Return to Transcripts main page

CNN Newsroom

Iraqi Ambassador, White House Respond to Iraq Study Group Report; Police Still Searching for California Man

Aired December 06, 2006 - 13:00   ET

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


KYRA PHILLIPS, CO-HOST: Hello, everyone. I'm Kyra Phillips live at the CNN world headquarters in Atlanta.
DON LEMON, CO-HOST: And I'm Don Lemon.

Stay the course. Well, it didn't work. Now guidelines to change the course. Is there a new time line for U.S. troops in Iraq? Will a solution involve Iran and Syria?

PHILLIPS: The urgent search for a California man in Oregon. He left his family to get help. They're now safe. Now hundreds of people are trying to find him.

LEMON: His lunch partner is dead but the Italian security agent who says he tried to warn Alexander Litvinenko gets an all clear on polonium exposure. Where does the Russian spy investigation go next?

You're in the CNN NEWSROOM.

Grave, deteriorating, possibly sliding into chaos. The situation in Iraq right now, according to the Iraq Study Group. The bipartisan panel released its long awaited report just hours ago. It warns there's no magic formula for success, but it's offering some hopeful options.

Here's what we know. The group calls for moving most U.S. troops out of their combat roles by early 2008, but it does not set specific timetables. It also urges direct talks between the U.S., Iran and Syria, along with a new U.S. diplomatic effort across the Middle East. And, it says, the U.S. should reduce economic military support if the Iraqi government fails to meet specific goals.

PHILLIPS: We're still waiting for that White House briefing and Tony Snow to step up to the microphone. When that happens, we'll take it live. We are waiting for reaction to the Iraq Study Group. And what we've been listening to within the past couple of hours, each member of that group coming forward and talking about the changes that need to take place in Iraq.

Now let's turn to the Iraqi people. What do they think? And what will they make of the new report?

Joining us from Washington, Iraq's ambassador to the U.S., Samir al-Sumaidaie.

Mr. Ambassador, nice to have you. When you heard the results of this study group, when you listen to each one of the members talk about the decisions that this group made, what was your first reaction? What stood out to you?

SAMIR AL-SUMAIDAIE, IRAQI AMBASSADOR TO U.S.: Well, I didn't have the opportunity to listen to the members, unfortunately, but I did read most of the report this morning. And I believe it's a very good report, a worthy report. It's -- has a lot of ideas. And my government will be...

PHILLIPS: What are the ideas that you like?

AL-SUMAIDAIE: Well, it's very difficult to make a judgment in an hour or two. I believe my government will study this and all the recommendations that are included in it, and we will take a position on each of them in the coming days.

PHILLIPS: Was there ever anything that you specifically appreciated, liked, honed in on, thought that it was a very good idea, something that hasn't come up in the past?

SUMAIDAIE: Well, it's not so much the specific ideas, but the general tone of the report is very helpful. It's positive. It says that the situation is difficult, which it is. It requires internal and external factors to be employed in order to move forward. And on both sides, it is -- it is positive. It is not either too pessimistic or too optimistic.

PHILLIPS: OK. Let me -- I'll get you to respond to some specifics then. Hamilton laid it out loud and clear with regard to dealing with Iraq's neighbors, specifically Iran and Syria. This is what he had to say.

(BEGIN VIDEO CLIP)

LEE HAMILTON, IRAQ STUDY GROUP: Both Iran and Syria have a lot of influence in the region and have a lot of impact on Iraq. Iran probably today is the national power that has the single greatest influence inside Iraq today. We will be criticized, I'm sure, for talking with our adversaries, but I do not see how you solve these problems without talking to them.

(END VIDEO CLIP)

PHILLIPS: Mr. Ambassador, do you agree or disagree about the U.S. talking with Iran?

SUMAIDAIE: Well, not only -- excuse me, I not only agree, but I'll remind you that the Iraqi government is ahead of the report on this point, because we already started to engage the Iranians. Our president was there about 10 days ago and had a very frank and positive dialogue with the Iranian president and officials.

PHILLIPS: Did your president specifically talk about the weapons that Iran is providing to the insurgency in Iraq?

SUMAIDAIE: Well, a lot of security issues were discussed, frankly, and I think it was decided that people at a technical level should be involved, and we will be looking at intelligence information for our next discussions.

PHILLIPS: A number of analysts have said, look, you've got to get U.S. troops out of Iraq. That forces Maliki to make a decision about the Iraqi police and the Iraqi military. Focusing on the Iraqi police and Iraqi military, getting both of those entities ready to take over the country. Until then, he is just going to continue to be co-dependent on U.S. forces. Do you agree with that?

SUMAIDAIE: Well, not in that way. The Iraqi government has to move forward. There is no one who realizes this more than the Iraqi prime minister. But given the circumstances he is in and the Iraqi government is in, there is -- there are limitations. And you cannot do things overnight.

So things will take time. And there is no point forcing -- I mean, the incentive is there to move forward. It does not require a stick to threaten them to move forward.

PHILLIPS: Final question, sir. Do you believe that your country is in the middle of a civil war?

SUMAIDAIE: No, I don't, and I don't believe it will be.

PHILLIPS: Iraq's ambassador to the U.S., Samir al-Sumaidaie, thank you for your time, sir.

SUMAIDAIE: Thank you.

LEMON: A developing story to go to now. We're going to take you to Merlin, Oregon, where the search for that missing man in Oregon -- a press conference is being held now, Lieutenant Gregg Hastings speaking.

LT. GREGG HASTINGS, OREGON STATE POLICE: I believe one wool sock, a blue girl's skirt and pieces of an Oregon state map that were sort of cut up. And these, according to the information I have, were sort of placed, again, with our belief that little signs are being left by James for anyone that may be trying to find him so that they can continue into the area that he's continuing to move in.

Undersheriff Brian Anderson will talk further about the search and then Sheriff Mike Winters will talk about his SWAT team members that are being lowered down into the drainage area to help in the search today.

UNIDENTIFIED MALE: Can we clear up the items first, please? Are they items that have been identified?

HASTINGS: They are items -- yes, thank you, I appreciate that. They are items that -- yesterday evening were shared with family members, and they were positively identified as items that James Kim had with him when he left the car.

UNIDENTIFIED FEMALE: Were they spaced out and following down the river or tied to trees or branches...

HASTINGS: Only as it was described to me, they were -- they were laid out in a well-defined area, but in a pattern which seemed to indicate that they're being laid out so someone could follow along as they're trying to follow the area that he was headed.

UNIDENTIFIED MALE: Is there a line or an arrow?

HASTINGS: I don't know.

Thank you.

UNIDENTIFIED MALE: Did he have an additional cell phone on him?

UNDERSHERIFF BRIAN ANDERSON, JOSEPHINE COUNTY, OREGON: This morning, we're attempting to insert several teams into that Big Windy Creek drainage area. We have 12 members of the Jackson County sheriff's office SWAT team that we're trying to insert.

We do have the Josephine county swift water rescue team, five members there. They're hiking in, are going to work in the drainage area and the water.

We do have some members of the forest service rappel team that are hiking in. We also have a team from the Eugene Mountain Rescue that are attempting to hike in.

Our goal this morning is to get in the creek bed, do a thorough search. We're trying to get in front of Mr. Kim and make contact with him. We're also putting the team at the mouth of Big Windy Creek where it dumps into the Rogue River, containment paint.

As you can see from the fog, we are having some problems with it this morning and in the search area. There is some fog down in the drainage. I'll let Sheriff Winters talk about that a little bit.

Those are our -- what our goals are this morning. And today, we are also planning for night operations and also planning for tomorrow's operations.

UNIDENTIFIED MALE: Do you have dogs out with you?

ANDERSON: We do not have dogs out there today. It was the determination made by people on scene that they would not be helpful in this terrain. The original Eugene Mountain Rescue Team that came out said there's a lot of down, heavy old growth in it. It's a lot of water. It's not really conducive for a dog search.

UNIDENTIFIED MALE: Frank, can you talk about the rerouting of the satellite? It's been reported that's supposed to fly over about 10:30. Can you talk about that a little?

ANDERSON: We have received information that a satellite has been rerouted over the search area. I believe it was requested by Mr. Kim. They're going to come over and take a picture of the area. And we'll take a look at what information that develops, if it helps us at all. UNIDENTIFIED MALE: How quickly...

LEMON: All right. You're listening to the press conference now. Just an update from the Oregon state police on James Kim. He's been missing since November 25.

They're talking about the items that they found. Yesterday, they found his pants, what are believed to be his outer pants. And then today, when they resumed that search, they found a wool sock, a little girl's skirt, they said, a piece of -- pieces of Oregon map. So this may be some sort of clues that he's leaving as to where he's going in this terrain.

They've deployed a satellite. Several search teams from the Oregon state police, all have been deployed in this. The only problem that they're having right now, they said some problem with fog, but they're still looking. Several search teams out looking for that man who's been missing since November 25 -- Kyra.

PHILLIPS: Let's get back to the report from the Iraq Study Group. There's no guaranteed path to success in Iraq, and any path might be better than the one that we're on. That's what the Iraq Study Group suggests. So where do we go from here?

Let's bring in our senior political correspondent, Candy Crowley. The question is, Candy, how much will the president pay attention to this report?

CANDY CROWLEY, CNN CORRESPONDENT: Well, I talked to someone recently who said "watch what the Republicans do." and that will give you a very good view into what the president will have to do. Not the Republicans that have split from him before, but those that have stuck with him.

If they embrace this Iraq Study Group report, it's going to be very, very difficult for the president to ignore it or to reject it. He will have to in some way, embrace it or he's going to be the Lone Ranger.

PHILLIPS: That's the next bracelet that's going to go around: WWRD, what would Republicans do, Candy?

CROWLEY: Exactly.

PHILLIPS: OK. Let me ask you about Iran. Very interesting. Hamilton laid it out, look, that's the biggest problem going on: Iran is funneling weapons into Iraq and building the chaos that's happening in that country.

Is that -- I mean, the Bush administration has made it clear, look, that's the axis of evil. We don't negotiate with evil. We don't negotiate with Iran. But the group is saying you've got to do it.

CROWLEY: Well, and the president has said if they verifiably dropped their nuclear weapons intentions that he would talk with them. And it seems to me that this Iraq Study Group gave him a way out, which is to say, let the U.N. Security Council deal with this nuclear weapon problem. You go ahead and engage them on Iraq. So there is a way out for him on this.

But he's been very firm, as you say, about not talking to Iraq until certain conditions are met.

PHILLIPS: Let's listen to Tony Snow. We'll talk again afterwards. Thanks, Candy.

TONY SNOW, WHITE HOUSE PRESS SECRETARY: ... with the Iraq Study Group, as you know. The group presented its report to the president at a 7 a.m. meeting. Just a couple of opening observations and then I'll be happy to take questions.

It was -- it was a meeting noteworthy, I think, for the civility and also the good will of the participants of the panel and also just the general tone of the conversation, which was entirely constructive.

This is an organization that's made it clear that it sees its mission not as one of trying to draw partisan lines but, in fact, try to make a contribution to an issue that is of extreme importance to this country, as you've heard Leon Panetta say. It's a nation that's been divided over this war, and we need to be divided. And members of the study group think that they have found a way. And we are certainly going to study it with great care.

At the outset, the president thanked all of them for their hard work. He said, and I think it's an accurate prediction, he said, "You're going to get -- the country is going to pay a lot of attention to your work," which has been happening today. He noted the distinguished nature of the panel. So we're going to give it a close look.

And after the panel had gone through and each member had given observations about his or her role and what they thought of the report, the president then thanked them all once again and said that we're going to give this close study.

A couple of preliminary notes. And I know that many of you have had a chance to look through it. But I think you get a sense from the tenor of the report from the very opening sentences in the executive summary.

During the letter from -- actually, the letter from the co- chairs. Says, "There's no magic formula to solve the problems of Iraq. However, there are actions that can be taken to improve the situation and protect American interests. Many Americans are dissatisfied not just with the situation in Iraq but with the state of our political debate regarding Iraq. Our political leaders must build a bipartisan approach to bring a responsible conclusion to what is now a lengthy and costly war."

At the beginning of the recommendations, in terms of what the commission thinks might provide a way forward, commission members noted, "We agree with the goal of U.S. policy in Iraq as stated by the president: an Iraq that can govern itself, sustain itself and defend itself. In our view this definition entails an Iraq with a broadly representative government that maintains its territorial integrity, is at peace with its neighbors, denies terrorism a sanctuary and doesn't brutalize its own people."

As you know, there are diplomatic tracks in here. There are discussions about military. There are discussions about the role of the Iraqis. Members of the Baker/Hamilton Commission did, in fact, do a secure video teleconference earlier today with members of the Maliki government. At least according to press reports, the Maliki government also thought it was a very good exchange.

Now, you may hear some people trying to fly speck the report. There may be even anonymous voices within the administration that may try to draw conclusions. I would just let you know that that's not going to be the White House position. We're going to take a work at this.

And it's going to be tempting to ask me to give the president's evaluation of any one of the 79 recommendations. I'm not going to do that. But I will be happy to talk about the -- many of the areas within the report.

But we're studying it. We got it at 7 a.m. this morning. Therefore, I think it probably deserves close study and scrutiny, and that's exactly what it's going to get.

DAVID GREGORY, NBC NEWS: Tony, about the evaluation, can I just start on the point of...

SNOW: I think -- I think David's out shouted you, let me...

UNIDENTIFIED FEMALE: Well, that's not fair at all.

SNOW: ... I was looking. We'll go to David. David, yes?

GREGORY: On the -- on the evaluation of the report, it says the following, and the co-chairs say the following, "Stay the course is no longer viable. The current approach is not working. The situation is grave and deteriorating." Chairman Hamilton says he is not sure whether the situation can be turned around...

SNOW: Well there are...

GREGORY: Can this report be seen as anything other than a rejection of this president's handling of the war?

SNOW: Absolutely. And I think you need to read the report...

GREGORY: I have.

SNOW: You've read the whole report?

GREGORY: No, I've gone through most of it.

SNOW: OK, I've read the whole report. And I will tell you also based on the conversations...

GREGORY: Well, this is --

SNOW: Based on the -- well, if you listen to the chairman you will note...

GREGORY: Tony.

SNOW: David, please. You get mad...

GREGORY: ... read the report. I'm just saying, those are all quotes.

SNOW: I know. I know they're all quotes. I'm now going to try to proceed to try to place them in context.

No. 1, they are not trying to score partisan points or to look back. The one thing they've said is they're not doing a look back.

The second thing is that they understand the difficulties. They have adopted the goals that the administration has laid out. Why don't you go back and read through some of these and I'll go ahead and deal with them -- go back on your notes there and give me the comments one at a time.

GREGORY: Stay the course is no longer viable...

SNOW: OK, stop, stop -- no, no, stop. No, I just want to address them in their order and I'm going to forget. So I'd rather just let you do it one at a time.

GREGORY: It's a totality question, though. How you can hear these things and not conclude that it's rejection of the president's policy?

SNOW: No. 1, stay the course is not the policy. And you know the president's been saying that for months. And if you take a look, what they're talking about is moving from so-called stay the course, it is what? It is this. It is working on a process where the United States works as aggressively as possible to hand over governing responsibilities to the Iraqis, which is precisely what's going on.

If you listen to what Chuck Robb said, he's the one who gave context to it, which is that you work on training up the Iraqis so they can what, sustain, govern and defend themselves. Which is -- we agree. And so stay the course is not an option.

And in a situation where you have to go on to the other point where you've got a deteriorating security situation in areas of Baghdad, which the president talked about before the election in the press conference, saying that that is a situation that was not acceptable and we needed to address. That, in fact, you look at this as somebody trying to make a constructive difference.

In a situation, the realities of which we have discussed, taking a look at policies, many of which we find very interesting, and certainly we're going to be talking in more detail about.

But you need to understand that trying to frame it in a partisan way is actually at odds with what the group itself says it wanted to do. And so you may try to do want you want in terms of rejection. That's not the way they view it...

GREGORY: I just want to be clear. Are you suggesting that I'm trying to frame this in a partisan way?

SNOW: Yes.

GREGORY: You are? Based on the fact that...

SNOW: Because you said...

GREGORY: Wait a minute, wait, wait, based on quoting the report and the chairman, and I'm asking you a straight question which you're not answering straight. You're actually -- you're trying to answer it by...

SNOW: No, no. No, here's...

GREGORY: You're suggesting that by quoting...

SNOW: No, you didn't...

GREGORY: You're suggesting that by quoting the report I'm trying to make a partisan argument?

SNOW: Let me put it this way. Where in the report -- what you have said is can you read this as anything other than a repudiation of policy? And the answer is I can. And what I was trying to do was explain to you, for instance, when you suggested that the stay the course is a repudiation of policy. Not true. It's not an administration policy.

When you talk about the fact that there's a deteriorating situation, is that a repudiation of policy? No, it's something that we have acknowledged.

So what you've asked is a series of bullet points, each of which we have been discussing and addressing. And then you're asking if that is a repudiation of policy. No, it's acknowledgement of reality, David.

GREGORY: I just want to follow up here. So you're -- I just want to be clear of what your argument is, which is not entirely clear to me, but it is that...

SNOW: You're trying to frame this as an argument. We're reading it. We're taking this in.

GREGORY: I know. You're clear in suggesting that I'm trying to frame this in a partisan way. I've got you on that. You're suggesting that the representations of this report are in sync with the way the president has described the reality in Iraq and his policy toward Iraq? Is that what you're saying?

SNOW: Well, go through -- rather than -- because you'll accuse me of nitpicking. Read it. I mean, this is serious. I'm not trying to be snide.

If you go through and you take a look at the metrics at the beginning, we've acknowledged that you've got a deteriorating situation in Baghdad. We have talked about the al Qaeda problems in Anbar. We have discussed the importance of trying to come up with a transition where the Iraqis stand up and take greater responsibility. We've talked about the importance of having Iraqis assume primary combat control.

Last week, you had -- or maybe even earlier this week, you had Major General Caldwell in Baghdad talking about a timetable that's a lot like the one that's in this report.

So what you have here, I think, is a basis for both political parties actually to be working together. We look at this as a very positive document. And rather than -- again, I don't want to get into the business of trying to render judgment on individual recommendations, but I will tell you -- it was very striking to all of us in the room.

When you listen to Lee Hamilton or you listen to Vernon Jordan or you listen to the other side to Ed Meese or Sandra Day O'Connor. These are people who said that they've never been in a commission like this before. Because I mean, this town is awash in bipartisan commissions. You know that. This is not someone where somebody put on the ceremonial bipartisan hat and just went through the motions. These people worked very hard.

And the one thing that they felt was absolutely important is to rebuild a sense of national unity on this. And this is their overriding objective. You can talk to Leon Panetta, who made a point of that in the briefing that many of you attended on Capitol Hill, or you can talk to the members individually. That will strike -- and it was something that we saw as positive and constructive.

And one of the things they said is, we're not coming here, Mr. President, to criticize you. We're not -- what they said is this is an opportunity -- they see an opportunity to come with a new way forward. Well, yes, and we like that. We like the formulation. It's what the president's been talking about. It is why he's instructed relevant institutions throughout this government to take a fresh look at what's going on.

UNIDENTIFIED FEMALE: Tony, I'm not going to shout...

SNOW: Martha, go ahead, that's all right, yes.

UNIDENTIFIED FEMALE: I'm not going to shout. You're just going to come to me.

SNOW: I was going to call on you anyway, thank you, Martha, go ahead. UNIDENTIFIED FEMALE: Very good. Very good. It appears from some of the things that the president has said, despite the fact you say for several months he has said we're not going to stay the course, he said for a long time...

SNOW: Can we get the -- can we get the mic on in here...

UNIDENTIFIED FEMALE: Can you shout, please?

UNIDENTIFIED FEMALE: I am not going to shout.

SNOW: No, no. We've had to...

UNIDENTIFIED FEMALE: Can't hear what she's saying.

UNIDENTIFIED FEMALE: OK, I will shout.

SNOW: OK, I'll reparaphrase it. I apologize. Go ahead.

UNIDENTIFIED FEMALE: One of the things that it appears the president has done in the last week and in Jordan, as well, is he has ruled out some things, talking to Iran, goals. We asked him specifically last week about goals for the Iraqis to attain. These are some of the recommendations in this report. So has he, in fact, ruled out some of these recommendations?

SNOW: Well, keep in mind, with the Iranian -- it's interesting because -- let me just go to the question of Iran and then I'll go to the issue of goals. I'll go to goals, because that's easier and I don't have to leaf to a page.

On the issue of goals, what you've had is the Iraqi government itself has been doing benchmarks. We had this long benchmark discussion a few weeks ago. It is clear that there has to be progress. I think if you read what's going on here in this document, it says that the Iraqis do have to make progress and demonstrate real effort on national reconciliation, on economic development, on diplomatic efforts with their neighbors, and certainly on the security fronts.

And in that regard, we've seen a lot of action in the last couple of days. Prime Minister Maliki yesterday -- I don't know if you saw, but he had a press conference in Baghdad and actually ended up addressing these things. And he hadn't seen the report because he just got briefed on it.

But among other things he call for a regional conference to be attended by all neighbors and I imagine GCC countries and others, to talk about issues of mutual security. He talked about declared national reconciliation initiative, and they're going to be meeting in mid-December. That's a key part of this report.

He talked about Iraq being for all Iraqis and Iraq's riches for all. He talked about the hydrocarbon law, which is a critical matter addressed in the report. He talked about having a cabinet reshuffling in certain ministries. He... UNIDENTIFIED FEMALE: But by when, Tony? Are there benchmarks? Does this have to happen by a certain time or does something happen?

SNOW: No, and if you look at it there are no suggestions for drop dead dates or benchmarks. If you look at the report, what it says is that you want to see -- and you need to expect -- real progress on the part of Iraqis.

What I'm saying to you is we're already seeing encouraging signs of the government itself in the words and the actions of the prime minister. When you're talking about a national reconciliation initiative, he's talking in the next couple of weeks. When you're talking about diplomatic outreach, he's doing it now. When you're talking about a cabinet reshuffle, that apparently is going to happen within the next couple of weeks.

The investment law, which is mentioned in here, has been drafted by the parliament. Hydrocarbon laws have been drafted and it's going to be presented...

UNIDENTIFIED FEMALE: ... sectarian violence...

SNOW: ... want to do that and the president...

UNIDENTIFIED FEMALE: ... and are there benchmarks for that, or are you ruling them out?

SNOW: I don't know. I mean, he point is what you want to see is a reduction in this.

Let's put it this way. The first thing you want is a demonstration of seriousness and capability. And the president had very honest conversations with Prime Minister Maliki about that. He met with Mr. Al-Hakim a couple days ago and spoke about militias. He will be meeting with Sunni leaders and will be having conversations about insurgencies.

The fact is each of these issues is being taken up. Whether there's a date certain or a number, I don't know if they're going to be attached to it. But on the other hand, and to get back to something that David might have mentioned, open-ended commitments. There is no open-ended commitment. We've never said there was.

And the commission says you need to have -- or the Iraq Study Group, you need to have the Iraqis standing up. What is reassuring, and obviously, we have to wait and see how it works out, is the Iraqi government is saying the same thing. And they are saying that they want to see more rapid progress on getting at violence in Baghdad, at getting in violence in Al Anbar, at building political reconciliation.

Part of meeting with Mr. Al-Hakim was to strengthen a moderate bloc of Sunni and Shia so that you can have ways of isolating militias and rejectionist groups that are causing so much violence and bloodshed throughout Iraq.

UNIDENTIFIED FEMALE: Just one more thing. The report -- the bipartisan report says they're not certain this can be turned around.

SNOW: Yes.

UNIDENTIFIED FEMALE: Is the president certain the situation in Iraq can be turned around?

SNOW: The president -- the president feels confident for the following reason. And I understand -- what the commission's doing is acknowledging the very -- the great difficulty of the task ahead.

The president believes in the transformational power of liberty. He talks about it a lot. It's not a throwaway line. And what you have seen are people in Iraq already risking their lives. And you see a real rededication on the part of the Iraqis and also very practical talk about what they think it's going to require. For instance, to deal with sectarian violence.

When we were meeting in Amman, the conversations were far more concrete than in the past in terms of what they think they need. And you have the discussions of the way forward.

But the point is the president believes that the power of the hope of liberty is something that you can't quantify, but it is certainly something that has propelled this nation into the forefront of history.

UNIDENTIFIED FEMALE: Is that a yes?

SNOW: That is a yes.

PHILLIPS: Tony Snow, responding to the Iraq Study Group that we'll be talking about throughout the day and its recommendations that it is making to the Bush administration on how to handle the war in Iraq.

If you want to continue to watch that briefing at the White House, you can go to CNN.com/pipeline.

LEMON: A race against time in Oregon.

(BEGIN VIDEO CLIP)

ANDERSON: We knew he'd left at 7:45 in the morning. If he didn't find anything, he was supposed to be back at 1 on Saturday. He didn't return.

(END VIDEO CLIP)

LEMON: But has time already run out for a missing San Francisco man? The latest clues in a desperate search. We're on it in the NEWSROOM.

PHILLIPS: No power, no relief. It's already polar in much of the Midwest. Now a fresh assault of frigid is on the way. The mercury keeps dropping. We'll keep watching it right here in the CNN NEWSROOM. (COMMERCIAL BREAK)

PHILLIPS: Hello, everyone, I'm Kyra Phillips live at the CNN world headquarters in Atlanta.

LEMON: And I'm Don Lemon. Reaction is fast and furious in the new report presented on Iraq. Our Andrea Koppel is on Capitol Hill. Barbara Starr has Pentagon and troop reaction. And our Ben Wedeman is in the heart of it all in Baghdad.

Well, the Iraq Study Group's findings are being released amid high hopes in Washington. But in Iraq, the report comes amidst a backdrop of renewed violence.

Our Ben Wedeman is in Baghdad with reaction to the report and its findings -- Ben.

BEN WEDEMAN, CNN CORRESPONDENT: Yes, Don, well, as I'm standing here, we're listening to a fairly intense exchange of gunfire not too far away from here. You'd be able to hear it if we didn't have the generators on, because most of the time here there's no electricity.

Now as far as reaction goes, we don't know if this gunfire is reaction in any way to that report. We have heard the Iraqi Prime Minister Nuri Al-Maliki did receive a closed-circuit television briefing from Mr. Hamilton and Mr. Baker about that report and what he came away from that briefing was that the report supports the national unity government of Iraq, it supports the intensification of regional diplomatic efforts to bring about peace in this country, and it supports the idea of giving the American forces here less of a combat role and more of a training role in the future. And that of course is something that the Iraqis themselves would like.

Prime Minister Maliki, when he met with President Bush last week in Amman, discussed and they agreed upon exactly that, that the Iraqis would have an ever greater role in the combat -- in leading the military operations in this country -- Don.

LEMON: Ben Wedeman, thank you so much for your report.

PHILLIPS; The Pentagon's been doing its own assessment of the war in Iraq. And with today's release of the study group report, it might be time to compare notes.

Let's get straight to Pentagon correspondent Barbara Starr -- Barbara.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Kyra, the report of course had a lot of discussion of potential military options for Iraq. But the question may well be what's new, are there new ideas in here for the U.S. military that they hadn't thought of? Is there one of those silver bullet solutions to Iraq's problems, if you will?

Talking to people around here, the assessment is that a lot of the military things the report discussed were in fact already under way. Let's just consider a couple of the ideas here. The report talks about accelerating the turnover, getting the Iraqis to take more control, having the U.S. shift to a noncombat role beginning in 2008. Well, the U.S. military already, in fact, has been talking about accelerating the turnover of security to Iraqis.

Plans are already under way in Baghdad with the military on another point, and that is increasing the size of U.S. training teams and U.S. advisers.

And they are already, in fact, repositioning some troops to areas in the rear, if you will, so that they are in less of that front-line combat role and in more of a training or advisory role. All of these things have essentially been under way by the U.S. military.

But here's the problem, Kyra -- as always, the security situation in Baghdad in Iraq's western Al Anbar province, until that security situation fundamentally improves, it's going to be very tough business to make significant progress in any of these areas -- Kyra.

PHILLIPS: We've been talking so much about Iraq. But also the report talked about more military support in Afghanistan.

STARR: Indeed in Afghanistan there is considerable attention being paid to the very same issue, training and equipping the Afghan army and the Afghan police. And interestingly, very much like Iraq, the army forces in Afghanistan are making progress, but, like Iraq, there is considerable concern about Afghan police forces. Those forces that handle security in towns and villages in both countries. U.S. commanders believe that is really an essential problem that has to be addressed. They think they're a long way from having really credible police forces in either country -- Kyra.

PHILLIPS: All right, Barbara Starr, live from the Pentagon, thanks.

LEMON: The tone is blunt. The conclusions are sobering. The Iraq Study Group has released its long-awaited report, and it gets straight to the point. Current U.S. policy in Iraq, it concludes, is not working. It also warns of a deteriorating situation and a potential slide into chaos.

Our congressional correspondent Andrea Koppel is standing by for us now on Capitol Hill -- Andrea.

ANDREA KOPPEL, CNN CONGRESSIONAL CORRESPONDENT: Don, i don't think anybody who's been following the news in recent weeks is surprised by what this commission has come forward with in terms of the ideas that are out there. We even heard yesterday Robert Gates during his hearing say there are no new ideas, we know what the list of suggestions are.

Nevertheless, the three main points that we heard mentioned here, one, of course, the diplomatic front, engaging with countries the United States has not been willing to engage with beyond certain preconditions. That being Iran and Syria. The other setting specific milestones for the Iraqi government, for Prime Minister Al-Maliki to achieve by a date certain, and that includes a national reconciliation, and to lay out consequences if he did not, which could include drastically diminished U.S. support on the military, economic and other fronts.

And then finally, the front that you've been discussing now with Barbara and with Ben has to do with the military side of it.

And interestingly, I spoke with both -- two of the members, Leon Panetta and Secretary Lawrence Eagleburger off camera, and they said that that was the real point of contention, whether or not to put a date certain out there on the horizon as they have for the mission, the military mission in Iraq, to shift.

Now when you look at all three of these points, the question that was put to both Lee Hamilton and to Secretary Baker was, what are the chances of success? The answer, they don't have a crystal ball.

(BEGIN VIDEO CLIP)

JAMES BAKER, IRAQ STUDY GROUP: If we do what we recommend in this report, it will certainly improve our chances for success.

LEE HAMILTON, IRAQ STUDY GROUP: We cannot, of course, predict the future. We believe that the situation in Iraq today is very, very serious. We do not know if it can be turned around, but we think we have an obligation to try.

(END VIDEO CLIP)

KOPPEL: Now, what they hope will be sort of the catalyst behind this report, and perhaps the reason why it's embraced by the White House, is the fact that it is bipartisan. They feel that there is nothing out there that sort of encompasses both the Republican and Democratic view, and they also believe, Don, that the American people are demanding this, and we saw that on November 7th -- Don.

LEMON: Andrea Koppel on Capitol Hill, thank you so much for that.

PHILLIPS: He went to hospital, but his friend went to the grave. An Italian security agent says he still fears for his life after the murder of Alexander Litvinenko, an exclusive interview on an addictive story, next in the CNN NEWSROOM.

LEMON: Take a look at these pictures. We're following a developing story, a building explosion in Milwaukee. The news keeps coming, and we'll keep bringing it to you, right here in the CNN NEWSROOM.

(COMMERCIAL BREAK)

PHILLIPS: Let's go straight to the NEWSROOM. Fredricka Whitfield working details on a developing story -- Fred.

FREDRICKA WHITFIELD, CNN ANCHOR: This out of Milwaukee, one person is dead, one other missing, and at least 30 people were injured as a result of this. This was an explosion that may have been started by a propane tank. There was a gas leak and there wasn't an evacuation which preceded this explosion, an explosion so fierce the fire chief says it flipped a car, it blew out windows in nearby buildings in this industrial park area.

And you see right there, it crushed and destroyed at least one other vehicle. It happened at the Faulk Corporation, which manufacturers steel products. So again, one person has been killed from this. At least 30 others are being treated for injuries. Some are minor, at least four are very serious injuries. And one person remains missing -- Kyra.

PHILLIPS: All right, what more do we know, Fred, about the search for the missing father and husband in Oregon?

WHITFIELD: This taking place in Oregon. The search intensifies for James Kim. He has been missing since Saturday when he decided to leave the vehicle with his wife and two daughters inside. They had been stranded in the Oregon area for a week after making a Thanksgiving trip. He decided to go seek help, got out of the car, and left.

Well, Monday, the mother, the wife, and the two daughters were found by two rescue workers, but now the search continues for James Kim. And now emergency crews have decided they really are holding out hope that he is alive. So they've put together eighteen care packages that will be air-dropped in the Windy Creek drainage area.

And included in those care packages: a sweatshirt, sweatpants, a wool blanket, socks, overalls, a flare gun, as well as MREs and flashlights and a letter from the family. A personal letter that the officials say they don't want to read or publicize. But they're certain when James Kim is able to get this care package, he'll be able to get closer to perhaps being rescued.

They're holding out hope that he is still alive. But rescuers warn that not only is the terrain a real challenge, but, of course, the weather is likely to worsen over the next few days. Earlier, we heard from Brian Anderson, the undersheriff of Joseph County.

(BEGIN VIDEO CLIP)

BRIAN ANDERSON, UNDERSHERIFF, JOSEPH COUNTY: Our goal this morning is to get in Creek Bed, do a thorough search. We're trying to get in front of Mr. Kim and make contact with him. We're also putting a team at the mouth of Big Windy Creek where it dumps into the Rogue River as a containment point.

As you can see from the fog, we are having some issues with it this morning and in the search area there is some fog down in the drainage. I'll let Sheriff Winters talk about that a little bit. Those are our -- what our goals are this morning. And today we are also planning for night operations and also planning for tomorrow's operations.

(END VIDEO CLIP) WHITFIELD: So, again, the search continuing for James Kim there in this photograph, being seen with his wife and they have two daughters. The wife and the two daughters are fine, after being rescued, after being in that vehicle for seven very cold, long days. And now rescuers are very hopeful that perhaps the care packages that will be dropped might find James Kim -- or he might find those packages and get closer to being rescued perhaps -- Kyra.

PHILLIPS: All right, Fred, we'll track both stories, thanks.

LEMON: $1 billion dollars that went into the wrong hands. A new Federal report about where the money went after Hurricane Katrina proves you didn't have to take a direct hit to end up getting soaked. Details that will probably burn you up. Next in the CNN NEWSROOM.

(COMMERCIAL BREAK)

COLLINS: FEMA money, Hurricane Katrina money. It flowed like floodwater after the storms last year. And this may not surprise you, but some people who got paid didn't deserve it. Federal accountants are turning up scammers, out right liars, and double-dippers. It's expensive too. Details from CNN's Jeanne Meserve.

(BEGIN VIDEOTAPE)

JEANNE MESERVE, CNN CORRESPONDENT (on camera): More indications that it's the American taxpayer who got soaked in the Katrina recovery. The Government Accountability Office says there was double- dipping, nearly $20 million worth of improper or fraudulent payments went to 7,000 people who filed for assistance twice on the same property --once for damage incurred by Hurricane Katrina and again for damage in Hurricane Rita. A FEMA computer program that should have flagged the problem, had been turned off.

Another finding, nearly $17 million in rental assistance went to people already living rent free in trailers, trailers also paid for by FEMA. GAO says $46,000 in rental assistance went to ten people living rent free in FEMA apartments, but they can't get a handle on how often that happened because of limited data.

Another shocker, $3 million went to 500 foreign students who were not eligible for assistance, even though in many cases the students had informed FEMA of their immigration status.

Big picture, the GAO estimates that FEMA paid out about $1 billion on fraudulent claims but has recovered only about $7 million. That's less than 1 percent of the total.

A spokesman for FEMA says the agency hasn't seen the new GAO testimony and won't comment on the details. The agency has acknowledged big problems in distributing aid but says new safeguards are being put in place.

Senator Susan Collins, the chairman of the Senate Homeland Security and Governmental Affairs Committee which is holding hearings on this today, says current FEMA practices invite and enable fraud. And she says just think of the additional relief and rebuilding that could have been done with the misspent funds.

Jeanne Meserve, CNN, New York.

(END VIDEOTAPE)

PHILLIPS: And we're going to ask the Secretary of Homeland Security, Michael Chertoff, about this report on Katrina fraud. Be sure to join us in THE NEWSROOM on Friday when he will take your questions. That's right here live in THE CNN NEWSROOM.

LEMON: He's not sick. He's out of the hospital. But Mario Scaramella still believes he dodged a bullet. Former Russian spy Alexander Litvinenko died after a still unsolved radioactive poisoning. Scaramella sat with Litvinenko at a London restaurant the day before he fell ill. Scaramella tells CNN's Matthew Chance he has reason to think his life was and still is in danger.

(BEGIN VIDEOTAPE)

MARIO SCARAMELLA, ITALIAN SECURITY CONSULTANT: I have received several e-mails from another source. He introduced to me some years before saying that him and, in a certain sense, also me, I was measured as well for different reasons, were under the special attention of -- or are still, people, and so to take care.

The problem for me was this mail was so full of details, so specific, it seems not genuine. But I asked him to make a comment, especially because the source he introduced me some years before.

MATTHEW CHANCE, CNN CORRESPONDENT: And what kind of hostile forces do you believe were placing -- were targeting you and your colleagues?

SCARAMELLA: Well, people -- people linked with some clandestine organizations not directly under control of Russian establishment, but from Russia.

CHANCE: That's rogue security agents in Russia?

SCARAMELLA: Well, you know, generally retired people from secret services -- these kind of people, yes.

(END VIDEOTAPE)

LEMON: We have learned in just the past few minutes that Scotland Yard is now treating the Litvinenko case as an allegation of murder. We'll have more on that live from London coming up right here in THE NEWSROOM.

PHILLIPS: Well by now, you've probably heard the words.

(BEGIN VIDEO CLIP)

LEE HAMILTON, IRAQ STUDY GROUP: The situation in Iraq is grave and deteriorating.

(END VIDEO CLIP)

PHILLIPS: And that's just for starters. So what does the White House have to say about the stark report from the Iraq study group? We'll have reaction ahead in the CNN NEWSROOM.

(COMMERCIAL BREAK)

LEMON: Getting a lot of unwanted stock tips in your e-mail inbox lately? Apparently, you are not alone. Susan Lisovicz joins us now from the New York Stock Exchange to explain that. Hey, Susan.

SUSAN LISOVICZ, CNN CORRESPONDENT: Hi, Don.

Well, that's just one of the many spam scams out there on the world wide web and it's getting a lot worse. Spam filtering firm Ironport estimates that worldwide spam volumes doubled from last year. In fact, Ironport says unsolicited junk mail now accounts for more than 9 out of 10 e-mails.

The problem is, there's a new breed of junk e-mail called image spam. Instead of using traditional text, these e-mails include the words of the ad as part of a picture and that fools a lot of traditional spam filters.

Don, I don't know if you've noticed them. They're real friendly and they say, hi, it's me, Trudy. Hi, it's me Gary...

LEMON: Haven't heard from you in a long time.

LISOVICZ: I open them up and then I see it's like for some penny stock or something like that.

LEMON: No. No. The best thing to do is -- I just keep one just to send out e-mail, never look at it just kill all of it.

Just because some years ago, some people in the industry thought that our spam problems, all of this, would soon be over. That's what I thought.

LISOVICZ: Wishful thinking, right Don? Two years ago, none other than Bill Gates, Microsoft's chairman and chief software architect said the spam issue would be solved by 2006. The problem is anti-spam companies are having a tough time keeping up with spammers.

For example, this past summer, firms figured out how to scan that image spam for words and catch phrases but spammers responded by swiftly by adding things like polka dots to background colors to their e-mails tripping up scanners.

Basically one step up ahead when it comes to trying to make a dime illegally.

(MARKET REPORT)

LISOVICZ: The next our of NEWSROOM begins in two minutes.

(COMMERCIAL BREAK)

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.voxant.com