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JUDY WOODRUFF'S INSIDE POLITICS

George Tenet Resigns; Interview With Senator Bob Graham; 'Ticket Talk'

Aired June 3, 2004 - 15:30   ET

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


(BEGIN VIDEOTAPE)
ANNOUNCER: The CIA chief calls it quits.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: He's been a strong leader in the war on terror. And I will miss him.

ANNOUNCER: How will George Tenet's resignation affect President Bush's bid for re-election?

Are you tired of hearing rumors that John McCain will be Kerry's running mate? We soon may be able to lay that story to rest. Stick around for "Ticket Talk."

UNIDENTIFIED FEMALE: It's going to be crazy.

ANNOUNCER: The brouhaha in Boston: many are angry over the expected disruptions during next month's Democratic Convention.

UNIDENTIFIED MALE: They should have come up with a better plan to think of the people from Boston and the people coming into Boston.

(END VIDEOTAPE)

ANNOUNCER: Now, live from Washington, JUDY WOODRUFF'S INSIDE POLITICS.

JUDY WOODRUFF, HOST: Thank you for joining us.

Today's decision by CIA Director George Tenet to resign caught much of official Washington off guard. But it didn't take long for the speculation to begin on the political impact of Tenet's announcement and the reasons behind his exit.

Tenet presided over a rocky period in the nation's intelligence services and he weathered a number of agency mishaps, primarily the failure to prevent 9/11. Most recently, the failure to find weapons of mass destruction in Iraq sparked calls for his resignation. Although today he cited personal reasons for the decision.

(BEGIN VIDEO CLIP)

GEORGE TENET, CIA DIRECTOR: This is the most difficult decision I've ever had to make. And while Washington and the media will put many different faces on the decision, it was a personal decision and had only one basis in fact: the well-being of my wonderful family. Nothing more and nothing less.

(END VIDEO CLIP)

WOODRUFF: George Tenet said he plans to leave office July 11th, the seventh anniversary of his hiring. He served under both presidents Clinton and Bush, and his tenure is the second longest in history behind Allen Dulles. We have extensive coverage of the Tenet resignation, beginning with our White House correspondent, Suzanne Malveaux -- Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, Judy, Tenet and the White House are really taking great pains to dismiss this notion that he was forced out, that somehow he was pushed out of his office. It was his intention to really leave for personal reasons. White House spokesman Scott McClellan, aboard Air Force One, traveling with the president en route to Rome, said that the first time that the president found out about Tenet's intention to resign was when he received this letter last night at the White House.

Now, here's how it all unfolded. We're told that Tenet actually called chief of staff Andy Card when President Bush was at the U.S. Air Force Academy in Colorado yesterday. Said he wanted to talk to both of them when they returned to Washington. And when the two came back, Tenet was waiting here at the White House.

He met with the president for about 45 minutes, we are told, in the residence. That's when he presented him with his letter of resignation, saying that he was stepping down for personal reasons. We're told that the president did not argue with him, but rather, he said he accepted his resignation and that he understood his reasons and that he appreciated his service.

(BEGIN VIDEO CLIP)

BUSH: George Tenet is the kind of public servant you like to work with. He's strong, he's resolute. He served his nation as the director for seven years. He has been a strong and able leader at the agency. He's been a -- he's been a strong leader in the war on terror.

(END VIDEO CLIP)

MALVEAUX: The two men have a very close relationship, a good working relationship. But, of course, it is one, Judy, that has been tested.

This is something -- a leader who said in Bob Woodward's book that he believed that the weapons of mass destruction in Saddam Hussein's hands was a slam-dunk case. He has also blamed for faulty intelligence leading up to the war, as well as September 11th. And there are two reports that are due out later this summer highly critical of the CIA, talking about the intelligence lapses before 9/11 and before the Iraqi war. But still, again, Judy, both Tenet and the Bush administration saying today that he was not forced out, that the president appreciates his service, and he accepts his resignation and the reason for his resignation, that it was for personal reasons -- Judy.

WOODRUFF: All right. Of course all this coming just as the president prepares to go overseas. Suzanne, thank you very much.

Along the presidential campaign trail in Missouri, Senator John Kerry said he wishes George Tenet the very best. Kerry also said, while he has known Tenet for years, "There is no question, however, that there have been significant intelligence failures. And the administration has to accept responsibility for those failures." Kerry went on to repeat his call for a new position of director of national intelligence, with total control over the nation's intelligence personnel and budgets.

On Capitol Hill, many members of Congress were surprised by today's announcement. George Tenet endured tough questioning from Congress recently over Iraq and other issues, with a number of House and Senate members among those demanding that he step down. The reaction there today was mixed.

(BEGIN VIDEO CLIP)

SEN. TRENT LOTT (R), MISSISSIPPI: It could be truly personal reasons. He's been under a lot of pressure. He's been head of the CIA at a very important and a very difficult time.

I know he probably would like to spend some more time with family. I don't know that he has any health problems. So we don't know for sure. But I think we should take a moment to thank him and commend him for his service to the country.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D-CA), MINORITY LEADER: I think there are many more people who are responsible for the mess that the Bush administration has gotten us into. But if Mr. Tenet thinks there should be a change of leadership at the CIA, for whatever reason, including, you know, taking one for the administration, then so be it. But I think that the responsibility goes far beyond George Tenet.

(END VIDEO CLIP)

WOODRUFF: Senator Trent Lott and, of course, House Democratic Leader Nancy Pelosi. We'll have more from Capitol Hill in just a few minutes, when I'm joined by Republican Senator Orrin Hatch, a member of the Intelligence Committee, and Democratic Senator Bob Graham, who is the former Intelligence Committee chairman.

As we've been reporting, George tenet has served as CIA chief under two presidents from different parties. That is a rarity. Something far more common is the turmoil that has surrounded many of those serving in the post. Here now, CNN national correspondent Bruce Morton with a look back at some of Tenet's predecessors.

(BEGIN VIDEOTAPE) BRUCE MORTON, CNN NATIONAL CORRESPONDENT (voice-over): The headquarters is named after this president's father, who, in fact, at one point did head the agency. That Bush's tenure was fairly calm. Not all CIA directors can say that.

When John Kennedy became president, Allen Dulles was CIA director. He had worked for President Eisenhower, helped right wing coups in Guatemala and Iran. But after the bungled landing by anti- Castro Cubans at the Bay of Pigs, he had to resign.

Then there was Richard Helms, who headed the agency from 1966 to '73. He helped the right wing coups that overthrew Salvador Allende in Chile, and he kept the agency from getting tangled up in President Nixon's Watergate cover-up. But like other CIA directors, Helms resisted telling Congress everything it wanted to know.

He was director during various congressional investigations of the agency, and finally pleaded no contest to charges of failing to testify fully about the agency's covert operations, especially that Chilean coup to a Senate committee. He got a suspended two-year sentence.

Then there was William Casey, who managed Ronald Reagan's successful 1980 presidential campaign, and got the job he had always wanted, head of the CIA. Casey played a leading role in trading arms to Iran in exchange for its help in freeing U.S. hostages. Then went one step further, using that money to send arms to the contra rebels in Nicaragua.

Congress had prohibited aid to the contras, but that didn't stop Casey, who Oliver North told the Iran Contra investigating committee once fantasized about how good it would be to have a spy agency which raised its own money. It didn't need Congress.

Spy masters seldom want to share their secrets. Tenet was probably more candid than most.

Bruce Morton, CNN Washington.

(END VIDEOTAPE)

WOODRUFF: President Bush reiterated today that he is ready to cooperate in a grand jury investigation into the leak of the name of a CIA operative. This as the news -- or rather as the president confirmed that he has had talks with a private attorney to determine if he needs legal advice.

(BEGIN VIDEO CLIP)

BUSH: This is a criminal matter. It's a serious matter. I met with an attorney to determine whether or not I need his advice. And if I deem I need his advice, I'll probably hire him.

(END VIDEO CLIP)

WOODRUFF: Vice President Dick Cheney's office says Cheney also has an attorney ready if he needs legal counsel. A federal grand jury is investigating who in the Bush administration leaked the identity of CIA operative Valerie Plame to CNN "CROSSFIRE" co-host and syndicated columnist Robert Novak. Novak attributed the information to administration sours. Federal law prohibits disclosing the identity of a covert agent.

More on George Tenet and more from the campaign trail when we return. Teresa Heinz Kerry weighs in on U.S. policy in Iraq. We'll have her comments.

The latest "Ticket Talk" surrounding John Kerry's potential running mates. Why is John Edwards missing this week's gathering of progressives?

Plus, President Bush jets off to Europe. We'll preview the president's goals for securing new support for the mission in Iraq.

This is INSIDE POLITICS, the place for campaign news.

(COMMERCIAL BREAK)

WOODRUFF: With me now to talk more about George Tenet's resignation as CIA director, Democratic Senator Bob Graham of Florida. He's the former chairman of the Intelligence Committee. And we expect to have joining us any minute, Orrin Hatch, a member of the Intelligence Committee now.

Senator Graham, do you take George Tenet at his word that this was personal?

SEN. BOB GRAHAM (D), FLORIDA: Yes. The president has placed a great deal of faith in George Tenet, including accepting his assurance that there were weapons of mass destruction in Iraq being a slam dunk. So there's no indication that the president pushed him out. And the president has given him the label of having done a superb job while he served as the director of Central Intelligence.

WOODRUFF: Good for the country or bad for the country that George Tenet is stepping down?

GRAHAM: Well, I think that Mr. Tenet has served admirably and is a good person. But it was time for him to move on.

The fundamental issue of a director of Central Intelligence is the willingness to go before powerful people, such as the president of the United States, and tell them what they don't want to hear but what they need to hear in order to reach the best possible judgment. I think Mr. Tenet was having a difficult time fulfilling that fundamental responsibility of a director of Central Intelligence.

WOODRUFF: To what extent do you believe he was responsible for the bad intelligence with regard to weapons of mass destruction before going into Iraq?

GRAHAM: That's a question that ought to be asked of President Bush. President Bush has said that George Tenet, in spite of the fact that he was the head of our intelligence agencies during at least two major failures, the run-up to September the 11th and then the period before the war in Iraq, that he was superb in his performance, which would lead a person to say, well, there must it be somebody else in the intelligence organizations who were the cause of those failures. I think the president, when he gets back from Europe, will deserve to tell the American people what went wrong, who went wrong, who am I going to hold accountable, and what will happen to that person.

WOODRUFF: Do you think we're going to hear that?

GRAHAM: I hope so. It's been almost three years since September 11th, and not one person, Judy, not one person has been held accountable for that terrific tragedy to the American people and failure of American intelligence.

WOODRUFF: Do you hold George Tenet responsible? And if so, to what degree for 9/11?

GRAHAM: Well, the president clearly is not holding George Tenet responsible. You could not describe his job as being superb if you thought that he had any role in the failure before 9/11 and the failure before the war in Iraq. I think it's up to the president as a modern manager of the presidency to determine who to hold accountable and then to do so.

WOODRUFF: The former head of the CIA under Jimmy Carter, Stansfield Turner, said he thinks the biggest problem with the intelligence community today is political direction from the White House. Do you agree with him?

GRAHAM: Well, there are a number of serious problems, Judy, with the intelligence community. But the excessive politicalization is certainly one of the core defects. If intelligence has any meaning, if the billions of dollars that we spend to gather clandestine information is to have value, it's got to be given to the decision makers in the most honest, direct, candid, professional way possible. If all you do is tell the decision makers what they already want to hear, then you might as well save your money and effort.

WOODRUFF: Different question, Senator Graham. President Bush confirmed today that he has talked with a private attorney and he may hire him if need be in connection with the investigation into CIA leaks or leaks of CIA information. What does this tell you?

GRAHAM: Well, what this tells me is here is another example. In this case, a domestic intelligence failure. We have not been able to find out who sent the anthrax letters back in October of 2001. We haven't been able to find out who leaked material about the National Security Agency. We haven't been able to find out who leaked the name of this undercover agent to the press.

That's a pretty dismal record. And in this case, it's the responsibility of the Federal Bureau of Investigation, which is our domestic intelligence agency.

WOODRUFF: All right. Senator Bob Graham, former chairman of the Intelligence Committee, thank you very much.

GRAHAM: Thank you.

WOODRUFF: We had hoped to have Senator Hatch. He was not able to join us. We hope to be able to talk to him soon. And we thank you, Senator Graham.

GRAHAM: Thank you, Judy.

WOODRUFF: We appreciate it.

Just ahead on INSIDE POLITICS, a check of the "Campaign News Daily" headlines, and the latest buzz on who might become Senator Kerry's running mate on the Democratic ticket.

(COMMERCIAL BREAK)

WOODRUFF: Checking the headlines in our "Campaign News Daily," a new poll in West Virginia shows John Kerry with a six-point lead over President Bush. The Mason Dixon Survey gave Kerry 47 percent to Bush's 41 percent, with 12 percent undecided. Bush had a four-point lead in mid-April. Bush carried West Virginia by six points in 2000.

The president is also under 50 percent in a state he did well in four years ago. An insider's advantage poll gives Bush 49 percent in Georgia. Still well ahead of Kerry, who has 32 percent.

John Kerry's wife, Teresa Heinz Kerry, last night criticized the Bush administration's handling of the war in Iraq. At a meeting with military families in West Virginia, she said it's time to focus on bringing U.S. troops home with honor.

(BEGIN VIDEO CLIP)

TERESA HEINZ KERRY, JOHN KERRY'S WIFE: We've lost our allies, and we've lost the support of the world community. And I think our people in this country are paying not just in blood and in tears, but they are paying also in the lack of schools and the lack of health care and the lack of a lot of things for a war that really didn't need to have happened the way it happened.

(END VIDEO CLIP)

WOODRUFF: The timing of the GOP convention means the Bush-Cheney team is still not on the November ballot in Illinois. Because of their later-than-usual convention this summer, the president won't officially be the nominee until after the state deadline for candidates to be placed on the Illinois ballot. State Republicans may have to ask a federal judge to place the president's name on the ballot.

The Bush-Cheney campaign is trying to recruit volunteers at places of worship. The volunteers would distribute campaign materials and register voters among what is described as friendly congregations. Critics charge the effort violates separation of church and state and could jeopardize church's tax exempt status. Time now for our "Ticket Talk." That's where we get the latest intelligence on whom Senator John Kerry is looking at as a possible running mate. Back with us, CNN political editor, John Mercurio, to share his reporting.

All right. What's the latest on this process?

JOHN MERCURIO, CNN POLITICAL EDITOR: Well, by all accounts, we are really deep at this point into the vetting process of the short list of five or six candidates. And this a list that you could recite in your sleep.

You've got John Edwards, Dick Gephardt, Tom Vilsack, Bill Richardson and Wesley Clark. Mark Warner, the governor of Virginia, his name is also sort of bouncing around. But the scrutiny at this point is extremely intense.

In fact, speaking of Vilsack, there was a great article that was in the Chicago Tribune this week by Jeff Zelnick (ph) that sort of showed how meticulously the Kerry campaign's VP search committee is combing through the records of these guys. In fact, for example, there was a -- the aides have apparently gotten their hands on about 20 years worth of back copies of the Mount Pleasant News, which is a daily newspaper in a small town in Iowa called Mount Pleasant, Iowa, where Tom Vilsack was the mayor before he became the governor.

Now, he actually wrote a column, apparently, called "The Mayor's Moment." So that was -- apparently some Kerry aide is staying up all night having to read years of this column.

They're also apparently trying to acquire all the public writings of Christie Vilsack, the governor's wife. And aides are talking about -- sources are saying that the Vilsacks are sort of taking up a disproportionate amount of the search process, not necessarily because he's the top candidate, but because he's never run for president before, like most of the other candidates, or he's never served, like Bill Richardson in the Clinton administration. So he hasn't been through kind of a vetting process like this before.

WOODRUFF: That brutal vetting process that the candidates go through.

MERCURIO: Exactly.

WOODRUFF: All right. There's this story out there that just won't die. Now, what's the latest on that?

MERCURIO: There are so many people who want the McCain VP search or VP story to die. I'm one of them. And today, I have good news.

There's a light at the end of the tunnel. And that light is the Arizona filing deadline for Senate candidates. That deadline is Wednesday, June 9th at 7:00 Eastern. Mccain's office apparently has already called the Arizona Elections Office and said that they plan to file for re-election to his Senate seat today. Now, this is a big deal because, under Arizona law, a candidate who's running for one office can't run for another office unless they can reasonably presume they can serve in both offices. So by running for re-election, by filing for re-election, he's effectively taking himself legally in a way out of the VP process.

WOODRUFF: So we can drive the stake through the heart on that?

MERCURIO: Yes, exactly. I'll never mention that story again. I promise.

WOODRUFF: Very quickly, John Edwards, he usually does what John Kerry wants him to do. He didn't show up somewhere this week.

MERCURIO: Right, exactly. He's been one of the most vocal and active Democratic speakers on the speaking circuit other than John Kerry. Today, though, he didn't show up at the Take Back America Conference, which is in Washington.

It's a three-day meeting of sort of red meat liberals, like Hillary Clinton, George Soros and Howard Dean. Edwards said he had a scheduling conflict. But we did a little digging and found out that the conflict, which was a Senate committee meeting, was actually canceled. So he could have shown up if he wanted to. A lot of Democrats today wondering whether Edwards was strongly advised by Kerry or other people to sort of avoid a meeting where he might have a photograph taken with Arianna Huffington or Hillary Clinton during this sort of crucial month.

WOODRUFF: We caught you, Senator Edwards.

MERCURIO: We caught you.

WOODRUFF: OK. John Mercurio, thanks very much -- "Ticket Talk."

MERCURIO: Thank you.

WOODRUFF: We'll see you next week.

MERCURIO: All right.

WOODRUFF: Not sooner.

Well, George Tenet says he is leaving the CIA for personal reasons, but will his resignation affect the race for the White House? Next up, a live report from the campaign trail.

Plus, are you afraid to put your money where your mouth is? George Soros isn't, and he has a lot of money. We'll explain.

And it is a key battle in the Bush-Kerry contest. We'll take a look at which side is winning the campaign ad wars.

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE) BUSH: I'm sorry he's leaving.

ANNOUNCER: A major player in the case to go to war against Iraq is out. How will CIA Director George Tenet's resignation affect the race for the White House.

SEN. DIANNE FEINSTEIN (D), CALIFORNIA: This is very unusual. We're within a few months of a presidential election.

ANNOUNCER: John Kerry on the attack.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: Our soldiers are stretched too thin.

ANNOUNCER: The Democratic presidential hopeful fires away. But will the White House return fire?

He's heading to Europe, but he's got Iraq on his mind.

BUSH: And we'll discuss -- continue to discuss with world leaders our common responsibility to help the new government of Iraq.

ANNOUNCER: Can President Bush gain European support on Iraq?

Now, live from Washington, JUDY WOODRUFF'S INSIDE POLITICS.

(END VIDEOTAPE)

WOODRUFF: Welcome back. It was the timing, not necessarily the decision itself that surprised many in Washington when they heard today that George Tenet was stepping down as director of the CIA. There are just five months and until the presidential election. And intelligence issues are playing a bigger role in this campaign than at any in recent memory. Our Bill Schneider has more on the political impact of Tenet's resignation.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST (voice-over): The issue of intelligence is at the center of the presidential campaign. 9/11, Iraq. And George Tenet, CIA director since 1996, is at the center of the intelligence issue. Why did U.S. intelligence fail to appreciate the al Qaeda threat before 9/11?

UNIDENTIFIED MALE: Why was it that you didn't put the question of prosecuting Moussaoui to the side and go after the information which may well have led to unraveling this plot?

SCHNEIDER: Tenet wasn't prepared to answer. But earlier, he acknowledged the CIA wasn't ready.

TENET: It will take us another five years to have the kind of clandestine service our country needs.

SCHNEIDER: The president made an inaccurate assertion in his 2002 State of the Union Speech. BUSH: The British government has learned that Saddam Hussein recently sought significant quantities of uranium from Africa.

SCHNEIDER: Tenet took responsibility for the mistake.

Reporter Bob Woodward wrote that on the question of whether Iraq had weapons of mass destruction, "'It's a slam-dunk case, Tenet told the president. And then for emphasis repeated his assurance. 'Don't worry. It's a slam-dunk.'"

BOB WOODWARD, "PLAN OF ATTACK": They may the classic mistake of not putting the doubt up front and saying, look, we think he has it, we judge he has it. But we don't have ironclad evidence. And if they'd said that the dynamic might have changed.

SCHNEIDER: Who's really to blame here?

BOB KERREY, 9/11 COMMISSION MEMBER: It's up to the president to say, are you sure there's weapons of mass destruction.

SCHNEIDER: Tenet was first appointed by President Clinton, but now he's Bush's man.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: I called for George Tenet to resign several months ago. That is not a new call for me.

SCHNEIDER: The Democrats got what they want. But Tenet's resignation is likely to intensify the debate. A former CIA director raises the issue, is Tenet taking the fall for others?

UNIDENTIFIED MALE: I think he's being pushed out and made a scapegoat, that is that the president feels he's got to have somebody to blame and he's doing it indirectly by asking Tenet to leave.

BUSH: He's done a superb job on behalf of the American people.

SCHNEIDER: No one in the Bush administration is saying he was pushed out. Others note he's really been under a lot of pressure lately.

TENET: It was a personal decision. And had only one basis in fact -- the well-being of my wonderful family. Nothing more, nothing less.

SCHNEIDER: Democrats say they know where the buck stops. And it's not on Tenet's desk.

REP. NANCY PELOSI (D-CA), MINORITY WHIP: But I think that the responsibility goes far beyond George Tenet.

(END VIDEOTAPE)

SCHNEIDER: Now Democrats are free to raise the big issue -- did the U.S. go to war on the basis of intelligence that was wildly wrong and who's fault is that -- Judy. WOODRUFF: Bill Schneider, thanks very much. And it echoes what Senator Bob Graham was saying moments ago on this program. Bill, thanks.

Democrat John Kerry is on the campaign trail today. And he added his voice to those reacting to George Tenet's resignation. But he also tried to remain on message. Our senior political correspondent Candy Crowley is traveling with the Kerry campaign.

(BEGIN VIDEOTAPE)

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT (voice-over): George Tenet was not the designated topic du jour for camp Kerry. This candidate doesn't like to interrupt his campaign flow with the daily distractions of news.

QUESTION: Any thoughts today, Senator?

KERRY: We already put out a statement on it.

CROWLEY: In a mildly worded written statement, Kerry, who had previously called for Tenet's resignation thanked the CIA chief for his years of hard work, adding that the Bush administration must accept for responsibility for intelligence failures and use this change as an opportunity to lead.

Which was more or less what Kerry did want to talk about, leadership. What he would do as commander in chief versus what the current commander in chief is doing.

KERRY: Our soldiers are stretched too thin. The administration's answer has been to put a Band-Aid on the problem. They've effectively issued a stop loss policy as a backdoor draft. They have extended tours of duty, delayed retirements, prevented enlisted personnel from leaving the service.

CROWLEY: At the Truman Library in Independence, Missouri, Kerry delivered the third in a series of speeches designed to cut into George Bush's edge in the polls on national security matters.

Accusing the administration of failing to transform the military to fight new dangers, Kerry says he would add 40,000 new volunteers to the military, though a top aide conceded recruitment can be a problem. Half the new force would be combat troops, the other half civil affairs personnel to help with post-war efforts.

KERRY: We must also recognize that the battle itself is only half the mission. In any conflict, we need an expanded, well-trained force with soldiers prepared for both the war and its aftermath.

CROWLEY: Kerry says he would also double the number of Special Forces, use the National Guard primarily for homeland security and provide the latest in high tech.

KERRY: Right now, the technology actually exists to let a soldier see what's over the next hill, or around the next road -- next bend in a road. But every soldier in every unit should have access to that modern break-through.

CROWLEY (on camera): The Bush campaign greeted Kerry's speech as a set of empty promises, noting, again, that Kerry voted against the $87 billion bill to fund troops in Iraq. A campaign spokesman says there seems to be a disconnect between Kerry's campaign rhetoric and his Senate record.

Candy Crowley, CNN, Independence, Missouri.

(END VIDEOTAPE)

WOODRUFF: For his part, President Bush has set out on a short swing through Europe that will take him to Sunday ceremonies in France honoring World War II's D-Day.

He met at the White House earlier today with Australian Prime Minister John Howard. Howard pledged that his 850 troops will stay in Iraq until their mission there is complete. The small boost to the U.S.-led effort in Iraq came just before Mr. Bush left for Italy.

As CNN senior White House correspondent John King reports, there is a great deal at stake during the president's brief journey.

(BEGIN VIDEOTAPE)

JOHN KING, CNN SENIOR WHITE HOUSE CORRESPONDENT (voice-over): (AUDIO GAP) the quick trip will test promises from the president and key Iraq War opponents to work together now on Iraq's political; transition.

BUSH: I will discuss -- continue to discuss with world leaders our common responsibility to help the new government of Iraq and our common opportunity to help the advance the momentum of freedom in the broader Middle East.

KING: Rome comes first for a courtesy call on Pope John Paul II and talks with an Iraq ally, Italian Prime Minister Silvio Berlusconi.

Next France where Mr. Bush will see two outspoken Iraq War foes, French President Jacques Chirac and German Chancellor Gerhard Schroeder.

JEAN-DAVID LEVITTE, FRENCH AMBASSADOR TO THE U.S.: In a way, President Bush is considered as one who decided a war which for most Europeans was not necessary. But it is important now to have a good positive dialogue between our leaders.

KING: Mr. Bush's immediate goal is agreement on a new United Nations resolution endorsing the interim Iraqi government.

CONDOLEEZZA RICE, NATIONAL SECURITY ADVISER: Whatever differences we had in the past, that a free and prosperous and stable Iraq is a linchpin and a key to a stable Middle East is understood and that people are looking for ways that they can help to get that done.

KING: Under pressure from France and others, the draft resolution now says U.S. and other coalition troops will be out of Iraq no later than January 2006.

The more conciliatory White House tone has not gone unnoticed.

MAX BOOT, COUNCIL ON FOREIGN RELATIONS: I certainly think that the Bush administration has been humbled to some extent by the problems it has encountered in Iraq in the past year. Things have note gone as well or as easily as the optimists had expected.

KING: More opponents are polite, but there is a touch of we told you so.

LEVITTE: I think that now everybody recognizes that America cannot do everything alone, that it is necessary to work as true friends and allies.

KING: White House officials say the president's focus is on building as much international support as possible for Iraq's fragile transition. But less feuding with traditional allies could also help Mr. Bush as his diplomatic skills are called into question in his own political campaign.

John King, CNN, the White House.

(END VIDEOTAPE)

WOODRUFF: He is a billionaire willing to use his money to oust George Bush. Coming up, George Soros energizes the left in its fight to take back the White House and Congress.

Talking dollars. Which side is spending the most when it comes to campaign commercials? We'll ring up the numbers.

Plus, come convention time you won't be able to get from here to there in Boston. That has many in Beantown steamed.

(COMMERCIAL BREAK)

WOODRUFF: Thousands of progressive activists are in Washington this week for a, quote, "Take Back America" rally. The goal? To win back the White House and Congress. Today they heard from Howard Dean, Hillary Clinton, and the star, billionaire, George Soros. He has given millions to groups that want to get President Bush out of the White House. More now from our congressional correspondent, Ed Henry.

(BEGIN VIDEOTAPE)

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT (voice-over): George Tenet's resignation was greeted with cheers at this gathering of 2,000 liberal activists already pumped up by the president's declining poll numbers.

HOWARD DEAN (D), FMR. PRESIDENTIAL CANDIDATE: It's about time somebody in this administration resigned over all the misdeeds that have gone on and let this not be the first one culminating on November 2 when George Bush is the last one to fall. HENRY: The left wing has energy and money thanks to billionaire George Soros who has already given $15 million to progressive groups and vowed to spend what it takes to defeat President Bush. Soros was introduced by Hillary Clinton and then issued a call to arms saying his check book alone will not carry Senator John Kerry to victory.

GEORGE SOROS, SOROS FOUNDATION: Hillary, again, said the right thing. That it isn't one person with money that can make a difference. It can only make a difference if there are people in the country who believe in those ideas and are willing to stand up.

HENRY: Soros, a Hungarian Jew who survived the Holocaust has said that when the president says you're with us or against us, it reminds him of the Nazis and he issued a broad indictment of Bush's national security record.

SOROS: This is a very tough thing to say, but the fact is, that the war on terror as conducted by this administration has claimed more innocent victims than the original attack itself.

HENRY: Soros also equated the Iraqi prisoner abuse to the 9/11 attacks. Republican party chairman Ed Gillespie blasted Soros for making that connection and made it clear that if Democrats take the billionaire's money, they'll have to answer for his opinions.

ED GILLESPIE, RNC CHAIRMAN: George Soros is the No. 1 funder of efforts to elect John Kerry for president and so his positions are relevant to this election.

HENRY: Democrats were unapologetic, insisting they're just countering what they believe to be conservative propaganda.

SEN. HILLARY CLINTON (D), NEW YORK: I do know a little bit about the vast right wing conspiracy. Oh, and there were doubters.

(END VIDEOTAPE)

HENRY: Democrats say they're just trying to level the playing field, but Republicans charge that this Soros money has actually helped to set up a shadow Democratic party that is circumventing this new campaign finance law -- Judy.

All right, Ed Henry, they are tying George Soros to John Kerry every which way they can. Thank you very much. Coming up, the political ad wars. John Kerry releases a new TV ad in select states aimed at voters worried about health care. We'll take a look at that ad and update the overall spending numbers when INSIDE POLITICS returns.

(COMMERCIAL BREAK)

WOODRUFF: The Kerry campaign has released a new television ad which will air in select states this month. The ad features Kerry talking about health care costs in a town hall meeting format. Kerry tells the audience that health care should be, quote, "accessible and affordable to every American." The spot will rotate with a different Kerry ad in 14 of the 19 states that are already running Kerry ads this month.

Well, time now to check the big picture on ad spending in the presidential race. Our consultant Evan Tracey of TNS Media Intelligence is with us. His group analyzes spending in the nation's top 100 media markets. We've been at this for three months essentially since we knew John Kerry was the nominee. Where do we stand in terms of spending?

EVAN TRACEY, TNS MEDIA INTELLIGENCE: This is going to be one for the record books. The total spending of everybody combined, candidates and 527s, is now $155 million since March 3. So three months where -- it's incredible. We looked at this four years ago and it was $14 million at the exact same time period. So it's not even comparing when you put them next to each other.

WOODRUFF: 14 versus 155. All right. We've heard a lot about these 527s, outside groups that have cropped up since McCain-Feingold. What effect are they having? How much money are they spending and where?

TRACEY: The 527s still are a pro-Kerry story. The spending right now is really divided up into bigs and into littles. Kerry spent about $43 million on his own but another 39 and almost $40 million has been spent really between three groups, Moveon, the Media Fund and the AFL-CIO. The second group are the littles. About seven of these from the Sierra Club to Nay Raw (ph) to Save Our Environment to a new group called Quality Education. When you wrap those seven groups up together, it's about another million dollars. Bush conversely has spent about $69 million but he's been doing it all. Kerry's a lot of moving parts still.

WOODRUFF: What about the 527s, the FEC rule that they can go forward? So where are the Republicans? I mean, you talk about the Democrats.

TRACEY: Well, that's the thing. There was a couple weeks ago the FEC came out and said the status quo was OK with them. Really there was sort of this waiting at the gate for the Republicans to come rushing through with their own 527s. Hasn't materialized yet. We've really had two small efforts, one between the group Citizens United and the other, the Club For Growth and they've really only amounted for a couple hundred thousand and it's just spread out over too many states to really matter.

WOODRUFF: You were just telling me that's in part because the Bush campaign want to keep control over their advertising.

TRACEY: I suspect they raised 2000-plus million, they feel like they can carry their own message out there. I don't think that's going to deter Republican and pro-Bush groups from getting into the act. I think they were just really waiting for the FEC to issue the green light. So I think we've got really, going into a second wave of this 527 spending the rest of the summertime. So we've gone through pro-Kerry groups right now. I think we're heading into a phase where you're going to see a lot more pro-Bush groups. WOODRUFF: One other question I actually hadn't planned to ask you. Is there any research being done on the effect that these 527 ads are having versus the ads that are run formally by the campaign?

TRACEY: The research will be on election day. I think what voters say on the exit polls will be very indicative of what messages stuck with them throughout this process. Right now these ads are really 100 percent negative. These ads are doing one thing, holding Bush's negatives down and right now with Bush campaign kind of carrying his -- they're holding his approval rating down, they're holding his poll numbers down. They can't do a lot to advocate a position because they're not a party, they're an interest group.

WOODRUFF: But it's something I would think that the political scientists and all the ad experts like you are going to be very interested in.

TRACEY: It will be studied. This is the first election under this rule book. There's really no historical precedent and we'll have to see how it all comes out in November.

WOODRUFF: Evan Tracey, any quick prediction on what number we'll end with on ad spending before they convert to public spending?

TRACEY: I would not be surprised to see this get close to the $500 million mark all said and done by election again with probably two-thirds of that coming before the conventions.

WOODRUFF: All we can do is gasp.

TRACEY: It's a lot out there, but this is how the rules were written.

WOODRUFF: Evan Tracey, TNS Media Intelligence. It's always good to see you. Appreciate it.

Ahead on INSIDE POLITICS, why getting around the Boston area by plane, train, or car at the end of July could prove a real headache for some commuters.

(COMMERCIAL BREAK)

WOODRUFF: In Boston, business leaders are rallying today in support of the upcoming Democratic National Convention. They say the event in late July will give an economic boost to the area and generate jobs. But as CNN's Dan Lothian reports others are predicting commuting snarls and headaches due to tight security.

(BEGIN VIDEOTAPE)

DAN LOTHIAN, CNN BOSTON BUREAU CHIEF (voice-over): Whether the highway runs through Boston or high above it, the traffic flow of planes and cars will be severely disrupted for the Democratic National Convention. On the ground, two transit hubs will be closed. Criticism is mounting. From a limo driver...

UNIDENTIFIED MALE: I think you're going to find problems with people aren't going to have any patience whatsoever.

LOTHIAN: To a bus driver.

UNIDENTIFIED FEMALE: It's going to be crazy.

LOTHIAN: To a wheelchair-bound resident.

UNIDENTIFIED MALE: Should have come up with a better plan to think of the people from Boston and the people coming into Boston.

LOTHIAN: VIPs flying into Boston on private jets will be forced to take a detour too. During the four-day event, noncommercial aircraft will be banned from flying within a ten-mile radius of Boston Logan International Airport and heavily restricted within a 30-mile ring.

UNIDENTIFIED MALE: Pretty strict control by the control tower and the ATC or the air traffic people.

LOTHIAN: Small airports like this one in Norwood, 25 miles away are bracing for heavy traffic.

UNIDENTIFIED MALE: We expect probably an additional 100 aircraft.

LOTHIAN: And beefing up security to meet temporary guidelines.

LEN CARROLL, EASTERN AIR JETS: Vector police 24 hours a day and we canceled, no vacations, we've brought in extra help.

LOTHIAN: Small commercial airlines like Cape Air, considered a security risk because of the lack of cockpit doors on its prop-driven planes will not be allowed to use Logan Airport during late afternoon and evening hours, the convention's peak times. Responding to criticism, Mayor Tom Menino says the headaches are necessary.

MAYOR THOMAS MENINO (D), BOSTON: I'd rather make sure the site is secure and since 9/11, you know, our lives were changed drastically and we have to make sure that security is in place.

LOTHIAN: It's not clear how intense security plans will impact New York City during the Republican National Convention in August. A counterterrorism force will be in place but there are no plans for major closures.

MAYOR MICHAEL BLOOMBERG (R), NEW YORK: You just hope that we are in the right place at the right time if something does happen.

LOTHIAN: Two big cities hosting two national political events still searching for balance between security and major disruptions. Dan Lothian, CNN, Boston

(END VIDEOTAPE)

WOODRUFF: And the Democrats are gathering just next month. That's it for today's INSIDE POLITICS. Thanks for joining us. I'm Judy Woodruff. "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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