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THE SITUATION ROOM

President Bush Highlights Political Progress in Iraq While Other Problems Persist; Henry Paulson Nominated To Be Treasury Secretary; Search for Jimmy Hoffa's Body is Over; House Hearing Held on Jefferson Case; Americans Getting Mixed Signals From Iraq; Congressman John Murtha Interview

Aired May 30, 2006 - 16:00   ET

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


WOLF BLITZER, CNN ANCHOR: Thanks, Ali. To our viewers you're in THE SITUATION ROOM where new pictures and information are arriving all the time. Standing by, CNN reporters across the United States and around the world to bring you today's top stories.
Happening now, dueling images in a fight for Iraq. It's midnight in Baghdad, the scene of new bloodshed and questions about an alleged massacre by Marines. Over at the White House President Bush is trying to put the spotlight on handshakes and hope.

Also this hour, a new face on the president's economic policy. It's 4:00 p.m. here in Washington where Mr. Bush announced the change at the top of the Treasury Department. Will it matter to Americans with the economic jitters?

Political pomp and circumstance. Possible '08 contenders are very busy on the commencement speech circuit. Is this any way to run for president? I'm Wolf Blitzer and you're in THE SITUATION ROOM.

Another bloody day in Iraq drawing to a close. More than three dozen people are dead in multiple insurgent attacks. The country's new prime minister is vowing to do whatever it takes to try to restore stability. Prime Minister Nuri al-Maliki is promising to launch an investigation into an alleged massacre of Iraqi civilians by United States Marines. He says he's deeply troubled by suggestions that U.S. troops made such a grave, quote, mistake in Haditha last year. The quote is his.

At the White House today President Bush told Iraq's new ambassador to the U.S. that he's impressed by the new leaders in Baghdad. But he also acknowledged difficult times including the mounting death toll for U.S. troops in Iraq. As of today, it's up to 2,470. Let's check in with our White House correspondent, Suzanne Malveaux. She has the latest

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: The Bush administration is certainly hoping that this new permanent Iraqi government can turn things around. They are counting on it essentially to take on the terrorists and the insurgents. It's been some ten days since the installation of that new government and already bloody battles. Already a renewed sense here at the White House the need to be upbeat.

(BEGIN VIDEOTAPE)

MALVEAUX (voice-over): This is the picture on the ground today. At least 38 killed and 97 wounded from insurgent attacks and bombings in Baghdad and beyond.

This is a picture the White House wants Americans to focus on. The Iraq's new ambassador to the U.S. getting credentialed in the Oval Office.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The United States stands ready to help the Iraqi democracy succeed.

MALVEAUX: While Mr. Bush continues to try to call attention to the political progress in Iraq, the Pentagon announced it is now taking even more robust measures to deal with its security, moving some 1500 U.S. troops from neighboring Kuwait to the Anbar province in Iraq. The battle is especially bloody. Today the CBS correspondent, Kimberly Dozier, who was wounded by a roadside bomb attack Monday was moved to a U.S. base in Germany for further treatment.

GEN. BARRY MCCAFFREY, U.S. ARMY (RET): Iraq is abject misery.

MALVEAUX: That's the assessment from a retired four star Army general who just returned from Iraq and was invited to the White House to give Mr. Bush his perspective.

MCCAFFREY: I think it's a terribly dangerous place for diplomats and journalists and contractors and Iraqi mothers. Trying to go about daily life in that city is a real nightmare for these poor people.

MALVEAUX: The Bush administration is now trying to balance the need for cracking down on the insurgency, while not appearing heavy handed.

BUSH: I think the biggest mistake that happened so far at least from our country's involvement in Iraq is Abu Ghraib. We have been paying for that for a long period of time.

MALVEAUX: But officials worry the scandal of Abu Ghraib may pale in comparison to what military investigators uncover out of the western Iraqi city of Haditha. Pentagon sources say they suspect a small group of Marines massacred several dozen Iraqi citizens last November in retaliation for a killing of one of their own. The administration is now bracing itself for another potential crisis.

TONY SNOW, WHITE HOUSE PRESS SECRETARY: You don't do damage control. What you try to do is find out what the facts are.

(END VIDEOTAPE)

MALVEAUX: White House officials are urging everyone not to jump to conclusions or rush to judgment when it comes to the investigation. It is very clear and Tony Snow saying the details will be released to the public when it unfolds. It is very clear they are going to have quite a challenge on their hands. They have been trying to resuscitate their image for quite sometime after Abu Ghraib. This is likely to be a very serious challenge.

BLITZER: Suzanne, thanks very much.

One of the president's most outspoken critics of Iraq says the Haditha incident is as bad as the Abu Ghraib prisoner abuse scandal if not worse. Coming up, I'll speak live with the Democratic Congressman, a decorated war veteran, John Murtha. Also in the next hour with the new Iraqi ambassador to the United States.

Let's turn now to some other developments in the shake-up that continues in the Bush administration. After many weeks of speculation, President Bush today announced treasury secretary John Snow is indeed resigning. Mr. Bush tapped Wall Street's CEO Henry Paulson to replace him. Let's go back to the White House. Ed Henry is standing by with the latest on this.

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: In the election year Republicans are frustrated they are not getting credit for a good economy and they are nervous about high gas prices. It was time for a new economic salesman.

(BEGIN VIDEOTAPE)

(voice-over): President Bush had high praise for his pick for Treasury secretary, Wall Street titan Henry Paulson of Goldman Sachs.

BUSH: He has an intimate knowledge of financial markets and an ability to explain economic issues in clear terms. He's earned a reputation for candor and integrity.

HENRY: The questions are being raised about the president's own candor over exactly when he decided to replace outgoing secretary John Snow. At a May 25th prime time press conference with British Prime Minister Tony Blair the president was asked if Snow had given any indication he would leave his job soon?

BUSH: No, he has not talked to me about resignation. I think he's doing a fine job.

HENRY: But five days earlier on May 20th, the president had offered Snow's job to Paulson. And by the White House's own accounts, Paulson accepted the following day.

SNOW: It's no he's not talked to me about resignation. That does not mean there were not other discussions. It was artfully worded. On the other hand the one thing you do not want to do in a situation like this is to start speculating about changes before the changes are ready to be made. Those do have impacts on markets.

HENRY: It took the White House a long time to fill the job because of a perception that the previous Treasury secretaries have been cut out of policy making.

ROBERT HORMATS, VICE CHMN., GOLDMAN SACHS: The White House, I think mistakenly, has pushed the last two Treasury secretaries to the sidelines. I don't think that will happen with Hank Paulson, the president had made it clear he's the person who is going to look to for advice.

MALVEAUX: A Republican close to the process told CNN the White House talked Paulson into the job, convincing him he would have real power.

BUSH: Hank will be my principle adviser on the broad range of domestic and international economic issues that affect the well-being of all Americans.

(END VIDEOTAPE)

HENRY: Paulson is considered almost the Republican version of Robert Rubin, the Goldman Sachs executive turned Treasury secretary highly respected in the Clinton years. Republicans are happy this restores credibility on Wall Street. Democrats like Chick Schumer already saying they will support the nomination. Could be a relatively quick confirmation.

BUSH: I understand the sensitivities, Ed, in not saying there is going to be a new Treasure secretary. But Press Secretary Tony Snow, I take it, was beaten up a little bit with questions, did the president deliberately mislead the American public about the Treasury secretary slot. Did he lie deliberately in order to avoid the uncertainty in the markets?

What are they saying at the White House about these kinds of sensitive issues in the way the president, quote, artfully described the situation.

HENRY: I directly asked Tony Snow did the president mislead. He insisted there were clearances still being done. That was one of the reasons the president couldn't give that direct of an answer. As you noted, he also mentioned about the markets, but I've been hearing from various Republicans for weeks now that one reason they could not comment on all of this is that they did not have a replacement in place. That would have rattled the markets.

In this case they finally had a replacement in his pocket. That wouldn't have rattled the markets if he had said, look, there's going to be a smooth transition. So it is kind of strange the timing of all this, Wolf.

BLITZER: Ed Henry, thank you very much. A sensitive moment. Ed Henry and Suzanne Malveaux, by the way, are part of the best political team on television. CNN, America's campaign headquarters.

Henry Paulson has given hundreds of thousands of dollars to political candidates over the years. Now some of those very same politicians may be questioning the Treasury secretary nominee as his confirmation hearings are going to be getting underway. Let's bring in our Internet reporter Abbi Tatton. She has been looking at the record.

ABBI TATTON, CNN INTERNET CORRESPONDENT: Wolf, on line records show that Paulson has been a big fund raiser for President Bush, but if you look a few years back find that he also gave donations to Democrats like Charles Schumer back in 1996, a thousand dollars to now Senator Charles Schumer. This was when he was in the House, of course. He is now the senator for New York and a member of the Finance Committee. This committee is a one that is going to be holding hearings for Paulson.

By our count Paulson donated to four different members of that committee, including Charles Grassley, $2,000 there back in 2004. If you look back at his online record, Paulson wasn't just giving money away. He was certainly making a fair bit of it as well. This is Goldman Sachs' report from earlier this year, saying that he made over $30 million in stock awards. Compare that, Wolf, with what the secretary might be making if he is confirmed, it's about $180,000.

BLITZER: So he's going to take a mere $30 million pay cut for public service. That's very admirable. Thanks very much, Abbi, for that.

Zain Verjee is joining us from the CNN global headquarters. There's a developing story, Zain, out of Michigan?

ZAIN VERJEE, CNN ANCHOR: Yes there is, Wolf. The search for Jimmy Hoffa is over. The FBI is holding a news conference right now and it says that they have found no trace of the former Teamster boss. They essentially dug up a Detroit farmhouse. It took them two weeks.

They took apart a barn. It was one of the most intensive searches that was done in decades: FBI agents, anthropologists, cadaver-sniffing dogs. There were demolition crews there on site for the duration to see if there was any trace of Jimmy Hoffa, but there wasn't. Their efforts have been unsuccessful. The former Teamster boss was last seen in 1975.

To other news now, Wolf. He's the accused sniper who defended himself at the trial, but a jury apparently found his defense claims insufficient. John Allen Muhammad has been found guilty of six of 10 sniper killings in 2002 in the Washington area. Muhammad will be sentenced on Thursday and prosecutors say they are going to be seeking a life sentence without parole. Muhammad has already been sentenced to death for two other killings in Virginia.

Prayers and praise for a respected political figure. Former President Bill Clinton and other dignitaries spoke today at the funeral of Lloyd Bentsen. Clinton called his former treasury secretary one of the most outstanding policymakers since World War II. Bentsen, also a former senator from Texas, died last Tuesday. He was 85-years-old.

In Afghanistan, relative calm after a storm of controversy. Today we're learning that the driver of a military truck that rammed into pedestrians in Afghanistan says his brakes went out just as he was driving downhill. Officials say that he told them he tried to slow down by steering into empty parked cars, but he couldn't stop before hitting pedestrians. U.S. military officials say one person died in the crash, prompting widespread riots.

In East Timor, critical times are calling for emergency measures. Today East Timor's president, Xanana Gusmao, announced emergency measures after angry crowds laid waste to the attorney general's office. The crowds allegedly stole evidence implicating those who carried out massacres back in 1999. East Timor's president said he's going to assume sole responsibility for security, but he's also going to take direct control of the armed forces.

And in Indonesia, help is coming and more is on the way. This after the weekend earthquake that killed almost 6,000 people. Today two U.S. military cargo planes delivered aid for thousands. Japanese paramedics are also helping survivors. About 22 countries are helping out. Some 200,000 people are homeless. And officials are saying the search for survivors grows even more grim with each passing day. Wolf?

BLITZER: Our heart goes out to those people in Indonesia. Thank you, Zain, for that. We'll come back to you soon.

BLITZER: Let's check in with Jack Cafferty now. He's got "The Cafferty File." Hi, Jack.

JACK CAFFERTY, CNN ANCHOR: Hi, Wolf. President Bush comparing himself to President Truman and the war against Islamic radicals to the Cold War. Speaking at West Point the other day, the president said in both cases, we have been fighting "followers of a murderous ideology that despises freedom, crushes all descent, has territorial ambitions and pursues totalitarian aims."

In comparing himself to President Truman, Mr. Bush pointed to the ways both have responded to threats to the United States. There is one difference worth noting, however. That would be that President Truman didn't invade anybody the way President Bush invaded Iraq. It's also worth noting that Truman was controversial at the end of his time in office but is now viewed by many as one of America's great presidents.

Here's the question, how does the war on terror compare to the Cold War? E-mail your thoughts to CaffertyFile@CNN.com or go CNN.com/CaffertyFile. Wolf?

BLITZER: Jack, thank you very much.

Coming up, much more on our top story. The president meets with Iraq's new ambassador here in Washington. But are Americans getting mixed signals when it comes to the war with Iraq in Iraq?

Plus, he's a former marine. A fierce critic of the conflict in Iraq. I'll speak live with Congressman John Murtha about the war and the investigation of an alleged massacre by U.S. marines.

And there are new developments in the political battle between the branches. We're going to tell you what happened during a rare recess hearing on Capitol Hill earlier today. Stick around. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK) BLITZER: Welcome back. New legal and political wrangling today over the FBI raid on a congressman's office. Justice Department officials rejected Democrat William Jefferson's demand to have all the seized documents returned. And on Capitol Hill today, a hearing was held on the raid while Jefferson's future in the House remains in doubt. CNN's Sean Callebs is standing by in his home state of Louisiana. Let's go first to Capitol Hill. Our congressional correspondent Dana Bash has the latest -- Dana?

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Well Wolf, we're told that House Speaker Dennis Hastert is preparing to send a letter to the attorney general this afternoon that says that justice officials should come up to the Hill next week to meet with the general counsel of the House, to start talks about what kind of procedure they can put in place in case the FBI wants to search a lawmaker's office in the future.

But today even though Congress is in recess, lawmakers are officially not here or in session. The House Judiciary Committee did have a meeting about the past, looking at the fact that 10 days ago William Jefferson's office was raided by the FBI.

(BEGIN VIDEOTAPE)

BASH (voice-over): Most Republican leaders say they just want to move on. Not the House judiciary chairman.

REP. JAMES SENSENBRENNER (R-WI), JUDICIARY CHAIRMAN: Then I want to have Attorney General Gonzales and FBI director Mueller up here to tell us how they reached the conclusion that they did.

BASH: Republican James Sensenbrenner announced he'll summon the two top Bush law enforcement officials to explain why they OK'd a raid on a lawmaker's office for the first time in history.

SENSENBRENNER: There's no reason to ignore the 219 years of success of separation of powers and checks and balances.

BASH: The chairman stacked this hearing with constitutional experts who share his outrage.

CHARLES TIEFFER, UNIVERSITY OF BALTIMORE: This raid had all the elements of unconstitutional executive intimidation.

JONATHAN TURLEY, GEORGE WASHINGTON UNIVERSITY: A profound and almost gratuitous insult to a co-equal branch of government.

BASH: The witnesses said the Justice Department had not exhausted other options to get materials in Congressman Jefferson's office before searching it, like threatening jail. And they accused FBI agents of seizing privileged material.

TIEFFER: When you take the whole computer of a member of Congress, that means you're catching countless innocent constituents their, in your dragnet. BASH: The politics of this issue have been odd from the start, and it fell to a Democrat to suggest the Republican chairman was being unfair to the Bush White House.

REP. CHRIS VAN HOLLEN (D), MARYLAND: Far be it from me to defend the executive branch, but I just think that in terms of getting all the facts out and the views -- full range of views, that would be helpful to everybody.

BASH: Lawmakers from both parties expressed concern the raid violated the constitutional separation of powers but they also tried to combat criticism they are out of touch and looking for special treatment.

UNIDENTIFIED MALE: No one is above the law.

UNIDENTIFIED MALE: No one is above the law.

REP. LOUIE GOHMERT (R), TEXAS: You know, some people have said you guys are just defending Jefferson, and I agree if they are talking about Thomas Jefferson.

(END VIDEOTAPE)

CALLEBS: Meanwhile across town, Wolf, the Justice Department formally rejected William Jefferson's demand that they return all of the documents and materials seized from his office. They file a document in court saying that that request is inconsistent with the bedrock principle that the laws of the country allow no place or employment as a sanctuary for a crime.

They also, interestingly, Wolf, did say that they would allow Jefferson to have copies of everything they took to make sure that nothing that they took was privileged.

BLITZER: Dana, thank you very much. Dana Bash on the Hill.

Let's get to Jefferson's own political future right now. He's facing reelection even as he faces a federal corruption probe.

CNN's Sean Callebs is joining us now live from New Orleans with more -- Sean.

SEAN CALLEBS, CNN CORRESPONDENT: Well, Wolf, the Congressman has kept a low profile. He has sent this latest report out to his constituency. It's not anything out of the norm. Most congressional members do send information like this out.

He talks at length about the things Jefferson is trying to do in the wake of Hurricane Katrina to help this area. Not surprisingly, it doesn't mention the federal probe, but that's all the constituents in this area are talking about right now.

(BEGIN VIDEOTAPE)

CALLEBS (voice-over): William Jefferson is the most prominent African-American politician in Louisiana. He's also the target of a federal investigation into alleged bribery. An FBI affidavit says $90,000 was found in the freezer of his D.C. apartment. Jefferson has denied wrongdoing but won't talk about the allegations, but his constituents are more than willing to weigh in on the accusations.

UNIDENTIFIED MALE: Looks pretty bad, don't you think? I mean, money in the refrigerator? You know, that looks really bad.

UNIDENTIFIED MALE: I was disappointed but I understand that these are just allegations and until they are proven otherwise, I will just accept them as an allegation.

CALLEBS: Jefferson lives in the uptown area of New Orleans. A neighbor and city worker who didn't want his identity revealed says he believes it's obvious the Congressman was trying to hide the cash.

UNIDENTIFIED MALE: And it's a shame that he's doing something like this when the city is in shambles as it is. He should be doing more for the city than himself.

CALLEBS: Jefferson has been a trailblazer, the first black from Louisiana elected to Congress since Reconstruction. He's the member of the powerful Ways and Means Committee, a great place to help New Orleans residents punished by Katrina.

After the search of this Capitol Hill office, House Minority Leader Nancy Pelosi asked Jefferson to resign the committee post. He says he won't. Silas Lee is a New Orleans political consultant and isn't surprised Jefferson is digging his heels in.

SILAS LEE, POLITICAL ANALYST: Not really. William Jefferson is a fighter. And when you tell him that something is going to be very challenging, he will not run from it.

CALLEBS: Jefferson is up for reelection, and running for office under a cloud of suspicion won't be easy.

LEE: It's going to be a very tall political mountain for him to climb. However, voters still respect him and they respect his level of accomplishments and what he delivers for the constituents.

(END VIDEOTAPE)

CALLEBS: And Lee goes on to say don't be surprised if the race card doesn't play a part in this investigation at some point, if not on the Hill, Wolf, then with his largely African-American district down here in the heart of New Orleans -- Wolf?

BLITZER: Sean, in New Orleans for us. Sean, thanks.

Up next here in THE SITUATION ROOM, the Pentagon is investigating the alleged massacre of Iraqi civilians by U.S. Marines in Haditha. One lawmaker says some military leaders may be covering up the truth or at least try to. Congressman John Murtha is standing by to join us live. He's coming up next. And President Bush greets Baghdad's new representative here in Washington. In the next hour I'll speak with Iraq's new ambassador to the United States. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Welcome back to THE SITUATION ROOM. I'm Wolf Blitzer in Washington. Back now to our top story, the war in Iraq. Can democracy prevail with insurgents on the attack, and now a new uproar over an alleged massacre by United States Marines?

Let's turn to our senior political analyst Bill Schneider. He is watching the story for us as well -- Bill.

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Wolf, the news from Iraq is bad, but also good. What does it add up to?

(BEGIN VIDEOTAPE)

SCHNEIDER: Americans are getting mixed signals from Iraq. Good news, Iraq finally has a new government.

SAMIR AL-SUMAIDAIE, IRAQI AMBASSADOR TO U.S.: I am honored and privileged to serve as the ambassador of a free Iraq after 16 years of isolation.

SCHNEIDER: Bad news, there is still no agreement on key security positions.

BARHAM SALIH, IRAQ DEPUTY PRIME MINISTER: That is a difficult challenge because in this polarized society, there are different views about particularly the issue of security.

SCHNEIDER: Good news?

TONY BLAIR, BRITISH PRIME MINISTER: A Democratic political process has grown.

SCHNEIDER: Bad news, so has the violence, nearly 100 people killed this week including three American soldiers and two CBS News journalists.

MCCAFFREY: I think it's a terribly dangerous place for diplomats and journalists and contractors and Iraqi mothers.

SCHNEIDER: More bad news: allegations of killings of Iraqi civilians by U.S. Marines last November, and a possible cover-up of the incident.

REP. JOHN MURTHA (D), PENNSYLVANIA: We're supposed to be fighting this war for democracy, and yet something like this happens, it sets us back. It's as bad as Abu Ghraib, if not worse.

SCHNEIDER: More bad news: anti-American rioting in Afghanistan.

SAM DEALY, GQ MAGAZINE: It's been a very violent uptick in the insurgency and, you know, pressures are mounting.

SCHNEIDER: Including political pressures. Most Americans want to see U.S. military forces in Iraq decreased, though not immediately withdrawn. Ironically, the good news about Iraq's new government increases pressure for a timetable for U.S. withdrawal, which this month 60 percent of Americans said they favored.

(END VIDEOTAPE)

SCHNEIDER: Americans have to be frustrated. The United States helped liberate Afghanistan from the Taliban and Iraq from Saddam Hussein, and the result is not just democracy but also insurgency and anti-American violence -- Wolf.

BLITZER: Bill Schneider reporting. Thank you, Bill.

And up next, I'll speak live with Congressman John Murtha. He's standing by.

Also, the Pentagon investigating the allegations of a massacre by Marines in Iraq -- how much do the claims of a cover-up hurt America's overall mission in Iraq?

Plus, the president names a new treasury secretary. The economy appears to be doing rather well, so why isn't the president getting a lot of political bounce? I will ask Paul Begala and Torie Clarke -- they're standing by live -- in today's "Strategy Session."

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Welcome back.

Let's talk a little bit more now about the Haditha incident, the alleged massacre by U.S. Marines of Iraqi civilians, the potential fallout.

Joining us, a leading critic of the war in Iraq, Congressman John Murtha, Democrat of Pennsylvania, himself a 37-year veteran of the United States Marine Corps.

You have suggested, Congressman, that there was a cover-up of this incident that actually occurred back in November. Specify what you have learned, what you have been told.

MURTHA: Well, what I worry about, Wolf, is that this happened six months ago.

And nothing -- you heard nothing about it. As a matter of fact, the original story was that an IED killed these 15 people. It became very confusing to the public. "TIME" magazine came out with an article, and they still tried to cover it up.

Now, there were payments made to victims, which aren't made unless we kill them, one way or the other. And, secondly, they knew about it the day afterwards. So, there's no excuse for not having this be more open and know exactly what -- and the longer it goes, the worse it is for us, because it looks like it's the policy of our troops to do something like this.

But the Marine Corps itself told me, there were 24 people killed. There was no other enemy action, except the one explosive device. Now, they are under tremendous pressure, Wolf. You -- you have heard me say this before. They are stressful. They go out every day. They see arms blown off, legs blown off. There's inadequate number of forces.

So, I understand what happened. But you can't excuse it. And the cover-up is inexcusable. So, the chain of command, the chain of command, somebody in the chain of command said, we don't want to talk about this. It's so devastating that we don't want it to be made public.

Well, it's going to be made public at someplace. The Iraqis already knew about it. The Marines knew about it. It was going to come out. And they should have been very open about this from the very start.

BLITZER: Here's what the chairman of the Joints Chiefs, General Peter Pace, himself a Marine, said yesterday on CNN's "AMERICAN MORNING."

Listen to this.

(BEGIN VIDEO CLIP, "AMERICAN MORNING")

GENERAL PETER PACE, CHAIRMAN, JOINT CHIEFS OF STAFF: To my recollection, the first we knew about it back here in D.C. was around the 10th of February. And the very next day is when the investigations began. So, from my perspective, as soon as we found out that there were allegations, the investigations began.

(END VIDEO CLIP)

BLITZER: What do you think about that, Congressman?

MURTHA: Well, I will tell you, that's a pretty flat statement there.

It seems to me something as horrendous as this should take a little something in the statement. I mean, you know, this is a terrible event, a tragic event. It affects the troops. It affects our morale. It affects the ability of them to recruit against us.

And just say, well, it is going to start as soon as February, it should -- and even that was too long a period of time. They should have known about it before then, if they didn't know about it. It's a failure of leadership, when they didn't know about it. When other Marines knew about it, when the Iraqis knew about it, when they made payments about it, and they didn't know about it in Washington?

I mean, I think we have to find that out. Senator Warner said he's going to have hearings. And he ought to have hearings, ought to find out who knew what when.

BLITZER: There are some who are already making comparisons between Haditha and My Lai in Vietnam, the massacre in which hundreds of Vietnamese civilians were killed, an incident that you well remember.

Is that a fair comparison, a fair analogy?

MURTHA: Well, I think it's a fair analogy, except for the numbers. There was about 124, I think, in the My Lai incident. And then there was 24 here.

But it's the same thing, overstressed, these troops going out every day. IEDs go off. Some of them have seen 30 IEDs go off without being -- all at once, they're killed or one of their friends is killed. So, the pressure is tremendous.

It's one of those things where we have become the enemy. The Iraq -- there's only 1,000 al Qaeda, as I have said over and over again. There's no progress. Since I made my statement November 17, was two days before this happened, and it's worse today than it was then.

There was 500 incidents in that time a week. And now there's 1,000 incidents a week. So, it has gotten worse during that period of time. And these troops are under tremendous stress. And we ought to redeploy as quickly as we can and let the Iraqis handle this themselves.

BLITZER: What about President Bush? While this investigation continues, what, if anything, should he say about it?

MURTHA: The president should say that anybody that is involved in this, if they are found guilty, ought to be punished severely, because this helps recruit terrorists.

If there's anything that is going to recruit terrorists -- he finally admitted Abu Ghraib was a mistake. He finally admitted he had untrained soldiers there, unsupervised, and undisciplined. And that was a tremendous public-relations problem for the United States.

We started to lose credibility then. We're fighting for the ideals of democracy. We're fighting for the ideals of America. And when something like this happens, and then you try to cover it up, it makes it look like the United States doesn't stand for those.

Wolf, even when he signed the paper on torture and said we're going to make an exception to torture, when both houses -- both chambers passed that -- against torture, that's the kind of stuff that hurts us and unites the -- the Muslims against the United States.

BLITZER: John Murtha is a Democratic congressman from Pennsylvania.

Congressman, thanks very much for joining us.

MURTHA: Good to talk to you, Wolf.

BLITZER: Coming up here in THE SITUATION ROOM, we will have more on the fallout from Haditha.

Paul Begala and Torie Clarke, they are standing by live in today's "Strategy Session."

And, in the next hour, Michael Chertoff tours New Orleans, just days before the start of hurricane season. Our Jeanne Meserve spent some time with him earlier today.

Stay with us.

(COMMERCIAL BREAK)

BLITZER: Welcome back.

Today, in our "Strategy Session," the investigation into the events at Haditha last November creating a huge political outcry, likely to get worse in the days and weeks to come. Why are some charging there was a cover-up? How much will it hurt the U.S. mission in Iraq?

Joining us now, our CNN political analysts, Democratic strategist Paul Begala and former Pentagon spokeswoman Torie Clarke.

Torie, I will start with you.

You worked at the Pentagon. You know the Marines. You just heard Congressman Murtha say there was a cover-up; it goes up the chain of command.

What do you make of this?

TORIE CLARKE, CNN CONTRIBUTOR: With all due respect to the congressman, it is an awful, awful tragedy, but nobody sitting in Washington or in Johnstown, Pennsylvania, has all the facts or has all the details.

It needs to be taken very, very seriously, but we also need to lower the emotional rhetoric here and have the investigation be conducted, have the charges brought forward, if they will, and then have those people, if these crimes were committed, dealt with very, very seriously.

But it's interesting. When you were talking to him about what should the president do, anybody in that chain of command -- and the congressman knows this -- needs to be very careful not to say or do anything that will unduly influence the proceedings.

There are military lawyers from coast to coast who are giving that very, very strong advice. So, as much as some people might want to say, boy, we think some really terrible things have happened here, we have got to get to the bottom of it, they are very, very controlled about what they can and cannot say. BLITZER: Congressman Marty Meehan, a Democrat of Massachusetts, said this. He said, "Something like this" -- the incident in Haditha -- "just fuels the insurgency and makes it impossible for the United States to ever win this militarily."

What do you think?

PAUL BEGALA, CNN POLITICAL ANALYST: Well, it certainly is a boon for the insurgency.

And I thought Jack Murtha was very persuasive about that in his interview with you. I don't think that he was telling the president to prejudge this. And we will go back and look at the tape or the transcript.

It seemed to me, he said, the president needs to say, if anyone is later found to have been guilty here, he or perhaps even she could -- will be punished severely. The striking thing here is that what we know about this is very little. But all that I know about it, I know from Jack Murtha.

That does suggest that the administration -- understandably, governments don't like to put out tragic news, or bad news, or news of bad acts that happen in wartime. But we ought to be learning about this from somebody. And it's -- thank God that Jack Murtha at least...

BLITZER: Well...

(CROSSTALK)

BEGALA: ... is coming out...

(CROSSTALK)

BLITZER: ... we actually learned about it from "TIME" magazine, which broke the story, and -- several weeks ago. And they did an outstanding job of bringing this to everyone's attention.

(CROSSTALK)

BEGALA: But Murtha -- for viewers who don't know Jack Murtha -- I have known him for 20 years -- he's probably the most respected, even revered, congressman by the military.

These guys -- he was a Marine for 37 years, as you pointed out. He's a colonel. They love him. And he loves the Corps. And, so, this is really coming from the heart, from a -- from a real American patriot. And I think that's the way the military ought to be handling...

(CROSSTALK)

BLITZER: It goes without saying, though, that, yes, there may have been some bad apples. But there are 130,000, 140,000 U.S. troops, or whatever, in Iraq. And almost all of them do obey the rules of warfare, don't get involved in this.

The question to you though, Torie, is, is the war creating this kind of situation, where an alleged atrocity like this may be taking place, because it beats down, on a day-by-day basis, these troops who go into these kinds of situations?

CLARKE: Well, if the only thing they see and hear on -- on the airwaves and coming back to them from the United States is emotional rhetoric like we have been hearing today.

And I just think this is a time for members of Congress and others to be very, very responsible and say, yes, it sounds very serious. It sounds awful. Let's get to the bottom of it. But let's not add fuel to the fire, when we don't have all the facts. We will. People can wait a few days, a few weeks. We will have the facts and we can act accordingly. But it does not help to add fuel to the fire.

BEGALA: OK. I think -- I don't know. I didn't even finish the Boy Scouts, OK? So, I am speaking from pristine ignorance, but it won't stop me.

It seems to me, though, that those Marines are less stressed out by what a politician says in an interview with Wolf Blitzer than they are by what Jack Murtha told us, 30 IED attacks that some of these guys had seen.

There was one report that these Marines were on already their third combat tour. Now, what are we doing to overstress the guys? It was -- I think Congressman Murtha was right -- a failure of leadership. And I hope this isn't like Abu Ghraib, where one little PFC from West Virginia and a reservist one-star take the fall, and the Rumsfelds, Wolfowitzes, Tommy Franks of the world go on and prosper.

CLARKE: But it's just -- it is factually incorrect and also, I think, somewhat irresponsible to make judgments about all the Marines or everyone in the United States forces serving in Iraq or Afghanistan based on what a few Marines may have done.

The reality is, as you said, Wolf, the overwhelming majority of the people there are performing...

BEGALA: Right.

CLARKE: ... under the same tough circumstances and doing very, very well.

BLITZER: Very quickly, let me shift gears. A good decision to replace John Snow with Henry Paulson, the chairman of Goldman Sachs?

BEGALA: Great decision. In fact, I wore my green tie today, because he's as green as Al Gore, a great champion of being tough on climate change.

He's going to have a huge fight. I think we now have two camps. I think we have the new camp, which is Bolten, Tony Snow, Joel Kaplan, the new deputy chief of staff, and now Hank Paulson squaring off against the old guard of Cheney, Rumsfeld, Rice, and Rove.

BLITZER: Very quickly, Torie.

CLARKE: Paul Begala is the one many times on this show has said the president ought to bring in lots of new people. This guy is getting praise from the left to the right politically. He's getting a lot of strong support from the business community.

And what everyone says is, he's a very, very serious fellow, would not have taken the job unless he thought he was going to be a real player.

BLITZER: Let's hope he does a good job for all of us.

(CROSSTALK)

BLITZER: Thanks very much.

CLARKE: Thank you.

BLITZER: Torie and Paul are part of the best political team on television -- CNN, America's campaign headquarters.

Coming up, hurricane season starting in only two days -- is the federal government prepared? The Coast Guard commandant, Thad Allen, standing by to join us live.

Plus, has the White House lost its touch when it comes to dealing with fellow Republicans in Congress? Has first-term magic turned into second-term woe? We are going to find out from Jeff Greenfield -- all that coming up.

Stay with us.

(COMMERCIAL BREAK)

BLITZER: President Bush's most recent domestic policy adviser, Claude Allen, resigned in February. The following month, Allen was arrested as part of a felony theft scheme. Now the man tapped to replace Allen finds himself in another controversy. And the details are online.

Jacki Schechner is joining us with the details -- Jacki.

JACKI SCHECHNER, CNN INTERNET REPORTER: Wolf, Justin Park is a reporter for "The Syracuse New Times." And he interviewed Karl Zinsmeister back in August of 2004.

After that article ran, Park says that Zinsmeister sent himself this e-mail complimenting his work, calling it extremely fair and thoughtful, saying: You wrote it straight up.

Well, now a reporter for "The New York Sun" is saying that he found a reprint of the article at "The American Enterprise," the magazine, a conservative magazine, that Zinsmeister himself edits. There are some differences between the two articles. For example, in the one written by Justin Park, Zinsmeister said that Washington -- people in Washington are morally repugnant, cheating, and shifty human beings. In the reprint, it's a little softer. It says: "I learned in Washington that there's an overclass of people who are cheating and that" -- Or what was the word he used? -- "shifty human beings." Excuse me. Wanted to make sure that was accurate.

Now, Zinsmeister was unavailable for comment today. But, in "The Washington Post," Tony Snow, the White House press secretary, is quoted as saying that Zinsmeister erred in making the changes, but that it was well-intentioned; it was done in an unartful way, in an attempt to set the record straight. I should say that Justin Park stands very strongly by his reporting -- Wolf.

BLITZER: Jacki, thank you.

On our "Political Radar" this Tuesday, this spring, you might think that all roads to the White House lead through universities and colleges across the country. Take a look at who has been popping up at the podium. It is a virtual who's who for 2008.

Let's bring in our senior political correspondent, Candy Crowley. She is watching the early race for the White House.

Very early.

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Very early. But it's graduation season, all those voters and their parents all showing up in one place. Can politicians be that far away?

(BEGIN VIDEOTAPE)

CROWLEY (voice-over): Coe is a small liberal arts college about 1,200 miles, two plane rides, away from Boston. And, yet, there he is, the governor of Massachusetts, commencement speaker at Coe College in Cedar Rapids, Iowa, where presidential campaigns began. Lucky he was passing through.

RICH GALEN, REPUBLICAN STRATEGIST: I think it's more than just a coincidence that you're going to see a lot of leading Republicans come to Iowa over the next couple of years just to say hello and...

CROWLEY: Welcome to the transection of graduation '06 and election '08, a spot to track the travels and travails of potential presidential candidates.

SEN. JOHN MCCAIN (R), ARIZONA: I supported the decision to go to war in Iraq. Many Americans did not.

(BOOING)

CROWLEY: The liberals' favorite conservative was out of favor at the liberal New School in New York, where he talked largely about the need for debate without hate.

MCCAIN: Offer no worthy summons to the world.

UNIDENTIFIED MALE: We're graduating, not voting.

CROWLEY: Different moods, same speech at Liberty University, where McCain's words were heard as an attempt to patch up a six-year rift with a leader of the Christian right.

MCCAIN: United in our great cause and respectful of the goodness in each other. I have not always heeded that injunction myself, and I regret it very much.

CROWLEY: Kenyon College is almost smack in the middle of Ohio, the most visited state of the '04 election and the most pivotal. Guess who showed up for graduation?

SEN. JOHN KERRY (D), MASSACHUSETTS: Even as we flew in over Ohio today, I couldn't help but thinking, Ohio, we came so close. Well, so what? You can't go through life without disappointment.

CROWLEY: Kenyon was the perfect synch of politics and place for Kerry, who eyes '08, with '04 in mind.

KERRY: And now we are engaged in a misguided war. Like the war of my generation, it began with an official deception.

CROWLEY: Meanwhile, the '08 candidate seen as most likely to succeed and least likely to talk about it was true to form, giving commencement speeches in the safety of her state of New York, not one speech...

SEN. HILLARY RODHAM CLINTON, (D) NEW YORK: So, I do dare you.

CROWLEY: ... not two speeches...

CLINTON: I dare you to push yourselves.

CROWLEY: ... or three.

CLINTON: I dare you to make some audacious decisions.

CROWLEY: ... but four commencement speeches, all politics free.

CLINTON: It seems so terrifying at first, then as slowly but surely you take the risks...

CROWLEY: If you're really looking, you could make something of that.

(END VIDEOTAPE)

CROWLEY: We are near the end of the '06 graduation season and just the beginning of the '08 presidential season, which leaves open a good deal of political education opportunity in '07.

BLITZER: Candy Crowley, thank you very much.

Coming up, our question this hour. How does the war on terror compare to the Cold War? Jack Cafferty standing by.

(COMMERCIAL BREAK)

BLITZER: Jack is joining us with "The Cafferty File" -- Jack.

CAFFERTY: Thanks, Wolf.

At West Point the other day, President Bush compared himself to President Truman and compared the war against Islamic radicals to the Cold War. The question is: How does the war on terror compare to the Cold War?

Dan in Portland, Oregon writes: "In the Cold War, we knew our enemy. Not so with the war on terror. They can be your next-door neighbors and you will never know it until it's too late."

Yvonne in Cary, North Carolina: "I don't think there's a comparison between them, except that they are both founded on faulty ideology. Communism had done away with a god. Muslim terrorists are on a crusade to convert the world by murder."

Chris in Denver: "I think it is a desperate comparison made by a president trying to prop up his approval ratings. The Soviet Union had the ability to completely annihilate most major American cities within a few hours."

Ulf in Miami: "The difference was, the Cold War was between states. The war on terror is between states and non-state actors, thus, in reality, an international police operation, with the United States as the international self-declared unilateral police force."

Chris in Crawfordsville, Indiana: "The new Cold War is with China. And if this administration doesn't deal with it soon, they will lose this one. We are already losing the war on terror because of our open borders."

Marcus in Arlington, Virginia: "During the Cold War, the other side really did have WMDs."

And Tom in Nashville writes: "The Cold War was an intense chess game, where highly intelligent and skilled administration personnel moved knights and bishops with extreme care. In the war on terror, those people in the highly intelligent and skilled administration positions are wondering if they should move the little horsey or the ones with the pointy heads."

(LAUGHTER)

CAFFERTY: Wolf.

(LAUGHTER)

BLITZER: Good letters, Jack. Thank you very much.

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