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THE SITUATION ROOM

Early Release for 19,000 Prisoners?; Bhutto Back Under House Arrest

Aired November 12, 2007 - 17:00   ET

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


WOLF BLITZER, HOST: This mass reduction of sentences under consideration right now because of complaints that the sentences were unfair in the first place. And it all has to do with crack cocaine.
Let's go straight to our CNN justice correspondent, Kelli Arena.

She's watching what's going on.

A lot of people are going to be shocked when they hear this, but what is the latest on this story -- Kelli?

KELLI ARENA, CNN JUSTICE CORRESPONDENT: Well, Wolf, this all has to do with crack cocaine versus powder cocaine. Now, as you know, there used to be a huge disparity between sentences for crack versus powder -- which a lot of people said was discriminatory because crack dominates in African-American communities and powder cocaine in white communities.

And just this month, new sentencing guidelines went into effect which will shave about 15 months off of most crack sentences. And now the U.S. Sentencing Commission is considering whether to make those new guidelines retroactive, which, as you said, could mean an early release for more than 19,000 prisoners. Now critics, including the Justice Department, say that's going to put thousands of violent criminals back on the streets just as violent crime is already on the rise. Now, the Commission is going to hear from Justice and others who want to weigh in at a public hearing tomorrow -- Wolf.

BLITZER: When do we expect a decision, Kelli?

ARENA: Well, Wolf, actually, there's no timetable for when the Sentencing Commission will rule. But if it does fairly soon, that means that more than 2,500 people would be eligible for release within a year -- Wolf.

BLITZER: All right, we'll watch this story with you. A lot of ramifications as a result of this.

Kelli, thanks very much.

There's breaking news coming out of Pakistan right now, where the top opposition leader, the former prime minister, Benazir Bhutto, is back under house arrest. This comes ahead of a planned rally which Bhutto was supposed to lead tomorrow to protest the government's crackdown. CNN's Zain Verjee is joining us on the phone now.

She's in Lahore with the latest.

What is the latest going on -- Zain?

ZAIN VERJEE, CNN STATE DEPARTMENT CORRESPONDENT: Wolf, the local government has issued an order to put Benazir Bhutto under house arrest tonight. It's for seven days. She has refused to sign it. She is now at her house in Lahore. Wolf, her house has been declared a sub-jail. And that means that jail staff are guarding her. It's been surrounded by several hundred policemen that are heavily armed. No one can come in or go out. She's got a few aided that are locked in with her. And the security forces, Wolf, have also barricaded her up to a mile away. They've cut off all roads leading to her house and no journalists are even allowed there to cover this -- Wolf.

BLITZER: How do they expect -- the government of President Musharraf expect politicians to go out and campaign for an election that he says now is going to take place by January, if they're put under house arrest or if they're not allowed to organize any kind of campaign rallies?

VERJEE: It's going to be very difficult. It's unlikely to be free and fair. That's one of the major issues, if they can't campaign freely. And, as you know, there's a major media crackdown, as well.

Tensions are really rising here and we really are likely to see more clashes, perhaps, tomorrow. Benazir Bhutto wants to have this march from Lahore to Islamabad. A lot of people are anticipating we'll see a strong show of her supporters come out and there could be violence.

One side effect of this, Wolf, is that she may also get a lot of sympathies toward her because of this house arrest order and her popularity could increase.

BLITZER: All right, Zain, stand by.

We'll be checking back with you.

We'll have more on this breaking news coming up later this hour.

Our Fareed Zakaria is standing by with more analysis of what exactly is going on.

The stakes for the U.S. right now in Pakistan and its nuclear arsenal enormous.

A Pennsylvania teenager accused of plotting a Columbine-style attack on his old school now linked to the Finnish teen who killed eight people in a school rampage last week.

CNN's Jim Acosta is joining us now live from Philadelphia with more.

The connection between a Finnish student and a student in Philadelphia -- what is going on, Jim?

JIM ACOSTA, CNN NATIONAL CORRESPONDENT: Wolf, the attorney for that Pennsylvania teen, Dillon Cossey, said his client chatted online with that Finland school shooter about video games. They even shared videos that they liked. But most importantly, the two teens talked about Columbine.

(BEGIN VIDEO TAPE)

ACOSTA (voice-over): In the weeks before he gunned down eight people at a Finland school and before he left this cryptic YouTube warning of his campus attack, 18-year-old Pekka Eric Auvinen apparently chatted online with a 14-year-old Pennsylvania boy named Dillan Cossey, who police say planned his own school shooting outside Philadelphia last month.

Cossey's lawyer, J. David Farrell, confirmed his client exchanged messages over the Internet with Auvinen roughly one month before the rampage in Finland.

J. DAVID FARRELL, COSSEY'S ATTORNEY: I have a high degree of faith in my client telling me that there will be no such discussions indicating any specifics in terms of weaponry or planning or plotting behavior of any type.

ACOSTA: Farrell did say the two teens had one thing in common -- they both shared an interest in Web sites glorifying Columbine killers Eric Harris and Dylan Klebold.

FARRELL: Surely, that was one of the common interests that they had. And like many, many young people, they access these Web sites about Columbine.

ACOSTA: Chatting online is not likely to result in any new charges for Cossey, who is now in juvenile detention. But the Pennsylvania prosecutor who handled the 14-year-old's case warns the Columbine connection should worry parents.

BRUCE CASTOR, MONTGOMERY COUNTY DISTRICT ATTORNEY: There's a whole cadre of people who look up to Klebold and Harris. And I'm suspecting that Dillon was one of them, but also this kid in Finland was one of them -- part of this subgroup that ionized the Columbine killers.

(END VIDEO TAPE)

ACOSTA: Authorities in Finland and in Pennsylvania are now examining the computers that belonged to both of these teens to find out exactly what both of these young men were up to on the Internet -- Wolf.

BLITZER: A worrisome story.

Jim, thanks.

Jim Acosta in Philadelphia for us. A burst of gunfire turned into a mass rally -- turned a mass rally into a bloodbath today, as Palestinians marked three years since the death of Yasser Arafat. Rival Palestinian factions are now blaming each other.

CNN's Atika Shubert has the story -- Atika.

ATIKA SHUBERT, CNN CORRESPONDENT: Wolf, it was supposed to be a peaceful rally in Gaza. But at the end of the day, at least seven people were killed, dozens injured, and more than 100 arrested.

(BEGIN VIDEO TAPE)

SHUBERT (voice-over): It started as a celebration and a show of force -- tens of thousands on Gaza City streets to remember Yasser Arafat, father of the Palestinian national movement. But it quickly turned deadly. Gunmen opened fire. The crowd fled for their lives -- but not everyone escaped. It's not clear what sparked the violence, but the rally was charged from the beginning -- an unmistakable showdown between the flag waving supporters of Fatah, the group Arafat led and now controls the Palestinian Authority, and the uniformed forces of the Islamic militant group, Hamas.

Clashes between Hamas and Fatah have been a recurring nightmare for Gaza. In June, Hamas violently ousted Fatah from the Gaza Strip and took control of the territory. Hamas continues to call for the destruction of Israel, so when the group took over Gaza, Israel sealed its borders, plunging the already stricken territory even further into economic despair.

Resentment against Hamas has been steadily building among many in Gaza. Monday's rally was the largest expression of that anger to date. Hamas forces cleared the streets with gunfire, tear gas and wooden batons.

Within hours they had reasserted control, but for how long?

(END VIDEO TAPE)

SHUBERT: Now, the streets of Gaza remain tense. After a funeral of one of those victims today, more gunfire between Hamas and Fatah supporters. And there are fears there could be more tomorrow -- Wolf.

BLITZER: Atika, thank you.

Atika Shubert reporting on a developing story.

Let's go to Jack Cafferty.

He's got The Cafferty File in New York.

It's always lively, I must say, in that part of -- a tough neighborhood, the Middle East.

CAFFERTY: Yes, it is. And looking back, I wonder, in some respects, just how much good Yasser Arafat did for the Palestinian people. But that's another subject for another day.

A question -- where did Hillary Clinton's mojo go?

The "New York Daily News" says that's what the senator's campaign has to be asking after the last two weeks as "bruises are starting to show."

It all goes back to that Democratic debate in Philadelphia, where Clinton stumbled and dodged questions on giving driver's licenses to illegal aliens in New York. The campaign's damage control after the debate didn't seem to help much, when Clinton then suggested that boys had ganged up on her -- the girl.

Bill Clinton then jumped into the fray, perhaps making it even worse. He compared the whole thing to the Swift Boat campaign against John Kerry -- hardly valid.

And now this -- revelations that aides to Hillary Clinton planted questions with audience members at two campaign events in Iowa. Clinton says she didn't know anything about it, but a member of her campaign admitted doing it.

It may not sit well with the voters in Iowa, where informal and honest exchanges with candidates are highly valued -- emphasis on the word honest. It hardly qualifies if the questions are planted. And while Clinton has a big lead in the national polls, the race is tightening up with Barack Obama and John Edwards in Iowa. And a new poll shows a tightening of the race, as well, in New Hampshire.

So here's the question -- is Senator Hillary Clinton's campaign suddenly vulnerable?

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

It seems kind of silly to make that kind of a mistake, Wolf, when you're winning, when you're ahead.

BLITZER: It's the little things, sometimes, that cause big, big problems, Jack.

CAFFERTY: You bet you.

BLITZER: Thanks very much.

Jack's getting ready for our next hour and our roundtable discussion. That's coming up, as well.

Jack, we're going to work you really, really hard here in THE SITUATION ROOM.

CAFFERTY: Don't spoil me.

BLITZER: Thanks very much.

You're not going to believe who's getting nasty in the Republican Party race for the White House. John McCain's 95-year-old mom taking a swipe at one of his rivals.

Do politicians' moms help or hurt out on the campaign trail?

Also, get this -- a baseball playing, American born spy becomes a national hero in Russia for stealing his native country's nuclear secrets. We'll tell you what's going on.

And a killer storm is sinking ships in the Black Sea, taking a terrible human toll and a terrible toll on the environment.

Much more coming up right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: He's now revered in Russia -- an American that helped bring the atom bomb to the Soviet Union. There are stunning new details emerging about the mole who maneuvered his way into a highly classified project and stole his native country's secrets.

CNN's Brian Todd is watching this story for us.

It sounds like a classic spy thriller -- Brian.

But tell our viewers what we're now learning so many years after the fact.

BRIAN TODD, CNN CORRESPONDENT: Well, Wolf, John Le Carre might not have been able to write this story any better. An agent trained at the highest levels in Russia used his background and his accent to get the Soviets inside the Manhattan Project.

(BEGIN VIDEO TAPE)

TODD (voice-over): The Russian government says he's the only Soviet intelligence officer to penetrate the America's nuclear bomb program during World War II. President Vladimir Putin bestows the Hero of Russia medal on him posthumously. But this hero of Russia happened to be a baseball playing, Iowa born American.

George Koval, born in Sioux City to Russian parents, college educated in New York. Historians say by the time he had gotten out of school, gone back to Russia with his family, returned to America and joined the U.S. Army in the 1940s, he had been trained by Russia's notorious military intelligence agency, the GRU.

What set Koval apart from others who spied on America's nuclear program?

JOHN E. HAYNES, LIBRARY OF CONGRESS: For someone when is a professional intelligence officer to be sent to a country and to get themselves into an institution, to become a source themselves, is very unusual.

TODD: June 1945 -- a key phase of the Manhattan Project, just before the bomb is dropped on Hiroshima. Koval is assigned to the top secret nuclear plant in Oak Ridge, Tennessee. A physicist who worked there with him tells CNN Koval's American accent and education allowed him to blend in and he got close access to crucial information about the bomb.

Historians aren't sure how much he gave to the Soviets, but they believe he's a key reason the Russians did their first nuclear weapons test in 1949 -- years earlier than expected.

HAYNES: He would have been in a position to learn how, at the practical level, how the American mench program did it, what kinds of facilities were necessary, the size and the extent of the machinery and industrial support for that operation.

(END VIDEO TAPE)

TODD: And unlike other Soviet nuclear spies at that time, George Koval got out before he was found out. Historians say he left the U.S. after the war, when an article was written about his family in the Soviet Union. Koval became a professor and the Russian government says he died last year at the age of 94 -- Wolf.

BLITZER: Brian, aside from Oak Ridge, did Koval also have access to any of the other secret nuclear facilities here in the United States?

TODD: Unbelievably, he did. An official at Oak Ridge tell us he was also assigned to the top secret nuclear factories near Dayton, Ohio, where polonium 210 was refined. If you recall, that's the substance that helped start the bomb's chain reaction. So he got pretty close inside access.

BLITZER: What a spy thriller that story is.

All right, Brian, thanks very much.

Republican presidential candidate John McCain the latest politician to find out the hard way that bringing mom out on the campaign trail can sometimes backfire.

Carol Costello is here with more on this story.

So what did McCain's 95-year-old mother -- God bless her -- 95 years old, what did she have it say that's causing so much controversy right now?

CAROL COSTELLO, CNN CORRESPONDENT: I think we have to remember that. Roberta McCain is 95 years old. She's known for plain talk. And she said something pretty nasty about the Mormon faith and about a scandal Mitt Romney had nothing to do with.

As for John McCain?

He found himself where so many others have been -- wondering what you do when moms attack.

(BEGIN VIDEO TAPE) COSTELLO (voice-over): Roberta McCain campaigning for her son, John, in South Carolina. A day after she attacked her son's rival Mitt Romney and his religion for the bribery scandal surrounding the 2002 Salt Lake City Olympics.

(BEGIN VIDEO CLIP, COURTESY MSNBC

ROBERTA MCCAIN: As far as this Salt Lake City thing, he's a Mormon and the Mormons of Salt Lake City had caused that scandal.

(END VIDEO CLIP)

COSTELLO: Not good.

PETER FENN, GEORGE WASHINGTON UNIVERSITY: There are two things that you don't want to have happen if you're a candidate with your mother. One is for them to criticize you and the other probably is for them to criticize one of the opponents and to get in the middle of a campaign in the middle of the race.

COSTELLO: But despite the danger, politicians love to use mom as that window into their character. Bill Clinton has done it and President Bush.

But Barbara Bush may have given her son a few gray hairs when he sent his mother on an image repair mission after Hurricane Katrina. She was supposed to raise money for those who had lost their homes. But while visiting the Houston Astrodome, where many homeless families were staying, she said this.

(BEGIN VIDEO CLIP)

BARBARA BUSH: And so many of the people in the arenas here, you know, were underprivileged anyway. This is -- this is working very well for them.

(END VIDEO CLIP)

COSTELLO: Jimmy Carter also felt the sting of momtroversy. During the Iranian hostage crisis, Lillian Carter blurted she would like to have the Iranian leader, the Ayatollah Khomeini, assassinated.

Then there was Kathleen Gingrich. When her son Newt was speaker of the House, she confided to CBS' Connie Chung what he really thought about Senator Hillary Clinton.

(BEGIN VIDEO CLIP, COURTESY CBS)

CONNIE CHUNG, CBS NEWS: Why don't you just whisper it to me -- just between you and me.

KATHLEEN GINGRICH: She's a bitch.

(END VIDEO CLIP)

COSTELLO: The most difficult dilemma for the politician is how to distance himself from his mom. And Fenn says John McCain did that very well when he simply responded: "Mormons are great people and the fact that Mitt Romney is a Mormon should play no role whatsoever in people's decision."

(END VIDEO TAPE)

COSTELLO: Senator McCain also said he did not agree with his mother's views. As for Mitt Romney, he said, you know, if you're over 90, you get a pass.

And for the record, Romney was widely credited with restoring the integrity to the 2002 Winter Olympic Games in Salt Lake City.

BLITZER: And everybody -- every, at least, that I spoke to at the time, thinks he did an excellent job at those Winter Olympic Games, as well.

Thanks very much for that.

COSTELLO: Sure.

BLITZER: This programming note, by the way. On Thursday, I'll be in Las Vegas, Nevada to moderate a debate in that key Western state among the Democratic presidential candidates. The debate begins 8:00 p.m. Eastern, Thursday night in Las Vegas.

Up ahead, new developments in an environmental disaster. We're going to go live to San Francisco.

Is that massive oil spill an actual crime?

And the king of Spain tells Venezuela's president, Hugo Chavez, to shut up. We're going to show you the diplomatic 'dis that has a lot of the world buzzing right now.

You'll hear it right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Let's check in with Carol Costello.

She's monitoring some other important stories incoming into THE SITUATION ROOM right now -- Carol, what's going on?

COSTELLO: A couple of things, Wolf.

An autopsy scheduled for Wednesday on the body of Kanye West's mother. Donda West died over the worked after undergoing what her publicist says was a cosmetic procedure. The 58-year-old was an English professor before retiring and becoming manager for her hip hop star son. She also wrote a book "Raising Kanye" and headed his charitable foundation.

The U.S. military says insurgent attacks were down again in October for the third straight month, with 369 rocket and mortar attacks. That's the lowest level in 21 months and about half the number from the same time last year. In the meantime, the U.S. Command in Baghdad has announced one of the 20 brigades currently in Iraq is heading home.

More than two dozen Broadway theaters will be dark again tonight, with the strike by stagehands now in its third day. Negotiations broke down last week and there haven't been any talks since. The union wants to set numbers of stagehands for each show, while producers want the number to be flexible.

Airbus says a Saudi prince is buying one of its super jumbo A380s for use as his private jet. No word on exactly how much Prince Alwaleed bin Talal will pay, but the company says it will top the $320 million list price. But the plane is 6,000 square feet custom outfitted for the prince, who is the 13th richest person in the world.

Back to you -- Wolf.

BLITZER: Three hundred twenty million for his little private jet.

COSTELLO: (INAUDIBLE).

BLITZER: Yes.

COSTELLO: Taxi service.

BLITZER: He's got a lot of money, this prince.

COSTELLO: Wow!

BLITZER: Thanks for that, Carol.

Tens of thousands of gallons of oil spilled into San Francisco Bay, but was it a crime?

We're going to have details of the criminal investigation now underway into what has clearly been an environmental disaster.

Also, a former governor joining top military leaders, revealing their close encounters with UFOs. We're going to show you what they want the government to do right now.

And we're also following the breaking news in Pakistan. The former prime minister, Benazir Bhutto -- she's now under house arrest. Our Fareed Zakaria is standing by to join us olive.

Stay with us.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

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

Happening now, Pope Benedict XVI coming to America. U.S. Roman Catholic officials say he'll arrive in the United States April 15th with visits to the White House, as well as the United Nations on his agenda.

Also, a major fire in London at the construction site that will be a home to the 2012 Olympics. The giant plume of smoke visible all across the British capital -- but no injuries and no word on the cause.

And if you're traveling over Thanksgiving, brace yourself. An airline trade group expects 27 million people to fly over the holiday, up 4 percent from last year.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

There is a disaster unfolding on the Black Sea right now, but nature is clearly the culprit in this case.

Our Pentagon correspondent, Barbara Starr, shows us what's happening.

(BEGIN VIDEO TAPE)

BARBARA STARR, PENTAGON CORRESPONDENT: At least 10 ships have sunk or run aground off the coast of Russia in ferocious storms across the Black Sea. Oil tankers split in half. As many as five seamen are dead and up to 20 missing. Thirteen crewmen were rescued. But with more than 1,000 tons of fuel oil spilled, experts say it may be the worst environmental disaster in the region in years.

VLADIMIR SLIVYAK, CO-CHAIR, BIODEFENSE: It will probably take more than a -- more than a year to clean it up. But our concern is basically about the possibility to clean it up, because we believe that oil which is on the water can be cleaned. But the oil which goes down, which sunk to the bottom of the sea, cannot be cleaned and that this is greatest concern right now.

STARR: Russia's rescue service backed up by the Russian navy's black sea fleet have launched a massive rescue and cleanup effort as the region waits for a break in the weather. Officials say the ship simply could not survive the 18-foot waves generated by the brutal storms. Several other ships in the area are at risk if the weather does not improve. Three of the vessels that sank were carrying a dangerous cargo of sulfur. The main concern now, environmental damage. Russian officials say tens of thousands of birds may already have died. They are now watching to see how much the oil may damage fragile marine life along the coast. Barbara Starr, CNN, Washington.

(END VIDEOTAPE)

WOLF BLITZER, CNN ANCHOR: Meanwhile, Venezuela's Hugo Chavez is getting some more nasty publicity. Often he doesn't hesitate to speak his mind, especially when he's lashing out at the United States. But this time his target was in Spain and the Spanish king was simply in no mood, absolutely no mood to put up with Hugo Chavez.

Let's bring in CNN's Harris Whitbeck. Harris? HARRIS WHITBECK, CNN CORRESPONDENT: Wolf, this isn't the first time Hugo Chavez raised his eyebrows at high level, political or diplomatic gatherings. But it is the first time anyone can remember that he publicly rankles such a high-ranking member of a royal family.

(BEGIN VIDEOTAPE)

WHITBECK: Strong words from a king to a president. Just shut up, Spain's King Juan Carlos ordered Venezuelan President Hugo Chavez. At the closing ceremony of the Ibero-American Summit in Santiago, Chile, Chavez launched into a tirade about former Spanish Prime Minister Jose Marie Aznar when he called Aznar a fascist snake while repeatedly interrupting the current Spanish Prime Minister Jose Luis Rodriguez Zapatero, the king apparently lost his cool.

At a press conference on Sunday, Chavez was defiant. "I think the king was really desperate," he said. "He even looked like he was about to get up off his chair. I wonder if he wanted to hit me." Chavez later said, "If relations between Spain and Venezuela were damaged, it wouldn't be his fault."

(END VIDEOTAPE)

WHITBECK: And after the incident, Chavez went on to say back here in Venezuela that he wanted to ask the king if he knew about plans to oust him from power back in 2002. Spanish government is saying that it does not believe the incident will have a profoundly negative effect, however, on diplomatic relations between Spain and Venezuela. Wolf?

BLITZER: Harris Whitbeck on this latest uproar involving Hugo Chavez.

Meanwhile, there's a criminal probe underway right now and calls for a congressional investigation into an environmental disaster right here in the United States. Now that the coast guard now saying human error was probably a factor in that massive oil spill in San Francisco Bay.

CNN's Dan Simon is joining us now live with more on this story. What's the latest because this is a disaster what's happened right behind you, Dan?

DAN SIMON, CNN CORRESPONDENT: Well, hi, Wolf. More wildlife is turning up dead. The finger pointing is intensifying. House Speaker Nancy Pelosi who, of course represents San Francisco says there will be congressional hearings.

(BEGIN VIDEOTAPE)

SIMON: As crews continue to clean up this massive oil spill, the China shipping company and its crew are now the focus of a criminal investigation. The coast guard concerned about the communication among the people at the controls.

ADMIRAL THAD ALLEN, U.S. COAST GUARD COMMANDANT: There are two things that had to be ascertained. Number one a discharge, we demonstrated that and, number two, the culpability and responsibility associated with that. Those facts have to be determined in the investigation. That's under way.

SIMON: But the coast guard itself is facing scrutiny, as well. Why did it take four hours for the agency to notify the public about the magnitude of the spill; a question House Speaker Nancy Pelosi had as she toured her home district.

REP. NANCY PELOSI (D), HOUSE SPEAKER: While they may have prepared for a response commensurate with a larger spill, it still doesn't excuse the fact that they did not inform the city and the community that they should get off the bay and that is a major concern that I have.

SIMON: The coast guard admitting today it messed up in not issuing the warning sooner.

REAR ADMIRAL CRAIG BONE, U.S. COAST GUARD: There's no excuse for the four-hour gap between when we knew what the amount was and when notification should have been made to the city officials.

SIMON: The accident happened last Wednesday morning in heavy fog. The container ship struck a tower supporting the San Francisco/Oakland Bay Bridge. Two of the ship's fuel tanks ruptured. At first, it was believed only 140 gallons spilled under to the San Francisco Bay, a big difference from the 58,000 gallons that authorities say actually spilled. Only about 13,000 gallons have been soaked up.

REP. LYNN WOOLSEY (D), CALIFORNIA: How did this happen? Why was the size of this spill underestimated and underreported? Why did it take so long for the local governments to know what was happening and what the responses were going to be and what they needed to do?

SIMON: 200 seabirds, meanwhile, have turned up dead. Hundreds more soaked in the heavy oil have been recovered and are being treated. At least 20 bay area beaches remain closed; the city's beautiful backdrop tarnished by yellow containment booms.

LINDSAY PETERS, SAN FRANCISCO RESIDENT: It's horrible. It's a huge ordeal for us here because, you know, it's our home, our backyard and especially for the dogs and a lot of people here don't have yards and, literally, it is in our backyard that it's happening and it affects a lot of people.

(END VIDEOTAPE)

SIMON: At this point, it's believed that human error caused the accident but the China Ocean Shipping Company, the company that owns the vessel has yet to comment on about that. Wolf, we're told that this cleanup could take several months to complete.

BLITZER: What a mess. All right. Let's hope they can clean it up. Thanks very much, Dan, for that.

Hauled off to jail in suits and ties; lawyers leading the way as Pakistanis protest against a crackdown on civil liberties.

And just days before their debate, democrats get a little bit more nasty. Her rivals are turning on Hillary Clinton. Can they turn the campaign around?

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

(COMMERCIAL BREAK)

BLITZER: Pakistan's top opposition leader is now under house arrest. It's a formal decision. She earlier had effectively been under house arrest, but now it's a formal seven-day order. Police say Benazir Bhutto's home is now considered what they call a sub jail. No one is allowed in or out. There are a lot of security forces surrounding her home in Lahore, right now. It's all meant to keep the former prime minister from leading a protest march tomorrow. At the forefront of those protests against emergency rule, Pakistan's professionals.

Once again, here's CNN's Zain Verjee. Zain.

ZAIN VERJEE, CNN CORRESPONDENT: Wolf, journalists, lawyers, and human rights activists have been threaten, beaten and thrown in jail but they won't back down.

(BEGIN VIDEOTAPE)

VERJEE: She's a chain smoking 67-year-old and a serial thorn in the side of Pakistan's government. Shahtaz Qizilbash says enough is enough.

SHAHTAZ QIZILBASH, HUMAN RIGHTS ACTIVIST: It doesn't suit the dictators to hand over democracy on a silver plate. You have to fight for it.

VERJEE: This long-time human rights activist may look frail, but she has an iron will. The day before she planned to protest with the country's lawyers against President Musharraf's emergency rule, she was picked up and detained at a police station with more than 50 other activists. What did she do?

QIZILBASH: Sang songs, made a lot of rumpus and let them feel a presence. We made them feel a presence.

VERJEE: Shahtaz was released after a night, but she and her colleagues report under house arrest for a further three days. Now, she's out again and causing more trouble. Today, saying it with flowers she plans to deliver to a Supreme Court judge under house arrest. Police prevent her from entering and try to prevent us from filming. Just as Khalil-ur-Rehman Ramday has been sacked from the supreme court, the regime fearful he would support a ruling against Musharraf. His son, Mustafa, himself a lawyer says the fight for democracy will go on, but wants to see more support from western governments.

MUSTAFA RAMDAY, LAWYER: I think if the U.S. really believes in freedom and liberty and they believe in what they say about other countries, then they ought to treat us fairly.

VERJEE: Mustafa and Shahtaz are two of a small army of middle class Pakistanis ready to defy the state of emergency.

QIZILBASH: If they think they're going to stop us by force, that's something they will not be able to do.

VERJEE: In the meantime, Shahtaz Qizilbash will continue wearing a black arm band in mourning for Pakistan's step backward from free and fair elections.

(END VIDEOTAPE)

VERJEE: At least 1,000 lawyers are still in jails all over the country, but most of the human rights activists have been released. Both groups say the situation looks bleak in Pakistan, unless General Musharraf lifts emergency rule, holds free and fair elections and takes off his uniform so that he no longer has the power to intimidate them. Wolf?

BLITZER: Zain Verjee reporting for us from Lahore in Pakistan. Zain, thank you.

The Pakistani president, General Pervez Musharraf, won't say when he'll lift the crackdown that he imposed more than a week ago leaving open the possibility that January scheduled elections could be held under these emergency restrictions.

Joining us now is CNN's newest host, the veteran "Newsweek" columnist and editor, Fareed Zakaria. First of all, welcome to CNN, Fareed. Good to have you aboard our team.

FAREED ZAKARIA, CNN CORRESPONDENT: My pleasure Wolf. Good to be here.

BLITZER: Let's talk a little bit about what Pervez Musharraf is doing. He says you know the elections will be held in January. He's going to take off his uniform, his military uniform but he's not saying when or if he will lift this national emergency, this decree. How can you go ahead and have elections when politicians effectively can't go out and campaign?

ZAKARIA: I think he's now miscalculating almost every step of the way, Wolf. For the last six months, he's been trying various things. You remember he forsake the chief justice of the Supreme Court and then he took back that. He's tried to in effect institute martial law and hoped it would work. Western governments pushed. He wasn't able to do it. So, I think he's playing this game of just seeing what he can get away with. My guess is he won't be able to get away with that. He will have to allow political activity. This is the beginning of the end of the Musharraf era.

BLITZER: So what happens after that? Assuming he goes down because, as bad as a lot of people think he is, they're fearful of the Iran example. The Shia may have been bad, but what came afterwards from the U.S. perspective, the ayatollahs, was a whole lot worse. What should we be bracing for in Pakistan, which does have a nuclear arsenal?

ZAKARIA: I don't think we should be as worried. First of all, this is not a revolution of mullahs, this is a pinstripe revolution. Look at the people you saw in that film. They were lawyers. These are people who wear, you know, the traditional pinstripes of lawyers. The women are all unveiled, modern, secular women. They're really asking for the rule of law.

The second point is, the Pakistani military still runs the country. So, as long as we can, the United States, Great Britain and other countries, make clear that we want to work with the Pakistani military, we see them as part of this transition, they will have an interest in getting rid of Musharraf in some way or the other. I mean if he gets kicked upstairs to a kind of titular presidency, that's fine. I think what you want to hope for at this point is that Pakistan's democrats and generals begin working together rather than fighting with each other because that's the secular backbone of the country and that's the modern backbone of the country.

BLITZER: This is really a tricky one for U.S. officials right now, for the Bush administration, because what I hear you saying is that if there is any talk of suspending the millions of dollars in military assistance to Pakistan and there has been $10 billion provided since 9/11, that could backfire, undermine the military and affect the relationship it's developed, a positive relationship, I take it with the U.S.

ZAKARIA: You're exactly right, Wolf. This is one of those cases that is not black or white. It is a wash in gray. And the one problem the administration has is George Bush's rhetoric. The rhetoric of the second inaugural is coming back to haunt him because this is a case where we're trying to get to liberty and democracy, but along the route where you have to worry about other things. You have to worry about stability, jihadis, nuclear weapons and al Qaeda.

BLITZER: I've heard a lot of different assessments about the security of Pakistan's nuclear arsenal and people estimate they have maybe 50 bombs, 200 bombs. I think, it's obviously unclear to most western intelligence agencies how many bombs Pakistan may actually have. Some have suggested in the short term that arsenal is very secure. They have tight controls, but a year or two down the road, you never know what could happen. What is your assessment?

ZAKARIA: My own sense, Wolf I don't have access to any special data but the Pakistani military is very professional, very disciplined organization. You'll notice in all their years of many, many involvements in governments, you've never had a colonels coup, or you know a lieutenants coup. It's always the entire army with its command chain in tact that replaces the civilian government. So my guess is as long as that army stays in tact, there is very tight controls on the nukes. The danger here is more of the operation. One guy who has some kind of jihadi sympathies. There will be no command decision to hand over nuclear weapons to al Qaeda.

BLITZER: Thank you. Being the father of the Pakistani nuclear bomb, he's supposedly under house arrest, but U.S. officials have never been allowed to question him as a result of his status inside Pakistan right now. Fareed Zakaria is going to be a frequent visitor here in THE SITUATION ROOM. You have no choice, Fareed, right now. You're part of the CNN team. Thanks very much for coming in.

ZAKARIA: Delighted, Wolf, thank you.

BLITZER: And still ahead, we're watching the UFO watchers. They're serious. They're sober military officers, government officials sharing notes on what they've seen up above.

And they planted questions now controversy is growing. Clinton staffers reaping what they sewed on the campaign trail.

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

(COMMERCIAL BREAK)

BLITZER: A group gathering here in Washington to talk about their UFO sightings but this apparently is no crack pot convention. Former high-level government and military officials are among those sharing among what they've seen in the skies. Our national correspondent Gary Tuchman is here. He's watching all of this unfold. So what's this conference, Gary, all about?

GARY TUCHMAN, CNN NATIONAL CORRESPONDENT: Well Wolf, it's most interesting, a panel discussion within the beltway about might be taking place in the Milky Way and beyond. Have extra terrestrials visited us here on earth? Well, 14 men from seven different countries participated in a panel discussion described why they believe UFOs visited earth. These are not guys they picked up off the street. The panel includes former governor of Arizona, Fife Symington, who is one of many Arizonians who said they saw UFOs back in 1997 during an episode that is popularly referred to as the phoenix lights.

(BEGIN VIDEO CLIP)

GOV. FIFE SYMINGTON (R), ARIZONA: We want the United States government to stop perpetuating the myth that all UFOs can be explained away and down to earth in conventional terms. Instead, our country needs to reopen its official investigation that it shut down in 1969.

(END VIDEO CLIP)

TUCHMAN: Also participating was a retired air force captain who said he and his passengers saw a huge flying disk. Also, retired Peruvian air force pilot that says he came within 300 feet of a circular UFO flying at 63,000 feet and then there is a retired U.S. air force security officer who while stationed in England was summoned to a downed aircraft in a forest.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: When we came up on the triangular-shaped craft, blue and yellow lights swirling around the exterior as though they were part of the surface. The air around us was electrically charged and we could feel it on our clothes, our skin and our hair.

(END VIDEO CLIP)

TUCHMAN: Well, the craft took off. He never saw any beings inside or outside the UFO. He said he took pictures but inferred they were purposely overexposed by the government. Now, we have talked to the FAA before about investigating these kind of claims but the agency says, "It does not have the power to investigate." We've covered a few of these kinds of stories before, Wolf, and one thing that we always mentioned to the enthusiasts is if one of these crafts came down to earth and did an interview with one of us, the debate would be over. But that hasn't happened yet.

BLITZER: It hasn't happened yet but there's - you know, who knows. Could happen, Gary, thanks very much for that report.

By the way, there have even been some UFO sightings reported right here in the nation's capital. There was a fur flurry of them back in July of 1952 when the air force investigated but was never able to solve or prove anything. Take a look at these headlines, "Aerial, what's its buzz? D.C. again. Air force after D.C. saucers and jets ready to chase lights, jets ordered to hunt down flying saucers." There was a lot of hype, a lot of excitement, back in 1952.

Let's go back to Jack Cafferty. He's watching this and a lot more unfold. Well, you grew up in Nevada, Jack. You ever see any of those UFOs?

JACK CAFFERTY, CNN CORRESPONDENT: No, Wolf. And Gary Tuchman is one of the most distinguished and capable reporters in this business and that's not the culmination of a fine career being sent to cover the UFO convention, OK.

The question this hour is Senator Hillary Clinton's campaign suddenly vulnerable? Of course, doing this three times an hour isn't exactly the top of the mountain either.

James writes, "Of course it's vulnerable but there's nothing sudden about it. We suddenly got sick and tired of the brouhaha and the candidates are finding out that we're really paying close attention to this one. I'm an Obama man myself, but if he doesn't stay on the ball, he's out, too. My advice to Clinton and any other person running for president is when asked a tough question, give your honest thoughts and then reassure us that you're still open for new information."

M.C., Stevensville, Maryland, "Jack, you're better than this. This is exactly what was done to Gore. Pick, pick, pick, exaggerate, exaggerate, exaggerate and ignore the real issues. I don't think much of the main stream media, but I do have a higher opinion of you."

Mike in South Carolina, "Everyone had written off John Edwards and John Kerry at this time period before in 2003. A week before Iowa, Howard Dean was unbeatable. The pundits were wrong then and they may be very well wrong now. Hillary isn't helping herself right now and whoever it is on her campaign staff digging the hole deeper, they need to stop. She doesn't need help losing. She already has the highest negatives of anyone in the race."

Greg in Kankakee, Illinois, "The only reason Hillary is ahead in the polls is because of name recognition. As more people get to know Barack Obama, his policies and his stances on issues, you'll see his numbers go up. Hillary's got nowhere to go but down."

Fred in Ohio writes, "Senator Clinton is vulnerable only because board pundits at the nation's cable networks want some scandalous fodder to rant about and boost ratings. Can't wait until the writer's strike is settled so we can get our fantasies from the usual sources." Wolf?

BLITZER: Thank you, Jack. Stand by. We're going to be bringing you right back in the next hour, including our roundtable.

Up ahead, is Senator Hillary Clinton's campaign suddenly vulnerable? We just heard Jack, but we're going to have more on that coming up in our roundtable.

And the democratic race getting uglier by the day with one candidate taking a verbal beating.

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

(COMMERCIAL BREAK)

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