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A New "Bridge to Nowhere"; Secret Bush Documents Revealed; Helping You Stay in Your Home; Squeezing A Swiss Bank

Aired March 4, 2009 - 17:00   ET



Happening now, Congress squares off over secret Bush administration memos, one of which concluded the president could use the military for searches without warrants on U.S. soil.

And for the first time, the world's highest criminal court issues an arrest warrant for a sitting head of state accused of crimes against humanity.

And a successful stockbroker brought Citigroup tens of millions in new business but was fired for falsifying her resume years earlier. She argues that the giant bank was given a second chance.

Does she deserve one?

I'm Wolf Blitzer.


Even as President Obama vows to crack down on wasteful spending, critics complain that some of the economic stimulus money that has already been passed is not -- repeat -- not being used wisely. One project in Missouri is being portrayed as America's latest bridge to nowhere.

Here's Drew Griffin of CNN's Special Investigations Unit.


DREW GRIFFIN, CNN INVESTIGATIVE CORRESPONDENT (voice-over): We are headed to the nation's first project paid for by the nearly $800 billion stimulus bill. It's a bridge across the Osage River in Missouri.

Where's that?

Fair to say, that's part of the story.

(on camera): All right. Show me where we're going now. We're here, right?

(voice-over): Drive 40 miles south of Jefferson City, then take a left, 10 miles on a two-lane rural road and we find your stimulus dollars at work -- a handful of truck drivers, a bulldozer and a crumbling 75-year-old bridge near the tiny town of Tuscumbia, Missouri.

It's about three hours from Missouri's second largest city, St. Louis, where the mayor is not happy about the bridge. He says stimulus money in his state is going to rural, far-flung projects almost forgotten -- until stimulus money started flowing from Washington.

MAYOR FRANCIS SLAY, ST. LOUIS, MISSOURI: This is an insult to the people of St. Louis. It's a violation of federal law. And I think that they're doing -- they're spending this money contrary to the intent of Congress.

GRIFFIN (on camera): Of more than $4 billion in stimulus money coming to the state of Missouri, $600 million will be spent on transportation projects. And the mayor of St. Louis says most of that money should be spent in high unemployment areas like St. Louis, putting people back to work.

But the Department of Transportation in this state will spend just $2 million in this city, only enough, says the mayor, to repave a road.

(voice-over): The Missouri Department of Transportation says $200 million will be spent around St. Louis and says the projects are on a "worst is first" priority.

The Osage River Bridge tops that list, even though it's difficult to find on a map.

David Cochran (ph), the project manager here, says there's no doubt it needs replacing.

(on camera): So they're getting a two-year jump -- whoa, there's a perfect example.

DAVID COCHRAN, PROJECT MANAGER: This is the stuff that will come down.


COCHRAN: That came down off there.

GRIFFIN (voice-over)

Up the road, at the Red Oak Inn, owner Wes Horton says Missouri has been promising a new bridge for years. It's only the federal money -- the Obama money, he says -- that has suddenly got things going.

WES HORTON, OWNER, RED OAK INN: I think they ought to spend all their money on things like this instead of buying the bankers out.

GRIFFIN: There are will be 30 jobs here directly connected to this $8.5 million project. But like the Obama administration, Cochran says this one project will be a jobs multiplier -- steel workers, concrete haulers, even the gas stations supplying fuel -- an estimated 245 jobs created or saved from this one rural bridge.

Bunk, says University of Missouri economist, Michael Sykuta.


There's been a lot of research done on the Great Depression and the public works projects of that era. And most of that right here now -- and the general consensus of my economic historians is it didn't work, that there were a lot of people employed, but it didn't create a net long-term growth in the economy.

GRIFFIN: St. Louis Mayor Francis Slay says the Osage River bridge project is just plain wrong, in the middle of nowhere and nowhere on the road to recovery.

Drew Griffin, CNN, Tuscumbia, Missouri.


BLITZER: New details emerging right now of once secret memos from Justice Department lawyers to the White House in the months after 9/11. And we're now learning that they said President Bush had the authority to subordinate key Constitutional rights, including free speech and freedom of the press.

CNN's Elaine Quijano is joining us now -- Elaine, what else are we learning about these once secret memo memos?

ELAINE QUIJANO, CNN CORRESPONDENT: Well, Wolf, these once secret Justice Department memos served to justify the Bush administration's war on terror. And their release this week is raising new questions about how far Bush officials thought the president could go in overriding Constitutional rights.


QUIJANO (voice-over): In advice to President Bush written just weeks after the September 11 attacks, then Deputy Attorney General John Yoo concludes that: "The president has ample Constitutional and statutory authority to deploy the military against international or foreign terrorists operating within the United States."

And that when it came to warrantless searches: "The Fourth Amendment does not apply to domestic military operations designed to deter and prevent further terrorist attacks."

That same memo also said free speech and free press rights could also be subordinated to fight terrorism and said the terror fight might require even broader exercises of federal power domestically.

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: These memos raise one key, unanswered question -- what actions did the Bush administration take based on this legal advice?

They said not much. But you can be sure Congress is going to want to know the answers to how these legal opinions were used out there in the real world. QUIJANO: In the waning days of the Bush administration, a top Justice Department official, Stephen Bradbury, repudiated the previous legal opinions, but said they were written: "In a time of great danger."

Senate Judiciary chairman, Democrat Patrick Leahy, wants a truth commission to investigate, not prosecute, he says, the country's post- 9/11 actions.

SEN. PATRICK LEAHY (D), VERMONT: I think that we're less safe as a result of the mistakes of the last administration's national security policies. I also believe that in order to restore our moral leadership, we must acknowledge what was done in our name. We can't turn the page unless we first read the page.

QUIJANO: But conservatives warn an investigation would effectively criminalize working for the government. David Rivkin worked at the Justice Department under Presidents Reagan and the first President Bush.

DAVID RIVKIN, FORMER JUSTICE DEPARTMENT OFFICIAL: So how would you exactly write this up in a way that it does not come to conclusions that reads like a document that an assistant U.S. attorney prepares to send to his boss to get a decision on whether or not to prosecute?


QUIJANO: Now, in the meantime, civil liberties groups are pushing for the release of any other secret memos dealing with anti- terrorism policies. A senior Justice Department official confirms the Obama administration plans to release more documents at some point -- Wolf.

BLITZER: All right. We'll be watching those, as well.

Thanks very much.

Good work, Elaine.

Let's go back to Jack.

He has "The Cafferty File" -- Jack.

CAFFERTY: General Motors, Wolf, looking for a handout again -- but this time, not here. This time, G.M.'s hoping that Europe will drop a few coins on the collection plate.

The struggling American auto giant says its European divisions could collapse within weeks unless governments across the pond step in to make sure it doesn't run out of money.

General Motors wants Europe to give them $4.2 billion, saying that the countries who host their car factories in Europe should share the burden. G.M. has had talks with the governments of Germany, the United Kingdom, Spain and Poland, among others, to ask for the money. (COUGHING)

CAFFERTY: Excuse me.

And say if they don't get it, it could mean the loss of up to 300,000 jobs across Europe.

This all comes after G.M. asked the U.S. government for an additional $16.6 billion in bailout money last month, on top of the billions it has already received.

As part of its restructuring plan, G.M. said it would lay off 47,000 people globally and close 14 plants in North America by 2012. The company also talked about reducing the number of brands -- cutting it in half, leaving only Chevrolet, Buick, Cadillac and GMC.

So here's the question: Should European countries come to the aid of General Motors?

Go to and you can post a comment on my blog.

I guess they have a lot of car plants over there, as well, Wolf, and they sell a lot of vehicles in Europe.


CAFFERTY: And they're facing the same kinds of problems that they face here.

BLITZER: They're not doing well there. And they're not doing well in Japan right now, or Korea, for that matter. This whole economic crisis is affecting car buyers all over the world.


BLITZER: All right, Jack.

Thank you.

She was fired by Citigroup and forced to return her sizable bonus after earning the company tens of millions of dollars -- all over a little white lie. At least that's what some are calling it.

Does the punishment fit the crime?

Also, Republican Party Chairman Michael Steele appears to be on the losing end of a very public battle with Rush Limbaugh.

Are Steele's days as the GOP chief numbered?

Some are asking that question. I'll ask Paul Begala and Nicole Wallace. They're standing by live.

Plus, outrage in India -- Ghandi's few simple possessions are being sold at auction. The government can't stop it and now there's only one hope. We'll update you on this story, right here in THE SITUATION ROOM.


BLITZER: The Obama administration is kicking off a new program aimed at helping up to nine million borrowers stay in their homes. It may make it easier for you to refinance your mortgage or modify your loan so you can make lower monthly payments. Details were released earlier today.

And our CNN personal finance editor, Gerri Willis, is joining us now with more.

A lot of people are really happy about this.

But explain what's going on -- Gerri.

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Well, Wolf, after weeks of waiting, the Treasury Department finally unveiled details of its $75 billion plan for solving the foreclosure crisis -- revealing a complicated program that its authors hope can ease the problem.


WILLIS (voice-over): Dotting the Is and crossing the Ts -- that is what government officials were doing today with a sweeping $75 billion plan to stem the foreclosure crisis.

PETER ORSZAG, WHITE HOUSE BUDGET DIRECTOR: Clearly, what we want to do is not only jump-start the economy, which will help homeowners, also, but get homeowners to stay in their houses, to the extent that's possible. And it's going to take time to work our way out of this problem.

WILLIS: The plan, dubbed Making Housing Work, helps two groups of homeowners. The first are people who are underwater in their mortgage -- that is, they owe more than their home is worth but are current in their payments. Their mortgages will be refinanced into a new loan. Their principle will not be reduced, but their payments will be lowered or they will be able to avoid painful rate resets.

The other program sets out to help homeowners who have lost a job or are behind on their payments and at risk of foreclosure. Those borrowers will be eligible for loan modification, in which the lender lowers the interest rate or principle owed. This will cut the monthly mortgage payment and more importantly, help avoid foreclosure.

Both programs require the candidates live in their homes and that mortgages be less than $730,000.

U.S. homeowners are hoping it does more than just bail out potential foreclosure candidates. They would like to see home prices stabilize.

JOHN TAYLOR, NATIONAL COMMUNITY REINVESTMENT COALITION: This is the first program where there's some meat that has been put on this bone, that there's a chance that homeowners can actually be assisted with a combination of their giving a little, the bank gives it a little, the manager of the asset -- the services -- give a little and the government gives a little, with the hope that will help literally millions of families stay in their homes.


WILLIS: So, Wolf, big hopes for that program. And, of course, the hope that it will help stabilize the whole economy.

But some fresh details, as well. We just got off the phone with folks from the Treasury Department just tonight, asking more questions about this plan -- asking how do we know it's really going to work?

And they told us, Wells Fargo, Chase, Bank of America -- these banks are already signed onto this program -- something different than what happened with some of the programs of the past. Hopes, of course, are high -- Wolf.

BLITZER: And Gerri is going to have a lot more on this and a lot of other useful information on her own show, Saturday mornings, 9:30 a.m. "YOUR BOTTOM LINE." A good show. You should watch it.

Gerri, thanks very much.

A lot of American homeowners need help. A report out today shows 20 percent of people with mortgages -- 20 percent owe more than their home is worth. That's more than eight million U.S. mortgages. More than two million homeowners are within 5 percent of that negative territory. California led in the number of these so-called underwater borrowers, followed by Florida, Texas, Michigan and Ohio. Those five states had more than half the nation's so-called negative equity mortgages.

California, by the way, has fared the worst. Homeowners there lost more than a trillion dollars in housing value last year alone. That's roughly half of the national decline. Wow!

A successful stockbroker fired by Citigroup for falsifying her experience on her application. She argues that the banking giant has been given a second chance by the government, now she wants a second chance, as well.

CNN's Brian Todd is looking into this story for us -- Brian, what are you finding?

BRIAN TODD, CNN CORRESPONDENT: Well, Wolf, this broker admits that she made an error in judgment on that application. But she and her attorneys claim this punishment just doesn't fit the crime.


TODD (voice-over): Even as the economy started to hit the skids, Faye Halloran hit her stride. A successful broker at Morgan Stanley, she was recruited last summer to join Citi-Smith Barney -- a division of Citigroup.

As Halloran brought her partner and tens of millions of dollars of managed assets over, it seemed a sweet deal for everyone.

Then during her first days at Citi, she filled out the required job application.

FAYE HALLORAN, FIRED FROM CITI-SMITH BARNEY: I made a decision, which was a mistake, to indicate that my educational background was something that it was not. It was out of -- basically out of embarrassment.

TODD: Halloran wrote that she graduated Albertus Magnus College in Connecticut. In fact, she hadn't even gone there.

Citi found out, fired her and took back most of her nearly $300,000 signing bonus.

Halloran's attorneys want arbitration, want her money back and want her reinstatement at Citi. They're considering a lawsuit. They believe what they call her error in judgment has no bearing on her ability to make money for clients, which is well documented. They also say she's never had any complaints filed against her and the punishment simply doesn't fit the crime.

Halloran says at 67, it also means she may not work again.

HALLORAN: This has taken years away from me, I think. I have -- I'm not sleeping. And I'm alone. I'm single. I have nobody to, you know, pat me on the back all the time and say, you know, it will get better.

TODD: Halloran's attorneys also say Citi's conduct is made worse by the fact that the company has taken such massive losses and received tens of billions of dollars in government bailout money.

Contacted by CNN, a Citi-Smith Barney spokesman said the bailout has nothing to do with this, that if someone, in Citi's words, "willfully falsified her background on numerous occasions, the company has to protect its clients."

Halloran's attorneys say she, in their words, misrepresented only on the application.

But an employment attorney says Halloran may still have a tough case to make.

JIM BATSON, EMPLOYMENT ATTORNEY: If she's too embarrassed to tell the truth about whether or not she graduated from college, what's going to happen if there's a trade error?

Is she going to be too embarrassed to bring that to her employer's attention?

Those are the kinds of arguments I know that she's -- her lawyers are going to face.

(END VIDEOTAPE) TODD: And Jim Batson says this financial crisis and the bailouts do play into this, but not in Faye Halloran's favor. He says because of scandals like the Bernie Madoff case, securities firms are under so much scrutiny, they can't afford to let what he calls a mistake like Halloran's go unpunished -- Wolf.

BLITZER: She's been a broker for a long time, right?

TODD: Right.

BLITZER: How did she get away all those years with hiding the fact that she never went to college?

TODD: She says it never came up. She entered as an office assistant at Merrill Lynch more than 20 years ago, worked her way into being a broker, got all the licenses she needed. She went from Merrill Lynch to Morgan Stanley. You know, Merrill Lynch -- her experience there was so long ago, we couldn't find anyone there to comment on her background.

When we called Morgan Stanley about this, they wouldn't comment on any of it.

BLITZER: Interesting. A real dilemma there.

TODD: That's right.

BLITZER: All right. Thanks. Good piece.

Brian Todd, thank you.

Brian always does excellent pieces for us.

Hundreds of thousands dead and millions of people displaced -- now the war in Darfur prompts unprecedented action. An arrest warrant issued for the sitting president, accused of crimes against humanity.

Plus, a train hits a truck and the truck hits a man -- an accident that seems unsurvivable. It's all caught on tape. We'll tell you what happened right here in THE SITUATION ROOM.


BLITZER: Zain Verjee is monitoring some other important stories incoming into THE SITUATION ROOM right now -- Zain, what's going on?

ZAIN VERJEE, CNN STATE DEPARTMENT CORRESPONDENT: Wolf, Ford Motor Company is taking new steps to eliminate more than $10 billion of its debt. It plans to offer debt holders cash and stock shares as it tries to recover from the automotive sales downturn. The company says it's restructuring the debt to lower its costs and stay competitive. Ford says it still does not intend to seek government loans.

A big surprise for scientists studying Saturn. They found a small moon hidden in one of the planet's dazzling outer rings. The International Cassini Spacecraft spotted the moon. It measures about a third of a mile wide. The moon is one of more than five dozen moons that orbit Saturn.

And, Wolf, you have to take a look at this incredible video from Turkey. Look at this. It's really hard to believe, but a man is alive after this devastating collision. You can see a train that hits a truck. And the truck -- see that -- hits the man. He ended up underneath the truck. You see him there lying on the ground, after the truck is pushed away by the train's impact. He had, amazingly, just minor injuries. The man says that he truly values his life. And that's not all, Wolf. He's saying he's going to marry his fiance after this.

BLITZER: Wow! That is...

VERJEE: Isn't that incredible?

BLITZER: That is incredible video. That's almost miraculous.

VERJEE: It is.

BLITZER: I should say. Wow!

VERJEE: It is. He -- he was very lucky. He had a few cuts on his face, but they interviewed him.


VERJEE: And he -- he was fine.

BLITZER: Amazing.

All right, Zain.

Thanks very much.

Happy he's OK.

Here's a question -- are his days numbered?

We're talking about the GOP chairman, Michael Steele. He dared to tangle with the conservative icon, Rush Limbaugh.

Can he hold onto his new job?

Paul Begala and Nicole Wallace -- they're standing by live.

And even Fidel Castro is now blogging. He insists he's still very much in the loop in Havana.

Plus, the death of a Washington intern turned his life upside down.

Now that there's a suspect, could things turn around once again for the congressman, Gary Condit?

We'll update you on what's going on with his life, right here in THE SITUATION ROOM.


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

Happening now, Secretary of State Hillary Clinton comes to the Palestinian Territories with a dual agenda -- politics and economic opportunity. We have details of what she's delivering. Stand by.

The Dow bouncing back -- ending a five session losing streak that took blue chips to a 12-year low. The Dow was up almost 150 points today. It gained more than 2 percent, as did the Nasdaq and the S&P.

And a deli owner takes his beef to Washington -- his bank took millions of government bailout dollars, but won't give him a cent of credit. Now, lawmakers are getting an earful.

I'm Wolf Blitzer.


It's the IRS versus UBS -- the tax authorities want to force the giant Swiss bank to reveal information about Americans who are allegedly hiding money abroad.

CNN's Jeanne Meserve has details.


JEANNE MESERVE, HOMELAND SECURITY CORRESPONDENT (voice-over): Bucolic Switzerland -- a favorite tax haven for generations.

SEN. CARL LEVIN (D), MICHIGAN: They make a living off secrecy. Bank secrecy is a cash cow in Switzerland.

MESERVE: Through the courts, the U.S. government has tried to force Switzerland's largest bank, UBS, to give up the names of U.S. tax evaders -- with only very limited success.

Today, a UBS executive told Congress that it's done all it can without violating Swiss privacy laws.

MARK BRANSON, UBS EXECUTIVE: But UBS cannot disclose information to the IRS that would put its employees at serious risk of criminal prosecution under Swiss law.

MESERVE: The use of Swiss banks by U.S. citizens is costing the U.S. Treasury a bundle. According to an internal memo written in December of 2004, UBS had approximately 52,000 accounts held by U.S. residents where the account holder did not file the appropriate paperwork with the IRS. The total value, 17 billion Swiss francs or $14.5 billion. UBS says as of this past September, U.S. residents held 48,000 accounts, only 1,000 had filed with the IRS. Senator Carl Levin says Swiss bankers went to great lengths to generate those accounts. LEVIN: Swiss bankers aided and abided violations of U.S. tax law by traveling to this country with client code names and cryptic computers, counter surveillance training and the rest of it, to enable U.S. residents to hide money in the accounts.

MESERVE: UBS testified it has closed 14,000 accounts held by U.S. citizens and in future, U.S. residents will only be permitted to maintain accounts fully disclosed to the IRS.


MESERVE: The Obama administration says it is committed to stopping the use of offshore tax havens but the UBS makes it clear that will not be easy.

BLITZER: With the Swiss banking system it never is. All right Jeanne. Thanks very much.

Let's get to our Democratic strategist and CNN contributor Paul Begala and Republican strategist Nicolle Wallace. She used to work in the Bush White House. Guys, thanks very much.

This whole notion of having what Senator Leahy calls a Truth Commission, to go back and look at the Justice Department and other officials of the Bush administration over what was done with interrogations or renditions, other aspects, listen to what Senator Leahy said today.


LEAHY: How did we get to the point where our premiere intelligence agency, the CIA, destroyed nearly 100 videotapes, evidence of how detainees were being interrogated, how do we get to a point where the White House would say, if we tell you to do it, even if it breaks the law, it's all right because we're above the law.


BLITZER: We heard Senator Feingold echo that kind of thought. What do you think about this notion going back, reviewing what happened in order to make sure mistakes, if there were mistake, aren't repeated?

NICOLLE WALLACE, REPUBLICAN STRATEGIST: Well the truth is, the Democrats control everything, so if they decide to look back and to dig deep into past actions, they'll probably get their way. I spoke to an adviser from the Bush years and she said there's a debate within the Democratic Party. There's a lot of pressure on the far left to prosecute and to get to the bottom of this and I think there are others in the Democratic Party who would like to move forward, who would have the anti-terror policies be forward looking and I think that's largely a debate taking place on the left.

BLITZER: And one of those others might be the president of the United States himself who says he wants to look ahead and not necessarily look back. PAUL BEGALA, DEMOCRATIC STRATEGIST: Absolutely. I think Pat Leahy, the chairman of the senate judiciary committee who we saw a moment ago has it right. He says you can't turn the page until you've read the page and you know what is on it. He's not calling for prosecutions.

Democrats, by the way, refuse to move an inch toward impeachment which is another avenue should they believe and they did that the president was doing wrong things there. They didn't impeach. They are not turning - Senator Leahy is not turning to prosecution. He's saying let's empower a commission, independent, non-partisan, like the 9/11 Commission, or maybe just one person and let them go and get the facts.

The story that we ran earlier on our broadcast said that the president of the United States believed and claimed that he had the authority to suspend freedom of speech. That's dictatorship and if he did believe that, we need to know it.

BLITZER: I want to move on but do you want to respond to that?

WALLACE: I would just say that you know I think since the beginning, Barack Obama's greatest challenges in being perceived as the leader of all Americans are going to be with the cranky people on the far left who really want to prosecute those who have kept us safe from attacks since that day on September 11.

BLITZER: Let's talk about Michael Steele, the chairman of the Republican Party. Your good friend, James Carville our political analyst, he was on the show Monday and given the eyeball to eyeball exchange between Michael Steele and Rush Limbaugh, he concluded that James, this.


JAMES CARVILLE, DEMOCRATIC STRATEGIST: I think that Michael Steele is done. He's over.


BLITZER: He minces no words James Carville. What do you think?

WALLACE: I don't know if you're an "American Idol" fan, at the beginning, there are a lot of singers and a lot of them are pretty terrible. That's where the Republican Party is right now. We're at the beginning of our season. By the end, there's a pretty good singer out there. By the time the Republican Party has to stand before voters again, it will have its act together. There's no debate. You know we are in the political ...

BLITZER: Want to make a prediction who that might be?

WALLACE: You know I don't know but I think that Rush Limbaugh has said something that hasn't been covered by everyone that's paying a lot of attention to him and that was to urge Republicans to get back to a basic, philosophical debate about the role of government and the nature of Americans and America. People who have been prosperous, people who have been successful, are going to be punished under this president. There's a system for dealing with people who have cheated. It's the law enforcement system. I think that Rush's real message to Republicans and the people that were there Republicans heard from that speech was to get back to a basic philosophical debate about the role of government.

BLITZER: Paul, listen to this exchange of questions that Robert Gibbs, the White House press secretary, was asked today.


UNIDENTIFIED MALE: You've engaged on the podium here with CNBC reporters as well as Rush Limbaugh, which seems to feed that process you're criticizing. It seems hypocritical.

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: It may be counterproductive, I'll give you that.


BLITZER: You were supposedly part of some left wing conspiracy when James Carville and Rahm Emanuel to have created this over Rush Limbaugh and the Republicans if you believe what was reported in the politico today.

BEGALA: I state the obvious and I state the truth. The truth is Mr. Limbaugh is the leader of the Republican Party. I stood right here with you after Michael Steele became the chairman and I said he will only really be the chairman if he takes on Rush Limbaugh. He'll have to contend with Rush Limbaugh. We saw how that worked. As you said, they went eye to eye and Governor Steele, who I like, not only blinked, he begged for mercy. That shows you who the boss is here, who the bull goose of the Republican Party is.

I will say I don't know who that journalist is, I'm sure he's a fine journalist but it is really something when the White House press corp. asks the White House press secretary and then answers them and then they attack him for answering their questions. They're asking him about Limbaugh. They're asking him about this clown of CNBC Santelli. He answers their questions and then they say, why are you answering our questions, Gibbs.

WALLACE: The bigger problem is that they are working on behalf of a president who promised an end to childish things and I can't imagine anything more childish than the White House chief of staff starting a food fight with a conservative radio host. It is totally diminishing.

BEGALA: The chief of staff did not start this. Mr. Limbaugh, as is his right under the first amendment because Barack Obama isn't suspending our right as Bush wanted to, Mr. Limbaugh said, I quote, I hope the president fails. He has a right to say that. But I have a right to answer that. If this blow hard is going to speak to 20 million people for three hours, I should get five minutes.

BLITZER: Paul Begala, thanks very much. Nicolle, welcome to THE SITUATION ROOM. We hope you'll be back.

WALLACE: Thanks for having me.

BLITZER: More crimes against humanity and more. The alleged atrocities of Darfur resulted in an unprecedented arrest warrant for a sitting president.

Plus Indians aghast at a plan to auction off personal items belonging to Gandhi. Only one thing can stop it.

Stand by. You're in THE SITUATION ROOM.


BLITZER: For the first time ever, the international criminal court is issuing an arrest warrant for a sitting head of state. Sudan's president Omar al-Bashir accused of crimes against humanity and war crimes in his country's Darfur region. Take a look at reaction coming in from around the world. Demonstrators in Sudan in support, but elsewhere, demanding his arrest. The Sudanese government said it will not cooperate with what it calls a white man's tribunal and the country is expelling as many as ten humanitarian groups from Darfur. CNN's Robyn Curnow has more.


ROBYN CURNOW, CNN CORRESPONDENT (voice-over): Victims' justice for the 300,000 killed in and more than 2.5 million people displaced in Darfur. Sudan's leader Omar al-Bashir still smiling and defiant, named in an arrest warrant issued by the world's highest criminal court.

LAURENCE BLAIRON, ICC SPOKESWOMAN: Five counts of crimes against humanity. Murder, article 7, paragraph 1A, extermination, article 7 1B, forcible transfer, article 7 1D. Torture, article 7 1F and rape article 7 1G.

CURNOW: A ghastly list of alleged misdeeds for a sitting president to face, accused of master minding war crimes and crimes against humanity against the citizens of Darfur. For now, he has been let off a genocide charge but that might change says the world court.

BLAIRON: Omar al-Bashir's official capacity as a sitting head of state does not exclude his criminal responsibilities nor does it grant him immunity.

CURNOW: The court's action touched off demonstrations in Brussels, London and Rome. While rallies were held in Sudan's capital.

ABDALMAHMOOD ABDALHALEEM, SUNDANESE REP. TO U.N.: It is like putting oil on fire. In the Sudan today, it is a day of national outrage. A day of national anger. And we -- all residents of Arabia not clear this debt.

CURNOW: No one expects to see al-Bashir in the dark at The Hague anytime soon. The international criminal court has no police force. It says it expects United Nations member states to arrest the Sudanese president when and if he leaves the country's borders. Or for Sudan to give up its leader to face international justice, something the Sudanese say they have no intention of doing.

Robin Curnow, CNN, Johannesburg, South Africa.


BLITZER: He possessed a lot of moral authority, but India's independence leader Gandhi didn't believe in material possessions. The very few personal items he did own, some are on sale. Let's bring back Zain. She's working this huge controversy that's blown up.

What's going on?

VERJEE: There's a real firestorm Wolf. Gandhi's very few simple possessions are now creating a huge fight.


VERJEE (voice-over): Going, going -- hold on. A California collector's running into opposition as he gears up to auction Gandhi's personal possessions.

JAMES OTIS, GANDHI MEMORABILIA COLLECTOR: The majority of the money that is received from this auction will be going to non-violence causes.

VERJEE: But many in India are outraged, saying Gandhi's things shouldn't be sold and the Indian government should bring them back to India. James Otis, also a documentary film maker, says if the Indian government promises to do more to help the poor --

OTIS: I would be happy to donate the items to the government.

VERJEE: On the auction block, Gandhi's iconic round glasses, he once said they gave him the vision to free India. His leather sandals are also being auctioned and his personal pocket watch. This has an alarm too. He liked to be punctual. A bowl and plate he once used is for sale also.

JULIEN SCHAERER, ANTIQUORUM AUCTIONEERS: This is the rare, once in a lifetime opportunity to own some of the few items he actual had.

VERJEE: Gandhi's non-violent struggle against British rule brought India independence. He was an inspiration to great leaders like Martin Luther King Jr. and Nelson Mandela. The Indian government is trying to stop is auction and even tried to buy the items without success.

TUSHAR GANDHI, GREAT GRANDSON OF MOHANDAS K. GANDHI: We don't have enough money to qualify entering the bidding process.

VERJEE: The starting price for bidding is 20 to $30,000 and it's likely to skyrocket. India is hoping wealthy Indian Americans will step in.

SANTSINGH CHATWAL, BUSINESSMAN: Get the items and bring it back home to India. We don't want to keep anything over here and they should be there.


VERJEE: How did collector James Otis get Gandhi's personal possessions? We're told he bought them from the descendants of Gandhi's own family as well as at other auctions.

BLITZER: Is it possible there could be a last minute deal worked out?

VERJEE: He met with Indian officials at the consulate in New York and it doesn't seem so. I'm hearing from Indian officials that essentially, they were told this would be a violation of Indian law as well as Gandhi's own will if they went ahead with this auction and they served a legal notice. What the Indian government is saying is that this would be a huge and insensitive move to the people of India. The auction is tomorrow around 3:00.

BLITZER: We'll know soon enough what happens. You'll update us.

VERJEE: The auction is supposed to be tomorrow around 3 o'clock.

BLITZER: All right. Maybe tomorrow we'll have the final word. Thanks very much.

There have been similar uproars over other national treasures. These bronzes are part of a set of 12 representing the Chinese zodiac. The artifacts were obtained during the war in the 19th century and were part of a recent auction. A Chinese art dealer placed a winning but phony bid for the items as a protest against their sale. For years, Greece has been demanding the returned of the Elgin Marbles. The massive carvings were taken from the Acropolis back in the early 19th century. They are now at the British museum which says it has no intention of giving them up. And Peru recently sued Yale University, demanding the return of more than 4,000 pieces taken from the ancient Inca site 90 years ago.

General Motors says its struggling European divisions could collapse soon. Jack Cafferty is asking whether European countries should come to the aid of GM.

And he's no longer running Cuba but Fidel Castro is keeping busy. He's blogging. What is he up to online? We'll tell you right here in THE SITUATION ROOM.


BLITZER: Let's check back with Jack for "The Cafferty File" -- Jack?

CAFFERTY: The question this hour is: Should European countries come to the aid of General Motors? Brian writes, "It depends on how desperately they want to save those 300,000 jobs. If I were a European and my government was bailing out an American company, I would be pretty upset."

Steve in Texas says, "So don't help them. Then just drop European production and see how they like the job losses. If those with are supposed to help those without, why shouldn't that apply to everyone? If the countries benefit from the employment by General Motors, why not help?"

Andy in Illinois says, "They shouldn't get anything from Europe or anyone else. What incentive exists for GM or AIG for that matter to do anything right when lemon socialism is the rule of the day?"

Alex says, "Of course they should. General Motors has learned shaking down governments is more profitable than making cars."

Steven in New York, "If Europeans deem it worthwhile to infuse billions of dollars into GM Europe, let them. The U.S. infusion of billions doesn't seem to have helped that much."

Vince in Atlanta writes, "I think the European countries should help themselves to General Motors. Pay GM take over the plants. That should help everybody."

Jane in Minnesota, "If there are European factories involved, they absolutely should."

Michael in California, "Sure, why should we be the only ones who reward failure?"

And John writes, "I suspect pretty soon GM will make their case for bailout to the African wild life population. This scam is going global."

If you didn't see your e-mail here, go to my blog at file and look for yours there among hundreds of others. Mr. Blitzer?

BLITZER: I guess it's called globalization.

CAFFERTY: Indeed it is.

BLITZER: All right. Jack, stand by.

On Capitol Hill, our senior Congressional correspondent Dana Bash is standing by with word that Karl Rove and other former White House officials are now being forced to testify? And they will?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: That's right. This has been a struggle for almost two years, Wolf. And now finally the House judiciary committee has gotten Karl Rove, the former Bush adviser and the former Bush counsel Harriet Meiers to testify at least first in private. To have a transcribed deposition that will be under oath. So it will be for the risk of perjury. They will do this with regard to that issue that was really very big and very controversial. The firing of prosecutors in the justice department under President Bush. So this is something that is just breaking. And we expect it to happen very soon.

BLITZER: Dana, I know you're getting more details for us. Thanks v that's a significant development.

They've left Congress to work for the House, but some of those former lawmakers still have pet projects in this year's spending bill. And they're getting millions of dollars in those projects. We'll tell you what we know.

A special delivery to the White House. Sure to excite first daughters, Sasha and Malia, details of their big surprise coming up.


BLITZER: For a time he was the most notorious Congressman in Washington. Gary Condit in the spotlight with the disappearance of a young intern named Chandra Levy. Her case lead to his downfall but now, an amazing twist coming way too late for the former lawmaker. CNN's Thelma Gutierrez has details -- Thelma?

THELMA GUTIERREZ, CNN CORRESPONDENT: Wolf, the former California Congressman has kept a low public profile since he lost his house seat seven years ago. While Gary Condit has not spoken to reporters about the arrest in the murder case, his 79-year-old mother told CNN life has been hell at times for her son.


GUTIERREZ: It was a hard fall. The former Democratic Congressman from Modesto, California, a five-term elected official in D.C. to virtual obscurity in Arizona, selling real estate part-time and as his son Chad told Larry King in 2005, ice cream.


CHAD CONDIT, GARY CONDIT'S SON: We scoop ice cream. We own a Baskin-Robbins.

LARRY KING, CNN ANCHOR: You own a Baskin-Robbins?

CONDIT: In Phoenix, Arizona. A family-run shop.


GUTIERREZ: A business that failed according to court records, along with the grueling bid back in 2002 to hold on to his house seat.

KAREEM CRAYTON, UNIVERSITY OF SOUTHERN CALIFORNIA: As a political matter, I think it pretty much killed his opportunities for being an incumbent candidate for office.

GUTIERREZ: The summer of 2001 was the beginning of the end of Gary Condit's political life. He came under intense scrutiny when 24- year-old intern Chandra Levy went missing and police suspected foul play. Police investigators told CNN Condit acknowledged having an affair with Levy, although he never said that in public.

CRAYTON: We have a murder here, and that's not something that I think any politician could shake.

GUTIERREZ: At one point, Condit came under fire for not being forthcoming with reporters about his affair with Levy. But Condit told Larry King in 2002 he was open with investigators.

GARY CONDIT, FORMER US. CONGRESSMAN: I thought what I was doing was the appropriate thing to do, just to help law enforcement. I thought it was on the up and up, that they were going to go out and find her. I really thought any day they would find her.

GUTIERREZ: They finally did, a little more than a year after her disappearance. Now police say they believe they may have found the man who killed her.

JEAN CONDIT, MOTHER OF GARY CONDIT: I hope it brings some relief to the levy family. We've always prayed for them and had great compassion.

GUTIERREZ: Condit's mother says her son and daughter-in-law, Carolyn, are living in northern Arizona and caring for their grandchildren.


GUTIERREZ: CNN has made several attempts to contact Gary Condit but his mother says at this point he's just not ready to talk about the case -- Wolf?

BLITZER: Thelma Gutierrez, thanks very much.

Let's go to Abbi Tatton, our internet reporter. Fidel Castro blogging? What's going on?

ABBI TATTON, CNN INTERNET REPORTER: Wolf, he's going online to let everyone know he was in the know about a recent cabinet shakeup in Cuba. Blogging on the site Cuba debate, he writes reflections of all about this. He did approve it saying the people who were ousted were unworthy, seduced by the honey of power. If you didn't believe it was him, they've included his signature as well in case you were wondering. Fidel Castro not seen in public since undergoing surgery in 2006.

BLITZER: Abbi, thank you.

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

New allegations of impropriety, or worse in a controversial spending bill.