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THE SITUATION ROOM

Coverage of Libby Verdict; President Bush Issues Warning to Democrats; Interview with Howard Dean

Aired March 6, 2007 - 16:00   ET

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


WOLF BLITZER, CNN ANCHOR: Happening now, vice president's former chief of staff found guilty in the CIA leak case. We're going to have extensive coverage of the verdict against Lewis "Scooter" Libby, the powerful reaction and what happens next.
And does this trial leave a cloud over the Bush White House?

This hour, our correspondents and analysts are gauging the political fallout and the legal fallout in this presidential election year.

And President Bush issues a new warning to Democrats in the Congress not to tie his hands on Iraq. But the majority party is waging its own internal battle over the war. I'll ask Democratic National Committee Chairman Howard Dean about that split and about the Libby verdict.

All that coming up.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

He served in the inner sanctum of the Bush White House and now Lewis "Scooter" Libby could wind up in jail. The former top aide to Vice President Cheney was found guilty today on four out of five counts against him. Those charges stem from the investigation into the leak of a CIA operative's identity back in 2003.

Let's walk through these various charges against Lewis "Scooter" Libby.

Count one, obstruction of justice. Libby was found guilty.

Count two, making false statements to the FBI about a conversation with NBC's Tim Russert, Libby was found guilty.

Count three, making false statements to the FBI about a conversation with former "Time" magazine writer Matthew Cooper, Libby was found not guilty on that charge.

And counts four and five -- perjury. Libby was charged with lying to investigators looking into the outing of Valerie Plame Wilson's role as a CIA operative. He was found guilty on both of those charges.

Let's bring in CNN's Brian Todd.

He's our lead correspondent on the Libby trial.

What was the reaction, first of all, from the Libby camp, Brian, to this four out of five guilty verdict against "Scooter" Libby?

BRIAN TODD, CNN CORRESPONDENT: Well, Wolf, for the most part, "Scooter" Libby has tried to maintain a very stoic composure throughout this trial. He did that as the verdict was read, but was observed blinking several times as the verdict was read, those four or five counts guilty.

A short time after the verdict was read, his wife, Harriet Grant, was observed hugging Mr. Libby's lead defense attorney, Ted Wells, telling Ted Wells, "I love you," in apparent gratitude for Mr. Wells' advocacy of her husband.

Libby was very composed throughout this trial, cordial with reporters, cordial with others, basically maintained that composure even after the verdict was read, but did show some emotion -- Wolf.

BLITZER: How about the reaction from the attorneys, the -- as far as "Scooter" Libby's next move?

TODD: Well, we're going to hear reaction from the prosecutor, Patrick Fitzgerald. But as for Mr. Libby's attorney, Ted Wells, he vowed under no uncertain terms that this case is by no means over.

Let's hear what he said.

(BEGIN VIDEO CLIP)

TED WELLS, LIBBY DEFENSE ATTORNEY: We intend to file a motion for a new trial. And if that is denied, we will appeal the conviction and we have every confidence that ultimately Mr. Libby will be vindicated.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

PATRICK FITZGERALD, SPECIAL PROSECUTOR: Any person telling a lie under oath to a grand jury is a serious problem. Having someone, a high level official, do that under oath in a national security investigation, is something that is -- can never be acceptable. And that just made it mandatory that we pursue it.

(END VIDEO CLIP)

TODD: Now, Mr. Fitzgerald, the prosecutor, who you just heard from there, said that barring any other evidence presented in this case, his case is essentially closed. He does not plan to bring any more charges in this case against anyone at the moment.

Sentencing is set for June 5th, Wolf. Mr. Libby could face up to 25 years in prison. But under federal sentencing guidelines, likely to get far less than that.

BLITZER: All right, Brian, thank you for that.

We're going to check back with Brian.

He's going to be staying on top of this story.

Only one of the 11 jurors in the Libby trial spoke out publicly after the verdict was read. That would be Denis Collins. He says the panel's decision is not politically motivated. He says jurors had sympathy for Libby and saw him, actually, as the fall guy.

(BEGIN VIDEO CLIP)

DENIS COLLINS, JUROR: Some jurors commented at some point, "I wish we weren't judging Libby, you know? This sucks. This is, you know, we don't like being here, doing this." But that's -- that wasn't our choice.

(END VIDEO CLIP)

BLITZER: The legal wrangling isn't over by any means, yet. In addition to a likely appeal of today's verdict, there's a civil lawsuit pending against Libby and the vice president, Dick Cheney, as well as the presidential adviser, Karl Rove.

Let's go to our senior legal analyst, Jeff Toobin -- this civil lawsuit takes on new momentum, I take it now, because of this guilty verdict. They're going to go after -- Joe Wilson, Valerie Plame, their supporters -- they're going to go after the vice president, Karl Rove and others.

JEFFREY TOOBIN, CNN LEGAL ANALYST: Well, they're certainly going to try, although I have to say it's going to be very difficult even if they prove somehow liability, any damages.

You know, both -- both Wilsons, Joe Wilson and Valerie Plame Wilson, have made a great deal of money on book contracts, probably much more than they ever would have made had they stayed in the government.

So it's hard to see how they've been damaged financially by this case.

BLITZER: Well, what about the argument...

TOOBIN: I think quite the opposite.

BLITZER: What about the other argument that her career at the CIA as a clandestine officer was destroyed and that she and he have come under various threats, including death threats, from various people out there and that their lives have been dramatically changed as a result of this?

TOOBIN: Well, there's no doubt that they were dramatically changed. But in terms -- if you do the actual dollar amount, given what they've reported to have received, certainly it seems like Valerie Wilson has been made whole financially from losing her job at the CIA.

Certainly, she does have an argument that this wasn't her choice. This is not how she chose to leave the CIA. She was essentially forced out of a career. And that's something no one should have to do against, you know, without their confer -- without their consent.

But as a purely financial matter -- and that's what lawsuits are about -- it's hard to think that she lost much money or any money at all.

BLITZER: Some are suggesting already that this opens the door for forcing Dick Cheney, Karl Rove, to testify as part of this lawsuit, sort of along the way -- along the lines of the former president, Bill Clinton, was forced to testify in the Paula Jones lawsuits or Whitewater, that this opens a whole new potential area of looking to see if these guys engaged in perjury or whatever.

TOOBIN: Absolutely, that they will be subpoenaed in this lawsuit. There's no doubt about that. Whether they will testify or not, they will certainly try to delay it as long as possible, and civil litigation has a way of moving very, very slowly.

Karl Rove or Vice President Cheney would have the right to take the fifth and refuse to testify on the grounds that it might incriminate them. That is certainly going to be a possibility. And the Wilsons have no right to seek immunity, to force them to testify, if they take the fifth.

So there is a lot of legal machinations to go in that lawsuit.

BLITZER: And one final quick question, Jeff.

If all of this stands and he's going to be sentenced, even though he faces 25, maybe 30 years, potentially, he's going to get a lot less.

But do you -- based on your experience as a former federal prosecutor, he'll -- he'll wind up serving some time in jail.

TOOBIN: Based on the federal sentencing guidelines, which are not mandatory, but they are generally followed by judges these days, he is in the range of somewhere between a year-and-a-half and three years in prison and he almost certainly will get something in that range. And there's virtually no chance he'll be able to avoid prison, but he certainly won't serve anything like 25 years.

BLITZER: All right, Jeff, thank you for that.

Jeffrey Toobin reporting.

Democratic leaders are coming out swinging in response to the Libby guilty verdict. In a statement today, the Senate majority leader, Harry Reid, said, and I'm quoting now: "Lewis Libby has been convicted of perjury, but his trial revealed deeper truths about Vice President Cheney's role in this sordid affair.

Now President Bush must pledge not to pardon Libby for his criminal conduct."

The White House spokeswoman, Dana Perino, was asked about that today.

(BEGIN VIDEO CLIP)

DANA PERINO, WHITE HOUSE SPOKESWOMAN: I'm aware of no such request for a pardon and as with -- as is afford to all Americans, there is a process that is followed in which to apply for a pardon. And I don't think that speculating on a wildly hypothetical situation at this time is appropriate.

(END VIDEO CLIP)

BLITZER: Perino also says President Bush is saddened for Libby and his family. She refused to comment further on the pending legal proceedings.

The vice president was asked about the verdict against his former top aide and close friend. He declined to comment.

Let's turn to our senior political correspondent, Candy Crowley, for some of the political fallout from this -- and I assume it potentially could be very significant.

CANDY CROWLEY, CNN CORRESPONDENT: Well, you know, it's hard to see how a terrifically weakened president is any more weakened by this. Nonetheless, remember, the Democrats are in charge now. The Democrats have more fodder now for their investigations. You already have the Intelligence Committees looking into whether intelligence was manipulated in order to bolster the cause in Iraq for the U.S. going in.

So certainly this gives more ammunition to them.

The culture of corruption -- we heard a lot about that going into the 2006 election. It definitely had some ramifications on some of the House seats. If this goes on, you can see how it would slip into the 2008 election, as well.

BLITZER: Do you think that in terms of the Republican presidential candidates, and the Democratic candidates, the conviction of Lewis "Scooter" Libby, is that going to be an issue that they're going to try to take advantage of from various perspectives?

CROWLEY: Well, again, I think that the Democratic candidates could talk about the culture of corruption and what happened in this administration and how you need a Democrat to come in and clean house. And Republicans, I'm assuming, will take distance from it. I mean if this goes on and "Scooter" Libby does end up in jail and the appeals are all exhausted, I think you can expect to see the 2008 Republican candidates walking away from it.

BLITZER: We'll watch it with you, Candy.

Thanks very much.

Candy Crowley, Jeff Toobin, Brian Todd -- they are all part of the best political team on television. And remember, for the latest political news at any time, check out our Political Ticker at cnn.com/ticker.

Let's go to Jack Cafferty.

He's part of the best political team on television, as well -- Jack.

JACK CAFFERTY, CNN CORRESPONDENT: Thank you, Wolf.

Senator Barack Obama plays well way beyond Peoria -- in Tokyo, London, Frankfurt and Nairobi. That's according to the Politico.com. In an article they've titled "Globe Bama Mania," they report that the 2008 presidential race, and especially Barack Obama, are getting a lot of attention overseas.

One of Japan's top television networks broadcast a special on the senator from Illinois and got huge ratings. Interest in Obama also been high in Germany, Britain, Italy, and in his father's native Kenya.

Obama's Democratic rival, Hillary Clinton, is the other candidate whose star power has reached overseas, especially in Latin America. Of course, Germans, British and Japan won't be voting for the next U.S. president, but it probably couldn't hurt to have a candidate for this nation's highest office getting some positive reviews for a change overseas.

Here's the question -- does it mean anything if Senator Barack Obama's triggering a lot of interest overseas?

E-mail your thoughts on that to caffertyfile@cnn.com or go to cnn.com/caffertyfile -- Wolf.

BLITZER: Jack is going to have more to say later on the "Scooter" Libby trial, as well.

CAFFERTY: Oh, yes.

BLITZER: Jack, thank you for that.

Coming up, what's next for "Scooter" Libby?

Does he have a good chance at an appeal?

Victoria Toensing, former top Justice Department official. She's standing by live to joins us right here in THE SITUATION ROOM.

Plus, Howard Dean is speaking out on the Libby verdict. The Democratic Party chairman talks with me about the CIA leak trial, the political battle over Iraq and more. And later, why did the White House fire eight federal prosecutors? Was politics behind the dismissals?

We'll get to Capitol Hill for the latest on this continuing controversy.

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

(COMMERCIAL BREAK)

BLITZER: Let's get some more now on this story -- the guilty verdicts against former White House aide Louis "Scooter" Libby.

The special counsel, Patrick Fitzgerald, says he's gratified by the jury's decision. Some legal experts have questioned Fitzgerald's case and their tactics, among them Victoria Toensing.

She's one of those critics. She's a former Justice Department official, a former federal prosecutor.

Vicki, thanks very much for coming in.

VICTORIA TOENSING, FORMER FEDERAL PROSECUTOR: Good to be here.

BLITZER: He, according to this jury, men and women of his peers, he's convicted of lying to the FBI, lying to a federal grand jury. Presumably he's going to jail, at least for some period of time.

Was justice served?

TOENSING: Well, I didn't think justice was served by bringing the case in the first place.

I had never heard...

BLITZER: But you can't justify lying to a federal grand jury...

TOENSING: Well, wait a minute...

BLITZER: ... or obstructing justice.

TOENSING: That's not (UNINTELLIGIBLE) -- but, Wolf, there's a difference between lying and two witnesses' memories differing. I mean look at how the inconsis...

BLITZER: These aren't just two witnesses. These were like 10 wit -- nine witnesses...

TOENSING: (UNINTELLIGIBLE)...

BLITZER: ... said they discussed her identity with him...

TOENSING: Right.

BLITZER: ... before he claims he learned about it from...

TOENSING: And he...

BLITZER: ... Tim Russert.

TOENSING: The charges were only, because -- trust me, Fitzgerald would have brought more if he had had that kind of -- any kind of inconsistency with someone else -- were Matt Cooper and Tim Russert. And so those are two people.

And guess what?

They had all kinds of problems with what they remembered.

BLITZER: Yes, but there was a lot of...

TOENSING: Witnesses at the trial...

BLITZER: ... other witnesses -- there were a lot of other witnesses...

TOENSING: But witnesses at the trial just...

BLITZER: ... who said that -- prosecution witnesses -- who said they discussed her identity with him...

TOENSING: Right.

Guess what?

Let's just take Ari Fleischer, who is a fine man, an honest man. And he said that he remembered talking about it with "Scooter" Libby. But he said he never talked about it with Walter Pincus, the "Washington Post" reporter.

And what did Walter testify to?

I'm sure you know. He said oh my goodness, in the middle of the conversation, Ari Fleischer interrupted me and said, hey, you know, his wife works for the CIA.

This is why prosecutors -- and, Wolf, I don't know of another case where it's just a memories differ kind of case...

BLITZER: But...

TOENSING: You usually have to have something else, like Martha Stewart, there was witnesses there that she asked me to lie. You have none of that in this case and...

BLITZER: But are you questioning Patrick Fitzgerald, his integrity?

TOENSING: Oh, absolutely.

I'm not questioning...

BLITZER: He wasn't... TOENSING: I questioned his judgment because...

BLITZER: But, you know, he was named the special counsel by John Ashcroft, the attorney general.

TOENSING: Well, I wrote an article that questioned this...

BLITZER: He's an attorney...

TOENSING: ... his capability.

BLITZER: And he's a U.S. attorney in Chicago.

TOENSING: That's right.

BLITZER: So he comes with a really credible reputation.

TOENSING: Yes, well, I'm not alone in questioning his judgment in pursuing a case where you don't have evidence more than just some other witnesses...

BLITZER: Why did the jury convict him on four of five counts?

TOENSING: Because I don't think the jury understood. When you listen to the one juror j

BLITZER: This was a pretty smart juror, by all accounts.

TOENSING: Well...

BLITZER: Educated.

TOENSING: ... he did. But when he came out, I don't know what kind of bias he had, but when he said, well, as we all said, this bothered us a bit because, as one juror said, where's Karl Rove?

It showed that they didn't understand the law in any way whatsoever.

But that's our jury system...

BLITZER: But that was...

TOENSING: ... and you accept that.

BLITZER: That was his defense. Ted Wells, his lawyer, kept saying this guy, my client, is being made a scapegoat by Karl Rove, by Dick Cheney, by the White House. He's just an innocent guy. But they decided to make him the scapegoat.

That was...

TOENSING: Oh, I don't think they ever said Dick Cheney...

BLITZER: That was Ted Wells' argument.

TOENSING: Nobody ever said anything...

BLITZER: Well, he said high officials in the White House.

TOENSING: OK. Nobody ever said...

BLITZER: He said the White House is making...

TOENSING: ... said that.

BLITZER: ... this guy the scapegoat...

TOENSING: Well, actually...

BLITZER: And the jury was sympathetic to that.

TOENSING: ... they were making -- they were making the same point, that you don't indict "Scooter" Libby and not indict the other people.

But my point is you don't indict "Scooter" Libby because the standard for that indictment was so low that a whole lot of people could have met testimony that was not consistent with somebody else. That's my point.

BLITZER: But you -- but le me just be clear, because you're a former Justice Department official.

TOENSING: I am, indeed.

BLITZER: You're not justifying lying to FBI agents...

TOENSING: Absolutely not.

BLITZER: ... or to the -- to a federal grand jury?

TOENSING: But I'm saying the standard, when you have a perjury case, as a prosecutor -- and they're very few and far between -- you either have to have an underlying crime or...

BLITZER: Well, he says...

TOENSING: ... you have some kind of extraneous evidence...

BLITZER: He says he couldn't -- he couldn't come up with the underlying crime...

TOENSING: Correct.

BLITZER: ... because "Scooter" Libby threw dust in his...

TOENSING: Oh, please.

BLITZER: ... in the referee's eyes...

TOENSING: Wolf...

BLITZER: This is what he's...

TOENSING: I know...

BLITZER: I'm just telling you what he says.

TOENSING: I know what you're going to say, so let me add to it...

BLITZER: He says...

TOENSING: ... before we run out of time.

BLITZER: He says she was a covert officer of the CIA and that as a result, you know, this was a serious breach of...

TOENSING: See, that just shows what a...

BLITZER: ... security.

TOENSING: ... what a warped, you know, approach that is, because, look, he knew from day one that Dick Armitage had actually made the leak...

BLITZER: The deputy secretary of state.

TOENSING: The deputy secretary of state, who is not oppose -- who, he was opposed to the war, Armitage was. So this was not some cabal to go get the people who were for the war or against the war, and that Armitage was the person who leaked it to Bob Novak.

That didn't prevent him from doing an investigation. "Scooter" Libby didn't prevent him from doing an investigation. He got to talk to all kinds of people.

He knew whether she was covert or not from day one. And she isn't. So there was no underlying crime.

BLITZER: Well, listen...

TOENSING: And the fact that he came out today...

BLITZER: Listen to what he said...

TOENSING: He said she's classified.

BLITZER: Listen to this.

I'll play a little clip of what he said...

TOENSING: Sure.

BLITZER: ... the special counsel.

(BEGIN VIDEO CLIP)

FITZGERALD: There is no doubt that her relationship with the CIA was classified and that's -- that's just a fact.

(END VIDEO CLIP)

BLITZER: All right...

TOENSING: Covert, because, as I've said many times, I negotiated and wrote the law, the Covert Agent Identities Protection Act.

BLITZER: He used the word classified.

TOENSING: Classified is a very different legal term and he's a good enough lawyer to know that. And if you give the identity of a classified person, it doesn't mean diddly squat under the law. It has to be a cover agent. That's why we wrote the law in 1982, because there was this legal gap. People were exposing agents abroad and we didn't have a law to cover it.

BLITZER: How worried should Karl Rove, Dick Cheney be about the civil lawsuit that Joe Wilson and Valerie Plame Wilson are now moving forward with?

TOENSING: Oh, it's like a mosquito. I mean, there's just no basis. There's just no basis for that civil lawsuit and I predict it will be thrown out.

Do I get to come back here when -- when that...

BLITZER: You...

TOENSING: ... when that case goes away...

BLITZER: You'll come...

TOENSING: And, also, just by the way...

BLITZER: You'll come back in...

TOENSING: ... the sentencing guidelines say only 15 to 21 months, not a year-and-a-half to three years...

BLITZER: Not a -- which was what Jeff Toobin...

TOENSING: It's a level 14, 15 months to 21 months.

BLITZER: So, but, presumably, if this holds, he'll spend a little time in jail?

TOENSING: It depends, because the judge isn't bound now by the guidelines anymore.

BLITZER: All right.

Victoria Toensing, former Justice Department official and helped write the law in which a lot of this case was initially based.

Thanks for coming in. TOENSING: Sure.

BLITZER: Coming up, we'll take a look at some of the other top headlines, including a very deadly day in Iraq, for Iraqis and for U.S. troops.

Plus, President Bush tells Congressional Democrats not to tie his hands over Iraq.

What does Howard Dean have to say about that?

I'll ask him. The Democratic Party chairman is here in THE SITUATION ROOM.

Stick around.

We'll be right back.

(COMMERCIAL BREAK)

BLITZER: We're getting some reaction from Dick Cheney. We'll get to that momentarily, reaction to the conviction of Lewis "Scooter" Libby. That's coming up.

But let's check in with Mary Snow for a closer look at some other important stories making news -- Mary.

MARY SNOW, CNN CORRESPONDENT: Wolf, six American troops died in a single blast. Three others died after a bomb exploded right near them. That is what military officials are saying about incidents that happened yesterday, one in the Salahuddin Province, the other in Iraq's Diyala Province.

The pair of attacks is the deadliest day for U.S. forces in Iraq in months. So far, 3,184 U.S. troops have died since the war began.

Meanwhile, more Iraqis have also died today. Over 120 people are dead, over 220 hurt after a series of bombings targeting Shiites on a holy pilgrimage. In one incident insurgents placed themselves in a crowd of pilgrims and blew themselves up. Those pilgrims were making their way to the city of Karbala to celebrate a holy day.

And there's a major push going on against the Taliban in Afghanistan. It's a NATO-led multinational offensive called Operation Achilles. A British soldier died in the early hours of the fighting. NATO forces are trying to reestablish control of a dam in southern Afghanistan that produces hydroelectric power. They're also targeting the drug trade, which helps finance terrorism.

And the violence in Sudan's Darfur Region was the world's worst human rights abuse last year. That is according to a report from the State Department. It also found worsening human rights records in Iraq and Afghanistan. The State Department report is an annual review on human rights around the world -- Wolf.

BLITZER: Mary, thanks for that. And we now have the statement from the vice president on his top aide, Lewis "Scooter" Libby, being convicted four of five counts -- obstruction of justice, perjury: "I am very disappointed with the verdict," Cheney says in this written statement.

"I am saddened for "Scooter" and his family. As I have said before, "Scooter" has served our nation tirelessly and with great distinction through many years of public service. Since his legal team has announced that he is seeking a new trial and, if necessary, pursuing an appeal, I plan to have no further comment on the merits of this matter until these proceedings are concluded."

The first official statement from the vice president, reacting to the conviction of "Scooter" Libby earlier today by this federal jury. "Scooter" Libby convicted on four of five counts.

Coming up, President Bush speaking out on the war in Iraq and he's got a detailed message for Democrats and other critics in Congress. We're going to tell you what he's saying when we come back.

Plus, Howard Dean reacts. The Democratic Party chairman joins us right here in THE SITUATION ROOM. This is an interview I think you're going to want to see.

Stick around. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: To our viewers, you're in THE SITUATION ROOM.

Happening now: President Bush blasts Democrats, saying they should give his new Iraq strategy a chance to work. But one Democrat blasts the president right back for what he calls the administration's failed leadership on Iraq.

That's from the Democratic National Committee chairman, Howard Dean. I will ask him how united members of his own party are over the war.

Also, some in Congress want more heads to roll over those terrible conditions at the Walter Reed Army Medical Center here in Washington. Now the Army's top medical officer is being asked if he should resign.

And, in the race for the White House, can the Democrats' female front-runner get women to support her? You may be surprised to learn which women Hillary Clinton's campaign is turning to for help right now.

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

On the 10th day of deliberations, a jury finds Scooter Libby guilty on four out of five counts against him. The verdict comes after a series of handwritten notes that were passed from the jury to the judge, Reggie Walton.

Our Internet reporter, Abbi Tatton, has more on how those notes may have affected the jury's decision -- Abbi.

ABBI TATTON, CNN INTERNET REPORTER: Wolf, these notes were about the only clues we were getting in the last 10 days about what was going on in the mind of these jurors.

And they came -- they included multiple references to count three. Now, this was the count that refers to what Libby told the FBI about a conversation that he had with Matt Cooper. In -- February 27, one of the jury notes there asked for clarification over this count. And then a following one had three more questions about count three.

Now, this is the count that was the only one that Libby was found not guilty. Now, some of the notes that were passed back contained questions that were more mundane: They wanted more office supplies. A large flip chart was something that they asked for twice.

And the juror Denis Collins, who spoke out this afternoon, shed some light on why that was, saying that the jury filled 34 of these pages of information that they had gleaned from the testimony. They said -- he said they didn't take a straw vote straightaway, but they took their time -- Denis Collins saying that this case was just too big, too important, and that's why it took so long -- Wolf.

BLITZER: Thank you for that, Abbi.

The jury's verdict is now in, the saga sure to continue. And, already, some are warning the president against one thing.

(BEGIN VIDEOTAPE)

BLITZER: And joining us now from Burlington, Vermont, the former governor of Vermont, the chairman of the Democratic Party, Governor Howard Dean.

Thanks very much for coming in.

HOWARD DEAN, DEMOCRATIC NATIONAL COMMITTEE CHAIRMAN: Thanks for having me on, Wolf.

BLITZER: You say the president would make a mistake in pardoning Lewis Scooter Libby. Why?

DEAN: Well, the -- that's been done before, as you know, especially around the Iran-Contra times.

The problem is that Scooter Libby now has a -- a great incentive to tell what else was going on in the vice president's office. Don't forget, this is the tip of the iceberg. This is about the president and the vice president trying to discredit people who turned out to be right about the war in Iraq.

And they didn't -- Scooter Libby didn't do this all by himself. The best way that the president has to shut Scooter Libby up before sentencing is to pardon him. I hope that -- that will not happen. I think we need to find out what really did happen when the CIA gave the president reports that said that -- not to trust some of their sources in Iraq.

What really did happen in the vice president's office, when the vice president got CIA reports he didn't like? Did he pass them on to the president? Did he withhold them from the president? There's a lot more going on here...

BLITZER: But...

DEAN: ... than just this.

BLITZER: But the special prosecutor, Patrick Fitzgerald, says, as far as he is concerned, case is closed. He's not pursuing any other leads. He's not pursuing any other investigations. He says he's done, for all practical purposes. What makes you think this is the tip of the iceberg?

DEAN: Because we know that the president was not truthful to the American people when he sent us to war. And the -- we know that politics consumes this -- this administration.

You know, here, you have a spectacle of the vice president of the United States circling things in newspaper articles that he didn't like, in order to discredit his -- his foes, while our kids, our young men and women in Walter Reed hospital are not getting proper medical care.

This administration needs to stop talking about politics and start doing something about the actual problems that are facing the American people...

BLITZER: But...

DEAN: ... starting with those soldiers in Walter Reed. There's a lot going on in this administration that's about politics, and it's -- and the truth is a casualty in this administration.

BLITZER: Well, it's one thing to talk about politics. But it's another thing to accuse the president and/or the vice president of actually committing a crime. Are you suggesting either has committed an actual crime?

DEAN: We have no way of knowing what happened.

What we do know is that the president sent us to war, and the facts that he told us, when he was sending us to war, turned out not to be true. We don't know why that happened. I will bet Scooter Libby has a pretty good idea how that happened.

BLITZER: But there have been all these presidential commissions, congressional commissions. They have been investigating whether there was any crime, per se. There may have been misjudgments. There may have been mistakes.

But it's -- it's one thing to say that. It's another thing to say there was a deliberate lie and that the president actually committed a crime. DEAN: We don't know.

As I said before, Wolf, we don't know if the president committed a crime or not. It would be interesting to find that out. What we do know is that the -- the vice president's chief of staff has just been convicted of obstruction of justice and lying. And we know that that happened in conjunction with trying to suppress people who were criticizing the war, people who were in a position to know something about the war.

And we do know that the president of the United States gave false information to the American people in the State of the Union addresses and in many other places. And we do know that, in fact, the 9/11 Commission disputed some of the president's statements, such as the idea that Iraq and Saddam Hussein were somehow linked to al Qaeda.

BLITZER: So -- so, Governor...

DEAN: So, we know there's a...

BLITZER: Governor, do you want to see a special prosecutor investigate the president and/or the vice president? Is that what I'm hearing?

DEAN: Well, no, I didn't say -- you are very good with this, Wolf, but I didn't say any of those things.

What I did say is, there is more to come. I think we ought to stay tuned. But I think pardoning -- pardoning Scooter Libby would deprive us of a potential witness at some point.

BLITZER: The president today invoked the name of Osama bin Laden, in saying that Democrats, other critics on Capitol Hill should hold their fire, let this new strategy in Baghdad and the Al Anbar Province work.

Listen to what the president told the American Legion today.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: For the enemy, it's their plan. They are not debating whether the war in Iraq is worth it.

Hear the words of bin Laden in a message to the American people just last year. He says of Iraq: "The war is for you or for us to win. If we win it, it means your defeat and disgrace forever."

(END VIDEO CLIP)

BLITZER: All right.

What do you say about giving the -- the military, giving the president the chance he says they desperately need to win this war?

DEAN: Well, the fact of the matter is, the president made a huge mistake in getting us into this war. He -- we didn't have to have this: Either you win or we win.

The fact of the matter is, the president sent our troops over there without the proper equipment. They are now in Walter Reed hospital without proper care. The fact of the matter is, the president has said he cares about the troops. The president has said he cares about the war on terror, and we are not doing what we ought to be doing in Afghanistan.

We are not keeping the troops properly equipped when they send us to Iraq. We are not paying for this war. The president sent us another $100 billion bill without telling us how he was going to pay for it.

The fact of the matter is, this is a failed administration. This is failed leadership. And the president can make whatever speech he wants in front of the American Legion. I think we ought to focus on those soldiers in Walter Reed hospital that are not being taken care of, and forget about the politics, for once.

BLITZER: But are you concerned the Democrats themselves in the House and the Senate, they're -- they -- they see it differently. There's no unified Democratic stance on what legislative action should be taken, if any, to try to curtail the president's hands.

DEAN: Wolf, we are unified in the fact that we need to get out of Iraq. And we -- we got elected to do that in 2006.

The American people disagree with the president. They now see the president's misstatements, and they now see what's going on in Washington. They now see that the president cares more about politics than he does about the soldiers that need to be taken care of when they get home.

You know, this president has cut the VA, the Veterans Administration, outlays every year for five budgets in a row. You can't convince me that he is sincere and -- and deeply regretting what's going on in the Walter Reed hospital if he didn't put the money in the budget to take care of these folks properly.

And what the Democrats are going to do is what we promised. We have already added money to the Veterans Administration budgets. We are now going to put a stop to what's going on at Walter Reed hospital. And we are going to put a stop to what's going on in Iraq. We may -- it may be tough for us, because the president is in charge of foreign policy and military policy. We will find a way to get us home from Iraq.

BLITZER: Governor Howard Dean, the chairman of the Democratic Party, thanks very much for coming in.

DEAN: Thanks, Wolf.

(END VIDEOTAPE)

BLITZER: Coming up: Democrats charge the White House playing politics with the Justice Department. We're going to go live to Capitol Hill, where six fired federal prosecutors get to make their case.

Also, much more on Hillary Clinton's pitch for women voters -- we will take a closer look at the senator's strategy. That's coming up in the next hour right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Fired federal prosecutors appeared before the Democratic--controlled Congress today, amid allegations they were let go because of pressure from Republicans -- at issue, claims the prosecutors were too soft on Democrats and too hard on Republicans in corruption cases.

Let's go to our congressional correspondent, Dana Bash. She's following this story.

Dana, there was some pretty stunning testimony today from one of these prosecutors from New Mexico.

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: That's right.

David Iglesias, he says that he was fired by the Bush administration for not prosecuting New Mexico Democrats before the election. And, today, he described a phone call that he got at home 12 days before November's election from GOP Senator Pete Domenici, a call he said made him sick.

(BEGIN VIDEOTAPE)

DAVID IGLESIAS, FORMER U.S. ATTORNEY: And he wanted to ask me about the corruption matters or the corruption cases that had been widely reported in the local media. And I said, all right.

And he said, are these going to be filed before November?

And I said, I didn't think so, and to which he replied: I'm very sorry to hear that. And then the line went dead.

SEN. CHARLES SCHUMER (D), NEW YORK: So, in other words, he hung up on you?

IGLESIAS: That's how I took that, yes, sir.

I felt leaned on. I felt pressured to get these matters moving.

BASH (voice-over): Iglesias described a similar call from GOP Congresswoman Heather Wilson.

IGLESIAS: She says: What -- what can you tell me about sealed indictments? The second she said any question about sealed indictments, red flags went up in my head.

BASH: Both Domenici and Wilson deny pressuring the former New Mexico U.S. attorney.

The stunning testimony also included allegations that a top Justice Department official warned one prosecutor after being quoted in newspaper stories about the dismissals.

He e-mailed fellow fired prosecutors about the call.

JOHN MCKAY, FORMER U.S. ATTORNEY: I felt that that was a threat. I felt it was hugely inappropriate, coming from a Department of Justice official.

(END VIDEOTAPE)

BASH: The Justice Department is denying that anyone tried to silence or threaten any fired former federal prosecutors -- a spokesman saying any suggestion that a conversation like that took place is ridiculous and not based on fact -- Wolf.

BLITZER: Republican Senator Pete Domenici -- these -- these were some pretty strong accusations leveled against him -- what is he saying?

BASH: I bumped into him in the hallway after that -- that particular bit of testimony in a hearing. And he basically said he wasn't going to answer any questions at this point.

He did release a statement on Sunday, saying emphatically that, yes, he did call the New Mexico U.S. attorney at the time, but that he did not put any political pressure on him. Today, he just said to me, at this point, he's going to let that statement speak for itself -- Wolf.

BLITZER: All right, Dana will stay on top of this story for us.

Thank you.

Up next in our "Strategy Session": Washington is atwitter over the Libby verdict. But will Democrats overplay their hand? And what are the chances of a presidential pardon?

And a new poll shows some mixed reactions on the war in Iraq. What does it mean for the Bush team? All that coming up -- Paul Begala, Dick Armey, they are standing by live to participate in our "Strategy Session."

We will be right back.

(COMMERCIAL BREAK)

BLITZER: Welcome back.

In our "Strategy Session: reaction from at least one presidential candidate to the guilty verdict against Lewis Scooter Libby.

Joining us now, our CNN political analyst, Democratic strategist Paul Begala, and Republican Dick Armey. He's the former House majority leader. He's the chairman of FreedomWorks.org.

Guys, thanks very much for coming in. That one presidential candidate, Barack Obama, saying: "The conviction today underscores what happens when our foreign and national security policies are subverted by politics and ideology. Leaks and innuendo in pursuit of a flawed policy lead to shameful episodes such as this. It should never happen again."

Is there a possibility Democrats will overplay their hand right now and -- and -- and see the situation sort of counter -- go against them?

PAUL BEGALA, CNN POLITICAL ANALYST: Yes, there's a possibility, but not a likelihood. It's kind of hard to imagine.

You have one of the most senior aides inside the Bush White House, at the very heart of the Bush White House, now proven to be a convicted felon. And what was he doing? He was lying to the grand jury to cover up for his boss, Dick Cheney. He didn't want -- I don't -- I'm not accusing Cheney of any crime. I don't believe he committed any.

But I think he didn't want the public to know that the vice president -- maybe even the president -- were involved in this effort to mislead the American people and to discredit Joe Wilson when Joe Wilson blew the whistle on them when they were misleading us about the war. I think that's what's going on here.

And it's why, you know, a lot of people are pretty certain that Scooter Libby is going to be pardoned. That's where the story is going.

(CROSSTALK)

BLITZER: Well, let's get to the pardon issue in a moment.

(CROSSTALK)

BLITZER: But what do you think?

DICK ARMEY, FORMER HOUSE MAJORITY LEADER: I -- I think it's so typical. It goes way back to Nixon and Watergate.

It is -- in -- in politics, you get in trouble, one, for something you didn't need to do in the first place. Almost always, it was not necessary. It's in defiance of Armey's axiom: You can't get ahead while you are getting even.

And, two, he didn't get in trouble for what was done. He got in trouble for lying about it.

BLITZER: For covering up.

ARMEY: Just tell the truth.

BLITZER: The cover-up. The cover-up is worse.

ARMEY: Just tell the truth. And, no, I -- I -- I think -- I don't think the Democrats will -- will...

BLITZER: Overplay their hand.

ARMEY: .... overplay their hand. But I think the Republicans need to not be wallowing in this.

They need to get past it, and they need to start talking about serious issues of public policy. The biggest concern the American people have with the Republicans in office today: Are you guys capable of dealing with serious policy matters and getting beyond politics?

BLITZER: Bill Clinton, he was president of the United States. He issued pardons, as you well know. There's an ironic twist here. One of the guys he pardoned, Marc Rich -- you know who Marc Rich's attorney was...

(CROSSTALK)

BLITZER: ... in -- in helping him get that pardon?

BEGALA: I would say this is somebody who...

(CROSSTALK)

BLITZER: Tell our viewers who it was.

(CROSSTALK)

BEGALA: Scooter Libby.

BLITZER: That's correct.

BEGALA: As a lawyer.

BLITZER: Scooter Libby, when he was a private attorney in Washington, represented Marc Rich, and helped him get a pardon from President Clinton.

BEGALA: Yes.

And -- and, as somebody who loves Bill Clinton, I have never defended that pardon. It was an outrage. It was a terrible mistake that President Clinton did. I don't blame Scooter Libby. He was doing his job as a lawyer.

But Scooter Libby knows the law of presidential pardons pretty darn well. And, believe me, they are -- he's going to get a pardon. I think it will be unjust, unwise, even possibly worse, if possible, than the Marc Rich pardon.

Why? Because now -- Scooter's only hope now is to cooperate. And that is to spill more beans and to -- to -- to say more things that could implicate other people in the White House. Mr. Bush does not want that. He is going to pardon Scooter Libby. I think it's an outrage.

BLITZER: What do you think?

(CROSSTALK)

BLITZER: Do you think he should -- do you think he's going to be pardoned? And -- and should he be pardoned?

ARMEY: I think you have got the great -- makings of a great novel here.

BEGALA: Yes.

(CROSSTALK)

ARMEY: But Scooter is not going to get a pardon. I will just pretty well bet on that.

He's now this -- this episode is pretty well over now. It's -- it's time now. The country will go on. The office holders need to get back to work, serious work. They need to get past this thing.

It was a silly thing at the time. It wasn't necessary. They didn't need to get involved in this thing. And, then, of course, if -- if I were Scooter Libby covering it up, I would have been covering it up over embarrassment about having gotten involved in something this silly and something this -- this -- what should I say -- much of a -- sort of a personal vendetta sort of thing.

BLITZER: But you don't think that there's no chance the president will pardon him?

ARMEY: No. He won't be pardoned.

BLITZER: And you think he will?

BEGALA: One hundred percent. Save this tape.

BLITZER: All right, let's talk...

(LAUGHTER)

BLITZER: Let's talk a little bit about Iraq.

This new "USA Today"/Gallup poll: Will the U.S. win in Iraq? Right now, March 2007, only 28 percent of the American people think we will win. That's down from September 2005, where 43 percent thought we would win.

And -- and this other number: Should Congress deny funding for more troops? Thirty-seven percent say yes. Sixty-one percent say no.

Is there a split there between those two respective numbers?

BEGALA: Absolutely. Absolutely. It says that the Republicans, who are telling the country that President Bush has us on the right course, are out of step with public opinion -- they may honestly believe it in their hearts, but the country isn't buying that -- but that the Democrats, some on the left in my party, who say we should defund the war immediately are equally out of step.

I mean, it seems odd, but that's where the country is. We -- we -- we -- I think that the Democrats kind of in the center, who are saying, we should redeploy troops, that is, make them do force protection, make them do counterterrorism, redeploy them into counterterrorism, those sorts of things, but not in these combat operations, they have the best of the argument, because we're not defunding the troops, but we're not having the Bush policy.

BLITZER: Let's hear from Dick -- Dick Armey.

ARMEY: Well, one, I don't know how you would define winning there.

If it's getting out of town with a little bit of self-respect, that would be, in my estimation, a victory. So, I don't know how you do it. But the American people are not going to stand for cutting off any funds for troops in the field.

If I were in the Democrat -- if I were to advise the Democrats, I would say, you know, right now, this gunk is stinking up the president's garden party. Why would you want to take ownership of it? If they want to get aggressive and say, let us decide what the policy will be, let us own this thing...

BLITZER: That's why they are challenging the Democrats.

ARMEY: ... I would be happy...

(CROSSTALK)

BLITZER: "You want to cut off the funds, go ahead. But don't just make some statements."

All right.

ARMEY: Right.

BLITZER: Guys, thanks very much for coming in.

Paul and Dick Armey, thank you.

Still to come: "The Cafferty File." Does it mean anything if Senator Barack Obama is triggering a lot of interest overseas? Jack, with your e-mail, that is coming up.

And Jerry Brown, the former California governor, a onetime Democratic presidential candidate, he is standing by to join us live right here in THE SITUATION ROOM. Does he think California could go red in next year's election? Stick around.

(COMMERCIAL BREAK)

BLITZER: Let's get back to Jack for "The Cafferty File" -- Jack.

CAFFERTY: Wolf, the question this hour is: Does it mean anything if Senator Barack Obama is triggering a lot of interest overseas? And he is. A Japanese television network ran a documentary on the senator, got huge ratings.

Here's some of what you have written to us.

Jenny in New York writes: "It means the world is as hungry for a change in leadership as we are."

Mike in Texas: "Barack Obama's international appeal bodes well for repairing some of the loss in prestige and the damage the U.S. has suffered as a result of the reckless cowboy image of Bush around the world. Bush has sunk U.S. credibility to an all-time low. And a new, fresh image of someone like Barack Obama is sorely needed."

Scott writes: "If foreign countries are joining in Obama-mania, it's because they're as sick and tired as the present administration as we are. Just as Obama has inspired us to have the audacity to hope here in the United States, he's inspiring those in foreign countries to once more be optimistic about the future of our country as well."

Dick in Camarillo, California: "No, but it makes for good press. And what else could a politician hope for?"

Ben in Washington: "Yes. It means the media have turned Obama, a two-year senator, into a golden idol for the world to love. We can't go 10 minutes without hearing about Barack Obama. And I only wish your network and others would give the same attention to candidates like Chris Dodd or Joe Biden, who have served for decades and articulate real ideas for the country."

Jon in Owings Mills, Maryland: "Leaders have been elected throughout the world in response to America's ridiculous actions over the last six years. George Bush makes our country look stubborn and ignorant. It's about time we wake up, hire someone the world can support, to reduce the threat of people like Hugo Chavez."

And Joe writes from Delaware: "Maybe he's running in the wrong country" -- Wolf.

BLITZER: Jack, thank you.

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