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JUDY WOODRUFF'S INSIDE POLITICS

Dean Slips in New Hampshire Polls; Do Swing Voters Exist?; Independent Counsel to Investigate White House Leak

Aired December 30, 2003 - 15:30   ET

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

ANNOUNCER: Live from Washington, Judy Woodruff's INSIDE POLITICS.
CANDY CROWLEY, GUEST HOST: Thanks for joining us. Judy is off today.

Leaking information to members of the news media is a time- honored tradition here in Washington. Today, though, an alleged White House leak involving the identity of a CIA employee has led to the appointment of a special prosecutor.

The Justice Department announced that attorney general John Ashcroft will recuse himself from the criminal investigation into who was behind that leak. Ashcroft's deputy announced the appointment of the special prosecutor.

(BEGIN VIDEO CLIP)

JAMES COMEY, DEPUTY U.S. ATTORNEY GENERAL: In anticipation of this development, I have given a great deal of thought to this in recent days and have decided that, effective immediately, the United States attorney for the northern district of Illinois, Patrick J. Fitzgerald, will serve as special counsel in charge of this matter.

I chose Mr. Fitzgerald, my friend and former colleague, based on his sterling reputation for integrity and impartiality. He is an absolutely apolitical career prosecutor.

(END VIDEO CLIP)

CROWLEY: This is sounding just like the kind of story that will have implications for politics next year. Later on in the show, we will talk to our Suzanne Malveaux, who is with the president in Crawford, Texas.

We want to turn to the presidential race now and new signs that some New Hampshire Democrats may be rethinking their early allegiance to Howard Dean.

The possible shift is small, the evidence is limited, but it does offer a glimmer of hope for Dean's party rivals.

(BEGIN VIDEOTAPE)

CROWLEY (voice-over): When you run as an outsider, every attack proves the point, which may explain why nothing Dean's rivals throw at him sticks.

SEN. JOHN EDWARDS (D-NC), PRESIDENTIAL CANDIDATE: The last thing we need in the South is somebody like you coming down and telling us what we need to do. That's the last thing in the world we need in the South.

CROWLEY: Nothing makes a dent, not the Confederate flag flap and quasi-apology, not the undiplomatic explanation of his Middle East policy views. Slip-up, misspeaks, even past policy decisions that run counter to party orthodoxy, camp Dean has not just survived but thrived. Supporters register their indignation by sending more money to Dean.

But today, after rival camps spent post-Christmas days pounding Dean over remarks on Iraq and Osama bin Laden, there is this.

The latest New Hampshire poll from the American Research Group finds support for Dean has dropped to 37 percent, down from 45 percent in mid-December. There is some Dean sag in recent national numbers, as well.

KEATING HOLLAND, CNN POLLING DIRECTOR: There are indications in national polls that when Democrats tire of Howard Dean they go into one of two camps. Some of them in the national polls go to the undecided category.

But some of these Democrats appear to be looking for another candidate whose anti-war but maybe has a better resume in the wake of the capture of Saddam Hussein that would help him beat Bush. And that's Wesley Clark.

CROWLEY: Ditto in New Hampshire, where Dean's loss is paralleled by a four-point gain in the Clark column and a three-point gain in undecideds.

All of which must be worrisome for the Kerry camp. The candidate once thought to be a mortal lock in New Hampshire seems to be in idle, picking up nothing perceptible from Dean's loss.

(END VIDEOTAPE)

CROWLEY: This is less than fatal stuff for Dean, the frontrunner. After all, he still has a double digit New Hampshire lead. And if it shifted today, it can certainly shift back tomorrow.

New Hampshire primary voters will head to the polls four weeks from today. With me from Manchester to talk more about the showdown is the state Democratic Party chairwoman, Kathy Sullivan.

Kathy, thanks so much for joining us.

KATHY SULLIVAN, NEW HAMPSHIRE DEMOCRATIC PARTY CHAIR: You're welcome and happy New Year.

CROWLEY: Same to you. Listen, do you pick up anything at all on the ground about any shifting? What's the kind of state of play that you can tell us about there?

SULLIVAN: Well, the state of play that I'm seeing is that New Hampshire voters don't care about polls. They don't care about process stories.

They want to hear about the issues, and what they're doing is going out to the town meetings that the candidates are having and listening to their plans for restoring jobs to the economy. They're listening to the candidates' plans for affordable health care and those types of things.

And so really, voters don't pay a heck of a lot of attention to the process stories. They want to hear about the issues, and then we'll make our minds up based on where the candidates stand on the issues.

CROWLEY: Well, do you think that people have not made up their minds? This is a pretty formidable, if dwindling, lead for Howard Dean. It looks like a done deal from out here. Is it a done deal in New Hampshire?

SULLIVAN: Well, you know, people in New Hampshire and I think similarly people in Iowa do a funny thing. They like to make their own minds up and not be told how things stand based upon the polls and based upon what people from outside of our states tell us.

We're going to make up our minds based upon, as I said, what the candidates are saying on the issues. We want to hear about plans for health care. We want to hear about plans for the economy and education and environmental issues.

And so it's never a lock in New Hampshire, just as it never is in Iowa. I mean, people want to look at the issues, educate themselves about where the candidates stand and make up their own minds.

And I'm convinced that this election will be similar to most elections, where the majority of voters don't make their minds up until the last of couple weeks before the election.

CROWLEY: We should probably point out that obviously, the people they're polling are New Hampshire-ites. We're not sort of making the numbers up out of the thin air. But they do show that there are a large number of undecideds.

You've talked a couple times about the issues. If you have to pick an issue that concerns them the most in New Hampshire, from what you're hearing, what's that one issue?

SULLIVAN: That issue is jobs and the state of the economy.

We've had close to 20,000 manufacturing jobs lost in the state in the last year. We continue to lose jobs. Just a couple weeks ago, there was announcement of 700 more layoffs in a manufacturing facility here in Manchester.

I mean, people in New Hampshire understand that the few jobs that have been created since George Bush became president are low paying jobs. They're not good paying jobs.

People working harder and earning less. They're having problems paying for health insurance. They're losing health care when they have to change jobs. They're having problems sending their kids to college, because tuition rates are going up.

Our property taxes are going up because more costs are being passed through to the local level because of the problems at the federal level.

So it really comes down to jobs and the economy. And as part of that, education and health care, because those are all interrelated.

CROWLEY: Kathy, let me ask you a final question on the campaigns. And that is, what campaign has surprised you the most, either by doing worse than you thought they'd do or a lot better?

SULLIVAN: It's tough to say. I mean, I think all the campaigns are really doing things a little bit differently. They have their own plans. They're sticking to their plans, and I think that we're seeing a lot of good, hard campaigning.

And we're at that point where we've just got a couple of laps left in the race, so you're seeing some bumping and some shoving. And it's -- this is the fun part. This is the part where it really gets to be fun, because everybody is starting to pay attention. Everybody is looking at the candidates, and I think you're going to see some interesting things happening over the next few weeks.

CROWLEY: Kathy Sullivan, the state Democratic Party chairwoman there up in New Hampshire. And what people don't know is that state chairmen have to be every bit as diplomatic as the State Department people.

Thanks so much, Kathy.

SULLIVAN: You're very welcome. Have a good holiday.

CROWLEY: You too.

Money and an ability to keep the cash flowing, of course, are critical to a presidential campaign's success. As we end the near of the fourth quarter fund-raising period, the preliminary numbers shed light on the candidates who have the most success raising cash.

Howard Dean maintained his overall lead, bringing in more than $14 million. His total for the year is expected to be close to $40 million.

Wesley Clark raised more than $10 million in the quarter, while John Kerry is expected to report less than $4 million. By comparison a Bush campaign source tells CNN, the president raised between $20 and $25 million in the fourth quarter. For the year, he's the undisputed fund-raising champ with close to $110 million.

For years, political experts have keyed in on so-called swing voters and their ability to make or break a presidential campaign. But do swing voters really exist? It's an issue our senior political analyst Bill Schneider has been looking into as the election season heats up.

(BEGIN VIDEOTAPE)

BILL SCHNEIDER, CNN POLITICAL ANALYST (voice-over): Soccer moms were the hot constituency for Bill Clinton in 1996. Then there were waitress moms and office park dads.

UNIDENTIFIED MALE: Hi. Can I help you?

SCHNEIDER: And don't forget security moms. They were big after 9/11.

A swing group has to be up for grabs, which is why analysts were puzzled when Howard Dean targeted this constituency.

HOWARD DEAN (D), PRESIDENTIAL CANDIDATE: White folks in the South who drive pickup trucks with Confederate flag decals on the back ought to be voting with us and not them.

SCHNEIDER: Southerners who put Confederate flags on their pickup trucks aren't swing voters; they're Republicans.

Maybe Dean was thinking about a much larger constituency that's been getting a lost attention: NASCAR voters. But stock car racing fans are intensely patriotic, not the kind of people who rally to an anti-war message.

Democrats believe they can appeal to NASCAR fans on economic issues.

Meanwhile, Republicans have been focusing a lot of attention on Hispanics. They voted heavily for Al Gore in 2000. Are Hispanics really up for grabs?

They tend to have conservative social values. Republicans believe they can appeal to Hispanics on non-economic issues.

There's another theory going around about 2004. It says there are no swing voters anymore. There is no middle, White House political strategist Karl Rove told the "New Yorker" magazine.

Right now, 37 percent of Americans call themselves Republicans, and 29 percent call themselves Democrats. That leaves about a third who call themselves independents.

Aren't independents swing voters? Not necessarily. A lot of independents say they lean Republican or Democratic. And they behave very much like partisans.

If you combine the partisans with the fellow travelers, fewer than 10 percent are left as true swing voters. And most of them don't even vote.

So maybe the way to win is to forget appealing to swing voters. Concentrate on energizing your base. Isn't that what Howard Dean has been doing?

DEAN: The way to beat George Bush is to stand up, say who you are, be proud of being Democrats, and let's go get them.

SCHNEIDER (on camera): Critics say President Bush has put aside compassionate conservatism, while Howard Dean is repudiating President Clinton's third way. Which makes sense, if you believe the Gilbert and Sullivan song that every boy and every gal that's born into the world alive is either a little liberal or else a little conservative.

Bill Schneider, CNN, Los Angeles.

(END VIDEOTAPE)

CROWLEY: Because we in INSIDE POLITICS like to keep our promises, we have Suzanne Malveaux here now, our White House correspondent, in Crawford, near where the president is vacationing.

Suzanne, I know you just got out of a briefing. We had the lead story here today on the special prosecutor for the leak story. Was anything said about that?

SUZANNE MALVEAUX, CNN CORRESPONDENT: Well, yes, as a matter of fact that was the first question.

And what the White House is trying to do, on the one hand, President Bush expressing confidence in the Justice Department and Ashcroft's ability to carry out an impartial and fair investigation.

On the other hand saying that, of course, the administration is not going to tolerate anybody who actually leaks.

That is exactly what we heard from spokesman Trent Duffy just moments ago. Essentially, reiterating the administration's point, saying that the president wants to get to the bottom of this, that he has confidence in the Justice Department.

He also made an important point, however. He said the president was notified about the Justice Department's decision on this about 12 noon by his staff. That the White House was not consulted on this, that this was a decision that they made independently. That they notified the president about this.

Now, as you know, there are about 40 White House officials who have been actually interviewed by the FBI, including the president's top advisor, Karl Rove as well as his White House spokesman, Scott McClellan. So far, the FBI not at least sharing any type of details on the investigation or any great revelations in terms of who is behind these leaks.

But I did speak with a number of people reacting quite positively to the development, including Joe Wilson.

You may recall that he is the ambassador who, his wife -- he accuses of administration of actually disclosing that his wife was a covert CIA operative. He believes that someone in the administration released that information to the columnist Novak and that in doing so that broke the law.

He believes it's in retaliation for making his own case that President Bush overstated the facts when it came to Saddam Hussein's weapons program and he used that to go to war.

I talked to Wilson just moments ago, and he gave me this quote, saying that "Irrespective of the type of relationship you have with the White House, I can understand everyone's loathing about an independent counsel. The fact that the attorney general recused himself indicates that the administration wants to avoid the potential perception of a conflict of interest, and that's a good thing."

We also got a statement from Senator Chuck Schumer's office. As you know, he was the first person to call for Ashcroft to recuse himself, and he really released this statement saying, "It's not everything that we asked for, but it comes darn close" -- Candy.

CROWLEY: Suzanne Malveaux in Crawford, thanks very much.

Howard Dean's campaign has raised plenty of money, but is the campaign starting to show signs of political heat related stress? I'll ask a reporter who's been tagging along.

Later, we put the spotlight on Dixie. Will South Carolina's Democrats make or break a potential nominee?

And the redheaded stranger is singing the praises of his favorite presidential candidate. We will have time for at least a verse of his new song.

(COMMERCIAL BREAK)

CROWLEY: Checking the Tuesday headlines in "Campaign News Daily," Wesley Clark headed out on day two of his "True Grits" tour this morning, with stops planned in three states.

Clark began the day in Tennessee, with stops in Memphis and Nashville. From there, he headed off to Georgia and South Carolina.

As we've reported, Clark's newest TV ad features a short clip of Bill Clinton. The biographical ad shows Clinton awarding Clark the presidential Medal of Freedom. It's the first presidential campaign ad to show the former president.

Dick Gephardt is making a somewhat rare appearance in New Hampshire today. He spends most of his time in Iowa these days. This morning in Nashua, Gephardt told a group of working moms, he's committed to universal preschool for children from birth to age 5.

Howard Dean jokes that he knows he's the frontrunner because he's, quote, "picking buckshot out of his rear end." With New Hampshire's primary only four weeks away, and Iowa's caucuses even closer, it must seem like open season.

Ron Brownstein has been following the Dean campaign, joining us now.

Ron, do you get a sense that there's real irritation on the part of the Dean campaign, or that this is a great fun and a good way to win money?

RON BROWNSTEIN, "LOS ANGELES TIMES": Irritation is maybe Howard Dean's natural state. I mean, he often seems, you know, very impassioned, very angry. But that's largely what his supporters like about him.

And this whole dust-up the last few days about Terry McAuliffe and asking him to intervene in the Democratic race has been kind of silly. You know, Howard Dean rose to the top of the Democratic field by criticizing the other candidates on the war and No Child Left Behind. And for him to sort of ask Terry McAuliffe to step in now and stop them is really kind of ridiculous.

On the other hand, he doesn't look like he needs the help. I was out with him yesterday in the Midwest. First of all, he's perfectly capable of taking care of himself verbally. And his supporters are very ardent, very strong, even in states that aren't in the bull's eye right now, like Iowa and New Hampshire.

He's is making -- he is moving forward, and he really doesn't need anybody to come in and protect him on the schoolyard.

CROWLEY: So mistake?

BROWNSTEIN: Well, I just think kind of a diversion. I mean, he does...

CROWLEY: Diversions are always mistakes.

BROWNSTEIN: That's right. He spends a lot of time, I mean, he creates a lot of little explosions with things that he says. I mean, he has not been the most disciplined candidate as the frontrunner.

As we say all the time that's what's allowed him to emerge. I think for his supporters, there is that John McCain straight talking quality.

But you do see how it can be a problem, when he says things that he has to apologize for, or qualify or retract. And it's something that the Bush people feel, even more than the ideological issues that have opened, may the vulnerability if he's the nominee.

CROWLEY: You started to a little bit, but give us a sense of what it was like out there with Dean. Anything surprising? Anything you picked up or you thought, "Oh, interesting"?

BROWNSTEIN: Well, I think -- Look. I mean, I think when you go out beyond the states that are really right in the central focus for everybody now, Iowa, New Hampshire, and to some extent South Carolina, Howard Dean is doing very well.

I mean, he really does seem to be the one who is generating buzz among grass roots Democrats in states where the race is not on you all the time.

He had a big crowd out there in Green Bay yesterday. He had a very good turnout in Detroit, Michigan, two states that will be critical in the middle of February.

In Michigan, Candy, they're going to be starting to vote next week. People don't realize this. The Internet voting there allows for early voting. And Dean and to a lesser extent Dick Gephardt are the only ones who look organized enough to take advantage of this.

He may have thousands of votes, possibly tens if thousands of votes in the bank in Michigan before anybody even goes to the polls in Iowa.

CROWLEY: You've been commenting -- we've got about a minute left. I wanted to get your sense as to whether Dean at this point is unstoppable. And if not, where does it get stopped?

BROWNSTEIN: Well, you can't say anybody is unstoppable before the race begins. I mean, there are obviously scenarios that any of them can point to for how to beat Howard Dean.

But one thing I would say is that Dean is the only one with breadth of strength. The others may be strong in an individual state or two. He is someone who's competing across the board, not only in Iowa and New Hampshire on February 3, but importantly, beyond February 3.

Even if somebody does nick him in South Carolina or Oklahoma, he is very well positioned to come back afterwards in states like Washington, Maine, Michigan and Wisconsin.

So it is a formidable challenge for any at this point, not only because of the money, and the advantage the money allows with this early organization, but also because he really has caught the attention of grassroots Democrats in a way that you'd have to say no one else really has to this point.

CROWLEY: Ron Brownstein, "L.A. Times," thank you so much.

BROWNSTEIN: Thank you.

CROWLEY: We will see you in...

BROWNSTEIN: In Iowa.

CROWLEY: ... in Iowa Sunday. BROWNSTEIN: Thanks.

CROWLEY: With the clock ticking toward the first primary of the election year, the candidates are not alone in the battle for attention. When we return, we'll focus on advocacy groups and the issues they're pushing in New Hampshire.

(COMMERCIAL BREAK)

CROWLEY: With just four weeks to go until the New Hampshire primary, the presidential candidates are stepping up their fight for support. But another key battle is being waged. Advocacy groups are also pounding the pavement in New Hampshire.

CNN's Anish Raman reports.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: Would you like to wear a sticker that's says you're voting for kids?

ANISH RAMAN, CNN CORRESPONDENT (voice-over): Crunch time in New Hampshire is not just for candidates, but for issue advocates, as well.

UNIDENTIFIED MALE: Granite Centers for Medicinal Marijuana. This is Aaron.

RAMAN: They're on the phone and on the road, trying to beat the clock.

UNIDENTIFIED MALE: We have somewhere around 800 and -- 870 hours until the election at this point. And so every minute is a lost opportunity.

RAMAN: The first in the nation primary is an ideal setting for activists, giving them a chance to get their cause into the limelight.

UNIDENTIFIED MALE: We're all out there every day doing the same thing, pretty much. We're all trying to get our issue to the forefront and trying to get our issue talked about by the candidates.

RAMAN: That's easier said than done at this Dean town hall meeting. The environmental activists of the Carbon Coalition fight to get in a question.

DEAN: Two more.

UNIDENTIFIED FEMALE: Over here, over here. Look to the left, not the right. Please!

RAMAN: While for less controversial groups...

UNIDENTIFIED FEMALE: Would you guys like any T-shirts?

RAMAN: ... easier access. At this dinner, Every Child Matters gets a ringing endorsement from John Edwards.

EDWARD: And I am proud of what they do and I'd like to have a round of applause for the people who do Every Child Matters.

UNIDENTIFIED FEMALE: Anytime that we show up anywhere or we have -- we ask a candidate questions, they light up, you know. They love kids. Who doesn't love kids?

RAMAN: Whether winning the public's attention tension...

UNIDENTIFIED MALE: For us it is a war for the hearts and minds of the American people.

RAMAN: Or nudging a presidential hopeful.

UNIDENTIFIED FEMALE: What are you going to do as president?

DEAN: About global warming?

RAMAN: It's a final push for these groups to have their cause become part of the candidate's stump speech. But...

DEAN: I think the Washington Democrats were so proud of their vote last week when they caught Saddam Hussein, and the president made the wrong choice.

RAMAN: They've got heavy competition.

Anish Raman, CNN, Manchester, New Hampshire.

(END VIDEOTAPE)

CROWLEY: We had one governor recalled this year. Will another face impeachment? Next, the troubles continue for Connecticut Governor John Rowland.

Plus, he is the first wartime president in decades to run for reelection. But will the mission in Iraq help or hurt George W. Bush?

(COMMERCIAL BREAK)

ANNOUNCER: They're storming the South today as five of the '04 Dems campaign away from the cold of Iowa and New Hampshire. The biggest prize, South Carolina.

UNIDENTIFIED MALE: The lay of the land in South Carolina is it's wide open.

ANNOUNCER: We'll map out the state of play.

Kerry's on top. No, Dean's the man to beat. The media did a big about-face in 2003. We'll chart the change of tone.

Political ad making, not just for professionals anymore.

UNIDENTIFIED MALE: Are you a traitor, take our all-American patriot test.

ANNOUNCER: We'll tell you about a new contest for amateur pitchmen.

Now, live from Washington, Judy Woodruff's INSIDE POLITICS.

CROWLEY: I'm Candy Crowley. Judy is off today.

Iowa and New Hampshire have taken the political spotlight, as usual, this primary season. But South Carolina, as the lone Southern primary on February 3, is also emerging as a major player in the Democratic race for the White House.

Howard Dean is among several party hopefuls in the Palmetto State today. Our Kelly Wallace caught up with him in Florence, where he commented on several issues, including his chances of success in South Carolina.

(BEGIN VIDEOTAPE)

DEAN: I think South Carolina is not used to being so early. South Carolina now has a very early primary, and that takes a little while to adjust to that. So I think you're going to see, in the next few weeks, a lot of moving around, a lot of people coming through South Carolina and we're going to be right there with everybody else.

KELLY WALLACE, CNN NATIONAL CORRESPONDENT: How important, courting the African-American community here in South Carolina?

DEAN: The African-American community is the most loyal Democratic group that there is in the country and I think one of the mistakes the Democrats have made in the past is to come to the African-American community with three weeks to go and say can you get the vote out. We're starting early.

We think we ought to go -- we think the biggest mistake the Democrats have made over the last couple of years is to take our constituency groups for granted. We want to start with the Democratic base and then get the swing voters, rather than the other way around.

WALLACE: I have to ask you one news item. You called Terry McAuliffe yesterday. What was your message in that phone call?

DEAN: If I wanted to make that public, I'd have had you in on the phone call. No, Terry McAuliffe and I get along fine, you know, and we talk often.

(END VIDEOTAPE)

CROWLEY: We will check in on the other hopefuls in South Carolina in our second edition of "CAMPAIGN NEWS DAILY."

Joe Lieberman has turned in his papers to enter the state's primary. Lieberman delivered the documents to state party headquarters in Columbia just before noon. He later headed to Florence where he discussed his health care plan. Al Sharpton tied for second in a recent South Carolina poll and today he expanded his state campaign operations. Sharpton announced he's opening a new field office in Columbia, scheduled to be up and running by next week. The campaign also hired three new staff members to coordinate Sharpton's Carolina effort.

Carol Moseley Braun has Carolina on her mind as well. Braun opened a new campaign office today in Columbia.

Wesley Clark, as we reported, ends his day with a house party outside Charleston.

For insight into the race for Democratic support in South Carolina, I'm joined from New York by Dick Harpootlian, the former chairman of South Carolina's Democratic party. What are you doing in New York? Isn't the action down in South Carolina today?

DICK HARPOOTLIAN, FORMER CHAIRMAN, SOUTH CAROLINA DEMOCRATIC PARTY: Well, my wife and daughter drug me up here for a little New Year's Eve event that they have here at Times Square. So we're going to be out there yelling and screaming with everybody else. And let me say this to you, I'm in the greatest city in the world right now.

CROWLEY: You are, indeed. Let me drag you back to South Carolina, at least, mentally. What's going on down there that you can tell us about? The state of play, who is up, who's down, who's been surprising?

HARPOOTLIAN: I think it's sort of tough to tell who is up, who is down, because the poll numbers really don't mean much. Unlike other states, New Hampshire, Iowa, where there's an easy way for a pollster to figure out who is going to vote, we don't have a history of that in South Carolina.

So these polls can be off 10 percent, 15 percent, easily. My gut tells me that Edwards and Clark and Gephardt are probably leading the pack. However, if Dean does -- you know, if he takes Iowa and he takes New Hampshire, he's going to have national momentum coming in and it's going to be a dogfight.

CROWLEY: Let me ask you about the polling and about the fact that this really is relatively new to have this kind of spotlight for the Democrats in South Carolina. A lot of question as to whether the polling and the polls in the party is up to that. Do you feel like that's pretty much in place and you can pull this off?

HARPOOTLIAN: Oh, sure. Jill Irwin (ph) has done a tremendous job and the county chairman have done a tremendous job of getting all of the polling places staffed. I remind you, that the big 2000 primary where George Bush did McCain in, they only opened 1,400 of the over 2,000 precincts. The Democratic party's already got more than that number staffed so it's going to come off without a hitch.

CROWLEY: I'm wondering about the issues down there. I judge -- South Carolina, as we know, is a conservative place. You have a huge veterans population. How does Dean's anti-war message play down there and what do you see as the biggest issue?

HARPOOTLIAN: I think jobs and the economy are the biggest issue. We have counties, like Marion county or Williamsburg county where unemployment's over 20 percent. We're having a depression in some of these areas of South Carolina. When manufacturing jobs exited the country, it really hurt South Carolina. We don't have a textile industry anymore. We have no manufacturing jobs to speak of.

So we're in more than just a recession in South Carolina and we haven't bounced back. That's what resonates out there. The war is an important issue, but so far, I don't think it's got big traction in South Carolina.

It's the economics messages you hear from Gephardt or Edwards or Clark or Lieberman that seem to be resonating. And again, we are a conservative state. Over two-thirds of the African-Americans are not pro choice. They're Evangelical Christians who believe in the death penalty. Even the African-American base of vote in South Carolina is very conservative.

CROWLEY: Less than a minute left. I want to ask you, who has the biggest force out there? I mean, who do you sense has the best campaign organization going on the ground?

HARPOOTLIAN: I think Clark and Edwards both have good campaign organizations on the ground. Gephardt, of course, has got the endorsement of Jim Clyburn. I don't know whether that will morph into any sort of organization. But I would say Edwards and Clark are both putting together -- and Clark's the new guy on the block and really seems to have the momentum.

CROWLEY: You know, I remember being down in Charleston for the sort of fall kickoff of the John Kerry race. But I sense not much of a presence down there. What's happening with the Kerry race?

HARPOOTLIAN: It's a mystery. John Kerry, when I was chairman in the 2002 race, he was down, sent staff down, sent money down. Very visible all last year. He's evaporated. I don't see him or his staff. His state chairman, James Smith (ph), is off in active duty reserves. We don't see much of Kerry. He evaporated. I don't know what happened to him.

CROWLEY: Dick Harpootlian, you always know what's going on the ground even when you're in New York. Have a great New Year's. We really appreciate your joining us.

HARPOOTLIAN: Happy New Year's to you.

CROWLEY: Polls taken earlier this month show the capture of Saddam Hussein blunting Howard Dean's momentum and boosting public opinion of President Bush. CNN senior White House correspondent John King looks back on George W. Bush's year as a wartime leader.

(BEGIN VIDEOTAPE)

JOHN KING, CNN SENIOR WHITE HOUSE CORRESPONDENT: War was this year's steady shadow. And constant controversy. A January state of the union making the case. This passage later discredited.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The British government has learned that Saddam Hussein recently sought significant quantities of uranium from Africa. Our intelligence sources tell us that he has attempted to purchase high strength aluminum tubes suitable for nuclear weapons production.

KING: A December capture that ended a manhunt.

BUSH: Good riddance.

KING: In between, a year of so many memorable moments. Thanksgiving in Baghdad, one of a few big surprises. As always, some events are viewed differently in hindsight than as they unfolded. Perhaps this one, on the deck of the USS Abraham Lincoln back in May most of all.

BUSH: In the battle of Iraq, the United States and our allies have prevailed.

KING: Critics see a president who exaggerated the threat posed by Saddam Hussein and who alienated much of the world in what they consider a rush to war.

IVO DAALDER, DEAN FOREIGN POLICY ADVISER: What we've seen, in fact, is the end of 2003, 90 percent of the troops, 95 percent of the casualties, and 96.5 percent of the financing for 2004 is being paid by American soldiers or American lives and American dollars. That is the consequence of having the kind of foreign policy that we have seen in the last three years.

KING: Confidants see a decisive commander-in-chief willing to lead when others blink.

DAN BARTLETT, WHITE HOUSE COMMUNICATIONS DIRECTOR: The United Nations themselves had drawn the same conclusions when they passed dozens of resolutions outlining the threat that he was to the world and the world is better off now that Saddam Hussein will never come back.

KING: Not in dispute that that war shaped the president's year and his image heading into the campaign for reelection.

KEN DUBERSTEIN, FORMER REAGAN CHIEF OF STAFF: It's also very lonely at the top. And in those dark moments, you have to make fundamental decisions that affect whether or not you're putting somebody in harm's way. The president has convinced the American people and the world that what we're doing in Iraq is not only just, but right. And that it is worth the expenditure of the U.S. life. Of course, a decision like that takes its toll.

KING: John King, CNN, the White House.

(END VIDEOTAPE)

CROWLEY: The year is ending on an uncertain political note in Connecticut. Democratic leaders of the state legislature are meeting in private this afternoon to talk about the possibility of impeaching the state's Republican governor. Three-term Governor John Roland has admitted lying about work to his home, paid for by a state contractor, staff members and political supporters. He has not been charged with a crime and the Democrats say today's review of procedures is only precautionary.

For the Democrats trying to unseat President Bush, 2003 has been a topsy turvy year. Just ahead, Howard Kurtz looks back at the media's coverage of the Democratic campaigns and the prognostications that have been made.

Later, a new plea for peace on earth from a big supporter of Dennis Kucinich.

(COMMERCIAL BREAK)

CROWLEY: Critics of online voting are certain to take note of an embarrassing incident at a company developing security technology for electronic voting. The company is Votehere Incorporated of Bellevue, Washington.

A couple of months ago, a hacker broke into the firm's computers, accessing internal documents and possibly copying sensitive information. Officials with Votehere say they're confident they know the hacker's identity and say the break-in did not affect the integrity of the company's technology. The FBI and the Secret Service are on the case.

It's been a year of phases for members of the media who are keeping track of the race for the White House. For example, to hear the pundits talk and you know who you are, Howard Dean didn't stand a chance at the beginning of the year and now he is head of the pack. Howie Kurtz, one of CNN's reliable sources weighs in on the prognostication that has been going and whether it really means anything.

(BEGIN VIDEOTAPE)

HOWARD KURTZ, HOST, RELIABLE SOURCES: Here's the latest on the presidential campaign. The "New York Times" says John Kerry has accomplished something quite remarkable and is viewed as the leading candidate to take on President Bush.

The "Los Angeles Times" has Kerry and Joe Lieberman leading the pack in a new poll. The "Wall Street Journal" says Dick Gephardt is the closest thing to a frontrunner. Wait. This script is from a year ago. My mistake. Or rather, the media's mistakes.

KURTZ (voice-over): The pundits have been through several distinct periods in 2003.

DEAN: I'm Howard Dean and I'm here to represent the Democratic wing of the Democratic party.

KURTZ: Phase one, Howard Dean is a colorful underdog who could catch fire, but like such previous mavericks as Bruce Babbitt, Paul Tsongas and John McCain, he obviously can't win.

UNIDENTIFIED MALE: I don't think he'll be a finalist. I think he'll be a factor. A finalist would be Kerry, Gephardt, Lieberman. Two of those three.

KURTZ: Phase two, Howard Dean has suddenly raised more money than any of the other Democrats. Maybe there is something to this Internet thing.

Phase three, Howard Dean is now the frontrunner and anyone who can't see that is crazy. What were they we thinking with Kerry anyway?

Phase four, Howard Dean is unstoppable. He's got two major unions and Al Gore. We might as well cancel the primaries. Though some pundits suggested we might just want to wait for some actual voting.

UNIDENTIFIED MALE: Let's let somebody vote before we declare a nominee.

UNIDENTIFIED JOURNALIST: Does this make the nomination all but inevitable for Howard Dean?

UNIDENTIFIED MALE: No.

KURTZ: Phase five, Howard Dean is the next George McGovern. He'll win the nomination but Bush will clean his clock. And what about those misstatements on the confederate flag and avoiding the draft and downplaying the capture of Saddam Hussein. And doesn't Vermont have more cows than people anyway?

Phase six, the search for the anti-Dean as journalists desperately crave a horse race. Will it be Wesley Clark, the four- star candidate? Can Gephardt trip up Dean in Iowa? Can Lieberman get enough of a bounce from being snubbed by Gore?

Here's what's wrong with a lot of this prognostication. In a "New York Times" poll of Democrats, Dean is the choice of one-third of voters, but 55 percent say they don't know enough about the doctor to have an opinion. Much of the country isn't watching the endless debates, poring over news stories or watching INSIDE POLITICS.

That means the Democratic candidates still haven't broken through and probably won't until the voting starts. Which could make the media's coverage in 2003 look like a rush to judgment. Besides, we're so fickle, we'll probably change our minds another time or two before this battle is over.

(END VIDEOTAPE)

CROWLEY: Hey, whose idea was that story?

Bob Novak is standing by to tell us about some true election year rarities. Coming up, tightly contested races for Congress. And what could turn into the Kentucky version of "Trading Spaces." (COMMERCIAL BREAK)

CROWLEY: Bob Novak joins us now from the "Crossfire" set at George Washington University with some inside buzz. Bob, I can't believe it. You found some races that will be hotly contested next year?

BOB NOVAK, "CHICAGO SUN-TIMES": In the house of representatives. Here, of course, most of those seats are gerrymandered but here are four ones that could be something.

One of them is a special election, February 17. The sixth congressional district of Kentucky. This was Ernie Fletcher's seat but he's been elected governor. The guy who beat him, Ben Chandler, the grandson of Happy Chandler, ran a good race, though he lost, is the Democratic candidate. He's the favorite. So the Republicans got a good candidate, Alice Forgy Kerr, but this could be a rare thing, a Democratic pickup in the south.

CROWLEY: And I'm also told the Janklow race, what's going on with that?

NOVAK: That's Bill Janklow, the former governor, convicted of manslaughter and is resigning his seat in South Dakota. That's an at- large seat. The person he beat ran a good race. Ms. Herseth, Stephanie Herseth, whose grandfather was the governor of the state and she is the favorite to pick up that state in Republican South Dakota.

They have a Republican operative Larry Russell, running against her. It will be a close, another good race in South Dakota, but maybe Bush will push it over. But I see that right now as a Democratic pickup.

CROWLEY: I'm going to just skip over one and go back to it. But Missouri, because it's, you know, a place where I grew up. I want to find out what's going on in the Gephardt district.

NOVAK: Dick Gephardt isn't running. After 14 terms, a guy named Bill Federer who ran against him twice, Republican, is running. But he's an underdog against somebody, guess what the name is? Carnahan. State representative is Russ Carnahan, the son of the late former governor, the former senator, and that should be a Democratic retention. But a pretty good race in the St. Louis area.

CROWLEY: And back on the East Coast, Pennsylvania, you've got somebody running for the U.S. Senate seat so you have an open seat there?

NOVAK: Yes, Congressman Joe Hefley, Democrat running for the Senate. And Melissa Brown, who has twice been defeated in that district but a pretty good candidate, is the Republican. I think she has a good chance for a Republican pickup against the Democratic state senator, Allyson Schwartz. Should be a hot race in the Philadelphia suburbs. I bet you want to cover that one, Candy.

CROWLEY: Absolutely. Right after I get back from Iowa and New Hampshire and South Carolina and Arizona and all of that.

NOVAK: But there are some congressional races so democracy is not dead in America.

CROWLEY: Absolutely. Let me ask you before you go, since it's New Year's, your own prognostication so that Howie Kurtz can run it next year and say how wrong it was. Is the House going to stay Republican?

NOVAK: House will stay Republican because they're going to get the extra gerrymandered seats or ungerrymandered seats, depending on how you look at it, in Texas. They'll pick up some seats in Texas. And I think the Senate will stay Republican as well. There's going to be very good Senate races that we'll talk about presently.

CROWLEY: It's a deal. Thanks so much, Bob Novak of "Crossfire." We appreciate it. Happy New Year.

NOVAK: Happy New Year to you, Candy.

CROWLEY: Up, we have also our own buzz from Pennsylvania, where Republicans have turned to newspaper want ads in search of a candidate. The party is running the ad in the Johnstown "Tribune- Democrat" seeking a challenger to face a nine-year veteran Democratic state house member. The ad has been running since Saturday, but so far, they say they have no takers.

Political ad making, it's not just for professionals anymore. When we return, the public gets a chance to make a political statement. All it takes is an idea, some creativity, and a camcorder. The story just ahead.

(COMMERCIAL BREAK)

CROWLEY: A Dennis Kucinich fund-raiser in Austin, Texas, this weekend will feature an interesting draw. Kucinich supporters Bonnie Raitt and Willie Nelson, among others, will perform at a concert. Nelson will give the first public performance of a song he wrote on Christmas day called "Whatever Happened To Peace On Earth?" The campaign has released the lyrics, but unfortunately not the melody so we can only tell you part of a verse.

"Now you probably won't hear this on your radio, probably not on your local TV. But if there's a time and if you're ever so inclined, you can always hear it from me. How much is one picker's word worth and whatever happened to peace on earth."

I guess thank Heavens they didn't have the music for that.

For decades, professionals have spent hours and millions of dollars to come up with the best possible political ads. This year, with the help of the Internet and advocacy group Moveon.org is changing the tradition. Through an online contest, the group has solicited regular people who have an idea and a camcorder to create what they think is a winning ad. CNN's Joseph van Harken caught up with one of the teams. (BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: (UNINTELLIGIBLE) which should you wear as temperatures...

JOSEPH VAN HARKEN, CNN CORRESPONDENT: This is what happens when an actor, writer and nonprofit program director make a political ad with a $55 budget.

UNIDENTIFIED MALE: We didn't really have a tripod, and we would do a bunch of different takes from a bunch of different angles...

VAN HARKEN: Ken Goldman (ph), Marlo Highman (ph), and their neighbor, Todd Weeks (ph), created the ad "Chillin' with Uncle Sam" for an online contest called "Bush in 30 Seconds."

UNIDENTIFIED MALE: So we started off with me in the camera, mini DV cam pointing that way.

We didn't realize that if you're watching television you have to have light that flickers and so we got this piece of aluminum foil and just found the right motion and created a little shadow and light on the walls.

UNIDENTIFIED FEMALE: Since it was evening, we had to light the TV so we used this flashlight to pick up the rabbit ears and the side of the television to highlight what was going on.

UNIDENTIFIED MALE: You'd be amazed how many different selections of Uncle Sam costumes one store would have. We went through about 20 to find the perfect one.

UNIDENTIFIED MALE: This is also pretty much our budget right here.

UNIDENTIFIED MALE: That was 99 percent of our budget. One percent was spent on potato chips.

VAN HARKEN: "Chillin' with Uncle Sam" was one of almost 2,000 ads submitted to the contest sponsored by online activist group, Moveon.org.

ELI PARISER, MOVEON.ORG: Basically, people submitted 30-second videos of a ad that tells the truth about President Bush. And then we invited the general public to rate the ads and the top 15 will be the finalists and they'll go to a celebrity panel which includes people like Jack Black and Michael Moore and James Carville. The winning ad, which is selected by those celebrities, is going to air during the week of President Bush's state of the union address.

BUSH: Our intelligence sources tell us that...

VAN HARKEN: To no surprise, most of the ads turned in were highly critical of President Bush.

UNIDENTIFIED MALE: You see, the panel of judges is going to be Al Franken, Janeane Garofalo, Michael Moore, you pretty much know where this is going.

JIM DYKE, REPUBLICAN NATIONAL COMMITTEE: It sounds like this is a competition to produce the angriest grassroots ad you can. What we found is what's most important is to use technology to excite our grassroots activists and we do that through our team leader program. We think it's important, the way you get more people involved, is to deliver positive messages.

UNIDENTIFIED MALE: In order to win this contest, you're going to have to put a liberal view down and appeal to people that tend to agree with what Moveon's philosophies are.

UNIDENTIFIED MALE: Are you a traitor?

Take our all-American patriot test...

VAN HARKEN: Joseph van Harken, CNN, New York.

(END VIDEOTAPE)

CROWLEY: That is it for INSIDE POLITICS. I'm Candy Crowley. "CROSSFIRE" starts right now.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com



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