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Hurricane Earl's Path; Fire Erupts on Gas Production Platform

Aired September 2, 2010 - 18:00   ET

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


WOLF BLITZER, CNN ANCHOR: A major Afghan bank on the verge of collapse, it is threatening to take the country's fragile economy with it. Now the brother of the Afghan president wants a bank bailout from the United States of America.

We want to welcome the viewers here in the United States and around the world. I'm Wolf Blitzer. You are in THE SITUATION ROOM.

We are following the breaking news on Hurricane Earl right now. A new update just out in the last hour from the National Hurricane Center. Here are the latest developments.

Earl remains a Category 3 storm, but it has weakened a little bit this afternoon, with maximum sustained winds down to 115 miles an hour. Earl is prompting watches and warnings all along the Eastern Seaboard from North Carolina all of the way up to Canada.

CNN's meteorologist Rob Marciano is on the Outer Banks of North Carolina, where mandatory evacuation orders are now in effect.

But let's begin with our meteorologist and severe weather expert Chad Myers. He's at the CNN hurricane headquarters in Atlanta.

What is the latest forecast?

CHAD MYERS, CNN METEOROLOGIST: The latest forecast is for it still to start losing, still losing steam, and it is going to continue to do that. We knew that was going to happen. It is getting torn apart by some winds in the atmosphere, those same winds that are actually going to make it turn away from North Carolina, that much anticipated turn that took like 10 days too long to happen.

Right now 115 miles per hour. The threshold is 111. When it gets below 111 miles per hour, it will be a Category 2. That is expected later on tonight as it moves away. We can now see this storm on the radar. The radar is out of North Carolina, and there it is, in fact, 217 miles from Cape Hatteras, about 260 miles through Kill Devil Hills.

But there is the eye of the storm right now on Doppler radar. So, we know it is moving. We know it is beginning to turn away eventually. It may be a very slow and painful turn. We knew, though. We know this, if this did not turn, Wolf, that this would slam right into the Outer Banks. It's still a possibility. It could wobble back to the left and go right along the Outer Banks, those very fragile dunes all of the way from Ocracoke right on up even in toward Kill Devil Hills and Corolla.

That does not look like it's going to be the forecast. That is not what the computers are saying, and now it is finally doing what it has been predicted to do for so long -- Wolf.

BLITZER: We have a lot of viewers who are worried further up the Eastern Seaboard, whether in New Jersey or New York or New England, right here in Washington, D.C. What can they expect?

MYERS: Well, eventually, this is going to make a kind of run at what we would call the eastern sections of Long Island, maybe toward Nantucket, and even toward Cape Cod.

That forecast as it continues to lose steam, 85 miles per hour, but that approach will be late tomorrow night, 10, 12, maybe even 2:00 in the morning Saturday morning. And that will just take it to the east of Cape Cod, Cape Hatteras, or Hatteras here and also Nantucket here.

So, finally, that glancing blow as it turns, but the biggest threat, the biggest threat to life will be if you are in the water with those rip currents that are going to be everywhere from New York all the way down to Florida for the next few days -- Wolf.

BLITZER: just stay out of the water.

And what about all of our viewers in Canada?

MYERS: Absolutely.

BLITZER: How worried should they be?

MYERS: They should be very worried, because that is its next step. It will eventually turn back to the left and get into Nova Scotia. This is the Bay of Fundy, a very large swell. If you go -- you can Google Bay of Fundy and figure out the tide that they get in there.

It could be at times 40 feet from low tide to high tide. If you ram a hurricane into that Bay of Fundy, you will increase those tides again, also, all along here from Nova Scotia toward Saint John's, the onshore pounding.

But you know what? Those people up there, Atlantic, Canada, the Maritimes, they are a hearty bunch.

BLITZER: They certainly are.

MYERS: If you have never met them, they can take it.

BLITZER: It's a great part of Canada.

All right, thanks very much, Chad. Stand by. MYERS: Yes.

BLITZER: North Carolina's Outer Banks are just hours away from feeling the storm.

Our meteorologist Rob Marciano is there in Kill Devil Hills.

Rob, we got some new pictures, satellite pictures. I want to show those to our viewers right now. It shows the enormous power and strength of this Hurricane Earl. I can see the wind picking up behind you, certainly the surf as well. Set the scene for us.

ROB MARCIANO, CNN METEOROLOGIST: Well, it has been a slow- developing day. It started out almost sunny at times with just a light breeze, but things have deteriorated throughout the day.

And the size of this storm as it has grown at one point being a huge Category 4 storm, I can tell you that the pulse of this community went from a little bit more casual yesterday to one of much more concern and serious today, with those evacuation orders being made. There was more of an exodus and more immediacy today. I can tell you that.

And there were more accidents actually on the main highway to get out of there probably because of all of that and all this that now is coming in. We have east winds that have been picking up, not quite tropical storm strength yet. We do expect that in the next couple of hours.

But the sea you see behind me, the Atlantic Ocean, is certainly getting a little bit more fierce as time goes on, a whitewash out there. And the big story, as high tide comes in -- and it is not high tide now -- it's about -- it's low tide -- later on this evening, it will be high tide. And those waves will get even bigger.

The difference between here and the Gulf of Mexico -- most of the action tropically the past couple years has been in the Gulf. You get a massive storm surge. Here, the layout is different. The waves are going to be the bigger issue, pounding surf -- 20, 30 feet high -- 30- foot-high waves will be the main concern.

And there are slivers of the Outer Banks that are just that, slivers. So, those waves could actually cut through and overwash the roads. When Isabel, Hurricane Isabel, came through in 2003, it actually made a new. That has been since rebuilt. That may be cut again.

But points south of here, mandatory evacuations for both visitors and permanent residents. Here and points north, it's for mostly just visitors. So, here we go. Things will begin to ramp up tonight. If that eye moves any further to the west, we are going to see some issues.

I did notice that it did kind of grow a little bit and the focus of the center of this storm, Wolf, you know, you have got to remember that the diameter of this eye is 20, 30 miles wide, so if you look at the center, the center may stay offshore, but that western eyewall that could very well rake this coastline.

And we will be talking a lot more than just rip currents. We will be talking about wind damage here as this storm potentially pounds this area for six to 12 hours before it moves up towards New England -- Wolf.

BLITZER: Now, just be careful over there, Rob. We will stay in close touch with you, Rob Marciano on the scene for us in Kill Devil Hills, North Carolina.

There is breaking news right now in the Gulf of Mexico, a fire on an oil and gas production platform about 100 miles off the Louisiana coast -- 13 people have been rescued from the water and of course the immediate fear is another oil disaster.

CNN's Tom Foreman is working this story for us.

Tom, what is going on right now? What do we know?

TOM FOREMAN, CNN CORRESPONDENT: Well, the most important thing we know right now, Wolf, is that the fire is now out on this rig, which is about 102 miles south of the coast of Louisiana out here in Vermilion Bay.

Here is a picture of it earlier in the day when it was burning. Important to know this is a production rig, which is different than the drilling rig that BP was using. Industry folks are making a big point of it today, because they are saying, look, this is involved in producing oil and natural gas, which means there are a lot of things that have been sealed in, a much more controlled environment.

They don't even have a blowout preventer here, like you would have on a drilling rig, because all this is much more permanent. They have many valves and things which shut off the flow of oil and natural gas. They say that all of those were triggered right about the time this happened, which kept any kind of big leak from happening. That is their claim right now.

Obviously authorities are trying to ascertain if that is true. As you mentioned, there were 13 people in the water. The Coast Guard found them there. They spent about two hours floating in the water before they could all be rescued. Apparently, no serious injuries, that is what we are being told.

But let's talk just a little bit more about the differences between this and BP, because they are important and profound -- 102 miles off the coast. The BP spill which is over in this area was about 80 miles off of the coast. But big difference is where they are.

This is in about 300 feet of water, something like that. When you look at the shelf here, you can see the paler area here. You move across the continental shelf here -- I will bring up a better map -- you can see there is a big drop-off here. This is in the shallow water. The Deepwater Horizon, as the name it implied, was in deepwater over here, a much bigger fire on a rig that was producing somewhere around 25 times as much oil as the one we are dealing with today, and most importantly, Wolf, a rig that broke loose on the ocean floor a mile down, where it was very hard to get loose -- get at.

Again, no sign of a spill over here, but big differences between the two rigs, even if there had been one -- Wolf.

BLITZER: Do they have any suspicion of the cause of this explosion?

FOREMAN: They have suspicions, but they have no proof yet. They are launching an investigation. They will look for specific sources of it. Right now they are focusing I believe on a tank that held some of the separating equipment for separating the oil from the natural gas.

BLITZER: We will have more on this story as information comes in. Thanks, Tom.

More than six weeks after a cap was finally placed on BP's ruptured well in the Gulf of Mexico, crews today removed it. It is a critical first step in removing the blowout preventer, whose spectacular failure led to that explosion and fire that triggered the oil disaster in April.

Officials now hope to find valuable evidence inside the blowout preventer and replace it with a new one. This would be a major step toward the final fix of this huge disaster, the worst oil spill in American history.

Jack Cafferty is coming up next with "The Cafferty File."

Then: children holding on to hope in the middle of a disaster. Our own Dr. Sanjay Gupta is in Pakistan with the youngest flood victims.

And calls for the U.S. to bail out an Afghan bank on the verge of collapse, it is raising new concern about the stability of the government in Afghanistan and the overall U.S. mission.

Plus, the Arizona governor's awkward moment in a debate, what impact will it have on her campaign? You will see Jan Brewer's face- off. She fumbled. We will tell you why, what happened. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Jack Cafferty is here with "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: Wolf, for those Americans lucky enough to have a job, stress is the biggest complaint about their work.

A new Gallup poll shows a majority of U.S. workers are completely satisfied with many parts of their job, including their relations with co-workers, the flexibility of their hours, their boss or immediate supervisor, and the amount of work that's required of them. They are least satisfied with stress, followed by their pay, their retirement plan, health insurance benefits, and chances for promotion.

The poll shows 48 percent of workers are completely satisfied with their jobs. That's similar to satisfaction levels of the last several years, despite the onset of the global financial crisis.

What's more, job satisfaction is higher now than it was a decade ago. Go figure. Workers appear to be more satisfied with several aspects of their job than they were in 2001.

Experts suggest that means either employers have become more generous -- not likely -- or maybe employees have become more grateful to have a job or easier to please, since the economy went off the cliff -- much more likely.

Meanwhile, the national unemployment rate stands at 9.5 percent. Underemployment in this country estimated at about double that figure. Stay tuned for the monthly jobs report that comes out at 8:30 tomorrow morning. You can be bet it will be gone over with a fine-tooth comb for any signs that businesses are beg to hire.

Here's the question, then: What's the biggest complaint about your job?

Go to CNN.com/caffertyfile and unburden yourself.

What is your biggest complaint about your job, Wolf?

(CROSSTALK)

BLITZER: I have no complaints at all, Jack.

CAFFERTY: I knew you were going to say that.

BLITZER: And I think all of the people who have jobs right now, given the current state of the economy, should just be grateful that they have a job.

CAFFERTY: Absolutely.

Well, and the research indicated that people are a little more appreciative of having a paycheck and employment than maybe they were a decade or so ago, because it is tough out there right now.

BLITZER: Very tough. Very tough. And tomorrow morning's numbers do not sound they're going to be very good at all.

CAFFERTY: No.

BLITZER: All right, Jack, thank you.

Meanwhile, the United States is launching another major program right now in flood-ravaged Pakistan to try to help families devastated by this horrible disaster. The United Nations now warning that children are especially at risk from the floods, with aid funding slowing down.

Our chief medical correspondent, Dr. Sanjay Gupta, is witnessing the crisis firsthand at refugee camps. And he tells us in this touching report that Pakistan's children are hoping onto their hopes for the future.

(BEGIN VIDEOTAPE)

DR. SANJAY GUPTA, CNN SENIOR MEDICAL CORRESPONDENT (voice-over): Here in Pakistan, there are fields of dreams. They look like this, mixed with pain and poverty. But spend some time here and look closer.

(on camera): So, this is something maybe you would not expect to see. We are in this tent and all the kids in this particular tent are doing their homework. This is Ramsha (ph). She is 8 years old.

She is trying to do her schoolwork, she is telling me. She tells me she wants to be a doctor. People here have dreams, just like Ramsha and a lot of the other kids that are here with her.

(voice-over): They had a real house once, they tell me. It is now covered in water. She had her friends. She went to school. And, yes, she had dreams. It is Ramsha's story. And it may not be much different than yours, starting with the neighborhoods they were forced to leave.

(on camera): Looking at all the images, you may think that people who are affected be this flood only lived in little grass huts. Simply not true. Real neighborhoods affected by this flood as well, homes, and all these people had to flee also.

(voice-over): And she ended up here, no idea how long she will stay, so she does her homework. And her parents' mission, establish some sort of normalcy for their kids, a routine for Ramsha rooted in religion.

(on camera): And you're looking at aid being distributed here. This is rice with some potatoes and chick peas. They put that in big buckets and they distribute it to all these tents.

One of the things that may surprise you a little bit is that they wait until the sun goes down. This is Ramadan. And even here in a camp like this, they make sure to abide by those rules, no food in between.

(voice-over): Ramsha and others in this camp are surprised when I share reports about the floodwaters starting to recede, surprised because just this week another million people in southern Pakistan became displaced fleeing waters on the rise.

(on camera): And she said she knows some English and she wanted to try that out with me as well.

So, what is your name?

UNIDENTIFIED FEMALE: My name is (INAUDIBLE).

GUPTA: Your name is...

(LAUGHTER)

GUPTA: OK. And you are answering for her?

What is your name?

UNIDENTIFIED MALE: "My name is Ramsha."

UNIDENTIFIED FEMALE: My name is Ramsha.

GUPTA: Very good. Very good.

(voice-over): Nothing can change this reality, more than a dozen awful deaths over the past week here, and people who have lost everything simply trying to survive. But that is the thing about hopes and dreams. They are spread equally throughout the world and no one can take them away from you.

(on camera): She says she really likes to go to school and she says she is studying really hard to be a doctor.

UNIDENTIFIED FEMALE: Yes.

GUPTA: Yes. Do you think you can do it?

UNIDENTIFIED FEMALE: I don't know.

GUPTA: You can do it.

Dr. Sanjay Gupta, CNN, Bin Qasim, Pakistan.

(END VIDEOTAPE)

BLITZER: Remember, you can go to CNN.com/impact to impact your world, if you want to help the people in Pakistan, CNN.com/impact. It is a good idea.

Thanks, Sanjay, for doing these reports.

Another oil rig blaze in the Gulf of Mexico. An oil platform goes up in flames -- 13 workers are tossed into the water. Are we seeing another BP disaster or something very different?

And a debatable performance. Can Arizona's governor recover after a campaign debate fumble?

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

(COMMERCIAL BREAK)

BLITZER: We're standing by for an update on Hurricane Earl. You can see, it is moving toward Cape Hatteras in North Carolina. It should be hitting in the next few hours. Chad Myers is standing by at the CNN Hurricane Center. We will give you all the information you need to know. It's coming up in a few moments.

(NEWS BREAK)

BLITZER: THE SITUATION ROOM, by the way, is now on Facebook. You can Facebook.com/CNNSituationRoom. Click on the like button to become a fan. You will get latest show updates and exclusive behind- the-scenes material on Facebook.

Fears of another disaster in the Gulf of Mexico. Another oil and gas platform today catches fire, forcing workers to leap for their lives into the water. We are learning new details.

Stand by.

(COMMERCIAL BREAK)

BLITZER: Let's get an update now on the breaking news we are following -- Hurricane Earl closing in on the U.S. East Coast right now.

CNN meteorologist, our severe weather expert Chad Myers is at the CNN hurricane headquarters in Atlanta.

Give our viewers an update. What is happening right now, Chad?

MYERS: Down to Category 3.

Now, that is good, although it is 115 miles per hour, 115. The threshold between two and three is 111. So, it is not a very big Category 3 and it will lose its Category 3 status later on tonight. But there is the eye. You can see it on radar.

There is Cape Hatteras. And here is Morehead City. Here would be Cape Hatteras right there. Our Rob Marciano is right up there. Kill Devils Hills going to be feeling that. Still moving off toward just east of due north there, making its closest approach to Cape Hatteras probably -- I don't know -- probably six or seven hours from now.

That's when we will see the highest winds blowing onshore here and probably knocking down some of the dunes, as Rob was talking about a little bit ago.

Another thing we are talking about, you think, well, you only get updates every once in a while, every, what, three hours, two hours? No way. Look at this airplane right there, Wolf. Airplane called Miss Piggy flying right through it right now and every little notch that you see right there is an indication of what that plane and those people in the plane are feeling.

We can keep up to date on this hurricane minute by minute by minute and we will do it all night long.

BLITZER: And even if it does not hit, make landfall directly, the outer parts of this massive, massive storm are going to have a direct impact? (CROSSTALK)

MYERS: No question about it. And we talk about that a lot. We talk about, don't focus on the eye, because with a storm this large, as it was a Category 4 last night, the arms of this storm will circle like this. OK, yes, only the middle will feel the hurricane-force winds, but tropical storm force winds will go out farther than that.

And there may even be some flooding from the heavy rainfall around that. So, yes, a hurricane is a large mass, not just the eye.

BLITZER: Thanks very much, Chad. We will continue to check back with you.

Let's get the latest right now on that fire that was burning in the Gulf of Mexico today. An offshore oil and gas production platform went up in flames -- 13 people were thrown into the sea.

Brian Todd is following these developments for us.

Brian, all 13 of these folks have been accounted for.

BRIAN TODD, CNN CORRESPONDENT: All 13 have been accounted for, Wolf. That's according to the Coast Guard and according to Mariner Energy, the owner of the platform.

We have some dramatic new pictures of all of this, this from TV station KATC of Lafayette, Louisiana. Now in one of the pictures you can see the 13 workers in the water, waiting to be picked up. Pretty dramatic stuff.

None of these crew members was hurt in this incident. Louisiana Governor Bobby Jindal visited these workers in the hospital, says they spent about two hours in the water. One of them reported sun burn, but otherwise, the injuries are fairly minor.

Now, this fire happened on the Vermilion oil rig 380. That's the name of it. It's about at least 80 miles south of Vermillion Bay, Louisiana. Some reports put it at about 100 miles south of there. Mariner says the fire was reported to the Coast Guard by workers on a nearby rig at about 10:20 Eastern Time. It burned for several hours. And there were earlier reports of a sheen in the water, but a short time ago, the Coast Guard clarified all of that.

(BEGIN VIDEO CLIP)

CAPT. PETER TROEDSSON, U.S. COAST GUARD: The fire is out. And Coast Guard helicopters on scene and vessels on scene have no reports of a visible sheen in the water. There's no report of an evidence of leaks, but we continue to investigate and to monitor that situation to make sure that that doesn't change.

(END VIDEO CLIP)

TODD: All of us will be waiting to see if that doesn't change, as well, because we all have nightmares about the earlier spill off the Deepwater Horizon.

Now the owner, Mariner Energy, says the automated equipment safely shut off the flow of oil and gas before this fire occurred. The cause is still under investigation.

Very important to note: this is an oil and gas production platform, not a drilling rig. Production platforms act as pumping stations to move oil and gas from its source to a pipeline for transportation, Wolf. This is not like the Deepwater Horizon. It doesn't do drilling operations.

BLITZER: You've been looking into the inspections of this platform, the track record of the company, as well. What did you find?

TODD: Well, an official with the Bureau of Ocean Energy Management -- this is formerly the Minerals Management Services -- says the last inspection that this form -- this platform had was on January 12 of this year. This official not able to provide the results of that inspection, but we hope to get those very soon.

We have found on the bureau's Web site records of Mariner's violations and fines since 2006. Last year in one incident a heliport on one platform -- I don't know which one -- it may very well not have been this one -- was taken out of commission after a fire. A boat landing there was also found to be unsafe. So inspectors found personnel did not have a safe way to get off the platform. There was a fine in that incident of $20,000. Mariner got hit for that.

Also, last year, was found that one of Mariner's operations was conducted without adequate contingency plans for safety. They got a $35,000 fine for that one.

And in 2006, an employee was injured when he fell about 11 feet while working on an electrical tray above a deck. Mariner got a $30,000 fine for that incident. Important to note that these kinds of incidents, from what we have researched in the past with the Deepwater Horizon and other incidents, probably not uncommon in a lot of these rigs, Wolf.

BLITZER: Brian, thanks very much. Good report. We'll stay on top of this story for our viewers.

Arizona's governor gives voters a campaign debate to remember and one that she will prefer to forget. Stay with us here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: A very awkward showing by the Arizona governor, Jan Brewer, in her debate last night with the Democratic opponent, Steve Goddard, and that was followed by an even worse run-in with the news media. Take a look and listen.

(BEGIN VIDEO CLIP) GOV. JAN BREWER (R), ARIZONA: I have done so much, and I just cannot believe that we have changed everything since I have become your governor in the last 600 days. Arizona has been brought back from its abyss. We have cut the budget. We have balanced the budget. And we are moving forward. We have done everything that we could possibly do. We have -- did what was right for Arizona.

UNIDENTIFIED FEMALE: Why wouldn't you recant the comment you made earlier about the beheadings in the desert?

UNIDENTIFIED MALE: That's a serious question, Governor.

BREWER: Well, this was an interesting evening tonight.

UNIDENTIFIED MALE: Governor, please answer the question about the headless bodies. Why won't you recant that? Do you still believe that? Come on, Governor.

BREWER: OK. Thank you all.

UNIDENTIFIED MALE: Governor. Governor.

UNIDENTIFIED MALE: I'm astonished, frankly.

(END VIDEO CLIP)

BLITZER: All right. Let's talk about this with our senior political analyst, Gloria Borger, and with CNN's John King. He's the host of "JOHN KING USA." That begins right at the top of the hour. How big of a mistake is this for the incumbent?

GLORIA BORGER, CNN POLITICAL ANALYST: Well, it was painful to watch. It was a complete meltdown. The answer or the lack of an answer in her introductory remarks.

Look, she's 20 points ahead in the polls. It's not going to kill her candidacy. She's still an overwhelming favorite. But I think what was even worst was the second clip you showed, and that was her inability to defend something that she had said, which was that there had been beheadings. And, you know, you have to -- you have to have an answer for those questions. Either say, "I said it and I stand by it" or "I was misinformed."

BLITZER: What are you hearing? What's the reaction out there in Arizona?

KING: Well, the Democrats think, actually, this is a potential opening. They don't say it's a huge opening. They say it's a potential opening. She has been comfortably ahead in all of the statewide polling, but if the state is just tuning in.

We're in the final stretch, nine weeks to election day. They saw that from the governor last night. You know, all of us who do live television have to have a little bit of empathy for the governor there. But as a politician, that's the part you rehearse over and over again, your opening statement. Because they tell you, especially when you're ahead like Governor Brewer, you knock this debate out of the park. This one could be over, and she just froze.

BLITZER: And speaking of Arizona, Joe Arpaio, the sheriff, the well-known sheriff there, he's got himself into some more trouble today with the U.S. Justice Department.

KING: The Justice Department sued him, saying that he is not cooperating with the civil rights investigation. So I interviewed him earlier today and talked about that. He says the Justice Department, in his view, is trying to sandbag him. He says his lawyers are trying to work this out, says they're asking for every document he has, to interview everybody in his office. They need to limit what they want. But this one's going to go on and on and on.

But Wolf, you know, that controversy with Governor Brewer we just talked about there, she had said earlier there are beheadings, as part of the illegal immigration issue. And Arizona media tried to investigate. And none of the coroners have reported any beheadings. So I asked Joe Arpaio. He's the sheriff. I said, "What about your county, any other counties? Have you ever heard about a beheading?

(BEGIN VIDEO CLIP)

SHERIFF JOE ARPAIO, MARICOPA COUNTY: I'm not going to speak for her. That's her comments. I'm not running for governor. I just spent 14 years in Mexico on the border. But I don't -- well, maybe she was talking about across the border, you know, Mexico and the United States and Canada, North America. I don't know what she was talking about. But I'm not going to talk -- I'm not running for governor. You're going to have to ask her what she meant by that, not me.

KING: Let me just set her aside then. Have you -- have you ever come across evidence or a report from your county or a neighboring county of a beheading in Arizona?

ARPAIO: Well, I haven't. Doesn't mean other people have. But I'll tell you one thing. There's plenty of beheadings going on right across the border. I hope it doesn't come across the border into my county.

(END VIDEO CLIP)

KING: I want to note for the record what Governor Brewer said back in June was that in Arizona in the desert they were finding bodies in the desert either buried in the sand. They were finding bodies in the desert that were beheaded.

BLITZER: More on this interview, more on this story coming up at the top of the hour, guys. Thanks very much.

BLITZER: A U.S. bailout for a bank in Afghanistan? A U.S. bailout for a bank in Afghanistan? We have details of an unfolding economic crisis and what it mean -- may mean for U.S. taxpayers; what it may mean for the government of Hamid Karzai.

(COMMERCIAL BREAK) BLITZER: The Afghan president Hamid Karzai's brother wants the U.S. to bail out the banking system in Afghanistan.

Joining us now is Peter Galbraith, a former United Nations special representative to Afghanistan.

Peter, this is a very weird story right now. What is going on with this bank in Kabul and this desire by the brother of Hamid Karzai for U.S. taxpayers to bail out the bank?

PETER GALBRAITH, FORMER UN. SPECIAL REPRESENTATIVE TO AFGHANISTAN: Well, Wolf, you have to admire Mahmoud Karzai's chutzpah in this case. The Kabul bank, which is the largest in the country, it turns out that $160 million went missing, was looted by the top officials of the bank to buy real estate in Dubai, luxury real estate in Dubai for them and for top politicians, including apparently, members of the Karzai family.

Depositors, having heard this news, have rushed the bank to try to get their money back. It isn't there. And now Mahmoud Karzai, who owns 7 percent of this bank, would like U.S. taxpayers to bail him out.

This is part of a larger picture of the Karzai family. One of Karzai's other brothers, Ahmad Walid Karzai, is the power broker in the strategically-important Kandahar province. He runs a private militia. U.S. officials believe he is involved in drug dealing, doing deals with the Taliban. And Hamid Karzai himself stole his last election.

I think that this is a level of corruption and dishonesty that's frankly revolting. I think many Americans should be asking what are our troops fighting for? And more importantly, it makes it extremely difficult for us to accomplish our mission when this is our partner.

BLITZER: Listen to Robert Gates, the secretary of defense, in Kabul this week, and he said this. And I want to play this clip. Listen to this.

(BEGIN VIDEO CLIP)

ROBERT GATES, SECRETARY OF DEFENSE: We learned our lesson in turning our back on Afghanistan in 1989. And we have no intention of doing so again.

(END VIDEO CLIP)

BLITZER: He says the U.S. is not going to pull out. What do you -- how do you react when you hear that?

GALBRAITH: Well, the problem is -- is that we have 100,000 troops. We're spending $120 billion a year on a mission to defeat the Taliban in a counterinsurgency strategy where all the architects, Secretary Gates included, say the central feature for success a credible Afghan partner. And the partner we have, it runs the second most corrupt country in the world. He is clearly personally corrupt. He is ineffective. He's known by diplomats as the mayor of Kabul. He is illegitimate. He stole his last election, and under those circumstances, there's no prospect for success.

BLITZER: So what should -- what should the Obama administration do?

GALBRAITH: Well, it made a huge mistake by tripling the number of troops there. And if you are -- and it's really immoral to be sending troops to fight in a mission that they can't succeed at, because again, you don't have a credible partner.

So what I would say is to change the mission to something that is achievable: namely protecting the non-Pashtun parts of the country where the Taliban is not present -- and Kabul. And that you could do with 10,000 troops instead of 100,000.

BLITZER: I've heard high U.S. officials in recent days say to me, Peter, that they're worried about Karzai, that he seems to be acting in a rather bizarre way, firing one intelligence chief, getting rid of an anti-corruption chief, now firing his longtime U.S. ambassador. Do you see Karzai becoming more erratic?

GALBRAITH: He has a long history of being erratic, of temper tantrums, and now he realizes that he has the U.S. over the barrel and he could do what he wants.

This is the product of a big mistake the U.S. made last year when it went along with the U.N. in covering up the massive fraud in Afghanistan's presidential elections. And Karzai realizes that his weaknesses actually means that the U.S. has to back him up. He came to the U.S. There was a love offensive from President Obama and his top officials. He really thinks he has a blank check.

The trouble is, with this weird behavior, this corruption that involves him and his family, it is undermining the chances for success. And not only undermining, but...

BLITZER: So on this issue -- sorry for interrupting, but on this issue of what the strategy should be, I hear in what you're saying, and it seems to be in total disagreement with General Petraeus.

GALBRAITH: Well, General Petraeus, if he were here, he would say to you that we are -- our strategy is a counterinsurgency strategy. It is one that U.S. troops cannot do it by themselves. They need to have a credible Afghan partner. And so, the only question is, is the government of Hamid Karzai a credible partner?

And frankly, I know that many of the officials in the Obama administration privately, they know that -- they see exactly what we all see, what is exemplified by this scandal of the Kabul bank. They see a corrupt, ineffective, illegitimate government, and they're very worried. But of course, Petraeus would put a public face on it and say something different, but I suspect in his heart, he knows and in his -- in private he knows what the score is.

BLITZER: I guess President Karzai's brother would say this bank is too big to fail, but that refers to another part of the story.

Peter Galbraith, thanks very much for joining us.

GALBRAITH: Wolf, good to be with you.

BLITZER: We're just getting this into CNN here in THE SITUATION ROOM, word that Hamas is joining forces with 11 other militant groups to attack Israel.

This comes as a new effort at Middle East peace is getting under way right here in Washington, and only days after a shooting attack on four Israelis in the West Bank that left those four people dead, attacks for which Hamas has claimed responsibility.

A Hamas official says what he calls resistance operations will continue despite the arrest of Hamas activists in the West Bank. We'll stay on top of this story, a very worrisome development.

Jack Cafferty is coming up with your e-mail.

(COMMERCIAL BREAK)

BLITZER: Check back with Jack for "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: The question this hour is what's the biggest complaint about your job?

Tom in Atlanta writes, "I can't complain about something I don't have."

Viv in New York says, "No vacation time, no health care coverage, no sick days. The restaurant business is a blast."

Betty writes, "No complaints. With so many people out of work, I'm just blessed to have a job."

Sarah in Houston, "Lack of job security. We've had two rounds of layoffs in three months, and we have another coming in a few weeks. This time we will lose 50 percent of our employees."

Scott in Illinois writes, "I have no complaints. I'm glad to have a job. And everyone else who has jobs should feel the same way. My father just lost his job after 35 years of service to his company. They said, 'We don't need you anymore.' And now he has to move, because he can't afford the home he's in."

Joe writes, "Too many temps to avoid paying fringe benefits. For employees" -- employers, rather -- "of more than 50 workers there ought to be a limit on the percentage of temps."

Dave writes, "No raises in five years despite record profits. The minute I can leave them in bad spot and profit myself with a new job, I will." Mike in Alabama writes, "They have the air conditioners turned up too high."

And Barbara in North Carolina: "It's in India, doofus, and I'm here."

If you want to read more on this, go to our blog, CNN.com/CaffertyFile, and knock yourself out.

BLITZER: Glad we have jobs.

CAFFERTY: Indeed. Indeed. And I -- and I'm just so pleased that I'm able to work with you every day.

BLITZER: And vice versa.

CAFFERTY: Very fulfilling.

BLITZER: It's been a good five years. Now on to the next one.

CAFFERTY: God, has it been that long?

BLITZER: Good. See you tomorrow.

She's been a mayor, a governor and a nominee for vice president of the United States. But wait until you hear what a friend is now saying Sarah Palin doesn't do. Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Say it isn't so. Sarah Palin doesn't hunt? Jeanne Moos stalks this most unusual rumor.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): When you think of Sarah Palin it's one of the first things to pop into your mind.

UNIDENTIFIED MALE: A hunter.

SARAH PALIN, FORMER GOVERNOR OF ALASKA: Good hunting.

UNIDENTIFIED FEMALE: Moose hunting. Salmon fishing. Pistol packing.

CHRIS ROCK, COMEDIAN: Holding a dead bloody moose.

MOOS: Actually, it was a dead caribou in the famous photo. Now, according to an article in "Vanity Fair" citing an unnamed longtime friend of the Palins, that woman has never hunted. The picture of her with a caribou she says she shot? She got out of the RV to pose for a picture. It's all a joke.

(on camera) Sarah Palin not a caribou killer? Not a stalker of moose? (voice-over) Didn't she prepare moose stew for Greta Van Susteren?

GRETA VAN SUSTEREN, HOST, FOX NEWS CHANNEL'S "ON THE RECORD": Who shot the moose, though?

PALIN: I think my dad did. Maybe my mom did.

MOOS: But that anonymous family friend says that Palin's husband, Todd, was calling everyone they knew the day before: "You got any moose?" Desperate.

VAN SUSTEREN: How many caribou do you think you've ever shot?

PALIN: Oh, just a few.

MOOS: But she sure tried to shoot down a "Vanity Fair" reporter while she was on Sean Hannity's radio show.

PALIN: Impotent, limp and gutless reporters take anonymous sources and cite them.

MOOS (on camera): But hunting for the truth is even more elusive than hunting for moose. For instance, here's what Palin's dad said shortly after she became the VP nominee.

CHUCK HEATH, PALIN'S FATHER: I remember every time she would go home from college she'd say, "Let's go bird hunting." She saw -- shot several big-game animals.

TINY FEY, COMEDIAN: Sarah Palin is a tough lady. She kills things. Big...

PALIN: I can't wait to kill with you.

MOOS (voice-over): Anyway, we need Sarah Palin the moose slayer for a computer games, for impersonators.

UNIDENTIFIED FEMALE: We have spotted our prey, the Barackas Obamas, king of the liberals.

MOOS: Even for the prankster who called her up, pretending to be French President Nicolas Sarkozy.

UNIDENTIFIED MALE: You knew we have a lot in common, because personally, one of my favorite activities is to hunt, too.

PALIN: Very good. We should go hunting together.

MOOS: And it's not just detractors. Fans, too, need the moose- shooting mama.

UNIDENTIFIED MALE (singing): The moose shooting mama to help keep our country free.

MOOS: Even the moose-shooting mama herself clings to her guns and her red meat.

UNIDENTIFIED MALE: She likes red meat!

AMY POEHLER, COMEDIAN: Shoot a mother-humping moose eight days of the week!

MOOS: Jeanne Moos, CNN, New York.

(END VIDEOTAPE)

BLITZER: That was a great "Saturday Night Live."

Remember, you can always follow what's going on here in THE SITUATION ROOM. I'm on Twitter. You can get my tweets, @WolfBlitzerCNN, all one word.

I'm Wolf Blitzer in THE SITUATION ROOM. "JOHN KING USA" starts right now.