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THE SITUATION ROOM

Hamas Military Wing Ends Truce After Israeli Shells Kill 7 on Beach; Al-Zarqawi: Last Moments; New Terror Tape; Former FEMA Head Fires Back; MLK's Personal Papers to be Auctioned Off; Border Patrol Agents Accused of Taking Bribes; Philadelphia Cheesesteak Icon Stirs Immigration Debate

Aired June 9, 2006 - 17:00   ET

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


WOLF BLITZER, CNN ANCHOR: And 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, it's midnight in Gaza. A girl hopelessly appeals for the life of a loved one after the Israeli military strikes Palestinians having picnics. Dead bodies dot the beach and Hamas vows revenge.

It's 1:00 a.m. in Iraq. How could anyone survive two bombs that blew buildings to bits? Abu Musab al-Zarqawi did. Now new details on how the al Qaeda leader outlasted the blast.

And not a smoking gun, but an awkward accusation. Here in Washington, the former FEMA director, Michael Brown, gives CNN an e- mail alleging some candid comments from President Bush in the wake of Hurricane Katrina. It could prove embarrassing for the White House. Only on CNN we're going to show you the e-mail, and we're going to talk with Michael Brown.

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

There are new developments this hour in two bloody conflicts in the Middle East.

First, in Gaza, the military wing of the radical Islamic group Hamas has called off a 16-month truce with Israel after Israeli gunboats shelled a beach where Palestinians were having a picnic, killing at least seven people.

In Iraq, the U.S. military, in a stunning new twist, now says that when the smoke cleared after that powerful airstrike, Abu Musab al-Zarqawi was still alive, at least for a little while. We have new details on the last moments of Iraq's most wanted terror leader. Our Barbara Starr is standing by live at the Pentagon.

But let's go to Jerusalem first. CNN's Fionnuala Sweeney on this other very, very potentially significant story -- Fionnuala.

FIONNUALA SWEENEY, CNN CORRESPONDENT: Indeed, Wolf, it has been a very bloody 24 hours in Gaza. It began with an Israeli military airstrike which killed a Hamas government senior official, the head of security in Gaza, and culminated, as you say, with the shelling of a beach, killing seven people in one family who were picnicking on a Sunday Friday afternoon.

(BEGIN VIDEOTAPE)

SWEENEY (voice over): Uncontrollable grief on a Gaza beach. This young girl had been picnicking with family when artillery shells hit the sand. Her father among seven people killed. The dead included three children.

The Israeli military has been pounding the border areas between northern Gaza and southern Israel for weeks in a bid to stop Kassam rockets being fired by Palestinian militants. Friday's shelling came only hours after thousands flooded the streets of Gaza for the funeral of Jamal Abu Samhadana (ph), slated to be the security chief in the Hamas-led government, blamed by Israel for the ongoing rocket attacks and a series of deadly suicide bombings. He was one of seven militants killed by an Israeli airstrike on Thursday.

Israel immediately announced a suspension of attacks on Gaza and began an investigation following the beach incident. Hamas called off its unofficial truce with Israel.

SAMI ABU ZUHRI, HAMAS SPOKESMAN (through translator): Amid these terrifying pictures of the kids and women and the girl who was screaming for help, we cannot remain silent amid these images. And these demonstrations emphasize the necessity of the renewal of the struggle.

(END VIDEOTAPE)

SWEENEY: Eighteen Palestinians killed in Gaza in 24 hours. The Palestinian Authority president, Mahmoud Abbas, has described it as a bloody massacre and has called for international intervention. The mood in Gaza tonight, Wolf, one of anger and revenge.

BLITZER: Fionnuala, so what does Hamas mean when they say they're going to suspend or end this truce that's been around for a year? Are they going to launch strikes against Israel right now?

SWEENEY: Well, it's interesting that the political wing of Hamas hasn't said anything. That, of course, Wolf, being the Hamas-led government as we know it. It is the armed wing of Hamas that has been issuing that statement tonight, and the truce that they say is now over is the truce that lasted for more than a year, but was an unofficial truce.

And many says that truce was called because Israel about two years ago kept pounding Hamas leaders to the extent that they eliminated them one by one. And in Israel minds, that is what led to this unofficial truce. However, as I say the mood and anger in Gaza is one of anger and revenge, and there will be hood political pressure on the Hamas government now to go along with the armed wing of its movement and call off its unofficial truce BLITZER: A very, very tense, delicate moment in the Middle East.

Fionnuala, thank you very much for that.

There were also some stunning details out on the death of the most wanted terrorist in Iraq, Abu Musab al-Zarqawi, killed in a U.S. airstrike. Among them, al-Zarqawi did not die right away.

Our Pentagon correspondent, Barbara Starr, joining us now with details -- Barbara.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Wolf, you know there's that old saying in the military that first reports are often wrong. This time it was very wrong.

(BEGIN VIDEOTAPE)

STARR (voice over): The official statement from Baghdad yesterday left no doubt. Zarqawi died in the attack by two 500-pound bombs.

MAJ. GEN. WILLIAM CALDWELL, U.S. ARMY: He as dead when we -- when we arrived there.

STARR: But now that first report was utterly wrong. This was General Caldwell today on Zarqawi.

CALDWELL: According to the report, we did in fact see him alive, there was some kind of movement he had on the stretcher, and he died shortly thereafter. But yes, it was confirmed by other than the Iraqi police that he was alive initially.

STARR: Iraqi police were first on the scene, but U.S. troops arrived soon after and saw Zarqawi alive. They report he mumbled something, but nobody could make it out. Military officials confirm that a medic tried to offer aid, but Zarqawi, in the final moments of his life, slipped in and out of consciousness and died within minutes.

But now there are more questions about the attack on the safe house north of Baquba. Could the bombs have hit while he was outside the house? Was Zarqawi wearing a suicide vest? Was there a firefight on the ground before the bombs were dropped?

CNN has confirmed that a group of Special Operations Forces known during the mission as Task Force 145 had the house under surveillance.

(END VIDEOTAPE)

STARR: But, Wolf, here's the ultimate question: Could Iraqi forces, those units that were first on the scene to get to Zarqawi, might they have actually shot him dead right before U.S. troops got there? Now, General Caldwell says no. At the moment, the forensics show no evidence that Zarqawi suffered a gunshot wound, but still, an awful lot of questions on how all this went down -- Wolf.

BLITZER: Do we have any idea how much -- how many minutes or hours or whatever he was alive between the time of the airstrike and the time he died?

STARR: It is generally described as just being a short matter of minutes. Basically, the Iraqi police got there, they put him on a stretcher, U.S. troops arrived very, very quickly, they saw him. He apparently mumbled something that they say they cannot -- they -- they couldn't make out, they don't know what he was trying to say, and that he turned away on the stretcher and was slipping in and out of consciousness. That they tried to render medical assistance to him, but that he very, very quickly died.

BLITZER: All right, Barbara. Thanks very much for that.

Barbara Starr at the Pentagon.

Both Iraqi and U.S. military officials are on alert for possible insurgent attacks avenging al-Zarqawi's death, and they're taking unusual precautions.

CNN's John Vause is in Baghdad with that part of the story -- John.

JOHN VAUSE, CNN CORRESPONDENT: Wolf, the Iraqi prime minister says his government will soon reach a tipping point in dealing with the insurgency, but the most immediate threat now is reprisal attacks after the death of Zarqawi.

(BEGIN VIDEOTAPE)

VAUSE (voice over): The deserted city streets of Baghdad. For four hours at the time of noon prayers, all traffic was banned from the capital and northern city of Baquba. The logic was simple, no cars mean no suicide car bombings.

"It's a healthy security move," said this Baghdad resident. And he was right. While the streets were quiet, so, too, the insurgents.

Abu Musab al-Zarqawi and his fighters often targeted Shiite mosques with car bombs, especially at Friday prayers, the most important and most crowded day of worship. The Iraqi government still fears there will be bloody retaliation for the death of the man known as "The Prince of al Qaeda." And while many Iraqis have celebrated his demise, many others fear it will have little impact on the daily violence.

"I believe nothing will change," says this man. "It's not because of Zarqawi. If they want to improve the security, they should control the militias in the country."

And some have questioned whether al-Zarqawi was as big to the insurgency a as the U.S. claimed.

MARWAN SHEHADEH, VISION RESEARCH INSTITUTE (through translator): From the first moment of the American occupation of Iraq, the Americans had deliberately exaggerated Abu Musab al-Zarqawi's role as an excuse for the continued American presence in Iraq and to link Iraqi resistance to global terror. VAUSE: Zarqawi's foreign fighters have been only a small part of the overall violence in Iraq. And his brutal tactic, kidnappings, beheadings, and targeting civilians, according to some U.S. assessments, cost him support not only among Iraqis, but within al Qaeda as well.

(END VIDEOTAPE)

VAUSE: The U.S. military expects Zarqawi to be quickly replaced, but his death might just ease some of the tensions between Sunnis and Shiites which have threatened to push this country to civil war -- Wolf.

BLITZER: John Vause in Baghdad.

Thank you.

And the Pentagon now says 2,486 Americans have died as a result of the war in Iraq.

Let's go to New York. Jack Cafferty has got "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: You know, you think you've seen it all, all the years I've been kicking around this business. Then you come in and you read something like this.

First, Senator Arlen Specter was going to hold President Bush's feet to the fire on that secret NSA spying thing without a court order. Remember he promised to have hearings, he threatened to cut off funding if the White House didn't come clean about what they were doing.

But in the end, you know what Arlen Specter did? I mean, besides none of the things that he said he was going to do. "The Washington Post" reports that Specter has proposed legislation that would, in effect, make anything the administration has been doing legal.

President Bush insists he has the constitutional authority to do what he's been doing, but nobody knows what that is. Not even Arlen Specter has been briefed on the current NSA program. And guess who's going to review this bill if it ever gets that far? Well, that would be Bush's Justice Department.

And guess who else is involved in the negotiations? Well, that would be Vice President Cheney.

And the capper to all this? Listen up, now. Anyone involved in the current secret NSA spying program without a court order would be giving blanket amnesty.

Very courageous, Senator Specter.

Why would they need amnesty if what they're doing is legal? Presumably we'll never know if our rights have been violated. And if they were, those responsible stand to get off scot-free. This is your government at work.

Here's the question: Should blanket amnesty be given to the people who authorized the NSA to spy on Americans without a court order?

E-mail your thoughts to caffertyfile@CNN.com or go to CNN.com/caffertyfile.

It boggles what's left of my mind -- Wolf.

BLITZER: Jack Cafferty, thank you.

And to our viewers, if you want a sneak preview of Jack's questions, plus an early read on the day's political news and what's ahead right here in THE SITUATION ROOM, sign up for our daily e-mail alert. Go to CNN.com/situationroom.

Up ahead, the former FEMA director, Michael Brown, he's here in THE SITUATION ROOM and he's bringing with him a post-Katrina e-mail that could prove somewhat embarrassing to the White House. It's something you'll see only here on CNN.

Also, cheese steaks and immigration. We're going to show you how a Philadelphia landmark is now the scene of the latest skirmish in the border battle.

And a new tape from Osama bin Laden's top deputy. Details -- details of what he says. That would be Abu Musab al-Zarqawi, what he says about him.

Stay with us.

(COMMERCIAL BREAK)

BLITZER: In our CNN "Security Watch," al Qaeda's number two leader has put out a new audiotape one day after the world learned of the death of Abu Musab al-Zarqawi. Our national security correspondent, David Ensor, is joining us with details -- David.

DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT: Wolf, there are so many tapes from Zawahiri and bin Laden these days that they clearly are trying hard to seem relevant.

(BEGIN VIDEOTAPE)

ENSOR (voice over): The tape was clearly recorded before Zarqawi's death, but on it al Qaeda's number two does refer to the group's late leader in Iraq. "May god salute the lions of Islam in Iraq," Zawahiri says on the tape, "and may god salute the Mujahid (ph), Abu Musab al-Zarqawi."

SEAN MCCORMACK, STATE DEPT. SPOKESMAN: The timing perhaps could be coincidental. It refers more to the proposed Palestinian referendum. ENSOR: Zawahiri calls on Palestinians not to vote in the referendum proposed by Palestinian President Mahmoud Abbas on whether to accept Israel's right to exist and negotiate a peace deal, including a more secure state of Palestine. Experts expect another tape soon from al Qaeda about Zarqawi's death.

BRUCE HOFFMAN, RAND CORPORATION: I think both bin Laden and al- Zawahiri will be very quick to capitalize and to exploit Zarqawi's death for their own propaganda purposes, that Zarqawi has died a martyr.

ENSOR: They will do it, analysts say, though the once wealthy, well-connected bin Laden disliked and feared Zarqawi, who started his violent career as a thuggish criminal in Jordan.

DAN BENJAMIN, CO-AUTHOR, "THE NEXT ATTACK": They were for most of the time more rivals than they were colleagues.

(END VIDEOTAPE)

ENSOR: Though the timing of the Zawahiri tape may be coincidental, it also may not be. Al Qaeda may have rushed out a tape that was ready to go in order to try to stay relevant at a time of upheaval and uncertainty in the global jihadist world -- Wolf.

BLITZER: David, thank you for that.

And to our viewers, please stay tuned to CNN day and night for the most reliable news about your security.

With the 2006 hurricane season under way, more can be done to improve how first responders work together. That's according to a new federal study. It goes on to say that in the days following Katrina, the challenge for the Red Cross and FEMA wasn't just coordinating relief, it was coordinating with each other.

Our Abbi Tatton has more -- Abbi.

ABBI TATTON, CNN INTERNET REPORTER: Wolf, the government's national response plan tasks FEMA and the Red Cross with working together when a disaster strikes. The first time it was used was after Hurricane Katrina, and according to this new report by the Government Accountability Office, precious time was wasted by the two organizations as they negotiated who did what.

According to the report, the Red Cross would go to FEMA asking for urgent supplies, cots, water, food, but FEMA had no way to track these requests, didn't know if they'd been received or located, or whether they'd been shipped, thus hampering the efforts of the Red Cross. FEMA officials complained that some of the Red Cross key personnel hadn't been in their positions for long enough to know exactly what they were doing.

The Red Cross has responded, agreeing coordination could be improved. Also, a FEMA spokesman said today that this issue was critical to the new secretary, David Paulison -- Wolf. BLITZER: Thanks very much, Abbi.

Meanwhile, there are other revealing details about what is going on. Coming up, we'll speak with Michael Brown, the former FEMA director. He's here in THE SITUATION ROOM.

Stay with us.

(COMMERCIAL BREAK)

BLITZER: Welcome back.

It's one day after a new FEMA chief was sworn in here in Washington, one week into the new hurricane season, yet a storm's brewing from last year's volatile season. The former FEMA director, Michael Brown, has been giving CNN an e-mail alleging some very candid comments President Bush made in the wake of Katrina.

Our Brian Todd is standing by. He has details of a story you'll see only here on CNN -- Brian.

BRIAN TODD, CNN CORRESPONDENT: Wolf, this is documentation that the Bush administration's public show of support for Michael Brown in the immediate aftermath of Hurricane Katrina may not have been what it seemed.

(BEGIN VIDEOTAPE)

TODD (voice over): Wednesday, August 31, 2005, New Orleans has been submerged for two days. In an interview with Larry King, FEMA director Michael Brown is on the defensive about government failure after Hurricane Katrina.

LARRY KING, HOST, "LARRY KING LIVE": Where's the help?

MICHAEL BROWN, FEMA DIRECTOR: Larry, the help is right there, and it's going to be moving in very, very rapidly. I'm going to ask the country to be patient.

TODD: The next day the city still is overwhelmed by chaos and official paralysis. Brown is besieged with criticism. In another CNN interview, he admits he's just finding out about one of the most horrific human catastrophes.

BROWN: The federal government did not even know about the convention center people until today.

TODD: The following day the president declares the federal response is "not acceptable," but voices public support for Brown.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Again, I want to thank you all for -- and Brownie, you're doing a heck of a job. The FEMA director is working 24...

(APPLAUSE) TODD: Two days later, Brown's immediate boss, Homeland Security Secretary Michael Chertoff, is asked by Wolf Blitzer if he still has confidence in his FEMA director.

MICHAEL CHERTOFF, HOMELAND SECURITY SECRETARY: Look, I think Michael Brown has had a lot of experience, I think he's done a tremendous job under pressure.

TODD: But CNN has obtained an e-mail from three days after that, September 7, 2005, indicating the Bush administration may have been happy that Brown was taking the heat. A high-level White House official close to the president writes to Brown, "I did hear of one reference to you at the cabinet meeting yesterday. I wasn't there, but I heard someone commented that the press was sure beating up on Mike Brown, to which the president replied, 'I'd rather they beat up on him than me or Chertoff.' Congratulations on doing a great job of diverting hostile fire away from the leader."

Michael Brown, through his attorney, provided this e-mail to CNN on the condition that we redact the name, not revealing the identity of its author. CNN cannot independently verify the authenticity of the e-mail, but it does have the White House EOP.gov designation at the end, signifying Executive Office of the President.

Just two days after that e-mail is sent to Brown, Secretary Chertoff changes his tune.

CHERTOFF: I have directed Mike Brown to return to administering FEMA nationally. And I've appointed Vice Admiral Thad Allen of the Coast Guard as the principal federal official overseeing the Hurricane Katrina response.

TODD: Three days later, Monday, September 12th, Michael Brown resigns as FEMA director. The next day President Bush says this...

BUSH: To the extent that the federal government didn't fully do its job right, I take responsibility.

TODD: Historian Douglas Brinkley, whose recent book chronicles the infighting of state and federal officials after Katrina, says the e-mail is consistent with information he received.

DOUGLAS BRINKLEY, HISTORIAN: The e-mail clearly shows that the Bush White House and the president himself was trying to scapegoat Michael Brown, who became the human pinata of the entire Katrina debacle.

TODD: But another analyst says traditionally it's the job of people like Michael Brown to absorb criticism for the president.

UNIDENTIFIED MALE: That's what happens. We have an old saying in Washington: All good news comes from the White House and all bad news come from the departments and agencies.

(END VIDEOTAPE) TODD: We contacted a White House spokeswoman for reaction to our story. She replied in an e-mail, "This is an old rumor that surfaced months ago, and we're not commenting on it. This story has already been reported, and I have heard nothing at all that would substantiate it" -- Wolf.

BLITZER: Thank you, Brian.

Brian Todd reporting.

So what might this e-mail mean and how embarrassing could it be for the White House? Joining us here is the former FEMA director, Michael Brown, and he's joined by his attorney, Andy Lester.

Gentlemen, thanks very much for coming in.

You did give us this e-mail, Michael Brown, is that right?

BROWN: That's right, Wolf.

BLITZER: Why?

BROWN: Well, because I'm frankly getting tired of Chertoff out there every time he testifies talking about how Brown didn't do this or that, or he's trying to act independently. And as long as Chertoff continues to criticize me, I think we need to recognize that I was doing everything I needed to do down there, and this kind of e-mail just shows that while I was willing to take the sword for the president, which is, as your reporter said, is the job of the political appointee, I'm not willing to take that sword for Michael Chertoff.

BLITZER: The president -- in this e-mail it specifically says -- the person who wrote it says, "I wasn't there." This is hearsay from this individual who wrote this e-mail.

BROWN: Right. Right.

BLITZER: Do you have any reason to know for sure that it was said by the president at this cabinet meeting?

BROWN: Well, there's no doubt in my mind that it was, because it's a good friend of the president, it's someone that's been with the president a long time. Frankly, I consider him a friend, and that's why I won't give you his name.

But, yes, there's no question in my mind this e-mail is authentic. It came off my e-mail that I provided to the attorney for all of the hearings.

BLITZER: But in your giving us this e-mail, you're not really going after Chertoff as much as potentially embarrassing the president.

BROWN: Well, it could embarrass the president, but frankly, as long as we're going to continue to play this game of every time the administration talks about what worked or didn't work, I'm not going to sit back and continue to take those stabs. I was doing everything I could down there, and as long as we have this debate about what should happen to FEMA in the future, I'm going to be outspoken about that.

BLITZER: Were you just being a good soldier? Is that what you're saying?

BROWN: Absolutely. That's one of the jobs that you have to do. But being a good soldier means that the captains and the generals support you in being a good soldier.

BLITZER: Now Andy Lester is your attorney.

Tell me why you wanted to come to this interview.

ANDY LESTER, ATTORNEY FOR MICHAEL BROWN: Well, this e-mail I saw several months ago. It showed something that was a very different picture, frankly, than even I was even aware of, because what it shows is that -- not that the White House was, as I frankly thought, cowardly in not backing up Mike, but what the White House was actually doing was taking some stories that got started in the media and pushing them and pushing them until everything got diverted to Mike.

BLITZER: So, in other words, what you're saying is that Mike Brown was being made the scapegoat.

LESTER: Mike Brown was being made the scapegoat. Wolf, I'm a lifelong Republican. I was on Ronald Reagan's transition team. I'm very disappointed in this White House for doing this and doing it in a cowardly way.

They've been doing it all along. They did it back when he testified before the Senate. You may recall they asked him not to -- not to answer questions. Well, that's a crime.

BLITZER: The White House says this is an old story, it's an old rumor, it's been reported. You actually wrote about this in "Human Events".

LESTER: I wrote about it in "Human Events" a couple of months ago, that's correct. It's not an old story, it needs to be out there. The public needs to know.

BLITZER: What we have that's beyond what you wrote in "Human Events" is the actual copy of this e-mail in which the suggestion is made. And let me read it one more time in case our viewers don't remember.

The e-mail says, "I did hear of one reference to you at the cabinet meeting yesterday. I wasn't there, but I heard someone commented that the press was sure beating up on Mike Brown, to which the president replied, 'I'd rather they beat up on him than me or Chertoff.' Congratulations of doing a great job of diverting hostile fire away from the leader."

Now, you have asked us not to disclose the identity of this White House official. Why is that?

BROWN: Well, because he's been an incredibly good supporter of mine, he's always been up front and honest with me, and his name has not been mentioned anywhere in any of the hearings or anything else. And I just don't want to drag him into it. He doesn't deserve to be dragged into it.

BLITZER: But you have to assume the White House knows who wrote this e-mail. They can do a quick check...

BROWN: Oh, absolutely.

BLITZER: ... and find out that this individual wrote this e- mail.

BROWN: Absolutely. That's right.

BLITZER: So you knew it was going to come back to him.

BROWN: Absolutely. No question.

BLITZER: Do you feel like you could endanger his career or anything like that?

BROWN: It's not endangering his career. It's just that this is about -- I want the White House in general, particularly Michael Chertoff to stop dragging me through the mud every time the issue of FEMA comes up. There's a lot of things that need to be done to fix FEMA, and continuing to throw that at me is not going to solve anything.

BLITZER: Your job was at that time, like all people who work for the president, especially political appointees, to serve the president and protect the president in this kind of criticism.

BROWN: Absolutely. Absolutely, Wolf.

BLITZER: So you were ready to do that. When you read this e- mail it's possible that the president did say that in the cabinet meeting. He may have been joking, too. He might not necessarily have been serious.

BROWN: That's absolutely true, but the point is, it seems to me to be a pattern of what the administration is doing. Look, every time that Michael Chertoff -- just yesterday in GovernmentExec.com, talking about whether FEMA should be pulled out or not, and continues to berate me in those stories. He needs to stop that.

BLITZER: You want him to step down, you want him to resign. You told me that on this program just a few weeks ago.

BROWN: Right. Right. He either -- look, you have the political -- you have the political -- he's not serving the president correctly. You have the political tone deafness of the grants, you know, being kept in New York City and other places. That could have been handled so much better. He could have come in and at least told the American public why you're doing this.

Let's assume for a minute it's the right thing to do. Why shouldn't we know the basis upon which those grants were cut?

And then he testifies in front of the homeland security committee that, well, the real problem with FEMA was not that it was in DHS but Michael Brown.

BLITZER: What happens to this Michael Brown? What happens to Michael Brown right now? Is he in any kind of legal danger or problem? I mean you obviously wanted to be here.

LESTER: Absolutely not. But here's the thing. Here's what's happened. Mike Brown was blamed for everything. He became the poster boy of everything that went wrong, and then, as you recall, the video tapes came out, and I think actually that was right after they came out that you had Mike on this -- on this show.

Those videotapes showed that Mike Brown was doing precisely what he was supposed to be doing. In fact, he seems to have been the only top level official that was doing that.

The reason I wanted this e-mail to be out there, I wanted it to be public, is because it shows an attitude that has been going on at this White House now for, certainly, the whole time since Katrina made landfall.

BLITZER: Is it part -- releasing this e-mail -- is it part of the rehabilitation of Michael Brown?

BROWN: Absolutely. But you know, I'm not still in a campaign to do that, because, Wolf, the business is going well. There's clients out there. You know, just yesterday I had a meeting with St. Bernard Parish, some folks from there, about things that they need to do and how they might -- some strategies they might use. So I think the videotapes and everything else has been rehabilitative.

It really has more to do with it's time to stop this issue about Mike Brown when it comes to what needs to be done to FEMA. Let's deal with the facts and the policies that need to be corrected.

BLITZER: David Paulison has been now sworn in as the new FEMA director. He says the country, the federal government is ready for another hurricane, and we're in the hurricane season right now. Is the federal government -- is FEMA, your old agency, ready?

BROWN: Well, I don't think so based on what the people inside the agency tell me, and it really worries me that when I talk to Junior Rodriguez (ph), for example, from St. Bernard Parish, he talks to me about 26,000 homes, 20,000 of which have not been gutted and cleaned up yet, rats the size of Chihuahuas down there.

Look, in the previous workings of FEMA we cleaned up Ground Zero, under budget and in a short schedule. We cleaned up Florida within a good time period. But in St. Bernard Parish, it's still not happening. It needs to happen. BLITZER: Let me follow up on a GAO report that came out yesterday, the Government Accountability Office. "FEMA and the Red Cross disagreed about their roles and responsibilities, and this disagreement strained working relationships and hampered their efforts to coordinate relief services for hurricane victims."

This is the first I've heard that FEMA and the American Red Cross were at odds in the aftermath of this disaster.

BROWN: They were, and I can tell you, Marty Evans, the previous president and I, tried to resolve some of those at a very high level. I have since, after leaving FEMA, worked with the Red Cross and given them several ideas of things they might do.

It was also a function of, for example, the Department of Homeland Security, throwing the national response plan out there, and The Red Cross not fully understanding what DHS wanted them to do. And DHS didn't understand what the Red Cross should do.

So I've given them some advice about what we could do, what they might do in the future to solve those. But there was. There was a conflict that Marty and I tried to solve that was just impossible to do.

BLITZER: Michael Brown is the former FEMA director. Andy Lester is his attorney from Oklahoma. Thanks to both of you from coming in.

BROWN: Thank you, Wolf.

BLITZER: And you, too, can read the entire September 11 e-mail sent to Michael Brown. Get the White House response, as well. We've posted it online at CNN.com/SituationReport.

Coming up, they're paid to keep immigrant smugglers out, so why are some border protection officers, who are driving around in luxury cars, making their bosses suspicious?

And tick tock. With every second that goes by, President Bush says Iran is running out of time. Now he's warning of consequences. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Here's a look at some of the "Hot Shots" coming in from our friends at the Associated Press, pictures likely to be in your hometown newspapers tomorrow.

Sudan, an African Union soldier patrols a refugee camp in Darfur.

Jakarta, Muslim women raise their fists in protest against the local publication of "Playboy" magazine. Their posters read "'Playboy' is Against the Sharia Law" and "Till Death We Refuse 'Playboy'."

Beijing, a group of new hair dressers play a teamwork game, part of a weeklong training session. And in Laramie, Wyoming, two young entrepreneurs operate their own small business, a lemonade stand in their front yard. Good luck to them.

Those are some of today's "Hot Shots", pictures often worth a thousand words.

How much would you pay for Martin Luther King Jr.'s personal notes from inside his famous Birmingham jail cell? It might run you more than $15 million. The auction house Sotheby's is putting King's personal archives up for auction this month.

Let's bring in our Internet reporter, Abbi Tatton. She has details.

TATTON: Wolf, thousands of documents here, many of them handwritten by Dr. King, drafts of sermons, of speeches, including that famous "I have a dream" speech. Eight hundred index cards from Dr. King's graduate studies. All of this makes up this collection that could fetch up to $30 million.

Some of the earliest documents here go back to the 1940s. Take a look at this. This is an examination book from Dr. King dated March 1946. That's from his time at Moorehouse College. The subject there, the Bible.

There are also documents that were in Dr. King's possession. This is a telegram from the White House. It's dated August 1965, marked important, inviting Dr. King to the signing of the Voting Rights Act.

The King estate is requiring that the entire collection stay together. It's on display. It's going to be on display at Sotheby's before it goes to auction on June 30 -- Wolf.

BLITZER: Thank you very much, Abbi, for that.

Zain is at the CNN Center with a quick look at some other important stories making news -- Zain.

ZAIN VERJEE, CNN ANCHOR: Wolf, President Bush says that the clock is ticking on Iran during a joint news conference with Denmark's prime minister, Anders Fogh Rasmussen. The president repeated calls for Tehran to stop enriching uranium. He said Iran's running out of time and warns of consequences.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We've given the Iranians a limited period of time, you know, weeks, not months, to digest a proposal to move forward, and if they choose not to verifiably suspend their program, then there will be action taken in the U.N. Security Council.

(END VIDEO CLIP) VERJEE: This week Iran's leader, Ayatollah Ali al-Khameini, suggested that Iran could disrupt the flow of oil from the Middle East.

At the same news conference, President Bush drew attention to what he called Genocide in Sudan's western Darfur region. Tens of thousands have been killed and more than two million are refugees. Rights groups accuse the Sudanese government of backing militias that have killed civilians.

President Bush has called for U.N. peacekeeping troops to take over in the region. Today a top level U.N. and African Union team arrived in Sudan to try and persuade the government there to accept a U.N. peacekeeping force in Darfur. Sudan has not been open to that.

We're getting new reports of insurgent attacks in Afghanistan. The violence there surged in recent weeks, killing some 400 people. Now a series of ambushes and bombings, along with at least two sustained gun battles between Afghan forces and suspected Taliban militants has been reported over the past 36 hours. The violence coincides with the release of a statement said to be from Taliban leader Mullah Mohammed Omar, mourning the death of Abu Musab al- Zarqawi in Iraq.

And, Wolf, it's the sporting event most watched around the world. Businesses often close. Fans celebrate and cheer, head for bars. Millions more hold parties at homes. It's the World Cup, in which 32 qualifying countries play for the ultimate prize in football, or soccer as it's known here.

The tournament kicked off with the host, Germany, beating Costa Rica 4-2. It was watched worldwide by more than one billion people. Were you one of them, Wolf?

BLITZER: I wasn't. One billion people watching that. Do you think that's more than watch our show, Zain?

VERJEE: Just a little bit, Wolf. Just a little bit more.

BLITZER: Thanks, Zain.

Still to come, why is a place well-known for cheesesteaks in the middle of the immigration war? Mary Snow is standing by to tell us.

And there are is this startling accusations lodged against agents who are supposed to protect the nation's borders. We're going to have those details as well. Stay with us.

(COMMERCIAL BREAK)

BLITZER: In California two federal agents paid to protect the U.S. border are now accused of doing the opposite: taking bribes to let smugglers let smugglers bring illegal immigrants into the United States.

CNN's Chris Lawrence is joining us from Los Angeles with the story -- Chris.

CHRIS LAWRENCE, CNN CORRESPONDENT: Wolf, these border patrol agents make about $65,000 a year. But they showed signs of living beyond their means.

(BEGIN VIDEOTAPE)

LAWRENCE (voice-over): Thousands of people try to smuggle illegal immigrants through this border crossing, and every day, nearly 1,500 agents do everything in their power to stop them.

CAROL LAM, U.S. ATTORNEY: Unfortunately, two cases this week illustrate exceptions to that general rule.

LAWRENCE: Two veteran customs and border protection agents have been arrested. They're charged with taking bribes to wave smugglers through their lanes: no inspection, no proof of citizenship.

Richard Elizalda was charged Friday. Agent Michael Gilliland earlier in the week.

STEWART ROBERTS, FBI: Mr. Gilliland sold out his country for $1,500 per smuggled alien. Mr. Elizalda sold out his country for between $500 and $1,000 per smuggled alien.

LAWRENCE: There are two dozen lanes at the San Ysidro border crossing. Agents like these only work any one lane for 20 minutes at a time. Prosecutors in the U.S. attorney's office allege Elizalda coordinated with smugglers to get cars full of illegal immigrants funneled into his lane, where he waved them through in exchange for cash and a Lexus.

Prosecutors say one group was caught because Elizalda had to change shifts just before the car made it to his booth.

ADELA FASANO, DIRECTOR, CUSTOMS AND BORDER PROTECTION: It is important to our agency to see one of our officers breach the trust, break the laws that they are sworn to uphold themselves in their job every day.

LAWRENCE: Federal agents arrested seven other people they say were working with Elizalda, all U.S. citizens. Elizalda was just appointed an attorney, who had not spoken with him as of Friday afternoon. Both agents have pleaded not guilty to these charges.

(END VIDEOTAPE)

LAWRENCE: We got our hands on the indictment against both those agents. Federal agents say they always found $26 million Iraqi dinar in agent Gilliland's home. That's about $18,000 U.S. They're looking into it, of course, but right now say there's no indication he was smuggling anyone from the Middle East -- Wolf.

BLITZER: All right, Chris. Thank you for that story.

Coming up Arnold Schwarzenegger running for reelection, but does California's governor see eye to eye with his party over immigration? You won't want to miss John King's candid conversation with Governor Schwarzenegger. That's in our 7 p.m. Eastern hour.

Up next, though, a political food fight. We're going to tell you why a famous cheesesteak joint is right now smack in the middle of the immigration wars. Mary Snow is in Philadelphia. Stay with us.

(COMMERCIAL BREAK)

BLITZER: The cheesesteak is a symbol of Philadelphia, but now it's a symbol of the battle over illegal immigration as well, and that battle is raging in the City of Brotherly Love.

Our Mary Snow is in Philadelphia right now. And she's joining us with details -- Mary.

MARY SNOW, CNN CORRESPONDENT: Wolf, an unlikely spot for this debate. We're at Geno's, one of the famous spots for cheesesteaks. And what is igniting this debate is a sign that says, "This is America. When ordering speak English."

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Let me get three Wiz with and one without.

SNOW (voice-over): The biggest debate at Geno's is usually whether you'll take Cheez Wiz or provolone on your cheesesteak, but now a whole new kind of debate is heating up at this famous Philadelphia cheesesteak landmark after owner Joey Vento, who's run this business for 40 years, put up a sign in December requiring customers to place orders in English only.

JOEY VENTO, OWNER, GENO'S STEAKS: I'll take that stand. I'll be the poster child. I'll lead the charge.

SNOW (on camera): And how about in the debate on illegal immigration? Where would you take a stand there?

VENTO: Ship them all back.

SNOW (voice-over): Geno's is a Philadelphia icon, serving countless famous customers, including Bill Clinton and Rudy Giuliani. And because of Geno's status in the city, the debate has gained plenty of attention.

VENTO: I'm a proud American, and I want everybody to speak English. And I don't see anything wrong with that.

SNOW: But some in the community see a different meaning.

LIZA RODRIGUEZ, "JUNTOS" COMMUNITY OUTREACH: It's a way of saying no Mexicans allowed. Or no Latino immigrants allowed.

SNOW: Community leaders say there are a growing number of Mexicans in the city. Some, including a city councilman, believe the English only rule is targeting them as the nation debates illegal immigration.

Emotions run so high a passerby interrupted one of our interviews to weigh in.

UNIDENTIFIED MALE: This is a private establishment, and he has the right to refuse service to anybody he wants. If I'm not wearing a shirt, if I'm not wearing a shows.

RODRIGUEZ: Like 50 years ago, when they said signs that said "whites only" or "no coloreds allowed."

UNIDENTIFIED MALE: But it doesn't say no Mexicans.

SNOW: Vento says he won't turn anyone away.

VENTO: When you come to Geno's, even though you don't speak English doesn't mean you're not going to get served.

SNOW: Vento says he'll actually help customers with the translation. But not everyone in the community is convinced.

HELEN GYM, ASIAN AMERICANS UNITED: Underneath the say, it says management has the right to refuse service, and the two of them combined together, if you read it in English, send a message.

(END VIDEOTAPE)

SNOW: Wolf, this debate is so heated that a city councilman here in Philadelphia yesterday asked the owner here at Geno's to remove the sign, saying it was mean-spirited. The Anti-Defamation League also wrote a letter of protest. But the owner, Joey Vento, says he's keeping that sign up, and he says he's been getting calls and letters of support -- Wolf.

BLITZER: All right, Mary. Thanks very much. Go enjoy a cheesesteak, if you can order it in English.

Up next, should amnesty be given to the people who authorized the NSA to spy on Americans without a court order? Jack Cafferty standing by with his question of the hour. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Time now to check back with Jack. Jack.

CAFFERTY: Wolf, the "Washington Post" reports that Senator Arlen Specter has proposed legislation that would give President Bush the option of getting a warrant from a special court for the electronic surveillance programs like the secret one being conducted by the NSA.

Also anyone involved in the current secret NSA spying program without a court order would be given blanket amnesty. Aren't they cute?

So the question is if blanket amnesty ought to be given to these people. I have a couple of thoughts, but I guess this is time for the viewers' thoughts.

Kris from Dallas: "You were right, Jack. Sen. Specter was so outraged at Cheney obstructing the NSA investigation that two days later he's proposing amnesty for folks like Cheney. Why would amnesty be needed if the NSA programs were legal, as the administration has been claiming?"

Now there's a question.

K. writes, "I've never, ever heard of a blanket amnesty. Isn't it amazing that all the 'crooks' in the White House, administration, and especially, the ones currently residing in our Republican Senate, keep making up these ridiculous 'new rules' for themselves?"

Cliff in Front Royal, Virginia: "If you were a journalist, and by definition I don't think you are, you would report on the NSA wiretapping in the context of its importance or effect on national security."

Marge in Kenosha, Wisconsin: "Jack, Jack, Jack, get with it, pal. These guys want to give amnesty to immigrants breaking our laws by entering or staying here illegally and grant citizenship to illegals who use our Social Security numbers. That's identity theft. That's a felony. Did you think they'd leave themselves out of this amnesty festival? Just SOP for these SOBs."

And Ann in Texas: "Jack, the people who authorized the NSA to spy on Americans without a court order should be covered with a blanket and then beaten senseless with the receivers from our telephones, not be granted amnesty" -- Wolf.

BLITZER: Jack, just footnote. We just got a call from Senator Specter's office a few minutes ago. They're taking issue with the "Washington Post" article that you cited. They said they intend to send a letter to the editor of the newspaper tomorrow. I'm going to follow up on all of this with Senator Specter Sunday when he joins me on "LATE EDITION".

Jack, you want to comment?

CAFFERTY: No, just -- I'll be watching.

BLITZER: Good. Glad you will be.

Jack's going to be back with us in one hour when we return. We're here weekday afternoons 4 to 6 p.m. Eastern, back at 7 p.m. Eastern. Our guests tonight include the California governor, Arnold Schwarzenegger. Until then, thanks very much for joining us. "LOU DOBBS TONIGHT" starts right now. Kitty Pilgrim is standing by -- Kitty.

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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