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Ousted Honduran President Returns; Dems in Disarray on Health Care; Black Market Organ Dealing; An Arrest That Rocked America; Obama Reacts to Cambridge Police Incident; Scandal in Italy

Aired July 24, 2009 - 17:00   ET


WOLF BLITZER, CNN ANCHOR: A surprise appearance today by President Obama, trying to ease the uproar over the arrest of an African-American scholar and over his own controversial remarks. The president is trying to get all parties to cool off, and he's offering regrets for his own role. We're going to have the full story for you. That's coming up shortly.

But, right now, there's some breaking news we're following.

He -- he was run out of his country during a military coup. He vowed to return. Now the ousted Honduran president, Jose Manuel Zelaya, has crossed the border and is once again on his home soil in Honduras.

CNN's Karl Penhaul is there as well. He's joining us on the phone.

What's the very latest on this developing story, Karl?

KARL PENHAUL, CNN CORRESPONDENT: Well, Mr. Zelaya has taken two steps inside of Honduras. The item that demarcates the frontier because Nicaragua and Honduras is a rusty chain. And Mr. Zelaya, a few moments ago, took two dramatic, theatrical steps across this side of the Honduran border.

Now prior to doing that, he had a brief conversation with a Honduran military officer. The two shook hands and it started what seems to be a kind of cordial conversation. And then the armed colonel received a call from what appeared to be his -- his unit commander. And he suspended the conversation at that stage and then withdrew.

What we've seen now is that both the military and the police in Honduras have a standing order to arrest Mr. Zelaya if he ventures into Honduras. And right now, he is two steps inside of Honduras. The Honduran military has not yet moved to arrest him -- Wolf.

BLITZER: And so we're going to watch this situation and see what happens.

Stay in touch with us, Karl, and fill us in once there's a new development.

Meanwhile, another huge story breaking here in Washington -- signs of anger and real chaos among Congressional Democrats unable to bridge their differences over health care reform. The party feud between the conservatives and the liberals in the Democratic Party has the president's reform effort grinding to a halt, at least for now.

Let's go straight to our senior Congressional correspondent, Dana Bash.

She's up on Capitol Hill.

What are you learning -- Dana?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Well, we're learning that the divide among Democrats that is stalling the president's top priority, health care reform, appears to be getting deeper. And, in fact, talks between Democratic leaders and the so- called Blue Dog conservative Democrats, who have problems with their party's health care plan, they are at an impasse.

In fact, look at what the House Energy and Commerce chairman, Henry Waxman, said about his fellow conservative Democrats. I'll put it up for you to see. He said: "We're not going to let them empower the Republicans." That is a Democrat talking about a fellow Democrat there.

Well, we heard that and we went to the office of Congressman Mike Ross. He is leading the charge for those conservative Blue Dog Democrats. And he said his party would be making a mistake if they move forward over their objections.


REP. MIKE ROSS (D), ARKANSAS: Unfortunately, we have failed to reach an agreement on the bill. But the seven of us, we're every bit as much a Democrat as -- as anyone else and that's on the -- on the Committee.

We're not empowering Republicans. We're trying to save this bill and save our party, because it's not just the seven of us that are on the Energy and Commerce Committee that are conservative Democrats that have concerns with the bill. It's the entire -- almost the entire Blue Dog Coalition. And I can tell you that if they -- if they try to bring it up for a vote on the -- on the House floor, I think it would be a mistake.

BASH: Would it pass?

ROSS: I don't think so.


BASH: So that conservative Democrat says that they have enough votes -- enough power among those conservative Democrats to stop any health care legislation on the House floor.

But in an exclusive interview, with our John King, the House speaker, Nancy Pelosi, she disagrees. She said, when I take this vote to the floor, it will win. And, you know, Wolf, just a few moments ago, the House Democratic leaders, they had a hastily arranged press conference, trying to change the "we're divided" story line, insisting that there is progress.

But I can tell you that you can cut tension here among Democrats on this issue with a knife.

BLITZER: Well, she's not going to let it come up for a vote, Nancy Pelosi, the speaker, unless she's 100 percent sure it will pass. If it's close, she's going to hold off. She's got that power -- the timing, being the speaker of the House, right?

BASH: You would think so. You would think so. She is determined. But I can tell you right now, if things don't change in terms of the substance of the Democrats' health care plan, specifically -- the biggest issue, of course, is controlling medical costs -- those conservative Democrats say that they have enough votes within their rather large coalition and among other Democrats -- they insist they have the votes to stop it.

But Nancy Pelosi didn't get where she is because she doesn't know how to vote count.

BLITZER: If you...

BASH: So you'd think that if she says she knows she's got the votes, then she'll have the votes.

It is still really unclear, though, Wolf, we should say, when that vote would even happen, because the House majority leader, Steny Hoyer, he just said moments ago -- he gave a little hint or a suggestion to reporters that maybe it won't, in fact, happen before the House leaves for August recess. That is still something that seems to be up in the air.

BLITZER: Yes. Because, on the Senate side, they're not going to have a vote before the recess.

BASH: Exactly.

BLITZER: So we'll see what happens on the House side.

I've done a little informal math myself, Dana. And I'd be interested if you want to check it out with your people over there.

If you add up the liberal Democrats versus the Blue Dogs and all the Republicans -- we assume at least most of the Republicans, if not all of them, will vote against it -- it would be a very, very close -- close vote in the House of Representatives.

BASH: Very close.

BLITZER: It could be tight.

But we'll see who's right, Nancy Pelosi or Congressman Ross. Thanks very much.

BASH: Thanks, Wolf.

BLITZER: Dana is watching the story and the tension building up on Capitol Hill.

President Obama today announced plans to boost another of his priorities -- education. He unveiled a $4 billion stimulus fund called Race To the Top, to be allocated based on academic performance.

Listen to the president.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: This is not about the kind of testing that has mushroomed under No Child Left Behind. This is not about more tests. It's not about teaching to the test. And it's not about judging a teacher solely on the results of a single test. It is about finally getting testing right, about developing thoughtful assessments that lead to better results.


BLITZER: The Education secretary, Arne Duncan, says states seeking the money will also be judged on how well they've managed stimulus money they've already received.

Let's go to Jack Cafferty.

He's got The Cafferty File -- Jack.

CAFFERTY: All right, Wolf, the Cambridge cops want an apology from the president of the United States for saying the police "acted stupidly" in the arrest of Harvard Professor Henry Gates.

They didn't get one today, but they got something. President Obama made a surprise appearance in the White House Briefing Room today, saying he talked with the arresting officer and that he did not mean to malign the police department. But he stopped short of apologizing.

This was a local story that probably would have gone away in a day or two until President Obama got involved. Mr. Obama criticized the arrest of Gates, even though he admitted he didn't know all the facts.

The first black president also talked about how blacks and Hispanics are still unfairly singled out for arrest.

Gates was arrested for disorderly conduct when police responded to a possible break in at his home.

Cops say Gates at first refused to identify himself and then accused the officer of racism. It turns out the arresting officer, Sergeant James Crowley -- who stands by his actions, by the way -- taught a racial profiling course to other police officers for five years. The commissioner of the Cambridge Police Department says Crowley's actions were not racially motivated.

The International Association of Chiefs of Police says: "It's critically important to have all the facts on any police matter before making a public statement."

And Republicans, as you might expect, say that Mr. Obama was not acting presidential by rushing to judgment on this.

So here's the question -- should President Obama apologize for saying Cambridge police "acted stupidly" in the Gates arrest?

Go to and post a comment on my blog.

Why do I think this is all they're going to talk about on Sunday?

BLITZER: They'll talk about health care a little bit, too.

CAFFERTY: A little bit.

BLITZER: Yes. It's a big issue.

All right, Jack.

Thank you.

An incident that cuts to the heart of America's racial divide -- an African-American scholar, a police officer and the president all caught up in a raging controversy. You'll hear them tell about it in their own words.

Plus, an alleged kidney salesman and a black market in human organs -- just the strangest part of a far-reaching corruption sweep that's led to dozens of arrests.

And the first lady, Michelle Obama -- you're about to hear her talk about what she loves about the art of design, American-style.


BLITZER: It's now been roughly 24 hours since the FBI's sweeping political corruption bust yesterday in New Jersey. Forty-four people, including majors, assemblymen, even some rabbis, face charges.

CNN's Mary Snow is joining us now with some details on one aspect of this investigation -- a very disturbing aspect centering around the buying and selling of human organs -- Mary, what are you learning?

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, you know, this is part of the probe that's linked to the money laundering investigation. And it sounds like the stuff of urban legend. A Brooklyn man who is said to be in the real estate business is accused of trying to broker a kidney sale.


SNOW: (voice-over): Among the dozens arrested in a wide-ranging corruption probe, prosecutors called this man "the kidney salesman." Levi Izhak Rosenbaum faces charges of acting as a human organ broker. A criminal complaint alleges Rosenbaum offered to obtain a kidney for an undercover FBI agent and informant, explaining: "I am what you call a matchmaker."

RALPH MARA, U.S. ATTORNEY: His business was to entice vulnerable people to give up a kidney for $10,000, which he, in turn, would turn around and sell for $160,000.

SNOW: About his business, the complaint quotes Rosenbaum as saying: "I'm doing this a long time. Let me explain to you one thing. It's illegal to buy or sell organs, so you cannot buy it. What you do is, you're giving a compensation for the time."

We've reached out to an attorney representing Rosenbaum, who declined comment, explaining he wanted to review the charges in the case before speaking.

While officials would only say the probe is continuing, an anthropologist at the University of California at Berkeley and director of the group Organ Watch says she met with the FBI in 2002 to pass on information about Rosenbaum. She said the meeting involved a much wider global investigation into trafficking of human organs.

She also says she witnessed poorer people in Eastern Europe recruited to sell organs.

NANCY SCHEPER-HUGHES, ORGAN WATCH: They got so little money -- $2,000, $2,500. They -- they felt abused. They felt that they were living cadavers, that nobody cared about them. They'd chop them up and then, you know, after a day or two in the hospital, were sent home.


SNOW: Now, we asked the FBI about Nancy Scheper-Hughes going to them in 2002. She also says that the FBI contacted her again just recently, in recent days. The FBI says it cannot discuss sources or citizens who come forward to lend assistance -- Wolf.

BLITZER: Mary, how does all of this fit into the larger corruption case?

SNOW: You know, that's the part that isn't crystal clear, because this is one of 44 people facing charges. The prosecutor has said this is part of the money laundering probe. But the one connection, he says, is this cooperating witness. So whether this defendant is linked to other defendants, that's not 100 percent clear. But that cooperating witness is that one link.

BLITZER: All right, Mary. Thanks for that report.

Fredricka Whitfield is monitoring some other important stories incoming into THE SITUATION ROOM right now -- Fred, what's the latest?

WHITFIELD: Hello again, Wolf.

Afghanistan's president campaigning for re-election close to home. President Hamid Karzai held his first campaign rally in the capital city of Kabul today. He told the 3,000 people crammed into an assembly tent that he would hold international troops more accountable for civilian casualties, raids and detentions. Karzai has campaigned very little, but he is widely expected to win another term. Afghan elections are scheduled for August 20th.

Three inmates are still at large after busting out of a jail in Belgium yesterday. They escaped with the help of two accomplices and the chopper pilot that they took hostage at gunpoint. One of the accomplices was captured in the prison because there wasn't enough room on the helicopter for everyone. The pilot was later set free and the chopper abandoned.

And he is pedaling as fast and long as he can -- this tiny humanoid robot on a tricycle is Panasonic's way of unveiling its latest incarnation of long-running batteries. The 8 x 11 inch robot is powered by a pair of batteries on its back. Developers plan to challenge the little guy with a test cycle around France's Lemans race course on August 5th. And they say he should be able to go around the course for about 24 hours.

And speaking of endurance, Canada's last known surviving veteran of World War I is now 109 and a day. John Babcock celebrated his 109th birthday with a party yesterday in Spokane, Washington, where he has lived since 1932. Born in 1900, Babcock joined the Canadian Army at 15, but they figured out his youth and he never fought in France. After the war, Babcock came to the US, joined the Army and then became a citizen.

What a life -- Wolf.

BLITZER: Did you see that video?

Look at him. He looks great.

WHITFIELD: I know. He's fantastic.

BLITZER: What is, 109, you said?

WHITFIELD: That's what they say.


WHITFIELD: That's what he's saying -- and a day.

BLITZER: Seventy years only.

WHITFIELD: I know. You look good.

BLITZER: He looks good. Congratulations.

Happy birthday to him.

WHITFIELD: Yes, happy birthday to him.

BLITZER: Thanks, Fred.

An African-American scholar, a police officer and the president of the United States, in their own words, about a controversial arrest and the fallout that's followed.

Plus, a sex scandal in Italy -- an alleged encounter between the prime minister and a call girl. We're going to take you to Rome.

Stay with us.



BLITZER: It's an incident that's gripped the country, cutting to the heart of America's continuing racial divide -- a distinguished African-American scholar arrested in his home by a highly regarded police officer responding to a burglary call.

What happened in the heat of the moment may still not be clear, but it involves a professor's charge of racial profiling, a cop's insistence that he was playing it all by the book and President Obama's quick fire comment that police, "acted stupidly."

There have been demands for apologies, with all sides digging in their heels.

But President Obama has now become the first to try to heal all of these wounds.

Let's step back and take a closer look at the differing accounts, in the words of those directly involved.

We begin with the Harvard University professor, Henry Louis Gates.

He spoke exclusively with CNN's Soledad O'Brien.


PROF. HENRY LOUIS GATES, HARVARD UNIVERSITY: I came from New York to Boston. And my driver picked me up. We've got to my house in Harvard Square and the door was jammed. The door wouldn't open.

And to make a long story short, I asked my driver to sort of -- to push the door through. I gave him his tip. He left. I called Harvard Real Estate, which does the maintenance on my house, because they own the house. And while I was on the phone, a Cambridge policeman showed up on my porch.

I walked, with the phone still active, to my porch. And he demanded that I step out of my house onto the porch. That's all he said. He said, I would like you to step outside.

I said, absolutely not.

I said, why are you here?

He said, I'm investigating a breaking and entering charge.

I said, this is my house. I'm a Harvard professor. I live here.

He said, can you prove it?

I said, just a minute.

And I turned my back. And I walked into the kitchen to get my Harvard I.D. and my -- my Massachusetts driver's license. He followed me without my permission. I gave him the two I.D.s. And I demanded to know his name and his badge number.

SOLEDAD O'BRIEN, CNN CORRESPONDENT: And when you demanded that, what did he say?

GATES: He wouldn't say anything. He was just very upset. He was trying to figure out who I was. He was looking at the I.D. He didn't say anything.

And I said, why are you not responding to me?

Are you not responding to me because you're a white police officer and I'm a black man?

He turned, walked out -- turned his back on me, walked out. I followed him onto my porch. It looked like a police convention, there were so many policemen outside.

I stepped out on my porch and said, I want to know your colleague's name and his badge number.

And this officer said thank you for accommodating my earlier request, you are under arrest. And he slapped handcuffs on me and they took me to jail.

O'BRIEN: Originally, they put the handcuffs behind your back.

GATES: They put my -- the handcuffs behind my back. And I told them that I was handicapped, that I used a cane. They had a debate. There was a black officer there who was very sensitive. He persuaded them to move the handcuffs from around the back to the front.

They took me to the Cambridge police station and booked me -- fingerprints, mug shot, which has now been all over the universe.

O'BRIEN: We've seen it a lot. GATES: What it made me realize was how vulnerable all black men are -- how vulnerable all people of color are and all poor people to capricious forces, like a rogue policeman. And this man clearly was a rogue policeman.


BLITZER: Ironically, the man that Professor Gates labeled a rogue policeman was once picked to teach fellow officers about avoiding racial profiling.

Sergeant James Crowley insists that on the night in question, he tried to avoid a confrontation. But he says Gates went way too far.


SGT. JAMES CROWLEY, CAMBRIDGE, MASS POLICE: I was continuously telling him to calm down during this whole exchange, because I really didn't want this either. And I didn't -- although I don't -- didn't know at the time who Professor Gates was, knowing that he was an affiliate of Harvard, I really didn't want to have to take such a drastic action, because I knew that it was going to bring a certain amount of attention -- unwanted attention -- on me.

Nonetheless, that's how far Professor Gates pushed it and provoked and just wouldn't stop.


BLITZER: We're going to have more of what the sergeant is saying.

Also, you're going to want to hear what else Professor Gates had to say about this incident.

When we come back, though, the White House version -- you'll hear what President Obama had to say about it and the role that he's played in this whole affair.


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

Happening now, successes and failures -- the 9/11 Commission revisits its recommendations and what Homeland Security has done to meet them. Five years later, the report card now far from perfect.

Moving day for the resigning Alaska governor, Sarah Palin. On this, her last day on the job, we examine what Palin's political future might be.

And on Wall Street, investors hang onto their two week rally despite disappointing news on a key tech stock. The Dow Jones Industrials Average posted a 24 point gain, to close the week at 9093.

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

During his prime time news conference on Wednesday, President Obama wound up fanning the flames of the controversy surrounding the arrest of Harvard University Professor Henry Gates. He said Cambridge police, in his words, "acted stupidly".

Listen to this.


QUESTION: Thank you, Mr. President.

Recently, Professor Henry Louis Gates, Jr. was arrested at his home in Cambridge.

What does that incident say to you and what does it say about race relations in America?

OBAMA: Well, I should say at the outset that Skip Gates is a friend,, so I may be a little biased here. I don't know all the facts.

What's been reported, though, is that the guy forgot his keys, jimmied his way to get into the house. There was a report called into the police station that there might be a burglarly taking place.

So far so good, right?

I mean if I was trying to jigger into -- well, I guess this is my house now so...


OBAMA: probably wouldn't happen. But let's say my old house in Chicago. Here, I'd get shot.


OBAMA: But so far, so good.

They're reporting -- the police are doing what they should. There's a call. They go investigate what happens.

My understanding is at that point, professor Gates is already in his house. The police officer comes in. I'm sure there's some exchange of words. But my understanding is, is that Professor Gates then shows his I.D. to show that this is his house. And at that point, he gets arrested for disorderly conduct -- charges which are later dropped.

Now, I don't know, not having been there and not seeing all the facts, what role race played in that. But I think it's fair to say, number one, any of us would be pretty angry.

Number two, that the Cambridge police acted stupidly in arresting somebody when there was already proof that they were in their own home.

And number three, what I think we know separate and apart from this incident is that there's a long history in this country of African-Americans and Latinos being stopped by law enforcement disproportionately. That's just a fact.


BLITZER: The president's remarks -- you just heard those remarks Wednesday at his news conference, after the Gates arrest -- infuriated law enforcement officers. And today, police unions in Massachusetts called on him to apologize.

The Cambridge police sergeant involved has been speaking out, as well, telling his side of the story to reporter Kim Khazei, from our affiliate in Boston, WHDH.

BLITZER: ... affiliate in Boston, WHDH.


SGT. JAMES CROWLEY, CAMBRIDGE POLICE: I really was surprised and disappointed that the president, who didn't have all the facts by his own admission, then weighed in on the events of that night and made a comment that, you know, really offended not just officers in the Cambridge Police Department, but officers around the country.

KIM KHAZEI, WHDH CORRESPONDENT (voice-over): Sergeant James Crowley sitting down with 7 News, react to President Barack Obama's comments about the day he arrested Harvard Professor Henry Gates and talking extensively for the first time what happened at the Cambridge House.

CROWLEY: I asked him if he could step outside and speak with me, and he said no, I will not. And again words to the effect of what's this all about? I said I'm Sergeant Crowley from the Cambridge Police Department and I'm investigating a break in progress. And he responded, why, because I'm a black man in America? In a very agitated tone. And again, I thought that was a little strange.

KHAZEI: Sergeant Crowley saying after getting a call about the break-in, he was just trying to protect Gates as well as himself.

CROWLEY: It was a report that there was two individuals. I see one and it could be him, so where's the second person? Or there's two people in the residence that he doesn't know are there. Either way, I wasn't expecting his response, which was, that's none of your business. To me, that's a strange response for somebody that has nothing to hide, he's trying to cooperate with the police.

KHAZEI (on camera): So, did he come out and speak with you?

CROWLEY: I was leaving. As I reached the porch, I could -- I was aware that now he was following me because he was still yelling about racism and black men in America and that he wasn't somebody to be messing with.

KHAZEI (voice-over): Sergeant Crowley says he warned Gates he was acting disorderly, and when he didn't calm down, he arrested Gates. The professor wants an apology, but the sergeant said he will not set that precedent for police officers. He regrets the event and wants to let his story be heard.

CROWLEY: The amount of negative things that aren't true that he was saying about me at least warned a response and allowed people to see that I'm not a monster or the bigot or racist that he has portrayed me to be. This is me.


BLITZER: An hour after the police union spoke out today, President Obama tried to ease all the tensions, making a surprise appearance over at the White House briefing room. He didn't apologize, but he did concede that his earlier remarks might have been better phrased. Here's what the president had to say.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I wanted to address you guys directly because over the last day and a half obviously there's been all sorts of controversy around the incident that happened in Cambridge with Professor Gates and the police department there.

I actually just had a conversation with Sergeant Jim Crowley, the officer involved. And I have to tell you that as I said yesterday, my impression was that he was an outstanding police officer and a good man, and that was confirmed in the phone conversation, and I told him that. And I -- because this has been ratcheting up and I obviously helped to contribute ratcheting it up, I want to make clear that in my choice of words I think I unfortunately gave an impression that I was maligning the Cambridge Police Department or Sergeant Crowley specifically.

And I could have calibrated those words differently. And I told this to Sergeant Crowley. I continue to believe, based on what I have heard, that there was an overreaction in pulling Professor Gates out of his home to the station. I also continue to believe, based on what I heard, that Professor Gates probably overreacted, as well. My sense is you've got two good people in a circumstance in which neither of them were able to resolve the incident in the way that it should have been resolved and the way they would have liked it to be resolved.

The fact that it has garnered so much attention I think is a testimony to the fact that these are issues that are still very sensitive here in America. And, you know, so to the extent that my choice of words didn't illuminate but rather contributed to more media frenzy, I think that was unfortunate.


BLITZER: In addition to calling the police sergeant, the president also called Professor Gates. He's invited both of them to come to the White House and, in his words, "have a beer." We'll see how that unfolds. President Obama admits he did make a mistake in his reaction to the arrest of Professor Gates. Will that help him or hurt him politically? Hilary Rosen and Alex Castellanos, they are here, they are standing by.

And Italy right now absorbed in a huge sex scandal, an alleged encounter between the prime minister and a call girl. We're going to go to Rome. Stay with us, you're in "The Situation Room."


BLITZER: President Obama surprises a lot of reporters today over at the White House and not with a formal apology but with an admission that he made a mistake in the way he reacted to the arrest of Harvard University Professor Henry Louis Gates. So how will all of this play out politically?

Joining us now, a pair of CNN political contributors. Hilary Rosen is a Democratic strategist. Republican strategist Alex Castellanos is joining us, as well. Not every day that the president of the United States comes in and surprises us and says, you know what, I shouldn't have phrased it the way I did.

HILARY ROSEN, DEMOCRATCIC STRATEGIST: You know, the president played the grown-up in the room when he went into the briefing room today and tried to turn this incident back into the teachable moment that it was. I think the other day when it happened because I don't know a single person who when they first heard the story of what happened to Professor Gates didn't say, "That wouldn't have happened if he was white." Everybody thought so. And the fact that the president actually talked about it didn't seem to me to be such a bad thing. And I think today he toned the rhetoric down, he brought it back to the teachable moment. Good for him.

BLITZER: I heard a lot of people defending the cops when I first heard this story, too, but maybe we're hanging around different circles. But go ahead.

ALEX CASTELLANOS, REPUBLICAN STRATEGIST: Let's give the president a thumbs up today. If you turn on your TV tonight, we don't like our leaders or our heroes on TV to pretend they're perfect. We like them, hey, they're human like us. But when they make mistakes, we want them to see it, pick themselves back up, admit they've made a mistake and demonstrate their strength that way. The president did that today.

I think the problem for the president is that he's becoming the -- what's that word he used? He didn't calibrate his words. He's becoming the calibrator in chief. It seems that one day he says one thing, then the next day he tweaks it. So, there's a lot of uncertainty there.

ROSEN: You know, the one thing that's frustrating here is I didn't hear that police officer in any of his interviews or any of his allies, you know, the Republican Party or FOX News today, ginning this story up, give one ounce of recognition or apology that maybe they'd overreacted. And that's frustrating.

CASTELLANOS: Well now, let's remember what the most powerful weapon the police has to keep us safe, and that is it's not a gun, it is the respect we give them for authority. And when that's undermined by, you know, disruptive behavior, that's really important. Then if they don't have that respect, all they have is force.

BLITZER: In fairness to Sergeant Crowley, he got a lot of support from his fellow officers, white and black. And we've heard that over the past few days. And we've learned a lot more about him.

The president, obviously, had strong words of praise for him today, and invited him to the White House to share in a beer with Professor Gates, as well.

Let's get back to the politics of this because it's not every day that the president has a gaffe, and some argued this was a gaffe at the news conference, at the end of the news conference the other day, and then comes out quickly and tries to fix it. But he's done it before, including a reference he made to the former First Lady Nancy Reagan. Listen to this.


OBAMA: In terms of speaking to former presidents, I have spoken to all of them that are living. Obviously, President Clinton -- I didn't want to get into a Nancy Reagan thing about, you know, doing any seances.


BLITZER: He wasted no time in calling Mrs. Reagan and apologizing and trying to fix that one. Just as he did, remember, when he was on the on the "Tonight Show with Jay Leno," and he said this.


OBAMA: I bowled a 129.

JAY LENO, TALK SHOW HOST: That's very good. Yeah. That's very good, Mr. President.

OBAMA: Looked like the Special Olympics or something.


BLITZER: The reference to the Special Olympics and he wasted no time calling Maria Shriver and others who have been involved in the Special Olympics to say you know what, I'm sorry, I screwed up, which I think the American public can relate. We all say things that we regret saying. The thing is not to dig down and say, you know what, I'm going to resist that to acknowledge the mistake and then move on.

ROSEN: Pretty human reactions that we see him -- I mean, he's as regular a guy, a president, as we've ever had, and I think people like that about him. They see him as somebody who has some emotion about issues that he cares about. You know, let's be real. He's not wrong about the 14,000 people who are losing health insurance every day. He doesn't make gaffes about, you know, capitals of country where he has to work with foreign leaders. We're talking about for a personality, jokes, that sort of thing. You know, this is a president we can count on intellectually.

CASTELLANOS: I think Hilary is right mostly. He's certainly -- that does make him more accessible. He is us in a lot of ways. He's fighting to quit smoking, and that's one of the things the sense of humor, the family, what a lovely picture, that's what keeps his numbers up here.

But his policies are something else. They're a lot less popular. Now if he could only admit a mistake on policy like on the health care plan that nobody in America seems to like except him.

BLITZER: Well so far there's no plan, there's a lot of different plans and there's not a final vision of a plan and he's avoiding taking positions, Hilary, that maybe could nail this down if he were to say, you know what, this is the tax I want to increase for rich people, this is what I want to do as far as employer health care benefits, if anything. This is what I want to do about the public government option, health care insurance plan to compete with some of the private companies. He's so far staying above this.

ROSEN: We are so close to a final bill out of the House of Representatives and out of the Senate, final proposals that will allow the president then to get in and be very much a part of forging the final process, and I think you will see he and the White House be very aggressive once the House and Senate have had their way. But these bills have been so far been forced by the Congress, which ...

BLITZER: As you know, what she's referring to is once the House passes a version and a Senate passes a very different version, they then have this conference committee, they have to reconcile, come up with a new version and it's then that some people are saying the president will roll up his sleeves and get involved.

CASTELLANOS: Well, he's learning from the Clinton mistakes, which they got their plan out early and it was picked apart. But you know, Wolf, as you said, there really isn't a plan yet, so why are they in such a hurry to get everyone to sign off on it and approve it and pass something that no one's read, no one's seen, and no one knows how it's going to affect us. It's going to change this economy and our health care for years and years to come. Something this big, this major, this is not the calibrator in chief again. He should let us calibrate the health plan. BLITZER: We'll be calibrating a lot over the next few weeks.

ROSEN: The talking points, right, the Republican talking points. Slow down something we've studied to death.

BLITZER: We'll see what happens, guys. Thanks very much. There's going to be a congressional recess coming up in a week or so. We'll see what happens.

And you're going to see this only on CNN, a close look at one of the U.S. military's most valuable tools. And the best part -- no risk of human casualties, at least from the U.S. side. We're going to look at unmanned weapons that act as eyes and ears on the enemy.

And the prime minister and the call girl. Italy's leader finding himself embroiled in a rather steamy sex scandal.


BLITZER: The First Lady hosted the nation's top designers in all disciplines today over at the White House. She addressed them at the 10th Annual National Design Awards.


MICHELLE OBAMA, FIRST LADY: You are scientists and artists. Your work is both practical and poetic, educational and inspirational. You represent diverse fields of disciplines, but you share the common thread of superior design.

What I love about design is the artistic and scientific complexity that also becomes useful. A laptop, a bridge, an outfit, a garden. All drawn from a thousand wells of inspiration and yet grounded in the basic principles of math or science. Great designers also pursue a mission. Great designers design with mankind in mind. Building on the innovations of the past, you help to shape a better future. Like your lifetime achievement honoree, Bill Moggridge what would we do without our laptops? My kids would die. They wouldn't make it through the summer. I don't know whether to thank you Bill, for that.

But that future and our ability to solve the great challenges of our time will depend on how we educate and engage the current generation. That's why the president has made such a strong commitment to ensuring access to high quality education for all children, particularly in math and science. And today the president and Secretary Duncan are announcing the race to the top, which is a competitive grant to spur education reform across the country and encourage educators and leaders to embrace innovative approaches to teaching and to learning.


BLITZER: Hosting the Design Awards, by the way, is a recent tradition for first ladies that began with Hillary Clinton back in the year 2000, her last year as the first lady. Let's go to Jack Cafferty right now for "The Cafferty File." I know you'll like this first one.

CAFFERTY: This first lady?


CAFFERTY: I think she's delightful.

BLITZER: I know.

CAFFERTY: I wrote a column about the fact that I have a crush on her.

BLITZER: I know.

CAFFERTY: I still do. She's great.

The question this hour, should President Obama apologize for saying the Cambridge police acted "stupidly" in the Gates arrest?

Boy, did we get a bunch of e-mail on this.

P. writes "It was wrong of President Obama to make comments on a situation for a lot of reasons, but perhaps the most important is that it has enflamed rather than bring constructive attention to the real issues at hand. As far as the president is concerned, I'm disappointed, because he just proved himself to be a black president rather than everyone's president, and to me that says that he is more concerned with race issues than he led on during his campaign."

Bea writes, "Jack, the real concern in all of this is that president commented on an issue he didn't have all the facts on, by his admission. Will he comment, act or react to other issues without having all the facts? Scary."

H. in Seattle, "President Obama 100 percent correct, and anything short of what he said would have been phony and politically motivated. A man was arrested in his home even after providing identification. That was stupid, period."

Matthew writes, "Absolutely. I have lost a lot of respect for him over the issue. Imagine how devastating it would be to have the president call your actions stupid when you have an incredible track record and were just following procedures. The president should apologize immediately."

And Michael in Dallas writes this, "This became a story because of one serious misjudgment, the unnecessary arrest. Now that it's a story, why don't we treat it as an opportunity? This could be the point when black men and white policemen start to realize what it is that sets off these unpleasant occurrences. I'm not siding with either side, but the arrest was unnecessary and probably occasioned by President Gates' bad attitude, as seen by Officer Crowley. Therefore, it could be called a stupid act."

If you didn't see your e-mail here, go to my blog. There is a lot of mail on this, so if you are interested in this story, that's a good place to go and sample a lot of opinions.

BLITZER: There's huge interest in this, Jack, huge. Thank you.

An alleged call girl, a prime minister and some pretty steamy audio. They're all elements in a sex scandal that involves the Italian Prime Minister Silvio Berlusconi. CNN's Delia Gallagher is in Rome with the story.

DELIA GALLAGHER, CNN CORRESPONDENT: Hi, Wolf. Let me show you the cover of one of Italy's leading left-wing news magazines. The title is "Sex and The Silvio" and on the Web site of this magazine is some audio recordings which are alleged to be between the prime minister and a paid escort. In these recordings, there is discussion of the night which the escort claims they spent together, as well as some sexually explicit advice to the escort from the voice, which is alleged to be that of the prime minister.

Now, Prime Minister Berlusconi has said through his lawyer that these recordings are pure invention. They are questioning the legality of even publishing these recordings because they are part of an ongoing investigation into a businessman who is said to have introduced the escort to the prime minister.

Now, this is just the latest in a series of allegations against the prime minister since April of this year, including an open letter from his wife to the Italian newspapers in which he criticizes her husband for consorting with young ladies. He says he is unwell, and she asks for a divorce.

Despite all of these allegations, Wolf, the prime minister continues to have a stable popularity in this country. His latest polls show him hovering at about 50 percent approval rating, and, of course, he does enjoy a very comfortable majority in both houses of parliament with his center right coalition. Wolf?

BLITZER: Delia Gallagher in Rome for us, thank you Delia.

He was driven out of Honduras in a military coup. Now the ousted president Jose Manuel Zelaya has crossed back over into his country. Can he take back the government, though?

And Sarah Palin steps off into an uncertain political future. The resigning Alaska governor spends her last full day on the job saying good-bye. Stay with us. You're in "The Situation Room."


BLITZER: A four-legged fast food icon is gone. The Taco Bell Chihuahua passed away this week. CNN's Jeanne Moos says a most unusual adios.


JEANNE MOOS, CNN CORRESPONDENT (voice-over): For whom the bell tolls, the Taco Bell farewell Gidget. Instead of a stroke at the age of 15, that's between 73 and 105 in people years, despite the voice, he was a she nicknamed Gidgey, and here's what her voice really sounded like.

We first met her looking for work at a licensing convention after Taco Bell dropped her and her ad agency when sales started to dip. Her disappearance was so sudden, rumors of her death had to be debunked. The false story spread that she had been run over by a camera dolly.


MOOS: But until the taco tide turned against her, Gidget was a star with a signature line.

UNIDENTIFIED MALE: Yo quiero Taco Bell.

MOOS: I want some taco bell earned her a top advertising award, miniature replicas.

UNIDENTIFIED MALE: Get yours now at Taco Bell.

MOOS: She even got to ring the bell at the New York Stock Exchange. Gidget had a movie role playing the mom dog in "Legally Blonde 2." On the darker side, she was the subject of a Web game that fed her tacos until she blew up.


UNIDENTIFIED MALE: Viva gorditas, but it was chicken on a skewer that got her to perform. Gidget had private talents the world never saw.

UNIDENTIFIED FEMALE: She'll fold socks if you leave your socks on the floor. If you leave your socks on the floor, she'll pick them up and fold them.

MOOS: It's not every dog whose death is reported by "People." The next time you are chowing down a taco, observe a moment of silence and then repeat.

UNIDENTIFIED MALE: Yo quiero Taco Bell.

MOOS: Jeanne Moos.

UNIDENTIFIED MALE: Yo quiero Taco Bell.


UNIDENTIFIED MALE: Yo quiero Taco Bell.

MOOS: New York.



BLITZER: And happening now, breaking news. President Obama's surprise solution to a volatile showdown over race. Did he back down far enough from remarks that enraged an entire police force? We're standing by for new reaction is just coming in in the case of the police officer versus the professor.