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Passport Breach: Snooping on the Candidates; Rivalry between the Democratic Candidates Grows; Nancy Pelosi Meets with Dalai Lama

Aired March 21, 2008 - 17:00   ET


JOHN KING, CNN ANCHOR: Secretary of State Condoleezza Rice has been very busy today apologizing. It turns out the passport files of all three major presidential candidates were breech and the snoopers working for the State Department.
Let's go straight to CNN State Department correspondent, Zain Verjee.

Zain, any evidence here of political dirty tricks?

ZAIN VERJEE, CNN STATE DEPARTMENT CORRESPONDENT: Well, John, the State Department has been brushing aside those questions all day. What they're doing is focusing on the early stages of the investigation.


UNIDENTIFIED FEMALE: Allow me to do that.

VERJEE (voice-over): The "I'm sorry"s just keep coming.

First, to Senator Barack Obama, after the revelation that State Department contractors had sneaked a look into his passport file three times this year.

CONDOLEEZZA RICE, U.S. SECRETARY OF STATE: Told him that I was sorry and I told him that I myself would be very disturbed if I learned that somebody had looked into my passport file.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: She called me and offered her apologies, which I appreciated, but I also indicated that this is something that has to be investigated diligently and openly.

VERJEE: Then word that the trainee, a State Department employee, got into Senator Hillary Clinton's file last summer. Rice called the senator.

Next victim, on the Republican side, Senator John McCain. He reacted to the Obama breach.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: If anyone's privacy is breached, then they deserve an apology and a full investigation.

VERJEE: That's even before he knew one of the same people who clicked into Obama's file surfed his, as well. Rice telephoned him in Paris. A top State Department official was dispatched to the Hill to brief all three Senators' staff. Obama and others are demanding Congressional investigations.

Big questions remain. What's in a candidate's passport file? Is it just an application form with a picture and bio info? Was all this politically motivated?

SEAN MCCORMACK, STATE DEPARTMENT SPOKESMAN: It is still our initial take this -- I referred to it as imprudent curiosity. But we are not dismissive of any other possibility.

VERJEE: We've been down this road before -- an unauthorized leak of the passport files of then presidential candidate Bill Clinton in 1992. The probe cost $2.2 million and no laws broken. The counts so far -- two contractors fired, one disciplined for the two violations and a State Department trainee still on the job.

The State Department, John, is saying that the good news here is that the computers were able to immediately flag the breaches. But the real problem in all of this -- and they acknowledge it -- that there was a total failure from the lower levels to report up the command chain and tell them exactly what had been going on -- John.

KING: And, Zain, in most of the cases, they say the contractor involved. What do we know ability the contractor?

VERJEE: Well, the State Department hasn't released the names of the contractors. We understand that there are two contractors. But just a short while ago, two State Department officials confirmed to CNN that one of the contractors involved is Stanley Incorporated.

They're based in Arlington, Virginia. And just a few weeks ago, they were actually awarded a $570 million contract to the State Department, again, to deal with passport applications. It was just very recent.

KING: And we'll keep an eye on this as it goes on.

Zain Verjee at the State Department. Zain, thanks so much.

And as the rivalry between the Democratic candidates grows more bitter, hard feelings could hurt the party come November.

CNN's Carol Costello joins us now.

Where is all this bickering headed?

CAROL COSTELLO, CNN CORRESPONDENT: Well, John, maybe the loser, really. I don't know. But remember the love not so long ago when Democratic voters told pollsters they'd be happy if either candidate won? My, how times have changed.


COSTELLO (voice-over): Obama versus Clinton -- for many of their respective fans, the rivalry has become as intense as, well, the Mac Daddy of all rivalries -- the Yankees versus the Red Sox.

UNIDENTIFIED MALE: A couple of losers.

COSTELLO: And while fan passion can be a good thing, it may not be the best thing in a political primary. Just as a Yankees fan would never root for the Red Sox, some Obama fans now would never root for Clinton -- even if she wins the nomination.

UNIDENTIFIED MALE: I will not vote for Hillary.

UNIDENTIFIED FEMALE: I will move to Canada.

UNIDENTIFIED MALE: It could be very polarizing.

UNIDENTIFIED MALE: There will be a deep divide.

COSTELLO: They're not alone. According to a CBS poll, if super- delegates put Clinton on top, more than 90 percent of Obama supporters say they'll be angry or disappointed. Clinton supporters feel almost as strongly. If Obama gets the nod, 73 percent of Clinton supporters would also be angry or disappointed.

Voters are frustrated over the nasty fight for superdelegate support. And they don't much care for the name-calling, either.


OBAMA: I mean, Senator Clinton has been completely disingenuous.

H. CLINTON: Representing your contributor, Rezko, in his slum landlord business in inner city Chicago.

COSTELLO: Analysts say the increasingly bitter Democratic battle and the bringing bitter split among Democratic voters should worry the party. If the anger gets out there gets of control, it could spell Democratic doom in the general election.

MARK HALPERIN, POLITICAL ANALYST, TIME.COM: The key moment to try to defuse the anger that a lot of voters claim they'll feel now will come after one of these two Democrats sews up the nomination. Then it's going to be up to the loser to step up forward and say to his or her supporters, support the winner.

If that happens, the Democratic Party, I think, will be brought back together in a big hurry. If it doesn't happen, things could be very tough for the Democrats against John McCain.


COSTELLO: The problem is even if the losing candidate steps up to support the winner, will anything nice they say seem sincere -- sincere enough to overcome the anger that some voters feel? I guess we'll have to see.

KING: We'll have to see. You mentioned Loserville. Where do I find that on the map?



KING: We'll keep looking.

Carol Costello. Carol, thanks very much.

More evidence today of how the Democrats are playing hard ball. The Obama campaign said: "Senator Clinton has consistently made political calculations to deliberately mislead the American people and the voters have noticed."

While the Clinton campaign issued this statement: "Senator Obama talks about voter participation while actively disenfranchising millions. He calls for high-minded debates while practicing low down politics."

KING: Let's bring out CNN senior political analyst, Gloria Borger.


What about this -- remember, I like Senator Clinton? We were friends at the beginning, we'll be friends at the end?

BORGER: I'm honored to be with you at this debate, right?

KING: Yes, a crackling -- a little bitter. We've seen worse, probably, in history.


KING: But in such a high stakes battle for the Democratic nomination, where are we going here?

BORGER: I think we're seeing what they call in politics a pivot. I think both of these campaigns are pivoting now because they're talking not only to their constituencies out there, but they're also talking to the superdelegates. And they're trying to convince these pols -- superdelegates are -- that they're the most electable.

And so both sides are engaging in this campaign. It's not one side over the other. The Obama campaign leaks pictures of the Reverend Wright with former President Bill Clinton while the Clinton campaign whispers to superdelegates, gee, this Reverend Wright thing just might hurt his electability in a general election.

So we're seeing this campaign pivot to these intangibles -- character, leadership, the issue of race all being discussed right now, because they're not that different on the issues.

KING: And you get these conference calls and the exchange of statements all day long...

BORGER: Oh, yes.

KING: And sometimes it seems like the fifth grade. Sometimes it's not...

BORGER: Or the third grade.

KING: Or maybe the third -- yes, maybe I'm giving it too much credit. But the reason we spend time on this -- and viewers out there might say well, why are they worried about it, if it's the fifth grade?

BORGER: Right.

KING: Is it -- talk about the margins. I mean, if Hillary Clinton wins the nomination and a tiny percentage of African-Americans think she stole it or somehow got it through dishonest ways, the Democratic Party...

BORGER: Is in real trouble. And you could see a large sector of the Democratic base -- which is the African-American community -- decide well, maybe we're just going to sit on our hands.

You know how the Republicans are worried about those Evangelical Christian voters? Well, this would make that pale by comparison, because it's a substantial part of the Democratic base.

So at some point, as Carol was saying, these folks have to find a way out of this and into holding hands and saying OK, we're going to run as a team, because, of course, winning is the most important thing to Democrats.

KING: And so let me bring your attention to the passport-gate, as this thing goes Plouffe. It's being called a "gate" even though we don't know where the end of the road is here.


KING: But, you know, the State Department says at first glance, it appears to be irrational curiosity.

BORGER: Right.

KING: Some people who were just saying oh, Barack Obama is in the news, he's interesting, let me look at him.

BORGER: Right after Super Tuesday.

KING: Yes. Right, yes.

BORGER: Right after...

KING: That's sort of the question --

BORGER: ...the Iowa caucuses. Right.

KING: Is there some -- is any reason to believe today that there's something nefarious behind this?

BORGER: Well, actually, as I was watching this story unfold last night, I was thinking last night that it might have been more nefarious because it was only one candidate involved, when we only knew that it was Barack Obama. Now that we know that it's equal opportunity snooping, with John McCain and Hillary Clinton and Barack Obama, there may be more of an argument to be made that it's bipartisan and therefore it could have just been some wayward people who were curious.

But the point is we don't know because there hasn't been an investigation by the inspector general up until this point. And what we do know is that somebody messed up, because this did not go up the food chain to Condi Rice, the secretary of state, until yesterday.

KING: A mistake there. And I suspect that in addition to the State Department investigation, the Congress might also get involved in this a little bit.

BORGER: You think? The Democratic Congress?

KING: They just might.


KING: Gloria Borger, thanks very much.

A federal appeals court today tossed out a lawsuit against the Democratic National Committee. It was filed by a Florida man who claimed Florida voters were disenfranchised when the national party stripped Florida of its convention delegates.

The ruling upholds a lower court order that found the Florida man -- a Democratic activist -- had no standing to file such a suit. But the court left the door open for another challenge.

For the latest political news at any time, check out the political ticker. That's at The ticker the number one political news blog on the Web.

Jack Cafferty is in New York with "The Cafferty File" -- hi, Jack.

JACK CAFFERTY, CNN ANCHOR: John, it's been quite a week for U.S. foreign policy. In a radio interview meant to reach the Iranian people on the occasion of the Persian New Year, this is what President Bush had to say about Iran's intentions: "They have declared they want to have a nuclear weapon to destroy people and that's unacceptable to the United States and it's unacceptable to the world."

Mr. President, your own intelligence experts have said that Iran stopped its nuclear weapons program in 2003.

Experts on Iran and nuclear proliferation told "The Washington Post" the president is flat out wrong, that Iran has never said it wanted a nuclear weapon for any reason ever. The National Security Council says oh, Mr. Bush was just referring to Iran's previous statements about wiping Israel off the map. But that's not what he said.

One global security expert says the president's comment on Iran is as uninformed as John McCain's statement in front of foreign leaders in Jordan this week that Iran is training al Qaeda. Now, this is a man who touts his foreign policy experience as one of the top reasons why he should be elected president, but who apparently gets confused when it comes to Sunnis and Shias and Iran and al Qaeda and all that Middle East stuff.

It's embarrassing.

Oh, and there was this. The White House announced President Bush will still attend the Beijing Olympics, despite China's crackdown on Tibet. Mr. Bush's position is the Olympics should be about the athletes and not necessarily about politics. So it's OK that Chinese soldiers are killing Tibetans.

Let the games begin.

Of course, we owe China so much money, it would be a little tough for President Bush to say anything else now, wouldn't it? We didn't used to be like this.

Here's the question: Why would President Bush say Iran has declared that it wants to have a nuclear weapon to destroy people when his own intelligence experts have said that's not the case?

Go to You can post a comment on my blog -- John.

KING: Well, I'm going to wager you're going to get a lot of incoming on that question.

CAFFERTY: I hope so.

KING: We'll see you in a little bit. Jack, thanks.

Barack Obama gets a major endorsement from a friend of the Clintons. New Mexico Governor Bill Richardson, a former candidate himself, calls Obama "a once in a lifetime leader."

Also, a Cuban revolutionary who now owns a restaurant dusts off his old interview with prisoner of war John McCain.

And snoopers found it easy to peek into the passport files of the presidential candidates. What kind of job is the government doing with your private information?

Stay right here. You're in THE SITUATION ROOM.


KING: Barack Obama landed a big endorsement today from a friend of the Clintons and one of his former presidential opponents, the New Mexico governor, Bill Richardson.


GOV. BILL RICHARDSON (D), NEW MEXICO: Your candidacy -- and this is an expression of your candidacy -- is a once in a lifetime opportunity for our nation and you are a once in a lifetime leader.


RICHARDSON: You will make every American proud to be an American. And I am very...


RICHARDSON: And I am very proud today to endorse your candidacy for president of the United States.


RICHARDSON: My great affection and admiration for Senator Clinton and President Clinton will never waver. It is time, however, for Democrats to stop fighting amongst ourselves and prepare --


RICHARDSON: -- And prepare for the tough fight we will have against John McCain in the fall. It is now time for a new generation of leadership to lead America forward.


RICHARDSON: Barack Obama will be a great and historic president who can bring us the change we so desperately need by bringing us together as a nation here at home and with our allies abroad. And I know that all Democrats and all Americans are going to work tirelessly to get this man elected.



KING: So after heavy courting by both campaigns, put Richardson in Camp Obama. But some other big name Democrats are still sitting on the fence.

Well, CNN's Brian Todd joins us now.

What are they waiting for?

BRIAN TODD, CNN CORRESPONDENT: Well, it seems in at least one case, John, not even his closest advisers know for sure. Al Gore, Barack -- excuse me -- John Edwards could be two of the most high impact endorsers in this entire campaign. Both the Obama and Clinton campaigns very eager for their endorsement.

But the question now is whether they will endorse at all or instead remain uncommitted until the convention and perhaps there play a different role entirely.


TODD (voice-over): One of the most hotly sought after endorsements -- John Edwards, who beat Hillary Clinton in Iowa and won 26 delegate slots before dropping how. Edwards still is not saying whether he will endorse Clinton or Barack Obama and he didn't tip his hand on NBC's "Tonight Show."

JOHN EDWARDS (D), FORMER PRESIDENTIAL CANDIDATE: In the case of Senator Obama, he's inspirational. He gets people excited. He gets young people out who otherwise may not be involved in the process.

Senator Clinton has a toughness and a tenacity and experience that has value.

So I think -- I think both -- either of them, I think, will be a great candidate. And I think either one would be a great president.

TODD: Both Clinton and Obama have visited the Edwards house since he dropped out. A former top aide to Edwards says he is speaking frequently with both and has also consulted advisers about whom to endorse or whether to endorse at all. So far, he has divulged nothing.

Also still silent, Al Gore, who won the popular vote for president in 2000 and endorsed Howard Dean's failed candidacy in 2004.

BORGER: I'm told that he didn't really want to insert himself into the middle of this campaign because if he had, say, endorsed Barack Obama, it would have brought up the whole psychodrama between the Clintons and Al Gore.

TODD: But if the race is still undecided at the time of the convention, could Gore take on a different role at the convention?

ROGER SIMON, POLITICO: You are going to need someone to step in, meet with both senators and say, look, we don't want to go to 55 votes on the floor of the convention. And we don't want to leave anybody with a bad taste in their mouths. We've got to work out a deal in this room and I'm here to help you come to some agreement. I think that is the role -- if any role exists -- that Al Gore could play.


TODD: He's not the only one to look for, though. Some other high profile Democrats -- Jimmy Carter, Howard Dean have pledged to make no endorsement, and they could also conceivably play a very critical role down the road -- John.

KING: We'll keep watching that. And it gets more interesting as the days go by.

TODD: That's true.

KING: Brian Todd, thanks so much. If snoopers can peer into the presidential candidates' passport files, can the government guard your privacy? From medical and employment records to tax data, we'll see just how safe these databases are.

And Venezuela's Hugo Chavez has threatened to help make it a reality -- what if oil goes up to $200 per barrel? We'll look at how that could affect you.

Stay right here. You're in THE SITUATION ROOM.


KING: Our Carol Costello is monitoring stories incoming into THE SITUATION ROOM right now.

Carol, tell us what you have.

COSTELLO: Well, John, French President Nicolas Sarkozy moves to cut his country's nuclear arsenal. He announced plans today to trim the total number of France's air and sea nuclear weapons to fewer than 300. The plan is viewed as a move to balance budget constraint constraints against maintenance of what he calls France's life insurance policy against potential new attackers. Mr. Sarkozy also is urging China and the U.S. to commit fully to ending nuclear testing.

Times may be tough right now, but apparently most Americans are optimistic things will get better -- and relatively soon. A new CNN/Opinion Research Corporation poll found that 75 percent of Americans consider current conditions poor. But 60 percent of those surveyed say they're confident the U.S. economy will be good again in 2009.

A judge in San Diego has ordered Starbucks to repay its California workers who served the coffee more than $100 million for back tips plus interest. It's money Starbucks paid its shift supervisors out of tip proceeds. The judge cited a California law forbidding managers from sharing gratuities. The suit could affect as many as 100,000 former and current Starbucks employees. Starbucks says it will appeal.

And updating you now on a story we told you yesterday about that freak accident in Florida yesterday. A medical examiner says head trauma killed a boater who was struck by a 75-pound sting ray. Judy Kay Zagorski of Michigan was sitting in a moving boat in the Florida Keys when the spotted eagle ray jumped from the water and slammed into her face. Officials say it was the impact and not the ray's barb that killed her -- back to you, John.

KING: What a horrible story.

Carol, thanks very much.

Barack Obama says it's not just a problem for the three presidential candidates. He wants an investigation into the breach of passport files. The secretary of state promises answers. Also, we'll look at how secure your records might be -- financial transactions, medical information. Is the government guarding your privacy?

And he was a Cuban revolutionary who interviewed prisoner of war John McCain. Now he's a restaurant owner with a unique take on the presidential candidate.

Stay with us.



Happening now, new numbers for campaign war chests. Presumptive Republican nominee John McCain reports raising $11 million last month in his bid for the White House. That's about a third of what Democrat Hillary Clinton raised and roughly a fifth of Democrat Barack Obama's take in February.

China has issued a most wanted list from last week's anti-Chinese unrest in Lhasa, Tibet that claimed 19 lives. Thousands of Chinese troops are still pushing into western China to contain renewed demonstrations.

And Tibetan unrest casts a shadow over Easter observances as Pope Benedict XVI leads Good Friday services. The mass at the Coliseum had Chinese overtones, to reflect the pontiff's advocacy of greater freedom for China's tiny Catholic minority.

Wolf Blitzer is off today. I'm John King. You're in THE SITUATION ROOM.

Republican John McCain is calling for a thorough review of the snooping into the passport files of the three major presidential candidates. Traveling in France, McCain says in a statement: "The procedures should be changed, if necessary, to ensure the privacy of all passport files."

Democrat Barack Obama is also calling for an investigation. And Secretary of State Condoleezza Rice is promising to dig deep.


OBAMA: One of the things that the American people count on in their interactions with any level of government is that if they have to disclose personal information, that it is going to stay personal and stay private. And when you have not just one, but a series of attempts to tap into people's personal records, that's a problem -- not just for me, but for how our government is functioning. And so I expect a full and thorough investigation.


(BEGIN VIDEO CLIP) RICE: It appears on the first examination that, indeed, the system worked in that there is a flag that goes up if there's any unauthorized look into a file of that kind. And we are going to do an investigation through the inspector general, who will get to the bottom of it and make certain that nothing more was going on.


KING: Back now to the increasingly bitter battle between the Democratic candidates.

Joining me, Alabama Congressman Arturo Davis, an Obama supporter. In Philadelphia, Mayor Michael Nutter. He's in the Clinton camp.

Gentlemen, thanks for joining us today in THE SITUATION ROOM.


KING: I want to go through the tone in this campaign, which has turned a little bit more pointed.


KING: Thank you both for joining us.

And let me start, Congressman, with you. This is from David Plouffe, the Obama campaign manager: "If Senator Clinton wants to have a discussion about electability and vetting, we're happy to have it. She would be a deeply flawed nominee. There are character issues here that will cause us real problems in the fall."

Is that helpful, I know they're in a heated primary campaign, but for the Obama campaign manager to be saying, look, Hillary Clinton has character problems?

DAVIS: John, this has been a campaign where a lot of blows have been exchanged on both sides. And I don't think Plouffe's comments were beyond the pail. Electability is a major factor for the superdelegates, I can tell you that as a member of Congress, it's a major factor, frankly, for a lot of Democratic primary voters and without having to rehash one of the things that Senator Obama's campaign has pointed out is that the Republicans know how to run against Senator Clinton.

And that's not entirely her fault, there have been a lot of unfair attacks on Senator Clinton. But the reality is there is a lot of evidence in the polling data that she's a more polarizing figure.

You know, we can't be afraid of these campaigns criticizing each other. That's OK. I think we have to make sure the debate, though, is about electability and it's about issues and it's about who would be a better candidate in November.

KING: So, Mr. Mayor, fair game for the Obama campaign to say, look, Hillary Clinton can't win in November, she has character problems?

NUTTER: Well, I'm just hearing that statement, John, I appreciate it, and of course, with every with respect to Congressman Davis, I think savaging each other during the course of the primary is not going to help us in the general election. As I ran last year, I said that I was going to talk about issues, not about the other candidates.

If we want to talk about records, if we want to talk about who matches up well based on issues and productivity and demonstrated record, that's one thing, but I think there has to be a line in any of these races that none of us cross, whether it's supporters and certainly the candidates, themselves, directly.

KING: So, let me ask you both. I'm talking to two African- American gentlemen in different camps. One of the worries you hear, if you talk privately to Democrats in both campaigns, is that this has become so pointed that perhaps somebody's base will stay home, maybe only a tiny bit.

But if you're the mayor of Philadelphia or if you're in a competitive state elsewhere, I suspect Alabama is going to go red in November, but maybe you'll want to argue that point, Congressman, please do -- do you have a concern based on the tone of this, that a tiny percentage, say of Senator Clinton, in the end, prevails a tiny percentage of African-Americans stay home and that could be -- swing the election to the Republicans?

Congressman, you first, sir.

DAVIS: John, obviously I have a concern if the tone of the race worsens. But, let's put it in perspective, we've had hard contests before. As long as these candidates are not making personal attacks -- and I don't think Plouffe is so much saying that, Plouffe is talking about a perspective that some people have.

But, let me give an example of something that's not helpful. When Governor Rendell said about a month ago, that well, this is Pennsylvania and there are conservative whites in Pennsylvania that may have a problem with Senator Obama, that was an unhelpful comment by Governor Rendell. I think a lot of us agreed that Ferraro's comments were unhelpful.

The surrogates in this campaign have to take care not to drag issues into the campaign under the guise of, well, there are conservative voters in my state who may worry about this. We shouldn't be debating about race. We shouldn't be debating about these kinds of things. Barack Obama moved a lot of people this week when he denounced racist comments by a black minister. Barack Obama...

KING: Congressman, let me jump in. Because, Mr. Mayor, you work in a city, you're the leader of a city that has had some racially polarized politics over the year. You have succeeded in winning votes in both the African-American and the white community.

The congressman just said, you know, we shouldn't have a campaign about race, and yet, Barack Obama did give a big speech about race this week. How is race playing among Democratic voters?


NUTTER: And that big speech about race, I think, was a function of being in the middle of a campaign -- the comments made by his spiritual guide -- leader and he was -- obviously Senator Obama felt that he needed to address the issue because of the campaign.

Philadelphia, our suburb and across Pennsylvania, I respect the citizens of our state who are smart enough to figure out which candidate is talking about content, who's talking about issues, who's going to move this country in a different direction to deal with the issues that we deal with every day in cities, like crime and education, poverty, jobs and economic development.

And so, we need to let the candidates be candidates. Move beyond issues of race and gender, not that we can ever get away from them, but we shouldn't become consumed by them or think that the voters are so distracted that they can't think about the other things that really matter in their lives on a day-to-day basis. We need to move this campaign forward and talk about real issues that matter to real people.

KING: Let's look for it a little bit, because many watching this campaign are stumped by the numbers I'm just about to show you. But first, before I show you the numbers, we're nearing the end of an eight-year presidency.

After a two-term presidency the White House almost always changes hands in terms of the parties. We're in the middle of an unpopular war, the president's approval rating is in the 30s and the economy is on the verge or in the early days of a recession.

You put that into any historical context and the Democrats should be way ahead in this election and yet if you look at our latest poll, Clinton versus McCain; Clinton, 49, McCain, 47. Obama versus McCain: Obama, 47, McCain, 46. So, essentially a dead heat between the Republican and either of the Democratic candidates.

I know it's a long way from March to November, but through historical context -- and Mr. Mayor, you go first on this one -- the Democratic candidates should be 10 points ahead.

NUTTER: Well, we don't have one Democratic candidate yet. You're asking the voters to choose a matchup in November when the Democratic nominee has not been decided yet. I think by the time we get to November, when we have a nominee, when the issues are so crystal clear and the choice is so cut and dry, that it's clear it's time for a change in the White House and a Democrat should be there and that's what we're all going to work our collective butts off to make happen.

KING: Doesn't worry you, Congressman Davis -- and you get the last word here -- that because of all the infighting, the positions on the issues is getting lost and the voters are saying, you know what, the Republican is not so bad here?

DAVIS: John, I don't underestimate John McCain, he's an authentic American hero. And to beat John McCain, the Democratic nominee is going to have to show the kind of leadership Barack Obama showed earlier in the week. Barack Obama was very direct in denouncing a form of black racism.

Senator Clinton would have helped herself if she had been has direct in saying, Governor Rendell, your comments were out of bounds, Miss Ferraro, your comments were out of bounds. Barack Obama showed leadership this week, and also showed an ability to rise to higher ground when someone throws some sticks and stones at him. He's going to need that ability against John McCain.

KING: Mr. Mayor, you're shaking your head. Quickly, sir.

NUTTER: I just have to say here at the end, we cannot allow this entire election to just be a discussion about race in the middle of the campaign. There are real issues that challenge Americans on a day-to-day basis.

Race is very important, gender is important, but crime, education, taxes and the ability to get things done and have a record of achievement are equally, if not more important, in this election. This is an election, not a philosophy class.

KING: OK, not a philosophy class. It's a great election and gentlemen; we'll have you both back. I can see you both would like to debate this a little bit longer. We're out of time of today.

Congressman Davis, Mayor Nutter, thank you so much for your time. We'll have you back another day.

And if the government can't keep prying eyes out of the candidates' passport files, what kind of job is it doing keeping your private records secure? We'll take a look.

And as a Cuban revolutionary he interviewed prisoner of war, John McCain, now he's a restaurant owner with a unique take on the presidential candidate.

Stay right here. You're in THE SITUATION ROOM.


KING: The breach of passport files for the three major presidential candidates raises fresh questions about security in general. If contract workers can gain access to information about such high-profile figures, how safe can millions of other U.S. passport holders expect their information to be?

CNN homeland security correspondent, Jeanne Meserve checked it out.

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: John, every agency in government will tell you it has protections in place to guard your personal data, but are those protections good enough?


MESERVE (voice-over): Details of your medical history and work record, financial transactions, your social security number, travel history. The kind of personal information entered into government databases.

How often do prying eyes look at it?

MCCORMACK: It's a handful each year that we know about. Now, of course, there's always the possibility there are some that you don't know about.

MESERVE: Very possible. A report card on government computer security, issued last year, failed the State Department and seven other federal agencies, the government-wide grade, C-minus.

Some agencies have made improving security a priority. The Veterans Administration was red faced when personal information of more than 26,000 beneficiaries was compromised in 2006. Now, all medical information in its filed is encrypted and customized thumb drives can only be read on authorized computers.

Other government agencies have privacy officers who are supposed to police the use and disclosure of personal information. Many agencies require employees and contractors undergo privacy training and sign privacy pledges. Many have computer systems designed to detect unauthorized snooping in files. Of course, the State Department had all of these and still files were breached.

BARRY STEINHARDT, ACLU: The fact that it happened to three of the highest profile people in the America shouldn't be taken as an indicator this only happens to the powerful. It happens to ordinary Americans, it just doesn't get the same sort of attention.


MESERVE: And Steinhardt says if it happens to you, it is very likely you will never find out -- John.

KING: Jeanne Meserve. Jeanne, thank you very much.

As Senator John McCain wraps up a week-long tour of the Middle East and Europe, in Cuba, someone who met the presumptive Republican presidential nominee long ago is watching the campaign with great interest.

CNN's Shasta Darlington has details from Havana.

SHASTA DARLINGTON, CNN NEWS CORRESPONDENT: John, Cuba is one country that won't be on John McCain's international tour, but he does have some acquaintances here.


DARLINGTON (voice-over): At 79, Fernando Barral says his life has taken a lot of unexpected twists. The Cuban restaurant owner displays part of his history on the wall. There's Ernesto "Che" Guevara, his boyhood friend who went on to become a global revolutionary icon.

Then there's this interview he conducted 38 years ago in Hanoi. The subject? American prisoner of war, John Sidney McCain.

"McCain was very sure of himself, very proud," he says. "He sat there comfortably and started to drink coffee and eat sweets."

Barral won a drip to North Vietnam in 1970 to study how it was resisting U.S. forces. The Spanish-born communist still has those notes. His interview with the American POW was published in Cuban's Communist Party newspaper. He's stored it away for years, but when John McCain's bid for the U.S. presidency took off, he dug it up again.

"When journalists see it, they go after it like vultures," he says.

McCain also wrote about this page from his past in his 1999 autobiography "Faith of My Fathers." McCain called Barral "a Cuban propagandist masquerading as a Spanish psychologist and moonlighting as a journalist."

In their interview, McCain talked about his jet being shot down and captivity as well as his upbringing.

(on-camera): But, it seems fitting that this decades-old encounter has resurfaced here in Havana, a city surrounded by Cold War era trenches and often seemingly frozen in a past, largely forgotten elsewhere.

(voice over): But Barral's life has changed since then. Once a starry-eyed revolutionary, he turned his home into a private restaurant during the economic crisis of the 1990s.

"It seemed like a betrayal of my ideals to turn myself into a merchant," he says.

But now he's even started following American politics. Not because of John McCain, but the newcomer on the U.S. campaign trail, Barack Obama.


DARLINGTON: But, there's no doubt all the publicity he's been getting for that chance encounter with McCain so many years ago has been good for business -- John.

KING: Good for business.

Shasta Darlington in Havana. Shasta, thank you.

After a rough week, Barack Obama's campaign gets a boost. In our next hour, why former Democratic rival and Clinton friend, Bill Richardson, made the surprise endorsement.

And the stomach-churning rise and fall of oil prices, they've retreated a bit, for now. But, what happens if they start climbing again?

Stay right here. You're in THE SITUATION ROOM.


KING: Oil prices, if you haven't noticed, have been on a dizzying ride. They dipped back below the $100 a barrel this week, right after surging to record highs. But, what if they go back up again, way up?

Let's go to CNN's special correspondent, Frank Sesno.


FRANK SESNO, CNN SPECIAL CORRESPONDENT (voice-over): What if oil prices go to $200 a barrel, nearly double their recent benchmark? Hard to imagine? Think again. Venezuela's Hugo Chavez has threatened it, the European Union's Energy Commission recently said it's a possibility, so did some prominent Wall Street analysts.

Some think there's a high likelihood oil could go to $200 a barrel and beyond.

MATTHEW SIMMONS, SIMMONS & COMPANY: We're so tight right now that we don't have any tolerance for anything bad happening. That's the problem, we have no spare capacity.

SESNO: What if oil hit $200 a barrel? We'd be pushing toward $6 a gallon at the pump, says an analyst at the American Petroleum Institute. Food prices would go up fast, especially things that come from half a world away because of all the energy that goes into growing, transporting and refrigerating the things we eat.

Home heating oil, which already costing a lot of New Englanders $1,000 a month or more this winter, will set new records. Planes, trains, automobiles and trucks will get much more expensive to run.

Some will make money.

SIMMONS: Oil company profits, like it or not, are going to go through the roof.

SESNO: A lot will want to tax it.

SIMMONS: The governments will say, I'd like three times more tax, thank you.

SESNO: China and India will find their booms getting more expensive and maybe slowing. A lot of people dispute this $200 a barrel scenario. They say there's plenty of oil. But $200, even $300 a barrel oil is a "what if" scenario people argue at their peril according to Matthew Simmons who thinks global oil production has already peaked.

SIMMONS: This is the biggest threat to sustainability of the 21st century and it's right on our doorstep. It's not two years away, it's here, it's in our front room.

SENSO (on-camera): Why all the relentless upward pressure on prices? One word, really, and that's demand and not just the made in America variety. Take a look at this. In China and India alone over the next two decades or so, about half the growth in the global energy demand will come from those two countries alone.

China looks like it's going to exceed the United States in the next two years or so as the single largest energy consumer. And China, which is going to quadruple its demand for fuel for planes and cars and trucks and all that kind of business, is likely to put another 270 million vehicles on the road in the next 20 years. A lot of those vehicles going to people who've never had a vehicle before. Cars pollute and use a lot more gas than bicycles do.

Frank Sesno, CNN, Washington.


KING: Well, time now to check back with Jack Cafferty -- Jack.

CAFFERTY: Our question this hour, John, is: Why would President Bush sat that Iran has declared that it wants to have a nuclear -- I almost said it the way he does -- nuclear weapon to destroy people when his own intelligence experts say that's not the case.

Richard writes: "Bush has never listened to his experts before since he's the decider. I fear Bush's recklessness will get us into war with Iran."

Norma writes: "I was just in Iran and heard many versions of "We have a lot in common. We both have president's that people don't like.' This is coming from people who are afraid to speak."

Laura in Oregon writes: "Because the Bush administration will be bombing facilities in Iraq before the next election. As was the case in Iraq, they need justification."

Nancy writes: "Because it worked last time, with Iraq. He still doesn't get it that we have finally gotten it and that this time we won't buy his latest rush to war."

James in New York writes: "The intelligence community was wrong with it came to Iraq, so I guess President Bush has decided that they are wrong about Iran, too."

Mary writes: "President Bush is just continuing to play every fear card that he can think of to try to keep the American public away from the truth. He can only 'win' for the Republicans if there is enough fear generated. He doesn't remember the American people are strong and can stand firm against outside forces if presented the truth."

And Rick writes: "Harvard and Yale are asking the same question and they're now reviewing their criteria for matriculation" -- John.

KING: Ouch.

CAFFERTY: Yes, well, you know.

KING: All right, Jack, see you in a little bit.

And now a look around the world. A coalition of Darfur activists are reporting to authorities that it has been attacked online by hijackers in China -- hackers in China, excuse me. The group has been a vocal critic of China's support for the Sudanese government.

Let's bring our Internet reporter, Abbi Tatton.

Abbi, how were the attacked?

ABBI TATTON, CNN INTERNET REPORTER: John, while the Save Darfur Coalition was escalating this China campaign, earlier this year, it looks like someone in China was reading their e-mails. The coalition says they met with the FBI this week to report what they call a series of sophisticated hacks into this Web site, hacks that appeared to originate in China.

A spokesman said the hackers weren't coming in destroy stuff, more like just snooping around. Save Darfur has been pressuring China to do more to end the violence in Darfur, ramping up their campaign in the run-up to the Beijing Olympics.

The group's president says of the hack, someone in Beijing is clearly trying to send us a message. The Chinese embassy in Washington did not respond to our call. And an FBI spokeswoman said, "we're looking into the matter" -- John.

KING: Abbi Tatton. Abbi, interesting. Thank you very much.

The candidates' passport information, there for the taking. CNN's Lou Dobbs joins us in just a few minutes to talk about the implications of this newly discovered security breach.

And later, Bill Richardson bucks his Clinton ties and throws in with Barack Obama. What his shift in loyalty means for both sides in the Democratic race.



KING: With much of the world focused on the unrest in Tibet this week, the speaker of the House, Nancy Pelosi, traveled to India to meet with the exiled Tibetan spiritual leader, the Dalai Lama.

Sara Sidner has our report.


SARA SIDNER, CNN CORRESPONDENT (voice-over): Nancy Pelosi stood on the steps of the main Buddhist temple in Dharamsala to lend her support to the cause of a free Tibet.

NANCY PELOSI (D), SPEAKER OF THE HOUSE: Today we are here at this sad time to join you in shedding the bright light of truth onto what is happening in Tibet.

SIDNER: With the Dalai Lama at her side, Pelosi told thousands of Tibetan exiles and her supporters that China's actions in Tibet were a challenge to the conscience of the world.

PELOSI: Speaking for myself, I would say that a freedom-loving people throughout the world do not speak out against China's oppression and China and Tibet, we have lost all moral authority to speak on behalf of human rights anywhere in the world.

SIDNER: Pelosi had come to India with the U.S. congressional delegation to talk about global warming. Instead, she became the first senior official from overseas to meet the Dalai Lama since violence erupted in Tibet last week. Exiles say 99 people have been killed in Tibet, but the Chinese authorities put the death toll much lower then that.

For their part, the Chinese have said that Tibetans were responsible for inciting the violence and accused the Dalai Lama of inciting it in hopes of sabotaging this summer's Beijing Olympics.

(on-camera): The Olympics, of course, came up in the discussion with Pelosi. She said she had no reason to boycott the games in any way, but said that the world is watching to see if China lives up to its promises for a more open society and a better human rights record.

Sara Sidner, CNN, Dharamsala, India.


KING: Happening now, an investigation and apologizes over snooping into the presidential candidates passport files. Is there any evidence of a search for political dirt?

Plus, Bill Richardson's difficult choice. The New Mexico governor endorses Barack Obama, despite lots of personal history with both Bill and Hillary Clinton. Richardson joins us to explain his decision.

And a wakeup call from the girl in Clinton's now famous 3:00 a.m. ad. She's grown up and now she's going to new lengths to help the Obama campaign.