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Hurricane John and Tropical Depression Ernesto Hitting Both Coasts; Pentagon Out Now With Sobering Assessment Iraq Situation; Christopher Van Hollen Interview

Aired September 01, 2006 - 16:59   ET

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


JOHN KING, 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, dangerous weather as Ernesto roars across the Mid- Atlantic. Some roads look like rivers.

Meanwhile, Hurricane John is taunting Mexico with the threat of landfall.

Attack escalating, deaths climbing.

It's 1:00 a.m. in Iraq, and a new report from the Pentagon says the fighting is moving from troops battling insurgents to Iraqis killing Iraqis and that it could all lead to civil war.

And doing a lot of explaining. New Orleans mayor Ray Nagin eating his words again. This time in New York. He's sorry for calling a sacred site from 9/11 a "hole in the ground."

Wolf Blitzer is off today.

I'm John King. You're in THE SITUATION ROOM.

On today's horrible, even deadly weather, one man simply says, "We are at god's mercy." All due to Ernesto and John.

Ernesto is now a tropical depression, but only after it roared through the Mid-Atlantic as a tropical storm. In Virginia, some cars almost need flotation devices to deal with flooding roads.

The situation isn't much better in North Carolina. There, flooding forced residents of some 30 homes to flee, some of them by boat. The water reached as high as three feet.

Ernesto is blamed for four deaths in Virginia, North Carolina and Florida.

Meanwhile, Hurricane John is taunting parts of Mexico with whopping winds. Thousands of villagers and tourists in Cabo San Lucas are scrambling for shelter, fearful that John is likely to soon make landfall. We're tracking all the weather developments.

CNN's Harris Whitbeck is in Cabo San Lucas.

CNN meteorologist Jacqui Jeras is at the CNN weather center.

CNN's Kathleen Koch is in North Carolina.

But we begin with CNN meteorologist Rob Marciano. He's in soggy Virginia.

Hi, Rob.

ROB MARCIANO, CNN METEOROLOGIST: Hi, John.

It is soggy, that's for sure. After really a week's worth or a couple days' worth earlier in the week of torrential rains from thunderstorms, now they had Tropical Storm Ernesto and all of the tropical rains that it brought in through eastern North Carolina and eastern Virginia.

We are in the eastern point just north of, say, Newport, near the Chesapeake Bay area, in the town of Poquoson. It's pretty much a fishing village, and you see the road behind me. It's inundated with water.

Just -- when we got here about an hour and a half ago it was up to our knees. And before that, before they were letting us in, easily up to our waist. And there's many, many streets in this neighborhood where there's folks who live in homes that aren't necessarily on stilts. So there has been some water in folks' homes, in businesses, and people are now just waiting for that water to receded. And it's doing just that.

You can actually see the ripples in this water going across the road and back into this marsh area, which eventually dumps into the Chesapeake Bay. This is an area that does flood when they get a Nor'easter or a tropical storm, but the locals say that it really hasn't been this bad since Hurricane Isabel, which roared through back in 2003.

This isn't the only spot in Virginia that has seen some headaches. Certainly down the road in Norfolk they've seen some headaches as well. Just in that city, some smaller streets, 60 roads closed, mostly from runoff there. And the downtown -- a couple of downtown buildings were closed as well.

No major facilities closed, but one nursing home had to go on backup -- backup generator, Wolf -- John. Over 200,000 people without power today. And this area is one of them.

The good news is, most of the heavy rain has stopped and the waters, if not slowly, at least, are receding back into the Chesapeake Bay.

John, back to you. KING: Rob Marciano for us.

Rob, we'll continue to check in as the day progresses.

Thank you very much, Rob.

And for the latest on where the storm is and where it's headed next, let's go to the CNN weather center in Atlanta and our meteorologist, Jacqui Jeras.

Hi, Jacqui.

JACQUI JERAS, CNN METEOROLOGIST: Hey, John.

(WEATHER REPORT)

KING: As you just heard Jacqui point out where John is headed in Mexico, residents and out-of-towners all scrambling for safety as that hurricane threatens to make landfall.

Our Harris Whitbeck is in Cabo San Lucas with more.

Hi, Harris.

HARRIS WHITBECK, CNN CORRESPONDENT: Hi, John.

As you say, residents here have been seeking shelter since yesterday afternoon, in some cases. The local government here ordered 15,000 people who live in low-lying areas to seek shelter, and it brought in the Mexican army to ensure that those people do so.

There are about 160 public schools that have been set up as public shelters for residents of these low-lying areas. The concern is that this storm might bring in a lot of rain.

The terrain here in Baja is desert -- it's very arid -- the ground is very arid, and it's not prepared to absorb large quantities of water. So the fear is that there might be mudslides and flashfloods.

Meanwhile, about 7,000 tourists, most of them from the United States, are holed up in some of the resort hotels that dot the coastline here. They have been asked to leave their rooms and, in some cases, they have been in holding rooms and ballrooms that have been set up as temporary shelters since very early this morning -- John.

KING: Harris Whitbeck for us in Cabo San Lucas.

Harris, stay safe. We'll check back in with you.

Watching John about to make landfall.

Harris, thank you very much.

Let's come back east and head a little bit south of where Rob Marciano was in Virginia for a look at the damage in North Carolina.

Our Kathleen Koch is standing by for us in Goldsboro at the moment.

Hi, Kathleen.

KATHLEEN KOCH, CNN CORRESPONDENT: Hi, John.

Goldsboro is one of the many North Carolina towns who were just dumped on by Tropical Storm Ernesto. Seven to eight inches of rain fell here. There's still a fine mist coming down, still some pretty strong wind gusts.

But as you can see behind me, what does certainly remain is the water. Stony Creek is a body of water, a creek that runs through Goldsboro. It overflowed its banks this morning, flooding bridges, cutting off some of the neighborhoods here in town, and swamping one small shopping center.

Business owners at the Barnyard shopping center had to scramble getting her early this morning, salvage what they could. They say that they haven't seen flooding like this since 1999, when Hurricane Floyd roared through here dumping then some 22 inches of rain. So really no comparison.

Then they had five feet of water, today about one foot of water. But, still, the business owners, at least many of them here in this shopping center, are fed up. One woman did manage to get out most of her supplies, but she says she's not coming back -- John.

KING: Kathleen Koch for us.

Kathleen, try to stay try. It looks a little better at the moment.

And time now for "The Cafferty File."

Let's check in with Jack in New York.

Hi, Jack.

JACK CAFFERTY, CNN ANCHOR: Hey, John.

In the days following September 11th, a small office in the Department of Education took on a new responsibility: fighting terror, by going through financial aid and college enrollment records of students who were already being watched by the FBI. The program was called Project Strike Back, and the FBI says only the records of those already under investigation were combed through.

It's not surprising and it's not the first time the feds have sorted through databases which contain personal information. It's not clear whether any arrests were ever made because of this five-year-old initiative, but it got us to wondering how effective these programs really are.

The question is this: Is combing through thousands of government databases the most effective means of fighting terror?

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

KING: Thank you, Jack.

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

And up ahead, the Pentagon reports something the Bush administration likely does not want to hear, that attacks and Iraqi deaths are up and that the situation in Iraq could be ripe for civil war.

It was no careless whisper. Ray Nagin's recent comments about Ground Zero being a "hole in the ground" were heard in New York and beyond. And now the New Orleans mayor is eating those words.

And blurring the line between fact and fiction. There's a new movie about a fictional assassination. Add to the debate about the war on terror or only stir up more controversy?

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

(COMMERCIAL BREAK)

KING: Attacks are escalating and deaths continue, seemingly without end. The Pentagon is out now with a sobering assessment of the situation in Iraq.

We'll have reaction from everyday Iraqis from CNN's Michael Holmes.

But first, that Pentagon report.

Our senior Pentagon correspondent, Jamie McIntyre, has the details -- Jamie.

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT: John, whether it's civil war, sectarian violence, or whether you want to call it the work of criminal death squads, this report makes clear the situation in Iraq is getting worse, not better, and it calls it a setback that is affecting the transition, the reconstruction, and the stability of the country.

(BEGIN VIDEOTAPE)

MCINTYRE (voice over): The report to Congress on how things in Iraq went in June, July and August does cite progress in building up Iraqi forces, as well as turning over one southern province to Iraqi control. But the good news is tempered with grim statistics.

Attacks up 15 percent over the summer and Iraqi casualties up an alarming 51 percent, compared to the spring. The report says civilian casualties increase by about 1,000 per month over the three-month period and says 90 percent of the bodies brought to the central morgue in Baghdad appear to have been executed in Iraqi-on-Iraqi attacks, which the U.S. still insists does not constitute a civil war.

COL. TOM VAIL, COMMANDER, 101ST AIRBORNE DIVISION: I've got an optimistic view that civil war would not occur, but I can't predict the future. My optimism comes from the amount of forces and the amount of capability available in Baghdad right now, as we intervene and we protect the people.

MCINTYRE : The report echoes that hopeful assessment but also warns ominously, "Conditions that could lead to civil war exist in Iraq," even as it concludes, "The current violence is not a civil war, and movement towards civil war can be prevented."

(END VIDEOTAPE)

MCINTYRE: The document gives ammunition to some of the critics of the Bush administration. Democratic leader Senator Harry Reid fired off a statement this afternoon in which he said the report shows that the speeches of President Bush, Vice President Cheney and Defense Secretary Rumsfeld are "increasingly disconnected from reality" -- John.

KING: And Jamie, as you noted, the report talks about a security problem continuing, sectarian strife continuing, perhaps even escalating. It talks about continuing problems with the security forces in Iraq. And yet, General George Casey, the commander in Iraq, saying he thinks by next year maybe start bringing U.S. troops home.

Are those statements at odds with the report?

MCINTYRE: Well, if you read carefully, what General Casey said was, he said he thought in a year or a year and a half, Iraqi forces could essentially operate without much help from the U.S. What he did not say was that would enable U.S. troops to come home.

He was very careful to say that that was a decision that would have to determine based on the situation on the ground. And so it may be that both things are true. But what is certain is that at this point, there's no prospect of significant numbers of U.S. troops coming home any time soon.

KING: Jamie McIntyre for us at the Pentagon.

Jamie, thank you very much.

Now, how does this new report match the situation on the ground?

Well, Michael Holmes is in Baghdad, where he's seen the violence firsthand, and he's listening to what Iraqis are saying about the issue of a possible civil war.

MICHAEL HOLMES, CNN INTERNATIONAL CORRESPONDENT: John, the numbers that come out of that Pentagon report really come as no surprise to people, especially here in Baghdad, as well as elsewhere around the country, nor does the somewhat pessimistic tone that it contains.

In just the last week alone, nearly 300 Iraqis have died. Hundreds, over 650, have been wounded. Many of those horrific wounds. And when the semantics become talked about, about whether it's a civil war or not, they honestly don't care.

They are being killed in record numbers. In July, 3,500 civilians were killed in Iraq.

And whether it's a civil war or not matters very little to the daily lives of the average Iraqi. When I asked somebody about civil war, he said to me, well, "They didn't wall Rwanda a genocide either until after it was over."

But what they want to see is the crackdown continue. Operation Together Forward, in those areas where it has been carried out, has been remarkably successful. The numbers of deaths have dropped well over 50 percent -- acts of violence, that is. But they still go on.

What people are worried about is, when the U.S. troops and the Iraqi troops pull out and Operation Together Forward becomes a normal policing situation, they fear the insurgents who left will come back -- John.

KING: Michael Holmes for us in Baghdad.

And we're joined now by a vocal Democratic critic of the war in Iraq, Congressman Christopher Van Hollen of Maryland.

Thank you for joining us in THE SITUATION ROOM.

This report, a pretty sober assessment from the Pentagon itself.

Now, let me start with this. Democrats have often said this administration has this pie in the sky, rosy scenarios for Iraq. Do you give them credit at least for laying out a pretty significant, serious challenge here?

REP. CHRIS VAN HOLLEN (D), MARYLAND: Well, this is a report that was actually required by the Congress. The Congress -- the Democrats have been trying to push for greater accountability. Every once in a while we get a little bit of it. What this report clearly reflects, though, is that the situation is getting worse, not better.

The administration has mismanaged this war from the beginning. They've ignored the advice of experts. They've ignored the advice of many generals that were providing good input to them. And the result has been a situation where more and more people are dying.

It's getting worse, not better. And so when I think people hear the administration happy talk, they do see a disconnect with reality.

Let me just remind people that it was back in May 2003 where the president stood aboard an aircraft carrier and declared "Mission Accomplished." Vice President Cheney, more than a year ago, said the insurgency was in its final throes. And they're just totally disconnected from what's going on, on the ground.

KING: To be fair, the president was under a banner that said, "Mission Accomplished.". He never spoke those words. But that certainly was the visual image he portrayed.

You say that things are getting worse. What is your solution to make them better? Is it to bring U.S. troops home?

VAN HOLLEN: No. I think what we need to do is, first of all, work more closely with the Iraqis with changes to the constitution. This is a critical moment, they're scheduled to make changes to reach a political accommodation within Iraq. I don't think we've done a good enough job in working with the different parties in Iraq and on the ground right now.

There are a number of different proposals that have been floated. Senator Biden has some, others have some. What I think we need is a serious national discussion.

Now, the president says he wants a national discussion. But he's gone out and finger-pointing, and name-calling. That's not the way you get people around a table.

We need to ask the hard questions. This Congress, unfortunately, has been just a rubberstamp for the president. They have not asked the hard questions. They've written a blank check.

I think people want accountability. They want to know what we can do to get the situation better. And to do that we need a serious national conversation.

KING: As you know, there are some differences within your party. Senator Joseph Lieberman lost a primary because he says not that the president's right, but that the war is right and we need to keep the troops there.

Others say set a firm timetable. Or say let's start thinking about it, bring some troops home symbolically, then start debating a timetable.

What does Congressman Van Hollen say, U.S. troops should be out by Date X? And what would that be?

VAN HOLLEN: No. No. My view is very similar to the proposal that the Democrats advanced in the Senate and was supported by a majority of the Democrats and opposed by a majority of Republicans.

It was floated by Senator Levin. It said we should begin to draw down. We should begin talking with the Iraqi government about drawing down troops, but it does not have a particular date certain. And I don't think that it's a good idea to put that law.

I do think it's a good thing to begin talking with the Iraqi government about how they can take on more responsibility KING: Responsibility. More an more, this report talks about -- its says there's al Qaeda in Iraq. It says there are outside people coming into Iraq. But the most sobering, scary, if you read it, is Iraqis killing Iraqis, Sunni on Shia violence, Shia on Sunni violence.

How do you stop that? Is it the job of U.S. troops to stop sectarian violence in Iraq?

VAN HOLLEN: Well, this is a very disturbing environment. And what's also disturbing is it was eminently foreseeable.

If you go back before the war and you look at the analysis that was done by people at the CIA, the people who really knew what they were talking about, they predicted that this might happen. If you go back and listen to what Vice President Cheney said back in 1991 when he was secretary of defense, explaining why we didn't go into Baghdad, he said it could have this kind of effect on sectarian violence.

Look, I think the United States has got to be very involved in political accommodation, trying to build political reconciliation that will put an end to the violence.

I'm not necessarily hopeful that that will happen, but it seems to me, as others have said, as our military commanders in the field have said, in the end there's no military solution to this. You've got to find a political solution

KING: What happens lastly? Let's project forward a little bit. Assume as the projections now stand that the Democrats take back control of the House. And let's, for the sake of this discussion, the Senate stays in Republican hands by a seat or so.

If the Democrats still disagree with the president and his policy, are we going to se things like fights over appropriations bills, cutting off funding to the troops, inserting things in appropriations bills, as some Democrats have suggested, saying Secretary Rumsfeld should resign?

Is that what is going to happen if this war debate carries over into a changed Congress, with Democrats running at least one chamber?

VAN HOLLEN: No. What you -- what you've seen is the Democrats, by large majorities, have continued to support our troops, making sure that they get the equipment they need and the support that they need.

What you will see is a much more vigorous debate. You'll have people held accountable.

I think one of the big problems we've seen in Iraq is that this administration has rewarded people who got it wrong. And they punish people who got it right. When you reward failure, you get more failure.

We need to focus on the issues. The administration diverted us from Afghanistan. We still haven't finished the job against al Qaeda. They're still plotting attacks against us. And yet, we've actually reduced our force presence in Afghanistan. We've disbanded the unit at the CIA that was specifically dedicated to go after al Qaeda.

So, we need to get our priorities straight. We need to be smart in how we approach that. And what the Democrats are going to do is begin to hold this administration accountable, ask the hard questions, have a real national conversation, not finger-pointing.

KING: Congressman Christopher Van Hollen, thank you for joining us today with your thoughts.

Thank you very much, sir.

VAN HOLLEN: Thanks for -- thanks for having me.

KING: And still to come, the Pentagon tests an anti-missile missile. We'll tell you how that test went. And will it keep the United States safe from a possible ballistic missile attack?

Also, Ernesto slogs ashore. We'll have all the soggy details.

Stay right here. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

KING: In Virginia right now, Tropical Depression Ernesto has drenched the coast, swamped roads, and left tens of thousands of people without power.

We're joined on the phone by Virginia -- Virginia's governor, Tim Kaine.

Governor, thanks for joining us.

Tens of thousands without power. Can you give us a more specific number? And what's your biggest concern at the moment?

GOV. TIM KAINE (D), VIRGINIA: John, two concerns, we have about 245,000 now without power, generally between Richmond and further east down into Hampton Roads and so getting power restored is key. Now that the winds are dying down a little bit, I think it's easier to accelerate restoration of power.

And the second major concern is flooding. We've had a lot of rain and that has created flooding in the lower coastal areas and that always brings problems immediately as people are out trying to drive. Almost all our flooding accidents are people try to drive through water that they think is still or not very deep, and they get into trouble. Some of the rain has also fallen on streams that will swell over the next couple of days. So we're going to have to be monitoring flooding throughout the whole weekend.

KING: Is the flooding severe enough that people are shut off, roads inaccessible or just a hassle?

KAINE: A whole bunch of roads are closed. We've had to close a lot of interstate on and off ramps. We've done some minor evacuations of groups of people. There was a community where we had to evacuate about 50 homes on the northern neck in Virginia. There's a park in Richmond, the state capital that is like a small canyon that fills with water.

We had to evacuate around about 20 homes around that park. And so there's some other evacuations of that kind. Small evacuations that are happening. But again, the rain is kind of moving through now. But a lot of streams are carrying a lot of water and as it goes downstream we may well see some additional flooding over the next couple of days.

KING: Concern always when you have these power problems and trouble getting to people, senior centers, hospitals, anything like that cut off where you have an emergency situation?

KAINE: We do. We have two hospitals in the Hampton Roads are without power, one is using a backup generator. But the second their backup general failed and we are working to get a backup in for them. Think that they may be out of power for two or three hours and we're doing what we can to make sure folks' health care isn't compromised in that little gap.

We have a pretty good sense of the senior facilities and other places. I don't have any other instances of those being significantly hurt by the power outages. But 245,000 is a pretty good chunk of our population right now and we're anxious to get this wind died down and start getting the power restored.

KING: Pretty big chunk as you mentioned. In closing, one last question, as this moves more to the north, I'm in D.C., obviously, suburban Alexandria, Arlington, places like that. What are you seeing in terms of the flood threat over the next 24 hours or so?

KAINE: Two kinds of flooding you worry about in the D.C. area, one is storm surge up the Potomac and the good news is we don't think we're going to see that. But the second is you know just the intense rain that cause streams to overflow. We had some pretty serious flooding on Cameron Run, right around the beltway in northern Virginia in late June.

And so far Cameron Run is okay as of about an hour and a half ago. But just again, the intensity and length of the rain may bring some of these streams out of their beds or cause storm sewers to back up. And so that's what we're watching for now.

KING: Governor Tim Kaine, democratic Virginia governor. Good luck in the hours and days ahead. Thank you so much for joining us.

KAINE: Thank you John, take care.

KING: Take care governor. And as Ernesto heads up the east coast residents in affected areas are sharing images of the damage left behind and sharing them online. Our internet reporter Abbi Tatton standing by with the details -- Abbi.

ABBI TATTON, CNN INTERNET REPORTER: John pictures of the flood in North Carolina coming in to CNN through iReport. These are from Ryan Kingsbury, he's in the outerbanks, specifically in Kill Devil Hills. This is an area heavily hit by hurricane Isabel in 2003. These pictures he sent in here, just a couple of blocks there from the beach, you can see the beach houses with a few people around them.

Though Ryan said that most of the tourists did leave before the storm hit. These pictures taken just a couple of hours ago. Further inland, and the picture isn't too much better, this is Greenville, North Carolina. Matthew Long took these pictures of his backyard and put them onto the sharing site, the photo sharing site flickr.com. His backyard doing a little bit better there than his neighbors.

This again in Greenville, North Carolina. And as Ernesto is moving north, you can see some of the flooding in Virginia as well, this is Norfolk, Virginia, from Brandon Ash, entire intersections there he said under water -- John.

KING: Abbi Tatton, thank you very much. We want to shift now back to our other major story, the war in Iraq. And a new report from the pentagon, bombings, body bags, death and destruction. The U.S. military says Iraqi insurgents want you to see all of it in your newspaper and on TV as a way to advance the insurgent cause. Our Brian Todd has more -- Brian.

BRIAN TODD, CNN CORRESPONDENT: John, in a new document coalition military leaders say the insurgents in Iraq are using psychology among other tactics to try to start a civil war, and the coalition is determined to fight back.

(BEGIN VIDEOTAPE)

TODD (voice-over): U.S. military commanders in Iraq seem more fed up than ever that the mainstream media is reporting mostly what they believe are negative stories on the war.

LT. COL. BARRY JOHNSON: We know that bombs, deaths, and the tools of our enemies tend to make the news more quickly than the things that we're doing to reinforce democracy and the progress that our troops are making each day and decreasing the violence which is less likely to make it on the news.

TODD: Now, for two years, and up to $20 million, U.S. military commanders in Iraq plan to hire a civilian PR firm to keep a close eye on news reports on the war. On a new contract document, CNN tops the list of so-called western news sources along with the pentagon channel and so-called Pan Arabic news outlets like Al Arabiya. But the firm won't just monitor the news, it will also brief commanders on their public messages.

Draft ideas for newspaper columns and news conferences. The goal, to send what they believe is a more positive message on the war. Defense Secretary Donald Rumsfeld in his own editorial this week, writes, "The war on terror, to a great extent will be fought in the media on a global stage." Analysts believe insurgents in Iraq have already mastered that.

ROBERT MALLEY, INTERNATIONAL CRISIS GROUP: If they're going to go on a sniper attack or an IED attack, they send journalists, a media team, to tape it, to record it, have commentary and then it is posted on the Web site.

TODD: Is the new coalition effort propaganda?

JONATHAN ALTERMAN, CTR. FOR STRATEGIC & INTL STUDIES: To the extent that we're trying to do this sort of audience research that people in media do all the time, that's useful. But to the extent that we are trying to buy good news, Iraqis don't need more news about what we're doing, because they look out the windows and they see what we're not doing.

(END VIDEOTAPE)

TODD: The U.S. military has hired PR firms before for this kind of thing. Last November it was disclosed that the military had used one firm to plant articles written by American troops in Iraqi newspapers, while hiding the sources of those articles. An internal investigation found that did not violate military policy -- John.

KING: Brian Todd, thank you very much. Let's talk more about all of these issues, especially this new pentagon report out today, a sober assessment of the ground situation in Iraq. Joining me to discuss it, CNN military analyst, Brigadier General James Spyder Marks. General Marks, if you read this report it runs about 70 pages. A pretty sober assessment of the situation on the ground in Iraq. It talks about the increasing sectarian violence.

Also talks about some of the problems. One of the big issues has been training the Iraqi troops and getting them ready so that U.S. troops can eventually come home. I want to read you a couple of quotes about the corruption and the training problems in getting this done. This is from the Department of Defense report. There is currently no screening process to ascertain military allegiance of ministry of interior employees.

Currently no method exists to track the success rates of these or other police officers. Unprofessional and at times criminal behavior has been attributed to certain units in the National Police." The report goes on to say, "corruption, illegal activity and sectarian bias have constrained progress in developing ministry of interior forces. Inappropriate tolerance of and infiltration by Shia militias, some of which are influenced by Iran, is the primary concern for the government of Iraq."

Three and a half years into this war, more than $300 billion spent, and you still have this kind of a problem. What does that say about the effort by the U.S. to train the Iraqis and the Iraqis to simply police their own people?

BRIG. GEN. JAMES MARKS (RET.), CNN MILITARY ANALYST: Well let me address the second part of your question first. The Iraqis and their requirement to step up and do some of the vetting in advance. Absolutely has to be done. Clearly when we got into Iraq, we made a decision to in essence decapitate the Baathists. What you did by that as you well know is we lost a lot of professionalism, we lost a lot of very objective skill sets from within the military and within the police force. In the effort, over the last three years is to regenerate and to kind of grow that and get it back into the ranks. Clearly, what the military is trying to do in Iraq right now is very agnostically establish a professional ethos.

You've got to do that through skill sets and you've got to train that from the very, very lowest levels up. And with that, you could start to professionalize this and it will take a generation. It will take time. And there's a lot of work that has to be done and it needs to be accelerated.

Because I would tell you John, I don't know that you do and I don't think the calculation is that you do a one for one replacement. As a U.S. or as an Iraqi unit is brought up and is trained and is validated, a like U.S. unit can go away. I would tell you that there probably is a real calculation right now that they might need to increase the U.S. presence.

KING: If you read this report, sectarian violence increasing, I think many would say it's a civil war. The pentagon says by its definition it is not yet. I want you to listen to something the president said in his speech yesterday. The administration is trying to make the case this is not a civil war. It's a problem, but not a civil war. Let's listen to the president.

(BEGIN VIDEO CLIP)

BUSH: This cruelty and carnage has led some to question whether Iraq has descended into civil war. Our commanders and our diplomats on the ground in Iraq believe that's not the case. They report that only a small number of Iraqis are engaged in sectarian violence while the overwhelming majority want peace and a normal life in a unified country.

(END VIDEO CLIP)

KING: You see the violence continuing, you read the assessment in this report. You know some of these guys, the commanders on the ground. Do they think it's a civil war? Are they saying it's not a civil war because they know they're supposed to say that?

MARKS: I know these guys. I grew up with these guys. They are giving an accurate assessment of what they see on the ground. There is a functioning x-stamped government in Baghdad right now. It is growing and it's getting it's legs underneath it.

So by definition, that government would allow you to say it's not a civil war. What you have is violence all around. You have tribes, you have sects, you have that sectarian violence which will spike, which will grow. But the government continues to try to grow. So it's not a civil war, but definitionally all the ingredients are there.

KING: One of the key ingredients to prevent a civil war, if you're not in a civil war is for the Iraqi people to have some confidence in this government, but the government obviously needs help. Civilian help from the United States and others, military security help from the United States and others. And yet, here is something else in this report. "Security issues have made some ministers reluctant to have U.S. personnel visit them. This reluctance hampers coordination between the coalition and some ministry personnel."

In other words, Iraqi ministers and the government feel if they're with a U.S. soldier, a U.S. military officer or even just a civilian from the United States trying to help teach them the business of government, that makes them a target. Does that not support the argument that some war critics make that the United States is now more of the problem than the solution and you got to get them out?

MARKS: I wouldn't say that. But if I thought I had crosshairs on my chest routinely and you were causing that I wouldn't want to stay around you. I don't know that I support that entirely, I mean to its very, very lowest levels. The challenge still remains that it's more than just a military solution, and you know that, John. I know you know that.

There are political elements, social elements, infrastructure elements that have to be in place. So it's a catch up game to make sure all of that can kind of get into G, if you will. That hasn't coalesced. And so what you see is the military solution which it is not exclusively.

KING: And as the president tries to make the case, we're in an election year here in the United States and Iraq is a big issue. A majority of the American people think this war is a bad idea. As he tries to make the case that perhaps it's slow but we're getting to the point of eventually, the tipping point toward progress and stability. The numbers would seem to support the critics right now.

What does the military do when you see numbers like this. Since May, civilian casualties up 1,000 per month. Ninety percent of civilian casualties are the result of executions. Since May, the average number of weekly attacks up 15 percent. The number of Iraqi casualties up 51 percent. You have the president and the political leadership saying we're making progress, it's ugly at times but we're making progress. Those numbers are pretty damming.

MARKS: They are very, very difficult. General Pete Corelli is the senior guy on the ground, he's got the tactical and operational requirements. Pete's an American hero, he's a great patriot. He has his arms around this challenge and he knows what it is. It is not simply a kinetic solution. There are reconstruction elements that have to be in place and those are not exclusively military. Yet, the preponderance of those must be performed by military guys.

So when you look at that, your question is, what do the military guys on the ground say? They say we have to have a greater capability to have situational awareness locally and then be able to act very quickly on that actual intelligence, locally from soup to nuts. They've got to be able to clean the teeth of young kids on the street corner and they have to be able to walk around the corner and kill some bad guy who is intending somebody else harm.

KING: Stand by for one sec because I want to bring Zain Verjee into the conversation. She has a new statement from a leading member of congress. I think it's the democratic leader in the House Nancy Pelosi that adds to this debate. Zain?

ZAIN VERJEE, CNN ANCHOR: Yes, that's right John. This is what the statement says. It says, today the Department of Defense reported to congress on the real situation in Iraq, contrary to the optimistic public statements of President Bush, Vice President Cheney and Defense Secretary Rumsfeld. The report makes clear, she says, the prospect for improving security in Iraq in the foreseeable future are bleak.

The alarming report indicates that the number of attacks against Americans and Iraqis is higher than ever. Sectarian violence, as she goes on to say is spreading in Iraq and pushing the country further toward all-out civil war. The war in Iraq is the wrong war it says. Reality that no amount of White House rhetoric can distort. It has strained our military and crippled our ability to prosecute the war on terror -- John.

KING: You hear the statement there from Leader Pelosi. And thank you Zain for that. You hear the statement, now look, we're in a very heated political environment here two months before the election here in the United States. But when you talk to the guys on the ground that you know, the officers, is this the situation, General Marks, it's going to get worse before it gets better or it's getting worse and we're still trying to scramble and we might have to seriously adjust the way we're doing things here?

MARKS: I think it's a combination. I think really what it is, is, it is Iraq is close to a tipping point. There is tremendous progress that's taking place in a number of different areas within Iraq. And the military perspective as I've said is very broad, it's just not the training in the security peace, it's the very large reconstruction effort. But look, if I walk into my house, and I'm a normal Iraqi, a Baghdadian and I can't turn on the power at 3:00 in the afternoon.

I turn around I see an American uniform and I go, hey, help me out here man. What are you doing to try to help solve this problem? The solution is how do we get more of that type of capability. That's when you -- when you can create that type of environment where there is trust and confidence where that type of security can take place. Where normalcy of life can occur, you're going to have progress. It's more than just a military solution. Yet those are the ones that are carrying that load.

KING: Sober report. We appreciate your thoughts. Thank you very much general.

And still to come, the government is combing through thousands of databases in hopes of finding information that may lead to terrorists. Jack Cafferty wants to know is searching through personal information the best way to do this? And the mayor of New Orleans still struggling to recover from Katrina goes to New York to make an apology. Details coming up. Stay right here. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

KING: New Orleans Mayor Ray Nagin is in New York right now trying to drum up business for his crippled city. And to do that, well the mayor's doing a little back peddling. CNN gulf coast correspondent Susan Roesgen is live in New Orleans. Susan?

SUSAN ROESGEN, CNN GULF COAST CORRESPONDENT: John we all know by now that Mayor Nagin tends to shoot from the hip and sometimes he shoots himself in the foot. But now that he's in New York asking for New Yorkers' help, he's also asking for their forgiveness.

(BEGIN VIDEOTAPE)

MAYOR RAY NAGIN (D), NEW ORLEANS: You're live, right? So I better watch myself.

ROESGEN (voice-over): For the most part in New York, the mayor is sticking to his script. When he doesn't he can get in trouble. Responding to the criticism about the slow pace of the New Orleans recovery. On CBS' 60 Minutes, Nagin compared it to the lack of progress on the 9/11 memorial in New York.

NAGIN: That's all right. You guys in New York City can't get a hole in the ground fixed. And it's five years later. So let's be fair.

ROESGEN: Fair or not, New Yorkers cried foul and Nagin's been apologizing ever since.

NAGIN: What I will never do again is refer to that site as a hole. It's a sacred site that is presently in an undeveloped state. And I want to make sure that everyone in New York understands, I love New York City, I've been here on many occasions. And I think that we, as New Orleanians and New Yorkers understand what tragedies are all about.

ROESGEN: It was one part (INAUDIBLE), one part economic arm twisting. Mayor Nagin is leading a delegation of New Orleans business leaders, looking for help from big investors in the big apple.

NAGIN: We are here with one message. That one message I want everyone to understand and hear loud and clear. New Orleans is open for business.

(END VIDEOTAPE)

ROESGEN: And, by the way, John, Mayor Michael Bloomberg says that his office bears no resentment for what he said.

KING: We'll see if he recovers from this latest apology. Susan Roesgen for us in New Orleans. Susan thank you very much. And up ahead, drawing the line between fact and fiction. There's a new movie about a fictional assassination. Add to the debate about the war on terror or only stir up more controversy? (COMMERCIAL BREAK)

KING: Now to a topic that's shocking, thought provoking and controversial. To spell it out for us, let's turn to our Zain Verjee. Zain?

VERJEE: Hi there John. It's not even out yet and it's causing quite a stir. Good for the advertisers, but is it good for the president?

(BEGIN VIDEOTAPE)

VERJEE (voice-over): This is not real life but it's made to look that way. An assassination, the president of the United States, George W. Bush, shot and killed by a sniper's bullet. The secret service, shocked. The nation mourns the president's death and the hunt for his killer begins, all in 2007. "Death of a President" is a controversial fiction documentary that producers say puts U.S. foreign policy and the war on terror in the line of fire by examining what would happen if George W. Bush was killed.

PETER DALE, BRITISH DIGITAL CHANNEL: I think it's very important that we deal with the country as it is now. That we don't try and invent a fictional president or a fictional state of affairs. This is a very gripping and compelling documentary about the state of America as it is today.

VERJEE: Whatever the movie's intentions, many Americans themselves are disgusted, insisting it's irresponsible.

TED BAEHR, CHRISTIAN FILM & TV COMM.: Movies like this tend to produce a very negative reaction from people who are susceptible to it. So the movie itself is not going to do well but it will agitate a certain number of people.

VERJEE: Channel 4 executives in the U.K. who will air the film in October say it's not going to encourage someone to shoot the president.

DALE: I think in terms of a copy cat that would be appalling but I think it's extremely unlikely.

(END VIDEOTAPE)

VERJEE: And those executives go on to say that they're not putting the film on the air just to be sensational, but to provoke discussion in the U.S. about U.S. foreign policy. The movie premieres at the Toronto Film Festival in September -- John.

KING: I was talking to a White House Official this morning and I brought this up and he used one word, he said disgraceful. We shall see. Zain Verjee thank you very much. And up next, as the anniversary of 9/11 nears, Jack Cafferty wonders how effective is to comb through government databases to fight the war on terror. He'll go through your emails, next. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

KING: Let's check back in now with Jack Cafferty in New York. Hi Jack.

CAFFERTY: John, in the days following September 11th the FBI teamed up with the education department to search the financial aid records of students being watched as part of its terror investigations, it's called Project Strikeback. But it was not the only program of its kind as we know.

The question is, "Is combing through thousands of government databases the most effective means of fighting terror."

Mark writes, "If the search is performed using an effective data mining tool, properly designed and instructed as to points of interest, the answer is a resounding yes."

Del in Kentucky, "If we're at war and we should use every available resource to win or at least to minimize our casualties until we're able to get out. As long as we're asking American servicemen and women to die for us, we can't whine about the loss of privacy."

Fidel in New Jersey, "Combing through databases is only one component of the strategies used to combat terror. It should not be seen as a violation of privacy, particularly by those who have done nothing wrong."

John writes, "Hey Jack, if going through various databases will keep us safe, I say do whatever it takes."

Mare writes, "If our government is so damn worried about terrorists, why haven't they closed the border? You don't have to be a brain surgeon to figure that out."

And Fred writes, "No, of course not, but they make it sound like they're really, really trying to keep us safe from French majors. Besides look at all the patronage jobs it creates. And who really knows if they're even doing it. Or if they're doing more than they admit, which is illegal." John?

Oh, if you didn't see your email here, go to CNN.com/CaffertyFile, you can read more of these online -- John.

KING: It was pretty clear for me at the beginning what you thought the answer should be.

CAFFERTY: To what, combing through databases?

KING: Whether it helps the government?

CAFFERTY: I don't know if it helps or not. My only concern is we might be doing stuff that's illegal. And I think that's a very big issue and nobody's working that out except that one federal judge who ruled the NSA stuff is legal. And so far I think the feds are still doing it because that thing's on appeal. But nobody has decided if this stuff is legal. I don't care if we do it, if it's legal. If it's not legal, then change the law or stop doing it. It's kind of fundamental stuff to me.

KING: Jack Cafferty's answer to Jack Cafferty's question. Jack, thank you very much. And remember, we're here every weekday afternoon from 4:00 to 6:00 eastern and we're back on the air at 7:00 p.m. eastern. That's 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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