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Hundreds Fight Latest California Blaze; Wildfires Rage Across Russia; Debris Delays Effort to Kill Well; U.S. Passport Security Scare; U.S. Consulate Closed in Mexico; Clinton Wedding Details Emerge

Aired July 30, 2010 - 18:00   ET

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


SUZANNE MALVEAUX, CNN ANCHOR: You're in THE SITUATION ROOM.

Happening now, wildfires rage near Los Angeles. The flames have already blackened thousands of acres and they could blackout most of southern California if they get closer to those vital power lines. We're going to take you to the scene.

And real U.S. passports obtained using fake driver's licenses and bogus birth certificates. There is fresh outrage about the security threat that the State Department can't seem to eliminate.

And we watched her grow up from the spotlight and now Chelsea Clinton is about to get married, but can she avoid the spotlight? I will be speaking with a wedding planner to the stars.

Welcome to our viewers in the United States and around the world.

Wolf Blitzer is off today. I'm Suzanne Malveaux, and you are in THE SITUATION ROOM.

Dangerous wildfires are racing across southern California today. Here are the latest developments. There are hundreds of firefighters backed by more than a dozen aircraft. They are fighting a third blaze near Los Angeles. This latest blaze known as the crown fire, and I want you to take a look at these live pictures now. This is blaze threatens to destroy power lines that provide electricity throughout the region. Together, the fires have already scorched more than 25,000 acres. I want to go straight to CNN's Ted Rowlands who is on the ground and it is hot and it is dry and windy weather. It is healthy at all?

TED ROWLANDS, CNN CORRESPONDENT: No, Suzanne, not at all. The winds have picked up considerably. You are looking at a live picture of a portion of this fire. This is one of the many leading edges of the fire. You will see the smoke behind the homes and obviously, firefighters are doing their best to make sure they don't lose any structures or homes. One home has been lost. At the top of their list is to save these high voltage power lines in the area.

(BEGIN VIDEOTAPE)

RICHARD BARZAGHI, HOMEWONER: This is the first time I have seen anything like this. ROWLANDS: Richard Barzaghi and his family have been watching the flames get closer and closer to the home. Richard says that I are pack and ready to go.

BARZAGHI: Those pictures, documents you need, passports and things like that, and just valuable stuff. Pick and choose. I mean, the rest is homeowner's insurance I guess.

ROWLANDS: We are up here on the leading edge of the fire, and you can see that it is burning out of control in different areas and the wind is driving this fire. Right now, the bulk of the defense is through the air where they are dropping foscheck (ph), which is a retardant, and water on the different spots of the fire and the key here is not necessarily to protect structures. It is to protect these power lines.

DEP. CHIEF MICHAEL BRYANT, LOS ANGELES COUNTY FIRE DEPT.: That is one of our primary priorities today because these lines support power through southern California. So, we are going to have crews. We are going to have a very extensive air show today with fixed wing. We are bringing in the dc-10.

ROWLANDS: The fire which authorities believe started from a spark caused by someone changing a tire has destroyed more than 8,000 acres and a handful of buildings, including one home.

(END VIDEOTAPE)

ROWLANDS: And the wind has been picking up in the last few hours, which of course, is a concern, Suzanne, but one thing that the wind does to help the firefighters if you look out to the hillside. It is all black and the problem or what happened was is that the wind basically shifted earlier and put the fire on top of itself, and it had burned itself out in this area specifically, and you could see that the power lines in this area came through with no problem. These are huge structures. There is concern, but the reality here is that as the day progresses firefighters say that they are confident that these power lines will hold up and if they don't, it could be big problems in Los Angeles tonight. But right at this point, they feel confident that these power lines and the homes in the area are safe for now at least.

MALVEAUX: OK. Thank you, Ted. Please keep us posted.

Wildfires in Russia have destroyed more than a thousand homes and killed at least 25 people, and forced thousands to evacuate. These fires are the worst ever to hit the European part of Russia which is enduring one of the hottest months on record. It reached 102 degrees yesterday in Moscow, the highest temperature ever recorded there. More than 21,000 fires have been report so far this summer. The Russian military has been called out to help fight the blaze.

BP's incoming boss, Bob Dudley, says that the company will do all that it can to absolutely kill the blown out well in the gulf. Now, the hope is that a relief well can provide a permanent seal by late August. In the coming days, there is going to be mud and cement pumped into the broken well in a process that is called static kill. But there has been a slight hitch. I want to turn to our CNN's Chad Myers in Atlanta. Chad, take us, again, to this graphic, and explain to us what is going on and what happened.

CHAD MYERS, CNN METEOROLOGIST: The graphic that you are seeing there, that is part of the bottom kill. That's part of what they are going to do in basically a week or two when they pull this new well out. Basically, they are drilling a brand new well to intersect the bottom of the old well. The old well has failed, and it is basically useless, because the blowout preventer on top is not working. Nothing we can do to stop the oil from pouring out. In fact, inside of the real well, 7,000 psi, pounds per square inch of pressure there. The top kill or the static kill they're talking about is taking mud from the surface, from ships, pumping it into a couple of these small openings, the manifolds, the valves of the blowout preventer and filling this entire thing with mud, heavy mud. It is not dirt. It's a solution, it's a chemical, it's heavy, much heavier than water and it would push all of the oil back down into the reservoir. That is the top kill or the static kill. The bottom kill that they are working on that we thought would be a lot farther along today than it is, because there are rocks in the bottom.

I will get to that. They are drilling another well to intersect the bottom to fill the bottom up with mud and concrete cement to kill it from down here as well. What happened today when they went back to put what we called the casing and remember we talked about this yesterday? Basically the steel sleeve that goes into the well, itself, well, when they went to go do that, put that sleeve in today, they found out, and here is the bottom of the new well right here, they found out that the bottom of the new well had rocks in it, had debris in the bottom, because they had not been drilling for many days because of bonnie, tropical storm bonnie, and they pulled everything out, but the sides of the well kind of collapsed in on itself, so that there is stuff down there, and they could not put the sleeve, or that casing in today and they could not cement it. So it is a day and a half's delay. And that day and a half is going to push everything back a day and half. So what was supposed to be a top kill on Saturday or Sunday, does not look like it is until Tuesday. They don't want to go too far. They don't want to do this top kill procedure in case something really breaks, unless this well is much closer than it is right now. That is why they are waiting and why they are on a kind of day and a half delay on where they should have been now. It is a slow down, and not a big hiccup, but a slow down.

MALVEAUX: And basically, Chad, they have to remove the debris first, right?

MYERS: Yes, they have to get the debris out which will take about 36 hours. They want the casing in; they want this well ready to go down. They still have another 100 feet down to drill before they intersect where they want to be. You have to understand that this is like trying to poke a pin in a nine-inch well down in the bottom 17 or 18,000 feet down. This is not the first try may not hit. You know the first try when they try to get your I.V., sometimes they don't hit your vein, well, they may not just like this, and depends on the nurse. MALVEAUX: Thanks for comparison, Chad. I am a little queasy now. Appreciate it.

MYERS: Sure.

MALVEAUX: Well, parts of the gulf were reopened to recreational fishing yesterday, and now the Louisiana Governor Bobby Jindal is restoring commercial fishing in much of the area as well. Commercial fishing will be, again, allowed in some of the waters east of the Mississippi River. The governor calls the reopening, quote, he's saying great news for our fishermen and seafood processors who have been sidelined because of the oil spill.

Jack Cafferty is off today, but among the stories that we are working on, fake driver's licenses and birth certificates. They are being used to get real U.S. passports. An undercover probe reveals massive fraud.

And security fears close a U.S. consulate in Mexico. We will talk about the raging drug violence and the impact on the immigration debate here with CNN national security adviser Fran Townsend.

(COMMERCIAL BREAK)

MALVEAUX: An undercover investigation shows that there is still a significant security flaw with the way that the state department issues U.S. passports. Our Lisa Sylvester has been looking into the story, and Lisa, what do we know about this?

LISA SYLVESTER, CNN CORRESPONDENT: Well, Suzanne, this really is a major national security issue. Nine years after the 9/11 attacks, independent investigators show us just how easy it is to get a hold of a valid U.S. passport using fraudulent means.

(BEGIN VIDEOTAPE)

SYLVESTER: These are very real and authentic U.S. passports, but they were obtained using counterfeit driver's licenses and bogus birth certificates. Undercover investigators with the Government Accountability Office applied for seven passports using the phony documents. The state department detected fraud in only two of the initial applications. The GAO says some of the details should have been obvious.

GREGORY KUTZ, GOVERNMENT ACCOUNTABILITY OFFICE: Some of the key flags the state missed include a 62-year-old using a social security number issued in 2009, counterfeit driver's licenses and birth certificates as shown on the monitor to my right there, and one application with a vast age difference of the passport and the driver's license photo. And one application with a California mailing address, a West Virginia permanent address and driver's license and a Washington, D.C. telephone number.

SYLVESTER: Five of the seven passports were issued, but the state department realized belatedly it was part of a sting operation and was able to recover two of those in the mail. This is all of the more shocking because it is the second time in less than two years the GAO was able to show major flaws in the way that the state department issues passports. After the 9/11 attacks, the federal government began to issue a more secure passport with biometric data embedded. An embarrassed state department says since the last sting, they've doubled the number of people in fraud detection and increased training, but state also says it doesn't have the ability to fully vet those so called feeder documents like birth certificates.

PHILLIP CROWLEY, STATE DEPARTMENT SPOKESMAN: We need to have some expanded authorities that allow us to have complete access to the same kinds of information that states have access to when issuing driver's licenses.

SYLVESTER: That is little comfort to public watchdog group the Center for Public Integrity that has also been researching gaps in the U.S. passport system.

JOHN SOLOMON, CENTER FOR PUBLIC INTEGRITY: This is what gets you into the United States. It's your credibility, your identity and if we are giving them away as easily as to someone who has a fake driver's license or a dead person's identity or the social security of a 1- year-old and they were 62 years old on the application, then we are really at risk.

(END VIDEOTAPE)

SYLVESTER: Senator Ben Cardin has introduced legislation to give the state department the same authority that law enforcement officers have to access state birth and death records. State officials also want to require all people seeking a passport to provide a valid social security number which is Suzanne something that is not currently mandatory.

MALVEAUX: It is surprisingly how easy that works that you can fool the authorities. Thank you very much, Lisa.

Well, a key U.S. consulate just across the border in Mexico has been closed for a security review. U.S. officials are offering no explanation, but the move accompanies a surge of violence in the area. It also comes as Mexico announces that a key drug cartel leader was killed in a military raid in the south near Guadalajara, and joining me is CNN national security contributor Fran Townsend. She was President George W. Bush's homeland security adviser and also served in the Clinton justice department. She is currently an external board adviser to the homeland security department.

Fran, obviously the drug cartel is a big problem on the Mexico part of the border. Two trips I went with President Obama, and the rhetoric has changed. They say that part of the problem is that the U.S. has a greet demand for the drugs, and we are contributing to this. Is there a real partnership with the United States and Mexico in fighting the drug cartels?

FRAN TOWNSEND, CNN NATIONAL SECURITY CONTRIBUTOR: Well, Suzanne, this is a problem when I was in the government that I personally worked on with others over the last decade. Going back to my time in the Clinton justice department, we began this thing called the bi- national commission meetings where senior levels of government would get together at the cabinet level. We saw a meetings with Secretary Clinton and Secretary Napolitano talking about the border violence and the border security and the drug cartel issue. There is a real partnership, but it is a difficult one, especially when you see the arrests of police officers. Our very partners on the other side of the border are people who have corruption, money and drugs have the better part of and it makes it a difficult partnership.

MALVEAUX: And how is this related to the immigration debate? Because that's what a lot of people saying on this side of the border you know what, there are a lot of problems with crime, with drugs, with cartels, and we are afraid.

TOWNSEND: Well, this is the rally cry for states like Arizona and Texas where they see this influx and they fear the violence slipping across the border. And I think that they rightly call for the federal government to do more. It is one of the reasons that George Bush when he was president understood the need to do the enforcement first before the comprehensive immigration reform. He wanted the comprehensive approach, but understood the enforcement piece had to come first and I think that is the same thing that the Obama administration is seeing now. They are going to have to convince people they have a real effective handle on the enforcement approach before the president can push through a comprehensive reform.

MALVEAUX: OK. Thank you, Fran, for joining us. Have a great weekend.

TOWNSEND: You, too.

MALVEAUX: Shock and anger back home as a veteran lawmaker faces serious ethics charges in the house. We're in Harlem getting reaction from the people Charlie Rangel represents.

Plus, new details leaking out of the wedding of the year. That is right, Chelsea Clinton's nuptials just hours away.

(COMMERCIAL BREAK)

MALVEAUX: Lisa Sylvester is monitoring some of the other top stories that are coming into THE SITUATION ROOM right now. Hi, Lisa, what are you working on?

SYLVESTER: Hi, Suzanne. The justice department says that Northwest Airlines will plead guilty to conspiring to fix prices on cargo rates between the U.S. and Japan. The airline has reached a deal with prosecutors that includes a $38 million fine in cooperation in an ongoing investigation of the airline cargo industry.

And he spent 27 years in prison for a rape he did not commit. Michael Anthony Green was on the verge of freedom when he was sent back for one more day behind bars because the Houston man shouted at deputies who handcuffed him and shackled him before a final court appearance. Green he said that the cuffs were too tight, and after one more night in incarceration, he was finally freed this afternoon. New stem cell developments are giving hope to arthritis patients who need joints replaced. For the first time researchers have successfully regenerated the limb joints of a rabbit using the animal's own stem cells and the animal regained normal function after the procedure. So far, this has not been tried in humans and the study appears in the British medical journal the Lancet.

In South Dakota, a record-breaking hailstone nearly the size of a soccer ball. Take a look at this. There it fell from the sky during a thunderstorm with a whopping 18 1/2-inch circumference. The one pound 15 ounce hailstone has been officially declared by NOAA as the largest ever recorded in the United States. The hailstone is an inch larger in diameter compared to previous record holder, and that is certainly something that you don't want to be around when it is falling.

MALVEAUX: Lucky, nobody got hit by that one. OK. Thank you, Lisa.

Michigan hopes for a battery-powered comeback as President Obama drives an electric car. But is that really what the future will look like?

And a Congressman gets pulled over by police in the middle of a live phone interview at a radio station. Wait until you hear what happened next.

Plus, you have seen her grow up, but will you get to see her get married tomorrow? Chelsea Clinton tries to avoid the spotlight, but I will ask a wedding planner to the stars if that is really possible.

(COMMERCIAL BREAK)

MALVEAUX: Well, it is arguably the wedding of the year bringing some of the biggest names in Washington and Hollywood to a small town in New York, Hudson River Valley. Tomorrow Chelsea Clinton marries her longtime boyfriend Marc Mezvinsky and with the celebration now just hours away, there's details of a top secret event that are already spilling out. Our CNN national correspondent Susan Candiotti is there, and Susan, give us the juicy details. What do we know?

SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT: Well, a little bit of dish here. We are hearing the rumors that Oprah, and Barbra Streisand will be here, but we have no confirmation of that, but we did see a pretty big celebrity sighting. I we think you will agree. Take a look, none other than former President Bill Clinton and also known as the father of the bride he showed up in downtown Rhinebeck this morning and stopped to have lunch in an Italian restaurant and he was surrounded by spectators and someone yelled out, are you excited? And he said, oh, yes, I'm excited. And someone else wanted to know, will Chelsea look beautiful? And he said, she looks beautiful everyday, just like a father would tell you. And just over my shoulder is that road that leads to the estate of the late millionaire John Jacob Astor. That is where the wedding will take place. One of the neighbors told us that the Clintons handed out bottles of wine to all of the neighbors in the area apologizing for any possible inconvenience. Nice touch.

(BEGIN VIDEOTAPE)

CANDIOTTI: On the banks of the Hudson less than two hours of New York City, Rhinebeck is a picture postcard setting for Chelsea Clinton's summer wedding.

JIM LANGON, HUDSON VALLEY NEWS: You could make the case that this is the significant thing to happen in Rhinebeck since Washington's army drove back the British out of Rhinebeck in the 1700s.

CANDIOTTI: And yet even police are not to blurt it out.

UNIDENTIFIED MALE: There is a private event that's planned for the Rhinebeck area.

CANDIOTTI: Maybe the understatement of the year. But throw in a few lines like --

UNIDENTIFIED MALE: We are working with the secret service and providing direct support to United States Secret Service.

CANDIOTTI: Virtually no doubt, Chelsea and fiance Marc Mezvinsky are going to get married right here. Tucked into a tree top hill, party tents are in place at the late John Jacob Astor's sprawling estate. A lot of activity continues to go on outside of the Astor Courts, and this is where the wedding is expected to be. Look, there is another bus going in there, and across the street, you can see what appears to be some kind of delivery truck, maybe a catering truck, and they have even blocked out the letters on it, so you can't tell who it belongs to, because if we did, we would be calling them right away.

NANCY AMY, RHINEBECK AREA CHAMBER OF COMMBERCE: Nobody wants information about the wedding getting out the day before the wedding.

CANDIOTTI: Hudson Valley News editor Jim Langon broke Rhinebeck's biggest nuptials story weeks ago and even his best buddies won't dish about the details.

LANGON: One of them was in a swimming pool with me three days ago and he was speaking Swahili than rather answer any of my pathetic attempts to get information out of him.

CANDIOTTI: For an event planner, how big of deal is this?

TATIANA BYRON, EVENT PLANNER: This is the wedding of the century.

CANDIOTTI: Event planner Tatiana Byron says fashionistas are dying to see what Chelsea will be wearing. Wedding guests can't bring cell phone.

Do you think that anyone will try to sneak something in?

BYRON: Yes, for sure. People will try to sneak things in but it's going to be really difficult when you have the local police and the state police and the secret service on your tail.

CANDIOTTI: The world has watched Chelsea grow up, even comforting her parents during rocky times and eventually campaigning for her mom, and always known for protecting her privacy.

CHELSEA CLINTON: I do not think that is any of you business.

HANK SHEINKOPF, DEMOCRATIC STRATEGIST: This young woman has survived tumultuous time of her parents, and has chosen to marry in a ceremony that is open to those who are invited because they are real friends and not for any other reason.

(END VIDEOTAPE)

MALVEAUX: Susan, what is the plan tonight?

CANDIOTTI: Well, of course tonight is the rehearsal dinner, and we saw the state police, the U.S. Secret Service are staying at the entrance of this. It's a place called Stone Barn, a private home where all of the guests are now being believed to start to gather, but there is a security sweep going on in downtown Rhinebeck at a hotel located right there the Beakman Inn. And there is talk that it could cost up to $3 million or $5 million, some are saying even 10 times that amount but a long-time Clinton family friend tells CNN that the figure is less than $1 million. Ouch, either way. Back to you.

MALVEAUX: All right. Susan, keep us posted if you see any celebrity sightings.

Well, celebrity weddings are in a different category for most nuptials. Mindy Weiss knows them well. She has helped plan the weddings of starts including Heidi Klum, Eva Longoria and Ellen Degeneres, and what you have seen and based on what you know about Chelsea Clinton's wedding how does this compare to some of the others that you have actually planned?

MINDY WEISS, CELEBRITY WEDDING PLANNER: Well, everybody asks me, what is the difference between a celebrity wedding and a normal wedding and right here, it is the security. That is the major issue here, because everybody wants to have their wedding day. And having known the Clintons a little bit myself, I know that they are a traditional family, and want the best for their daughter. So that the security is what is going to get in the way and needs extra attention.

SUZANNE MALVEAUX, CNN ANCHOR: How do you keep all of this so secret and quiet? How do you actually prevent people from talking about it, and yeah, I'm a guest and I'm going, and talk all about what they are going to be doing?

WEISS: Well, I predict that they have probably wrote a beautiful letter to all of the guests asking for their respect, their privacy, and it is an intimate moment, and they only want to share it with the people they invited and what a privilege, if you are invited to this wonderful event.

MALVEAUX: What makes it more difficult, a celebrity wedding and how is that different from a normal wedding? What do you have to deal with?

WEISS: Well, a lot of the celebrities don't send out a wedding invitation, and how sad to not have a traditional wedding invitation. At Fergie's wedding for a party favor, we gave out a wedding invitation, because she wanted one for her memories. So it is really has to stay as quiet as possible. The minute the guests know, and the minute we call and tell them the date, 9 of 10 times, the next day, it is in the news. It is not always because the people are selling it, but sometimes, it is Aunt Bertha who is so excited and she has just told the wrong person.

MALVEAUX: Now, the celebrities, and you deal with them all of the time, how are they different from other guests? Do they have their own set of requirements, their own security, and are they kind of like prima donnas themselves and have to be taken care of during the wedding ceremony?

WEISS: You know what is wonderful, I think because they are always in the limelight, they do not require any attention. If anything, they really want to be quiet and enjoy the moment, and sometimes in the celebrities, I have met them only four times to plan the entire wedding because of the busy tour schedules or because we do so much online. So truly, they are respectful of time, happy that you have become their friend, because a lot of them don't have time for a lot of friends, so, you are in their intimate moment. So, that is a little different than a bride who hires me that I see once a week.

MALVEAUX: In the age of cell phone and blackberries and cameras, how do you keep the people from actually taking pictures?

WEISS: Well, what we do is that for celebrities, we actually inform them beforehand, no phones, no cameras. When they come, we check them again, and we actually have a station like you would check your coat, we have a cell phone and camera station where they can leave it there. And then inside, we set up an actual phone table. Some people want to check on the kids or the doctors and business people, but so, at least they know they can make a call, but we make sure that there are no cameras attached.

MALVEAUX: And tell me, any advice that you would give to the Clintons going into the weekend tomorrow? This wedding?

WEISS: Well, I just hope they can just put their blinders on and ignore all of the stuff going on around, because I am sure it is havoc right now. I'll bet you right now it is rehearsal dinner time, and I think that they know, they know that this is the only daughter, and their only time hopefully she is going to get married, and they are going to take it all in. I always say thank god for photography and videography, because you can't miss a moment.

MALVEAUX: OK. Thank you, Mindy. We appreciate it. Thank you.

WEISS: Thank you.

MALVEAUX: Well, police pull over a Congressman during a live radio interview, and you will hear what shocked listeners actually heard.

And a major new development in allegations of sexual abuse against former vice president Al Gore. Prosecutors in Portland, Oregon have just put out a statement, and so has Mr. Gore. We are working on that story.

(COMMERCIAL BREAK)

MALVEAUX: Lisa Sylvester is monitoring some of the other top stories coming into THE SITUATION ROOM right now. Hi, Lisa. What are you working on?

LISA SYLVESTER, CNN CORRESPONDENT: Well, Suzanne, we have some new information. The district attorney for Portland, Oregon, has just announced he will not be charging former vice president Al Gore in connection with allegations of sexual abuse. A massage therapist had claimed she was victimized by Gore in 2006. But police investigators are not recommending prosecution citing a lack of credible evidence. A statement from Gore's office welcomes the news saying that the former VP denied the accusations from the beginning.

A sign of just how tense relations are between U.S. personnel and Afghan citizens. Rioting broke out in Kabul after a car carrying American contractors was in an accident with a car full of Afghans, some of whom were killed or seriously hurt. An angry crowd burned the American's car and threw rocks at the passengers even though they were cooperating with the Afghan security forces investigating the wrecks.

Malaysia has a new twist on the TV talent shows and this is not looking for the next top singer, designer, model or chef. It is searching for a Muslim cleric, and the hugely popular show is called "Young Imam." And today, the winner was revealed, the 26-year-old gets a pilgrimage to Mecca, and a job at the mosque.

There is never a good time to be pulled over by the police, but the timing couldn't have been much worse for Congressman Dan Lundgren. The California Republican was in the middle of a phone interview with a radio station in his home district as he was driving in suburban Washington. Listen to this.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: We are talking about specifically this morning the passage of the international Meghan's law; can you tell folks about it?

UNIDENTIFIED MALE: Can you hang up the phone, sir?

REP. LUNGREN: I have to get off of the phone just a moment here. Can I call you back in just a second? I'm sorry. I'm talking to a police officer here.

UNIDENTIFIED FEMALE: No, you go ahead to talk care of your business, and we will let you go.

(END VIDEO CLIP) SYLVESTER: Oh, boy. Well, a Lundgren aide says that the police officer let the Congressman off with a warning. I assume that he was on a cell phone driving through District of Columbia, and that is a no-no, because they have banned the use of cell phone unless you have a hand's free device.

MALVEAUX: I could see that happening to me, so it is a good lesson to learn there. Thank you, Lisa.

Well, President Obama hopped into an electric car and hailed the recovery of the auto industry, but could to economy still slip into reverse?

Did you know that the white house has more art than many museums? We will take you on a private tour.

You are in THE SITUATION ROOM.

(COMMERCIAL BREAK)

MALVEAUX: President Obama drove a car today for the first time, yup, in three years. It was part of his visit to Detroit hailing the recovery of the auto industry. But economic numbers also out today show that 2.4 percent economic growth, and that is under what was expected, and consumer spending remains weak. Joining me is chief political correspondent Candy Crowley of CNN's "STATE OF THE UNION" and chief national correspondent John King who is host of "JOHN KING USA" up at the top of the hour. Thank you for joining me. You look at the numbers and you know that the president is trying to put a good face forward. Is he going to credit at least for some of the good economic news?

CANDY CROWLEY, CNN CHIEF POLITICAL CORRESPONDENT: I am thinking not. I mean, I just tell you that it is tough to fight that 9.5. He is in Michigan, but guess what, the unemployment rate is over 13 percent. So, look, I think the people that want to give him credit will give him credit. And those who don't, won't. And I think the question is always, what about the middle? What we are seeing so far is that the middle is not giving him credit for an economy that they think is still bad.

MALVEAUX: And John, these visuals that the president is driving around in a car and everything and some people say, that looks like political stunt here, and that is not convincing them that things are getting better.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: The biggest challenge for the president right now is the psychology of the economy, because we have an economy that is largely driven by consumer spending, and consumers are still nervous. They're not sure if they come forward and spend a little money they will get some pause and retreat. So the president needs to say, things are getting better. In the case of the auto industry, he wants to say a lot of people said if I helped bail out this industry, it would fail and it's starting slowly to come back. So in that particular issue, the president is on pretty solid ground, be to Candy's point, look, if people don't feel it's getting better, the risk for the president is to have a disconnect. If they see the president being upbeat and optimistic and they're looking around in their town with 9 percent or 10 percent or in some states 12 percent or 14 percent unemployment and for them to look around and say, Mr. President, what planet are you on? But he has to try it, because the more people feel down about the economy the more the Democrats will suffer in November.

MALVEAUX: And the president was back in Michigan again. This is - you know he was there a couple weeks ago and I went with him on a trip and today in Detroit and I had a chance to talk to the Michigan Governor Granholm, and they are touting this new industry of producing the electric batteries for the electric vehicle, but one of the things that is happening and she admits is that they got a lot of money stimulus money, state money pouring into these companies, and it is a foreign company that's providing American jobs, but it is still a foreign company, so how much further do they have to go before we actually start to see a turnaround where you've American companies take over the industry?

CROWLEY: Well, there is less of a problem, as long as it is American jobs, I don't think people are going to care. I think that is totally irrelevant, but the problem is the stimulus money is about to run out. You just talked about the second quarter where it was very weak and economists believe that the third quarter will be weaker still. So as long as you have numbers like that, nobody really cares where the jobs come from.

KING: And the autoworkers not that they don't love GM, Chrysler and Ford and the landmark American companies, but if it's a union in a Toyota plant or even a non-union job in a BMW plant in Alabama, it is an American job. But to your point Suzanne, a lot of these new green economy jobs as the president calls them, a Korean company makes those batteries. Yes American jobs but for an auto industry that's lost 300,000, to get 50,000 back is great, but it is not the 300,000. I visited a wind turbine factory outside of Philadelphia, and a Spanish company with 400,000 employees and they love that job, but when that was a big U.S. steel plant where it is, there were 15 or 20,000, so they are slowly growing the jobs, but not on the scope and scale that the president needs to say we are truly back.

MALVEAUX: All right. John and Candy, thank you so much, look forward to seeing your shows. Appreciate it.

His home district is being rocked by ethics charges against Congressman Charlie Rangel. We are in Harlem getting reaction.

Plus moving paintings and a white house ghost? We will get the inside scoop in a private tour from the white house curator.

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MALVEAUX: He has been one of the most powerful members of the House of Representatives, but his colleagues now accuse Congressman Charlie Rangel of a series of rules violations. An ethics committee investigator says that Rangel may face a reprimand which would be a relatively light punishment. There is shock in New York's Harlem district which Rangel has represented for decades. Our Mary Snow has been getting reaction, and Mary, what are people saying? How do they feel about this?

MARY SNOW, CNN CORRESPONDENT: Well, it is mixed reactions, Suzanne. Just a week ago today, Congressman Rangel said he would be relieved when the constituents could see the results of the house ethics committee investigation and now that the report is out, we asked his constituents what they think.

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SNOW: With 13 ethics violations brought against Democratic Congressman Charles Rangel in Washington, back home in New York, he faces headlines like this one, the "New York Post" declaring he is all washed up. In Rangel's home district of Harlem where he has served for 40 years, mixed reaction.

JERMAINE ALEXANDER, HARLEM RESIDENT: 13 or 15 -- 13 different counts. Mr. Rangel has done so much for Harlem and especially for New York. It's surprising.

SNOW: While Jermaine Alexander encourages him to fight and stick with his bid to get re-elected, others think his time is up. What do you think he should do now?

FRANK GADDY, HARLEM RESIDENT: He should get out. It's time to go. It's time for him to go. He done his thing. He done got his money saved up. It's time for him to move. Put somebody else in that will help the people.

SNOW: Dolores Richards blames race as a factor.

DOLORES RICHARDS, HARLEM RESIDENT: The same thing has been done to the honorable Adam Clayton Powell. This is like deja vu.

SNOW: Adam Clayton Powell faced misconduct allegations and lost his House seat to Charles Rangel in 1970.

RICHARDS: Any time anybody black gets into any kind of position of any little bit of power, people go after them, for whatever reason.

SNOW: One of the charges accused Rangel of improperly using a rent stabilized apartment in Harlem as a campaign office for more than a decade. Another charge involves the center bearing his name at City College. Rangel is accused of soliciting money from corporate heads with business before the house ways and means committee, a committee he chaired until stepping down earlier in the year. On Thursday Rangel said he took some comfort that the charges didn't involve corruption, wrongdoing or self-dealing.

REP. CHARLES RANGEL (D), NEW YORK: Even though they're serious charges, I'm prepared to prove that the only thing I've ever had in my 50 years of public service is service. That's what I've done.

SNOW: Rangel is seeking a 21st term. And at a time when Democrats are facing an uphill battle, if there's nervousness about Rangel, this New York Democrat isn't showing it.

HERMAN D. FARRELL (D), NEW YORK STATE ASSEMBLY: I'm a Democrat and I'm not nervous. I come from New York City. I don't know a Democrat in Idaho, if there is such a thing, about how they feel. Within New York state and New York City, we feel in very good shape.

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SNOW: This election, while Congressman Rangel is seen as the favorite, he faces an unprecedented numbers of challenges. Four Democrats are running against him including the son of Adam Clayton Powell. Suzanne?

MALVEAUX: Thank you, Mary.

It's the seat of executive power, and it's a family home. But the white house is also a museum with a one-of-a-kind collection. We get a private tour from the man in charge of it all.

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MALVEAUX: They're residents of 1600 Pennsylvania Avenue that transcend politics. There are hundreds of works of art, all overseen by the white house curator. He gave us a private tour.

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WILLIAM ALLMAN, WHITE HOUSE CURATOR: This is the red room. It's the sort of mirror image of the green room. The two rectangular parlors that flank that oval-shaped blue room in between.

MALVEAUX: What kind of art in general is here at the white house?

ALLMAN: Well, we have - I mean principally our collection is portraits of presidents and first ladies.

MALVEAUX: We'll get that with white house curator Bill Allman in a minute. First, some surprises.

The most famous portrait inside the white house is this portrait of George Washington. As famous as it is, it actually has a mistake. Here it says the constitution laws of the United States. It's missing the "T." The painting is the only piece of art from the original white house that burned down. Officially there are more than 500 works of art here. Nearly everything is considered part of the collection, from the cloth walls, carpets, furniture and odd objects.

ALLMAN: One of the most interesting pieces is the silver-plated hot water urn. Above the spigot it is engraved with the initials J.A. for John and Abigail Adams.

MALVEAUX: And this unique chair. Can I sit in this chair?

ALLMAN: Sure.

MALVEAUX: Tell me who has sat here.

ALLMAN: Most often it's the first lady. I think you know Mrs. Bush and Mrs. Clinton both particularly like this chair and the guests got to sit in this chair.

MALVEAUX: This is considered part of the artwork, this is considered a part of the historical collection?

ALLMAN: Right. Now unlike most museums where everything is under glass and behind ropes, here the nature of the white house collection is for people to come in and actually be able to enjoy it in the sense of sitting on the chair, walking on the carpet, eating off the china.

MALVEAUX: Bill, I have to say, I am enjoying this chair. It's very comfortable. You let me know when I can eat off the china, okay?

Most of the pieces on the first floor are from the 19th century, traditional portraits and landscapes with a few recent modern editions like this abstract from African-American artist Jacob Lawrence. There are fresh flowers everywhere.

ALLMAN: Fresh flowers weren't in the white house until the 1850s. It was considered unhealthy. They had glass or cloth flowers, and they ask all the time. They're always asking me what are the species? That's roses. I got roses down. Beyond --

MALVEAUX: Very beautiful. Part of the art as well.

350,000 visitors traipse through each year.

Does Bo, the dog, does he get to run on the carpets? Are there any room that are off limits?

ALLMAN: As far as I can tell, no. He's a really good dog.

MALVEAUX: Has he ever messed up the carpet?

ALLMAN: Not that I've been told.

MALVEAUX: And like I promised, all the past presidents and first ladies are here.

ALLMAN: This was painted by Samuel Morris who invented the telegraph. This one, based on the idea that Lincoln sitting in this chair listening to his generals and his admiral advice him on how to bring the civil war to a conclusion. President Kennedy was done by Aaron Schick her, a very contemplative looking down with the weight of the world on your shoulders kind of painting.

MALVEAUX: That's what Mrs. Kennedy wanted. Let's take a look at the first ladies.

ALLMAN: This is the ground floor corridor.

MALVEAUX: Here Hillary Clinton, Jacqueline Kennedy, Lady Bird Johnson and Eleanor Roosevelt.

The art collection of the first family, their private collection is in the residence in the east and west wings. That's where you see their personality and tastes reflected in their artwork.

If we were in the Obama residence, what kind of different art would we see?

ALLMAN: Well, it's these large, generally abstract works by famous American artists, Jasper Johns, Louise Nevilleson.

MALVEAUX: Also more works by African-Americans, women and other minorities. In the oval office a bust of Martin Luther King and a Norman Rockwell of the Statue of Liberty torch. But before we let Bill go, we had to ask one more question.

There have been lots of rumors about the white house being haunted. Any of those paintings ever seem to talk to you or --

ALLMAN: I'm not big on the haunting story. But there are people -- President Truman thought it was true. He claimed President Lincoln's ghost was here. He claimed that the paintings were moving because of President Lincoln's ghost.

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MALVEAUX: Bill, the curator also told us at one point the white house used to auction stuff off and people would buy it and then they would occasionally come back to him with pieces that they say their grandmother told them came from the white house. Well, he can test it, tell them whether or not it did indeed originate from the white house. And sometimes they'll actually buy back those pieces and put it back into the collection.

I'm Suzanne Malveaux in THE SITUATION ROOM. "JOHN KING USA" starts right now.