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THE SITUATION ROOM

Corruption in Iraq; Craig Will Not Resign

Aired October 4, 2007 - 19:00   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, sordid details about a controlled corruption in Iraq. Tonight, are officials in Baghdad turning a blind eye to missing money and black-market horrors? And are all of us here in the United States paying a huge price for this, in the billions of dollars?
Plus, two U.S. senators make a very different, but equally stunning announcement. One embroiled in a major scandal, the other suffering from dementia. Should both of them call it quits right now?

And never-before-seen video of a woman who died in police custody, cuffed and shackled. Do these images prove her airport arrest was justified?

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

Tonight we're learning new details about a secret report that lays out in very disturbing detail just how corrupt parts of Iraq's government really are. It says gangs run some agencies; many Iraqis can't get anything done without bribes and possibly billions of dollars of our tax money, billions of dollars used to help prop up the government, a lot of that simply going to waste.

Let's go straight to CNN's Jim Clancy in Baghdad. Jim?

JIM CLANCY, CNN CORRESPONDENT: Wolf, the documents leaked here in Baghdad say investigators can't even begin to probe the corruption in Iraq because of sectarian interference, armed criminal gangs, and militias.

(BEGIN VIDEOTAPE)

CLANCY (voice-over): Corruption means drugs that should be freely available have to be purchased on the black market instead. Corruption in Iraq today means your children may be learning from a teacher whose only qualification was having enough money to buy the job.

UNIDENTIFIED FEMALE: (SPEAKING FOREIGN LANGUAGE)

CLANCY: They told me, you can get a job in any school you choose for $1,000, says this woman. She couldn't afford it.

(on camera): If Iraqis can't afford it can U.S. taxpayers afford to ignore it? This 82-page draft report prepared by the U.S. embassy in Baghdad and leaked to the media says the Iraqi government is doing virtually nothing to root out corruption. It says quote, "several ministries are so controlled by criminal gangs or militias as to be impossible to operate without a tactical force protecting the investigator."

When CNN received the report, it was marked sensitive, but unclassified, but the State Department has since moved to classify the draft. Its findings are stunning. The Interior Ministry, untouchable by anti-corruption enforcement, the Ministry of Defense, where nearly $1 billion may be missing, and corruption investigations are judged to be ineffectual. How can they get away with it?

The report says the problem is top down. The prime minister's office has demonstrated an open hostility to an independent agency to investigate or prosecute corruption cases. Iraqi officials respond that while the report may portray the situation a year ago, the government is trying.

ALI AL-DABBAGH, IRAQI GOVERNMENT SPOKESMAN: There are steps and measures being taken by the prime minister to defeat and to use that level of corruption on a high level.

CLANCY: The embassy draft report states that Iraq's oil sector has the most glaring reputation for the sheer amount of money misappropriated, and much of it may be going to fund the insurgency.

(END VIDEOTAPE)

CLANCY: The draft is embarrassing because it shows a dysfunctional government when it comes to corruption, and it's going to make for some difficult reading there in Washington, especially among those who are hoping to see signs the Iraqi government might be able to stand on its own some day soon. That's not found in this report, Wolf.

BLITZER: All right, Jim. Thanks very much. What a story.

Also tonight, a bombshell from the U.S. senator arrested in a bathroom sex sting, Republican Larry Craig is once again refusing to make good on his promise to step down, even after a major legal defeat today. Our congressional correspondent Dana Bash is watching this story for us. What he announced today, Dana, is not necessarily what a lot of his Republican colleagues were hoping to hear.

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Wolf that is certainly an understatement. You know, in watching Senator Craig, in terms of his actions and knowing some of the private conversations he's had with confidantes, this was where he was heading. But you're right, GOP colleagues, the senators, many of them tell us that they are upset, disappointed by his reversal.

(BEGIN VIDEOTAPE)

BASH (voice-over): Hours after losing his court battle to withdraw his guilty plea, Senator Larry Craig defiantly announced he is staying in the Senate, saying "I have seen that it is possible for me to work here effectively." That is an about-face from what he said just last month when he announced his intention to resign. Then Craig suggested the men's room scandal made it hard for him to be effective in the Senate.

SEN. LARRY CRAIG (R), IDAHO: And the people of Idaho deserve a senator who can devote 100 percent of his time and effort to the critical issues of our state and of our nation.

BASH: But now Craig is staying in office, despite a Minnesota judge's rejection of the senator's motion to withdraw a guilty plea he signed, admitting to disorderly conduct in a Minneapolis men's room. Craig says he's innocent and pleaded guilty because he panicked. But in a lengthy order, the judge dismissed Craig's arguments, calling him a career politician with a college education. He knew what he was saying, reading, and signing. Craig's attorney says he is considering an appeal. Politically, Craig's decision to remain in the Senate is a big challenge for GOP leaders who tried to force him out, and some are not hiding their anger.

SEN. JOHN ENSIGN (R), NEVADA: So I think it's best for the U.S. Senate, it's best for certainly his party, that if he just keeps his word. He gave us his word, he would do something. He's backing out on us, so I don't think it's the right thing to do.

(END VIDEOTAPE)

BASH: Other GOP senators say that this is surprising. One told CNN that this is a distraction and Republican leaders are also warning that the Ethics Committee investigation, which is still ongoing, will be an embarrassment, they say, to the senator and to the senator's Republican Party. Wolf.

BLITZER: All right, Dana. Thanks very much.

Another Senate Republican has just announced his surprise retirement. New Mexico's Pete Domenici is stepping down at the end of his term next year because of a degenerative brain condition.

(BEGIN VIDEO CLIP)

SEN. PETE DOMENICI (R), NEW MEXICO: And I come here today to the site of the school that I attended as a boy to tell you that I will not run for re-election to the United States Senate. The reason is simple -- I am suffering from a disease known as Frontotemporal Lobar Degeneration. It's frequently just called FTLD. This disease is progressive and incurable.

(END VIDEO CLIP)

BLITZER: Domenici's announcement has some people wondering if he should even finish out his term. Our medical correspondent Elizabeth Cohen has more on the condition and what doctors are saying. Elizabeth?

ELIZABETH COHEN, CNN MEDICAL CORRESPONDENT: Wolf, the doctors who we talked to said that when they have patients with this disorder, they almost always tell them you have to stop working. (BEGIN VIDEOTAPE)

DOMENICI: Thank you. It's good to be with you and to talk this morning.

COHEN (voice-over): Given the news about Senator Pete Domenici's health, the question is, can he continue to be a U.S. senator? CNN asked four prominent neurologists that question, experts on Frontotemporal Lobar Degeneration and they all had the same answer. They said it's difficult to see how Domenici can continue his work for long, now that his disease has been diagnosed. Dr. David Knopman at the Mayo Clinic says when patients come to him with this type of dementia...

DR. DAVID KNOPMAN, NEUROLOGIST, MAYO CLINIC: I would certainly encourage them to stop working as soon as possible. It is the case that somebody diagnosed with Frontotemporal Lobar Dementia probably would have a great deal of difficulty in the employment world and would be prone to make poor judgments, would be prone to make major mistakes.

COHEN: Another neurologist says he's seen about 500 patients with Domenici's type of dementia, and almost all of them have had to quit work. He said -- "at times they can shift to a different style of work that doesn't require making big judgments, like being a paperboy."

Front-temporal lobar degeneration (ph) or FTLD affects the frontal and temporal areas of the brain, areas that involve organization, decision-making, mood, behavior, communication, and personality. All important, the doctors noted, to being a United States senator.

(END VIDEOTAPE)

COHEN: A source close to Domenici tells CNN that the senator's doctor at Johns Hopkins has quote, "a level of comfort" with the senator finishing out his term. The senator himself says that for the past two years, he's had quote, "very little impact" from this disease. Wolf?

BLITZER: Elizabeth Cohen, thanks very much. Senator Domenici's announcement could affect the balance of power in the U.S. Senate. Right now the split is 49-49 with two independents who signed with the Democrats. As of today, there are four open Senate seats, all held by Republicans who are retiring. Democrats are gunning hard to retake the four seats which are in Colorado, Virginia, Nebraska, and now New Mexico. Senator Larry Craig's seat, by the way, could be available, but that would most likely stay Republican, because Idaho is a very, very red state.

Jack Cafferty is joining us now in New York with "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: A stunning report, Wolf, on the front page of today's "New York Times". It says the Justice Department issued a secret opinion in 2005 authorizing the use of the harshest interrogation techniques ever used by the CIA on terror suspects, things like head-slapping, freezing temperatures and simulating drownings. Never in the history of this country has the government allowed such treatment of suspects and this secret opinion not only authorized this stuff but explicitly allowed it to be used in combination.

Then Attorney General Alberto "I can't remember much of anything" Gonzales approved this secret, legal memorandum over the objections of James Comey, the deputy attorney general at the time. Comey reportedly told colleagues, including Gonzales they would all be ashamed when the world learned about this. This all happened a year after a 2004 opinion when the Justice Department declared torture abhorrent, and the administration seemed to back away from claiming the authority for these kinds of practices.

The Justice Department says that 2004 opinion remains in effect and that no one in the department the modified or withdrew that opinion, and the White House denies today's story in the "Times". Here's the question -- what lasting damage was done to our country if the government secretly authorized torturing people for the first time in our history? E-mail CaffertyFile@CNN.com or go to CNN.com/CaffertyFile -- Wolf.

BLITZER: Thanks, Jack, very much.

He says U.S. interrogators tried to break him with torture.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I was beaten, shackled, spat at, kicked, punched, striped naked, left in isolation, sometimes naked.

(END VIDEO CLIP)

BLITZER: You're going to hear one man's account of being so afraid of being executed, he signed a confession. This story on the day the government's interrogation policy is exposed.

Also, we're getting video regarding the woman arrested in a Phoenix airport who died in custody. It shows what happened in the moments before her death.

And is it any way to treat those who fought bravely for their country? Some Iraq war veterans are denied benefits they were promised.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I really feel disappointed in the Army. I poured my heart and soul into the Army.

(END VIDEO CLIP)

(COMMERCIAL BREAK) BLITZER: A battle is brewing between the Army and more than 1,000 National Guard troops just back from a very long deployment in Iraq. The military is not giving the guardsmen a key benefit, one that prompted some of the soldiers to enlist in the first place. CNN's Brian Todd is joining us with this story. A lot of outrage as a result of this story, what's the benefit those National Guard troops thought they were promised?

BRIAN TODD, CNN CORRESPONDENT: Well, Wolf, some of them are only getting a partial G.I. bill benefit for college, while men in their same unit who served the same amount of time get the whole package. Some of these soldiers who did more than their time in combat feel the Army betrayed them.

(BEGIN VIDEOTAPE)

TODD (voice-over): They served longer in a combat zone than any other ground unit in the war, suffered nine fatalities, were awarded dozens of Purple Hearts.

(CHEERING AND APPLAUSE)

TODD: But when they go home from Iraq recently, nearly half the members of this Minnesota National Guard unit learned they couldn't get a full package of educational and other benefits under the G.I. bill.

LT. JON ANDERSON, MINNESOTA NATIONAL GUARD: I really feel disappointed in the Army. I poured my heart and soul into the Army.

TODD: To get the full package, Lieutenant Jon Anderson needed his written orders to say he was deployed for 730 days or more, but Anderson and hundreds of others in his unit fell short by just 1 to 12 days. As a result, they were shorted more than $200 a month for college. And unlike those who get the full package, their college benefits end when they leave the National Guard. Anderson says this about Army officials in charge of writing those orders...

ANDERSON: It was set up purposefully to make sure that we did not get the G.I. bill. It was set up. Because why else would you pick 729 days?

TODD: The head of the Minnesota National Guard has written a memo saying these soldiers were victims of a significant injustice. We asked an Army official about Anderson's charge that the Army was just trying to save money.

LT. COL. DARRYL DARDEN, U.S. ARMY: I can't imagine that there would be anybody here, anybody in the organization that would do something to save money when you have soldiers that have gone down range and answered their nation's call.

(END VIDEOTAPE)

TODD: So how did it happen? Army officials tell me this goes back to the surge, when Anderson's unit had their orders extended. Now, even though they're all in the same unit, not all of them had gotten their original orders on the same day. So when they were extended, the Army tried to calculate their orders to make sure they all got home on the same day and the total number of days simply came out differently, Wolf.

BLITZER: So how are they going to fix this, Brian?

TODD: Army officials tell us they're reviewing all the paperwork. They're going to ask the soldiers to apply to have their orders amended. The bottom line, Army officials tell us they will help these soldiers get their full benefits hopefully by the New Year.

BLITZER: All right, let's hope. Brian, thank you. The National Guard is certainly playing an unprecedented role in the war in Iraq. Right now there are about 350,000 men and women in the Army National Guard. During peacetime, they're commanded by the governors of their respective states, but the president can take command. When they're not on active duty, National Guard troops usually with one weekend drill a month and two weeks of training once a year, citizen soldiers.

Iraq is making a massive purchase of weapons and military equipment but guess what? Not, not from the United States. Instead, the Baghdad government is spending $100 million in a purchase from China. Our senior Pentagon correspondent Jamie McIntyre has details. Jamie?

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT: Wolf, the Pentagon insists it has no problem with Iraq buying arms from China, but that's not how everybody sees it.

MCINTYRE (voice-over): Frustrated at what it says is the slow pace of arms shipments from the United States, Iraq is turning to an alternate supplier, sending a reported $100 million to China for guns and other like weaponry urgently need by its ill-equipped national police. Much of the order is for AK-47 assault rifles, preferred by the Iraqi interior ministry for its police. The Pentagon says China is a logical choice for the AK-47s, which are not made by any...

(AUDIO GAP)

BLITZER: Want to apologize, a technical problem, unfortunately ended that. It's a big story we'll continue to follow up on it.

Meanwhile, a new milestone for President Bush, one that the White House probably isn't very pleased about. We're going to have details of his new drop in a critical poll.

Also, the administration is very upset tonight over the revelation of those alleged secret torture memos. We're going to show you what's in them and we're going to be joined for some reaction by the president's homeland security adviser.

Plus, surveillance video emerging of that controversial airport incident that left a mother of three dead.

Stay with us. You're in THE SITUATION ROOM. (COMMERCIAL BREAK)

BLITZER: Presidential hopeful Rudy Giuliani is backing up his status as the Republican front-runner with cold, hard cash. Tonight top Republicans are out with new fund-raising reports. Giuliani raised $11 million over the past three months. He edged out Mitt Romney, who reports raising $10 million over the same period. Romney, though, is using his own wealth to pad out his campaign war chest. He loaned himself $8.5 million in the third quarter of this year.

Fred Thompson, by the way, reports raising $9.3 million during that period. John McCain is trailing in the money race, raising $6 million in this third quarter. That's slightly more that be the underdog candidate, Ron Paul, who raised a stunning $5 million. The Democrats did a whole lot better raising money, Hillary Clinton raising, what, some $27 million; Barack Obama more than $20 million over the same past three months.

Carol Costello is off today. Fredricka Whitfield is monitoring some other stories in-coming into THE SITUATION ROOM right now. Fred, what do you have?

FREDRICKA WHITFIELD, CNN ANCHOR: Well, we'll begin, Wolf, with a huge about-face for an Olympic champion. Track star Marion Jones is reportedly acknowledging using steroids as she prepared for the 2000 Olympic Games in Sydney. "The Washington Post" is reporting that Jones will plead guilty tomorrow in federal court in New York to lying to federal investigators about her drug use. Jones won five medals at the Olympics and has repeatedly denied using any performance-enhancing drug. CNN is working to confirm this report and has been unable to reach Jones for comment.

Meantime, approval ratings for President Bush and Congress are at new lows. A new "Associated Press" poll shows only 31 percent of Americans approve of the job President Bush is doing. His previous low was 32 percent. Congress scored even lower, only 22 percent of those polled approved of the job Congress is doing, two points below the previous low.

And just hours ago, the House passed a bill making private contractors working in Iraq and other combat zones subject to prosecution in U.S. courts. The measure comes after a deadly shooting last month involving employees of the American security company Blackwater in Iraq. Legal experts say that under current law, Blackwater employees are probably not under the jurisdiction of the U.S. courts and are immune from prosecution in Iraq.

And a military investigator is reportedly recommending that charges should be reduced against a Marine accused of leading a massacre of Iraqi civilians. Staff Sergeant Frank Wuterich had been charged with murdering 17 Iraqi civilians in the town of Haditha back in 2005, but now his attorney says a lesser charge of negligent homicide is being recommended. Wolf?

BLITZER: Fred, thanks very much.

The White House fuming tonight over revelations of secret memos on alleged torture.

(BEGIN VIDEO CLIP)

FRANCES TOWNSEND, WHITE HOUSE HOMELAND SECURITY ADVISER: I think it is incredibly irresponsible to leak classified information that threatens our national security and the effectiveness of the techniques that we do have at our disposal.

(END VIDEO CLIP)

BLITZER: That's Fran Townsend, the president's homeland security adviser. She'll join us in THE SITUATION ROOM to talk about it.

Also, dramatic, new video of a mother of three only moments before she died in the custody of airport police, will it shed new light on the mystery surrounding her death?

Plus, one gunman, three guards, and what police are calling an assassination, tonight, the manhunt for an attack outside a bank.

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

(COMMERCIAL BREAK)

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

Happening now, all 3,200 miners who had been trapped in a South African gold mine are now safely above ground. An accident yesterday disabled elevators in the mine. No one was killed or injured.

General Foods safety officials say they'll speed up warnings about contaminated meat. The Agriculture Department is facing criticism about an 18-day delay in seeking a recall of tainted beef last month. Officials say they followed department policy, but the procedures for quicker warnings will not be put in place -- will now, that is -- will now be put in place.

And a day after warnings that retailers could face a shortage of toys for the upcoming holiday season, another major recall of products made in China. More than half a million toys are being taken off the shelves because they contain dangerous levels of lead paint.

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

The torture debate is ripped open once again. CNN has confirmed the existence of two secret Justice Department memos approving controversial interrogation methods. Critics say they are nothing less than torture that includes one man who was once detained at Guantanamo Bay.

Here is CNN's international security correspondent Paula Newton in London.

PAULA NEWTON, CNN INT'L SECURITY CORRESPONDENT: Wolf, here in London one former detainee claims he is living proof the U.S. has a secret policy on torture. (BEGIN VIDEOTAPE)

NEWTON (voice-over): Moazzam Begg says he doesn't need a secret memo to tell him something he remembers so vividly.

MOAZZAM BEGG, FORMER DETAINEE: I was beaten, shackled, spat at, kicked, punched, stripped naked, left in isolation sometimes naked, hog-tied.

NEWTON: As a British detainee in Afghanistan and then Guantanamo Bay, Begg claims his American interrogators used the most brutal of techniques over and over to get him to confess to being an al Qaeda operative, something he says he finally did, not because it was true, but to escape torture.

BEGG: I signed the confession because I was terrified of being executed. I was terrified of being held there for decades on end.

NEWTON: The Pentagon tells CNN there is no evidence to suggest Begg was ever abused, and they say Begg was a known al Qaeda sympathizer, fundraiser and recruiter. But after negotiations with the British government, the U.S. released Begg in 2005. He's been a free man ever since. Among those who worked for his release, there is a feeling the U.S. has undermined its own founding principles.

CLIVE STAFFORD SMITH, ATTORNEY, "REPRIEVE": Our leaders have been so profoundly hypocritical and they stand up and say we're for human rights, we're for decency and they do the opposite.

NEWTON: At stake, not just the moral high ground, but good intelligence that is supposed to save lives. Begg says he told his interrogators what they wanted to hear, whether it was true or not. And some security experts warn that is the Achilles heel of the torture argument.

KAREN GREENBERG, CENTER ON LAW AND SECURITY: Once you start pushing somebody and poking somebody, where do you stop? So I would say that good old-fashioned interrogation will get us good old- fashioned results.

(END OF VIDEOTAPE)

NEWTON: Those kinds of results, apparently, aren't good enough. Begg claims that his interrogators again and again tried to get him to back up what he considers bad or even naive intelligence about security threats. Wolf?

BLITZER: we're joined by the White House Homeland Security Adviser Fran Townsend. She's joining us from the White House. You just heard this former inmate, this former detainee at Guantanamo Bay say I was beaten, shackled, spat at, kicked, punched, stripped naked, left in isolation, sometimes naked, hog-tied. What do you say to that charge that he's making, in effect, experts say, that amounts to torture?

FRAN TOWNSEND, W.H. HOMELAND SECURITY ADVISER: Ok, let's back up and be very clear. You have heard Dana Perino say it today, you've heard the president say it numerous times, the United States does not torture. Do we have a program? Yes, we do. It is very limited. There have been fewer than 100 people in it, and the people who participate in that program are carefully trained with more than 250 hours of training. The average age of an interrogator is 43. They're not just interrogators who are part of the team. There are also subject matter experts and individuals who are there to monitor that the health and psychological well-being of the detainee himself. We start with the least harsh measures first. It stops after -- if someone becomes cooperative. And let's be clear, Wolf, this is a program that was used when Abu Zubaydah was in custody and not being cooperative. He had clearly been trained in resistance techniques to interrogation -- wait a minute, Wolf, these techniques were used on Abu Zubaydah, it produced actionable intelligence that resulted in the capture of Ramzi Binalshibh. These programs stop attacks.

BLITZER: All right, well let's go through some of the specifics and you'll tell us if you're doing that. For example, "The New York Times" says these memos authorize not only slaps to the head, but hours held naked in a fridge itself, days and nights without sleep while battered by thundering rock music, long periods manacled in stress positions. Or the ultimate water-boarding. Never in history "The Times" says had the United States authorized such tactics." Is that true?

TOWNSEND: Wolf, obviously, I'm not going to talk about each individual specific technique that we use. The director of central intelligence has talked to members of both intelligence committees in the House and the Senate. What he did was he understood this was not just a legal question, but there was a policy issue and there is a political willingness question. Frankly, Wolf, if Americans are killed because we fail to do the hard things, the American people would have the absolute right to ask us why.

BLITZER: Let me rephrase the question. Without confirming that you were actually doing those things, but those things as described in the "New York Times" today, if someone were doing those things, would that be torture?

TOWNSEND: Wolf, we adhere to the law, and the president has made clear his expectation that we will do that. No one has ever suggested that, say Miranda or the army field manual went to the limits that were legally permissible. The constitution does that, which is why we seek legal opinions from the office of legal counsel, but we don't talk about the specific techniques because we know they train against those techniques that they know we use.

BLITZER: Would it be appropriate if other governments captured Americans and used those techniques against Americans?

TOWNSEND: The fact is, Wolf, these are not people who wear a uniform or represent a state. And quite frankly, I'm a little bit baffled by the suggestion that somehow, if we didn't use harsh interrogation tactics that somehow, if our men and women in uniform were captured, they'd be treated better by al Qaeda -- BLITZER: That's what John McCain who himself was tortured when he was a POW in Vietnam, he says that if the United States uses these harsh interrogation techniques, then others will be encouraged to follow suit.

TOWNSEND: John McCain was tortured. We do not torture. And the fact is, no matter how we treat detainees, al Qaeda, when they capture our soldiers in uniform will still torture and behead them. How we treat detainees is not going to affect that.

BLITZER: How many detainees were given these kinds of harsh interrogation techniques? Are we talking about a handful? Are we talking about dozens, hundreds, thousands?

TOWNSEND: Well, we know from the director of central intelligence that fewer than -- there have been fewer than 100 CIA detainees in any type of program, and less than a third of those have ever used techniques against them. But I will say to you though, that less than a third produced 8,500 intelligence reports on threat information. We don't even consider putting somebody into this program, the director of CIA doesn't, unless we think one of two things is a factor -- either they have timely information about location of al Qaeda leadership or they have information about an imminent or a real threat to the United States and our interests.

BLITZER: You heard Paula Newton's report, saying that some of these detainees, some of these people who face these kinds of techniques, these harsh interrogation techniques, in the end, they'll say anything to simply stop the pain. And in the end, you really can't buy what they're saying. Some other foreign intelligence services say, you know what, torture really doesn't work because you're just going to get these guys to say whatever they think you want to hear.

TOWNSEND: We begin, as I said, Wolf, we begin with the least harsh methods first. There has to be an interrogation plan, it has to be approved by senior folks in the CIA. There's got to be reports and monitoring after each interrogation session, and when detainees are cooperative, the interrogation tactics stop and it turns into a debriefing.

BLITZER: We've got to wrap it up, but are these techniques, whatever they are -- and I know you don't want to describe them -- are they still being used?

TOWNSEND: Wolf, I'm not going to talk about the operational activity of the CIA. I will tell you that when we capture someone who is in a position to have location data on al Qaeda leadership or information about a relevant threat, we will operate within the limits of the law.

BLITZER: Was the "New York Times" story accurate?

TOWNSEND: Look, I'm not going to go through which parts of it were accurate and not. I will tell you, as I've said to you before, I think it is incredibly irresponsible to leak classified information that threatens our national security and the effectiveness of the techniques that we do have at our disposal. If we want the men and women of the intelligence community to be successful, we've got to give them the tools they need.

BLITZER: Fran Townsend is the president's homeland security adviser. Thanks for coming in.

TOWNSEND: Thanks Wolf.

BLITZER: Police say he intended to assassinate people and he did. A man dressed in black ambushed three guards of an armored truck. Tonight a massive manhunt is underway and we'll have the latest. That's coming up.

A woman dies mysteriously handcuffed in police custody. Tonight, there are some new videos, surveillance pictures from the Phoenix Airport that could shed new light on just what happened before she died. We'll be right back.

(COMMERCIAL BREAK)

BLITZER: Right now we're getting some fresh video of a woman's last moments before she mysteriously died at a Phoenix Airport. She was in police custody, handcuffed when officers found her. Let's go straight to our Mary Snow, she's watching the story for us. Mary, what are police saying?

MARY SNOW, CNN CORRESPONDENT: Well, police in Phoenix still say they don't know exactly why 45-year-old Carol Ann Gotbaum died in their custody last week at the Phoenix Airport. They did release airport surveillance tapes of the moments leading up to her death. If you take a look at the video, you can see that it is shot from a distance. There is no audio on it. Gotbaum is running in the airport. We now know that the mother of three had missed a plane to Tucson to alcohol rehab. Now, police say she was screaming, "I'm not a terrorist," and officers approached her. You could see at some point, the officers then approach her and then surround her. They say they tried to calm her down but failed. They say she resisted when they went to arrest her and that she went limp and they followed her to the ground and then handcuffed her. Now, police say that she was screaming the whole time, and they led her to a holding room. What you don't see on this tape is that holding room where she was taken. Police say two shackles were placed on her in addition to the handcuffs. They say female officers searched Gotbaum, she resisted, and when the search was over, Gotbaum was left alone in the cell.

(BEGIN VIDEO CLIP)

SGT. ANDY HILL, PHOENIX POLICE: After that six to eight-minute period, she did not yell or scream anymore. One of the officers recognized that she was now quiet, went to check on her, and they found her unconscious inside that holding room.

(END OF VIDEO CLIP)

SNOW: Now, police say officers did CPR and mouth-to-mouth on Gotbaum before she died. When she was found, she had the chain of the shackle against her neck. The medical examiner is still investigating how she died. Wolf?

BLITZER: All right, Mary, thank you. Mary Snow reporting.

Police are searching for a gunman who ambushed an armored truck in a busy part of Philadelphia this morning. Two guards died. CNN's Jim Acosta is there.

JIM ACOSTA, CNN CORRESPONDENT: Wolf, investigators believe the gunman cased this target and decided he wasn't going to leave anyone alive. Today the city's police commissioner called on the presidential candidates to pay more attention to the issue of gun control.

(BEGIN VIDEOTAPE)

ACOSTA (voice-over): Three armored car security guards servicing an ATM machine in Philadelphia did not know what hit them until it was too late. A gunman opened fire, killing one guard, grabbed a bag of cash and then killed another before making a clean get away. A third guard sprayed with shattered glass from the gunfire somehow survived.

COMM. SYLVESTER JOHNSON, PHILADELPHIA POLICE: Obviously, it was planned. Obviously, whatever he did today, he intended on assassinating people and he did. And he robbed the place.

ACOSTA: The two guards who died were both retired Philadelphia police officers. 50-year-old Sergeant Joe Ulo and 65-year-old William Woodmeyer. Police say they had been friends for years. Images of the two guards were cropped out of these snapshots from the surveillance tape out of respect for their families. The tape may not offer many clues only that the shooter dressed in dark clothing wearing a yellow cap escaped in a black Acura TL.

JOHNSON: Again, if you're a police officer, once you leave home there's no guarantee. ACOSTA: At a news conference Philadelphia's police commissioner who has come under heavy criticism over the city's high murder rate wondered aloud why urban crime and the availability of guns are barely getting a mention in the presidential campaign.

JOHNSON: Any time you have in a country where there's 100,000 people shot or killed, there's not even a mention in the presidential campaign, there's something wrong with that.

ACOSTA: The commissioner has come up with his own controversial solution to street violence. Proposing that 10,000 men take to the streets later this month to help patrol the city's most dangerous neighborhoods.

(END OF VIDEOTAPE)

ACOSTA: Last year, Philadelphia had the highest murder rate out of all of America's big cities, but as far as the ATM killings are concerned, the commissioner says 20,000 people on the streets would not have made a difference. Wolf?

BLITZER: Jim Acosta in Philadelphia for us. Thanks Jim, very much.

A government is accused of simply standing by as genocide unfolds.

(BEGIN VIDEO CLIP)

BLITZER: Do you have trouble sleeping at night knowing what the accusations against your government are?

(END OF VIDEO CLIP)

BLITZER: You're going to want to hear the answer. My interview with Sudan's foreign minister. That's coming up.

Also, Jack Cafferty is asking this question, "What lasting damage is done to our country if the government secretly authorized torturing people for the first time in history?" Jack with "The Cafferty File" when we come back.

(COMMERCIAL BREAK)

BLITZER: Former President Jimmy Carter is telling Sudanese officials to their faces today that the crisis in the Darfur region is simply deplorable. At least 200,000 people have died and 2.5 million people have been displaced in what the U.S. government formally describes as genocide in Darfur. I asked the foreign minister of Sudan about the relentless bloodshed and the pressure to do something about it.

(BEGIN VIDEO CLIP)

BLITZER: You represent Sudan, a country that's been accused of these horrific crimes. And I pointed out that you're experienced, you're highly educated. Do you have trouble sleeping at night knowing what the accusations against your government are and that you're representing this government?

LAM AKOL, SUDANESE FOREIGN MINISTER: What I know is that most of these accusations are misrepresentation of the facts. Yes, there is a war in Darfur. As a result of war, some life is lost, some human rights are violated. There is a lot of trauma. People are not going about leading a normal life, and therefore, they need relief assistance as a result. All this is happening in Darfur. The way to solve that is not trying to mud sling or finger point to the government or other sources. The best way to do it is to cooperate as the national community has agreed, so that we have a last round of peace talks that will solve all the outstanding political problems behind the conflict in Darfur. The best way is cooperation, not finger-pointing.

(END OF VIDEO CLIP)

BLITZER: You're going to want to see the full interview with Sudan's foreign minister. He's here in Washington, Lam Akol. That interview airs on "LATE EDITION" Sunday, 11:00 a.m. eastern. "LATE EDITION," the last word in Sunday talk.

Let's go to Jack Cafferty, he's in New York with "The Cafferty File." Jack?

JACK CAFFERTY: Question Wolf this hour is what lasting damage is done to this country if the government secretly authorized torturing people for the first time in our history, as was reported on the front page of today's "New York Times"? Eileen in New Jersey writes, "Our reputation can't get much worse than what we have right now. Abu Ghraib, Guantanamo, wire-tapping will forever go down in the history books as national disgraces. We've lost our standing in the world as a moral authority, dishonored by the trigger-happy Texan policy. We've undermined our very own founding principles. What now separates us from the terrorists?" Steven in New York writes, "Torture, war under false pretense, Blackwater and on and on. It used to just take a --blank blank -- to get impeached. What does it take now"? Scott in Florida, "The fact we approved torture is a plus. For too long, the U.S. has been acting like a grade school child, taught by liberals, who believes that one plays by the rules in a fight. We have all learned that if you're in a fight, the purpose is to win." Jim in Highlands Ranch, Colorado, "We're turning rotten like a lot of rotten military powers in history." Another one from Colorado, Peter writes, "It appears to me anybody who thinks more harm can be done to the rest of the world's opinion of the United States is delusional. Nuking the Vatican is about the only thing that comes to mind." Gene in Sonoma County, California, "I think this story opens the door to the possibility of charges being brought against U.S. leaders in the world court at some time in the future." And Larry in Oregon writes, "Not all the king's horses or all the king's men can put our honor back together again." The children of the greatest generation have repudiated the very things they believed in, fought for, and many, many died for."

If you didn't see your e-mail here, you can go to cnn.com/caffertyfile. We post more of them online along with video clips of "The Cafferty File." Wolf?

BLITZER: Thanks Jack, I'll see you back here tomorrow.

Let's see what's coming up right at the top of the hour. Rick Sanchez is standing by with a preview. Hi Rick.

RICK SANCHEZ, CNN ANCHOR: Here's what we're going to be talking about. One of the questions is this, who's really in charge at the White House these days? Is it a guy named Bush or is it a guy named Cheney? And who should we really ask that question of, I don't know, maybe Ann Coulter? Yeah, not a bad idea. This is an interesting conversation. She gives her first CNN interview on her new book to us and we talk about a couple of things, including what's going on with immigration. Then Wolf, I don't know if you saw our show yesterday, but we had a guy who was so upset because somebody was flying the Mexican flag on top of the U.S. flag and he took out his knife -- this guy's a veteran -- and he tore it down and he started screaming and he was angry about it, and he's joining us here. He's going to talk to us as well and he's going to take us through why he feels this way. And it really tells the story about what's going on in our country. Wolf, back to you.

BLITZER: I sense there is going to be fireworks tonight at the top of the hour. Rick, we'll be watching.

SANCHEZ: Thanks.

BLITZER: Thank you.

When we come back, an unusual, let's say very unusual custody case is coming up. It's not over children, it's over a limb. Jeanne Moos with the most unusual story. That's coming up.

(COMMERCIAL BREAK)

BLITZER: Here's a look at some of the hot shots coming in from our friends over at the "Associated Press." In Kinshasa, Congo, volunteers pass a fire hose down to the site of a cargo plane crash where at least 19 people were killed.

In Turkey, a soccer player keeps his eye on the ball while making a move during a first-round match. In Rio de Janeiro, check it out. Beachgoers walk past a bright orange fiberglass cow. It's one of many cows around the world that will be auctioned off for charity.

And in San Diego, a 9 week old giant panda cub gets an eye exam from a veterinarian. Zoo visitors can suggest a name for the young cub starting tomorrow. Some of this hour's hotshots, pictures worth a thousand words.

Jeanne Moos has the story of a most unusual custody battle that began with a 911 call that can only be called bizarre.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): Forget the Britney Spears custody battle. In North Carolina, a one-legged guy is fighting for custody of his own severed leg, the one in this bag.

UNIDENTIFIED MALE: This thing has become a freak show.

MOOS: His rival for the leg found it in a meat smoker.

UNIDENTIFIED MALE: But this is off the wall, man, you know? I mean, a real foot with five toes --

MOOS: And when you find something like that in a smoker you just bought at auction, you call 911.

911: What's the problem there?

WHISNANT: I've got a human foot --

911: Have a what?

WHISNANT: A human left foot.

911: What's your name?

WHISNANT: My name is Shannon Whisnant and it's plum nasty, got me grossed out.

MOOS: Don't say that to the original owner.

UNIDENTIFIED MALE: It actually looks pretty good. I had a real nice pedicure before it was done.

MOOS: John Wood lost his leg in a plane crash a few years back and had it embalmed. He wanted to keep it so he could someday be cremated as a whole man. He kept the leg at this mini storage in a meat smoker, but when he got behind in his storage rent, his belongings were sold and Whisnant bought the smoker with the surprise inside.

WHISNANT: It still got meat and bones and skin on it, toenails.

MOOS: Whisnant turned it over to police, but soon after decided he wanted to display the leg as a tourist attraction, charging adults $3 a peep. As for the original owner -- it's his leg! It's his very own flesh and blood leg.

WHISNANT: Well, honey, if he wanted it, he should have packed it up, put it in a duffel bag and took it with him, because it sure don't take up much room, hmm.

MOOS: Hmm. Police took it to a funeral home. John Wood came and got it.

UNIDENTIFIED MALE: I have it. I have possession of a leg. I have a leg up on this situation.

MOOS: And I see you have a sense of humor about it, too.

UNIDENTIFIED MALE: And he doesn't have a leg to stand on.

MOOS: Or does he?

RAOUL FELDER, ATTORNEY: A buyer paid good money at an auction for it. It's his property.

MOOS: But he bought the cooker, he didn't buy the leg.

FELDER: What about when you get a chest of drawers or something, you find something, you own it.

MOOS: Do you know how much you paid for the smoker?

WHISNANT: Yes, ma'am, mm-hmm.

MOOS: How much did you pay for the smoker?

WHISNANT: [ laughter ] Oh, let's just say I got a good deal. MOOS: Ok.

WHISNANT: I didn't give no arm and a leg for it.

MOOS: Now Whisnant's getting a lawyer, what we really need is an injunction against any more leg puns.

WHISNANT: I'll keep it close at hand, I'll guarantee you that.

MOOS: At hand, the leg.

(LAUGHTER)

MOOS: Jeanne Moos, CNN, New York.

(END OF VIDEOTAPE)

BLITZER: Leave it to Jeanne Moos to tell a story like that. To our viewers, thanks very much for joining us. Remember, we're in THE SITUATION ROOM weekday afternoons from 4:00 to 6:00 p.m. eastern, back for another hour at 7:00 p.m. eastern. I'm Wolf Blitzer, up next Rick Sanchez, with "OUT IN THE OPEN." Rick?

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