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House Ethics Committee Ends Investigation Into Mark Foley Scandal; New Cargo Security Deal Raises Controversy; Michael Chertoff Interview

Aired December 08, 2006 - 15:00   ET

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

KYRA PHILLIPS, CNN ANCHOR: Hello, everyone. I'm Kyra Phillips, live at the CNN World Headquarters in Atlanta.
DON LEMON, CNN ANCHOR: And I'm Don Lemon.

He is one of Washington's hottest hot seats -- Homeland Security Chief Michael Chertoff live this hour. He's talking TSA, border control, port security, and wasted FEMA funds. It's a NEWSROOM exclusive.

PHILLIPS: Whom can you trust? It's a tough question for anyone, but a heck of a lot tougher when you're a spy. Scotland Yard wants answers. What was this man up to when he met Alexander Litvinenko for a lethal lunch date?

LEMON: And lawmakers let their colleagues off the hook. The House Ethics Committee releases its report on the Mark Foley scandal.

You're live in the CNN NEWSROOM.

If you think this Russian spy poisoning is just about one ex-spy getting killed, think again -- more developments again today. More people may be sick, prominent among them a man who met face to face with Alexander Litvinenko the day he apparently became ill.

More now from CNN's David Mattingly in London.

(BEGIN VIDEOTAPE)

DAVID MATTINGLY, CNN CORRESPONDENT (voice-over): He's become the mystery man in Scotland Yard's hunted for the killer of Alexander Litvinenko. The case has thrust Andrei Lugovoy man into the global spotlight, an unusual place to find someone whose background in Russian intelligence helped him build a career in the lucrative world of private international security.

SERGEI STROKAN, RUSSIAN JOURNALIST: They had contacts. They had knowledge. They were disciplined. So -- and -- they knew now the techniques. You see how to do things in Russian. That's why it's quite common, and it's no surprise that Mr. Andrei Lugovoy, ex-KGB guy, was in business.

MATTINGLY: Russian journalist Sergei Strokan says Lugovoy capitalized on his deep contacts inside the Kremlin to attract wealthy private customers outside. While working for the government, Lugovoy became bodyguard for top Russian officials.

But, when Vladimir Putin came to power, Lugovoy's associations temporarily cost him his freedom. He ended up in prison, briefly, after trying to help an executive elude authorities. Unlike Litvinenko, who fled after speaking out against corruption, Lugovoy stayed in Russia, and continued to build his business and diversify beyond security.

Former Lugovoy associate Sami Rosen says the man is not a low- profile figure.

SAMI ROSEN, SECURITY ANALYST (through translator): He's impressive physically. His looks stand out, as well as his ability to communicate. He's interesting to talk to. He's quite open. He's not going to tell you all his secrets, though.

MATTINGLY: In an interview broadcast on Russian radio, Lugovoy said he and Litvinenko had known each other for more than a decade. And two had been working together for about a year, acting as facilitators for British companies interested in doing business in Russia.

(on camera): At their last face-to-face meeting, at a hotel in London on November 1, Lugovoy says Litvinenko gave him a contact for a company in Spain, and the two made plans to meet there later in the month. But that meeting never happened.

(voice-over): Litvinenko got sick. They exchanged a few phone calls, where Lugovoy says he offered his sympathies.

He publicly maintains he had nothing to do with Litvinenko's killing, and promises cooperation in the investigation. The ex-spy's death meant the end of a business partnership between two men with similar backgrounds and the beginning of a sensational murder case that put the name Andrei Lugovoy in headlines all around the world.

David Mattingly, CNN, London.

(END VIDEOTAPE)

PHILLIPS: It was a story that rocked official Washington just weeks before Election Day.

The House Ethics Committee, last hour, wrapped up its investigation of former Florida Congressman Mark Foley and the Republican leadership's handling of the Foley scandal. You saw the news conference right here on CNN.

Let's bring in our Dana Bash from Capitol Hill -- Dana.

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Well, Kyra, we're still trying to go through the report that the House Ethics Committee issued just a short while ago.

But the headline is that, after they have investigated, talked to countless witnesses, under oath, from the speaker of the House on down, they have concluded that members of Congress and top staffers or officers of the House did fail to protect young pages, but no one broke the House rules.

Now, you see a quote there. This is part of the headline. "In all," this report says, "a pattern of conduct was exhibited among many individuals to remain willfully ignorant of the potential consequences of former Representative Foley's conduct with respect to House pages."

However -- and this is a big but here -- "The investigative subcommittee," it says, "did not find, any current House members or employees violated the House code of official conduct."

So, nobody will be reprimanded, because the report says that nobody officially violated the rules.

But, in this report, Kyra, the members of the House Ethics Committee try to bend over backwards to say, no, nobody violated the rules, but they do see, as I mentioned, that many members, at least staffers, were ignorant, willfully ignorant, of what was going on with Congressman Foley.

The report says, rather than addressing the issues fully, some witnesses that they talked to did far too little, while attempting to pass responsibility for acting to others. And the report says, almost no one followed up adequately on the actions that they -- that they took.

Now, it tries to go into why, in fact, there wasn't adequate responsibility taken, or a willful ignorance, as the report says. This concludes that they don't know exactly what the motivations were. However, they do say that a couple of reasons could have been at play. Number one is that some of these top staffers, those in the leadership and those close to Mark Foley, didn't want to reveal that he was a homosexual.

It was not revealed publicly and openly by Mark Foley that he was gay until after he had already resigned under these allegations. Another is, they say that perhaps they did not want to hurt or go against the wishes of some of the family members of these pages and former pages involved.

So, this -- these are some of the conclusions. Again, we are still combing through this. But one interesting thing is that, apparently, these concerns didn't just start shortly -- start recently. In fact, this report says that concerns about Foley's conduct started when he came into office. That, Kyra, was in 1995.

Kirk Fordham, apparently, who was -- who was very close to Mark Foley, one of his top staffers, started raising these issues directly with Mark Foley back about a decade ago -- Kyra.

PHILLIPS: ... Hill.

LEMON: Zack Hall knows firsthand about the page program. He was a House page back in 2004. And he has been actively fighting to preserve the program ever since the Foley scandal hit. Zack Hall joins us now in Austin, Texas.

Zack, when you first spoke to us, not that long ago -- it was back in October -- you said you felt the House leadership put pages' safety in jeopardy by not aggressively handling the Foley program. Do you agree with the House Ethics Committee's conclusion, that Republican House leaders were negligent, but did not violate any rules?

ZACK HALL, FORMER CONGRESSIONAL PAGE: No, I absolutely do agree that they are negligent, and they should be held accountable for what happened here.

But I think what's concerning to me is that no one in particular was held accountable. There's reports that have come out since that say that, since 1995, there may have been people that knew about this up on Capitol Hill.

And it just continues to -- to show us that no one wants to hold anybody else accountable for anything that goes on, on Capitol Hill. And that's concerning to me. And to know that they may have known about this for many years, the speaker may have known about it since 2002, that's concerning. And it should be concerning to any parent of a former page that sent their kid, their children, up to Capitol Hill to try and keep them thinking that they were safe.

LEMON: Well, and, you know, when you joined us back in October, you said -- I asked you the question. I said, did anyone ever warn you about Congressman Foley?

And you said: "No, I wasn't warned. I did not know anything about and was not warned about any congressman, for that matter. It's very surprising to me. And it was surprising to everyone else I know."

Do you still stick by that? Do you -- any people you spoke to since then, were they ever warned about Mark Foley since the...

HALL: No one I know...

LEMON: ... the months we have interviewed you?

HALL: Yes, no one I know was ever warned about any member of Congress -- no one.

And I think that the report shows that people on Capitol Hill, staffers, members of Congress, the speaker, Representative Reynolds, people knew about this. People knew that Representative Foley was a pedophile, and was doing things that he shouldn't have been doing. And no one did anything about it.

And I'm disappointed that this report just holds them negligent. It's just a slap on the wrist to Republicans everywhere. Instead, it should hold the specific Republicans accountable that are specifically responsible for this. And it's especially disturbing to me, because we're talking about 16-year-old kids here... LEMON: Right.

HALL: ... that went to Washington to learn about their country and to serve it. We're not talking -- this is a serious problem that needed to be dealt with immediately.

LEMON: I'm going to read you something from the report.

It says -- and I want you to comment on it. It says: "The failure to exhaust all reasonable efforts to call attention to potential misconduct involving a member and a House page is not merely the exercise of poor judgment. It is a present danger to House pages and to the integrity of the House."

Do you think the Ethics Committee went far enough?

HALL: Certainly not. And that statement there tells you that they're trying not to hold people accountable that should be held accountable.

It's -- you know, it's ridiculous. It's absolutely ridiculous. And...

LEMON: What about all the changes they said that they were going to make, Zack, with the phone number, and a way for the pages to call if they had any problems, any issues?

Do you have anything you want to add to that, or do you think that that's good enough, or at least a step in the right direction?

HALL: You know, I want to thank our leaders on Capitol Hill that are doing their part to ensure that the page program is able to stay intact.

And I also want to thank those that want to ensure that, in the future, if anything comes up that needs to be reported, that there are ways to have it reported, that the pages will always be protected, and that the program stays intact, and the safety of the pages is never again compromised.

LEMON: Real...

HALL: That's important.

LEMON: Real quickly, Zack, just to you personally, personally, you were a page. And to -- you know, there are hundreds of other kids who were pages. What did the program mean to you? How did it help you?

HALL: The program taught me about leadership. It taught me so much about Washington. It was an opportunity to realize that our country is a great country, and the House of Representatives is a great institution, that great things can truly come from there.

And the experiences that I had in Washington, the -- just the amazing experience that it was taught me that I want to serve my country someday. And I look forward to doing that, and hopefully going back to Washington to achieve my dreams.

LEMON: Zack Hall, thank you so much for joining us today...

HALL: Thank you.

LEMON: ... again, here on the CNN NEWSROOM.

And we put the entire House Ethics Committee report on Mark Foley on our CNN Political Ticker. To check that out, go to CNN.com/ticker.

PHILLIPS: Call it a listening tour of sorts -- as the dust settles from this week's release of the Iraq Study Group report, President Bush filling up next week's agenda with a wide range of meetings on Iraq.

CNN White House correspondent Suzanne Malveaux joins us now with a preview.

Hey, Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Hey, Kyra.

This really is the new reality here at the White House. The press secretary, Tony Snow, summing it up pretty well -- he said, look, this is following a trend from the Iraq Study Group. They have called for bipartisanship. And he said, there's a time for campaigning and a time for governing.

And, quite frankly, there's an admission here at the White House, an acknowledgment, that the American people want some governing from this president -- Tony Snow saying that the president is going to be inviting a lot of people here. He's going to be trying to build consensus. He's trying to listen to folks, and what Tony Snow said, of course, to get a lot of stuff done.

So, what you saw today is President Bush at a breakfast meeting with the Democratic leadership, incoming, as well as Republican chairs, outgoing, pledging his support to keep the White House open, to keep a listening ear to many ideas, consensus on Iraq, as well as domestic issues.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I think we ought to meet on a regular basis. I believe there's consensus toward that.

And the reason you meet on a regular basis is so that the American people can know that we're working hard to find common ground.

REP. NANCY PELOSI (D-CA), MINORITY LEADER: We had a heavy focus on the subject of Iraq. Almost every member mentioned the urgency of our working together for a new direction in Iraq. The president admitted that some new tactics might be needed.

(END VIDEO CLIP) MALVEAUX: Tony Snow added that this is not going to be all about peace and love, but he said it's certainly an attempt to try to get some things done here.

But, as you know, Kyra, it's one thing to invite a lot of people to the White House. It's another thing to see whether or not the president is really going to be listening to their suggestions, and coming up with a -- a truly new plan here.

We do know that there is going to be diplomatic outreach continuing next week. Monday, it's the State Department meeting -- State Department meeting with Condoleezza Rice. He comes back here, meets with outside experts in the Oval Office Tuesday, a video teleconference with his top military commanders in Iraq and the U.S. ambassador to Iraq, Zal Khalilzad.

Wednesday, it's to the Pentagon to meet with Secretary of Defense Donald Rumsfeld. And then, we're told, he will take all of this together in the next couple of weeks, make some decisions, present it in a major address to the American people. And the hope is, is that he does this before Christmas -- Kyra.

PHILLIPS: And included in all of that, the 79 recommendations from the Iraq Study Group?

MALVEAUX: Well, we will see which ones he accepts and rejects. And that is what we should get a sense of in the next couple of weeks.

PHILLIPS: All right, Suzanne Malveaux live from the White House -- thanks, Suzanne.

MALVEAUX: Yes.

LEMON: Once called a security risk, now part of a security program -- an Arab firm again at the center of a controversy. That's ahead in the NEWSROOM.

PHILLIPS: And coming up later from the CNN NEWSROOM, an exclusive interview with Homeland Security Secretary Michael Chertoff.

(COMMERCIAL BREAK)

LEMON: Remember what airports were like before 9/11? You could walk up to the arrival gate and greet your Aunt Betty the minute she got off the plane.

Now the Transportation Security Administration is running a test in Detroit and the Dallas/Fort Worth Airport. Guests at hotels inside those airports are being allowed to go through checkpoints without boarding passes.

Now, if the experiment is successful, it could lead to letting other non-passengers pass through security. But experts say it's too early to make predictions.

PHILLIPS: From a possible problem to part of the problem -- an Arab-owned company, once again, at the center of controversy involving port security.

Our Homeland Security correspondent, Jeanne Meserve, has that.

(BEGIN VIDEOTAPE)

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT (voice-over): It was a preemptive strike by the secretary of homeland security.

MICHAEL CHERTOFF, HOMELAND SECURITY SECRETARY: We will not outsource our security.

MESERVE: It was an effort to squelch congressional criticism, before it erupted, over the fact that Dubai-owned D.P. World operates three ports involved in a new cargo security program that will screen containers for radiation in foreign ports before they're shipped to the U.S.

CHERTOFF: The bottom line is this: If you want to do security overseas, you have got to work with foreign governments and foreign companies, because they own the ports.

MESERVE: Last February, there were high-decibel protests on Capitol Hill, when D.P. World purchased six port facilities in the U.S.

REP. PETER KING (R-NY), HOMELAND SECURITY COMMITTEE CHAIRMAN: I would urge the president to freeze this contract.

MESERVE: As for the new cargo program, King says he will be watching closely, but has been assured D.P. World will not have access to sensitive information or software.

However, some found it ironic that a company that raised security concerns a few months ago was now a partner in a security program.

In the pilot program, containers in six foreign ports will go through radiation detectors. Because those machines cannot detect shielded radioactive material, the container will also be X-rayed. If Customs and Border Prosecution personnel on site, or at the National Targeting Center, see a potential threat, the container will be pulled for further inspection by foreign authorities.

CHERTOFF: In the end, the go, no-go decision rests with our guys sitting in a CBP office. And if they have any doubt about how this has been resolved, they're going to say: Time out. It doesn't come in.

MESERVE: When the pilot is fully operational, just 7 percent of the cargo coming into the U.S. will be screened. DHS plans to expand the program over time, but some say 100 percent screening of cargo shouldn't wait.

REP. BENNIE THOMPSON (D), MISSISSIPPI: Unless we give a date certain, we will limp along. It has been five years since 9/11. It is time to finish the job.

MESERVE: Others think the entire approach is misguided.

RANDALL LARSEN, FOUNDING DIRECTOR, INSTITUTE FOR HOMELAND SECURITY: They're asking the wrong question. Most people ask the question, how do we prevent al Qaeda or other terrorist organizations from bringing a nuke through a seaport? The right question is, how do we prevent al Qaeda from becoming a nuclear power?

(END VIDEOTAPE)

MESERVE: DHS says, money is being spent on that, but critics say it is nowhere near enough -- Kyra.

PHILLIPS: And this a big -- been a big debate on the Hill. So, how is Congress getting involved, responding?

MESERVE: Yes, you remember D.P. World was a big dust-up back in February.

I was actually surprised, making calls around yesterday. There didn't seem to be anybody who was too agitated. You had Representative King saying, I think there are safeguards. You had Representative Schumer -- Senator Schumer, rather, saying, I think there is scrutiny. You had Senators Collins and Lieberman saying, hey, this is great; they're starting to come into compliance with the Safe Ports Act that we passed back in October.

So, at this point, anyway, they aren't saying too much negative about it.

PHILLIPS: And when could it be -- when will the program be expanded?

MESERVE: Well, that's an unknown. The secretary wouldn't be pinned down on that, because he says: This is a pilot program. We are testing things. We want to see how things work. And, only in the future, will we make decisions on where we will go next, and how many ports will be included, and when.

PHILLIPS: And still, though, not every single piece of cargo will be checked. I mean, not every -- it's just impossible, right?

MESERVE: No, no. And this only deals with containers, not things that are shipped in other forms.

They say, when all of these ports are up and operational, it will be about 7 percent of the cargo coming towards this country. The goal is obviously to kick that much higher. I can only say that there are, of course, radiation portals at -- ports in the United States. So, once it gets here, most stuff is being screened. And 100 percent of it will be eventually.

PHILLIPS: All right, Jeanne Meserve, in the house, because DHS Secretary Michael Chertoff was here. And you're visiting us. And how long are you going to be here?

MESERVE: Just until he's done, and then back to Washington. PHILLIPS: Outstanding.

MESERVE: But he will be with you before he's with me.

(LAUGHTER)

PHILLIPS: All right, Jeanne, thanks.

MESERVE: You bet.

LEMON: And coming up: Kyra's exclusive interview with the Homeland Security secretary, Michael Chertoff -- coming up in just a little bit.

Well, together, they helped forge the landmark Camp David peace accords, but no peace anymore between former President Jimmy Carter and longtime associate Ken Stein. Details on a new book and the bitter dispute it sparked, that's next in the CNN NEWSROOM.

(COMMERCIAL BREAK)

LEMON: A longtime adviser to Jimmy Carter has parted company with the former president -- the bone of contention, Carter's new book about the Middle East.

CNN's Brian Todd has the story in Washington -- Brian.

BRIAN TODD, CNN CORRESPONDENT: That's right, Don.

The man who brokered the Camp David accords has, in fact, angered some of the people who have worked closest with him on the Middle East peace. Foremost among those Jimmy Carter friends-turned-critics, as you mentioned, an Emory University professor named Ken Stein, who resigned recently as a fellow of the Carter Center.

Stein and others who were close to President Carter tell us, in his new book, "Palestine: Peace, Not Apartheid," the former president distorts events and interprets history in a way that implies Israel may have been more to blame for breakdowns in negotiations and for some aspects of the conflict.

(BEGIN VIDEO CLIP)

KEN STEIN, FORMER CARTER CENTER FELLOW: When you write a book, and you write it with a particular slant to it, the conclusions that you draw and the material that you pull from it indicate he was headed in one direction.

(END VIDEO CLIP)

TODD: Now, Stein has cited inaccuracies in the book, most of them fairly minor, about dates of events.

But Stein also points out something he initially called copied material, but, then, he backed away from that characterization. He cites two maps Carter uses when he discusses Bill Clinton's peace effort -- peace efforts in 2000. Stein said they are strikingly similar to two maps in a book by Clinton's envoy to the Middle East, Dennis Ross.

Now, we checked the maps against those in Ross' book, which is entitled "The Missing Piece." They are very similar. And Stein is upset that President Carter does not cite a source for the maps in his book.

But Stein is very clear. He is not accusing Jimmy Carter of plagiarism. We asked Dennis Ross about that. He says, the maps didn't exist until he created them, and he doesn't know where else President Carter have gotten them. Ross says, his publisher has sent a letter to President Carter's publisher, Simon & Schuster.

Mr. Carter said this today about the map dispute.

(BEGIN VIDEO CLIP)

JIMMY CARTER, FORMER PRESIDENT OF THE UNITED STATES: I have never seen Dennis Ross' book. I'm not knocking it. I'm sure it's a very good book. But it -- my maps came from an atlas that is -- that is publicly available. And I think it's the most authentic map that you can get.

(END VIDEO CLIP)

TODD: Now, we tried to contact the company that President Carter says put that atlas together to see if they got it from Dennis Ross. We have, so far, not been able to reach that firm, which is called the Applied Research Institute in Jerusalem. We are working on getting a formal response from Mr. Carter's publisher, Simon & Schuster -- Don.

LEMON: All right, CNN's Brian Todd, thank you so much for that.

And you can see more of Brian Todd's reports every day in "THE SITUATION ROOM."

PHILLIPS: From no gel to no-fly lists, from border crossings to port containers, it all falls on the shoulders of Homeland Security Chief Michael Chertoff. He joins us in the CNN NEWSROOM for an exclusive interview, coming up.

Don't miss -- you don't want to miss it.

(LAUGHTER)

(BEGIN VIDEOTAPE)

RICHARD SHORE, VOLUNTEER TEACHER: I may not be the most perfect person in the world here, but I feel like I'm an important person to these kids.

Let's try it.

VALERIE MORRIS, CNN CORRESPONDENT (voice-over): Soon after Richard Shore retired, he walked into the Interdistrict Downtown School in Minneapolis, and said he wanted to volunteer. That was nearly five years ago.

SHORE: The most critical thing to do is to provide kids with assistance in learning, and to hopefully enable them to experience satisfaction in learning. That's why I do it.

MORRIS: As an aide to teachers, Shore gives students that one- on-one support they may need to succeed. For these young minds, this special attention can go a long way. Many of these students have put aside their insecurities, and are facing their schoolwork assignments head on.

SHORE: Trying to enable them to appreciate that, you know, this isn't a major challenge they're going to face in their life.

MORRIS: Shore's career included many years of work for both the U.S. government and the educational system. He says he has traveled the world, and now tries to bring the world to students. And that's the satisfaction this 78 year-old retiree gets every day.

SHORE: If you ask me how long I intend to do this, as long as I can take the mile-and-a-quarter walk to school every morning and back.

MORRIS: Valerie Morris, CNN.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

PHILLIPS: I'm Kyra Phillips live in the CNN world headquarters in Atlanta.

LEMON: And I'm Don Lemon.

The job didn't even exist until 9/11 made it necessary. And Michael Chertoff is only the second person to ever hold it. The Department of Homeland Security secretary joins us for an exclusively live interview to talk TSA, borders, ports and the challenge of protecting all the U.S. on all fronts. You're live in the CNN NEWSROOM.

PHILLIPS: Senate Republican breaks ranks with his president. Oregon's Gordon Smith says that he's at the end of his rope and he can't support the war in Iraq any longer. He gave an emotional speech last night on the Senate floor calling the situation in Iraq, quote, "absurd."

(BEGIN VIDEO CLIP)

SEN. GORDON SMITH (R), OREGON: I, for one, am tired of paying the price of ten or more of our troops dying a day. So let's cut and run or cut and walk, but let us fight the war on terror more intelligently than we have because we have fought this war in a very lamentable way.

(END VIDEO CLIP) PHILLIPS: Until now, Senator Smith has supported the U.S. military policy in Iraq. He said he was moved to speak out by this week's release of the Iraq study group report.

And you can get more on CNN.com. Read the full Iraq study group report and interact with others on the direction the U.S. should take in Iraq. That's at CNN.com where you're in control.

LEMON: U.S.-led coalition forces carried out raids today on suspected insurgent hideouts in Iraq. The military says 20 suspected members of al Qaeda were killed northwest of Baghdad, but the mayor of the village disputed the account and said 19 civilians were killed including women and children.

Top U.S. commander in Baghdad was asked today if he thinks the U.S. is winning in Iraq.

(BEGIN VIDEO CLIP)

LT. GEN. PETER CHIARELLI, CMDR, MULTI-NATIONAL CORPS. IRAQ: You know, I thought that -- I thought I escaped that one, but, militarily, I can say without a doubt that we are winning. We've never been defeated on any battlefield, sir, in this conflict, nor will we be.

To ask if we're winning in Iraq is to think that one could boil the situation down to a simple yes or no answer and I don't believe there is a simple yes or no answer.

I think it's the wrong question. The real question that I think we should be asking ourselves is are we making the progress toward our strategic objectives. And I would have to give that answer a yes.

(END VIDEO CLIP)

LEMON: General Chiarelli is wrapping up his second tour of duty in Iraq. He acknowledged Iraq is in a more uncertain state than it was in the last time he left in early 2005.

PHILLIPS: If you're sending Christmas presents to soldiers overseas, you'd better get moving -- Monday is the deadline for sending mail to loved ones in Afghanistan and Iraq if you want it there by Christmas.

One thing that soldiers may be getting this year, silly string. New Jersey mother is organizing a drive to send cans of it to Iraq. Marcelle Shriver she says that her son wrote to her explaining that troops are using it to detect trip wires around bombs before going into a building. They spray it across the room and if it falls, no trip wires; if it hangs, they know they have a problem. Shriver already has 1000 cans packed up and read to go.

Well, from no jail to no fly lists; from border crossings to port cairns, it all falls on the shoulders of homeland security chief Michael Chertoff. He joins us in the CNN NEWSROOM for an exclusive interview coming up next.

(COMMERCIAL BREAK)

PHILLIPS: You remember what airports were like before 9/11. You could walk up to the arrival gate even if you didn't have a plane ticket and now the Transportation Security Administration is running a test in Detroit, at the Dallas/Ft. Worth airport also. Guests at hotels inside those airports are being allowed to go through checkpoints without boarding passes and if the experiment is successful, well, it could lead to letting other non-passengers pass through security.

They're keeping air travel safe to keeping dirty bombs out of the cargo containers to keeping terrorists from crossing our border. It's all under the watch of security of homeland -- the Department of Homeland Security rather, Michael Chertoff. He's the secretary obviously of that department and joins us for an interview today.

Nice to have you with us.

MICHAEL CHERTOFF, DEPARTMENT OF HOMELAND SECURITY SECRETARY: Nice to be here, Kyra.

PHILLIPS: Easy job, right? You only have to protect all of us from basically everything in this country?

CHERTOFF: Well, we cover virtually in the air, on land, and at sea. But lucky for me, I've got almost 200,000 really dedicated colleagues to work with me on it.

PHILLIPS: Well, let's get down to business. I have a lot of questions to ask you about -- particularly today, we saw the front page of "USA TODAY" and we've seen it on the wires. The TSA experimenting with, you know, Gatorade still can't get through, but hey, grandma might be able to greet us at the gate. Should we take this seriously? Could it go back to the old days?

CHERTOFF: Well, it's not going to go back to the old days. Job one is always protect the American public and protect those who fly, but we're also always looking to see if we can adjust to make things a little bit more convenient for travelers and for those who greet travelers.

So this is an experiment, we're going to see how it works. One of the things we want to be careful about is we don't want to overburden the system particularly during those periods of time when is there a lot of travel like we had at Thanksgiving. So we're going to watch and be careful, but the number one requirement is that it not compromise our security.

PHILLIPS: So, little by little, could we see this happening in other airports? Because right now, it's Dallas/Ft. Worth and Detroit -- they are sort of playing with it.

CHERTOFF: Well, we're going to have to see how it works out first. We're going to have to evaluate how it does with respect to security but also ...

PHILLIPS: Jamming up the lines?

CHERTOFF: We don't want to jam the lines up. So, once we've evaluated that we can make a decision about whether or how to go forward.

PHILLIPS: All right -- speaking of decisions. I want to ask you about this ruling that a federal judge by the name of Richard Leon made talking about -- well he came forward and said, look, thousands more displaced families, they are living in apartments. FEMA either cut off the aid with little explanation or no explanation.

Now, I understand, FEMA has been ordered by this judge to reinstate the aid and pay months back -- or pay months of back rent. FEMA is appealing this ruling. Why? Tell me what you think about that?

CHERTOFF: Well, let me explain what the challenge is. The challenge is at the same time that you want to make sure you get as much aid to people as they need, you also want to make sure they're eligible. And you may remember Kyra, there were some stories recently about people who were not eligible for aid who got it.

So, we've got to find a way to reconcile these two conflicting requirements. On the one hand, getting the assistance to people who are deserving, while making sure that they are in fact deserving.

And what we're trying to do here in the wake of what was the largest mass migration in American history, is to make sure we have a way to validate that the people getting the money are really entitled to it.

PHILLIPS: The judge, of course has disagreed, though, with the fact that -- with the appeal. And he is saying that the inconsistency amounted to a denial of the due process rights of evacuees and so he has ordered FEMA now to clarify the eligibility requirements and immediately restore these families to the program. Can you immediately do anything when it comes to FEMA?

CHERTOFF: Well, of course, I mean, you know obviously, we're going to do what a court says. Now as you pointed out FEMA is looking at an appeal and obviously courts of appeal exist to review what trial judges do.

We want to however be good customer -- provide good customer service. So, if there is more we need to do to make sure we are being clear, we ought to get that done and that's been my instruction to FEMA.

Obviously, we are going to pursue the legal questions where they have to be pursued, but we also want to make sure we're doing the right thing. We don't want to have deserving people kicked out, but we also don't want to have people ripping off the program.

PHILLIPS: All right. Speaking of ripping off the program. The report by congressional investigators was released. FEMA says that out of the $7 billion in emergency aid that was given to individuals after Katrina and after Rita, 290 million dollars was unjustified.

However, congressional investigators are saying that that's grossly underestimated and that actually it's at least $1 billion dollars.

CHERTOFF: Well, I think what they did is they sampled and I think what they said, it could be more than that. And I'm not sure I necessarily agree with the sampling and with the extrapolation from the sampling, but the bottom line is this -- it's the very same point I made a couple of moments ago.

We've got to balance between the desire to get the aid out quickly and the desire to make sure that we're not having the public lose money. One of the things we did in the wake of Katrina was build a system that would give us a lot more visibility to who is applying and a lot more ability to check.

So in the future, we will be able to be in a position to have much better control over the money. The problem is we're still living with a legacy of decisions that were made frankly at a time of extreme emergency where there were a million and a half people, who had moved out of New Orleans in a matter of days. People who were desperate for money and we were trying to make decisions that were humane, recognizing that there was going to be a risk that some people would rip off the system.

PHILLIPS: But, let me ask you, because the report even revealed that even this year, money was going to the wrong people and fraud was still taking place. So, obviously, what you're working on is still not working. So do you think FEMA should even be under Department of Homeland Security? Maybe FEMA should be separate from DHS?

CHERTOFF: Well, let's separate a couple of questions. First of all, a lot of the legacy we're dealing with from Katrina is the result of decisions that were made, essentially getting us off on the wrong foot.

And once that happens, it's very difficult to correct the legacy problem. What we have done is put measures in place going forward to allow us to make sure it doesn't happen again.

Second question you raise is whether FEMA, which is an emergency agency designed to deal with events over a period of a couple of months, should be in the position of providing huge amounts of assistance over a period of years or whether that ought to be, perhaps, something that another department takes over at some point, that there is a handoff when you get to long-term recovery.

That's an issue which when the White House did its Katrina lessons learned, they raised about whether at some point emergency becomes recovery and we ought to have a handoff and something we can talk to Congress about, but in the meantime, as we're following through on our responsibilities, we have to do the best to make sure that we are recovering the money where it was unjustifiably given out and building systems to prevent problems like this in the future.

PHILLIPS: Do you really think you can recover that money?

CHERTOFF: I think there's a lot of money we will recover. I don't necessarily as I say, agree with the a billion dollars. There are a lot of judgment calls. For example, sometimes you have families which are separated and so you may wind up giving money members of the same family, but they may not be living together, maybe they are separated or divorced.

So those are judgment calls in which one person might say that was unfair and another person might say that's called for. And what we're going to do is work through those. But nobody can say they were satisfied how this turned out.

I just have to emphasize Kyra, that we had never built a system at FEMA for the kind of million and a half person mass migration that we faced after Katrina. And so, basically, they were asked to build a system from scratch in a matter of a week and not surprisingly there were some problems in the way that happened.

PHILLIPS: But, and I just have to ask you again, because I don't know if I really got a clear answer. You're saying that possibly you could discuss it with Congress. You're not 100 percent sold that FEMA should be under DHS.

CHERTOFF: Well, no, no, no. I completely -- FEMA has to be in DHS.

PHILLIPS: All right. It has to be under your control?

CHERTOFF: We have to be able to integrate the full spectrum of prevention, protection, and response, so that we can provide seamless activity in an emergency.

What I suggested which is what the White House raised, is the possibility that when you move from emergency to long-term recovery, kind of years of social services, whether those particular functions ought to perhaps be in hands of a department like HUD or HHS where they basically do social services work.

So, that wouldn't be removing FEMA, it would be focusing FEMA on its core mission which is emergency, rather than the long-term recovery issue which at least in the exceptional circumstance, can go on for a matter of years.

PHILLIPS: Let's talk border security and port security after a quick break. Sound OK?

CHERTOFF: Great.

PHILLIPS: All right, we will be right back with the Secretary of Department of Homeland Security Michael Chertoff.

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PHILLIPS: Continue our conversation with the secretary of the Department of Homeland Security, Michael Chertoff. I want to ask you about border security, my first question. In a report to Congress this week, your department said that it has, quote, "effective control," unquote, of just -- of the 284 miles -- of the 2,000-mile long border with Mexico. That's less than 15 percent.

The report also said that DHS can't even adequately define what effective control means. So if you're having trouble defining the problem of illegal immigration, how can you control it?

CHERTOFF: Let me tell you what we meant. First of all, there's, obviously, a segment of the border that is virtually impassible so we don't really worry about that. We define effective control as the ability to know who is crossing border and to intercept them with virtual certainty.

Then there's another, larger chunk of the border where we have a very good handle who comes across, but our ability to intercept is not as good as we would like it because there are issues with the landscape or ability to transport people as quickly as we need to transport them.

What is difficult about defining effective control is, of course, you don't know what you don't know. We do have systems in place to measure the number of people we think are coming across the border.

PHILLIPS: What type of systems?

CHERTOFF: Well, we have actually gotten, for example, sometimes count tracks, footprints, and we are able to extrapolate from that on the border what we think the traffic is as opposed to what we're catching.

But where we want to go with a new program that we have called SPI-Net, which is a high-tech program, is to deploy a system of ground radar and sensors so that we will literally be able to get an accurate count of everybody who crosses the border because the sensors will record it.

Once we have that in place, we have, in effect, the denominator and the equation that measures what percentage of people we're capturing, and our program, our plan, is to deploy a good deal of this -- in fact, virtually all of this -- in the traveled sections of the border over the next couple of years.

PHILLIPS: Within a couple of years?

CHERTOFF: Yes.

PHILLIPS: That's a lot of money.

CHERTOFF: It's a lot of money and it's going to be a lot of effort including the effort of the Border Patrol which we're doubling in size from where it was before the president came in office. But if the public is serious, as the president is, about getting control of the border, then we do have to make the investment. Now, we're doing some other things as well, Kyra. We ended catch and release at the border. We no longer release people we catch at the border which was a huge turnaround from a year ago.

We are significantly increasing our interior enforcement against businesses that willfully violate the law by hiring illegals. Last year, we had criminal charges against 716 individuals or companies, as compared to 127 the year before.

PHILLIPS: Do you fine them or close them down?

CHERTOFF: Well, we actually prosecute them and if they're convicted, they wind up paying fines or going to jail. And with that, that certainly will close somebody down. So we are much more vigorous on the enforcement side and much tougher than we've ever been before.

This is part of a multiprong strategy to do something that's never been done in 30 years, which is turn the situation and the border around and get it to where the public has a right to expect it to be.

PHILLIPS: Port security -- quickly, our waterways, a lot of concern about the ships coming in and out of the U.S. and cargo. Can it all be screened? Once again, this is a multimillion dollar project.

CHERTOFF: Well, we have information about every shipment that comes out. The high-risk shipments we actually physically open up and inspect or we X-ray. More important, or equally important, we have radiation detection equipment -- because that's what we're mostly worried about -- at most of our ports right now. About 80 percent of the cargo coming in, in containers, is going through those detection monitors. And by the end of next year, we will be virtually at 100 percent.

Now, we're actually now working with our foreign partners to put some of that detections overseas so we can actually screen or scan for radiation before a container is loaded on a ship bound for the U.S., which is what we announced yesterday.

So we're pushing the layers of protection out, working with our partners so that we can stop radioactive material even before it gets on the way to come into the United States.

PHILLIPS: What if you find a nuke? Do you turned them around, send them back or do you act on it?

CHERTOFF: Well, what we would do if we found an alarm -- and we've had some instances where there have been alarms, they've never turned out to be a real nuke -- is we will stop a ship cold in the water with the Coast Guard or the Navy, and we will board it and we will open it right there, if necessary.

We're not going to play games with the American public. We want to have a balanced but we want to have a very effective security program against the kind of weapon of mass instruction which is the nightmare scenario for the American people.

PHILLIPS: DHS secretary, you've got a lot on your plate. Michael Chertoff, thanks for stopping by and talking with us.

CHERTOFF: Good to be here. I look forward to doing it again.

PHILLIPS: Likewise.

CHERTOFF: Great.

PHILLIPS: Well, the "Closing Bell" and a wrap of the action on Wall Street straight ahead. Stay with us.

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