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American Al Qaeda Suspect; Senate Stalls President's Timetable; Bin Laden's Son Reportedly Killed

Aired July 23, 2009 - 17:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


WOLF BLITZER, CNN ANCHOR: Happening now: mayors and rabbis arrested. They're among dozens nabbed in a wide-ranging corruption and money-laundering investigation in New Jersey. We're on the case.

And an all-American kid from the New York suburbs accused of plotting with al Qaeda to kill fellow Americans. Long-secret court documents reveal the shocking allegations. We have exclusive details.

And a distinguished African-American professor arrested in his own home -- was he a victim of racial profiling?

Will the president's comment that police acted stupidly come back to haunt the president?

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

Dozens of public figures, including mayors, are caught in a stunning corruption sweep. They belong to both major parties. Caught in the net along with them, some well-known religious leaders.

Let's go straight to CNN's Deborah Feyerick.

She's got all the details for us -- a pretty stunning development, Deb.

DEBORAH FEYERICK, CNN CORRESPONDENT: Absolutely. And, as a matter of fact, between the two federal investigations, Wolf, there were a total of 44 people charged. This is an investigation that has taken 10 years.

(BEGIN VIDEOTAPE)

FEYERICK: (voice-over): It began as an investigation into international money laundering, allegedly by a handful of prominent New Jersey rabbis with ties to Israel. It turned into a far-reaching probe of public corruption in New Jersey, as nearly 30 politicians and public officials, Democrats and Republicans, were rounded up in what prosecutors called the largest sweep of its kind.

WEYSAN DUN, "FORBES" SPECIAL AGENT: This case is not about politics. It is certainly not about religion. It is about crime, corruption. It is about arrogance. It is about a shocking betrayal of the public trust. FEYERICK: The two cases are linked by a single cooperating witness posing as a real estate developer, but, in fact, working for the government as New Jersey's top prosecutor.

RALPH MARRA, JR. ACTING U.S. ATTORNEY: "I don't donate, I invest," the C.W. would say in meetings, in parking lots, at restaurants, luncheonettes, diners, offices, basement boiler rooms and bathrooms. And the politicians willingly put themselves up for sale.

FEYERICK: Prosecutors say public officials, including mayors, deputy mayors, councilmen and a New Jersey assemblyman brazenly took envelopes stuffed with thousands of dollars in bribes in exchange for political favors. One of the most damaging statements allegedly made, Hoboken Mayor Peter Cammarrano III, who allegedly took $25,000 in bribes, telling the phony developer he would become a priority while, "The people who were against us the whole way, they get ground into powder."

Prosecutor Ed Kahrer has been working the case for 10 years.

ED KAHRER, "FORBES" PUBLIC CORRUPTION DIVISION: Corruption is not only pervasive, it becomes -- it has become ingrained in New Jersey's political culture.

FEYERICK: New Jersey Governor Jon Corzine criticized the corruption, while asking one of his staff to step down after he was investigated, but not charged.

GOV. JON CORZINE (D), NEW JERSEY: This morning, I asked for the resignation of Commissioner Joe Doria. And he has agreed to resign.

(END VIDEO TAPE)

FEYERICK: Now, prosecutors say that the same cooperating witness, the man posing as a phony real estate developer, the one who was paying those bribes to the public officials, well, he was also arranging for the money laundering -- the government paying out some $3 million as part of that scheme, which they believe laundered tens of millions overall -- Wolf.

BLITZER: A very shocking story.

Thanks, Deb.

Deborah Feyerick in Newark, New Jersey for us.

Meanwhile, not far away, in Long Island -- that's where he grew up, in the suburbs of New York -- a typical American kid who ended up, actually, in Pakistan, allegedly working for Al Qaeda. Now court documents reveal a stunning set of charges, including a plot to murder fellow Americans.

In a CNN exclusive, our senior international correspondent, Nic Robertson, has obtained a legal document with some extraordinary details.

What are you finding out -- Nic?

NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, Wolf, we're learning that Vinas, when he went to Pakistan, teamed up with Al Qaeda, with the help of what he describes as a New York friend. He bought a regular airline ticket, left on the 11th of September 2007, flew to Lahore in Pakistan, teamed up with Al Qaeda. And while with Al Qaeda, he agreed with them to become a suicide bomber.

They told him that he needed more training, so he went away to get more training. They told him that he'd need more religious training, which tends to give an indication here that Al Qaeda had other plans for him, other than to turn him into a suicide bomber.

He also went across the border to Afghanistan, into Kunar, attacked an Afghan military base there, carrying mortars and heavy machine guns to the top of a mountain. He also attacked a U.S. base in Afghanistan from the Pakistan side of the border, firing rockets. And he met with many Al Qaeda leaders and discussed with them Al Qaeda actions.

Toward the end of last year or toward last year, he left the border area and went to Peshawar, ostensibly to look for a wife, according to this court document. And it was just after that, that he was captured -- Wolf.

BLITZER: Captured by?

ROBERTSON: Captured by, presumably -- we don't know those details -- presumably, Pakistani authorities, who then passed him on to U.S. official, where his incarceration and interrogation began.

BLITZER: And it's a continuing process. Nic, thank you very much.

Let's get some more now on this American accused of working for Al Qaeda.

CNN's Mary Snow is picking up this story for us -- Mary?

MARY SNOW, CNN CORRESPONDENT: And, Wolf, as you can probably imagine, this comes as stunning news to many people in New York. Much about this man charged with being an American-born Al Qaeda recruit remains a mystery.

(BEGIN VIDEOTAPE)

SNOW: (voice-over): Exactly what led a terror suspect from this suburb of New York City to Pakistan remains unclear. Court documents unsealed Wednesday say 26-year-old Brian Vinas gave expert advice and assistance to Al Qaeda about New York's Long Island Railroad and the New York City Transit System that sparked heightened security.

Documents also say he helped launch a rocket attack against a U.S. military base in Afghanistan.

His mother did not talk to reporters. Outside his father and stepmother's house, a neighbor says it's all a mystery.

LAURA TOMASELLO, VINAS' NEIGHBOR: I never saw the son. I have always known the parents. They're excellent, excellent people -- church-going people.

SNOW: New York Congressman Peter King, who's on the House Intelligence and Homeland Security Committees, says he was briefed on Vinas' arrest in November and says Vinas is cooperating with authorities.

He says Vinas is the son of South American immigrants who were Catholic.

REP. PETER KING (R), NEW YORK: He was a Boy Scout. He was an athlete. And then became a Muslim convert, went to Pakistan for training and took up bombs against the United States.

And it shows to me -- or it reinforces my belief that we have a real threat in this country for homegrown terrorism.

SNOW: But the imam of this mosque on Long Island that Vinas attended says he was not aware of any radical activity. He said Vinas was known here as Ibrahim, a convert who showed up about four or five years ago. The imam says he didn't know Ibrahim well, but noticed he disappeared more than a year ago.

NAYYAR IMAM, ISLAMIC ASSOCIATION OF LONG ISLAND: I have a feeling that everything what he have done, he had done when he left the mosque, about a year-and-a-half ago.

SNOW: And with Vinas' capture, one former FBI official, who is now a CNN contributor, says there's significant information to be learned.

TOM FUENTES, FORMER FBI OFFICIAL: How he was radicalized, which internet sites he actually went to, how he made contact in Pakistan with the people that eventually led him to the training camps, who trained him, how they trained him.

(END VIDEO TAPE)

SNOW: And I spoke with the attorney representing Vinas, who would not discuss the charges. He gave us this statement, saying: "We would just ask the public to withhold judgment until all the facts come out in this case" -- Wolf.

BLITZER: Mary Snow, thank you.

Shocking details, indeed.

Let's go to Jack Cafferty once again.

He's got The Cafferty File -- Jack.

CAFFERTY: Well, it isn't going to happen, it doesn't look like. It's highly unlikely now President Obama is going to get his way when it comes to Congress passing his health care reform before the August recess.

Late this afternoon, Senate Majority Leader Harry Reid kind of sealed the deal. He said there will be no vote in the Senate until the fall on health care.

House Speaker Nancy Pelosi earlier insisted the Democrats had enough votes in the House to pass their health care bill, but she didn't schedule a vote yet. Pelosi suggested that she might keep the chamber in session past its scheduled vacation, if necessary, saying that she wants to see a bill.

However, one top conservative from the so-called Blue Dog group of Democrats says even though they're making progress in the negotiations, "We have a long way to go."

And Republicans don't think it's going to happen, either. House Republican whip Eddie -- Eric Can -- Eddie Cantor, I'm showing my age -- Eric Cantor says, "If they're going to get this passed next week, it's going to have to be a changed bill."

Although the president didn't repeat his demand last night that Congress pass legislation before the August recess, the White House insists the time to act is now. It's likely that Mr. Obama realizes time is not on his side if this thing gets pushed back: "If you don't set deadlines" -- this is the president talking -- "If you don't set deadlines in this town, things don't happen. The default position is inertia."

The House is scheduled to leave town Friday. The Senate will leave the week after.

The question is this -- should Congress remain in session until it completes the health care legislation?

Go to CNN.com/caffertyfile and post a comment on my blog.

The only other guy old enough to remember Eddie Cantor is probably you.

BLITZER: Eddie Cantor and Eric Cantor.

I wonder if they're related?

You know, Eddie Cantor was a great singer in (INAUDIBLE)...

CAFFERTY: No. I'm sure they're not related.

(LAUGHTER)

BLITZER: You never know. It's possible.

CAFFERTY: Well, I'd bet against it. But that was my -- my era.

BLITZER: Let's check with Eric Cantor's office.

CAFFERTY: All right. BLITZER: We'll find out.

CAFFERTY: All right.

BLITZER: Coming up, the president says police acted stupidly in arresting an African-American scholar -- there's a political storm gathering over those remarks.

Plus, a CNN exclusive interview with the actress and goodwill ambassador, Angelina Jolie. She's in Iraq right now -- why she says it's such a critical time there.

(COMMERCIAL BREAK)

BLITZER: A potentially significant setback for President Obama's health care reform efforts. He's been pushing hard for the Senate to get some quick action done, but many Senators have pushed back. And now the Democratic leader, Harry Reid, has put off a vote until after -- after the August recess.

Let's go to our senior Congressional correspondent, Dana Bash -- Dana, this is a setback for the president.

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: That's right. And, really, what happened, Wolf, is that Democratic leaders trying to meet the president's deadline crashed into the reality of what's going on behind me -- bipartisan negotiators saying that they need more time and really insisting that they are going to take that time.

So a Democratic source tells me that the Democratic leader had no choice but to acknowledge that reality.

(BEGIN VIDEOTAPE)

BASH: (voice-over): The writing was already on the wall, but this made it official -- the Senate will miss the president's deadline for a health care vote by next month.

SEN. HARRY REID (D-NV), MAJORITY LEADER: I think that it's better to have a product that is one that's based on quality and thoughtfulness rather than trying to jam something through.

BASH: Why the delay?

A big reason is disagreement among the president's fellow Democrats. In fact, inside this room, just before that announcement, Democrats trying to hash out health care legislation had what sources describe to CNN as a lively and contentious meeting -- Democrats voicing objections and differing opinions to many aspects of what bipartisan negotiators have been working on.

SEN. JAY ROCKEFELLER (D), WEST VIRGINIA: It was the most honest discussion of agreements and disagreements that I've been a part of in the last three months.

SEN. MAX BAUCUS (D), MONTANA: It gave me a very good opportunity to learn from senators on the committee, you know, what they want and what they don't want, what their real concerns are.

BASH: Concern and Democratic disagreement continues to delay a House vote, as well. House Democratic leaders had their own testy meeting in this room.

REP. JOHN CLYBURN (D-SC), HOUSE MAJORITY WHIP: It might be one of the most contentious.

BASH: The Democratic divide here -- conservative Democrats want to slow down, saying their party's plan spends and taxes too much without sufficiently cutting medical costs. Liberal Democrats, including members of the Black Caucus, disagree.

REP. GWEN MOORE (D), WISCONSIN: So we're concerned about the efforts to delay and frustrate this process.

BASH: But unlike the Senate, for now, House leaders appear determined to pass a bill by August recess.

CLYBURN: We leave here without doing this, nobody is going to interpret our going home as listening to people. All of you will report that we went home to take a vacation in August without having done it. That's the headline.

(END VIDEO TAPE)

BASH: Now, just moments ago, the White House chief of staff, Rahm Emanuel, left what we are told -- it was a three hour meeting in the House speaker's office with those rebellious conservative, so- called Blue Dog Democrats. But, you know, even leaders in the House, Wolf, they're watching what's going on in here -- in the Senate, because they're hoping in the House that there's some kind of bipartisan agreement that gives them a glimmer of hope and some momentum to move things through in the House, even if the Senate is going to be delayed.

BLITZER: He served in the House for a long time so he knows a lot of those guys personally.

Dana, thanks very much.

Let's bring in our chief national correspondent, the host of CNN's "STATE OF THE UNION," John King.

What's your take, this delay -- Harry Reid says, you know what, they're not going to have a vote before the August recess. And there's going to be a four week recess.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: A four week recess that is going to -- now going to be dominated by the health care debate, especially in those vulnerable Democrat -- conservative Democratic districts.

We're going to see more TV ads. We're going to see more grassroots lobbying. We're going to see a test of this president, Wolf. This is the first big test of his presidency, because the Republicans see a political opening here.

But forget them for a moment, no disrespect. This is about the Democrats. As Dana noted, you have some Democrats in the Senate complaining, how come we can't get into the Finance Committee negotiations, we have a stake here, too?

But it's a small group trying to negotiate. And you have what I'll call BTU deja vu in the House. You remember the debate in the Clinton administration. House members were forced to vote on higher energy taxes then the Senate never took up the legislation.

So in the House, even though they have a bill and they have roughly enough votes -- they have some work to do, but they're further along -- they don't want to vote, either, because they don't want to go on the record in favor of higher taxes not knowing what the Senate will do.

So there is an internal Democratic problem right now. The president still has -- he's the president. He still has a big majority. But we'll see if this gets better or worse over the recess. That its huge challenge.

BLITZER: You remind me about the BTU. That was the British thermal unit.

(LAUGHTER)

BLITZER: I didn't understand it then. I still don't understand it now and it went away, despite the Clinton White House saying this was a good idea for a new energy tax.

KING: Right.

BLITZER: You just came back from Dallas, Texas. And you got a chance to speak to some folks out there.

What are they saying to you about all this?

KING: Well, it's an odd mix and it does reflect the depth of this problem. One of the gentlemen we met was a 23-year-old, a young man, who just found out he had leukemia a few months ago. He's a Democrat. He voted for Obama. He just shook his head, Wolf.

And I said, what would it mean to you if the Democrats have all these votes -- big majorities -- and they can't pass this?

And he was shocking his head. He said, look, this is life and death to me. I need this done.

But others say delay might get you to a better place. Many believe delay might mean the president might have to negotiate on the public option -- put in a trigger instead of having it right away. That's one of the proposals the conservatives want to put on the table.

The other thing that scares some people, including where he was today, at the Cleveland Clinic, is the president says you can get a lot of the savings by squeezing Medicare and squeezing Medicaid.

In Texas, only 38 percent of the doctors will now participate in the Medicaid program, because they say already the reimbursement rates are too low.

So if you're going to squeeze that, the fear in the State of Texas is you'll have even fewer doctors doing what the president wants most -- getting care to those who don't have insurance or who just have the bare minimum or a government plan.

So many people you talk to say if a couple more months means a better plan, that's great. But in this town, Wolf, as you know, a couple more months means an uncertain political environment, which could work against the president.

BLITZER: Who's on "STATE OF THE UNION" Sunday morning?

KING: Well, we're going to discuss this issue. We have a great way to do it. We're going to sit down with the House speaker, Nancy Pelosi. She's in charge of getting this through the House. And we also have a Sunday exclusive with the Senate Republican leader, Mitch McConnell. And he has the key decisions to make. Right now, again, the Republicans feel strong right now.

But is there a moment where there will be pressure on Republicans to try to find some bipartisan way out?

So we'll figure that out.

BLITZER: A good lineup, CNN, 9:00 a.m. Sunday morning.

KING: Thank you.

BLITZER: John King, thank you.

Encouraging worlds from Vice President Biden to a former Soviet republic -- a promise to stand with a country that just last year went to war with Russia. But it -- but it was laced with a dose of tough love.

And the catch heard around the world -- how one outfielder's magic glove saved the first perfect game in years. We'll explain right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

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

WHITFIELD: And, Wolf, a wave of optimism over Wall Street today. The Dow Jones Industrial Average zoomed past 9000 for first time since early January. The Dow gained 188 points to end the day at 9069. The investor excitement is driven, in part, by the third straight monthly increase in sales of existing homes. Home sales were up 3.6 percent in June. And words of assurance and a dose of tough love from Vice President Joe Biden to the former Soviet Republic of Georgia. A year after its failed war with Russia, Biden said Russia should withdraw from two separatist Georgia regions, but Georgia should give hope of ever reclaiming those regions by force.

(BEGIN VIDEO CLIP)

JOSEPH BIDEN, VICE PRESIDENT OF THE UNITED STATES: Ladies and gentlemen, I know that some are concerned -- and I understand it -- that our efforts to reset relations with Russia will come at the expense of Georgia. Let me be clear -- they have not, they will not and they cannot.

(END VIDEO CLIP)

WHITFIELD: Biden is on a four day mission to Georgia and Ukraine in a show of support for the two countries.

And it happens only once in a blue moon -- and maybe not even that often. White Sox pitcher Mark Buehrle threw a perfect game to lead Chicago to a 5-0 win over Tampa Bay. But it almost didn't happen. Take a look at the video of center fielder DeWayne Wise reaching over the wall, right there, to save a home run in the ninth inning. Bam. Right there. A perfect game is when a pitcher completes at least a nine ending game -- inning game, rather -- without a single opposing player reaching base.

And I know, Wolf, you needed me to explain that to you.

BLITZER: Do you know the difference between a no hitter and a perfect game, Fred?

WHITFIELD: No. Give it to me.

BLITZER: You don't know?

You just explained what a perfect game was.

WHITFIELD: Yes, I know. Well, you know, I don't do baseball.

BLITZER: A no hitter is a little different. It's good, a no hitter, but it's not as good as a perfect game.

But did you see that catch?

WHITFIELD: That was quite the reach.

BLITZER: Yes. That was -- that was definitely a top 10.

WHITFIELD: It was impressive.

BLITZER: Maybe number two. The pitcher is number one.

By the way, you know that the president of the United States is a huge White Sox fan. You saw him wearing the mom jeans with the White Sox jacket over...

WHITFIELD: Oh, the mom jeans.

(LAUGHTER)

BLITZER: ...over at the All Star game.

You see the White Sox jacket over there?

WHITFIELD: Uh-huh.

BLITZER: Yes. He called Mark Buehrle to congratulate him right after the perfect -- that perfect game, the first time in five years. He said congratulations.

WHITFIELD: Wow! Very nice.

BLITZER: You get a...

WHITFIELD: Very nice.

BLITZER: You get a call like that from a hometown fan who happens to be the president of the United States.

WHITFIELD: Everybody likes that.

BLITZER: Very cool.

WHITFIELD: Quite impressive.

BLITZER: All right. Congratulations to that pitcher, Mark Buehrle.

A distinguished African-American professor arrested at his own home -- was he a victim of racial profiling?

Will the president's comment that police acted stupidly come back to haunt him?

And a barrage of insults from North Korea aimed at Hilary Clinton -- what did the secretary of State say to set off the communist regime?

Plus, get this -- why are The Beastie Boys dropping my name in their brand new single?

We're going to play it for you. You'll find out.

(COMMERCIAL BREAK)

BLITZER: You're in THE SITUATION ROOM.

Happening now, the swine flu pandemic is growing and growing and the U.S. is still working on a vaccine.

Where do things stand right now? I'll ask a renowned infectious disease specialist, Dr. Anthony Fauci. He'll be here in THE SITUATION ROOM.

And they're called the healthy way to smoke, but are electronic cigarettes another example of something that's simply too good to be true?

And two mules and a barge canal in Pennsylvania -- why Homeland Security thinks they are a danger to national security.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

There is word that a U.S. airstrike may have killed one of Osama bin Laden's sons.

CNN's Brian Todd has been digging into this story -- Brian, what are you learning?

BRIAN TODD, CNN CORRESPONDENT: Well, Wolf, a U.S. counterterrorism official tells us Saad bin Laden, one of Osama bin Laden's oldest sons, was likely killed. This official tells us Saad bin Laden, likely in his late 20s, is believed to have been killed earlier this year in Pakistan by a U.S. Predator drone.

This official said: "Unless you have DNA or other hard evidence, you don't know for sure, but that other intelligence led analysts to believe he's dead."

Saad bin Laden was active in Al Qaeda, but not considered a major player -- maybe involved in low level activities, possibly some training.

Still, at one time, according to U.S. officials, he is believed to have been part of a small group of Al Qaeda members managing the group from Iran.

Now, former National Intelligence director Mike McConnell said that after being held in Iran for a number of years under house arrest, Saad bin Laden left Iran last year and made his way to the border region between Pakistan and Afghanistan and settled there.

There are indications he was not targeted personally. A U.S. counterterrorism official told us he was simply at the wrong place at the wrong time -- Wolf.

BLITZER: If he was killed, in fact, he was at the wrong place...

TODD: That's right.

BLITZER: ...from his perspective at the wrong time, Brian.

TODD: That's right.

BLITZER: Brian, thank you. He also had a closer relationship, by the way -- Osama bin Laden -- with another one of his sons, right?

TODD: That's right. Now, Saad bin Laden, out of 20 children of Osama bin Laden, Saad bin Laden was, I believe, the third oldest son. But two of his older brothers, Omar and Abdullah, had broken with their father -- rejected him years ago. Omar spent years speaking out against his father. Saad bin Laden, of course, followed his father into al Qaeda. There are no indications whether he was anywhere near Osama Bin Laden when he was apparently killed.

BLITZER: Brian Todd, thanks very much, for that report.

A barrage of insults from North Korea aimed at Hillary Clinton. It followed some tough talk by secretary of state. Let's go live to our foreign affairs correspondent, Jill Dougherty.

Jill, what's behind the mudslinging?

JILL DOUGHERTY, CNN CORRESPONDENT: Wolf, over the years North Korea has had some pretty bizarre things to say about the United States, but these latest comments about Hillary Clinton are really over the top. It all started when Secretary Clinton explained how she deals with Pyongyang.

(BEGIN VIDEOTAPE)

DOUGHERTY: Maybe it's the mother in me, secretary Hillary Clinton said in an interview with ABC News, North Korea, she said, will do anything to get some attention.

HILLARY CLINTON, SECRETARY OF STATE: The experience that I've had with small children and unruly teenagers and people who are demanding attention, don't give it to them.

DOUGHERTY: That hit a nerve. Clinton and North Korean officials were attending the same conference. Pyongyang threw it right back at her calling Clinton's comments vulgar. "She's by no means intelligent," they said. "She's a funny lady who sometimes looks like a primary schoolgirl and sometimes a pensioner going shopping." Clinton didn't respond, but her spokesman did.

P.J. CROWLEY, STATE DEPT. SPOKESMAN: What is vulgar is that the North Korean government chooses to harvest missiles rather than enough food for its people, and what is unintelligent is the path that North Korea's government has chosen, it's a dead end.

DOUGHERTY: When it comes to North Korea, Hillary Clinton is not amused.

CLINTON: North Korea's ongoing threatening behavior does not inspire trust, nor does it permit us to sit idly by.

DOUGHERTY: After the north conducted an underground nuclear test in May and shot off missiles, the U.S. rallied the United Nations to impose strong sanctions on the north's leadership and on key officials in its nuclear program. Pyongyang, secretary Clinton says, has no friends left. And a senior administration official claims the north is squirming because of the sanctions. And yet Secretary Clinton says if North Korea's leader Kim Jong-Il follows through on promises he made in 2006, well, this war of words might end.

CLINTON: We are very open to a positive relation with North Korea on the condition that they denuclearize.

(END VIDEOTAPE)

DOUGHERTY: Secretary Clinton is offering the north a package of incentives that could include normalizing relations but only if the north stops its nuclear program, and as she put it, completely irreversibly and verifiably. Wolf?

BLITZER: Thanks very much. Jill Dougherty at the state department. When we come back, new developments unfolding right now in the aftermath of what the president said last night about Professor Henry Louis Gates of Harvard University, namely, that the police acted stupidly in arresting him. The police now just had a news conference. We'll update you on that and more when we come back.

(COMMERCIAL BREAK)

BLITZER: A distinguished African-American scholar arrested at his own home as a controversy blows up amid accusations of racial profiling. The president lashes out at police. But did he speak too soon? Let's bring in our senior political correspondent, Candy Crowley.

Candy, the story as we say in the business has legs precisely because what the president said last night.

CANDY CROWLEY, CNN CORRESPONDENT: When the president speaks, it gets at least another day's story. Beyond that, what you have here is the law, race, and politics. It's hard to get much more combustible than that, and last night, the president did step into the mix.

(BEGIN VIDEOTAPE)

CROWLEY: For starters, the president said he didn't know all the facts and was a bit biased because he's friends with Harvard scholar Henry Louis Gates.

PRES. BARACK OBAMA (D), UNITED STATES: That the Cambridge police acted stupidly in arresting somebody when there was already proof that they were in their own home.

CROWLEY: It is a fairly rare and pretty hard rebuke by the president of the United States.

UNIDENTIFIED MALE: They were really stunned by being -- not having the greatest regard for -- actually, taking his comments to heart. So, I would say to you that they were -- they were very much deflated. CROWLEY: By way of clarification, White House spokesman Robert Gibbs told reporters today the president was not calling the officers stupid, okay? This may be a distinction with no difference.

Charges against Professor Gates were dropped. He remained furious. Sergeant James Crowley said he did nothing wrong. It's still unclear what happened. And the case has exploded in the political arena.

UNIDENTIFIED MALE: That's just not the way to go.

UNIDENTIFIED MALE: Sit here and read a police account and automatically assume that it is absolutely, positively correct 100%.

UNIDENTIFIED MALE: Oh, no, no. I agree with you.

UNIDENTIFIED MALE: He can also have his own spin.

UNIDENTIFIED MALE: But it's the record.

CROWLEY: As the city tries to sort things out, the mayor of Cambridge is happy to decline repeated questions about whether her police acted stupidly.

MAYOR E. DENISE SIMMONS (D), CAMBRIDGE, MASSACHUSETTS: Well, what I understand is that it was an unfortunate circumstance of what happened and we're still trying to -- I am still trying to talk to all the individuals that were involved to find out what happened, how it happened and how could we have prevented it from happening.

CROWLEY: The been there, done that category, former New York City Mayor Rudy Giuliani who saw a fair amount of racially charged incidents involving police and minorities, he seems to give the president a pass.

FMR. MAYOR RUDY GIULIANI, NEW YORK: The president is a friend of the man who's arrested so I think you give him a little scope there.

CROWLEY: No pass in from the National Republican Senatorial Committee which has putting up a web ad, asking whether the president should have taken sides. People who click on the ad are take on the NRSC website to record their thoughts.

(END VIDEOTAPE)

CROWLEY: A spokesman for the NRSC says the group is not trying to politicize the issue, but if you go to their website, there is a request for donations. It's also an opportunity for them to collect e-mail addresses for future fund-raising and the like.

BLITZER: Candy, don't go away. We want to continue this conversation with our CNN contributors, the democratic strategist Paul Begala and the republican strategist Alex Castellanos.

Did the president go too far last night in saying that police acted stupidly? PAUL BEGALA, DEMOCRATIC STRATEGIST: Well, no. I think actually Rudy Giuliani and candy make a good point. This is his friend. Henry Louis Gates Jr. is one of the foremost scholars in America. I think anybody who puts themselves in that situation puts themselves in dr. Gates' shoes would be pretty angry, frankly. And actually, one of the criticisms I've had of President Obama is he's a lit tool cool, a little too Mr. Spock, not enough passion. Now we've seen some passion. Maybe he'll apply that to health care and other things, but I think it's good when a powerful person is still angry at potential abuse of power. You know, I think that's a good sign that he's still on our side even though he's the most powerful man in the world.

BLITZER: In an interview he just conducted with ABC News, he seems to be backing off a little bit, Alex, reading now from an associated press story that just moved in from Cleveland, he said he doesn't take back his words but he allowed and understood that the sergeant who made the arrest is, quote, an outstanding police officer. I have to say, I am surprised by the controversy surrounding my statements because I think it was a pretty straightforward comment that you probably don't need to handcuff a guy, a middle-aged man who uses a cane who's in his own home. So, the president explaining a little bit, you know, why he said it was stupid.

ALEX CASTELLANOS, REPUBLICAN STRATEGIST: I've had the privilege of meeting Henry Gates. Wonderful man, incredibly bright, just seems so unjust that something like this would happen to him. But, you know, the president is the president of all of us and the United States and supposed to be impartial. Prejudging something like this makes him look a bit reckless. And when he's already out there trying to rush through a health care plan that nobody's read or thought through, now he's prejudging a situation like this, I don't think it helps him.

CROWLEY: Well, listen, regardless of whether you feel he should have gotten into it or out of it, I think we can say safely had he not said it this case and this situation wouldn't have come up, and he could have easily said, listen, I don't know the facts, he's a friend of mine, but let' my is a we all know that racial profiling still happens and it was an unfortunate incident. He didn't have to say they acted stupidly and I think he would have been clear of the political fire.

CASETLLANOS: Raises the question, is there too much on his plate, is there just so much coming at this president that all of a sudden he kind of ready, fire, aim, and I think we saw a little of that.

BEGALA: A lot of my conservative friends are very worried about government power when it's used to help working people, like providing health care. Here's power arresting a man in his own home for no apparent crime, and I like the fact that the president is annoyed by that. Candy is right. Not something his political advisers scripted them to do. An opportunity cost, and I'm sure they wished it didn't happen. But I like seeing the human side of someone so cal benchmark rated and controlled as President Obama. BLITZER: We also saw something today at a town hall meeting in Cleveland, Ohio amidst reports that his healthcare initiative is having some serious problems in congress and among the American people. The president got passionate.

OBAMA: I have to tell you. I have to say that folks have a lot of nerve who helped get us into this fiscal hole and then start going around trying to talk about fiscal responsibility. I'm always a little surprised that people don't have a little more shame about having created a mess and then try to point fingers, but that's another topic.

BLITZER: Alex, what do you think?

CASTELLANOS: He's not blaming Republicans. This is the fellow who said last night he wouldn't do that. Republicans got kicked out of office because we were driving 15 miles above the speed limit on spending. We didn't do a good job on that. Guess what? Now President Obama is the president. It's his job. He's driving 100 miles above the speed limit, that's no excuse, and endangering people. A Gallup survey is out today say two-thirds of independents think this president is spending too much and expanding government too much. That's a real political problem.

BLITZER: When you talk about independents, that's a key factor right there.

BEGALA: Absolutely. That's the group that won him the white house. That's why he's saying compared to what. And this struck me as very Reaganesque sort of attack. It wasn't bitter and angry and finger-pointing. It was funny. It was very sort of mild ridicule, but also rebuking what he believes is a failed policy of the past, sounded exactly like the Gipper would have.

CROWLEY: Look, there's politics and then there's policy and this was politics, clearly, and it also helps the president who doesn't want to talk about the Democrats who are standing in his way because that's the real problem here.

BLITZER: You were with President Clinton and Hillary Clinton in '93 and '94 when they began to see health care reform slipping, slipping, slipping away. Honestly, how do you assess the situation right now?

BEGALA: It's the single hardest domestic issue, except race, that we've had for the last 75 years. And this guy's got tough sway. I remain an optimist because I do think congress working more cooperatively now than they did a generation ago. Industry is more cooperative than they were a generation ago. So, I still have some real hopes. But this is the hardest issue of all. And one thing I think we learned from President Clinton is all we did was try to describe the Clinton plan. When President Obama shifted last night not only to describing his plan but reminding people there is an alternative, which is the status quo, which he wants to hitch up to the Republicans and say -- he said it last night. There is a plan that will raise costs, bankrupt the country and kick you off your insurance. It's called the status quo. That's what will happen if we don't change. That contrast is essential. We lost that contrast in '93, '94. This president has learned from my mistakes.

CASTELLANOS: The truth is Paul is so embarrassed about this health care plan he's trying to change his identity and grow a beard.

BLITZER: He'll be in the witness protection plan. The big difference, of course, is Harry and Louise this time are with the president. That time they were against him.

BEGALA: Absolutely.

BLITZER: Thanks very much. We'll continue this conversation for weeks and weeks to come.

From the glamour of Kahn to the gritty realities of Iraq in transition, the actress, Angelina Jolie, tours an Iraqi refugee camp in her role as a U.N. goodwill ambassador and shares her insights in an exclusive interview with CNN that you're about to see.

And what could I possibly have in common with the Beastie Boys? It's all in a name and we'll tell you. You'll hear the song in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Life is pretty good. I've chatted with Leno, danced with Ellen Degeneres, and now my name has been dropped in a new rap song. The Beastie Boys have a brand-new single entitled "Too Many Rappers." Late in the track, if you listen very, very closely, well -- just listen.

I hope you got that. Something about a hologram with Wolf Blitzer.

JACK CAFFERTY, CNN CORRESPONDENT: I got it. I got it. How did you find out about that?

BLITZER: I can't tell you how many people love the Beastie Boys, and they were so excited. Your name. They mentioned your name in a new song.

CAFFERTY: Do you listen to their music?

BLITZER: No. Beastie boys, I'm not big on. I do like Lady Ga Ga, though.

CAFFERTY: I'm sure you do. The question this hour, should congress remain in session until it completes the health care legislation? It's not going to happen, but it's fun to dream, isn't it?

Phil in Georgia, "They ought to stay in session. They're on a roll. Nothing is a greater motivator than vacation being delayed until the bills are passed. The perfect time is now for health care, and we're going to need everyone to do their part in order to make it over the finish line."

Jerry in Georgia, "No, congress should not remain in session. Congressmen have to go back to their districts and hear from their constituents on this critical issue. Setting an unrealistic target date is naive and does not give adequate time to review all of the issues, let alone just read the multi-thousand page bill." That sounds like it was written by a congressional aide.

Gretchen in Denver, "Congress has some nerve taking a vacation when this country needs so much. They should stay and work until they have the health care bill done and passed. What a bunch of brats. I think they're taking their voters for granted."

Risa in Chicago, "No. Health care is a complex, multi-facetted issue -- rushing through short sighted band-aid legislation won't solve anything. I for one am tired of political expediency and unrealistic demands for instant fixes trumping a more rationale long- term consideration of the solutions."

Jennifer writes, "Yes, as a small business owner struggling to provide insurance to my employees, I don't get a vacation and neither should they."

James writes, "In my job we finish before we leave. A vacation sounds like a job is done, and it's not. They're stalling so they don't have to take a stand as always."

You didn't see your e-mail here, you can go to my blog at CNN.com/CaffertyFile, and look for yours there among the hundreds of others.

BLITZER: By the way, Jack, now that the Beastie Boys have mentioned my name in their new song, he like them.

CAFFERTY: Now you like them?

BLITZER: Now I like them. Maybe they knew what they were doing.

CAFFERTY: They got a little free blast on their album.

BLITZER: It will skyrocket to number one.

CAFFERTY: It will be number one on the charts.

BLITZER: It's called "Too Many Rappers."

Jack, thank you.

The mayor of a Pennsylvania town is calling it ridiculous. Still to come, how a mule-drawn barge down a Pennsylvania canal may cause a risk to national security.

And the FDA says the so-called healthy way to smoke is anything but. The latest findings on electronic cigarettes.

And Angelina Jolie in Baghdad as goodwill ambassador. Our own Arwa Damon's exclusive interview with the actress. That's coming up next.

(COMMERCIAL BREAK)

BLITZER: Angelina Jolie is on her third trip to Iraq as ambassador. Today she toured a makeshift settlement on the outskirts of Baghdad where sectarian violence has killed 20,000 Iraqis. Arwa Damon sat down with an exclusive interview with Angelina Jolie.

(BEGIN VIDEOTAPE)

ARWA DAMON, CNN CORRESPONDENT: What sort of conditions were the people that you met with today living in? I mean, how are they surviving? How are they and sustaining themselves?

ANGELINA JOLIE, UNHCR GOODWILL AMBASSADOR: Today I saw an area called Chico, and the -- what told me a lot about how kind of Iraq is working, I went with the UNHCR and the U.S. soldiers and found this was a place that was off the radar for everybody. Nobody had really gone to visit. Nobody was talking about it. Nobody had gone to the attention of the V.A. community, but an American soldier did. They're sleeping on dirt. They've built these little areas out of brick by hand. They don't have job opportunities. You could talk about -- it's one of those -- you meet with so many little, little babies that are malnourished. So many little kids that have infections with things that with minor medicine would be okay. Parents saying things like why -- you know, why -- our children didn't do anything. They're so little. They're innocent. Why are they going through this? We just want something we need. Aren't we people?

DAMON: You know, one of the barometers that can be used to try to look at quote, unquote, progress here is the situation of the IDP, whether it's how the government is handing them, or whether or not they're going back home. What were they saying to you today? Why haven't they returned back to their homes?

JOLIE: The community I met with today were mainly from Hessla. There was such extreme violence that they're simply terrified. With the new transition it's going to take them a while to have faith that the government security would protect them, and one of them did tell me a story about a woman who went back with her children and the children were killed, so I don't know when that was, but there's -- to them it's a living nightmare.

DAMON: We have actually heard more stories such as that one, that fear that people have of returning home still exists, and that is where, as we've been saying, the government needs to step in and install confidence in the people. Last time you were here you had said that there wasn't a coherent plan to try to help the IDPS. Have you seen any sort of changes on that front?

JOLIE: I haven't seen as much as I would like to. I'm not the best person to talk about all this stuff except that I wake around, and I meet with troops who feel like they see -- have seen some progress, however small, and it means something to them, and they hope that all this time here was not in vein and all the loss of their friends and was not in vein and that this country is going do have some -- some future. It is in the interest of all of us that there is a strong future for Iraq. The U.N. is doing everything they can. It's having funding issues. It's only half funded this year.

DAMON: Now, how desperate is the need for action?

JOLIE: I think it is the most critical time. I think this will make the difference in the future of Iraq and in the future of, you know, a country that is so crucial to our world and our security and this region in the world. It is in the hands of the government now to really step up.

(END VIDEOTAPE)

BLITZER: You could impact your world. If you would like to know more about the United Nations Human Rights Commission, UNHCR, the united nations human rights division for refugees, humanitarian division for refugees, I should say, and its efforts to help refugees in Iraq, you can visit our impact your world page. That's at CNN.com/impact.

Happening now, a SITUATION ROOM investigation. Why the feds think a couple of mules may be a threat to national security. Time and money wasted to protect you from this? Jeanne Meserve uncovers a startling example of broken government at an historic tourist attraction.

Also this hour, only on CNN, it's promoted as a healthy way to smoke, but officials now warn that electronic cigarettes are packed with toxic chemicals. Our Brian Todd reveals why a puff on one of these is like inhaling anti-freeze.

I'm Wolf Blitzer in CNN's command center for breaking news, politics, and extraordinary reports from around the world. You're in THE SITUATION ROOM.

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