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The Situation Room

New York City Tunnel Terror?; North Korea Missile Fallout; Interview With Former White House Chief of Staff Andrew Card

Aired July 07, 2006 - 17:00   ET

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


JOHN KING, CNN ANCHOR: 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, hopes of blowing up tunnels and bringing New York City to its knees.

It's 5:00 p.m. in New York, where officials say those were the goals of terrorists who hoped to strike New York again. But officials they were stopped.

President Bush's harsh message to a defiant dictator.

It's 4:00 p.m. in Chicago, where the president says the short and long-term fate of North Korea is up to its communist dictator.

And exit interview. An exclusive chat with President Bush's former chief of staff. In his first TV interview since leaving, I'll ask him why he wound up on the other side of a White House shakeup and if he feels like a scapegoat.

Wolf Blitzer is off today. I'm John King. You're in THE SITUATION ROOM.

Up first, our CNN "Security Watch."

Officials say it was a terrorist's dream, blow up trains and tunnels in New York, possibly to unleash floodwaters in Manhattan, and a new wave of fear. That scenario is described in disturbing detail. It concerns an alleged plot officials say they stopped similar to a scenario played out in London last year. Today, many marked the first anniversary of the subway bus bombings that killed 52 people.

Our Mary Snow is in New York, but let's get the details of this new alleged plot in New York first from our justice correspondent, Kelli Arena -- Kelli.

KELLI ARENA, CNN JUSTICE CORRESPONDENT: John, officials say that they were all over this plot and moved in before anyone was even close to being put in danger.

(BEGIN VIDEOTAPE)

ARENA (voice over): Government officials say the plot to blow up path tunnels in New York City came to their attention about a year ago. It was in the early stages, but officials say quickly maturing with the aim of attacking this fall.

MARK MERSHON, NEW YORK FBI ASSISTANT DIRECTOR: They were about to go to a phase attempt to surveil targets, establish a regimen of attack, and acquire the resources necessary to effectuate the attacks.

ARENA: With the alleged mastermind in custody in Beirut, officials went out of their way to say the threat has been neutralized.

Assem Hammoud is a 31-year-old Lebanese national.

MERSHON: We know that he has acknowledged pledging a bayat (ph) or allegiance to Osama bin Laden, and he proclaims himself to be a member of al Qaeda.

ARENA: The FBI says eight individuals in total are involved. At least two other alleged participants are also in custody. But the FBI won't say where.

As for the other five, officials say they do not believe they are in the United States.

MERSHON: There are still subjects out there mostly known, some only partially identified or unknown. And we remain vigilant.

ARENA: The fact that this information got out when it did infuriated some officials who say it jeopardized the investigation. But even more damaging, they say, was the revelation the FBI discovered the plot by monitoring Internet chat rooms. That gets uncomfortably close to disclosing sources and methods.

PAT D'AMURO, FMR. ASSISTANT DIRECTION, FBI, NEW YORK: This is a situation where I think the information came out prematurely. And whoever leaked this information really needs to take a step back and take a look at what they were trying to accomplish.

(END VIDEOTAPE)

ARENA: The FBI says there are at least six countries actively involved in this investigation. Sources tell CNN that those include Canada, Pakistan and Iraq -- John.

KING: And Kelli, their anger that this information came out that this was leaked, do they -- in addition to their anger, do they think that somebody's getting away or there have been setbacks because of it?

ARENA: Well, they do. They do believe that people disappear when they know that investigators are on to them. And other people clam up when they could be providing information -- John.

KING: Justice Correspondent Kelli Arena.

Kelli, thank you very much. Four hundred and fifty million people, that's how many people the Port Authority of New York and New Jersey says use the tunnels, bridges and transportation system every year.

CNN's Mary Snow is in New York with more on that threat -- Mary.

MARY SNOW, CNN CORRESPONDENT: Well, John, the FBI here in New York says it appears that the path train tunnels were the target. Officials say there are four tunnels from New Jersey to New York carrying passengers to stations like this one. And about 215,000 people take these trains every day.

(BEGIN VIDEOTAPE)

SNOW (voice over): Tunnels leading into New York City have long been considered terror targets. The FBI says this latest plot involved a path train carrying hundreds of thousands of commuters under the Hudson River from New Jersey to Lower Manhattan every day.

SAMUEL PLUMERI, PORT AUTHORITY OF NY & NJ: I think that any -- any explosion, any blast in any tunnel, regardless of its size, would cause an issue, obviously, and a disruption. To get into details as to what that means in terms of size of explosives, et cetera, I'm not prepared to do that here today.

SNOW: While the FBI specifically mentioned the transit tunnel, officials also said there have been a number of threats over the years targeting all river crossings. The Holland Tunnel also crosses into Lower Manhattan and was mentioned in a 1993 terrorist plot, with authorities wary of an explosion going off inside the tunnel.

LEE AMRAMSON, TUNNEL ENGINEER: It's possible that such an event would damage the inside of the tunnel, but they would very unlikely cause a complete collapse of the tunnel and water rushing in.

SNOW: Engineers say the path tubes, much like the Holland Tunnel, are built under the riverbed, protected by bedrock in most parts. Experts say that a "New York Daily News" report of a scenario to intentionally flood Lower Manhattan's financial district would be unlikely because New York is above sea level.

Pat D'Amuro, formerly with the FBI and now the CEO of Giuliani Security and Safety, says it wouldn't take much to inflict a lot of damage.

D'AMURO: It's the fear and it's the panic that al Qaeda or groups like that would want to bring into play by attacking a venue such as that.

(END VIDEOTAPE)

SNOW: Now, since 9/11, part of its stepped-up security have been random bag searches on path trains like this. And coincidentally, John, New York's police commissioner says that security had been stepped up at New York City subways today because of the anniversary of the London bombings today -- John. KING: Mary Snow for us in New York.

Mary, thank you very much.

And New York lawmakers are saying today's development are a prime reason why they think New York City deserves more money to prevent terrorist attacks. Those politicians roundly criticized the Homeland Security Department last month for cuts in terror funding.

Our Internet reporter, Abbi Tatton, has more on this latest reaction -- Abbi.

ABBI TATTON, CNN INTERNET REPORTER: John, those lawmakers saying today this threat only reinforces their criticisms of those cuts. In neighboring New Jersey, Senator Robert Menendez at his site a would-be terrorist with an Internet connection recognizes New York landmarks, but Homeland Security Secretary Michael Chertoff does not.

Since the cuts were announced in late May, New York Congressman -- Republican Congressman Pete King teamed up with Democrat Senator Hillary Clinton. They sent postcards to Secretary Chertoff of major landmarks in New York City, trying to remind him of the potential terror threats. They were all signed, "Wish you were here, Hillary and Pete."

Senator Clinton saying today she will introduce an amendment next week to restore some of the funds. Officials from Homeland Security pointing out today that New York is still the largest recipient of funds. In terms of mass transit security funding, receiving four times as much as the next city -- John.

KING: The political debate continues.

Abbi Tatton, thank you very much.

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

President Bush is urging diplomacy and patience with North Korea and sending a message to its leader, Kim Jong-il. The president is on his way back from Chicago, where he attended a fund-raiser but also spoke out about his latest diplomatic challenge.

CNN White House Correspondent Suzanne Malveaux is in Chicago and joins us live.

Hi, Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, hey, John.

President Bush blew through the Windy City, his first solo press conference outside of Washington really as a new media strategy to show that he is a president that is in touch with the people, the concerns of the heartland, even taking some questions from local reporters. But clearly, the one issue that dominated this press conference was the standoff with North Korea.

(BEGIN VIDEOTAPE)

MALVEAUX (voice over): Since the missiles were launched two days ago, Mr. Bush has been trying to get North Korea's neighbors to unite, and convincing the regime to come back to the stalled six-party talks, and for them to agree on sanctions.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: It's slow and cumbersome. Things just don't happen overnight.

MALVEAUX (on camera): If I could follow up, you say diplomacy takes time.

BUSH: Yes, it does.

MALVEAUX: But it was four years ago that you labeled North Korea a member of the axis of evil. And since then, it's increased its nuclear arsenal, it's abandoned six-party talks, and now these missile launches.

BUSH: Let me answer your question. It's increased -- that's an interesting statement, North Korea has increased its nuclear arsenal.

Can you verify that?

MALVEAUX: Well, intelligence sources say -- if you can -- if you would like to dispute it, that's fine.

BUSH: No, I'm not going to dispute it. I'm just curious.

MALVEAUX (voice over): According to U.S. intelligence sources, North Korea had the capability to produce one to two nuclear weapons in the mid to late 1990s. But since it began reprocessing 8,000 spent fuel rods in April 2003, U.S. intelligence estimates North Korea can produce six to eight nuclear weapons, while other experts suggest as many as 12 or 13.

(on camera): Why shouldn't Americans see the U.S. policy regarding North Korea as a failed one? What...

BUSH: Because it takes time to get things done.

MALVEAUX: What objectives has the U.S. government achieved when it comes to North Korea? And why does the administration continue to go back to the same platform process if it's not effective in changing North Korea's behavior?

Thank you.

BUSH: Suzanne, these problems didn't arise overnight and they don't get solved overnight. It takes a while.

You asked what we've done. We have created a framework that will be successful. I don't -- my judgment is, you can't be successful if the United States is sitting at the table alone with North Korea. You run out of options very quickly if that's the case.

(END VIDEOTAPE)

MALVEAUX: And, of course, John, the question is whether or not the president really has standing and the credibility when he meets face to face with world leaders next week at the G8 summit in Russia, important leaders like China's Hu Jintao, and, of course, Vladimir Putin. The pressure, whether or not he can convince them that his strategy for dealing with North Korea is ultimately a winning one -- John.

KING: And the world will be watching.

Suzanne Malveaux for us in Chicago.

Thank you, Suzanne.

In another new development, Japan is circulating a new draft resolution at the United Nations in response to the missile crisis. It includes sanctions against North Korea, a move opposed by Russia and China, which have veto power on the counsel.

Meanwhile, the Bush administration's point man on North Korea says China warned Pyongyang against launching missiles. Assistant Secretary of State Chris Hill is in Asia trying to jump-start the stalled six-party talks on the North Korean missile program.

Up ahead, much of Britain comes to a standstill remembering victims of that country's worst attack since World War II. We'll go live to London, marking the one year since the subway terror bombings.

Also, former White House chief of staff Andrew Card joins us in THE SITUATION ROOM for an exclusive interview, his first on TV since leaving a troubled White House.

Plus, she's a best-selling author and expert at causing controversy. Now there's a new one centering on her. Serious new questions about Ann Coulter's writing. We'll show you what that's all about.

(COMMERCIAL BREAK)

JOHN KING, CNN ANCHOR: As we mentioned earlier, President Bush spent the day in Chicago, addressing the economy, Iraq, and dealing with North Korea. One man very familiar with the president's current thinking on those issues is his former White House chief of staff, Andrew Card.

I recently spoke with Mr. Card in his first TV interview since leaving the White House. It's a CNN exclusive.

(BEGIN VIDEOTAPE)

KING: Let me ask you first to reflect on when you left the White House. And I'm wondering if after all your years of service to the president you felt at all like you were being made a scapegoat. ANDREW CARD, FMR. WHITE HOUSE CHIEF OF STAFF: Oh, no. I felt comfortable about leaving the White House. It was time for new leadership to come in there.

The president has a very great agenda for America, but people were losing their attention. And I think that they needed something to call more attention to the White House and its organization. And Josh Bolten is doing a terrific job as the chief of staff, and I'm very supportive of what he's doing.

And I have talked with him several times. I'm excited about the direction that the White House is offering to the president and how the president's leadership is making a difference. And I think it was time for me to go.

KING: When you say losing their attention, does that mean you were doing something wrong, the president was doing something wrong? Or just static in the system after so long?

CARD: Well, I actually think it was time for some changes to take place. And, you know, it was a new season. And Josh Bolten is the best person for that new season.

I had a wonderful run. I just had a spectacular time, and I got to watch the president as he made the toughest of decisions. And the leadership that he provided is -- is remarkable.

And he's a -- he's a very, very good man. And I watched him do great things. And it was a great privilege to work with him, and it was a great privilege to work with the other people at the White House.

But it was time for new leadership to sit in the chair of the chief of staff's office. And Josh Bolten is the right person to do that. And I'm excited for him, and I'm grateful for the opportunity that I had.

KING: A new press secretary was brought in. Karl Rove was reassigned a bit away from policy, more toward the political side.

In hindsight, do you think some of those changes could have and should have been made on your watch?

CARD: Well, we looked at making a lot of changes, but the truth is, you probably had to change some of the leadership at the White House. And it wasn't just moving chairs around. You wanted to move the right people into the right responsibilities.

KING: I want to go back and get your reflection on some of the big moments, especially of the second term, and whether there's any lessons in them.

The president made a conscious decision after winning re- election, where he said he had political capital, he believed, to spend a great deal of time on Social Security. He got nothing for it. He didn't get legislation passed. Republicans in his own party were reluctant to do it. And he spent so much time traveling on it and investment on it. The war became unpopular in that period of time as well, and his poll standing fell.

In hindsight, was it a mistake with a 51 percent victory to take on such a huge issue?

CARD: We lost a lot of momentum as we tried to build momentum to address the challenges of Social Security. But the president was right to call attention to the problem, and I think that history will show that the president's solution was the right solution. And hopefully it will come maybe during the final year of his second term.

We need a new Congress to recognize the leadership, but that new Congress will be a Republican Congress, because I think the Republicans have an agenda that's positive. It stands for something. It's not negative. And I think that the Republicans will be there to help solve of these problems that we know have to be addressed to protect future generations.

KING: One of this president's strengths as a Republican leader, not president of the United States as much, has been the solid support of the Republican base throughout his administration. And yet, when the Harriet Miers choice was announced for the Supreme Court, you saw the bubble pop, if you will.

Conservatives were outraged. They thought the president blindsided them. Many said the president betrayed them by picking someone they didn't know.

Was -- during that process, I assume somebody raised their hand and said, "Mr. President, this is your call. We know she is your friend. We know you trust her. But do you know, sir, if you do this, you are going to have a revolt on the right?

CARD: Well, he was picking someone that he thought would be right for the Supreme Court. And she reflects the president's philosophy, and he knows that. She would have been a terrific member of the Supreme Court, and we would have been very proud of her sitting there as a justice. But it wasn't meant to be.

KING: Does the president feel betrayed when something like that happens? He has kept faith with the base, and he was essentially asking them, "Trust me. I know you don't know this woman, but I know her. Trust me." And their answer was resoundingly, no.

Does the president feel betrayed when that happens?

CARD: I don't want to speak about the president, but I can tell you Harriet Miers is a very good person. And she would have been an outstanding member of the Supreme Court. But we also have an outstanding new member of the Supreme Court in Sam Alito, and that would not have happened if it hadn't been for Harriet Miers paving the way.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

KING: You're in THE SITUATION ROOM. Wolf Blitzer is off today. I'm John King.

More now of a CNN exclusive, the first TV interview with former White House chief of staff, Andrew Card, since he left the White House. What mistakes does he think were made while he was still there?

(BEGIN VIDEOTAPE)

KING: Another moment that has hurt the president in the second term is the government's response to Katrina. You've had some time to be away from the White House, to maybe reflect a bit when you're not in that day-to-day constant meetings and meetings and meetings and phone calls and more meetings.

Anything stick out now? Do you think, boy, we missed it here, we should have done this differently at the very beginning?

CARD: We've learned some valuable lessons, but I think the good leadership that came from the White House was much better than was preserved. And some of the frustration that I experienced in the White House that people didn't recognize that the president's hands were tied frequently during the response to Hurricane Katrina by a relatively weak response from the state and local governments.

KING: Take us behind the scenes into this president's mindset at a time that must be very difficult for him. The war is trouble -- troubling to begin with. Politically at home it's unpopular. He's in his second term, and he has to be thinking he's approaching the midterm elections, when, as you know, the term "lame duck" gets thrown around in Washington either just before or certainly after the midterm elections.

I know he says he doesn't govern by the polls, doesn't dwell on the polls, but he's also a human being and somebody who has been around politics a long time. He has to dwell a little bit on his legacy.

CARD: Well, what he's worried about is the security of the country. And he knows that it is very important that we win the war on terror. And part of that on terror includes winning the battles in Iraq. And now we have new government in Iraq. It took a lot longer to form than anybody wanted, and took a lot longer time to get the secretary -- or minister of defense and minister of interior.

And I was grateful that the new prime minister picked a leadership team that appears to have a will to succeed. And when the president had that surprise visit to Baghdad, and he met with the new prime minister, and the new minister of defense, and the new minister of interior, the president came back and he was filled with optimism.

KING: What's life after the White House mean for Andy Card? I assume it means you're not getting up at 4:00 in the morning anymore.

CARD: I get up at about 5:00 in the morning, rather than 4:20.

KING: That's a break.

CARD: And it is a break. I have a wonderful wife, and I'm spending more time with her, helping her, and that's something that I wanted to be able to do more of. And I just couldn't do it when I was White House chiefs of staff.

KING: But if you pick up the phone and call our friends who live in the home of Red Sox Nation, there are people who say Andy Card's going to home and run for governor someday. There are people who say Andy Card is going to come home and play a serious role in the Mitt Romney for president campaign. Either of those likely scenarios?

CARD: Well, I love Massachusetts. And Holbrook is my home. I'm very proud to call Holbrook home. I want to help the president do what he should be doing to help lead this country. I want to help our party.

So, yes, I'll be looking to make sure that those who look to carry the banner for the Republican Party in the next presidential election will hold that banner high and provide the right kind of leadership for the future generations.

But, no, I'm not looking to be a presidential candidate, I'm not looking to be a gubernatorial candidate or a Senate candidate or a congressional candidate.

KING: Andy Card, thank you very much.

CARD: Thank you, John.

(END VIDEOTAPE)

KING: Choosing his words diplomatically there. But look for Andy Card to be involved in the next presidential campaign.

One place you don't look for him anymore is Air Force One. Air Force One touched down in Andrews Air Force Base just a few moments ago. President Bush, as you see him here, returning from a fund- raising trip to Chicago. He also had a news conference there.

White House press secretary Tony Snow telling reporters on the flight home the president called Mexico's president, Vicente Fox, he also called the winner of Mexico's presidential election, Felipe Calderon.

Mr. Bush telling Mr. Calderon he looks forward to working with him. Mr. Calderon is scheduled to take office in December. His opponent, though, is still challenging those results. Mr. Bush making those diplomatic phone calls today on the way home from Chicago.

Still to come here in THE SITUATION ROOM, a chat with politicians of a different persuasion. My interview with Democratic senators Joe Biden of Delaware and Jack Reed of Rhode Island. They are both in Iraq today. I'll ask them what they're seeing.

And in New Orleans, why are some public housing residents raging mad at the federal government. Our Susan Roesgen will explain.

(COMMERCIAL BREAK)

KING: They died near their places of worship, on their holiest day of the week. As we reported a bit earlier, in Iraq, at least 13 people are dead from attacks at three Sunni mosques, a Shiite holy site, and in a marketplace in Baghdad. Today's violence comes as two U.S. senators are in Iraq to assess the security situation there.

(BEGIN VIDEOTAPE)

KING: Senator Joseph Biden of Delaware, Senator Jack Reed of Rhode Island, both Democrats, thank you for joining us today in THE SITUATION ROOM. You're both in Iraq, I assume, on a fact-finding mission.

Let me start with this question. The president had a news conference here today. And he is saying what he has said consistently, that the Iraqis are being trained, that that training is going well, that they're standing up, and that eventually the United States will be able to stand down. What is your sense from being there and talking to the British and the American generals?

Let me start with you, Senator Reed. Are the Iraqis doing better?

SEN. JACK REED (D), RHODE ISLAND: The Iraqi security forces are doing better. They have been -- consistently improved over the many months by great United States effort. The area which is of concern to myself, and I think to my colleague, is the other side of the aisle, the civilian agencies, the capacity to develop health care services, education, the energy sector. Without that type of capacity, the military efforts will merely buy time but not produce the progress we really want.

KING: So, Senator Biden, if the Iraqis are doing better, is the president right? And if the Iraqis are doing better, and he says as they stand up, we'll stand down, why do we need a timetable or why do we need to at least begin a partial redeployment and have the president then put a better plan on the table as the Democrats have called for?

SEN. JOE BIDEN (D), DELAWARE: Well, for two reasons. One, we don't need a date certain. We do need a timetable. The military here, essentially, has a timetable. The military here has told us there's no possibility of us having anywhere near the troop levels we have now this time next year. This is going to begin to change in September and October. So that's a reality, number one.

Number two, they still have a concern about sectarian violence here that's real. You still have to purge the police of the death squads that exist, that that's a real serious concern. And to reinforce what Senator Reed said. The department of -- this is the breadbasket of the Middle East, and the agriculture initiative here is moribund.

The energy and the sector relating to sewage and potable water needs a great deal of work. And it's not just standing up an Iraqi army. You have got to stand up an Iraqi government that can govern and you also have to have them stand together.

And so far it's an open question, at least in my mind, whether or not this new government is going to be able to get a Sunni buy-in, the Sunnis are in the center of the country, the heart of insurgency. And they have yet to fully buy into this new government.

And so this is a process. The president needs a plan. As a matter of fact, we just met with the -- at the deputy of the ambassador here, saying that they have laid out in detail an agenda for each of these ministries. That's a plan. The president doesn't talk about that. But we need a plan as to how they're going to be able to stand together and be able to govern the country.

KING: Well, let me bring you back quickly, Senator, I want to move on to other things. But you said the generals say there is no way there will be as many American troops there next year as there are right now. Are they giving you specific numbers? And over a scale of time, two months from now, four months from now, six months from now, about how many troops they think will be in Iraq?

BIDEN: Well, you heard...

REED: Well, they once again indicated to us that they anticipate drawing down troops beginning this year. They have, I think, a notion, a road map ahead of how many troops they might be able to have in the next several months, and next several years.

But once again, they indicated to us that likely redeployment will begin this year and it will continue based upon...

KING: But hard numbers, Senator, are they giving you hard numbers?

(CROSSTALK)

REED: I don't think they will give anyone a hard number. But I think what they'll say, which is essentially what Senator Biden and I supported just days ago in the Senate, begin redevelopment this year, to continue that redeployment, not on some artificial timetable or some arbitrary date, but as the conditions allow. And also to do what the president seldom speaks about, complement our military efforts with real progress on the civilian front, build a capacity.

And I think Senator Biden said it very well, this is not just about having an army, this is about the Iraqis having a government that works for them.

KING: Let me ask you about the troubling allegations in Mahmoudiya -- other troubling allegations against U.S. troops in Iraq. Senator Biden, do you know anything from this visit that the people of the United States don't know? And what's your assessment of the impact on how Iraqis view these American troops being there? Are we nearing a point where popular opinion in the country, because of these horrible allegations and incidents, is that they're not welcome anyway?

BIDEN: According to a number of people in the military we met with, the Iraqi tolerance for us being here is going to wear thin regardless of these allegations. And -- but they only make -- these allegations make it worse.

The only thing I can tell you about these allegations we met with General Chiarelli, he indicated -- he didn't give us an outcome. He told us how, in one particular -- the Haditha incident, where he showed us where he has reviewed -- and his staff, thousands of pages of documents, took us in a room where he showed us where that was done, making the point that this is thorough, this is going to be real, and that they're going to get to the bottom of it.

And I think that's all we can really ask of them right now. And I think that's all we can in fact do, deliver to the Iraqi people, a truthful assessment of what happened, and hold people accountable if they need to be held accountable.

KING: I want to ask each of you a domestic political question, even though you are in faraway Baghdad. One of your colleagues in the Senate, a friend, Joe Lieberman, said this week that he hopes to win the Democratic primary, but if he doesn't win the Democratic primary, he will get on the ballot as an unaffiliated candidate. He says he's still a loyal Democrat.

Senator Biden, you want to run for president. Would a loyal Democrat say, I'm a loyal Democrat unless someone challenges me -- somebody dares to challenge me under the rules of the party and the rules of my state and if I lose I want an insurance policy? Is that a loyal Democrat?

BIDEN: Joe Lieberman is a loyal Democrat in my view. Joe Lieberman, I think, will win the primary. We'll worry about what happens after that point, if, in fact, he doesn't. I expect him to win the primary.

KING: Senator Reed, if he doesn't win the primary, would you go up to Connecticut and campaign? It's your neighboring state. Would you go campaign for the Democratic candidate if it is Ned Lamont, or would you still support Joe Lieberman?

REED: I'm supporting Joe Lieberman in the Democratic primary. I'm confident Joe is going to win because I think Joe has been an excellent senator for the state of Connecticut and for the nation. And I'm confident he will win.

KING: I believe we call that punting the question big question down the road. But that's OK. We do that sometimes in politics.

Senator Biden, we need to close. But I want to ask you, Senator Biden, about something you said last month in New Hampshire that is just exploding on the blogs right now. And I want to give you a chance to answer it. You said this while you were up in New Hampshire, captured by CSPAN on June 17th: "You cannot go to a 7- Eleven or Dunkin Donuts unless you have a slight Indian accent, I'm not joking."

What were you thinking?

BIDEN: What I was thinking was, they took out of context the whole of what I said. I was making the point that up until now in my state, we've had a strong Indian community made up of leading scientists, and researchers, and engineers. I pointed out that over 30 percent of the engineers in Silicon Valley were Indians.

And I said, but now it is even healthier. We are having middle class people move to Delaware, take over Dunkin Donuts, take over businesses just like other immigrant groups had. And I was saying that.

And my comment about you can't go in unless you have an Indian accent was making the point that they're growing, it's moving. I could have said that 40 years ago about walking into delicatessen and saying an Italian accent in my state.

The point was, this is healthy. We're now having not merely engineers and scientists and the significant brain power that came our way in the Indian community, but we're also now having ordinary middle class people move to this country, building businesses, building families and strengthening our neighborhoods.

That was the generic point I was making. I've made it a number of times in the Indian community and out of the Indian community. This is a vibrant, vibrant community that ranges all of the way from CEOs in Silicon Valley to families that are taking over the Dunkin Donuts and fast-food stores in my state and building businesses and building the community.

KING: So anyone who casts that as an insensitive remark is taking you out of context?

BIDEN: Absolutely, positively. I have had an incredibly strong relationship with the Indian-American community in the State of Delaware, which has been vibrant. They are mostly engineers in the DuPont company, scientists and the drug companies.

And the point I'm making now is now you have not just the scientists and the cream of the crop, you have average middle class Indians moving to the United States and making contributions, at least in my state, which I'm very familiar with.

KING: Senator Joseph Biden of Delaware, Senator Jack Reed of Rhode Island, gentlemen thank you both for joining us today from Baghdad in THE SITUATION ROOM. Thank you both.

REED: Thanks, John.

BIDEN: Thank you. Thanks, John. KING: Up ahead, displaced people suing to get back in New Orleans public housing developments. We'll show you why they're in a showdown with the federal government.

Plus, wildfires and global warming, is there a connection? Our Internet reporters will show you "The Situation Online."

(COMMERCIAL BREAK)

KING: Our Zain Verjee, who, during the break, confessed to missing the vacationing Jack Cafferty, joins us with a look at other stories making news right now.

Hi, Zain.

ZAIN VERJEE, CNN ANCHOR: Where is he? How dare he take the day off.

KING: I think he's with Wolf on an undisclosed mission to an undisclosed location.

VERJEE: Well, I miss him. I don't know what to do with myself without him here. All right. Fine, I'll read this.

The Space Shuttle Discovery dropped off a cargo module holding more than 5,000 pounds of equipment and supplies for the International Space Station today. The crew says the shuttle is performing well and doesn't seem to have sustained damage to its exterior. Just last hour here in THE SITUATION ROOM, John King asked the space station's flight engineer about watching the shuttle dock yesterday.

(BEGIN VIDEO CLIP)

JEFFREY WILLIAMS, SPACE STATION FLIGHT ENGINEER: It was a magnificent view that Pavel and I had as the shuttle approached directly below the space station. And then it did that back flip, if you will, as you described. Just a fantastic view to see such a grand vehicle outside our window.

And as you also mentioned, we had an inspection requirement through photography. And we completed that as planned. And we saw nothing out of ordinary, nothing of interest.

(END VIDEO CLIP)

VERJEE: You can see more of John King's interview with the space station crew during the 7:00 Eastern hour.

Friends and family of Kenneth Lay attend two memorials for the Enron founder. The private services will be held in Houston and in Aspen, Colorado where the 64-year-old died this week. Enron's former CEO, Jeffrey Skilling, who, along with Lay, was convicted of defrauding investors, will attend both services. Lay faced decades in prison for his role in the collapse of the energy company.

Colin Powell says he's fine after a short visit to an Aspen, Colorado, hospital. The former secretary of state says he started to hyperventilating and feeling a little altitude sickness last night. The 69-year-old Powell had been attending a dinner with former President Clinton and others.

And a potential automobile alliance. General Motors' board has voted to start discussions with Renault and Nissan. Billionaire GM shareholder Kirk Kerkorian has been pushing the company to consider an alliance to help reverse its declining market share. The French Renault and Japanese Nissan companies say they're looking forward to starting the talks.

John, back to you. I'm looking to seeing Jack at some point next week.

KING: I assume he'll be here on Monday. But we'll put out the APB. Zain Verjee, thank you very much.

VERJEE: Thank you.

KING: Happening now in New Orleans, a showdown over public housing. Former residents are suing to get back in, but the government has other plans.

CNN Gulf Coast correspondent Susan Roesgen has that story for us.

SUSAN ROESGEN, CNN GULF COAST CORRESPONDENT: John, this is one of the public housing developments that's been closed here since Katrina. In fact, the city plans to tear it down. But some of the people who used to live here claim the city and the federal government are trying to keep poor people out.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: No justice, no peace!

ROESGEN (voice-over): For months now, people who used to live in public housing in New Orleans have been demanding to be let back in, people like Gloria Williams and her twin sister, Bobbi (ph), who lived side-by-side in a public housing development for nearly 30 years.

GLORIA WILLIAMS, PUBLIC HOUSING RESIDENT: I want to go home. I want to go home. I'm too old to start all over again.

ROESGEN: The federal government says Gloria can't go home, because she won't be safe there. The U.S. Department of Housing and Urban Development plans to demolish four public housing developments in New Orleans, saying they were in bad shape before Katrina, and because of flood waters and mold, are uninhabitable now.

ALPHONSO JACKSON, HUD SECRETARY: We are not here to displace anyone. We are not here try to gentrify a community. But we do believe that the community should be a decent, safe and sanitary place for people to live.

ROESGEN: HUD Secretary Alphonso Jackson says former New Orleans public housing residents can get vouchers to rent other places to live. Critics say the government is trying to scatter the poor, to drive them out.

ISHMAEL MOHAMMAD, ADVANCEMENT PROGRAM: The residents have a right to have an input into their own lives. Alphonso Jackson don't live in the projects.

ROESGEN: Ishmael Mohammad is part of a team of lawyers who filed a class-action lawsuit against the federal government. Residents who find the gates closed, now will have an open courtroom to try to force the feds to let them back in.

(END VIDEOTAPE)

Before Katrina, New Orleans had about 5,000 of these public housing unites. now only about 1,000. And some people say why spend the money to tear them down? Why not use that money to clean them up? Be it ever so humble, John, there's no place like home.

KING: Susan Roesgen, for us in New Orleans.

Wildfires, according to a new comprehensive study, the problem's getting worse. But this fire report asks a new question, is global warming to blame?

Our Internet report Jacki Schechner has the answer -- Jacki.

JACKI SCHECHNER, CNN INTERNET REPORTER: Well, John, the report stops just shy of making the direct link between global warming and an increase in wildfires. It was conducted by the Scripps Institution with federal funding.

What it does say is that our wildfire season is now two months longer than it was 30 years ago. And we're burning six times the amount of land. Now scientists studied some 1,200 Western wild fires from 1970 until the year 2003, and what they found is starting in the '80s the number of wildfires went up. And that correlated with an increase in temperatures in spring and summer. Also snow was melting earlier. And that had something to do it with as well.

Now one area that was particularly affected was the northern Rockies. And scientists say that basically the higher altitude means greater temperature, and that leads to more wildfires.

Now according to the National Interagency Fire Center, which keeps year-to-date updates, we have had more than 60,000 wildfires so far this year. That's spread over more than almost more than 4 million acres -- John.

KING: Interesting stuff, Jacki Schechner, thank you.

And up next, a hot spotlight on conservative pundit Ann Coulter. We'll show you why some accuse her of plagiarism in her columns and her new bestselling book. Details of the controversy coming up.

Stay right here, you're in THE SITUATION ROOM. (COMMERCIAL BREAK)

KING: Here's a look at some of the "Hot Shots" coming into from the Associated Press. Pictures likely to be in your newspaper tomorrow. In northern Gaza through the eyes of a soldier. Israeli troops push into the area hoping to end rocket attacks and to free a captured soldier. Not far away, a boy mourns for a relative killed in the clashes. More than two dozen Palestinians and one Israeli soldier have lost their lives in the fighting.

In California, a makeshift memorial at a sight of a car crash that killed two members of a Tonga's royal family. A teenager accused of driving recklessly is being blamed for that accident.

And in Mongolian, get this, men dressed as Mongol warriors check their cell phones during rehearsals for a festival to mark the 800th anniversary of Genghis Khan. I don't think Genghis Khan had a cell phone.

That's today's "Hot Shots," pictures often worth a thousands words.

For weeks now, conservative columnist and author Ann Coulter has sat high on The New York Times bestseller list with her controversial new book. But there is a new controversy brewing, not about her comments in that book, but the inspiration behind them. Our Brian Todd is here to explain.

Hi, Brian.

BRIAN TODD, CNN CORRESPONDENT: Hi, John.

New allegations of plagiarism now against the woman who has made a career out of being a lightning rod.

(BEGIN VIDEOTAPE)

TODD (voice-over): She is the left-wing's living nightmare, but spares seemingly no one who she thinks is politically insincere, like some September 11th widows.

ANN COULTER, AUTHOR: Apparently cutting a campaign commercial for John Kerry was an important part of the grieving process.

TODD: She also wrote about the widows, that she has never seen people enjoying their husbands' deaths so much.

Now, conservative author and columnist Ann Coulter is getting as good as she gives, with allegations that she a plagiarized several passages in her columns and in her bestselling new book "Godless."

HOWARD KURTZ, HOST, "RELIABLE SOURCES": When you engage in the kind of incendiary rhetoric that Ann Coulter does, there are a lot of people out there who are going to be poring over every syllable that you write, trying to find something they can use against you. TODD: One passage in question, on page 95 of the book, Coulter writes of Judge Charles Pickering, quote, "as the president of the Mississippi Baptist Convention, Pickering presided over a meeting where the convention adopted a resolution calling for legislation to outlaw abortion."

Checked against this passage in a 2002 news release from the group Planned Parenthood, the only difference is that Planned Parenthood had the word "judge" before Pickering's name, and the year 1984 later in that line.

Coulter's publicist said she couldn't appear on camera. But her book publisher issued a statement saying quote: "We have reviewed the allegations and found them to be as trivial and meritless as they are irresponsible."

Coulter's syndication company says it is reviewing the allegations. But the editor of a conservative weekly who runs her columns also defends Coulter.

TERRY JEFFREY, EDITOR, HUMAN EVENTS ONLINE: Does anybody really think that Ann Coulter is trying to plagiarize Planned Parenthood? Ann is not a reporter. She is a commentator. She takes her facts from other sources.

(END VIDEOTAPE)

TODD: The investigation of Coulter was done by a company called iParadigms which looks into plagiarism for high schools and colleges. Company officials and representatives of The New York Post newspaper tell CNN The Post reached out to iParadigms to investigate Coulter. Washington Post and CNN media analyst Howard Kurtz says The Post may have been upset by Coulter's attacks on the September 11th widows. The Post denies that. Its editor-in-chief says the paper looked into it after seeing online rumors about alleged plagiarism by Ann Coulter -- John.

KING: Many layers of this controversy, Brian Todd, thank you very much.

And we are here every weekday afternoon from 4 to 6 Eastern. And we're back on the air at 7 p.m. Eastern, just one hour from now. Until then, I'm John King in THE SITUATION ROOM. "LOU DOBBS TONIGHT" starts right now. Kitty Pilgrim is in for Lou -- Kitty.

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