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The Situation Room

House Majority Leader Tom DeLay Indicted; Gas Shortage Imminent?

Aired September 28, 2005 - 15:00   ET

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

WOLF BLITZER, CNN ANCHOR: I'm Wolf Blitzer. And you're in THE SITUATION ROOM, where news and information arrive at one place simultaneously. Standing by, CNN reporters across the U.S. and around the world to bring you the day's top stories.
Happening now, it's 2:00 p.m. in Austin, Texas, where a grand jury has indicted the House majority leader, Tom DeLay, for alleged conspiracy in a campaign finance scheme.

Here on Capitol Hill, it's 3:00 p.m. The hard-hitting Republican leader known as the Hammer announces he's temporarily stepping aside. Is this a bump in the road or the end of the road for Tom DeLay?

And it's 2:00 p.m. in the hurricane disaster zone, where the road to recovery will be long, hard and slow. Could damage to oil rigs from Rita lead to long lines at the pump?

You're in THE SITUATION ROOM.

It's no surprise, but the shockwaves are spreading across Washington. A Texas grand jury has indicted the powerful House majority leader, Tom DeLay, for allegedly breaking campaign finance laws. Now the tough enforcer of the president's legislative agenda must step aside, at least for now.

CNN senior legal analyst Jeffrey Toobin is standing by. Our senior political correspondent, Candy Crowley, will give us a closer look at the man known as the Hammer.

But we begin on Capitol Hill with our congressional correspondent Joe Johns, who is watching every step of this. Joe, update our viewers on what has happened today.

JOE JOHNS, CNN CONGRESSIONAL CORRESPONDENT: Wolf, Tom DeLay was indicted by a grand jury in Travis County, Texas, the Travis County prosecutor, Ronnie Earle, after a long, very lengthy grand jury investigation into allegations of campaign finance abuse.

As you just saw a little while ago right here on CNN, Tom DeLay absolutely coming out swinging, calling Ronnie Earle a rogue prosecutor, a partisan fanatic, a partisan zealot, describing a longstanding animosity that Earle allegedly has toward DeLay.

Let's listen to a little of what Tom DeLay said.

(BEGIN VIDEO CLIP) REP. TOM DELAY (R-TX), MAJORITY LEADER: Thank you all for attending.

This morning, in an act of blatant political partisanship, a rogue district attorney in Travis County, Texas, named Ronnie Earle charged me with one count of criminal conspiracy, a reckless charge wholly unsupported by the facts. This is one of the weakest, most baseless indictments in American history. It's a sham.

(END VIDEO CLIP)

JOHNS: Earlier today in Texas, Ronnie Earle also faced the cameras. He made the case that he was just doing his job.

(BEGIN VIDEO CLIP)

RONNIE EARLE, TRAVIS COUNTY DISTRICT ATTORNEY: The law says that corporate contributions to political campaigns are illegal in Texas. The law makes such contributions a felony. My job is to prosecute felonies. I'm doing my job.

(END VIDEO CLIP)

JOHNS: DeLay, of course, stepping down, at least temporarily, from his post as the majority leader of the House of Representatives.

A lot of speculation now about who will take over while DeLay is dealing with these legal charges. Among the names mentioned, David Dreier, the chairman of the House Rules Committee. He certainly is one of the people considered to be a rising star here on Capitol Hill.

Back to you, Wolf.

BLITZER: If convicted, he could not only face a fine, but he could wind up in jail. Is that right?

JOHNS: He certainly could. This is a felony charge. He could get as little as six months and more than a year, Wolf. So, certainly, this is -- the prosecutor is shooting with real bullets here.

It's interesting, though. I have spent a lot of time with Ronnie Earle, as well as Tom DeLay's Texas lawyers. And his lawyers have been advising all along that, if Ronnie Earle were to bring charges, they always said and always believed that, based on the facts that are out there that we know of, it would be very hard to get a conviction. Apparently, we will see, Wolf.

BLITZER: All right, Joe Johns, we will get back to you. Thank you very much.

President Bush says the legal process must run its course in the Tom DeLay case. That's the word from the White House press secretary, Scott McClellan. But he says the president still considers his fellow Texan a friend and an effective leader.

(BEGIN VIDEO CLIP) SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: Yes, Congressman DeLay is a good ally, a leader who we have worked closely with to get things done for the American people.

(END VIDEO CLIP)

BLITZER: Tom DeLay calls it a blatant act of partisanship by what he calls a rogue prosecutor. But it's not DeLay's first brush with ethics troubles.

What about all of this?

Our senior legal analyst, Jeffrey Toobin, is joining us now from New York.

This is a deadly serious matter. It's not just politics. There's a potential crime here and jail sentence, we just heard, if -- if convicted.

JEFFREY TOOBIN, CNN SR. LEGAL ANALYST: You bet, Wolf. And it was interesting listening to Tom DeLay just a few moments ago. You know, it's really all conversation at this point, anything that doesn't take place in a courtroom, because that's where this is going to be resolved. Tom DeLay is going to be booked. He's going to be fingerprinted. He's going to have bail set. And a judge, and potentially a jury, is going to decide whether he's a convicted felon or not.

BLITZER: Have you looked into the track record of this prosecutor? Based on the research I have done, he's gone after a lot of Democrats and Republicans over his career.

TOOBIN: He has. His most celebrated embarrassment was, he filed a case against Senator Kay Bailey Hutchison right on the eve of her first election to the U.S. Senate. And that case was thrown out. And that was sort of the basis of the argument that he was a partisan Democrat going after a Republican, because Hutchison is a Republican.

But, you know, he is the prosecutor in Austin. Austin has a lot of Democratic politicians, and most of the people that Earle has prosecuted, most of the politicians, have been Democrats, his fellow Democrats. So, you know, there is room to make the argument on both sides. But, you know, this case is not going to be decided based on Ronnie Earle's track record. It's going to be based on the evidence he can produce or can't produce against Tom DeLay.

BLITZER: Well, based on what he produced today, the suggestion is, the accusation is that what Tom DeLay and his political action committees, what they did was, they raised all this money from corporations. They then gave this money to an arm of the Republican Party with a list of various Texas candidates to whom this money should go. And, under Texas law, it's against the law to give corporate money to candidates, with the exception of administrative costs.

TOOBIN: That's right, Wolf. In plain English, this is a money- laundering case. Basically, the charge here is that Tom DeLay and his colleagues knew that corporate money couldn't go to Texas local politicians. So, what they did was, they raised this corporate money in their federal organization, where corporate contributions are legal, then took that money illegally and secretly passed it to the state candidates, laundering the corporate contributions into the Texas state system.

That's the charge. You know, the indictment has no evidence in it. It simply states the charge. So, we don't know if these charges will stick, but that's what the claim is.

BLITZER: They had a copy of the check, though, that seemed -- seemed to suggest that there was a deliberate conspiracy at hand.

TOOBIN: Well, correct. There was a check, very unusual, actually, in an indictment to have a piece of evidence like a photocopy of a check in the indictment. But, of course, money is fungible. And the question will be, did that money come from individual contributions, where it's permissible to go into the state system, or did it come from those illegal corporate contributions, which is what the prosecutor charged?

So, that's going to have to come out in court.

BLITZER: The lawyers will fight it out in court. Thanks very much, Jeffrey. We will get back to you as well.

He may not have won many friends, but he certainly knows how to influence people.

For a closer look at the man known as the Hammer, let's turn to our senior political correspondent, Candy Crowley. Candy, a huge, huge day here in Washington.

CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT: It is. It's -- on a purely political basis, this leaves a huge hole within the Republican apparatus on Capitol Hill. This is a man to whom the White House went when they wanted something to pass. This is a man who knows how to do favors, knows how to raise money.

He got to where he is, you know, largely, Wolf, because of his own efforts. I mean, this is a self-made man who ran as a Republican in Texas when there were barely any Republicans in Texas, went to the state legislature, saw a hole in the Reagan years, came to Washington. And then, in '92 -- and this is where the problems begin with this indictment -- he began to help Republicans win elections in the state legislature. And it turned into a Republican legislature, which redrew the districts, which helped him bring more Republicans to Washington.

So, he's been a hugely successful politician. He has been instrumental in the Bush administration agenda. They will be hard- pressed -- it's not impossible to replace him, but there's none like him. When you talk to his friends and his foes alike, they say, listen here. Here's the thing about Tom DeLay is, he always wins. I have had Democrats say that to me. So, he's a tough, tough competitor. They believe, of course, on the DeLay side that with success has come this scrutiny, which they say is ill-informed and all the things that you heard Tom DeLay say.

Nonetheless, on a purely political basis, this leaves a hole right now. And it gives Democrats fodder for 2006, when they would very dearly like to make some inroads in both the House and the Senate.

BLITZER: And, very quickly, David Dreier, the Republican congressman from California, or Roy Blunt, the majority whip right now, they are very well known here in Washington, both of them. But both of them have a very different style than Tom DeLay.

CROWLEY: Absolutely they do. Tom DeLay, whether it is deserved or not, inspired fear in the newbies that came in. He was a guy that they didn't like to cross.

I will tell you, his friends say, look, I have never heard him -- I have never heard Tom DeLay raise his voice. I have never heard him threaten anyone. But I tell you, there were times, and Democrats will tell you, where a vote would come up, Republicans would be losing the vote. All of a sudden, the clock would stop and Tom DeLay would show up on the floor and get people to change their votes. Hard to see either Roy Blunt or David Dreier being that effective that quickly.

BLITZER: All right, Candy, thank you very much. Candy Crowley is our senior political correspondent.

Let's check in with CNN's Jack Cafferty. He's in New York. He's watching all of this unfold in Washington. What goes through your mind, Jack?

JACK CAFFERTY, CNN ANCHOR: Well, kind of strange things happen sometimes, Wolf. It was one week ago today that Wolf and I were talking here in THE SITUATION ROOM about whether or not the transportation bill should be revisited and some of the pork cut out, in order to start paying for Hurricane Katrina. There was an interesting little exchange that went like this.

(BEGIN VIDEO CLIP)

BLITZER: All right. Tom DeLay says there's no pork; everything is essential. I don't know if you heard him say that.

CAFFERTY: Has he been indicted yet?

(LAUGHTER)

BLITZER: Well, we'll leave that alone. Jack Cafferty, thank you very much.

(LAUGHTER)

(END VIDEO CLIP) CAFFERTY: You -- you can't make this stuff up. I can assure you, I had no inside information on DeLay's upcoming indictment. A lot of you laughed out loud. It was an offhand comment. Some of you wrote and were highly critical of what I said. But it's probably a piece of videotape that I'm going to hang on to.

So, here's the question today. Should Tom DeLay resign from Congress, not from his leadership role, from the House of Representatives? CaffertyFile -- one word -- @CNN.com. We will read some letters later.

You could have knocked me down when I got off the elevator today and walked into the office and Sarah Leder (ph) says, DeLay has been indicted.

BLITZER: So, you are saying that the prosecutor, Ronnie Earle, did not consult with you in advance?

CAFFERTY: No. No. I had absolutely no knowledge of it. It was just, you know, one of those flip remarks that -- I had known that he had been under investigation for -- and this isn't the only investigation, by the way, of Tom DeLay. There are others that are ongoing.

But I knew he had been under investigation. I knew there were questions about him. And when you raised this absurd premise that everything in that transportation bill -- that Tom DeLay had said everything in that bill was legit and there was no pork, and -- it just occurred to me, you know, maybe it's time for this guy to be indicted.

And it was just an offhand, flip remark. No, I had no knowledge of anything. Those guys wouldn't talk to me anyhow. You barely talk to me.

(LAUGHTER)

BLITZER: You know, Jack, a lot of people on the Hill, Republicans, were upset at you, but you seemed to know what you were talking about.

Jack Cafferty, thank you very much.

Still to come, sidestepping the hurricane blame game. We will find out why Louisiana's governor is refusing, right now at least, to fire back.

Plus, the story of one New Orleans resident trying to get back to business.

And female suicide bombers. Are women now being used for terror against Americans in Iraq? We will have the story. Stay with us.

But first, a little bit more of the video from earlier today.

(COMMERCIAL BREAK) BLITZER: Louisiana's governor got a chance to keep the blame game going today. But she told a congressional panel she wants to look forward, not backward.

Back home, though, residents can look forward to a lot more heartache and hard work.

Our Mary Snow is live on the streets of New Orleans.

But let's go to Capitol Hill first. Our congressional correspondent, Ed Henry, with an update on what's happened here today. Ed?

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Wolf, today, there was nowhere near the same kind of fireworks we saw yesterday, when ousted FEMA Director Michael Brown pointed the finger of blame squarely at New Orleans Mayor Ray Nagin and Louisiana Governor Kathleen Blanco.

Last night, Governor Blanco issued a very tough statement, basically saying that testimony from Mike Brown was full of falsehoods. She had the opportunity today on Capitol Hill, when she was appearing before a Senate committee, to fire back. But she took the high road, even after a little prodding from a Democratic Senator Kent Conrad.

(BEGIN VIDEO CLIP)

SEN. KENT CONRAD (D), NORTH DAKOTA: I saw, Governor Blanco, you were criticized yesterday heavily by Mr. Brown. I'd just give you a chance here, if you would like to, to respond to that.

GOV. KATHLEEN BLANCO (D), LOUISIANA: Senator Conrad, I appreciate that. But today I came really to talk about job creation. I think there will be plenty of time to talk about...

SEN. MAX BAUCUS (D), MONTANA: Good for you, Governor Blanco. This is not about blame. This is about how to get the job done. I appreciate your response.

(END VIDEO CLIP)

HENRY: Now, you heard Democratic Senator Max Baucus jumping in there at the end, calling for an end to the blame game.

But all these various investigations on Capitol Hill are moving full steam ahead. In fact, CNN has learned that Senator Susan Collins, one of the lawmakers probing what went wrong in wake of Katrina, is now asking for documents from various state and federal agencies, including FEMA, as well the State Emergency Services Department in Louisiana, a clear sign that both federal and state officials are still going to feel a lot of heat.

Wolf.

BLITZER: As opposed to the House side, are Democrats cooperating with the Republicans in investigating this on the Senate side? HENRY: That's right. Democrats in the Senate are not officially boycotting any of the investigations.

They are boycotting the joint committee that the speaker of the House and Senate majority leader wanted to create. But they are moving ahead with other hearings on the Senate side to probe Katrina. And that's much different than what we're seeing on the House side with Democratic Leader Nancy Pelosi.

BLITZER: All right, Ed Henry, thanks very much.

Let's go over to New Orleans, where residents are returning to try to get their lives back on track.

Our Mary Snow is once again joining us from the streets of that city. What's going on today, Mary?

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, getting back on track is such an enormous task.

And we are going into a small business. We met up with a small business owner, a father-and-son team. They own this cell phone store. And they are returning for the first time this week since the hurricane.

As you can see, this is a store that had really been emptied out, these shelves completely empty, ransacked. And what the owners are saying is, you know, they have flood insurance, but they don't know how to cover the looting. They've been very busy throughout the day getting materials to clear out the mold that they've been seeing around here, trying to collect what they can. There's a curfew here.

And what they are saying is, they have followed the mayor's plan. The mayor has let business owners here in the Central Business District to come in and assess the damage, is what they have been doing. But they say they are a bit confused. What do they do next?

They say, once they assess, where do they go from there? In terms of getting information, they say they've been watching television, listening to the radio. But they really don't know what the next step is. And this is just one story of so many people here trying to rebuild.

Wolf.

BLITZER: They look like they've done a really nice job cleaning up that store, going through it, starting their lives. Is this an isolated incident? You've been around the city now for a while. Or is it happening in other stores as well?

SNOW: It is happening in other stores and some of the larger businesses we're seeing.

For instance, down here in the Central Business District, there are many hotels. And what they've been doing is busing people in throughout every day to try and clear out. Also, they have issues of water. Here, as you can see, electricity is coming on. That's a positive sign for parts of town, where they have seen more power, but they aren't allowed to use the water to drink or bathe. That's particularly a big problem for restaurants, as you might imagine.

But we are running into a number of small business owners who say they don't know whether they are going to stay, whether they are going to pack up and leave, because they have that flexibility, or they'll try to make a go of it here.

BLITZER: Mary Snow in New Orleans for us. Thanks, Mary. We will get back to you as well.

The line began forming last night in Houston. Thousands displaced by Hurricanes Katrina and Rita are seeking assistance at a FEMA center located in a grocery store. The center can handle more than 2,000 people at a time. It will stay open seven days a week until everyone who needs help can get it.

Some have called him the most powerful man here in Washington behind the president, Republican Congressman Tom DeLay of Texas. Coming up, we have been telling you about the indictment against him earlier today. Now we will try to demonstrate what he's alleged to have done. We will check in with our Ali Velshi for that.

And in Iraq, the men have been doing it. Now it appears women are as well. That would be suicide bombings. We will tell you about the latest incident that has killed and injured many and could be a first.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Welcome back.

Our Zain Verjee joins us now from the CNN Center in Atlanta with a closer look at some other stories making news. Hi, Zain.

ZAIN VERJEE, CNNHN ANCHOR: Hi, Wolf.

In Iraq, a female suicide bomber kills five and wounds 30 in Tal Afar. According to an Iraqi army official, the woman blew herself up in front of a building after she wasn't allowed inside. Tal Afar is a town near the Syrian border, and it has been a recent coalition battleground against the insurgency. The suspect is considered Iraq's first known female suicide bomber.

In Afghanistan, another suspected suicide bombing, this one apparently carried out on a motorcycle. Nine Afghan soldiers were killed, another 26 people injured in the blast outside an Afghan army base on the outskirts of Kabul. The country has seen a rise in violence proceeding, as well as after, the September 18 elections.

Just four days after surgery, Vice President Cheney is back at work at the White House today. The 64-year-old underwent an elective procedure on Saturday to remove aneurysms behind both his kneecaps. Cheney walked with a cane and a slight limp in a White House appearance with President Bush this morning.

Wolf.

BLITZER: Thanks very much, Zain. Zain, we will get back to you. Zain Verjee reporting for us.

We have been talking about our top story, the House majority leader, Tom DeLay, and his indictment in Texas earlier today. Now we want to illustrate what that indictment might mean.

Our Ali Velshi, only Ali Velshi can do that for us. He's standing by in New York. Ali?

ALI VELSHI, CNN ANCHOR: Wolf, thanks.

We non-lawyers need to try and understand exactly what this is. Remind me every couple seconds, Wolf, to use the word alleged and indictment, because that's where we are right now. This is nothing beyond that.

But it has got to do with Texas law and contributions and how they are used in a campaign. Now, without getting into the legality and the law, here's how it kind of looks. You got these three cups here, all right?

Now, these represent six corporate donors and the money in there.

The second one, it says TRMPAC on it. That's Texans for a Republican Majority. This is a political action committee that Tom DeLay is involved in.

The third cup is the Republican National State Election Committee, the Republican National Committee branch that -- that distributes state funding.

The money in here that came from six corporate donors -- and I have got $6 to represent that, although we're talking about over $150,000 -- couldn't legally, prior to an election, go into this account for the Republican National Committee.

Here's what the allegation is, that the money went from these donors into the bank account of the Texas -- Texans for a Republican Majority, went into this public affairs committee. Now -- political affairs committee. What happened is, this check was written out of that. This is the actual photocopy, enlarged photocopy, of a check that was written for $190,000 from this committee, the Texans for a Republican Majority PAC. And it was deposited to the Republican National State Election Committee.

So, the allegation is that it all came out -- as Jeffrey Toobin said, money is fungible. Is this -- was the intention to get these corporate contributions from here into here, which couldn't have been done legally under the Texas election code? That's what remains to be seen.

Obviously, there are -- there are lots of things to be examined during this -- during this trial, what comes out of this indictment. But basically it was, should the money have gone from there to there? Is this the same money.

Wolf.

BLITZER: Who were some of the contributors, the corporations that provided the funds?

VELSHI: One hundred and fifty-five thousand dollars. Sears Roebuck was one of the contributors, a company named Diversified Collection Services, the kind of company you don't really want to be getting a call from, I'm sure, $50,000 from them; $25,000 from Sears Roebuck; Williams Companies, the Energy Company, $25,000; Cornell Companies is $10,000; Bacardi, $20,000; and Questerra Corporation, $25,000 -- $155,000 in total that is in question.

BLITZER: Now there's no -- there's no question -- there's no allegation that any of these corporations did anything illegal.

VELSHI: No. No. The allegation is what -- those corporate contributions couldn't have legally been made into that campaign fund. So, was that money somehow put through this public affairs -- the political affairs committee and then funneled into this committee? Was that -- we sometimes use the word laundering, not in a legal sense. But that's -- that's the question.

BLITZER: All right, Ali, thanks very much. Ali Velshi in New York.

Tom DeLay's criminal defense attorneys are now speaking. Let's listen in.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: ... candidates who could accept -- this is Bill White.

DICK DEGUERIN, ATTORNEY: For well over a year, Bill White and Steve Brittain have been doing everything they can, along with Congressman DeLay, to cooperate with Ronnie Earle's office and to explain to them that there's no crime here. Tom DeLay didn't do anything wrong.

As many of you know, I represented Senator Kay Bailey Hutchison 12 years ago. And to me, this seems like what Yogi Berra said is deja vu all over again. That was a political prosecution, and this is political prosecution. There's no crime that's been committed. Tom DeLay didn't do anything wrong. He has cooperated to the extent of even waiving the statute of limitations, to the extent of answering questions on the record very recently.

I am confident that when we get to trial, we'll show that Tom DeLay did nothing wrong. And so what I'm going to ask the judge, the first opportunity that I get, is, as consistent with him being able to rule on pre-trial motions, we want a trial right away. We want a trial before the end of the year. Because what Ronnie Earle has done has attempted -- he's attempting to destroy Tom DeLay.

Now, Tom DeLay changed the face of Texas politics. Nobody can deny that. But Ronnie Earle wants to destroy him because of it. Just the bringing of this indictment has caused Tom DeLay to have to step down from his leadership role in the House of Representatives. And that's what Ronnie Earle wants. But I'm telling you, mark my words, when we go to trial -- if we even get to trial because the judge may throw this out -- when we get to trial, any fair jury is going to find that Tom DeLay did nothing wrong.

Now I'll take a few questions.

(END VIDEOTAPE)

BLITZER: All right, Dick DeGuerin, an attorney representing Tom DeLay, the House majority leader -- at least the former House majority leader. He's decided that he has to step down now that he's formally been indicted by a prosecutor in Texas. We'll have much more on this story coming up. Tom DeLay stepping down from his high perch.

But Congressman DeLay says he's not leaving the House of Representatives. Coming up, guilty or not, with this new indictment, should Tom DeLay resign? We've been asking you that question. Jack Cafferty has been going through your e-mail. He's standing by with that.

And it's the DeLay response. What's the White House saying? We'll tell you. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Let's go back to our top story. The House Majority Leader Tom DeLay has been indicted by a grand jury in his home state of Texas. DeLay says he'll step aside as majority leader, but insists he'll stay in the House of Representatives.

How is the Bush administration responding to all of this? Our White House correspondent Suzanne Malveaux is joining us now live with more on that. Hi, Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Hey, Wolf. It really can't be overstated here just how important Tom DeLay is to this president and to this White House. He is critical when it comes to pushing for the president's agenda, when it comes to CAFTA, that Medicare prescription drug. And, of course, he has been central when it comes to the Social Security reform debate, taking on the president's agenda.

There was a really key moment, an important moment that happened back in April. This was a Social Security event. The president was out there. He took Tom DeLay with him. This is when the questions first started to arise about these ethical questions, about this possible scandal, this corruption. President Bush is standing shoulder to shoulder with Tom DeLay, praising him, sending a very clear message, saying, I am standing by my man. Today that was the same message the White House sent. (BEGIN VIDEO CLIP)

MCCLELLAN: Sure. I think that the president's view is that we need to let the legal process work. There's a process in place, and we'll let that work.

(END VIDEO CLIP)

MALVEAUX: Now, Wolf, of course, the big question here is just how is this going to impact the president's own ability to push forward his legislative agenda? Some already believing that perhaps it will cripple the president. This is a president who has been weakened before by the hurricanes, by the high gas prices. Of course, you're looking at approval ratings of somewhere in the 40 percent range or so. There are even some Republicans who fear that perhaps the Democrats are going to be able to use this moment, really, to galvanize them, that this may even hurt the 2006 mid-term elections.

Wolf.

BLITZER: Suzanne, thanks very much. You've heard the he say/he say. Now you'll have your say. Up next, should Tom DeLay resign from the U.S. Congress in light of his indictment? We've asked, you've answered. Jack Cafferty has your e-mail. He's coming up.

And it's Rita's rage on oil rigs. Some reports say the damage to Gulf Coast rigs is the worst in history. Ali Velshi has that story. Stay with us.

(COMMERCIAL BREAK)

BLITZER: With Tom DeLay's indictment, you can only imagine all the blogs are buzzing -- at least a lot of them are buzzing -- on the Internet. Here to tell us what they are saying, our Internet reporters Jacki Schechner and Abbi Tatton. Hi, guys.

ABBI TATTON, CNN INTERNET CORRESPONDENT: Yes. They certainly started buzzing very quickly on this one. On Tom DeLay here, lots on the left and the right. Also posting the indictment you can read online on sites like thesmokinggun.com. You can read all about it. Complete there with a scanned copy of one of the checks in question.

On the right, also linking to the indictment, The Volokh Conspiracy. Conservative law blog groups of professors there talking about this, linking to the indictment and just saying one word there from a professor, Orin Kerr, "wow."

With the indictment, people are looking at it already on the right and deciding how much there is in this. Over at the corner at the nationalreview.com conservative group blog, their perception is, I can't find a single sentence tying Tom DeLay to a crime right now. Having said that, they are saying that this adds up to talking points for the Democrats. "Brace yourself. It's going to get ugly."

For a big blog reaction you can go to outsidethebeltway.com. James Joyner there has rounded up lots on the left and on the right. His own perception, he doesn't know why the House "GOP delegation has not dumped him" -- Tom DeLay -- "before now."

JACKI SCHECHNER, CNN INTERNET CORRESPONDENT: So we want to look at what they were saying down in Austin, Texas. This from the Burnt Orange Report. "Tom DeLay Steps Down." Earlier in the day they posted, "looks like the rat is finally getting his due."

We're seeing plenty of celebration on the left, but MyDD Chris Bowers over there saying we've got to be careful. His point basically is that "the Republican noise machine is going to push the partisan politics of this." And "the real thing they need to do is get the facts out there."

The gadflyer.com has a blog called "The Fly Trap." It's a liberal publication online with its own blog. And essentially, they are saying if you are confused by all of this, it comes down to two words: money laundering. Those are the facts that they are talking about pushing.

We go to Joe Gandelman's "Moderate Voice" where Jonathan Singer is posting the article on the indictment and he basically says, "even if DeLay beats the rap, it's a tough time to be a Republican." They are talking about the questioning Frist and his financial complications right now. There's a lot of things bubbling up in the Republican Party. And that's not lost on the blogosphere.

And finally "Seeing the Forest" talking about the domino effect that this possibly could cause, Wolf. They are talking about who might be next.

BLITZER: Thanks very much, Jacki and Abbi.

Let's go to Baton Rouge, Louisiana. The mayor of New Orleans, Ray Nagin, he is sitting there speaking to legislators. He's wearing the yellow shirt. You see him from behind. Let's listen in.

MAYOR RAY NAGIN (D), NEW ORLEANS: The second issue is dealing with zoning, as it relates to setting up temporary housing on state- owned land. Is that my charge?

UNIDENTIFIED MALE: That's pretty much what we've done today.

NAGIN: OK. Good. Well, you know, the issue has been widely reported in the newspapers and across the country at the height of the challenges that we had post-Katrina. The Superdome was full. The Convention Center was full. Conditions had deteriorated to the point where citizens were looking for options.

It became known to us that there was an escape route out of the city, that the buses were coming into. And that was going across the Crescent City connection, Highway 90, to 310 to I-10. We started to alert, you know, and talk to our -- to the people who were in the Convention Center that this was a route.

We started to get push from those particular individuals that they would like to start a process of walking to meet buses. General Honore and I talked about this and, you know, he thought it was something we could support from a troop standpoint. We had contacted FEMA, and we had asked them to drop ship water and MREs, I think they are called, as the people started to walk.

I think I had a conversation with the governor the morning before a lot of this was happening to alert her that this was a possibility and this could possibly be happening. It's -- the people started to move, and they were met -- it's my understanding. I'm not an eyewitness to this, but we have police officers that witnessed it, as well as Sewage and Water Board employees, as well as other citizens.

They were met at the parish line and turned around, which I find particularly offensive because it basically cut off any exit route that anyone had to leave the city of New Orleans under these very trying times to get, you know, to a better place.

Prior to that, we had gotten reports that there were individuals that had started the process of trying to leave the city of New Orleans for a better place. And then they were met at the Gretna Parish line, with attack dogs and shotguns and who knows what.

BLITZER: All right. We're going to break away from the Mayor Ray Nagin in Baton Rouge. Mayor Ray Nagin of New Orleans, testifying or speaking to legislators in the state capitol. We'll monitor what he's saying, bring you any important news, of course, as it becomes available.

We're also standing by. We understand that the former House majority leader, Tom DeLay, indicted today -- he stepped down as majority leader, although he remains a member of the House of Representatives, has been meet with Republican leaders in the House of Representatives. We expect him to be making a statement to reporters very soon. We'll bring that to you as soon as we get it.

We're also following other stories here in THE SITUATION ROOM, including steroids and baseball. Hall of Famers telling a Senate panel today they want tougher penalties for today's athletes. Will the players and owners go along?

And squeamish about squid? How about giant squid? There's a 29- foot long squid with eyes 10 inches in diameter. Is that big enough? We'll have the first ever pictures. That's coming up as well.

(COMMERCIAL BREAK)

BLITZER: Our Zain Verjee is joining us once again from the CNN Center in Atlanta, with another close look at some other stories making news. Zain?

VERJEE: Wolf, in Connecticut, an investigation is under way in a fatal collision between an Amtrak Acela train and a car. The driver of the car and a child passenger were killed. Another child survived but is in critical condition. The accident happened this morning in Waterford, Connecticut. None of the 130 passengers was injured.

Lawmakers say they'll act on pro athletes using steroids if the league can't or won't police themselves. The Senate Commerce Committee, headed by Arizona's John McCain, pushed Major League Baseball for a specific timeline as to when a much harsher drug policy would be put in place. Baseball Union Chief Donald Fehr says such a plan could be enacted within the next couple of weeks.

Now, fans of science fiction or calamari should love this, Wolf. Japanese scientists have captured the first ever pictures of the legendary giant squid, the world's largest invertebrate. This one was photographed 3,000 feet off Japan and had nearly 20-foot tentacles. These pictures were shot in September of last year, but weren't actually announced until this week.

Wolf.

BLITZER: How did they find this squid, Zain?

VERJEE: You know, the Japanese scientists were basically following whales that they know like to hunt this squid. So that's essentially how they found it. But they also learned a lot of really interesting information. Initially, they had thought the giant squid, for example, was quite sluggish. But it turned out that this one was extremely active and it put its tentacles around its prey, much like the way snakes get their prey.

And the other really interesting thing, too, was that they've pictured the squid -- they got it on camera escaping, because it got tangled up in some hooks. And it left a tentacle behind that was still alive when they stuck their fingers in. And this is actually the tentacle.

Wolf.

BLITZER: All right...

VERJEE: I'm getting hungry.

BLITZER: You like squid. All right. Thank you...

VERJEE: Does Jack?

BLITZER: Very much. Let's ask Jack. Jack, you like squid?

CAFFERTY: Yes. Why would they keep the pictures secret?

VERJEE: Don't know. Don't know why they would keep it a secret. But they were probably...

CAFFERTY: We have a picture of a giant squid...

VERJEE: ... they were testing it.

CAFFERTY: ... but we're not going to show anybody? I mean, what is that?

VERJEE: They were testing it out for the past few months, sticking their fingers in and deciding, you know...

CAFFERTY: Yes, OK, Zain, yes, fine.

VERJEE: ... what it does and how it does it. CAFFERTY: All right, that's enough, Zain. Sticking their fingers in. I don't want to hear any more about that.

VERJEE: Getting...

CAFFERTY: Has Tom DeLay resigned yet?

BLITZER: Has not resigned yet.

CAFFERTY: He's not resigning. All right. You know, the president is not having a very good run-in here. Karl Rove's been implicated in the outing of that CIA guy. You got Bill Frist being looked at because of a stock thing. You got that Michael Brown, that loser that fell on his face running FEMA in the wake of Katrina. And now you've got Tom DeLay being indicted. This is not a good run of luck for the president.

In light of today's indictment, the question this hour is, should Tom DeLay resign from Congress?

David in Alexandria, Virginia: "Tom DeLay should resign if the indictment proceedings will prevent him from properly carrying out his duties to represent his constituents in Congress. That would be the proper thing to do. Representing his district is why he's paid to be there."

Jerry in Arlington, Texas: "Grand juries rarely bring indictments unless there's ample evidence of a crime. Since DeLay will almost certainly be convicted, I don't think he should resign. I'm looking forward to watching him being dragged kicking and screaming from the Capitol building in handcuffs."

Mike in Waterford, California: "Tom DeLay should not resign from Congress unless and until he's convicted for violating Texas laws. What's happened to presumed innocence?"

Shirley in Green Valley, Arizona, writes: "Yes, he should resign, but the way things go in Washington, D.C., I'll be a size five first."

And Otis in Stockbridge, Georgia: "Certainly not. He should be allowed to stay on as a consultant. You know, figure out how he got caught."

BLITZER: Otis in Stockbridge, Georgia, has got a sense of humor. Thanks, Jack. We'll get back to you soon.

CAFFERTY: Well.

BLITZER: Coming up in THE SITUATION ROOM, Tom DeLay's legal problems and options. We'll have more on the unfolding legal drama surrounding the house majority leader.

And Mississippi Governor Haley Barbour answered questions during a Senate hearing earlier today on Hurricane Katrina. Coming up, he'll answer our questions. Governor Barbour is standing by to join us live in THE SITUATION ROOM. (COMMERCIAL BREAK)

BLITZER: We're standing by to hear from Tom DeLay, the House majority leader. He announced earlier he's going to step down as majority leader, after being indicted by a grand jury in his home state of Texas. He stays on in the House of Representatives. He's meeting right now with Republican leaders in the House. He'll speak with reporters, we're told, shortly. We'll bring that to you as soon as we get it.

It's almost time, though, now for the markets to close. The closing bell. Let's check in with our Ali Velshi in New York. He's got details. Ali?

VELSHI: Hey, Wolf, do you remember just before -- on the Friday before Hurricane Katrina hit, we were on that rig in the Gulf of Mexico?

BLITZER: I remember it, yes.

VELSHI: Do you remember thinking you were blown away by that report, by that coverage?

BLITZER: I remember you had to get off in a hurry because you were worried you could get stuck there.

VELSHI: That's the rig you're looking at right now. It has been blown away, too, found over 100 miles from where it is supposed to be and where we were on it. It is one of several rigs that have been dislocated. I want to give you some sense...

BLITZER: This was dislocated by Rita, not Katrina?

VELSHI: By Rita. Rita did a lot more damage than Katrina did.

Now, this is when we were on that rig. I want to give you some sense of how these things are tied down. I mentioned yesterday, these are the chains. Now, you may not get a full perspective of that, unless there's a person in that thing, but they're about the size of my body, the width of that chain. Two miles of that go out at nine different points. So nine times two miles of that chain is what holds a rig like that down. It's missing, 120 miles away.

There are at least six rigs -- at least six rigs -- that are not accounted for, no one can find. There are several more that are badly damaged. So we've got some damage right now. At this moment, 100 percent of all oil production in the Gulf of Mexico is offline. It is still not back. Four -- eight refineries still remain shut. Three million barrels of oil is not being refined.

And it is -- we are starting to see that. Now, oil has traded a little bit higher today, $1.28 higher, to $66.35. We continue to watch the effect of the damage to the oil infrastructure, both offshore and the refineries.

Wolf. BLITZER: What about the whole nature of the price, though, as far as oil is concerned right now? What are we seeing?

VELSHI: We're seeing two things. We're seeing the effects of the refineries being offline. We're paying more for gas than we would otherwise be paying. We're also seeing the fact that -- you know, we had one report that because of all these rigs that are being -- that are damaged, it's actually going to be a problem to ship these around the world and get them drilling for oil elsewhere. So part of the issue is this is going to affect the ability to get oil out of the water in other parts of the world.

Markets are closing right now, 20 points higher on the Dow Jones, 10,476 is the number. The NASDAQ is closing flat. It's absolutely flat, 2,116 points right now. As always, those are preliminary numbers.

Wolf.

BLITZER: Thanks very, much, Ali. We'll get back to you.

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