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CNN Wolf Blitzer Reports

New Warning about Possible Volcanic Eruption on Mount St. Helens; Good News For John Kerry in Key Battleground State; Will First Presidential Debate Sway Voters?; Are Some Iraqi Troops Supporting Insurgents?; Congress Has Questions for Lobbyists who Rake in Millions from Indian Tribes

Aired September 29, 2004 - 17:00   ET

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

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


WOLF BLITZER, HOST: Happening now, a new warning about a possible volcanic eruption on Mount St. Helens in Washington state. We're awaiting a news conference.
Also happening now, a brand new CNN/"USA Today"/Gallup poll with some good news for John Kerry in a key battleground state. Stand by for hard news on WOLF BLITZER REPORTS.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): One on one. Their first face-off. Will it make a difference? We'll look back at the record.

And we'll have our own debate.

Iraq's new army playing a bigger role. But which side are they on?

Business as usual or dirty business? Lobbyists rake in millions from Indian tribes.

UNIDENTIFIED MALE: It is a cesspool of greed. It clearly is a disgusting pattern of certainly moral corruption.

BLITZER: Congress has questions.

Wild ride. Heart-stopping moments as a private spacecraft goes for a $10 million prize.

ANNOUNCER: This is WOLF BLITZER REPORTS for Wednesday, September 29, 2004.

(END VIDEOTAPE)

BLITZER: We're following a developing story in Washington state right now where scientists have raised the alert level over at Mount St. Helens. They're warning that activity there is ramping up. Scientists saying an eruption is, in their words, "increasingly likely." Officials are about to hold a news conference. We're going to bring you the latest information on this potentially dangerous situation. We'll have a live report from Mount St. Helens. That's coming up in a few moments. We're watching very closely this potentially very dangerous story.

Let's move on to politics. Just a day away and they're poised and prepared and they're focused like lasers, at least that's what the Bush and Kerry spin machines might have all of us think on the eve of this first presidential face-off. We'll go live to Florida for the final preparations. Our senior political correspondent Candy Crowley is in Belle Harbor, our White House correspondent Dana Bash is in Miami, here in Washington our Brian Todd will look back at the sweats, the sighs and the rolling eyes and CNN's Paula Zahn is in New York with new numbers from a key battleground state.

But first, let's take a look at what's riding on this crucial debate.

(BEGIN VIDEOTAPE)

(voice-over): It's one of those rare moments in politics when is a simple shrug or a seemingly random comment can have a huge impact on an election. The candidates need to come across as smart but they also need to come across as likable. And that helps explain this preemptive strike by Republicans.

LYNNE CHENEY, WIFE OF DICK CHENEY: What do those orange shirts remind you of?

DICK CHENEY, VICE PRESIDENT: Um.

L. CHENEY: I'll say how about John Kerry's suntan.

D. CHENEY: I may have to disassociate myself.

BLITZER: Trying to bolster his likability, the president and Mrs. Bush went on the syndicated talk show "Dr. Phil" to talk about their family.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I was in the limo with her and she said, "I just stuck my tongue out."

LAURA BUSH, FIRST LADY: She turned around and told him.

G. BUSH: And I said, "Jenna, you just made national news." I said, "you have to be careful. You are in a fish bowl."

BLITZER: Kerry will be on that show next week. He was on "Good Morning America" today denying he's flip-flopping on the issues.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: See what the Republicans do, what they love to do and they're very good at it, and they've spent millions of dollars doing it. They just find a little sentence here, find a little sentence there and take it out of context. That's why I look forward to this debate because it is an opportunity to be able to really let the American people know the truth and know where you stand.

BLITZER: For President Bush and Senator Kerry, the stakes will be enormous when they face off for 90 minutes before tens of millions of American voters. Most of them have already made up their minds. But a potentially decisive number have not. The candidates have practiced and practiced, honing their debating skills, touching up their carefully scripted talking points.

Former Clinton White House press secretary Mike McCurry has been helping Kerry.

MIKE MCCURRY, FMR. CLINTON PRESS SECY.: I think it always is good to go into one of these high-profile debates as an underdog.

BLITZER: Mary Matalin has been helping Bush.

MARY MATALIN, FMR. ASSISTANT TO PRES. BUSH: We would rather be in the position that we are than to be behind. But the fact of the matter is this remains, whatever the polls say, a very close race.

(END VIDEOTAPE)

BLITZER: And on the eve of this first presidential debate we have a developing story in a key battleground state. No Republican has ever lost Ohio and gone on to win the White House. But a new CNN/"USA Today"/Gallup poll just out shows Senator Kerry gaining ground in Ohio. Let's go live to CNN's Paula Zahn. She's standing by in New York -- Paula.

PAULA ZAHN, HOST, PAULA ZAHN NOW: Hi, Wolf. Not only gaining ground in some areas but actually leading. The Kerry campaign has to be pleased with these numbers. Kerry now leading the president 50 percent to 46 percent among registered voters. Compare this, Wolf, just three weeks ago to when our poll showed Kerry down by a point. Our poll also shows Kerry making similar gains among likely voters. Bush has a narrow two-point lead among these voters. But this is down from an eight-point lead Bush had three weeks ago. Now you can see from both of these comparisons, Kerry has been doing better among the group of all registered voters, and he has among that smaller pool of voters, deemed to be the most likely to vote. This does indicate the Bush voters right now seem to be more motivated to go out and vote and the senator's real challenge may be to motivate his base.

BLITZER: Very interesting. Paula Zahn, of course, will have much more on "PAULA ZAHN NOW." That airs at 8:00 p.m. She is doing primetime politics between now and the election. Paula, I'll see you in Miami tomorrow.

Senator Kerry is heading to Florida from Wisconsin at this very hour. Aides say their candidate is ready to show America what he's got. Our senior political correspondent Candy Crowley already in Belle Harbor. Candy, first of all, how confident, if we can use that word, is the Kerry camp right now?

CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT: You can use that word because the Kerry camp, one of his top advisers saying, look, we are very confident about how he's going to do tomorrow night. We have said endlessly and they repeat John Kerry is an accomplished debater. He was on the debate team in college. He has had very famous debates with William Welles (ph) who was challenging him in Massachusetts during the senator's toughest race to date on senators.

So there are any number of reasons to believe that John Kerry will do well. One of the other interesting things that the Kerry campaign is doing at this point is to kind of draw the sting from what they expect to be what people will be saying after that debate. So they're conceding the point, telling reporters, look, George Bush is affable, he's likable. But they say this is not about personality. You don't need to be a cheerleader, that's a direct stab at George Bush and what he did at Yale. What they want is a serious discussion. That's what voters are looking for tomorrow night.

So they are setting the bar as well as kind of tamping down expectations about John Kerry in style.

BLITZER: Candy Crowley reporting for us. And as she was we saw some live pictures of John Kerry in Madison, Wisconsin, getting ready to fly down to Florida. There he is. Uttered a few words to his supporters there. A big day for him tomorrow in Miami at the University of Miami in Coral Gables.

President Bush returned to Florida earlier today. He goes into this first face-off leading in many of the polls, the key battleground states. His aides insist they are very confident. The debate won't change that. Let's go to our White House correspondent Dana Bash. She's already down in Miami -- Dana.

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, the president didn't have any official campaign stops today. But he used this power of incumbency, if you will, to tour some hurricane damage. Certainly that, the Bush campaign, does not hurt with Florida voters. He toured an orange grove that was hurt by three of the four hurricane that hit this state.

He didn't answer a question about how debate prep was going but, Wolf, his campaign is in full mode. As Candy said, the Kerry campaign is as well on Iraq, on specifically the line that Mr. Bush uses that he is going to try to cement tomorrow night that Kerry is a flip- flopper when it comes to Iraq. Now there are always gimmicks as you know, Wolf, in politics.

Today, from the Bush campaign, is this briefing book, a mock briefing book for Senator Kerry on Iraq. I will just give you an excerpt and you'll get the point. This is from -- supposedly for Senator Kerry. "You are currently against the war, wouldn't have gone to war but you used to be for the war before you were against the war before you were for the war."

Now if you can get all that straight perhaps you're better than most of us. But certainly that is something that the Bush campaign thinks has worked with Senator Kerry. The one thing that they know they're going to have to probably stop John Kerry from doing is explaining his plan. That's something the Bush campaign says the president will try to do -- Wolf.

BLITZER: Dana Bash in Miami. Thanks very much. How important is this first debate? Well, the campaigns have drawn lessons from some big successes and flops in the past. And that's led them to draw up so-called rules of the game. Here is CNN's Brian Todd -- Brian.

BRIAN TODD, CNN CORRESPONDENT: Wolf, those rules are already controversial and are bringing back striking images of critical first debates.

(BEGIN VIDEOTAPE)

TODD (voice-over): On the subject of the first debate experience, Al Gore can joke about it now.

AL GORE, FMR. VICE PRESIDENT: It's quite interesting. It makes me sort of want to sigh.

TODD: But those sighs, 18 of them by one count, become an albatross for Gore following the first presidential debate in 2000.

Perhaps because of those TV cutaways or the image of George Bush, Sr., checking his watch during a 1992 debate with Bill Clinton, the Bush and Kerry campaigns are trying to set debate rules banning shots of one candidate while the other is answering questions. The networks for now are refusing to go along.

BUSH: I'm beginning to think not only did he invent the Internet, but he invented the calculator.

TODD: Before that first debate in 2000, a CNN/"USA Today/Gallup poll had Gore slightly ahead of George W. Bush. But Gore, criticized for his aggressiveness, exaggerations and all those gestures, falls 7 percentage points behind in the days afterward. The political analysts we spoke to agree. The first face-off is critical.

RON BROWNSTEIN, "LOS ANGELES TIMES": In the last 40 years since we've had these televised debates, several times the first debate has proven to be a pivotal moment in the race.

TODD: 1960, John F. Kennedy trails Richard Nixon very slightly going into their first debate. Radio listeners say Nixon gets the better of Kennedy. But the more than 66 million people who watch make a difference.

JOHN F. KENNEDY, FMR. PRESIDENT OF THE UNITED STATES: So that our experience in government is comparable.

TODD: Based on that appearance, Kennedy overtakes Nixon in the polls and hangs on. 1980. A week before the election. The Democrats hammer on Ronald Reagan as a frightening warmonger. Reagan trails President Jimmy Carter by 8 points. Then on October 28...

RONALD REAGAN, FMR. PRESIDENT OF THE UNITED STATES: There you go again.

TODD: Viewers embrace Reagan's reassuring manner. Carter is stunned by an 11-point swing in the polls and a revolution takes hold.

(END VIDEOTAPE)

(on camera): Can John Kerry reverse his poll numbers in this debate? Analysts we spoke to say Kerry has an enormous opportunity and a very difficult two-fold challenge. He has to draw strong contrast with the president and make a case for change and at the same time make a personal connection with voters that many observers say has been missing -- Wolf.

Brian Todd, thanks very much.

And this note to our viewers, our special debate preview continues ahead. I will speak live with the former U.S. ambassador to the United Nations, Richard Holbrooke and Republican Senator Jon Kyl. That's coming up.

And this reminder. CNN's primetime coverage, fresh analysis of the first presidential debate begins tomorrow night, 7:00 p.m. Eastern. We will all be down in Miami for that coverage.

Here is your chance to weigh in on this story. Our web question of the day is this. Will the presidential debates impact the outcome of the election? You can vote. Go to CNN.com/wolf. We'll have the results for you later in this broadcast.

A wild ride to space and back. It is all captured live. SpaceShipOne flirting with disaster as the craft seems to spin out of control. Miles O'Brien standing by with a report.

Dangerous activity. Evidence that Mount St. Helens may, repeat, may be ready to erupt again. New information is being released right now.

Insulting the Indians. High-powered Washington lobbyists caught degrading the people they were paid millions of dollars to help.

(COMMERCIAL BREAK)

BLITZER: Now back to a developing story we're following. A volcano advisory is now out for Mount St. Helens, showing increasing signs of an impending eruption. CNN's Kimberly Osias is there. She's got new details.

KIMBERLY OSIAS, CNN CORRESPONDENT: Hello, Wolf. Believe it or not, I'm standing in front of Mount St. Helens. It is very difficult to tell in fact where we are because the fog is so substantial. Just a layer of fog. That is what scientists are battling with now. They are waiting to go back in with helicopters to test for gases. Primarily, they're looking for any emissions of CO2 or SO2. If you don't remember from your chemistry that's carbon dioxide and sulfur dioxide. Those gases would be emitted to show any kind of volcanic eruptive activity.

They tested earlier in the week and didn't find anything significant. But you contrast that with a picture of an enormous volume of earthquakes. They've seen about 1,000 to 2,000 in the past week. Earlier scientists with the USGS spoke about the danger.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: So what are we expecting?

CYNTHIA GARDNER, USGS SCIENTIST IN CHARGE: Well, we are expecting that either nothing could happen or we perhaps could have an explosive event. We're looking at something, our best guesstimate is something that small to moderate. What that means is that we might have fragments being hurled out of the volcano, primarily we're thinking the lava dome, upwards to perhaps five kilometers or about three miles from the current lava dome.

UNIDENTIFIED FEMALE: In the air or out?

GARDNER: Out. So that the crater floor and the upper flanks and the flanks of the volcano could be affected. We also could be having ash that could be expelled thousands of feet into the air and carried downwind. The concern there is an ash and aviation hazard.

(END VIDEOTAPE)

OSIAS: Now, obviously, it's been a concern for aviation because you can't see anything. Now if there is an eruption it wouldn't be like 1980 when 57 people were killed. They say it would be more tantamount to 1986. Steam and ash would go eastwards towards Oregon is what they're telling me. We won't have any kind of significant results for another 24 hours -- Wolf.

BLITZER: Kimberly Osias, on the scene for us. Kimberly, thank you very much.

Collaborating with the enemy. Allegations that Iraqi police forces, at least some of them, are actually cooperating with the insurgents they're supposed to be fighting.

Reality check. An update on the ground and the situation in Iraq. I'll speak live with Retired U.S. Army General George Joulwan, the former NATO supreme allied commander.

Also, broken promises and millions of dollars lost. Allegations of abuse and criminal conduct against Native American tribes. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Part of the key to stabilizing Iraq is getting the country's own security forces up and running. And while some progress has, indeed, been made, there are now some fresh and disturbing signs that at least some Iraqi security personnel may be helping to make matters worse. Our Zain Verjee is joining us now from the CNN Center in Atlanta. She has more -- Zain.

ZAIN VERJEE, CNN CORRESPONDENT: Wolf, both rank and file members as well as senior officers are undermining efforts to deliver stability in Iraq. And they're doing it either willingly, or under pressure.

(BEGIN VIDEOTAPE)

VERJEE (voice-over): Trained if not yet completely trusted, Iraq's fledgling security forces may be that country's best hope for stability and America's best hope for an exit strategy. But what happens when those charged to protect are suspected of collaborating with insurgents?

Military reporter Scott Taylor was seized in northwest Iraq. He says Iraqi police at a checkpoint told him to get into a car with armed gunmen.

SCOTT TAYLOR, FORMER HOSTAGE: I assumed it was sort of special forces unit of the police, little did I know that in fact these were a group of Ansar al Islam guerrillas, or Mujahedeen, and they obviously were working in completely collaboration with the American-paid Iraqi police.

VERJEE: As he rode through Mosul in a car with his captives, he says Iraqi police made no attempt to intervene and instead...

TAYLOR: Actually welcomed these guys, gave them cigarettes, banged on the roof of the car as we drove through and could easily see that we were kept, either handcuffed or tied up in the back seat.

VERJEE: U.S. experts say Iraqi some police are motivated to support insurgents by both money and blood.

KEN POLLACK, CNN ANALYST: For some, it is pure economics. They are desperate to support their families. And the insurgents often times will pay them for turning against the reconstruction effort just as the new Iraqi government pays them to stand by it.

For others, there are family considerations or tribal ties.

VERJEE: Many policemen are also simply afraid if they don't support, or at least tolerate the insurgents, they or their families will be attacked.

In places, there's still a trust gap. Last week in Tikrit the U.S. military arrested a lieutenant general in the National Guard and accused him of links to the insurgents.

Despite all the obstacles, General David Petreas, in charge of training Iraqi security forces, says progress is made. Analysts say, ultimately one thing matters.

KEN ROBINSON, CNN MILITARY INTELLIGENCE ANALYST: Legitimacy. The central challenge is both the legitimacy of their job and the population recognizing that they are Iraqis serving Iraqis.

VERJEE: A sentiment echoed by the police chief Whalid Khalid Abdul Salaam, who says if the Iraqi people don't trust them, there can never be peace.

(END VIDEOTAPE)

VERJEE: Wolf, to help deliver that peace the Pentagon says about 100,000 trained Iraqi police and soldiers are in place and that equipment is flowing to them. The Pentagon also says Iraqi counterterrorists forces are conducting successful operations -- Wolf.

BLITZER: Zain Verjee with a very comprehensive report for us. Zain, thank you very much.

No doubt, the focus of tomorrow night's presidential debate will be Iraq. John Kerry says President Bush is glossing over what is a deteriorating situation, while the president is accusing Senator Kerry of being overly pessimistic. Who is right?

For a reality check on the situation in Iraq, we're joined by the retired U.S. Army general George Joulwan, and the former NATO supreme allied commander. General, thanks very much for joining us.

We'll get to that in a moment, but how worried should we be that some of these police forces, security forces, soldiers we're training are actually, if you can use the phrase, in bed with the enemy?

GEORGE JOULWAN, FRM. NATO SUPREME ALLIED COMMANDER: First of all, given the amount of time we have been in Iraq, the amount of time we are training the forces, we should not be surprised that some of these forces, their loyalty is in question. We should have anticipated that. And I'm sure we did.

So we're going to have to go through these bumps in the road, whether it is a fatal issue or not is too early to tell. We have anticipated or should have anticipated that this will happen. It's happened in every country we've been in similar situations, and will happen in Iraq.

BLITZER: Do you get the sense -- you're not there in Iraq, but you're extremely well plugged into your former colleagues in the U.S. military, the Pentagon and elsewhere, do you get the sense that the situation is really gloomy, as some of the CIA National Intelligence Estimates would suggest, or that there is some good progress under way?

JOULWAN: Let me say that we're fortunate to have, I think, the best trained military and the best trained leaders that we've had in generations. Having said that, the conditions in Iraq now are very dangerous. And I think our commanders will say that.

The trouble you have in our own election year, is you have one side painting it as too rosy. The other side is painting it as too pessimistic. Somewhere in the middle is the real answer.

But we have fundamental problems. And the commanders will tell you that, that there is not a secure environment, that we do not control parts of that country, and that with the Iraqi election coming up, all of that is paramount. And we have to -- our forces have to be able to control the situation and provide a broad sense of security with the Iraqi forces to allow an election to take place. BLITZER: We've heard some Republicans make the allegation against John Kerry that by speaking so gloomily or pessimistically he is undermining the forces on the ground. You were in a situation in Vietnam, when you fought there, you heard a major debate thousands of miles away in the United States. Are those Republicans right?

JOULWAN: More recently I heard it when I was in during on a presidential election going into the Balkans. I think we understand that in democracy. Our military truly understands how our political process works, and this will go back and forth. What our military commanders must do though, is give clear military advice to our leadership. They cannot get tainted by one side or another and they have to give a clear assessment of what's happening so that we can make good political decisions and military decisions.

BLITZER: We're watching a live picture of the president arriving in Miami. You see him, he going to get ready to go into that limo, sometimes he walks around, shakes hands with people who have gathered, but he's not this time. He is getting ready for this debate, a debate on national security, a debate on foreign policy, homeland security, just a little bit more than 24 hours from now. What will you look for, general, specifically?

JOULWAN: Well, I'm looking for a little clarity here. The rhetoric has to go away. I think we'll probably, unfortunately, see some of that. But truly, what is the strategy here, for not just Iraq and Afghanistan, but in a global sense for not only the global war on terror, how we're going to proceed? How are we going to proceed with our allies? How we're going to proceed with the Israeli, Palestinian issue?

What are the larger issues? That's what the world expects of us. And I think that's what American citizens expect of their leadership. And I will tell you, that's what the American military expects of their commander in chief, or future commander in chief, to be clear in what it is you want to do. What is the mission and what is that clarity we need. I hope that comes out of this debate.

BLITZER: Give a precise order, and they willful fill it. There's no doubt about that.

JOULWAN: And so that you can then measure the expectations. And One of the problems we're going to have is in painting these scenarios on either side, what is the risk involved? And if you don't have enough forces, you take risk. As you can't control the environment, you take risk. What is a prudent risk? And what is an unacceptable risk?

BLITZER: General George Joulwan, we'll be watching with you. Thanks very much.

JOULWAN: Thank you, Wolf

BLITZER: Up next, the candidates getting ready to face off 24 hours from now, just a little bit more than that. We'll give a preview of what's in store when surrogates, important ones from each camp, they will square off right here on this program.

X Prize problem, a wild ride that caught everyone by surprise. It was very scary and made for some frightening moments.

Plus, Martha Stewart finds out where she is going to be spending her time in prison over five months. We'll tell where that is going to be. We'll give you a hint. It is not where she wanted to go.

(COMMERCIAL BREAK)

BLITZER: Welcome back.

Very dramatic moments, a spaceship rolling in midflight looking out of control. We were all frightened when we saw it live here on CNN.

Our Miles O'Brien witnessed it, along with all of us. He is about to join us live. We'll get to him.

First, though, a quick check of some stories now in the news.

Just ahead of the third anniversary of the signing of the Patriot Act, a federal judge in New York has struck down part of the law. The judge ruled that the part that allows the FBI to demand company records from businesses without court approval is unconstitutional. The American Civil Liberties Union, which challenged the provision, says it's happy with today's ruling.

Despite her wish to remain closer to home, Martha Stewart will be serving her five-month prison sentence in West Virginia. She has to report to prison by October 8. The minimum security compound in Alderson, West Virginia, is known locally as Camp Cupcake. Stewart, who was convicted in March of lying about a stock sale, had hoped to serve her time in a prison not far from her home in Connecticut.

The last time Washington, D.C. had a Major League Baseball team, Richard Nixon was in the White House. But it looks like that is about to change. Just a short time ago, it was officially announced that the financially troubled Montreal Expos plan to move to the nation's capital. The move faces approval by Major League owners and must still clear some legal challenges. There's no word on a name for the new team, a lot of ideas floating out there.

The first privately manned spaceship returned safely to Earth today after a corkscrew ride to the edge of space.

CNN space correspondent Miles O'Brien watched today's historic flight.

(BEGIN VIDEOTAPE)

MILES O'BRIEN, CNN SPACE CORRESPONDENT (voice-over): On a roll and the cusp of a head-spinning payday. SpaceShipOne rocketed straight toward a dip in space once again, the first of two hurdles to catch the $10 million Ansari X Prize, pilot Mike Melvill offering a breathtaking display of unplanned, high-altitude acrobatic flying. MIKE MELVILL, PILOT: It was a fast roll. And it was a spectacular view out of the window watching the world go around that quickly.

O'BRIEN: Fun, but he still turned the rocket motor off early just in case, but not too early to pass through the boundary of space, 328,000 feet. Radars at nearby Edwards Air Force Base recorded the apex at 337,500. The prize judges concurred.

GREGG MARYNIAK, X PRIZE JUDGE: In terms of white smoke or black smoke, the answer is white smoke.

O'BRIEN: Now the team has two weeks to repeat the feat in order to win the prize. Designer and winner Burt Rutan believes he can fly again much sooner. He says there is nothing to fix on the spacecraft. He says the rolls just prove how safe the spaceship really is.

BURT RUTAN, SCALED COMPOSITES: When you end up with a high roll rate and you didn't plan to do it, OK, on a manned space craft, that's normally a very, very big deal. I mean, that would be an accident if it happened on the space shuttle or the X-15. No question we would be looking for small pieces now.

O'BRIEN: Instead, they're looking to pick up a big check and the founder of the X Prize could not be happier.

PETER DIAMANDIS, PRESIDENT, X PRIZE FOUNDATION: Thank you, Mike, for making our dreams come true today, one step further towards getting us all into space.

(APPLAUSE)

O'BRIEN: Microsoft billionaire Paul Allen funded the $25 million project.

PAUL ALLEN, X PRIZE FUNDER: Being halfway to winning the X Prize is fantastic. Now we can do this every four or five days. We can do this.

O'BRIEN: Thousands crowded the Mojave Spaceport to witness the flight and cheer the team on, among them, NASA boss Sean O'Keefe.

SEAN O'KEEFE, NASA ADMINISTRATOR: This is exactly the way it's supposed to happen. It's the same thing that made the Lindbergh and the Orteig Prize motivated commercial aviation to start off.

(END VIDEOTAPE)

O'BRIEN: Now, Burt Rutan's team says they're still motivated to fly once again on Monday, October 4, well within that two-week boundary. He says there really isn't anything to fix on the spacecraft and that roll isn't a big concern.

It sure was spectacular and really breathtaking for those of us here on the ground. I guess that is what separates land lovers from the real right-stuff test pilots -- Wolf. BLITZER: All right, Miles O'Brien, thanks very much. And thanks to you for being there on the scene for us.

What's going to happen when President Bush and Senator Kerry square off tomorrow night? Nobody knows for sure.

But to get a little bit of an idea of what the candidates might say, we have decided to hold what we could call our own surrogate debate. We've asked Richard Holbrooke, the former United Nations ambassador to the U.N. and senior Kerry international policy adviser, to represent John Kerry's side of the debate. He's in New York. And we've asked Senator Jon Kyl, a Republican from Arizona, to stand in for President Bush. He is on Capitol Hill.

Thanks to both of you for joining us.

Ambassador, Kerry -- let me begin with you. And I'm going to play for you an ad that a group not supporting Kerry, as you will see, is now running, because this is one of the key arguments that has been leveled and no doubt will be leveled at John Kerry tomorrow night.

(BEGIN VIDEO CLIP, AD)

NARRATOR: These people want to kill us. They killed hundreds of innocent children in Russia, 200 innocent commuters in Spain, and 3,000 innocent Americans. John Kerry has a 30-year record of supporting cuts in defense and intelligence and endlessly changing positions on Iraq. Would you trust Kerry up against these fanatic killers?

(END VIDEO CLIP)

BLITZER: What do you say if that charge is leveled tomorrow night?

RICHARD HOLBROOKE, FORMER U.S. AMBASSADOR TO UNITED NATIONS: I don't think your network would allow an ad like that on TV for dental floss or toothpaste that is just factually inaccurate.

Senator Kerry is just as committed to the war on terrorism as George Bush. And our side does not question George Bush's commitment. We just question his effectiveness. And, as far as Iraq goes, there's no connection between al Qaeda and Saddam Hussein that's ever been demonstrated. And this is just another one of the misleading ads we've seen during the last few months.

BLITZER: Is it appropriate, Senator Kyl, to put pictures of Mohamed Atta and Osama bin Laden in an ad going after John Kerry?

SEN. JON KYL (R), ARIZONA: Well, I have got a higher tolerance level for free speech, I guess.

I think there is probably a point at which the American people turn off watching these ads or think that they go over the top. And I trust the American people to make the judgments. There are some that get pretty close to the line, to be sure. But I would respectfully disagree with my friend Richard Holbrooke. There was a very clear connection between al Qaeda and Saddam Hussein.

Tom Kean, the chairman of the 9/11 Commission, said so. On pages 66 and 69 of the report, they spell it out in detail. And George Tenet wrote a letter to the Intelligence Committee spelling out in detail what those connections were. So I think it is important for us to be sure we represent the facts correctly.

BLITZER: You want to respond to that, Ambassador?

HOLBROOKE: Well, it's hard to respond when Jon Kyl calls me his friend. And we are friends.

By the way, Wolf, I didn't see the visuals here. So I didn't realize that you were showing an ad which showed Mohamed Atta. And that I really think goes way, way beyond the legitimate bounds of political advertising.

On the connection between Saddam and al Qaeda, I understand what Senator Kyl has said, but the connection, if there is any, is very tangential. I don't believe it was there. And I don't think that the assertions of Vice President Cheney and others in this administration, in advance of the invasion of Iraq and subsequently, have been borne out or supported by that commission.

BLITZER: All right, Senator Kyl, I think it also said that there was no operational collaboration between Saddam Hussein and 9/11. I guess that was one of the major points in that 9/11 Commission report.

KYL: Well, that's what some of the media concluded was the major point.

But after detailing several pages of connections, including harboring al Qaeda, showing them how to make poison and biological weapons conventional bombs and a whole host of other things, they then concluded that, while these connections were real and they existed and they had been in existence for over a decade, there was still no, as you said, operational connection between Saddam Hussein and September 11.

A lot of the media just picked up that last point and didn't focus on all the other things that were said, which was that there were very clear connections.

BLITZER: All right, we're going to continue this debate, because we have a lot more to talk about. That's coming up. I want both of our guests to stand by.

Also, we're following some other stories, including a real shocking story involving casinos. It is a controversy, an alleged scam targeting Native American tribes. Now the U.S. Congress is stepping in.

And what punishment for two men convicted in a deadly attack on the USS Cole? The sentence is now in.

Plus, quest for freedom, details of a desperate effort to seek asylum. We'll show you the pictures.

Stay with us.

(COMMERCIAL BREAK)

BLITZER: We're back with our surrogate debate, a preview of tomorrow night's confrontation between the president and the Democratic nominee.

Once again, Senator Jon Kyl representing the president, former U.N. Ambassador Richard Holbrooke representing the Democratic candidate.

Senator Kyl, here is an ad that the Kerry campaign is running against the President Bush. Listen to this.

(BEGIN VIDEO CLIP, AD)

NARRATOR: There he goes again. George Bush said Iraq was mission accomplished. Sixteen months later, he still doesn't get it, today, over 1,000 U.S. soldiers dead, kidnappings, even beheadings of Americans. Still, Bush has no plan for what to do in Iraq.

(END VIDEO CLIP)

BLITZER: Is the president overly rosy in his assessment of what's going on, on the ground?

KYL: There are some who have a seemingly steely determination to keep hopelessness alive.

The president, on the other hand, wants to lead with realistic assessments, but also hope that we can persevere, as Prime Minister Allawi told a joint session of Congress this last week. The president has been realistic. If you look at the talk shows last Sunday, for example, his spokesmen, Secretary of State Colin Powell, General Abizaid, these people tell a very clear picture of what is happening. But they also note that there is a way for us to win. We have to be resolute and we have to persevere.

The challenge, of course, is that the bad guys over there are testing our resolve. And that's where the president knows that being pessimistic won't win, but holding out hope and optimism will help.

BLITZER: What would John Kerry do differently, Ambassador Holbrooke?

HOLBROOKE: I think what Jon Kyl just said is quite a rational position about Iraq, but it's at sharp variance with what President Bush and Vice President Cheney have said.

Colin Powell gave a much bleaker assessment than his own commander in chief on the Sunday talk show goes. The truth is that Iraq has no longer has a success strategy or an exit strategy. The president is dismissing his own national intelligence estimates and he's calling for things which he is not going to be able to accomplish. And I'm afraid we're getting caught into a quagmire in the desert of enormous proportions here.

BLITZER: What would he do differently?

HOLBROOKE: He's made very clear that as of now he thinks the president should do the four first things he outlined at NYU last week.

But he has also said very clearly and very honestly that by January 20 when he is inaugurated, he expects he will find a different situation. And every person I have talked to with on-the-ground experience says it is going to be worse. And are those elections really going to take place? Powell and Rumsfeld disagreed on that. Now, as for President -- as for Senator Kerry's proposals, you reported them very well on your program.

(CROSSTALK)

BLITZER: Let me interrupt for a second, Ambassador, because all four of those proposals that he outlined are steps that the president has endorsed as well.

And I want to give Senator Kyl a chance to respond to your earlier statement about the situation between now and January, the scheduled time for elections in Iraq. It is probably going to get worse.

Do you agree with Ambassador Holbrooke, Senator?

KYL: Well, by the way, thank you for pointing out that President Bush has the same four points. Actually, he has five, but they include the four.

And with regard to the assessment, General Abizaid was very clear. He said that there is going to be violence right up to and including the elections, because that's the strategy of the terrorists. They want to disrupt and prevent, if they can, those elections from being held. So they are going to be violent. And that was General Abizaid's assessment. I don't think anybody denies that.

When the president first told of us this mission, he said this is going to be long and it's going to be difficult.

BLITZER: But, Senator, should the president be held accountable for what has happened in Iraq, all the mistake that have occurred?

KYL: Well, eventually, the American people will judge his accountability when they decide whether or not to reelect him. And he has said he is perfectly comfortable with that. He's made tough decisions. But one of the reasons he is ahead is that the American people support a resolute leader, even when some of what happens is contrary to public opinion.

BLITZER: What does he have to do, John Kerry, Ambassador Holbrooke, tomorrow night to convince the American public he is fit to be commander in chief? HOLBROOKE: We've had four elections in a time of war since the Civil War. In two of them, the incumbents did not run again, '52 and '68. In the other two, '44 and '72, the incumbents won. It is very hard to run against a commander this chief in a time of war without appearing to be against the troops.

John Kerry, as a Vietnam veteran, has tried very hard to make clear he supports the troops and will accept nothing less than success in Iraq. In order to convince the American public, he has to do two things. And I believe he did them at NYU last week and he's done them on the campaign trail, one, to demonstrate that the president's own statements for the last two years have not been accurate and his projections and promises have not been fulfilled, and, secondly, to show that he would be a vigorous proponent of getting the troops to succeed and finding a way to extricate us successfully -- and I stress that word, Wolf -- from the mess that has been created in Iraq by this administration.

BLITZER: Two good debaters, indeed. Richard Holbrooke, Jon Kyl, surrogates for the candidates, thanks very much for joining us.

KYL: Thank you.

HOLBROOKE: Our pleasure.

BLITZER: Outrageous e-mail messages. Why would Washington lobbyists mock their Native American clients? We will have a story of some big bucks and big casinos. It is outrageous.

But, first, a look at some other news making headlines around the world.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): A judge in Yemen has sentenced two men to death for the attack on the USS Cole. The judge sentenced four other men to prison terms ranging from five to 10 years. The October 2000 attack killed 17 American sailors.

Seeking asylum. It's happened again; 44 North Koreans scaled a fence outside the Canadian Embassy in China. In recent years, a growing number of North Koreans unhappy with economic and political conditions at home have tried to use embassies in China as an escape route.

Deadly storm. At least two people are confirmed dead after a powerful tropical storm in southern Japan. Downgraded from typhoon status, the storm remained strong enough to damage homes, down power lines and force thousands to evacuate.

And that's our look around the world.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

BLITZER: Now a story involving outrage, lobbyists and Native Americans.

CNN congressional correspondent Joe Johns reports.

(BEGIN VIDEOTAPE)

JOE JOHNS, CNN CAPITOL HILL CORRESPONDENT (voice-over): In a multimillion dollar industry, Indian gaming, tribes running casinos paid two Washington power players $50 million to lobby, strategize, improve community relations and P.R. for them. But did the tribes get ripped off? The Saginaw Chippewa of Michigan ponied up about $14 million.

BERNIE SPRAGUE, SUB-CHIEF, SAGINAW CHIPPEWA: They may wear fancy suits and expensive shoes, but their greed, scare tactics and unscrupulous behavior is the same our people have faced for generations.

JOHNS: A federal investigation is under way into the activities of the two men, super lobbyist Jack Abramoff.

JACK ABRAMOFF, FORMER LOBBYIST: And the Fifth Amendment's right for a person not to become a witness against themselves.

JOHNS: And P.R. man Mike Scanlon, who skipped his appearance Wednesday before a bunch of angry senators on the Indian Affairs Committee. "The Washington Post" reported the lobbyists help shut down a tribe's Texas casino without the tribe knowing it, then got the tribe to pay them to help reopen it.

Making matters worse, inflammatory e-mail traffic between Abramoff and Scanlon putting down the very clients they were supposed to be serving, for example, this quote: "I have to meet the monkeys from the Choctaw tribal council."

SEN. BEN NIGHTHORSE CAMPBELL (R), COLORADO: According to your e- mails, you and Mr. Scanlon referred to your tribes as morons, stupid idiots, monkeys, F'ing troglodytes, which you defined as a lower form of existence, and losers.

JOHNS: Scanlon could not be reached. Abramoff denies wrongdoing. A source close to him said the Senate could make great hay from anybody's e-mails, and, as to the money -- quote -- "Given the revenues involved in Indian gaming and those paid to the Washington consultants at the firm of Scanlon and those at the firm of Abramoff would be no different than any other corporation dealing with similar amounts in America."

(END VIDEOTAPE)

JOHNS: Some argue the tribes have the right to enter into their own business agreements and contracts and that the Senate interference is insulting -- Wolf, back to you.

BLITZER: Joe Johns, thanks.

We'll be right back. (COMMERCIAL BREAK)

BLITZER: That's it for me.

"LOU DOBBS TONIGHT" 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


Aired September 29, 2004 - 17:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
WOLF BLITZER, HOST: Happening now, a new warning about a possible volcanic eruption on Mount St. Helens in Washington state. We're awaiting a news conference.
Also happening now, a brand new CNN/"USA Today"/Gallup poll with some good news for John Kerry in a key battleground state. Stand by for hard news on WOLF BLITZER REPORTS.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): One on one. Their first face-off. Will it make a difference? We'll look back at the record.

And we'll have our own debate.

Iraq's new army playing a bigger role. But which side are they on?

Business as usual or dirty business? Lobbyists rake in millions from Indian tribes.

UNIDENTIFIED MALE: It is a cesspool of greed. It clearly is a disgusting pattern of certainly moral corruption.

BLITZER: Congress has questions.

Wild ride. Heart-stopping moments as a private spacecraft goes for a $10 million prize.

ANNOUNCER: This is WOLF BLITZER REPORTS for Wednesday, September 29, 2004.

(END VIDEOTAPE)

BLITZER: We're following a developing story in Washington state right now where scientists have raised the alert level over at Mount St. Helens. They're warning that activity there is ramping up. Scientists saying an eruption is, in their words, "increasingly likely." Officials are about to hold a news conference. We're going to bring you the latest information on this potentially dangerous situation. We'll have a live report from Mount St. Helens. That's coming up in a few moments. We're watching very closely this potentially very dangerous story.

Let's move on to politics. Just a day away and they're poised and prepared and they're focused like lasers, at least that's what the Bush and Kerry spin machines might have all of us think on the eve of this first presidential face-off. We'll go live to Florida for the final preparations. Our senior political correspondent Candy Crowley is in Belle Harbor, our White House correspondent Dana Bash is in Miami, here in Washington our Brian Todd will look back at the sweats, the sighs and the rolling eyes and CNN's Paula Zahn is in New York with new numbers from a key battleground state.

But first, let's take a look at what's riding on this crucial debate.

(BEGIN VIDEOTAPE)

(voice-over): It's one of those rare moments in politics when is a simple shrug or a seemingly random comment can have a huge impact on an election. The candidates need to come across as smart but they also need to come across as likable. And that helps explain this preemptive strike by Republicans.

LYNNE CHENEY, WIFE OF DICK CHENEY: What do those orange shirts remind you of?

DICK CHENEY, VICE PRESIDENT: Um.

L. CHENEY: I'll say how about John Kerry's suntan.

D. CHENEY: I may have to disassociate myself.

BLITZER: Trying to bolster his likability, the president and Mrs. Bush went on the syndicated talk show "Dr. Phil" to talk about their family.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I was in the limo with her and she said, "I just stuck my tongue out."

LAURA BUSH, FIRST LADY: She turned around and told him.

G. BUSH: And I said, "Jenna, you just made national news." I said, "you have to be careful. You are in a fish bowl."

BLITZER: Kerry will be on that show next week. He was on "Good Morning America" today denying he's flip-flopping on the issues.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: See what the Republicans do, what they love to do and they're very good at it, and they've spent millions of dollars doing it. They just find a little sentence here, find a little sentence there and take it out of context. That's why I look forward to this debate because it is an opportunity to be able to really let the American people know the truth and know where you stand.

BLITZER: For President Bush and Senator Kerry, the stakes will be enormous when they face off for 90 minutes before tens of millions of American voters. Most of them have already made up their minds. But a potentially decisive number have not. The candidates have practiced and practiced, honing their debating skills, touching up their carefully scripted talking points.

Former Clinton White House press secretary Mike McCurry has been helping Kerry.

MIKE MCCURRY, FMR. CLINTON PRESS SECY.: I think it always is good to go into one of these high-profile debates as an underdog.

BLITZER: Mary Matalin has been helping Bush.

MARY MATALIN, FMR. ASSISTANT TO PRES. BUSH: We would rather be in the position that we are than to be behind. But the fact of the matter is this remains, whatever the polls say, a very close race.

(END VIDEOTAPE)

BLITZER: And on the eve of this first presidential debate we have a developing story in a key battleground state. No Republican has ever lost Ohio and gone on to win the White House. But a new CNN/"USA Today"/Gallup poll just out shows Senator Kerry gaining ground in Ohio. Let's go live to CNN's Paula Zahn. She's standing by in New York -- Paula.

PAULA ZAHN, HOST, PAULA ZAHN NOW: Hi, Wolf. Not only gaining ground in some areas but actually leading. The Kerry campaign has to be pleased with these numbers. Kerry now leading the president 50 percent to 46 percent among registered voters. Compare this, Wolf, just three weeks ago to when our poll showed Kerry down by a point. Our poll also shows Kerry making similar gains among likely voters. Bush has a narrow two-point lead among these voters. But this is down from an eight-point lead Bush had three weeks ago. Now you can see from both of these comparisons, Kerry has been doing better among the group of all registered voters, and he has among that smaller pool of voters, deemed to be the most likely to vote. This does indicate the Bush voters right now seem to be more motivated to go out and vote and the senator's real challenge may be to motivate his base.

BLITZER: Very interesting. Paula Zahn, of course, will have much more on "PAULA ZAHN NOW." That airs at 8:00 p.m. She is doing primetime politics between now and the election. Paula, I'll see you in Miami tomorrow.

Senator Kerry is heading to Florida from Wisconsin at this very hour. Aides say their candidate is ready to show America what he's got. Our senior political correspondent Candy Crowley already in Belle Harbor. Candy, first of all, how confident, if we can use that word, is the Kerry camp right now?

CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT: You can use that word because the Kerry camp, one of his top advisers saying, look, we are very confident about how he's going to do tomorrow night. We have said endlessly and they repeat John Kerry is an accomplished debater. He was on the debate team in college. He has had very famous debates with William Welles (ph) who was challenging him in Massachusetts during the senator's toughest race to date on senators.

So there are any number of reasons to believe that John Kerry will do well. One of the other interesting things that the Kerry campaign is doing at this point is to kind of draw the sting from what they expect to be what people will be saying after that debate. So they're conceding the point, telling reporters, look, George Bush is affable, he's likable. But they say this is not about personality. You don't need to be a cheerleader, that's a direct stab at George Bush and what he did at Yale. What they want is a serious discussion. That's what voters are looking for tomorrow night.

So they are setting the bar as well as kind of tamping down expectations about John Kerry in style.

BLITZER: Candy Crowley reporting for us. And as she was we saw some live pictures of John Kerry in Madison, Wisconsin, getting ready to fly down to Florida. There he is. Uttered a few words to his supporters there. A big day for him tomorrow in Miami at the University of Miami in Coral Gables.

President Bush returned to Florida earlier today. He goes into this first face-off leading in many of the polls, the key battleground states. His aides insist they are very confident. The debate won't change that. Let's go to our White House correspondent Dana Bash. She's already down in Miami -- Dana.

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, the president didn't have any official campaign stops today. But he used this power of incumbency, if you will, to tour some hurricane damage. Certainly that, the Bush campaign, does not hurt with Florida voters. He toured an orange grove that was hurt by three of the four hurricane that hit this state.

He didn't answer a question about how debate prep was going but, Wolf, his campaign is in full mode. As Candy said, the Kerry campaign is as well on Iraq, on specifically the line that Mr. Bush uses that he is going to try to cement tomorrow night that Kerry is a flip- flopper when it comes to Iraq. Now there are always gimmicks as you know, Wolf, in politics.

Today, from the Bush campaign, is this briefing book, a mock briefing book for Senator Kerry on Iraq. I will just give you an excerpt and you'll get the point. This is from -- supposedly for Senator Kerry. "You are currently against the war, wouldn't have gone to war but you used to be for the war before you were against the war before you were for the war."

Now if you can get all that straight perhaps you're better than most of us. But certainly that is something that the Bush campaign thinks has worked with Senator Kerry. The one thing that they know they're going to have to probably stop John Kerry from doing is explaining his plan. That's something the Bush campaign says the president will try to do -- Wolf.

BLITZER: Dana Bash in Miami. Thanks very much. How important is this first debate? Well, the campaigns have drawn lessons from some big successes and flops in the past. And that's led them to draw up so-called rules of the game. Here is CNN's Brian Todd -- Brian.

BRIAN TODD, CNN CORRESPONDENT: Wolf, those rules are already controversial and are bringing back striking images of critical first debates.

(BEGIN VIDEOTAPE)

TODD (voice-over): On the subject of the first debate experience, Al Gore can joke about it now.

AL GORE, FMR. VICE PRESIDENT: It's quite interesting. It makes me sort of want to sigh.

TODD: But those sighs, 18 of them by one count, become an albatross for Gore following the first presidential debate in 2000.

Perhaps because of those TV cutaways or the image of George Bush, Sr., checking his watch during a 1992 debate with Bill Clinton, the Bush and Kerry campaigns are trying to set debate rules banning shots of one candidate while the other is answering questions. The networks for now are refusing to go along.

BUSH: I'm beginning to think not only did he invent the Internet, but he invented the calculator.

TODD: Before that first debate in 2000, a CNN/"USA Today/Gallup poll had Gore slightly ahead of George W. Bush. But Gore, criticized for his aggressiveness, exaggerations and all those gestures, falls 7 percentage points behind in the days afterward. The political analysts we spoke to agree. The first face-off is critical.

RON BROWNSTEIN, "LOS ANGELES TIMES": In the last 40 years since we've had these televised debates, several times the first debate has proven to be a pivotal moment in the race.

TODD: 1960, John F. Kennedy trails Richard Nixon very slightly going into their first debate. Radio listeners say Nixon gets the better of Kennedy. But the more than 66 million people who watch make a difference.

JOHN F. KENNEDY, FMR. PRESIDENT OF THE UNITED STATES: So that our experience in government is comparable.

TODD: Based on that appearance, Kennedy overtakes Nixon in the polls and hangs on. 1980. A week before the election. The Democrats hammer on Ronald Reagan as a frightening warmonger. Reagan trails President Jimmy Carter by 8 points. Then on October 28...

RONALD REAGAN, FMR. PRESIDENT OF THE UNITED STATES: There you go again.

TODD: Viewers embrace Reagan's reassuring manner. Carter is stunned by an 11-point swing in the polls and a revolution takes hold.

(END VIDEOTAPE)

(on camera): Can John Kerry reverse his poll numbers in this debate? Analysts we spoke to say Kerry has an enormous opportunity and a very difficult two-fold challenge. He has to draw strong contrast with the president and make a case for change and at the same time make a personal connection with voters that many observers say has been missing -- Wolf.

Brian Todd, thanks very much.

And this note to our viewers, our special debate preview continues ahead. I will speak live with the former U.S. ambassador to the United Nations, Richard Holbrooke and Republican Senator Jon Kyl. That's coming up.

And this reminder. CNN's primetime coverage, fresh analysis of the first presidential debate begins tomorrow night, 7:00 p.m. Eastern. We will all be down in Miami for that coverage.

Here is your chance to weigh in on this story. Our web question of the day is this. Will the presidential debates impact the outcome of the election? You can vote. Go to CNN.com/wolf. We'll have the results for you later in this broadcast.

A wild ride to space and back. It is all captured live. SpaceShipOne flirting with disaster as the craft seems to spin out of control. Miles O'Brien standing by with a report.

Dangerous activity. Evidence that Mount St. Helens may, repeat, may be ready to erupt again. New information is being released right now.

Insulting the Indians. High-powered Washington lobbyists caught degrading the people they were paid millions of dollars to help.

(COMMERCIAL BREAK)

BLITZER: Now back to a developing story we're following. A volcano advisory is now out for Mount St. Helens, showing increasing signs of an impending eruption. CNN's Kimberly Osias is there. She's got new details.

KIMBERLY OSIAS, CNN CORRESPONDENT: Hello, Wolf. Believe it or not, I'm standing in front of Mount St. Helens. It is very difficult to tell in fact where we are because the fog is so substantial. Just a layer of fog. That is what scientists are battling with now. They are waiting to go back in with helicopters to test for gases. Primarily, they're looking for any emissions of CO2 or SO2. If you don't remember from your chemistry that's carbon dioxide and sulfur dioxide. Those gases would be emitted to show any kind of volcanic eruptive activity.

They tested earlier in the week and didn't find anything significant. But you contrast that with a picture of an enormous volume of earthquakes. They've seen about 1,000 to 2,000 in the past week. Earlier scientists with the USGS spoke about the danger.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: So what are we expecting?

CYNTHIA GARDNER, USGS SCIENTIST IN CHARGE: Well, we are expecting that either nothing could happen or we perhaps could have an explosive event. We're looking at something, our best guesstimate is something that small to moderate. What that means is that we might have fragments being hurled out of the volcano, primarily we're thinking the lava dome, upwards to perhaps five kilometers or about three miles from the current lava dome.

UNIDENTIFIED FEMALE: In the air or out?

GARDNER: Out. So that the crater floor and the upper flanks and the flanks of the volcano could be affected. We also could be having ash that could be expelled thousands of feet into the air and carried downwind. The concern there is an ash and aviation hazard.

(END VIDEOTAPE)

OSIAS: Now, obviously, it's been a concern for aviation because you can't see anything. Now if there is an eruption it wouldn't be like 1980 when 57 people were killed. They say it would be more tantamount to 1986. Steam and ash would go eastwards towards Oregon is what they're telling me. We won't have any kind of significant results for another 24 hours -- Wolf.

BLITZER: Kimberly Osias, on the scene for us. Kimberly, thank you very much.

Collaborating with the enemy. Allegations that Iraqi police forces, at least some of them, are actually cooperating with the insurgents they're supposed to be fighting.

Reality check. An update on the ground and the situation in Iraq. I'll speak live with Retired U.S. Army General George Joulwan, the former NATO supreme allied commander.

Also, broken promises and millions of dollars lost. Allegations of abuse and criminal conduct against Native American tribes. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Part of the key to stabilizing Iraq is getting the country's own security forces up and running. And while some progress has, indeed, been made, there are now some fresh and disturbing signs that at least some Iraqi security personnel may be helping to make matters worse. Our Zain Verjee is joining us now from the CNN Center in Atlanta. She has more -- Zain.

ZAIN VERJEE, CNN CORRESPONDENT: Wolf, both rank and file members as well as senior officers are undermining efforts to deliver stability in Iraq. And they're doing it either willingly, or under pressure.

(BEGIN VIDEOTAPE)

VERJEE (voice-over): Trained if not yet completely trusted, Iraq's fledgling security forces may be that country's best hope for stability and America's best hope for an exit strategy. But what happens when those charged to protect are suspected of collaborating with insurgents?

Military reporter Scott Taylor was seized in northwest Iraq. He says Iraqi police at a checkpoint told him to get into a car with armed gunmen.

SCOTT TAYLOR, FORMER HOSTAGE: I assumed it was sort of special forces unit of the police, little did I know that in fact these were a group of Ansar al Islam guerrillas, or Mujahedeen, and they obviously were working in completely collaboration with the American-paid Iraqi police.

VERJEE: As he rode through Mosul in a car with his captives, he says Iraqi police made no attempt to intervene and instead...

TAYLOR: Actually welcomed these guys, gave them cigarettes, banged on the roof of the car as we drove through and could easily see that we were kept, either handcuffed or tied up in the back seat.

VERJEE: U.S. experts say Iraqi some police are motivated to support insurgents by both money and blood.

KEN POLLACK, CNN ANALYST: For some, it is pure economics. They are desperate to support their families. And the insurgents often times will pay them for turning against the reconstruction effort just as the new Iraqi government pays them to stand by it.

For others, there are family considerations or tribal ties.

VERJEE: Many policemen are also simply afraid if they don't support, or at least tolerate the insurgents, they or their families will be attacked.

In places, there's still a trust gap. Last week in Tikrit the U.S. military arrested a lieutenant general in the National Guard and accused him of links to the insurgents.

Despite all the obstacles, General David Petreas, in charge of training Iraqi security forces, says progress is made. Analysts say, ultimately one thing matters.

KEN ROBINSON, CNN MILITARY INTELLIGENCE ANALYST: Legitimacy. The central challenge is both the legitimacy of their job and the population recognizing that they are Iraqis serving Iraqis.

VERJEE: A sentiment echoed by the police chief Whalid Khalid Abdul Salaam, who says if the Iraqi people don't trust them, there can never be peace.

(END VIDEOTAPE)

VERJEE: Wolf, to help deliver that peace the Pentagon says about 100,000 trained Iraqi police and soldiers are in place and that equipment is flowing to them. The Pentagon also says Iraqi counterterrorists forces are conducting successful operations -- Wolf.

BLITZER: Zain Verjee with a very comprehensive report for us. Zain, thank you very much.

No doubt, the focus of tomorrow night's presidential debate will be Iraq. John Kerry says President Bush is glossing over what is a deteriorating situation, while the president is accusing Senator Kerry of being overly pessimistic. Who is right?

For a reality check on the situation in Iraq, we're joined by the retired U.S. Army general George Joulwan, and the former NATO supreme allied commander. General, thanks very much for joining us.

We'll get to that in a moment, but how worried should we be that some of these police forces, security forces, soldiers we're training are actually, if you can use the phrase, in bed with the enemy?

GEORGE JOULWAN, FRM. NATO SUPREME ALLIED COMMANDER: First of all, given the amount of time we have been in Iraq, the amount of time we are training the forces, we should not be surprised that some of these forces, their loyalty is in question. We should have anticipated that. And I'm sure we did.

So we're going to have to go through these bumps in the road, whether it is a fatal issue or not is too early to tell. We have anticipated or should have anticipated that this will happen. It's happened in every country we've been in similar situations, and will happen in Iraq.

BLITZER: Do you get the sense -- you're not there in Iraq, but you're extremely well plugged into your former colleagues in the U.S. military, the Pentagon and elsewhere, do you get the sense that the situation is really gloomy, as some of the CIA National Intelligence Estimates would suggest, or that there is some good progress under way?

JOULWAN: Let me say that we're fortunate to have, I think, the best trained military and the best trained leaders that we've had in generations. Having said that, the conditions in Iraq now are very dangerous. And I think our commanders will say that.

The trouble you have in our own election year, is you have one side painting it as too rosy. The other side is painting it as too pessimistic. Somewhere in the middle is the real answer.

But we have fundamental problems. And the commanders will tell you that, that there is not a secure environment, that we do not control parts of that country, and that with the Iraqi election coming up, all of that is paramount. And we have to -- our forces have to be able to control the situation and provide a broad sense of security with the Iraqi forces to allow an election to take place. BLITZER: We've heard some Republicans make the allegation against John Kerry that by speaking so gloomily or pessimistically he is undermining the forces on the ground. You were in a situation in Vietnam, when you fought there, you heard a major debate thousands of miles away in the United States. Are those Republicans right?

JOULWAN: More recently I heard it when I was in during on a presidential election going into the Balkans. I think we understand that in democracy. Our military truly understands how our political process works, and this will go back and forth. What our military commanders must do though, is give clear military advice to our leadership. They cannot get tainted by one side or another and they have to give a clear assessment of what's happening so that we can make good political decisions and military decisions.

BLITZER: We're watching a live picture of the president arriving in Miami. You see him, he going to get ready to go into that limo, sometimes he walks around, shakes hands with people who have gathered, but he's not this time. He is getting ready for this debate, a debate on national security, a debate on foreign policy, homeland security, just a little bit more than 24 hours from now. What will you look for, general, specifically?

JOULWAN: Well, I'm looking for a little clarity here. The rhetoric has to go away. I think we'll probably, unfortunately, see some of that. But truly, what is the strategy here, for not just Iraq and Afghanistan, but in a global sense for not only the global war on terror, how we're going to proceed? How are we going to proceed with our allies? How we're going to proceed with the Israeli, Palestinian issue?

What are the larger issues? That's what the world expects of us. And I think that's what American citizens expect of their leadership. And I will tell you, that's what the American military expects of their commander in chief, or future commander in chief, to be clear in what it is you want to do. What is the mission and what is that clarity we need. I hope that comes out of this debate.

BLITZER: Give a precise order, and they willful fill it. There's no doubt about that.

JOULWAN: And so that you can then measure the expectations. And One of the problems we're going to have is in painting these scenarios on either side, what is the risk involved? And if you don't have enough forces, you take risk. As you can't control the environment, you take risk. What is a prudent risk? And what is an unacceptable risk?

BLITZER: General George Joulwan, we'll be watching with you. Thanks very much.

JOULWAN: Thank you, Wolf

BLITZER: Up next, the candidates getting ready to face off 24 hours from now, just a little bit more than that. We'll give a preview of what's in store when surrogates, important ones from each camp, they will square off right here on this program.

X Prize problem, a wild ride that caught everyone by surprise. It was very scary and made for some frightening moments.

Plus, Martha Stewart finds out where she is going to be spending her time in prison over five months. We'll tell where that is going to be. We'll give you a hint. It is not where she wanted to go.

(COMMERCIAL BREAK)

BLITZER: Welcome back.

Very dramatic moments, a spaceship rolling in midflight looking out of control. We were all frightened when we saw it live here on CNN.

Our Miles O'Brien witnessed it, along with all of us. He is about to join us live. We'll get to him.

First, though, a quick check of some stories now in the news.

Just ahead of the third anniversary of the signing of the Patriot Act, a federal judge in New York has struck down part of the law. The judge ruled that the part that allows the FBI to demand company records from businesses without court approval is unconstitutional. The American Civil Liberties Union, which challenged the provision, says it's happy with today's ruling.

Despite her wish to remain closer to home, Martha Stewart will be serving her five-month prison sentence in West Virginia. She has to report to prison by October 8. The minimum security compound in Alderson, West Virginia, is known locally as Camp Cupcake. Stewart, who was convicted in March of lying about a stock sale, had hoped to serve her time in a prison not far from her home in Connecticut.

The last time Washington, D.C. had a Major League Baseball team, Richard Nixon was in the White House. But it looks like that is about to change. Just a short time ago, it was officially announced that the financially troubled Montreal Expos plan to move to the nation's capital. The move faces approval by Major League owners and must still clear some legal challenges. There's no word on a name for the new team, a lot of ideas floating out there.

The first privately manned spaceship returned safely to Earth today after a corkscrew ride to the edge of space.

CNN space correspondent Miles O'Brien watched today's historic flight.

(BEGIN VIDEOTAPE)

MILES O'BRIEN, CNN SPACE CORRESPONDENT (voice-over): On a roll and the cusp of a head-spinning payday. SpaceShipOne rocketed straight toward a dip in space once again, the first of two hurdles to catch the $10 million Ansari X Prize, pilot Mike Melvill offering a breathtaking display of unplanned, high-altitude acrobatic flying. MIKE MELVILL, PILOT: It was a fast roll. And it was a spectacular view out of the window watching the world go around that quickly.

O'BRIEN: Fun, but he still turned the rocket motor off early just in case, but not too early to pass through the boundary of space, 328,000 feet. Radars at nearby Edwards Air Force Base recorded the apex at 337,500. The prize judges concurred.

GREGG MARYNIAK, X PRIZE JUDGE: In terms of white smoke or black smoke, the answer is white smoke.

O'BRIEN: Now the team has two weeks to repeat the feat in order to win the prize. Designer and winner Burt Rutan believes he can fly again much sooner. He says there is nothing to fix on the spacecraft. He says the rolls just prove how safe the spaceship really is.

BURT RUTAN, SCALED COMPOSITES: When you end up with a high roll rate and you didn't plan to do it, OK, on a manned space craft, that's normally a very, very big deal. I mean, that would be an accident if it happened on the space shuttle or the X-15. No question we would be looking for small pieces now.

O'BRIEN: Instead, they're looking to pick up a big check and the founder of the X Prize could not be happier.

PETER DIAMANDIS, PRESIDENT, X PRIZE FOUNDATION: Thank you, Mike, for making our dreams come true today, one step further towards getting us all into space.

(APPLAUSE)

O'BRIEN: Microsoft billionaire Paul Allen funded the $25 million project.

PAUL ALLEN, X PRIZE FUNDER: Being halfway to winning the X Prize is fantastic. Now we can do this every four or five days. We can do this.

O'BRIEN: Thousands crowded the Mojave Spaceport to witness the flight and cheer the team on, among them, NASA boss Sean O'Keefe.

SEAN O'KEEFE, NASA ADMINISTRATOR: This is exactly the way it's supposed to happen. It's the same thing that made the Lindbergh and the Orteig Prize motivated commercial aviation to start off.

(END VIDEOTAPE)

O'BRIEN: Now, Burt Rutan's team says they're still motivated to fly once again on Monday, October 4, well within that two-week boundary. He says there really isn't anything to fix on the spacecraft and that roll isn't a big concern.

It sure was spectacular and really breathtaking for those of us here on the ground. I guess that is what separates land lovers from the real right-stuff test pilots -- Wolf. BLITZER: All right, Miles O'Brien, thanks very much. And thanks to you for being there on the scene for us.

What's going to happen when President Bush and Senator Kerry square off tomorrow night? Nobody knows for sure.

But to get a little bit of an idea of what the candidates might say, we have decided to hold what we could call our own surrogate debate. We've asked Richard Holbrooke, the former United Nations ambassador to the U.N. and senior Kerry international policy adviser, to represent John Kerry's side of the debate. He's in New York. And we've asked Senator Jon Kyl, a Republican from Arizona, to stand in for President Bush. He is on Capitol Hill.

Thanks to both of you for joining us.

Ambassador, Kerry -- let me begin with you. And I'm going to play for you an ad that a group not supporting Kerry, as you will see, is now running, because this is one of the key arguments that has been leveled and no doubt will be leveled at John Kerry tomorrow night.

(BEGIN VIDEO CLIP, AD)

NARRATOR: These people want to kill us. They killed hundreds of innocent children in Russia, 200 innocent commuters in Spain, and 3,000 innocent Americans. John Kerry has a 30-year record of supporting cuts in defense and intelligence and endlessly changing positions on Iraq. Would you trust Kerry up against these fanatic killers?

(END VIDEO CLIP)

BLITZER: What do you say if that charge is leveled tomorrow night?

RICHARD HOLBROOKE, FORMER U.S. AMBASSADOR TO UNITED NATIONS: I don't think your network would allow an ad like that on TV for dental floss or toothpaste that is just factually inaccurate.

Senator Kerry is just as committed to the war on terrorism as George Bush. And our side does not question George Bush's commitment. We just question his effectiveness. And, as far as Iraq goes, there's no connection between al Qaeda and Saddam Hussein that's ever been demonstrated. And this is just another one of the misleading ads we've seen during the last few months.

BLITZER: Is it appropriate, Senator Kyl, to put pictures of Mohamed Atta and Osama bin Laden in an ad going after John Kerry?

SEN. JON KYL (R), ARIZONA: Well, I have got a higher tolerance level for free speech, I guess.

I think there is probably a point at which the American people turn off watching these ads or think that they go over the top. And I trust the American people to make the judgments. There are some that get pretty close to the line, to be sure. But I would respectfully disagree with my friend Richard Holbrooke. There was a very clear connection between al Qaeda and Saddam Hussein.

Tom Kean, the chairman of the 9/11 Commission, said so. On pages 66 and 69 of the report, they spell it out in detail. And George Tenet wrote a letter to the Intelligence Committee spelling out in detail what those connections were. So I think it is important for us to be sure we represent the facts correctly.

BLITZER: You want to respond to that, Ambassador?

HOLBROOKE: Well, it's hard to respond when Jon Kyl calls me his friend. And we are friends.

By the way, Wolf, I didn't see the visuals here. So I didn't realize that you were showing an ad which showed Mohamed Atta. And that I really think goes way, way beyond the legitimate bounds of political advertising.

On the connection between Saddam and al Qaeda, I understand what Senator Kyl has said, but the connection, if there is any, is very tangential. I don't believe it was there. And I don't think that the assertions of Vice President Cheney and others in this administration, in advance of the invasion of Iraq and subsequently, have been borne out or supported by that commission.

BLITZER: All right, Senator Kyl, I think it also said that there was no operational collaboration between Saddam Hussein and 9/11. I guess that was one of the major points in that 9/11 Commission report.

KYL: Well, that's what some of the media concluded was the major point.

But after detailing several pages of connections, including harboring al Qaeda, showing them how to make poison and biological weapons conventional bombs and a whole host of other things, they then concluded that, while these connections were real and they existed and they had been in existence for over a decade, there was still no, as you said, operational connection between Saddam Hussein and September 11.

A lot of the media just picked up that last point and didn't focus on all the other things that were said, which was that there were very clear connections.

BLITZER: All right, we're going to continue this debate, because we have a lot more to talk about. That's coming up. I want both of our guests to stand by.

Also, we're following some other stories, including a real shocking story involving casinos. It is a controversy, an alleged scam targeting Native American tribes. Now the U.S. Congress is stepping in.

And what punishment for two men convicted in a deadly attack on the USS Cole? The sentence is now in.

Plus, quest for freedom, details of a desperate effort to seek asylum. We'll show you the pictures.

Stay with us.

(COMMERCIAL BREAK)

BLITZER: We're back with our surrogate debate, a preview of tomorrow night's confrontation between the president and the Democratic nominee.

Once again, Senator Jon Kyl representing the president, former U.N. Ambassador Richard Holbrooke representing the Democratic candidate.

Senator Kyl, here is an ad that the Kerry campaign is running against the President Bush. Listen to this.

(BEGIN VIDEO CLIP, AD)

NARRATOR: There he goes again. George Bush said Iraq was mission accomplished. Sixteen months later, he still doesn't get it, today, over 1,000 U.S. soldiers dead, kidnappings, even beheadings of Americans. Still, Bush has no plan for what to do in Iraq.

(END VIDEO CLIP)

BLITZER: Is the president overly rosy in his assessment of what's going on, on the ground?

KYL: There are some who have a seemingly steely determination to keep hopelessness alive.

The president, on the other hand, wants to lead with realistic assessments, but also hope that we can persevere, as Prime Minister Allawi told a joint session of Congress this last week. The president has been realistic. If you look at the talk shows last Sunday, for example, his spokesmen, Secretary of State Colin Powell, General Abizaid, these people tell a very clear picture of what is happening. But they also note that there is a way for us to win. We have to be resolute and we have to persevere.

The challenge, of course, is that the bad guys over there are testing our resolve. And that's where the president knows that being pessimistic won't win, but holding out hope and optimism will help.

BLITZER: What would John Kerry do differently, Ambassador Holbrooke?

HOLBROOKE: I think what Jon Kyl just said is quite a rational position about Iraq, but it's at sharp variance with what President Bush and Vice President Cheney have said.

Colin Powell gave a much bleaker assessment than his own commander in chief on the Sunday talk show goes. The truth is that Iraq has no longer has a success strategy or an exit strategy. The president is dismissing his own national intelligence estimates and he's calling for things which he is not going to be able to accomplish. And I'm afraid we're getting caught into a quagmire in the desert of enormous proportions here.

BLITZER: What would he do differently?

HOLBROOKE: He's made very clear that as of now he thinks the president should do the four first things he outlined at NYU last week.

But he has also said very clearly and very honestly that by January 20 when he is inaugurated, he expects he will find a different situation. And every person I have talked to with on-the-ground experience says it is going to be worse. And are those elections really going to take place? Powell and Rumsfeld disagreed on that. Now, as for President -- as for Senator Kerry's proposals, you reported them very well on your program.

(CROSSTALK)

BLITZER: Let me interrupt for a second, Ambassador, because all four of those proposals that he outlined are steps that the president has endorsed as well.

And I want to give Senator Kyl a chance to respond to your earlier statement about the situation between now and January, the scheduled time for elections in Iraq. It is probably going to get worse.

Do you agree with Ambassador Holbrooke, Senator?

KYL: Well, by the way, thank you for pointing out that President Bush has the same four points. Actually, he has five, but they include the four.

And with regard to the assessment, General Abizaid was very clear. He said that there is going to be violence right up to and including the elections, because that's the strategy of the terrorists. They want to disrupt and prevent, if they can, those elections from being held. So they are going to be violent. And that was General Abizaid's assessment. I don't think anybody denies that.

When the president first told of us this mission, he said this is going to be long and it's going to be difficult.

BLITZER: But, Senator, should the president be held accountable for what has happened in Iraq, all the mistake that have occurred?

KYL: Well, eventually, the American people will judge his accountability when they decide whether or not to reelect him. And he has said he is perfectly comfortable with that. He's made tough decisions. But one of the reasons he is ahead is that the American people support a resolute leader, even when some of what happens is contrary to public opinion.

BLITZER: What does he have to do, John Kerry, Ambassador Holbrooke, tomorrow night to convince the American public he is fit to be commander in chief? HOLBROOKE: We've had four elections in a time of war since the Civil War. In two of them, the incumbents did not run again, '52 and '68. In the other two, '44 and '72, the incumbents won. It is very hard to run against a commander this chief in a time of war without appearing to be against the troops.

John Kerry, as a Vietnam veteran, has tried very hard to make clear he supports the troops and will accept nothing less than success in Iraq. In order to convince the American public, he has to do two things. And I believe he did them at NYU last week and he's done them on the campaign trail, one, to demonstrate that the president's own statements for the last two years have not been accurate and his projections and promises have not been fulfilled, and, secondly, to show that he would be a vigorous proponent of getting the troops to succeed and finding a way to extricate us successfully -- and I stress that word, Wolf -- from the mess that has been created in Iraq by this administration.

BLITZER: Two good debaters, indeed. Richard Holbrooke, Jon Kyl, surrogates for the candidates, thanks very much for joining us.

KYL: Thank you.

HOLBROOKE: Our pleasure.

BLITZER: Outrageous e-mail messages. Why would Washington lobbyists mock their Native American clients? We will have a story of some big bucks and big casinos. It is outrageous.

But, first, a look at some other news making headlines around the world.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): A judge in Yemen has sentenced two men to death for the attack on the USS Cole. The judge sentenced four other men to prison terms ranging from five to 10 years. The October 2000 attack killed 17 American sailors.

Seeking asylum. It's happened again; 44 North Koreans scaled a fence outside the Canadian Embassy in China. In recent years, a growing number of North Koreans unhappy with economic and political conditions at home have tried to use embassies in China as an escape route.

Deadly storm. At least two people are confirmed dead after a powerful tropical storm in southern Japan. Downgraded from typhoon status, the storm remained strong enough to damage homes, down power lines and force thousands to evacuate.

And that's our look around the world.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

BLITZER: Now a story involving outrage, lobbyists and Native Americans.

CNN congressional correspondent Joe Johns reports.

(BEGIN VIDEOTAPE)

JOE JOHNS, CNN CAPITOL HILL CORRESPONDENT (voice-over): In a multimillion dollar industry, Indian gaming, tribes running casinos paid two Washington power players $50 million to lobby, strategize, improve community relations and P.R. for them. But did the tribes get ripped off? The Saginaw Chippewa of Michigan ponied up about $14 million.

BERNIE SPRAGUE, SUB-CHIEF, SAGINAW CHIPPEWA: They may wear fancy suits and expensive shoes, but their greed, scare tactics and unscrupulous behavior is the same our people have faced for generations.

JOHNS: A federal investigation is under way into the activities of the two men, super lobbyist Jack Abramoff.

JACK ABRAMOFF, FORMER LOBBYIST: And the Fifth Amendment's right for a person not to become a witness against themselves.

JOHNS: And P.R. man Mike Scanlon, who skipped his appearance Wednesday before a bunch of angry senators on the Indian Affairs Committee. "The Washington Post" reported the lobbyists help shut down a tribe's Texas casino without the tribe knowing it, then got the tribe to pay them to help reopen it.

Making matters worse, inflammatory e-mail traffic between Abramoff and Scanlon putting down the very clients they were supposed to be serving, for example, this quote: "I have to meet the monkeys from the Choctaw tribal council."

SEN. BEN NIGHTHORSE CAMPBELL (R), COLORADO: According to your e- mails, you and Mr. Scanlon referred to your tribes as morons, stupid idiots, monkeys, F'ing troglodytes, which you defined as a lower form of existence, and losers.

JOHNS: Scanlon could not be reached. Abramoff denies wrongdoing. A source close to him said the Senate could make great hay from anybody's e-mails, and, as to the money -- quote -- "Given the revenues involved in Indian gaming and those paid to the Washington consultants at the firm of Scanlon and those at the firm of Abramoff would be no different than any other corporation dealing with similar amounts in America."

(END VIDEOTAPE)

JOHNS: Some argue the tribes have the right to enter into their own business agreements and contracts and that the Senate interference is insulting -- Wolf, back to you.

BLITZER: Joe Johns, thanks.

We'll be right back. (COMMERCIAL BREAK)

BLITZER: That's it for me.

"LOU DOBBS TONIGHT" starts right now.

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