the senator's privacy. And he is entitled to that, as any American citizen is.

He's also the leading candidate for the Democratic nomination for president of the United States, in fact, the likely nominee. And, given the fact that people are poking around in his very private records, or what are supposed to be very private records, and that there is apparently no reporting of this up the chain, there is not an investigation by the inspector general in a timely fashion, high-level people at the State Department apparently do not know this, all of this stuff leads me -- gives me great concern.

COOPER: So, the story that -- I mean, the State Department is saying it was just imprudent curiosity among these -- these three individuals. They were was separate incidents, they say, basically just a couple of people sitting around, deciding, oh, you know what, I'm going to look at Senator Obama's file, do you buy that, or do you just say, at this point, we don't know?

HOLDER: We don't know. And they can't say that, because they don't know that. They have not done any kind of investigation. Look, I'm a former federal prosecutor. If you gave me this set of facts, I would make some assumptions here that maybe we have a pattern here. We have a three-month stretch of time over which we have these three intrusions. We have people who are perhaps covering up, these mid-level people not expressing this, not sending it up the chain, as they should.

I would want to know exactly who looked at what, why did they look, who was told, and then who decided not to share this information.

COOPER: I don't want to sound too cynical, but, politically, isn't there an advantage for your campaign to push this story, because it does change the topic from the controversy over the last week?

HOLDER: We don't have to push the story. There is no desire on our part to push a story.

Senator Obama's fundamental rights have been violated here. And that is what, I think, people need to be focussed on. There is -- there is certainly administrative bungling here, and, if there was a dissemination of this information, a potential violation of the Privacy Act. That's what we need to be focused on.

COOPER: Will Senator Obama be publicly speaking about this at any point; do you know?

HOLDER: I'm -- I don't know what the plans are with regard to how the senator will be responding.

COOPER: All right.

Well, if you want to talk to him tonight, and you want him to call in, feel free.



COOPER: All right. Yes, Eric Holder, good to talk to you. Thank you.


COOPER: The bloggers have started weighing in on this.

I'm blogging, too. You can if we have I have much time, I will try to blog on this, time permitting. Join the conversation. Go to Erica Hill will be there as well.

Investigative journalist Carl Bernstein joins us next. He's got a little experience with this sort of thing, also David Gergen and Roland Martin.

We will also take up new developments on the campaign trail, a new racial headache for Barack Obama. That's right. He is described someone as a "typical white person" and is now having to explain what he meant. We will have what he said and the context to help you decide for yourself.

And a new blow for Hillary Clinton, making it tougher for her to close the gap in the delegate race. Can she still win? We will look at her strategy ahead.

And, at the top of the hour, "Shock and Awe: Iraq Five Years Later."

Our breaking news coverage, however, continues in a moment.


COOPER: Barack Obama -- Barack Obama under fire this week, but now also the victim of snooping at the State Department.

Updating our breaking news, on three separate occasions, starting in January and continuing through just last week, contract workers there improperly accessed his passport records. Two have been fired, one disciplined.

The State Department is downplaying it, but, just moments ago, said the inspector general is launching an investigation.

The question, though, is, why has it taken so long?

Joining me now by phone, Larry Johnson, former CIA officer and former deputy director of the State Department Office of Counterterrorism.

What do you make of this?


I think this is -- has no parallel with what happened to Bill Clinton. In Clinton's case, you had allegations of his visits to Moscow, anti-war activities. And that investigation -- the actual tasking occurred in England at the embassy to see if the Brits had any photographs that could be used in an incriminating fashion for him politically.

In this case, you are going to go into Obama's file, and, probably, the worst thing you are going to find are pictures of him as a child, if he doesn't want -- if there's an unflattering picture. The application, it's online. Your viewers can go look at it. It's very straightforward: name, current address, birth date, Social Security number.

Really, the only information that's on that passport application that's not out in the public on Barack Obama is his Social Security number. Everything else, we know because of his running for the presidency, because of what he's written in his book.

(CROSSTALK) COOPER: But the information in this file is protected by law, is it not?

JOHNSON: Sure. And I'm not minimizing that those contractors should not have been snooping.

But I think -- and they need to look at it to make sure that there was not some political campaign -- I mean, he's -- it's a Republican administration -- contractors likely have ties to a Republican candidate -- to make sure that they weren't tasked to see what they could find.

But, you know, here's Barack Obama, who has not traveled to Europe, even though -- even as an adult. He's been to Africa. He's been to Indonesia, and that's about it.


JOHNSON: And the State Department records don't keep track of when you're going in and out of the country.

COOPER: You said these Republican contractors -- these contractors probably have ties to Republicans? Why so? I mean, how -- how do you -- how do you -- can you say that?

JOHNSON: Well, you have had the last eight years under the Bush administration, and I'm not aware of them awarding contracts to Democratic firms.

COOPER: So, these -- these kind of contracts go to friends and -- and cronies?


JOHNSON: This has been -- this administration has been known as the friends and family program.


JOHNSON: You know, I have got -- I have got friends who, you know, have left on the inside and say they have never seen this level of...


JOHNSON: ... internal corruption on part of the Bush administration.

COOPER: Does it surprise you that -- that there was no -- that senior management, allegedly, at the -- the State Department, according to what they just said in this conference call, didn't know about this until today, that, basically, there was no inspector general investigation in any of this, even though it began back in January? Does that surprise you?

JOHNSON: No, not necessarily, because the people who looked at that probably realized that this was just snooping, and didn't press it.

Now, someone with better political instincts should have said, you know, regardless of whether we're fairly certain that it's idle curiosity, it's still -- in light of who Barack Obama is and the political perception of it, this ought to be investigated.

And, so, there will be some cracking of heads -- I'm sure there has been over the last three or four days -- about, that information should have been passed up the chain of command.

COOPER: Larry Johnson, we appreciate your expertise. Appreciate you being on the program. Thank you.

JOHNSON: Thanks so much.

COOPER: With me now, CNN senior political analyst David Gergen, CNN contributor Roland Martin, as well as Carl Bernstein, who has some experience in investigating this kind of things.

You have obviously been involved, Carl, in a lot of government investigations, most notably, of course, Watergate.


COOPER: What do you make of this?




COOPER: What do you make of this?

CARL BERNSTEIN, CNN CONTRIBUTOR: That you have got to take it a step at a time. I thought that Larry was a little ahead of himself there at the end.

First, he -- he downplayed it, but then he went to the fact that these are Republican contractors. And what you want to find out here is, who had the information and where did it go? And we don't know the answer. But you do start with a premise that this is a highly politicized environment, as we have learned from many other things in this administration. But it -- but, you know, we have got to wait for the facts.

COOPER: Roland Martin, is that good enough for you, waiting for the facts?

ROLAND MARTIN, CNN CONTRIBUTOR: That's how it always should be. I mean, as journalists, we should focusing on the facts.

Look, this is manna from heaven if you're a Democrat and, obviously, the Obama campaign. Don't you know the left, especially your bloggers and your conspiracy theorists, they want something else to attack the Bush administration on, even if they were contractors? And, so, you're going to hear a whole lot of talk tomorrow on progressive radio. You're probably going to see a lot of conservative radio talk show hosts trying to downplay it, all kind of different stuff.

But, trust me, Democrats are probably excited to have Henry Waxman or any other kind of Democrat put together a congressional hearing to get to the bottom of this.


You know, David, it is interesting. Roland raised a good point. I was watching coverage on, you know, the more conservative networks today. They haven't had anything about this in the last hour or two.

MARTIN: Shocking.

COOPER: Some of the more liberal ones are going crazy with it, speculating all sorts of things. We're just trying to focus on the facts here.

But what do you make of the facts, as we know them now?

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: Well, I think we do know there's been a violation of his privacy. We know it's been repeated. And we know it looks very suspicious.

And all of that, I think, makes it a story. What -- but there are some things that have been raised here tonight that I think need to be double-checked. Was it only his passport application? Is that all we're talking about, in which case, this is pretty limited?

Is there -- was the information on there passed to anybody else outside the contractor group who might have political motivations? I think you do need to know that.

Thirdly, there's been an assertion here that it was only civil servants knew about this at the bottom levels. Is that in fact true, as Joe diGenova said, or is it -- is it possible that there were some political people who knew and -- and sat on it? I think that makes it a much more serious situation.


COOPER: And, certainly, it does seem that we know at this point that middle-level managers or low-level managers, whoever it was who oversaw these contractors, decided, you know what, this information doesn't need to, for whatever reason, go any higher than us, because...


COOPER: ... if that is in fact -- if what the State Department said tonight, that the top levels didn't know about this until today, someone just decided to sit on this.

GERGEN: That's right, Anderson.

But, if the mid-level people were political appointees, that makes it much more suspicious. If they were civil servants, they just look like political idiots.


GERGEN: You know, but it's one or other.


BARNICLE: Go ahead.

GERGEN: Yes, but that's one or the other.

BERNSTEIN: There's one other aspect to this. And this is that the Democrats control the Congress now, so that you have the ability for the Democrats on the Foreign Relations Committee or some other entity that overlooks the State Department to make sure that the State Department does a proper investigation.

And that's a big difference than you had in some other examples of politicization...

MARTIN: Very true.

BERNSTEIN: ... by the Bush people in earlier years, when the Republicans controlled the congressional apparatus.

COOPER: Right.

BERNSTEIN: So, I think that there is the ability to follow through with an honest investigation here and just take it a step at a time.

COOPER: We're going to -- we're going to have more, not only on this later in the program, but a lot more to cover about what is going on, on the campaign trail today with our panel. There's a lot of new information happening on the campaign trail regarding Hillary Clinton and others. So, we're not just solely focused in on this story.

Coming up: Barack Obama's latest trip through the racial mine field, this time, using the phrase "typical white person." You might be surprised to find out who he was talking about. That's next.


COOPER: We're, of course, following breaking news on State Department contractors improperly accessing Barack Obama's passport information. We will have a check-in on that in a little while.

But this unfolded as Senator Obama was dealing with another racial mess today, a reminder, perhaps, of why politicians are so gun- shy when it comes to the issue.

On Tuesday, when Senator Obama spoke at length about race, he chose his words carefully. Today, on a Philadelphia radio station, he was talking off the cuff, defending remarks he made about his white grandmother and her sometimes fear of African-American men.

Let's listen.


SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: The point I was making was not that my grandmother harbors any racial animosity. She doesn't.

But she is a typical white person, who, you know, if she sees somebody on the street that she doesn't know, you know, there's a reaction that's been bred into our experiences that don't go away, and that sometimes come out in the wrong way.


COOPER: Well, those comments touched off another uproar on the blogs and among some cable commentators, who accused him of calling all white people racists.

Just moments ago, Senator Obama tried to explain his remarks -- or explain his explanation of his speech on CNN's "LARRY KING LIVE."



OBAMA: What I meant really was some of the fears of street crime and some of the stereotypes that go along with that, you know, were responses that, you know, I think many people feel. She's not extraordinary in that regard.

You know, the point I made is, is that good people, people who are not in any way racist, are still subject to some of these images and stereotypes.


COOPER: Let's talk it over with our roundtable, a lot to talk about.

David, last night, you had passed on some advice that Senator Obama should -- should try to pivot off this issue, have a broader conversation on general reconciliation. It doesn't seem like he achieved that today.

GERGEN: No, it sure doesn't.

But, Anderson, I have to tell you, after listening to all of this and what he further said, I -- I sort of think we ought to get a grip on reality here. I mean, he's right about the fact that there are stereo -- people have stereotypes in their heads.

I remember so distinctly a prominent, terrifically respected black columnist bringing his young 5-year-old into a newsroom and -- young son -- and how everybody oohed and aahed at such a cute little boy. And he said, you know, the sadness is that, about 10 years from now, if he's walking down the street, and he's coming one -- going one way, and there's a white woman coming down the other way, and they're the only two people on the street, she's going to cross the street and go on the other side.

And -- and -- and that -- they're -- those stereotypes do exist among good people. And I just think, like, are we not going to be allowed to have an honest conversation about this without it all being sort of blown up and pulled to pieces? Or are we just going to -- I don't know.

I mean, I -- it's -- it's -- I think he -- I think he was inartful in what he said. I think it's equally distressing that this suddenly has blown up to be a big deal.

COOPER: Well, it's interesting, Carl. On the one hand, it's doubly explosive, because it is an issue of race, which is always something that is difficult to talk to in an open format, and at the same during the height of this incredibly contested political season, where anything is so overanalyzed.

BERNSTEIN: But the genie -- the race genie is out of the bottle.

And, at the same time, Obama has called for an elevated conversation about race. And what are we seeing here, is the bottom- of-the-barrel conversation, a talk show nation hysteria, picking words out.

We need to look at all of these candidates, including Hillary Clinton, including John McCain, in the context of their lives. And the remarks that they make need to be understood in the context of their lives. And the choices they have made in their lives about pastors, about marriages, all about -- every aspect of their lives need to be looked at in the totality.

And, as long as we keep pulling these threads out, we're not going to have any kind of meaningful debate in this campaign. And David is absolutely right here. He spoke a truth. And the idea that, all day, over right-wing radio particularly, but also on television, much more than we should have, we are having these statements parsed for every word, for every little sensitivity.

Let's get over some of these sensitivities and talk about what needs to be talked about, about race, about what a problem we have, how do we bridge the gaps, etcetera, how do we get into each other's lives, how do we black people and white people to start understanding each other better.

This is something, incidentally, that, in their former lives, the Clintons were great at. There might be room for some agreement among the candidates here.

COOPER: It's interesting, Roland, because these are not the kind of conversations that -- that television or radio programs -- well, maybe radio does it better -- but, in this heightened atmosphere, does very well, that this is the kind of -- I mean, it's a difficult conversation to have, and it's a very nuanced conversation to have. And we live in an environment which is all about sound bites and -- and people yelling on television.

MARTIN: Yes, but we -- but we don't have to do what they do.

We -- we can call for something different. You know, last year, Anderson, when I hosted three faith specials on CNN, it was amazing the number of people who said, thank you for having a real conversation about faith on television that just didn't deal with abortion and homosexuality.

We can do that. The question is, do we have the courage to do that? And David is right and Carl was right. What Obama talked about were stereotypes. I have a mostly black radio audience, and I challenge them on their particular stereotypes that are out there.

We have to have real conversations. A lot of people don't want to do that. Look, I -- on my blog, you know, I have called out Sean Hannity and said, you want to have a conversation with race? Fine. Call me and let's do it, my show and your show, because see, what Obama talked about in his speech, when he spoke about conservatives, he said, the people who have made their careers.

There are black radio talk show hosts who have made their careers off of playing on racial stereotypes. We need to be able to challenge people and also be uncomfortable. It's OK to sit there and do that.

I had a guy who just sent me an e-mail who heard me earlier. He said, well, how do you know, when you got on the elevator, the woman wasn't clutching her purse because you're a man?

I told him, I said, when I tell people I went to Texas A&M, Anderson, do you know what nearly every white person says to me? They say, did you play football?


MARTIN: I'm 245 pounds. I'm overweight. I didn't play football.

But it's very rare will somebody say, what was your major?

We have these stereotypes, and I want us to challenge it. And I -- and you know what? And I think this network can be the leading voice to say, if you guys want demagoguery, go to the rest of these nuts out there. But if you want to have an honest conversation, we can do it right here and change this country.

COOPER: Well, the conversation continues. We've got to take a short break. Carl Bernstein, Roland Martin, David Gergen, we'll talk to you coming up.

A new blow today to the Clinton campaign, at least to her hopes of using new primaries in Florida and Michigan to erase Senator Obama's hefty lead in pledged delegates. You'll remember the two states broke party rules by holding early primaries. The party stripped their delegates, and delegates Obama certainly could use but that Clinton badly needs.

Today, lawmakers in Michigan went home without even taking up the issue of a new primary. Once again, here's CNN's Candy Crowley with the "Raw Politics" of it all.


CROWLEY (voice-over): The campaign action this day is the inaction in Michigan, where a plan to hold a primary do-over was left for dead. Michigan now looks like Florida, which also stalemated in its efforts to put on a second primary. It's a double-barreled blow in camp Clinton, and she has raised the stakes.

SEN. HILLARY CLINTON (D-NY), PRESIDENTIAL CANDIDATE: I do not see how two of our largest and most significant states can be disenfranchised and left out of the process of picking our nominee without raising serious questions about the legitimacy of that nominee.

CROWLEY: As the Michigan plan fell apart, the Obama camp touted a press release by supporter and Senator Chris Dodd. He suggested the best outcome would be "an arrangement where the delegates are apportioned fairly between Senators Obama and Clinton," which is to say divide the delegates in half.

Fair, Obama told Larry king, because the first primary cannot stand.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: We were told it wasn't going to count, and so we didn't campaign there. In fact, my name wasn't on the ballot in Michigan. But I think it's important to make sure that the people of Michigan and the people of Florida, that their delegates are seated.

CROWLEY: Since seating Michigan delegates in accordance with the first primary results was a no-go, she has focused on the redo and blames him for the death spiral.

CLINTON: I do not understand what Senator Obama is afraid of.

CROWLEY: A revote would advantage her, but he says the argument is about fairness, in part because it bars people who may have voted Republican in the first primary because they knew a Democratic contest wouldn't count. No revote means she loses her best chance to retake his leads in pledged delegates in the popular vote.

But she says it's about disenfranchisement. In the end, it may mean Michigan will end with no input at all.

GOV. JENNIFER GRANHOLM (D), MICHIGAN: I would like to see us resolve this. I think the fairest way to resolve it is by having a vote. I think it would bring a huge amount of excitement to Michigan. Our issues would be raised on a national level. CROWLEY: And it could well mean the Democratic National Committee will see a big fight at the summer convention in Denver.


CROWLEY: But they are going to do everything they can to avoid that fight. Democrats, whether they are party officials or elected officials, say the one thing they cannot have in August at that convention, when the entire country is watching, is a big fight -- Anderson.

COOPER: Yes, certainly.

Senator Clinton may not have math on her side but she does have some new poll numbers in her favor I just want to tell you about. In the latest Gallup tracking poll, covering March 17 through the 19th, Senator Clinton now holds a five-point lead. In a head-to-head match- up with John McCain, Senator Obama shows some erosion. He's now down by four. Senator Clinton is also behind, trailing by three.

Back now with Candy Crowley. Also joining us, Jessica Yellin, who's been covering the Clinton campaign, and Dana Bash, who's been reporting for us on the McCain campaign.

Jessica, so according to this latest Gallup poll, Clinton has turned it around, now has a five percentage point lead. I suppose a lot has to do with the controversy over Barack Obama's past reverend over the last week or so. How does the Clinton campaign read these numbers?

JESSICA YELLIN, CNN CORRESPONDENT: Well, look, they say that this is evidence of what they've been promising all along, that when the press starts vetting Barack Obama, that they were vetting him, his numbers will start to fall.

And what they're hoping is that this is either buyer's remorse among voters who have already been behind Barack Obama but may be reconsidering. And their ultimate hope is that he'll start to crater.

But look, all of this is really wishful thinking at this point, because national polls like this don't really matter. What matters is how she does in the upcoming primaries. And she really has to win by such a significant margin in those states in particular for her to really make a difference.

So the polls are good news. They feed her momentum, but they don't determine who is going to -- who's going to win this thing.

COOPER: Cooper, the poll also shows McCain now beating both Obama and Hillary Clinton in head-to-head match-ups. I think that's probably the first time that's happened, if I'm not -- not wrong on that.

How much of that has to do with the controversy over Reverend Wright and do the campaign -- I mean, does the Obama campaign even look at that kind of a match-up at this point, or are they solely focused on Clinton?

CROWLEY: No, the match-up is important because there are bragging rights with it. You can say to the Democrats, and this really right now is speaking to those super delegates, the elected officials, the party officials and saying, "I'm the most electable. Look, I'm beating John McCain by more than she or he is beating John McCain."

The reason I think that John McCain now leads both of them is they've been involved in a nasty little fight here. People tend not to like that. John McCain has the pleasure of going out there. He's the nominee. He can go overseas and he can look presidential. So I think that kind of accounts for his bump up in the polls.

COOPER: Dana, a McCain staffer was suspended today for sending out this viral video that it is big on the Internet. It inter cuts Reverend Wright's most controversial statements with video of Senator Obama and images of Malcolm X and the U.S. Olympians who lifted their hands in the black power salute. It's a very controversial video.

It was interesting that the Obama [SIC] campaign actually suspended this staffer. What did they say about that?

DANA BASH, CNN CORRESPONDENT: Right. The McCain campaign. I mean, what they say is they decided to formerly suspend this staffer and not formally fire him, because they were trying to get the facts.

But talking to a senior McCain adviser tonight, Anderson, who said that this staffer will never, ever, ever, ever -- in fact, I stopped writing down the "evers," be returning to the campaign. Because, as the campaign said in a statement today, that this really violates the policy that McCain himself has tried to put forward, that he insists -- he insists he is going to run a campaign and insists that his surrogates, particularly, of course, his staffers, abide by that rule, that they are not going to wage any kind of personal attack against Obama or Clinton or any of their Democratic opponents. And this adviser I talked to insisted that people who do things like this are going to get fired from the campaign.

But what this does show, Anderson, is how incredibly difficult this is in the kind of world that we live in. What have we been talking about for the large portion of the past few minutes, in the past few segments? The discussion about things that are on YouTube, things that are on the Internet.

It's one thing that he can control when it was coming from some staffers, even if they're low-level staffers, within McCain's own campaign. But it is going to be very hard for him to keep up this insistence that there is going to be a different kind of campaign.

They're hoping that they are going to be able to do this. But, you know, it's definitely not going to be easy, particularly when, as one McCain official said to me the other day, he's going to have to continue to go on an apology tour, because every time something like this happens, he's going to be asked, "Wait a minute. What about the campaign you said you were going to run." COOPER: It's interesting. We're into this election, so closely fought, where all these candidates are saying they want to run a different kind of campaign. People clearly responding to that, and yet as Dana points out, in this day and age, it is very hard to with all the technology that exists.

Candy, appreciate it. Jessica Yellin, as well. And Dana Bash, thanks.

Up next, she's behind in total delegates, as we've been talking about, but it's going to take a lot more than that for Hillary Clinton to give up the fight. What is her strategy now? We'll tell you that ahead.

And coming up at the top of the hour, in about 20 minutes, a 360 special, "Shock and Awe: Five Years Later."


COOPER: Well, Senator Hillary Clinton campaigning in Indiana today. She was joined by Senator Evan Bayh, a popular politician, of course, in the state. Perhaps Clinton's best hope for winning Indiana's May 6 primary. She needs the victory, but she also needs much more to clench the nomination.

CNN's Tom Foreman now has the strategy and the "Raw Politics."


TOM FOREMAN, CNN CORRESPONDENT (voice-over): Trailing Obama in delegates, states won and the popular vote, Hillary Clinton needs a trifecta of events to salvage her hopes for the nomination. First, the Pennsylvania primary.

CLINTON: I'm going to work hard across Pennsylvania, every corner of the state.

FOREMAN: She is heavily favored to win there, but she wants to win big. A decisive victory would bolster the case that she knows how to fight and can take the big population centers the Democrats will need in the general election.

Second, she needs Florida and Michigan. The Democratic National Committee has resisted reinstating the delegates stripped from those states and Clinton did not complain back when it happened. But now...

CLINTON: Ignoring Michigan and Florida would be a grave mistake.

FOREMAN: Now, even though any revote seems unlikely, she desperately needs any deal to bring those delegates back and give her more than a 50 percent cut.

And third, she needs the super delegates. Recent polls show both Clinton and Obama would run dead even with McCain in November. But Clinton insists she's more electable than Obama.

(on camera) And if enough super delegates believe her, they could effectively override the popular vote and give her the nomination.

(voice-over) So what Hillary Clinton needs most of all right now is time. Because remember, she is behind, and the convention is coming.

Tom Foreman, CNN, Washington.


COOPER: Still seems a very long way off, though. We're going to be updating our breaking news shortly as new information comes in about snooping on Barack Obama's passport records at the State Department. We know that it happened three times, in fact. The question is, what does it all mean? The Clinton campaign now weighing in, and so will our panel.

Also, more on Hillary Clinton's campaign strategy. We'll talk it over with some of the members of the best political team on television, David Gergen, Roland Martin and Clinton biographer Carl Bernstein.

Plus, a bizarre attack in the waters off Florida. A woman killed by that, a giant ray. She wasn't even swimming; she was in a boat. How could it happen? The story when 360 continues.


COOPER: Updating our breaking news. The Clinton campaign now weighing in. We just got their statement. The Clinton statement said, quote, "If it is true, it's reprehensible," talking about the security breaches of Barack Obama's passport files, "and the Bush administration has a responsibility to get to the bottom of it." That's from the campaign spokesman, Doug Hattaway.

Now back to the campaign itself. They are using the "E" word, as in "electable" a lot lately, pressing the idea that Hillary Clinton will be an easier sell in November than Barack Obama. That's their spin.

We're digging deeper now. Back to our panel: CNN senior political analyst David Gergen, CNN contributors Roland Martin and Carl Bernstein, whose recent biography of Senator Clinton is called "The Woman in Charge."

David, as we just heard from Tom Foreman, Clinton needs three things: a win in Pennsylvania, the popular vote and the super delegates. What's the likelihood she'll get all three?

GERGEN: Extremely low. But she might. I must say that she has a good point, and I think justice is on her side, that there should be re-dos in both Florida and Michigan. It's an injustice to people in those states, and it's an injustice, frankly, to her campaign.

But we are where we are, and rather than Barack Obama, it's the political leaders of those two states who bear the blame. Having said that, if they're off the boards, she not only has to win Pennsylvania big, Anderson, she has to run off a series of states: Indiana. She's got to win Kentucky. She's got to win West Virginia. And very importantly, she will need to win North Carolina. That way she would have an argument. But then it all -- she still won't have enough delegates.

And when she goes to the super delegates, she's got a new problem. And I think it was -- someone yesterday -- I think it was Chuck Todd, said, you know, before -- before this Reverend Wright deal, if she took the super delegates away from Barack Obama, it would look like a power play.

Now the problem for the Democratic Party and the super delegates is if they give it to Hillary Clinton over Barack Obama, who has more delegates, it also is going to look like it's a racial deal and that they're afraid of the white vote and what might happen to the white vote. And that could be very poisonous for the Democratic Party.

COOPER: Carl, it's interesting. Clinton's chief strategist, Mark Penn -- I'm not sure he still calls himself that -- but he has been known to be that.

BERNSTEIN: One-time strategist.

COOPER: ... on how things are going. But -- but Mark Penn says, and I quote, "The more that the voters learn about Barack Obama, the more his ability to beat John McCain is declining compared to Hillary. For a long time, we've explained the poll numbers for a candidate who has not yet been vetted or tested are not firm numbers, and we're beginning to see that clearly."

Does she have a stronger electability argument among -- among the super delegates now?

BERNSTEIN: First of all, it's very early, believe it or not. Because two weeks ago the numbers were flip-flopped. We've gone back and forth.

The real thing here is what was in Tom's set-up piece, and that is that she had earlier said, "Look, I'll go along with this plan. We're not going to seat these delegations."

Now she wants to change the rules. And the problem is -- and I don't usually disagree with David on these things, but with Hillary Clinton, you're always having to look at the fine print. It's always about there's another story. There's some lack of straightforwardness. And it seems to me that that is the underlying issue that Mark Penn is trying to controvert here.

And the real strategy of the Clinton campaign -- and I talked to a number of people in that campaign -- is to mess Barack Obama up as badly as they can so that, indeed, he does not look electable and the super delegates will go for Hillary Clinton.

But they're not too worried about the accuracy of what's thrown at him. As they say, "We're throwing the kitchen sink at him." It's a negative campaign.

And at some point the super delegates are also talking about -- they are now, many of them. At what point does the real issue of the campaign become the conduct of the Hillary Clinton campaign?

So you have these two things happening at once. And at the same time, a real shock has been thrown through the party as a result of that video.

COOPER: Roland, it appears the Michigan and Florida revotes basically have been stalled. Clinton said Obama is afraid of a revote. But before Michigan voted, she said this about its significance. I want to play that.


CLINTON: I personally did not think it made any difference whether or not my name was on the ballot. You know, it's clear, this election they're having is not going to count for anything.


COOPER: It's interesting. I mean, that was, I think, back in October. How does she reconcile that earlier statement with what she's saying now?

MARTIN: Oops, words don't matter. That's pretty much what it boils down to. And so, you know, they're going to dance away as fast as they can from what she previously said, what her campaign said. And so people are going to keep reminding them.

They have to make the argument. They need Michigan. They need Florida. Earlier, of course, I saw Ed Rendell with Campbell Brown, talking about criticizing Republicans in Florida, but he was so nice to not really say much about the Democrats in Michigan who blew it.

People keep forgetting, that is a Democratic governor, a Democratic legislature. They actually blew it.

But Anderson, that's the point about electability. She has to make that argument because she doesn't have that argument. But here's her problem. Hillary Clinton has a ceiling.

And so when it comes to Obama, they have to hope his negatives come down so they can close the gap with her. The problem with McCain is -- is that, look, he has independents, Republicans and her problem is will she be able to keep her margin? She cannot afford any erosion. That's the issue for her.

COOPER: David, quick final thought?

GERGEN: A quick final thought is that he looks closer to the nomination as a result of that speech and because Michigan and Florida are going to go away. But she still has some arguments, and she's still a Clinton.

COOPER: David Gergen, Roland Martin, Carl Bernstein, appreciate it. Good conversation tonight.

Still ahead, the latest on tonight's breaking news, a breach of Barack Obama's passport file. A developing story we're following closely tonight. We'll bring you up to date on what we know right now.

Plus, a freakish and, frankly, horrifying accident involving a massive fish. A woman killed -- killed by that animal, simply in the wrong place at the wrong time, not even in the water. All the details ahead.


COOPER: Top of the hour, let's get one more quick check on our breaking story. Snooping at the State Department on Barack Obama's passport records. Candy Crowley, Zain Verjee have been working the story all night. She joins us now once again.

Zain, what's the latest? What do we know?

VERJEE: Here's what we know, Anderson. On three separate occasions, Senator Obama's passport records were accessed and it was not authorized. These happened on January the 9th, February the 21st and March the 14th. Three separate contractors also accessed the records, and none of them were actually linked, Anderson, to one another.

Now, the State Department is saying that the supervisor's office realized immediately that this breach had happened and what ended up happening was that two of the contractors were fired. One was disciplined by that particular contractor that hired that person.

And the State Department is telling us that they're treating this as an initial case of imprudent curiosity, but they're saying, look, we're not being dismissive about this. We are going to investigate, the acting inspector general says, is apparently, according to the State Department, going to investigate.

But the senior management was only actually made aware that this even went on this afternoon. What happened was the State Department spokesman, Sean McCormack, got a call from a journalist who asked a question and they asked questions from the chain on down. And they managed to confirm it and called Senator Obama's Senate office, and Secretary Rice has also been informed.

COOPER: Candy, it's interesting. Zain said the State Department says they're not being dismissive about it, but clearly, someone in the State Department was pretty dismissive about this in January when it first happened again in February and then again it happened just last week.

CROWLEY: And that's one of the things that the Obama campaign wants looked into. They said, "Listen, we need to know who did this, why they did it, whether there was any kind of political gain in mind. And by the way, why it took so long for the State Department to let the Obama campaign or indeed the Obama Senate office know that this has gone on." So there is that.

There is also obviously as we put out earlier, this is a man with Secret Service protection. He is running for the highest office in the land. He is the front-runner. There are some security concerns that one would think that the State Department might have had at some level when they saw this.

We'll tell you, we do have some bipartisan agreement on this, Anderson. The Clinton campaign spokesman said, "If this is true, it is reprehensible and the Bush administration has a responsibility to get to the bottom of it."

Likewise, Joe Biden, a former presidential contender, said that we have to have an investigation right away of how this happened and why it took so long. So there is some bipartisan outrage about this.

COOPER: No doubt we're going to hear a lot about this throughout the evening and tomorrow. Candy, Zain, thank you.

Let's check some of the other headlines tonight. Erica Hill joins us with a "360 Bulletin" -- Erica.

ERICA HILL, HEADLINE NEWS ANCHOR: Hey, Anderson, in the Florida Keys, a spotted eagle ray weighing as much as 80 pounds jumped out of the water, struck a Michigan woman on a boat and knocked her down. The woman was killed. The person was actually killed when she hit her head on the boat deck. Wildlife experts say it is a freakish accident.

In parts of the Midwest, the death toll continues to rise along with the floodwaters. At least 13 people now dead, including five in Mississippi. From Texas to the Northeast, torrential rains have left rivers swollen and levees close to the breaking point.

Let's end on a high note. On Wall Street, some good news today. Stocks soaring as oil actually dropped under $100 a barrel. The Dow closed up more than 260 points. The S&P and the NASDAQ, Anderson also saw big gains.

Now the question is can it last tomorrow?

COOPER: And the next day and the next.

"The Shot" is next. The scoop I landed on Senator Obama's campaign plane. Kind of a scoop. Let's just say March Madness is alive and well on the presidential campaign trail. An update. We'll explain just ahead.


COOPER: All right, Erica. Time for "The Shot."

I spent the day yesterday traveling with Senator Obama and actually caught him filling out his NCAA tournament picks on his campaign plane.

HILL: Very important stuff.

COOPER: Exactly. Take a look.


COOPER: What are you doing? You're doing NCAA tournament stuff?

OBAMA: You got to fill out of the brackets. What do you think, Washington state or Winthrop?

COOPER: You're asking the wrong guy. I know nothing about sports. Who's going to go all the way, talking about basketball?

OBAMA: You know, I've got to say that I'm still doing my homework. I've got to study a little further. The Illinois teams are not that strong this year. Usually you want to go with your hometown favorite.

So I will report back to you. I will post this on the Internet so that people can see what my real track record is.

COOPER: You believe in transparency?

OBAMA: Absolutely. I believe in accountability. Thank you.


COOPER: He actually kind of said that as a joke and then right after we left, he turned to one of his aides and said, "You know what? We actually should do that." And true to his word, Senator Obama did, in fact, today post his picks online.

Check out his final four: North Carolina, Kansas, Pittsburgh and UCLA. Hmm, let's see. North Carolina and Pennsylvania, both with upcoming primaries. Coincidences?

HILL: Interesting.

COOPER: Well, we have to at least raise the issue. Obama is leaning toward North Carolina to win it all. John McCain, I think, also revealed some of his tournament picks.

HILL: Yes, he did. And it's interesting, his picks. If you look at them, like Obama, he also is betting on North Carolina to win the championship. Senator McCain has UNC, Kansas, Memphis and my sentimental favorite, Connecticut in his final four.

Frankly, I think he should have had UConn going all the way, but that's just me.

COOPER: All right, Erica.

Up next, a 360 special on the war in Iraq, "Shock and Awe: 5 Years Later." A look at how it all began and where it may be headed when 360 continues.