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THE SITUATION ROOM

Port Deal Surprise; Bush: Karachi Bombing Won't Stop Visit to Pakistan; Americans Give President Bush Some New Numbers

Aired March 2, 2006 - 16:59   ET

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


WOLF BLITZER, CNN ANCHOR: It's 5:00 p.m. here in Washington, and you're in THE SITUATION ROOM, where news and information from around the world arrive at one place at the same time.
Happen now, a CNN exclusive on a port deal surprise. Israel's largest shipping company supports the Dubai port deal. The chairman of ZIM Integrated says security is of the utmost importance. Now he's letting key lawmakers who oppose the deal know exactly where he stands.

President Bush is not backing down. The president says today's terror attack in Pakistan that killed four people, including an American diplomat will not stop him from visiting this week. Right now the president is in India, where he announced a landmark nuclear agreement.

And he says it will be the biggest stage he's ever played on. That would be Jon Stewart, and he's getting ready to host the Oscars. How will his off-color humor play in Hollywood and to tens of millions of people watching?

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

Unfolding right now, more scrutiny over the Dubai port deal and a surprising endorsement. On Capitol Hill the chief operating officer of DP World, Edward Bilkey, again testifies before lawmakers. Bilkey strongly defending the deal, saying it will not jeopardize U.S. national security.

Meanwhile, CNN has learned the chairman of Israel's largest shipping line is strongly endorsing the takeover of six major U.S. ports by the state-owned Arab company. In a letter to Democratic Senator Hillary Clinton of New York, Idan Ofer, the chairman of the board of ZIM Integrated Shipping Services, Ltd., says he wants to put his support for the deal on the record.

Ofer says ZIM has been pleaded to have DP World as "our business partner, supporting our operations by providing services at key terminals around the world, including in the United Arab Emirates."

He goes on to say this: ""As an Israeli company, security is of the utmost importance to us, and we require rigorous security measures from terminal operators in every country in which we operate, but especially in Arab countries. And we are very comfortable calling at DP World's Dubai ports." He says, "During our long association with DP World, we have not experienced a single security issue in these ports or in any of the terminals operated by DP World and have received exemplary service that enhances our efficiency and the smooth running of our operations."

After receiving a copy of letter, I called Mr. Ofer in Tel Aviv earlier today. He confirmed its authenticity and explained his motivation in sending the letter to Senator Clinton.

He said he was now planning to write a similar letter to Senator Chuck Schumer, also from New York. He says he's anxious for both senators to know ZIM's longstanding relationship with DP World.

These new developments come among continued scrutiny of the port deal in congressional hearings today. We have correspondents standing by. Our Ed Henry is up on Capitol Hill.

But let's begin in New York with CNN's Mary Snow -- Mary.

MARY SNOW, CNN CORRESPONDENT: Some of that scrutiny of the ports deal in recent days has focused on an Arab boycott of Israel, and that includes Dubai. Now with this latest development of an Israeli company supporting the deal, the question is, will it make a difference to critics of the port takeover?

(BEGIN VIDEOTAPE)

SNOW (voice over): The endorsement from Israeli shipping firm ZIM comes in stark contrast to concerns raised this week about the United Arab Emirates' boycott of Israel. A Dubai government Web site clearly states that "Nationals of Israel may not enter the UAE."

But in a letter obtained exclusively by CNN, ZIM says it does business in the UAE with Dubai Ports World, the Arab company at the center of the ports deal controversy.

ABRAHAM FOXMAN, ANTI-DEFAMATION LEAGUE: I'm delighted that ZIM is an exception to the Dubai boycott of Israel.

SNOW: Abe Foxman is one of the U.S. Jewish leaders to ask the administration to scuttle the DP World deal because of the boycott. He says ZIM's disclosure that it does business with the UAE does not change his opposition.

FOXMAN: Arabs have frequently made exceptions to their boycott provisions when it fits their interests.

SNOW: New York Senator Charles Schumer, who said Wednesday that the boycott of Israel should be a factor to be considered, isn't budging after ZIM's endorsement.

SEN. CHARLES SCHUMER (D), NEW YORK: Well, Israel's shipping firm has to do what's good for their stockholders. We have to do what's good for the security of Americans. So I don't really care what the head of this ZIM line says. SNOW: ZIM's letter was addressed to New York Senator Hillary Rodham Clinton. A spokesman for the senator says, "The letter was received by staff, along with scores of letters on both sides of this issue. In any event, we would prefer to learn about the security impact of this deal through the full 45-day investigation mandated by law."

(END VIDEOTAPE)

SNOW: Anti-Defamation League leader Abe Foxman says that ZIM's letter of support for Dubai Ports World only shows him that this deal has lot of money and interest at stake -- Wolf.

BLITZER: Mary, thank you very much for that.

Let's head up to Capitol Hill right now. Our congressional correspondent, Ed Henry, is getting some reaction to these late developments. Some of these rather surprising -- Ed.

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: That's right, Wolf. In fact, the White House's point man on the port deal was in the hot seat today in the Senate.

(BEGIN VIDEOTAPE)

HENRY (voice over): Robert Kimmitt, the Bush official charged with overseeing the initial approval of the port deal, was grilled about why the president found out so late.

SEN. CHRISTOPHER DODD (D), CONNECTICUT: I'm just curious as to why with this matter coming up, someone didn't raise their hand in the room of the 12 members of this committee and say, "Shouldn't we call the boss on this one?"

HENRY: Kimmitt, number two at the Treasury Department, made a startling admission. He himself was out of the loop.

ROBERT KIMMITT, DEPUTY TREASURY SECRETARY: I, too, learned about this after the fact in February. A staff member brought it to my attention. I got the facts quickly. I told by boss, and I said, "Let's notify the Hill," and I called you very shortly thereafter, Mr. Chairman.

If I had know about this earlier, you would have known about it earlier. That's the process that we have to improve.

HENRY: The Republican chairman of the Senate Banking Panel, Richard Shelby, declared the government approval process for such transactions known as CFIUS is broken.

SEN. RICHARD SHELBY (R), BANKING CHAIRMAN: We have long-held concerns that the process favors open investment policy over legitimate national security interests.

HENRY: Another Republican challenged Bush administration claims the United Arab Emirates a friend of America. SEN. JIM BUNNING (R), KENTUCKY: The UAE was one of the three countries to recognize the Taliban in Afghanistan prior to September the 11th. There are reports of censorship by their government. And the parent company of Dubai Ports World may participate in the Arab boycott of Israel. We should know if the UAE's friendship with the United States is sincere or if it's just good for business.

(END VIDEOTAPE)

HENRY: Even more trouble for the White House from a powerful House Republican, Armed Services Committee chairman Duncan Hunter, who just a few moments ago ripped this port deal. He charged that nuclear components have been shipped through the UAE. He vowed to kill this deal at all costs -- Wolf.

BLITZER: Ed Henry reporting for us.

Thanks very much.

We're going to be speaking to Duncan Hunter here this hour in THE SITUATION ROOM.

So what do Americans think about the port controversy? A new CNN-"USA Today"-Gallup poll just out finds 17 percent of those asked favor the sale of cargo operations to the Arab company DP World, 66 percent oppose it. And when asked about the impact on U.S. security, 39 percent called it a major threat, 36 percent said it was a minor threat.

Stay tuned to CNN day and night for the most reliable news about your security.

President Bush says a terrorist attack near the U.S. Consulate in Karachi, Pakistan, won't derail his plans to visit that country Saturday. Four people died in the two explosions, including an American diplomat.

Mr. Bush is in India, which is announcing a landmark deal on its nuclear programs.

Our White House Correspondent Elaine Quijano is traveling with the president -- Elaine.

(BEGIN VIDEOTAPE)

ELAINE QUIJANO, CNN WHITE HOUSE CORRESPONDENT: President Bush is moving ahead with a planned visit to Pakistan, and White House officials now say that Mr. Bush will be overnighting there. That is a detail that officials did not release earlier. Officials citing security concerns as the reasons why they were so purposely vague about the president's trip to Pakistan.

Now, the president says that despite the bombing there, he will not be deterred from visiting that country.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: It's important to talk with President Musharraf about continuing our fight against terrorists. After all, he has had a direct stake in this fight four times the terrorists have tried to kill him.

QUIJANO: So President Bush trying to ensure that Pakistan remains a strong ally in the war on terrorism.

In the meantime, here in India, President Bush and the Indian prime minister announced a deal on civilian nuclear energy. Now, under this deal, the United States would share nuclear know-how and fuel with India, but critics say that this is something that rewards bad behavior, essentially.

That bad behavior, for a long time India has said it will not sign on to the nuclear nonproliferation treaty. Nevertheless, the Bush administration believes the deal is progress. The administration saying that it will bring India closer to where other countries are on the issue of nonproliferation.

At the same time, officials also saying that Americans can benefit from this deal. They believe that it will in fact relieve some of the global demand for oil and perhaps have an impact on some of those high energy prices that Americans have been facing.

Elaine Quijano, CNN, New Delhi, India.

(END VIDEOTAPE)

BLITZER: Elaine Quijano reporting for us from India.

Thank you, Elaine, very much.

More now on our top story, the surprising word that an Israeli shipping line now supports this deal to hand over operations at six major U.S. ports to a Dubai-based company. Only a few moments ago, the chief operating officer of Dubai Ports World, during testimony before the House Armed Services Committee, said that the chairman of board of ZIM, the Israeli shipping line, has written a letter to his boss, the CEO, explaining his support, in addition to this letter he wrote to Senator Clinton, which we reported on earlier.

Listen to Ted Bilkey.

(BEGIN VIDEO CLIP)

EDWARD BILKEY, COO, DUBAI PORTS WORLD: This is a letter to my CEO, Sharaf. And it's from Idan Ofer, who's the chairman of the board of ZIM lines. It's the largest Israeli shipping company.

"I wanted to take a moment to express my complete dismay at the way your fine organization is being pilloried in the United States. As you well know, ZIM Israel considers DP World to be one of our closest global allies."

And I'm going to skip the middle of it. It says where they operate with facilities and we handle -- they're one of our large customers in many parts of the globe. "I sincerely hope this unnecessary political storm will cease so we can all focus on the business of providing the world safe and efficient shipping services. We truly look forward to working with you in the U.S., where I know we will enjoy the same great relationship we have in the rest of the world. Until then, I would like to extend an offer to help you and DP World any way we can."

"Sincerely, Idan Ofer."

(END VIDEO CLIP)

BLITZER: And earlier today, when I spoke with Mr. Ofer in Tel Aviv, he said the idea for his writing a letter to Senator Clinton and Senator Schumer in support of this deal came when he offered to help in any way he can during his conversation with Mohammed Sharaf, the CEO of Dubai Ports World.

Let's bring in Jack Cafferty right now.

Jack, what do you make of this, I thought, rather surprising development that this large Israeli shipping company, a privately owned company, really is going out and strongly endorsing this deal?

JACK CAFFERTY, CNN ANCHOR: How many Israeli ports do they operate?

BLITZER: They operate at Haifa and Ashkelon, Eilat. They've got three major ports in Israel.

CAFFERTY: The guy you just had on was referring to this as a political disagreement in this country. It's a debate over national security.

And what does it mean that an Israeli company is doing business with Dubai Ports World? It doesn't mean anything, nothing. At least not here.

This ain't Israel. Terrorists didn't attack the World Trade Center in Israel. They attacked here. And some of them came from United Arab Emirates, which owns Dubai Ports World.

This deal was done virtually in secret. The law mandating a 45- day review was ignored. The president said he didn't know anything about it. Of course, he said no one had any idea the levees wouldn't hold in New Orleans, too.

Why take a chance? Our ports in this country are an open invitation to troublemakers. Most of the stuff coming in isn't even looked at. It could be anything.

And yet, there are people insisting we should allow this country to do this. But fortunately, there aren't a whole lot of them.

An overwhelming majority of Americans don't want it, think it's dumb idea. Even members of President Bush's own party, some of them, think he's gone completely around the bend on this. And with all due respect, it's nobody's business but the United States. Not Israel's, not the United Arab Emirates. Not anybody's. This is our security we're talking about.

The question is this: Does it change your mind if an Israeli company supports the ports deal?

E-mail us at CaffertyFile@CNN.com, or go to CNN.com/CaffertyFile.

I wonder how receptive Israel would be to, say, China telling them what they ought to do about their internal security in Israel. This is nobody's business but the United States. They ought to butt out and worry about what goes on over there

BLITZER: All right. Jack Cafferty speaking his mind, as he always does.

Jack, thank you very much.

Up ahead, is the port controversy taking a toll on the president's popularity? We're going to show you the latest poll numbers. That's coming up

Also, he promise the most controversial Academy Awards ever. So what does the host, Jon Stewart, have planned? Our senior political analyst, Bill Schneider, on the politics of Oscar.

And coming up in our 7:00 p.m. Eastern hour here in THE SITUATION ROOM, the former FEMA director, Michael Brown, on those Katrina tapes and more. Do they show the administration underestimated the storm? Michael Brown joins us live in THE SITUATION ROOM, 7:00 p.m. Eastern

(COMMERCIAL BREAK)

BLITZER: As we reported moments ago, President Bush is now in India, hailing a landmark nuclear agreement with that country. But on the home front, Americans are giving the 43rd president some new numbers.

A CNN-"USA Today"-Gallup poll shows just 38 percent of the country approves of how the president is handling his job, 60 percent disapprove.

For more, let's turn to our White House correspondent, Dana Bash -- Dana.

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, while the president is in South Asia, top officials are still back home here, struggling to turn the tide of public opinion back, the one that is very much against them, of course, on allowing a Dubai company to operate U.S. port terminals. And it seems that that port controversy is now eating away at the president's number one asset, and that is fighting terrorism.

The new CNN-"USA Today"-Gallup poll shows only 47 percent of Americans now approve of how the president is handling terrorism. That is his lowest number ever a seven-point drop since just last month.

Now, if you ask the White House what they think their consistent and defining problem is, that has been and still is, Wolf, Iraq. So this number pretty much landed with a thud at 1600 Pennsylvania Avenue today.

Seventy-three percent of Americans say they think there will be civil war in Iraq over the next year.

Now, a senior Bush aide said they understand that that is a big problem, one they can't do much about, when the sectarian violence got so out of control as it was last week. But in talking to White House aides, Republican strategists, they say that the bottom line is, people just continue to feel bad about the way things are going, and they're very angry at Washington, and that's reflected in these poll numbers -- Wolf.

BLITZER: Dana, what about Americans' confidence in the president's management style?

BASH: That is really one of the most stunning figures in this poll. And the most disheartening for the White House.

George W. Bush prides himself on being the first MBA president. But this poll shows 59 percent of Americans, nearly 6 in 10, do not think that this president can manage the government effectively. And nearly as many say that he's not paying attention to what his administration is doing.

Now, chalk that up to Katrina, perhaps the controversy surrounding the vice president's hunting accident and how that was managed. As much as they say at the White House, Wolf, that they are not governed by polls, one senior aide looked at that management number and said, "Not good."

BLITZER: Dana, thanks very much.

Dana Bash reporting.

President Bush is hardly alone when it comes to a difficult second term in the White House. In fact, our CNN senior political analyst, Jeff Greenfield, finds Mr. Bush is in pretty good company -- Jeff.

JEFF GREENFIELD, CNN SR. ANALYST: Wolf, it is the most popular tune among political pundits these days, those old second-term blues. President Bush's low job approval ratings, troubling news from Iraq, friction within his own party, and just plain dumb luck -- duck hunting, anyone -- has sent us scurrying to the history books to chart the troubled course of second terms.

Well, it's true, but there's a "but."

(BEGIN VIDEOTAPE)

GREENFIELD (voice over): Yes, FDR, after his landslide reelection in '36, tried to pack the Supreme Court and lost a lot of congressional clout. Eisenhower had a bad recession, a White House staff scandal and huge midterm congressional losses.

Lyndon Johnson had Vietnam, racial and generational upheaval.

LYNDON B. JOHNSON, FMR. PRESIDENT OF THE UNITED STATES: I shall not...

GREENFIELD: A country so unhappy that he didn't even seek reelection.

Richard Nixon, well, you remember Watergate. He resigned under the threat of impeachment.

RICHARD M. NIXON, FMR. PRESIDENT OF THE UNITED STATES: Au revoir.

GREENFIELD: Ronald Reagan had Iran-Contra...

OLIVER NORTH, FMR. MARINE: Covert operations...

GREENFIELD: ... and plummeting popularity.

WILLIAM J. CLINTON, FMR. PRESIDENT OF THE UNITED STATES: I did not...

GREENFIELD: Bill Clinton had an intern and actually was impeached, although not convicted.

So, what's the "but"? Well, some presidents recover from second- term blues. FDR won a third and a fourth term. Reagan presided over the ending of the Cold War.

Bill Clinton, buoyed by a strong economy, left office with high job approval ratings, if not personal approval ratings. He might even have won a third term if he had been allowed to run again.

(END VIDEOTAPE)

GREENFIELD: One other note. Many of the troubles that afflicted second-term presidents, Vietnam, Watergate, Monica Lewinsky, actually began in those presidents' first terms. Who knows what scandals might have troubled those other presidents who never got a second term -- Wolf.

BLITZER: Jeff Greenfield.

Thank you very much

Coming up here in THE SITUATION ROOM, he's the only survivor of that West Virginia mine disaster. Now doctors offer a critical update on Randy McCloy's condition.

Plus, a major media company raided in the middle of the night by police commandos. We're going to show you what's going on.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Zain Verjee once again joining us from the CNN Center with a closer look at other stories making news -- Zain.

ZAIN VERJEE, CNN ANCHOR: Wolf, a federal judge is questioning the government over its defense in a detainee torture case. A suit brought by a prisoner at the Guantanamo Bay detention facility alleges that he was repeatedly strapped to a chair and painfully force-fed through a large tube inserted into his throat.

The judge in the case reacted skeptically today to affidavits presented by the Justice Department refuting those claims. She gave both sides 10 days to go and get more evidence

One person's dead and three are in the hospital after a truck crash on a suburban Washington highway overpass just rained debris down on to cars below. A tractor-trailer carrying lumber overturned on an elevated highway ramp during the morning rush hour. Police say that some of the cargo went over the barrier, causing a chain reaction crash on the highway below. The driver of the truck, though, was not seriously hurt.

The wife of the sole survivor of Sago Mine tragedy says details of the accident are slowly coming back to him. Randy McCloy spent 42 hours underground before he was rescued. He's now being treated for severe carbon monoxide poisoning. But his doctors say his recovery is well ahead of schedule -- Wolf.

BLITZER: Zain, thank you very much.

In the aftermath of two dozen miner fatalities, federal mine safety officials faced some tough questioning today from a Senate committee. At issue, why thousands of fines for unsafe mining practices remain uncollected.

Investigating the issue online, our Internet reporter, Jacki Schechner -- Jacki.

JACKI SCHECHNER, CNN INTERNET REPORTER: Wolf, a long list of expert witnesses on tap today for the Senate hearings. And one of the things that the Mind Safety and Health Administration and legislators like Senator Arlen Specter agree on is that fines are too low and too many of them remain uncollected.

Let's take a look, for example, at the Sago Mine, now 278 violations dating back to 2004, and many of them from July 2005 uncollected. And these are pretty serious violations.

If you take a closer look, like this one here for $60, if you dig in deeper, this is for not protecting against a possible roof or wall collapse. It's a pretty serious thing.

Now, fines that go uncollected if they're delinquent for 180 days are supposed to be referred to the Department of the Treasury. When we spoke to MSHA today and they said they have a backlog, Wolf, to 2003, that is some 8,000 cases and could mean tens of thousands of uncollected fines.

BLITZER: MSHA, Mine Safety Health Administration. Who would have thought?

Thanks very much, Jacki, for that.

Coming up, officially, Arab countries still have in place an economic boycott of Israel. But unofficially, Israeli goods are found throughout the Arab world. Coming up, we're going to explain how that's possible.

And in our 7:00 Eastern hour, one on one with the former FEMA director, Michael Brown, fired from his post in the days after Hurricane Katrina. Brown recently said he feels abandoned. I'm going to ask Brown about that and try to clear up some other questions that are still not clear to so many people.

Stay with us.

(COMMERCIAL BREAK)

BLITZER: More now on our top story -- Israel's largest shipping company strongly backing the deal that would Dubai Ports World in charge of six U.S. terminals.

The endorsement comes in a letter obtained exclusively by CNN to Senator Hillary Rodham Clinton, who strongly opposes the deal. The relationship between the two companies underscores the fact that the decades-old Arab economic boycott of Israel is now, in many parts of the Arab world, largely symbolic.

CNN's Guy Raz is in Jerusalem with more -- Guy?

GUY RAZ, CNN CORRESPONDENT: Wolf, it's hardly possible to talk about an enforced Arab boycott against Israel anymore.

Now, while some Arab states do pay lip service to the idea of a boycott, Israeli-made products and technology are widely available throughout the Arab world.

Now, it's rare to find Israeli-made countries overtly identified as such. And, in fact, in many Arab countries, Israeli-made products are simply relabeled. So, while its origin might be Israel, the packaging might suggest it comes from Greece or Turkey, for example.

It's all part of an unspoken understanding, a wink-wink, something that has been going on behind the scenes for years.

(BEGIN VIDEOTAPE)

RAZ (voice-over): This handshake cracked the hitherto united Arab front against Israel.

Nineteen seventy-nine: Israel's Menachem Begin and Egypt's Anwar Sadat signed a peace deal. The three-decades-long Arab economic boycott of Israel on companies that did business with Israel would start to unravel. By 1993, when Israel struck a deal with a Palestinian liberation organization, the boycott was coming to an end, at least unofficially.

The high-tech boom of 1990s meant that approximately one out of three Intel computer chips were being manufactured in Israel, computer chips that, inevitably, would end up in computers sent to Arab states.

Even Israeli agricultural products were ending up on the shelves of Arab markets, often unbeknownst to the customer. Israel's Port of Haifa is one of the most technologically advanced in the region. But, still, few Arab-owned ships are willing to dock here. And, usually, the ships sailing from here to the Arab fly non-Israeli flags.

(END VIDEOTAPE)

RAZ: But, Wolf, while the economic boycott is almost nonexistent, the diplomatic boycott persists.

Israelis are not allowed to enter most Arab countries using their Israeli passports, even to countries that have trade ties with Israel. But this, too, is starting to crack. For a long time, anyone with an Israeli stamp on their passport simply couldn't enter an Arab country. Nowadays, most passport officials in Arab states simply ignore the Israeli stamp -- Wolf.

BLITZER: Guy Raz reporting for us -- Guy, thank you very much.

And let's get some more now on that controversial port deal. We're joined by James Zogby of Arab American Institute, and also joined on Capitol Hill by Conflict Republican Congressman Duncan Hunter. He's the chairman of the House Armed Services Committee.

You had hearings on this whole subject today. You basically are so strongly opposed to this Dubai ports deal, Mr. Chairman. Tell our viewers why.

REP. DUNCAN HUNTER (R), CALIFORNIA: Well, Wolf, the last facts that came out were these.

In -- in 2003, Dubai allowed a shipment of 66 high-speed triggers that are ideally suited for nuclear weapon detonations. The United States tried to stop the sale -- or the transshipment through the Dubai ports. We asked the UAE not to do it. They said, we are going to do it anyway.

They transferred those triggers to a Pakistani businessman with a close relationship with the Pakistan military. They similarly have allowed shipments of heavy water -- that's the material that you use to ultimately build a nuclear weapon -- coming from Russia and China, through Dubai, into India.

The point is -- and they have also allowed the precursors to nerve gas to be shipped through Iran. And, thankfully, we stopped that deal, because we found out about it. We made a string operation and stopped it.

The point is, Dubai cannot be trusted. They are the people who will sell or allow a transshipment of anything to anybody. And those people shouldn't be in charge of our ports.

BLITZER: Jim Zogby, you were just there in Dubai. You strongly support this deal. But those are powerful arguments you just heard from the chairman of the House Armed Services Committee.

JAMES ZOGBY, PRESIDENT, ARAB AMERICAN INSTITUTE: Well, we will have to look into those. I think that the White House has, in fact, looked into much of this.

And most of the arguments that have been made in the past simply haven't held any water, heavy or light or any other kind of water. The reality is, is that Dubai and the government of the UAE are an ally. They have worked with our intelligence community.

We have U.S. Customs officials on the ground. And many of the stories that have come up before have turned out, as I said, to be -- to be false, or simply to be stories that were characterized in one way, but actually should be understood in another way, like, for example, the A.Q. Khan story.

For example, Dubai helped us track those shipments to Libya. What ultimately Libya to the negotiating table to surrender their nuclear weapons components was the intelligence provided by the UAE government, because they were involved in that transshipment that allowed our...

BLITZER: All right.

ZOGBY: ... intelligence officials to understand it.

So, we sometimes don't credit the friend with actually doing something that served our interests, as in this instance, or in the case of, for example, what is used, the -- the argument that they had relations with the Taliban. They provided valuable intelligence with that relationship.

BLITZER: Mr. Chairman...

HUNTER: Wolf -- Wolf, nobody argues...

BLITZER: Mr. Chairman, go ahead.

HUNTER: Nobody argues that, sometimes, the UAE accommodates the United States.

The problem is, sometimes, they accommodate our enemies. And we can't -- we can't risk operation of American ports based on which way they decide to go on a given day. And I will just tell you that the information coming from Gary Milholland, who is probably the world's expert on technology transfer, with respect to the 66 high-speed triggers used for nuclear detonations, and the fact that the American government tried to stop that, and asked the UAE not to allow the transshipment.

It took place anyway. The heavy water incident, the precursor to nerve gas -- the facts are that, if you want to ship something somewhere in the world, where you don't want the recipient to be known and you don't want the sender to be known, you ship it through Dubai. And that's how they make a lot of money.

BLITZER: Jim Zogby, the poll that we released today, the CNN/"USA Today"/Gallup poll, asked, what was the main reason for the controversy over the port sale? Sixty-nine percent said it's not in best interests of the United States, pure and simple. Twenty-two percent said it was discrimination against Arabs.

You understand this strong, powerful opposition. You got a guy like Duncan Hunter, who is a good Republican. He's the chairman of the House Armed Services Committee, very loyal to this president and vice president, secretary of defense. When he's willing to stand up and say, this deal is no good, he must be convinced, I assume.

ZOGBY: Well, look, I -- I think that there are those on the other side who are convinced as well. Tommy Franks says it ought to go through; they're good allies, and they have been valuable allies. Tom Ridge says the same.

These are people whose -- whose reputations, I think, have been proven on the front lines. And I -- I'm going to go with them on this one. I'm going to go with what I know of the UAE and how it has dealt with our country and how it has dealt with our intelligence community and the services that it has provided. They have stuck their neck out on the line for us. They're not fair-weather friends, as the congressman likes to describe them.

And, look, I understand. The congressman has a -- an important role to play. And he has served our country well. But the UAE has been a valuable ally. They fight with us on the lines, the front lines, in Afghanistan. They have been with us in Somalia. They have been with us in -- in Bosnia.

And -- and they are also...

BLITZER: All right.

ZOGBY: ... serving our -- our foreign forces overseas in -- in -- in Iraq. It's the base of much of our naval operations coming in the Persian Gulf. I don't think we would be involved with them to the level that we are if they were fair-weather friends, as they're currently being described.

BLITZER: Mr. Chairman, does it make any difference to you that the chairman of this large Israeli shipping line, ZIM, now writes to Hillary Clinton, and, in a conversation he had with me earlier today, that he thinks that Dubai Ports World has an excellent track record on security?

HUNTER: Well -- well, speaking of the -- of the Clinton position on this, we just -- I just left the hearing. And Mr. Bilkey, who is head of the Dubai Ports corporation, which is owned, as you know by Dubai, by the emir of Dubai, said that President Clinton talked to him within the last week, and gave him recommendations.

One of recommendations was to hire one of President's Clinton former people. So, I don't know where the -- where Senator Clinton is. But I think it's clear that President Clinton supports this particular deal.

And with respect to -- to the Israeli position on this, there's one position that we should listen to, Wolf, and that is the position of American security interests. And it -- and even if you have a sometime-ally who accommodates you in some military operations -- and I'm sure some of our leaders have seen this -- if they also accommodate the other side, and they do that at the wrong time, it is going to be a disaster for America.

We ought -- and, you know, the other question, Wolf, why can't Americans operate these ports? They're -- they're certainly capable and competent.

ZOGBY: But -- but, Congressman, it's your hero, Ronald Reagan, who began the process of privatizing our ports in the first place.

If we are going to now change in mid-course because an Arab country is involved, I find that discriminatory.

HUNTER: Private...

(CROSSTALK)

ZOGBY: The fact is, is that our ports are owned by people all over the place.

(CROSSTALK)

ZOGBY: I don't think, at this point, we can undo this process.

And I think the point here is that security is in hands of American officials.

BLITZER: All right.

ZOGBY: ... not in the hands of...

(CROSSTALK)

HUNTER: No discrimination. This is one...

ZOGBY: Not in the hands of...

HUNTER: This is one Scot-Irish guy that says let's not have the Scots or the Irish or the British do it.

(CROSSTALK) HUNTER: Let's have Americans run...

ZOGBY: It's...

HUNTER: ... American ports.

BLITZER: All right, guys...

(CROSSTALK)

ZOGBY: Security is not going to be hands of Dubai. It's going to be in the hands of Customs and the Coast Guard. That's the key issue here.

HUNTER: And the owner has something to say about that. That's the emir.

BLITZER: All right.

Jim Zogby and Duncan Hunter...

(CROSSTALK)

BLITZER: ... a good debate.

HUNTER: Thanks, Wolf.

BLITZER: Thanks to both of you for joining us.

ZOGBY: Thank you.

BLITZER: Let's get some more now.

Lou Dobbs standing by to bring us what is coming up right at the top of the hour on his program -- Lou.

LOU DOBBS, HOST, "LOU DOBBS TONIGHT": Wolf, thank you.

Coming up at 6:00, we will have full coverage of the outrage that is building over Dubai's efforts to buy U.S. port operations and other strategic U.S. assets. The investigation is now broadening. We will be reporting on another Dubai deal, this one an effort to buy a company that makes vital components for the U.S. military. And is Dubai a center for global business or radical Islamist terrorism and illegal weapons sales? We will have that special report as well.

And my guests tonight include two leading critics of this deal, Senator Robert Menendez and House Homeland Security Chairman Congressman Pete King. And I will be talking with three leading political analysts about the president's plummeting poll numbers -- all of that, and a great deal more, coming up at 6:00.

Please join us -- back to you, Wolf.

BLITZER: Thanks very much, Lou. Sounds like a good lineup, as usual. Still to come, Jack Cafferty has your e-mail on the ports deal.

And, in our 7:00 p.m. Eastern hour, one-on-one with Michael Brown. The former FEMA director joins us live. We will talk about Hurricane Katrina and the aftermath.

(COMMERCIAL BREAK)

BLITZER: Starting today, you can get your hands on some new $10 bills.

Besides a splash of color, the new Hamilton is chock full of security features.

Let's get the bottom line on the new bill from our Internet reporter, Jacki Schechner -- Jacki.

SCHECHNER: Well, Wolf, the $20 and the $50 have already gotten a makeover. Now it's the $10's turn for the face-lift.

You can see the enhanced security features. For example, there's a security thread that runs vertically down the front of the $10 bill. You can also see, there's a watermark here that you can see when you hold it up to the light. And, also, the 10 down here in the corner will change colors if you shift it back and forth.

What is really neat, if you go to moneyfactory.gov, they have an interactive feature, which will show you some of the other features that are on this bill. For example, there is a shifting color. You can see, as it moves across, there's new orange, yellow, and red colors there.

There are symbols of freedom. You will see those light up there, the torch from the Statue of Liberty, the enhanced portrait of Hamilton -- you can actually call that a face-lift. And, then, this is going to be tough to see, but there are small little yellow $10s that will pop up, like little popcorn there are on each side of the bill.

Now, what you can do is go online to moneyfactory.gov and check this out yourself. Or you can try and get your hands on a new $10 bill -- Wolf.

BLITZER: Jacki, thank you very much.

Up ahead, a political punch at the Academy Awards. We are going to show you what host Jon Stewart says he has planned for Hollywood's big night.

And does it change your mind if an Israeli company supports the ports deal? It's our question of the hour. Jack Cafferty is standing by with your e-mail.

(COMMERCIAL BREAK)

BLITZER: But they -- might they make an odd couple? One's an edgy comedian who pulls no punches when it comes to political jokes. The other is a sober ceremony that usually likes to focus in on the films, even if those films make political statements.

Let's get some more now from our CNN senior political analyst, Bill Schneider. He's joining us from L.A. -- Bill?

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: I'm on the red carpet, Wolf.

In fact, here's piece of the red carpet. My producer, Matt Hoy (ph), got it. I don't ask too many questions.

But with Jon Stewart as host this year, you can bet the Academy Awards are going to make a political statement, but what kind of statement?

(BEGIN VIDEOTAPE)

(BEGIN VIDEO CLIP, "LARRY KING LIVE")

JON STEWART, HOST, "THE DAILY SHOW": It's going to be most controversial Oscars ever. I would not be surprised if the whole country tunes in.

(END VIDEO CLIP)

SCHNEIDER (voice-over): Jon Stewart is expected to reach out to a whole new audience, younger, edgier.

MARTY KAPLAN, DIRECTOR, THE NORMAN LEAR CENTER: It also connects with the spirit of the times, which is wiseacre.

SCHNEIDER: For example:

(BEGIN VIDEO CLIP, "LARRY KING LIVE")

STEWART: This vice president thought a 78-year-old man was a bird.

(LAUGHTER)

STEWART: It happens.

(END VIDEO CLIP)

SCHNEIDER: You can expect Stewart to be pretty tough on the Bush administration.

(BEGIN VIDEO CLIP, "LARRY KING LIVE")

STEWART: I keep wondering what it takes to get fired from this administration. It seems like, literally, the worse you do, the bigger the medal you get.

(END VIDEO CLIP)

SCHNEIDER: But how risky is that these days?

KAPLAN: I don't think being anti-Bush is any different than believing what 70 percent of the country happens to believe now. So, if anything, it's an extremely safe choice.

SCHNEIDER: Stewart's message is not just liberal. It's anti- politics.

(BEGIN VIDEO CLIP, "LARRY KING LIVE")

STEWART: What seems absurd to me is the length that Washington just seems out of touch with the desires of Americans to be spoken to as though they are adults.

(END VIDEO CLIP)

SCHNEIDER: And anti-media as well. Remember Stewart's famous appearance on CNN's "CROSSFIRE"?

(BEGIN VIDEO CLIP, "CROSSFIRE")

STEWART: I'm here to confront you, because we need help from the media. And they're hurting us.

(END VIDEO CLIP)

SCHNEIDER: A lot of people feel that way about politics and media. Has Stewart considered running for office?

STEWART: Bill, there are pictures I have of myself in a shoebox that, if they got out, would preclude me from working at the post office.

(LAUGHTER)

SCHNEIDER: Here's how he defines his role.

STEWART: I, hopefully, will stick to what I do best, which is make light of things that accept me.

(LAUGHTER)

STEWART: So...

SCHNEIDER: They upset a lot of people.

(END VIDEOTAPE)

SCHNEIDER: Stewart's message is, you think Hollywood's out of touch with America? How about Washington?

See, the choice of Stewart was actually pretty clever -- Wolf.

BLITZER: Bill Schneider in L.A. -- thanks very much. Enjoy the Oscars.

Up next, Jack Cafferty with your e-mail.

And can airport security be effective and efficient? We are going to show you what the future may hold.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: All this week, CNN has been looking at the future of security. Since 9/11, airports have made many changes. But what's still needed?

CNN's Miles O'Brien has the story.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: There's a tradeoff between being safe and being efficient. What's missing right now is a consistent security system in all airports.

The ideal state for me would be an all-in-one system, whether it puffs you, X-rays you, puts you on a conveyor belt. But you're moving the whole time, because I have nothing to hide. I travel every week. I just want to be as efficient as possible.

As for the future of security, I'm not sure what direction we're headed. I -- I would like to know, where are we heading for -- for my safety?

MILES O'BRIEN, CNN CORRESPONDENT: Garry's wish is shared by many, to feel secure when flying, but not to waste time on inefficient screening systems. So, how close are we to getting the best of both worlds?

(voice-over): The future of airport security is this man's mission, chief technology officer for the Transportation Security Administration, Randy Null.

RANDY NULL, CHIEF TECHNOLOGY OFFICER, TRANSPORTATION SECURITY ADMINISTRATION: Since 9/11, there is a lot more research and development. The explosive-trace portals are the newest deployment that we have had.

O'BRIEN: As passengers walk through these so-called puffer machines, quick bursts of air dislodge and collect tiny particles from the person and test them for explosive materials, all within eight to 10 seconds.

Also in the works, a machine that captures images like these. It's an X-ray device with the power of Superman. The machines may make security types happy, but many passengers may feel violated.

NULL: We need things that will allow us to replace equipment, rather than add equipment. We will actually be doing better things, but doing them less intrusively and faster.

(END VIDEOTAPE)

BLITZER: And stay tuned to CNN day and night for the most reliable news about your security.

Jack Cafferty is back in New York with "The Cafferty File" -- Jack.

CAFFERTY: Wolf, Israel's largest shipping company says it supports this deal that would put an Arab company in charge of six major U.S. port operations.

The question is, does it change your mind, if an Israeli company supports the ports deal?

Jayne in Charleston, South Carolina: "No. Israel, the U.K., and the U.S. have all been suckered into a bait-and-switch deal that leaves us all with a Trojan horse at our doorsteps."

Virg writes: "I can't say I feel much better now that the CEO from ZIM says the Dubai port deal is OK. Aren't most of the problems we face the result of CEOs saying it is OK, you know, health care CEOs, oil industry CEOs, tobacco CEOs, security company CEOs, investment bank CEOs?"

Richard in East Brunswick, New Jersey: "My son and almost 3,000 other fine young men and women have died fighting a war on terrorism, and I don't know what the count of seriously wounded is. It doesn't matter what other country endorses the port takeover. Foreign governments, especially governments that support terrorists, should not be allowed to own businesses in America.

Eugene in Myers Flat, California: "The fact that Israel is comfortable with the Dubai port deal is B.S. Israel owes the administration and is simply paying them back with verbal support. Aren't we at war? After 9/11, it's ludicrous to allow any country to control our ports, period."

Celia in Lawrence, Maryland: "It's no surprise a corporate executive supports global trade. Security is not his area of expertise. I would like to read his letter of support for United Arab Emirates manning security checkpoints at Israel's airports."

And Jon writes: "How nice of Israel to offer up U.S. ports to a known terrorist-supporting, terrorist-funding state. Is the ZIM endorsement the Israeli version of 'Let the U.S. fight the terrorists over there, so we don't have to fight them over here?'" -- Wolf.

BLITZER: It sounds like you had a lot of anti-ZIM at least writers out there, who are not happy with what this chairman of ZIM said.

CAFFERTY: In the thousands.

BLITZER: Really?

CAFFERTY: And -- and 99 percent say, in effect, butt out; it's nobody's business but ours.

BLITZER: Jack, I will you in an hour.

CAFFERTY: Yes.

BLITZER: "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

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