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Mumbai Massacre: Outside Help; Alleged Prison-like Conditions for Laborers in Iraq; Interview with Rick Wagoner; Unheard of Mortgage Rate

Aired December 4, 2008 - 17:00   ET


WOLF BLITZER, CNN ANCHOR: Happening now, critical new developments into the probe into the Mumbai terror attacks. Investigators now think the killers, who they say were from Pakistan, also had some potentially inside help.
And workers for a U.S. military subcontractor allegedly held in prison-like conditions in Iraq. We're going to go live to Baghdad. CNN's Michael Ware has been investigating. You're going to be shocked.

Plus, a 30-year mortgage for 4.5 percent fixed. We're learning details of an unprecedented plan that could drastically change the housing landscape.

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

Two days of terror that left almost 180 people dead across India's financial capital. Now there are reports of unexpected twists into the investigation into the Mumbai massacre.

Let's go to Brian Todd. He's been following all of the latest developments for us -- and amidst all of this, Brian we've just learned of an airport scare in New Delhi. What's going on?

BRIAN TODD, CNN CORRESPONDENT: Wolf, we did get reports of a scare there. Now, these reports are being dialed back slightly as we speak.

Here's what we know now. New Delhi police are telling us that they are investigating reports that the shots were fired at New Delhi's international airport. There was an initial report that shots may have been fired by a criminal element -- shots into the air. They're investigating all of these reports.

What we're told by a police spokesman in New Delhi is that there are no casualties and no damage. This was not a terror incident. The airport is being checked. Nothing has been found and no arrests so far. But there was a scare earlier -- reports of shots being fired. We also have some new information on last week's attacks from Indian sources, who give us more detail how this operation was carried out.


TODD (voice-over): Indian security sources tell our sister network, CNN IBN, the Mumbai attackers -- who they still believe were all Pakistani -- had outside help. Specifically, the sources say, a single Bangladeshi national -- who bought cell phone SIM cards for the attackers at several locations inside India. Sim cards are portable memory chips that make it easy to switch cell phones. Intelligence experts say they're used by terrorists to throw their pursuers off the trail.

One analyst who studies India/Pakistan tensions believes this operation was planned and carried out by militants from Bangladesh, Pakistan and India.

FALI HOMI MAJOR, INDIAN AIR FORCE CHIEF: They needed people on the ground who could guide them and who had provided the inside dope. Otherwise, the Lashkar doesn't have the capacity to have cased the joints, to have made all these plans and to get these people into the target areas so effectively.

TODD: A reference to Lashkar-e-Taiba, an Islamic militant group based in Pakistan with ties to Al Qaeda. Indian authorities say Lashkar plotted the Mumbai attacks. And despite Pakistan's claim that so-called non-state actors were behind this carnage, there's huge pressure on Pakistan to go after Islamic extremists on its soil. U.S. Secretary of State Condoleezza Rice hit hard on that during a meeting with Pakistan's president.

CONDOLEEZZA RICE, U.S. SECRETARY OF STATE: I found Pakistan -- that Pakistani leadership that understands the importance of doing that, particularly in rooting out terrorists and rounding up whoever perpetrated this attack, from wherever it was perpetrated, whatever its sources.

TODD: Back in India, stepped up security at airports in major cities after intelligence reports that terrorists may be planning an air attack. Indian authorities aren't being specific about the information.

UNIDENTIFIED MALE: This is based on a little warning which has been received. That's all. Nothing else. We are prepared, as usual.

TODD: Indian officials are also weighing how to tighten security along their coasts.


TODD: Now, on the coastal security issue, the head of a small fishing village along the coast of Mumbai says he warned Indian police about terrorists smuggling in powerful explosives months before the Mumbai attacks. That fisherman told CNN the police did nothing. Police say the information he gave was too vague to act on -- Wolf.

BLITZER: I know you've been talking to Indian sources throughout the day, Brian. What are you picking up about the possibility of Indian military retaliation against targets inside Pakistan?

TODD: Well, the Indians are really hinging everything now on Pakistan's response to this terrorist attack. India has demand that Pakistan turn over a group of wanted terror suspects. There's no word on whether that's going to happen. Now, if Pakistan refuses, India's foreign minister has warned that his country will consider "all options to present its territorial integrity." The Pakistanis under enormous pressure right now.

BLITZER: That's certainly true. Brian, stay on top of this story for us.

Meanwhile, not far away, a violent day in Iraq today. At least 22 people killed, including two U.S. soldiers. They're dead after a string of bombings. Nearly 200 others were wounded.

The deadliest strikes happened in the City of Fallujah, where two suicide bombers rammed oil tankers into Iraqi police posts, damaging a nearby school in the process. Many people are believed to be trapped in the rubble.

Meanwhile, CNN's Michael Ware is digging into the story about a Defense Department subcontractor confining laborers in rather terrible conditions for months on end. He's joining us now -- Michael, what's going on here, because this is pretty shocking stuff?

MICHAEL WARE, CNN CORRESPONDENT: Yes, Wolf. This is an appalling story. And it's unfolding still, even as I stand here, in the middle of the Iraqi night. What we have is about a thousand Asian contract laborers who are being all but confined here in the midst of a war zone, by a Kuwaiti company subcontracted to the American KBR conglomerate. Here's their story.


WARE (voice-over): They say they feel like prisoners -- locked in a derelict warehouse for months on end -- no salaries or food and armed security guards prowling the fences. It's an obscenity -- abuse of contract workers in Iraq.

From India, Nepal, Bangladesh Sri Lanka and Uganda -- more than 1,000 men are penned here -- lured to Baghdad with promises of jobs that did not exist. Even crueler, most paid for the privilege to come -- selling farms or anything of value, told they had jobs waiting with American giant KBR.

All through Najlaa Catering Services, a Kuwaiti company whose officials in Iraq refused to comment. The Kuwaiti office saying only that the situation was under control and being dealt with. KBR says it abhors unethical behavior, insisting its contractors abide by its code of conduct and it alerts authorities when contractors do not.

But the Kuwaiti company who received these men from the recruiters shoved them in here -- a compound within Baghdad's airport, with showers without water and taps that are useless. Six hundred men who had hoped to send money to their families piled in one room -- as many as four to a bed -- and apparently all forgotten, a nuisance no one wanted to address.

Unable to stay without visas, they're unable to go without money.

(on camera): Is your government helping you? Is anybody helping you?

UNIDENTIFIED MALE: Nothing. Nothing.

UNIDENTIFIED MALE: We didn't get anything.


WARE (voice-over): And when they protested, the guards fired above to silence them. These Ugandans say Iraqi police handcuffed and beat them, though the police refused to comment.

UNIDENTIFIED MALE: They said, OK, if you say you are here because of USA influence, we are going to show the difference between...

UNIDENTIFIED MALE: Show you the difference between...

UNIDENTIFIED MALE: ...the Iraqi government and the U.S. government.

UNIDENTIFIED MALE: And the U.S. government.

UNIDENTIFIED MALE: We're going to -- let's see if the U.S. is going to help you.

WARE: And as they spoke to me, the manager who interns them locked them out for talking.

(on camera): Will you let these men back in?


WARE: You will not let these men back in?

UNIDENTIFIED MALE: No. No. I give them -- I give them two minutes. If not come back inside, that's (INAUDIBLE).

WARE: But if they talk to us, you won't let them in?


WARE: That's not -- that's not right.

(voice-over): Other workers, duped by different agents, don't have a camp at all. These men sheltered by this airport road in a wasteland -- living off food donated by Iraqi workers. The men who brought them here have disappeared. Their immigration status is in disarray -- passports taken or pages with visas torn out. They're stranded, forsaken.

The U.N. Has visited and it says it's trying to help. But all are in limbo. The U.S. military says it takes human rights abuses seriously and is looking into the matter. The Iraqi government has just confiscated one of the company's official's passport until a solution is found. Until then, the world needs to be watching so they're not forgotten again.


WARE: And, Wolf, what we've just learned is that this scrutiny that the company is now under has provoked some action. What we hear from one of the workers in the camp tonight is that as many as four buses have appeared at the compound. And workers are being told to get on the buses to get out of the country. Indeed, this worker who we spoke to said that they've even been told that Iraqi police may be standing by with tear gas.

Now, these men are some of the poorest of the poor. They gave out money to come here. And now, after months and months of internment, they may be forced out even poorer than when they arrived. We'll have to see if any of these companies can right any of the wrongs inflicted on these Asian workers -- Wolf.

BLITZER: We'll keep a spotlight on this story. It is shocking, indeed. And thank you, Michael, for doing that for us. Michael Ware is our reporter in Baghdad.

Let's go to Jack Cafferty in New York. He's a great reporter and he's doing -- he's doing important work, showing the world what's going on.

JACK CAFFERTY, CNN ANCHOR: That's very, very sad. I -- you know, we've got some tough economic conditions in this country, but we are so, so well-off by comparison to almost every place else in the world. What a shame.

President-Elect Obama campaigned on promises to fix the ailing health care system. Forty-seven million is the estimate of Americans who have no health insurance. And you don't have to look very far to find those who do have coverage complaining with it. But a new Gallup Poll finds that Americans are sending mixed signals when it comes to health care.

Forty-nine percent of those surveyed said leave the system alone -- leave it as it is, it's fine. Only 41 percent said they want a new government-run health care system. There's more confusion. The poll found 59 percent say the current system has major problems. Access and cost are cited as the biggest concerns. But at the same time, 57 percent say their health care is excellent or good.

On the heels of a campaign promising change -- health care included -- most people, according to this poll, are pretty much OK with what they have. Weird.

Here's the question: What does it mean when almost half of Americans want to leave the health care system as it is?

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

BLITZER: Jack Cafferty, thank you. The big three U.S. automakers are trying once again to convince Congress to lend them billions of dollars. But can taxpayers be assured they won't repeat past mistakes? I'll ask the General Motors CEO, Rick Wagoner. He's standing by live. He's here in THE SITUATION ROOM.

And CNN's Christiane Amanpour -- she returns to Rwanda, scene of a horrifying genocide. Christiane -- she's also standing by live with a preview of her CNN Presents special "SCREAM BLOODY MURDER".

Plus, the most dramatic plan yet to get the housing market back on its feet. We're learning new details of possible huge savings for millions of American homeowners.

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


BLITZER: The heads of the big three U.S. automakers -- they were back on Capitol Hill today, making their case for government loans up to $34 billion. We're going to be speaking later this hour with the CEO, Robert Nardelli, from Chrysler.

Right now, we're joined by the CEO from General Motors, Rick Wagoner. Mr. Wagoner, thanks very much for coming in.

RICK WAGONER, CEO, GENERAL MOTORS: Thanks. Great to be here today.

BLITZER: You spoke today. You acknowledged that some mistakes have been made by General Motors over the years. I guess the big question, what was the biggest mistake you made and how can the American public be assured you're not going to repeat it?

WAGONER: Well, look, we've been in the business a long time. In over 100 years, you get in habits, sometimes, that maybe aren't exactly what's right for the future.

I think probably the biggest things we've struggled with are making sure that we can get the new technologies to market at high enough volume. And I talked about the fact that we started with a -- remember the Saturn EV1. And we had to pull that off because we got financially very, very tight.

And I'd really liked to have been able to stick with those kind of technologies. So what we talked about today was, given the fact that the world's changed and we're going to be...

BLITZER: So I guess what you're saying is you were building the wrong cars -- making the wrong cars for the market that had been changing over the years? You were still living in sort of in the past?

WAGONER: Well, I think, given the low energy prices we had in the U.S. we've really been -- built up a strong position in trucks. And because of the lack of profitability in cars, in retrospect, we didn't put -- put enough effort into that side of the business. I think...

BLITZER: Why do you Nissan and Honda, Toyota, BMW -- they manufacture cars here in the United States. Why do they do so well and the American carmakers don't do so well? WAGONER: Well, but I think that's a backwards looking way of talking about it, Wolf. Because if you look at cars like the Chevy Malibu, this car won Car of the Year. It's got a hybrid system, that I drove down from Detroit in yesterday, by the way. And it can compete with any cars in the category.

So the point is, several years ago -- and I credit Bob Lutz -- we really began to put a lot of effort into winning cars. And our commitment is we're going to continue and expand that going forward.

BLITZER: The head of the United Auto Workers today, Ron Gettelfinger, he was blunt. He said if this money -- this bridge loan, as it's called -- doesn't come through for G.M. by the end of December -- by the end of this month -- you're going to have to file for bankruptcy. Is that true?

WAGONER: Well, that's what Ron said. I would say what we said in our filing, that we -- we could need up to $4 billion by the end of this month. That's what we're requesting it be. Being (INAUDIBLE), I'm not going to speculate what happens if we don't get it. We're focused on trying to really convince the Congress that it's -- it's a good investment for the American people.

BLITZER: But you have to have a Plan B if -- because right now, the mood in Congress -- in this Congress, which would have to vote on it -- doesn't seem to be all that receptive.

WAGONER: Well, I -- you know, this is why we're down here and have very much appreciated all the time that we were given today to talk to the committee and felt they asked a lot of good questions. And, you know, this is -- we think this is, by far, the best way to go. So we're going to stick -- stick with it as long as we can.

BLITZER: Is there a Plan B, though? Do you have some contingency planning...


BLITZER: You've been doing it -- if the money from the Federal government doesn't come through?

WAGONER: Well, there's several options. I mean we've been focused on the legislative process. We hope that works. But Senator Dodd pointed out today that, in his view, there are actions that the administration can take under the TARP or the Fed.

BLITZER: Because they'd be reluctant -- the president -- to use any of that $700 billion and make it available to the auto industry.

WAGONER: Sure. And they've really asked that it go through the legislative process. And we -- we're going to keep working through that. But my point is the consequences of this not working out would, as someone said today, would be -- at the panel -- would be just catastrophic for the economy. So we really hope that we can, particularly with the plan we filed with the committee earlier this week, really convince them that this is a -- this is a good thing to do, not just for the companies, but, really, for the industry and the whole economy.

BLITZER: We were flooded with e-mails when we notified our viewers that you were coming in. And I guess one of the great questions they want to know is how can the American taxpayer be assured that this won't be good money going after bad?

WAGONER: Well, I think it's -- while the amount of money being requested by the three of us is significant, if you look at the footprint of the auto industry and the number of jobs that it employs and creates all through the supply chain and the dealers, if you look at the importance of the technology we invest in, we're going to get this right. And when we do, this is a very high return for the U.S. taxpayer.

BLITZER: Can you assure the American taxpayer that if you get this money, if it comes through -- this bridge loan comes through, you won't come back a few weeks later or a few months later and say we need more?

WAGONER: Well, certainly not in a few weeks or a few months. But, to be fair, Wolf, we were asked to lay out different scenarios of volumes and how much money we would need under each scenario. So we put what we thought was a very conservative volume set. And that's where we came up with the up to $18 billion for G.M. We really think that the industry won't get weaker for that. So we think the amount we've asked for should be adequate under any scenario we see likely.

BLITZER: Because, you know, there's a lot of anger. And there's a lot of anger, I guess, symbolically, because you flew in on a private -- the private jets -- the corporate jets, as opposed to what you did this time, which is drive into Washington from Detroit.

I'm going to play for you one I-Report. We got a lot of them from our viewers. And it reflects the anger that is out there. Turn around. Listen to this question that comes in for you and we'll get your response.


PABLO FAJA, CNN I-REPORTER: My question is for Rick Wagoner.

During the years 2000 to you 2008, you have made about $100 million as CEO of G.M. During that time, the stock price has fallen 96 percent and the company has gone from a net profit to a net loss. Dear Rick, why should taxpayers give G.M. $18 billion and not fire you as CEO?


BLITZER: All right. I don't think you heard that.

WAGONER: Yes. Sorry.

BLITZER: So I'll read it to you. This was: "During the years 2000 to 2008," he asks, "you made about $100 million as CEO of G.M. During that time, the stock prices have fallen 96 percent and the company has gone from a net profit to a net loss. Dear Rick, why should taxpayers give G.M. $18 million and not fire you as CEO?" A tough question from Pablo.

WAGONER: Yes. Yes, first of all, I understand how he would ask the question. But I didn't make anywhere near $100 million. That's what (INAUDIBLE)...

BLITZER: But you made a lot of money. You made a lot of money.

WAGONER: Well, last year, as we indicated in our filing, I did. I made a $1.5 million. The proxy said I made $14 million. So I think vis-a-vis CEO level pay, G.M., really, we try to be very conservative. But I realize it's a lot of money.

The reason that I have my job is because our board thinks we've been taking on very tough issues -- and, really, some of the structural issues that have been around the company for years and years and years. And I don't have -- I don't have a golden parachute. I don't have an employment contract. I serve at their pleasure and I'll continue to serve at their pleasure. But...

BLITZER: So you're staying put?

WAGONER: Well, it's my -- yes, sure. That's my plan. I mean, as long as the board wants me to stay put. If they tell me no, then I'll go.

BLITZER: One final question. And I want to read to you what Mitt Romney, who's a son of the auto industry. His father, George Romney, used to run the old American Motors, as you know. He wrote this in "The New York Times" about a week or so ago: "Without that bailout, Detroit will need to drastically restructure itself. With it, the automakers will stay the course -- the suicidal course of the declining market shares, insurmountable labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses. Detroit needs a turnaround, not a check." Those are powerful words...


BLITZER: ...from someone who is from Michigan, originally, grew up in the auto industry and says the American public should not give you this bailout.

WAGONER: Yes. I have great respect for Governor Romney, but his information is extremely out of date. I mean for him to comment that we don't have competitive product when we have category winning products, like -- I talked about the Chevy Malibu, investments in things like the Chevy Volt, the changes in the labor contracts the UAW has agreed to. His comments, unfortunately, are maybe based in a Detroit 10 or 15 years ago, but do not reflect the ability of the industry to compete today. So, unfortunate, but everybody has the right to their opinion, I guess.

BLITZER: Based on what you heard from the lawmakers today, are they going to buy it? WAGONER: Well, we got a lot of excellent questions. I think they were very much focused around the plans that were submitted. You know, I can't tell you for sure how it's going to come out, but I remain hopeful and look forward to tomorrow's testimony.

BLITZER: We'll watch it every step of the way. Mr. Wagoner, thanks for coming in.

WAGONER: Great. Nice to be with you.

BLITZER: Good luck to you and all the men and women of the U.S. auto industry.

As I've been saying, the stakes right now -- not only for them, but for a lot of other people -- are enormous.

WAGONER: Yes, they are.

BLITZER: Appreciate it very much.

So why can't the big three get private loans and do they have a backup plan?

More of these kinds of questions coming up. The Chrysler CEO, Robert Nardelli, he's standing by live. He'll be joining us right here in THE SITUATION ROOM.

Thanks very much.


BLITZER: We're learning details of an unprecedented plan that could offer substantial help to millions of homeowners by drastically cutting a key mortgage interest rate.

Let's go to Mary Snow. She's working the story for us. Here, too, lots at stake. What's the latest -- Mary?

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, at this point, it's an idea being floated. The Treasury Department is declining comment. This is the latest plan to resuscitate the housing market.


SNOW (voice-over): It's an idea lobbyists are pushing in hopes of driving down mortgage rates so people will buy homes. An industry source tells CNN the plan, first reported by "The Wall Street Journal," would require Treasury to buy securities backed by 30-year fixed rate mortgages from Fannie Mae and Freddie Mac. This could drive mortgage rates down to as low as 4.5 percent.

And CNN's personal finance editor, Gerri Willis says...

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: This is unprecedented. I mean, to get a 4.5 percent mortgage rate for a 30-year -- for a fixed rate mortgage -- is unheard of. SNOW: Consider the owner of a house worth $191,000 -- the median price of a home. The current mortgage rate is 5.4 percent, equaling a monthly mortgage payment of around $1,084. If the rate was lowered to 4.5 percent, the payment drops to $970 -- which means the homeowner could save $114 a month. But not everyone is eligible.

WILLIS: This will only be offered to people with good credit. It's only offered to people who are buying new homes. This is not a refinance rate. So if you're in trouble with your mortgage right now, you are not getting helped.

SNOW: And because these loans would be backed by Fannie Mae and Freddie Mac, one financial analyst says the loans would have a cap.

GREG MCBRIDE, BANKRATE.COM: In much of the country, that limit would be $417,000.

SNOW: Supporters of the measure say lowering mortgage rates will entice people to get off the sidelines and buy a home. The Federal Reserve has already moved to lower mortgage rates -- but not by this much. Some question whether there might be unintended consequences.

MCBRIDE: By reducing mortgage rates so significantly in a short period of time, might we be inflating the next bubble?


SNOW: Now, while many people are sitting on the sidelines, lower mortgage rates could be attracted to buy a home. But with many people nervous about losing their jobs, it's hard to say just how effective those lower rates would be -- Wolf.

BLITZER: Any idea of a timetable -- a timeline -- how long this will take?

SNOW: You know, some reports say that there could be announcement as early as next week.

BLITZER: We'll watch it very closely. Mary, thanks very much. Appreciate it.

If Congress agrees to bail out the U.S. automakers, how can taxpayers be assured they won't come back asking for more? I'll ask the Chrysler CEO, Robert Nardelli. He's standing by live to join us.

And hundreds of thousands of people massacred in a matter of months. Now CNN's Christiane Amanpour returns to Rwanda. She joins us live with a preview of her CNN PRESENTS special, "SCREAM BLOODY MURDER." And Barack Obama putting women in some of the country's top national security roles -- has he shattered the glass ceiling once and for all?

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


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

Happening now, Detroit's big three pleading their case once again on Capitol Hill. Hours and hours of hearings today. Do they have a plan for financial survival? The Chrysler CEO Robert Nardelli is standing by live to join us. That's coming up right now.

The horrors of the Rwanda genocide. Christiane Amanpour takes a revealing new look inside the tragedy that claimed hundreds of thousands of lives.

Not even Bill Gates, one of the world's richest men is immune from the financial crisis. He's joining me coming up right here in THE SITUATION ROOM as well.

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

Let's get back to our top story right now. The big three automakers are back here in Washington asking for up to $34 billion in loans to bail out their troubled industry. Joining us now, the Chrysler CEO Robert Nardelli. Thanks very much for coming in.

ROBERT NARDELLI, CEO, CHRYSLER: Thank you very much, Wolf for the opportunity.

BLITZER: Do you believe that if you get this loan right now, the Congress approves it, the Bush administration approves it, before the end of the month, that that's it? You won't have to come back and ask the federal taxpayers for more money down the road?

NARDELLI: We really believe that, Wolf. And that was one of the things we were here, as you said earlier, two weeks ago. The Congress sent us away with a very detailed list of things they wanted to see. We submitted that document on Tuesday. Our document was 120 pages. And we went through tremendous detail from the entire income statement, P & L statement, cash flow, balance sheet by month, by quarter, by year. Basically what we showed in that report and we had six hours of dialogue today to try and reinforce the importance of this request, to grant us the $7 billion. It's a one-time request. And then we showed increasing cash flow and increasing profitability throughout the planning period, which is '09, '10, '11 and '12, Wolf.

BLITZER: If Chrysler doesn't get the $7 billion, what happens to Chrysler?

NARDELLI: I think it would be a tremendous impact on this economy.

BLITZER: What about specifically Chrysler? Walk us through what would happen to Chrysler if Congress refuses?

NARDELLI: Well, I think if Chrysler doesn't give us the money, the probability is we won't be able to get debtor in possession financing. I don't think we would be able to go into bankruptcy. It could force us right into liquidation. What that means for Chrysler specifically is there's about a million people depending on our success so you'd end up with tremendous unemployment. You would end up in tremendous systemic impact on the financial institutions of the people have invested in Chrysler. You'd have 30 million Chrysler car owners whose value would be depressed, their ability to get maintenance and service.

BLITZER: You'd have literally 3,300 dealers, about 140,000 men and women who work at those dealerships. You'd have over 1,000 suppliers impacted, all of the accounts payable, health care costs, pension funds. This would be a huge, huge impact on this economy, Wolf.

NARDELLI: Yesterday I interviewed Bill Gates. Arguably, is he one of the world's richest men. And he said this when I asked him if the federal government should bail out the big three automakers. Listen to what he told me.


BILL GATES, MICROSOFT FOUNDER: You to have some clear criteria when have the government come in and to what degree is the government insist on and able to judge whether there's profitability down the road. After all, you have to say if no one else is willing to invest, why is that?


BLITZER: Why is that that no one else, none of the big banks, the financial sector, even your parent company the Chrysler parent company, why aren't they willing to invest in Chrysler right now?

NARDELLI: Well, they're fully invested. I think, again, whether it's the lenders that helped infuse the original cash back in august of '07, whether it's the money that service invested in Chrysler when we did a pull down in the middle of the year, they have again, whether it's private equity or public, whether it's pension funds that are invested, there are certainly financial criteria. So we're in a situation now where we've gone to the government. I think bill is right. And we will openly agree to and we are more than willing to have government oversight with very specific benchmarks with very specific tollgates that the government would put in place relative to how the funds would be used, measurement of our success on a monthly, quarterly basis, and demonstrating our commitment that our plan really, really has accountability and viability, Wolf.

BLITZER: Are there any private investors willing to give you a loan other than potentially the federal government?

NARDELLI: Wolf, we've obviously looked and scoured the world. Not only here in North America but both east and west. And given the economic environment that we're in, given the financial crisis that contributed significantly to this downturn in the auto industry going from 17 million units annually to last month 10.5 annualized basis, the only place we could go was to try to go to the government just as the financial institutions went to the government given the crisis they found themselves in.

BLITZER: One final question. We asked our viewers to send us in their video questions for you earlier. We interviewed Rick Wagoner, the CEO of General Motors. I want you to listen to this because there's a lot of the anger out there. The complaint and I want to give you a chance to respond, American automakers are not making cars that are really all that good. Listen to this I-report from David White of Washington, D.C.


DAVID WHITE, I-REPORTER: Many Americans are sick and tired of investing their money on vehicles that end up with a Flintstone transmission. You know what a Flintstone transition is, don't you? It's this. We don't like walking when he we're paying for a vehicle.


BLITZER: All right. So what do you say about the argument that the Japanese, the Germans, Koreans make better cars than the Americans?

NARDELLI: Wolf, here's what we've done. You know, since august when we became independent. We spent about half a billion dollars in the first several months. Our warranty costs are down 29 percent. It's an interesting comparison because in the hearing today, going around the panel, the majority of the Senators said that citing specific vehicles that they own that they've got 60, 70, 80,000 miles. The comment was you guys are making them too good and therefore, we're not buying vehicles and we're contributing to your problem. That was from the Senators on the committee today. On the panel today, Wolf.

BLITZER: We got to leave it right there. Mr. Nardelli as I said to Mr. Wagoner, good luck. A lot riding on what's going on right now not only for the workers but certainly for the American public. Lots of jobs at stake. We hope for the best. Appreciate your coming in.

NARDELLI: Thank you, Wolf, very much. It's the most important session I've had in my 38 years of business.

BLITZER: All right. Appreciate it very much. Thank you.

You just heard the case for the auto industry bailout. It's also the cover story for our sister publication in the brand new issue of "Time" magazine. Reporter Justin Fox provides his rationale for rescuing the American auto industry.


JUSTIN FOX, TIME MAGAZINE: The thought is if you let GM in particular collapse, fall part, you would wreak such economic devastation that it would end up costing vastly more in terms of taxpayer dollars than doing something now. There are big questions about as soon as the government starts getting involved in private industry, what is free market capitalism? What should government's role be? Do we want an industrial policy that decides which companies survive and which don't those are all real questions. At the same time, the immediate cost of letting them go under right now, mainly gm is what the concern is, there's just some legitimate fear that it could take what's currently a pretty sharp recession and turn it into a truly brutal depression.


BLITZER: Barack Obama raised unprecedented amounts of money during the presidential campaign and he's not done yet. The Obama money machine. We'll talk about it. Alex Castellanos and Jamaal Simmons are standing by live.

And a woman who witnessed her neighbors kill her entire family. Christiane Amanpour, she's standing by live. She is about to relive some of the horror of one survivor of the Rwandan genocide.

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


BLITZER: What a day it's been on Capitol Hill today. The leaders of the big three U.S. automakers making the case for $34 billion. Let's discuss the political fallout. Joining us now, the Republican consultant and CNN political contributor Alex Castellanos and Democratic strategist Jamal Simmons.

What do you think, Jamaal? Did they make the case?

JAMAAL SIMMONS, DEMOCRATIC STRATEGIST: I think they made a solid case today. This is all anybody was talking about around the dinner table at thanksgiving. Three out of my four grandparents came to Detroit because of the industry. People are feeling this seriously. When I talked to people on the hill today, they said the case was made much stronger than the first case when they came up. Still work to do. The Senators want to talk about this more. But this is a good start. You know, companies like general motor who's say they want to repay the money by 2012, so I think it's a good start from what I hear so far. I'll tell you this from being home this can't fail. We've got to figure this out. A lot of people's lives are on the line.

BLITZER: Well as you know, they want the money by the end of the month. That means the current U.S. Senate and House have to approve it. There are still 49 Republican Senators in the Senate and most of them by my estimate, they don't like any part of this. Is this going to get off the ground legislatively before the new Senate where there will only be 41 or 42 Republicans is in play?

ALEX CASTELLANOS, REPUBLICAN CONSULTANT: It's hard to see how that's going to fly right now, Wolf. It's not just the Republicans in the Senate. It's 60 percent of the American people are saying no bailout. If Detroit really is competitive, if they really have changed, they should be able to raise the money you know in the marketplace to do that. No, they're going for a government bailout because they haven't made the case.

BLITZER: If the U.S. taxpayers are bailing out, you know, AIG and some of the big banks, why not bail out, you know, a pillar of domestic American manufacturing?

CASTELLANOS: That's the problem. We have laid a precedent that says we should bail out everybody. You know, our options here appear to be either we bail out the auto industry, throw a big wad of money at them or let them go under. There's another option. It's what I think most Americans think will happen. We throw a big wad of money at them and then they go bankrupt because they're still not making competitive cars. The problems we have now is the Washington plan to save Detroit may be to require them to make greener cars. Right now sales of green cars are dropping precipitously because Americans don't want to pay more for the same thing they have now. Washington doesn't need to get into the car business. The only people worse at running a business than Detroit play be Washington.

BLITZER: Jamaal, there are still a lot of Democrats really skeptical that this isn't a case of good money going after bad.

SIMMONS: You know Wolf, we did this in the late '70s with Chrysler and made money off of this plan. The question is are we going to spend $34 billion now to try to save an industry with millions of jobs or spends that money in lost taxes and taking care of unemployment benefits and all the devastation that will happen if we don't? I've only ever driven Chryslers in my life. I have a lot of family that work for General Motors. People from Detroit are serious about their cars. This has to help people in Indiana, Ohio, Michigan, Pennsylvania. There's some pretty important states with all the auto suppliers, dealers and the auto companies that are depending on this.

BLITZER: Very quickly to both of you. Jamaal is, Congress going to pass legislation that will provide $34 billion to the auto industry?

SIMMONS: I think they don't have a choice. There are too many jobs and too much money on the line here.


CASTELLANOS: I don't see it happening this week.

BLITZER: We'll see what happens. The clock is clearly ticking. Thanks to both of you coming in.

SIMMONS: Thank you.

BLITZER: I want to shift gears dramatically right now. There has been an incident in New Delhi at the international airport there. And Sara Sidner is on the scene for us on the phone. Sara, tell viewers what we know.

SARA SIDNER, CNN CORRESPONDENT: So far, what we know is that police are telling us that basically, a couple of shots were heard. And in or around the airport. They're not saying whether it was outside or inside, but that a couple of shots were heard and they were investigating that but they are also saying it was a minor incident. That it could have been some local elements that may have had something to do with this.

But at this hour, I just arrive at the airport about ten minutes ago and I'm looking around the airport. Basically passengers are coming and going. The airport is still functioning per normal except for the fact you cannot go into the airport without a ticket. You cannot go inside like you normally can and wait for a passenger, per se. Security is much more heightened than it is normally. There are plenty of officers out here with their guns very visible and several more officers at each entry and exit than there normally are. The airport is running as per normal at this hour, Wolf.

BLITZER: We'll stay in touch with you, Sara. Thank you.

Can a person who's watched her family murdered by her neighbors ever recover from the trauma? Christiane Amanpour is standing by live. She has a remarkable story for our viewers.

And one of the world's richest men says that even though times are tough economically, America needs to be giving more money to foreign corrupts. You'll hear Bill Gates explain why. The final part of my interview with Bill Gates, that's coming up.


BLITZER: Rwanda 1994, hundreds of thousands of people were slaughtered. CNN's Christiane Amanpour has been to Rwanda. In her upcoming documentary "Scream Bloody Murder" Christiane returns to Rwanda to a rural hillside and introduces us to a woman who watched as neighbors killed each other and then murdered her family.


CHRISTIANE AMANPOUR, CNN CORRESPONDENT: General Romeo Delair the head of the U.N. forces in Rwanda knew that trouble was coming. For months the U.N. commander in Rwanda had warned his bosses in New York that Hutu extremists were arming and training militias. Then, on April 6, 1994, the plane carrying the presidents of Rwanda and neighboring Burundi were shot down, a double assassination, and this is the moment that the Hutu plotters had been waiting for. The death of the president was the start point --


AMANPOUR: The signal. The colonel, a Hutu extremist, immediately declared the army in charge. Within hours, government troops and civilian death squads began slaughtering Tutsis.

UNIDENTIFIED MALE: People were literally screaming on the phone telling us that the militias were at the door. We could hear the people still on the phone as they were busting down the doors and opening fire.

UNIDENTIFIED FEMALE: We started hearing people screaming outside.

AMANPOUR: Efujenia Robanda (ph) lived a rural hilltop village when the genocide erupted. What do you remember?

UNIDENTIFIED FEMALE: What I remember is that they killed people and the women and girls were raped. We saw it all. The men and boys were beaten and slaughtered.

AMANPOUR: As the mob came closer, she and her husband and her children split up and fled. Their home was destroyed. Those are the rocks from your house? As Efujenia (ph) hid in the forests, her neighbors who she had lived with all of her life killed her husband and five of her children.


AMANPOUR: What is remarkable is that she embarked on a reconciliation process which is the national policy in Rwanda right now. It is happening in the local court system where they do it in front of neighbors and friends and the perpetrator begs forgiveness of the victim and they try to move on. You also heard from General Delair who is one of the heroes we profile in the documentary, those individuals in each case that we document who stood up to confront evil and to speak often inconvenient truths and too often not listened to and genocide was allowed to be perpetrated.

BLITZER: It is really interesting, Christiane, that only yesterday the former President Bill Clinton told CNN that the biggest regret he had of his eight years in the White House was that he knew what was going on in Rwanda and Burundi and yet he didn't do anything about it.

AMANPOUR: Well, Wolf, this is precisely the situation that has to change. President Clinton and other leaders have been apologizing since the catastrophic failure of 1994. Many officials who even now in the upcoming government were involved in that as well, and you have heard Barack Obama throughout the campaign talk about genocide and combating it and preventing it as a top priority in the next administration. Right now, today, it continues in Darfur. So this is urgent. This is something that really needs to be tackled, and there are ways to do it. It is not a hopeless case. And we are doing this documentary, because it marks the 60th anniversary of the U.N. convention to prevent genocide.

BLITZER: Christiane, thank you. The reviews, by the way, have been fabulous and including Tom Shale's writing in the Washington post today. This is a powerful, powerful documentary and I recommend all of the viewers in the United States and around the world to watch it tonight and learn from it. Christiane's two-hour CNN presents documentary is entitled "Scream Bloody Murder" and it airs tonight at 9:00 p.m. eastern. Christiane travels to the sites of some of the world's most heinous crimes and talks to some of the people who tried to stop the killing, but were ignored. 9:00 p.m. eastern, you must watch this documentary tonight.

Let's go to Jack Cafferty who has the Cafferty file -- Jack?

CAFFERTY: Well, there is the news media and then people like Michael Ware and Christiane Amanpour who operate at another level than if rest of us. That is remarkable stuff.

Question this hour: What does it mean when half of the Americans want to leave the health care system we have just the way it is according to a Gallup poll?

Dawn says: "It means that 50 percent of the people have no idea what Obama's health care plan is about and are just plain scared they have to wait in a public clinic to see a doctor they have never heard of and also scared that their taxes will go up to pay for those who don't have insurance."

Maryann in Houston writes: "My deductible is so high that I hope if I get sick I die because I don't want to face bankruptcy because of healthcare expenses."

D.J. in Detroit, Michigan: "Isn't that about the same number of people who still have jobs?"

Melanie says: "As a German American, I cannot pay for $130 a doctor visit since I have no insurance and live in Florida. Since I live in Germany now, and since I'm poor I have to pay ten euros every three months to see my doctor every chance I need to. So if poor Americans want to keep that health care system, please reconsider."

James who's a doctor in Metairie, Louisiana: "Simple Jack, the half that don't want to change the system have adequate coverage. They don't care that much about the other half who don't. Changes after all could affect their own coverage or their taxes. What a shame. Where is America's heart?"

And Matt writes: "People who think that America's healthcare system is OK have not had to use it. My wife has a serious lung condition and even though we have had insurance the whole time she is sick, we still owe about $30,000 in bills that the insurance companies find excuses to deny coverage for."

If you didn't see your e-mail here, you can go to my blog at and look for yours among hundreds of others -- Wolf?

BLITZER: Jack, stand by, for a moment because President Bush and the first lady are about to light the White House Christmas tree and this is the last time for President Bush in office. He will be doing it. It is a beautiful ceremony and he is about to do it and he is speaking about the U.S. military right now and I want to listen in briefly and watch the lighting of the Christmas tree.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Moms and dads across America have stepped forward to defend our country. And now I want to ask Caylee and Lindsay to get up here with Laura, to please come up with Laura -


-- and help us light this beautiful tree. Everybody join, five, four, three, two, one.