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The Situation Room

U.S. Discovers al Qaeda's Torture House in Iraq; Will Democrats Cave Into Bush on War Funding?

Aired December 19, 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: Jack, thanks very much.
And to our viewers, you're in THE SITUATION ROOM.

Happening now, al Qaeda torture house -- U.S. troops make a grisly discovery in Iraq -- mass graves, torture devices and a huge supply of weapons.

Are Democrats caving into President Bush when it comes to the Iraq war funding issue?

I'll ask the party chairman, Howard Dean. I'll get his reaction, as well, to my exclusive interview with Republican presidential candidate Rudy Giuliani.

And smoke and flames over at the White House compound -- a two alarm blaze. Vice President Dick Cheney's ceremonial office is damaged.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

A stunning discovery and a stunning -- some stunning pictures, as well, just coming in to us this hour from Baghdad. Coalition troops find what the U.S. military is calling an atrocity site -- with bunkers, detention rooms and a torture complex. Also found, mass graves and a massive quantity of weapons. The discovery coming after a bloody battle with al Qaeda militants right in the central part of Iraq.

Let's go straight to CNN's Harris Whitbeck.

He's on the scene for us in Baghdad -- Harris, what are you learning?

HARRIS WHITBECK, CNN CORRESPONDENT: Wolf, details are just now beginning to come in. The operation that was called Iron Reaper apparently lasted about three days and just ended. What is interesting about this find is not so much what was found -- although it is a large amount of weapons and such -- but where it was found. All this happened in Diyala Province, north of Baghdad. And U.S. military officials are saying that this find proves that they are pushing Al Qaeda in Iraq out from Baghdad and other areas, and that they are on the run, heading north. The find is described as an operations center for Al Qaeda in Iraq. They said that they found detention centers. They found what was in, in essence, a torture chamber with chains hanging from its walls and ceilings. They found a bed hooked up to an electrical system that apparently had been in use shortly before it was found. They found several blood-stained items. Soldiers also stumbled upon mass graves. They unearthed several bodies -- 26 bodies of people who had been buried in these mass graves. And they also killed several people that they describe as insurgents and detained at least 37. Twenty-four suspected terrorists and 37 detained.

Among the weaponry found, there was a surface to air missile launcher. There were sniper rifles, large amounts of grenades, explosives and mortars. So the find is significant -- again, not only in what was found, but also in where it was found, which is in Diyala Province, north of Baghdad -- Wolf.

BLITZER: Horrific material, indeed.

Harris, thanks very much.

Meanwhile, there's been a new twist today in the case of those destroyed CIA interrogation videos. "The New York Times" reporting at least four top White House lawyers were directly involved in discussions with the spy agency about whether to get rid of those tapes. That would suggest a deeper involvement by the White House than the administration had previously conceded. Experts say that could be damaging.

(BEGIN VIDEO CLIP)

PROF. JONATHAN TURLEY, GEORGE WASHINGTON UNIVERSITY: Just when you think the scandal can't get worse, it does. I mean this is a very significant development because it shows that this was not just some rogue operator at the CIA that destroyed evidence being sought by Congress and the courts. It shows that this was a planned destruction, that there were meetings and those meetings extended all the way the White House and included Alberto Gonzales, who would soon become attorney general, and Harriet Miers, who would become White House counsel. That's a hair's breath away from the president himself.

(END VIDEO CLIP)

BLITZER: A federal judge ruled this week that the Bush administration must answer questions about those destroyed videos, which reportedly showed the use of waterboarding and other methods used on Al Qaeda suspects.

Meanwhile, there are more allegations coming in of torture concerning the U.S. detention center at Guantanamo Bay in Cuba. The charges coming from three terror detainees who have now been released into the custody of British authorities.

Here's our international security correspondent, Paula Newton.

PAULA NEWTON, INTERNATIONAL SECURITY CORRESPONDENT: Wolf, more Guantanamo detainees have made their way home today and they've taken their allegations of torture home with them.

(BEGIN VIDEOTAPE)

NEWTON (voice-over): From the cells of Guantanamo Bay to the heavily secured cabin of a charter flight, three long time British residents are making their way back home after years in detention -- controversy tailing them all the way.

Jamil el-Banna, Omar Deghayes and Abedennour Samuer will return to British soil within hours. Under a security arrangement with American authorities, British investigators will detain and question them -- highlighting the nagging problem facing all released Guantanamo detainees -- how to prove they are innocent.

ZACHARY KATZNELSON, ATTORNEY: I don't think any of these men are dangerous. I don't think they're a threat to anyone in Britain or beyond.

NEWTON: The former detainees' American lawyer says he's seen the evidence against his clients, he's interviewed them in Guantanamo. He says the U.S. government has no evidence to prove they are or ever have been dangerous terrorists.

UNIDENTIFIED CHILD: This is the picture of our dads on our shirts.

NEWTON: Which is what their families back in Britain have been trying to prove for years. But the Bush administration maintains the three have terror links and should be considered dangerous.

But, clearly, the administration is losing its legal grip on Guantanamo -- giving into demands of the detainees for a fair hearing in a court of law in their home countries. Lawyers for those held at Guantanamo are again calling on the U.S. to close the infamous detention center.

KATZNELSON: It's making us less safe. It's actually backfiring. And every day it's being use used as a recruiting tool by extremists. It's a lightning rod for those who would do violence against the United States and its allies. It simply must stop.

(END VIDEO TAPE)

NEWTON: All of this underscores the continuing legacy of Guantanamo, with the Bush administration at a loss as to how to close it and what to do with the remaining detainees -- Wolf.

BLITZER: Paula Newton, thank you very much.

Let's go back to Jack.

He has The Cafferty File in New York -- Jack.

CAFFERTY: All right, Wolf.

Have you heard this? Two weeks to go until the Iowa caucuses.

You knew that, right?

The race couldn't be any tighter, either -- especially on the Democratic side.

There is a new "Washington Post"/ABC News polls out that suggests 33 percent of likely caucus goers support Barack Obama in Iowa, 29 percent back Hillary Clinton, 20 percent are behind John Edwards. The margin of error in that poll, 4 points.

The poll also shows Obama gaining ground on Clinton on the question of which Democrat is most electable -- which, of course, had been one of Clinton's early advantages in this campaign. When it comes to which candidate has the best experience, though, to be president, Clinton still has a significant lead.

In Iowa, it could also come down to which campaign does a better job of motivating and turning out their voters to come out in the dead of winter and spend hours attending these caucuses. The poll found more of Obama supporters saying that they're certain they will participate than Clinton's. But Clinton's backers are most committed to voting for her and the most enthusiastic. Seventy percent of Hillary supporters say they'll definitely caucus for her in two weeks, while John Edwards and Obama supporters are more likely to say they could change their minds. And the Iowa winner could change a lot of minds come caucus night.

So here's the question -- what does Hillary Clinton have to do in the last two weeks in order to win the Iowa caucuses?

E-mail your thoughts on that to caffertyfile@CNN.com or you can go to CNN.com/caffertyfile and can post a comment on my new blog. A lot of you doing that and the thing has become just a little beehive of political conversation.

Ain't that grand, Wolf?

BLITZER: It's the new world, Jack.

Thanks very much.

We'll check back with you shortly.

Found alive -- a family rescued after three days -- three days in the freezing cold -- lost after looking for a Christmas tree. We'll update you on this dramatic story.

Also, smoke and flames over at Vice President Dick Cheney's office. The president posing with firefighters. We'll tell you what's going on on that front over at the White House compound.

Also, flights canceled -- the government cuts back air travel in New York to try and clear up the air in the rest of the country.

Stay with us.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Smoke pouring out of a White House office building, flames raging within -- a two alarm fire right near offices used by the vice president, not so far away from the West Wing of the White House.

Let's go right to CNN's Brian Todd -- Brian, there was a pitched battle out there earlier today, when we saw it live on TV.

But how bad was it really?

BRIAN TODD, CNN CORRESPONDENT: It was pretty bad, Wolf, at its peak. Now, normally, where reporters are standing where I'm standing, it's to do the news of the day from the White House. We're going to pan the camera left and show you some of the network positions here. This is where reporters normally stand to do their live reports from the White House grounds. But today, these cameras had to essentially do a 180 and focus their attention on the building behind me -- the Eisenhower Executive Office Building -- on the same grounds as the White House. It's less than a football field away from the West Wing, as you can see that complex. It sent a big scare through the White House complex today. And Vice President Dick Cheney's ceremonial office was among those damaged.

(BEGIN VIDEOTAPE)

TODD (voice-over): At its peak, the fire sent heavy smoke through the windows of the Eisenhower Executive Office Building, known in the White House complex as EEOB. And Vice President Cheney's ceremonial office was damaged by smoke and water. Firefighters scoured ledges, punched through windows. Then, faint images of flames could be seen inside.

CHIEF DENNIS RUBIN, D.C. FIRE DEPARTMENT: There was hands-on combat by the firefighters.

TODD: Also punching through a window, this man -- identified as a U.S. Marine who tried to escape the smoke by climbing onto a ledge three floors above the actual fire.

ALAN ETTER, D.C. FIRE DEPARTMENT SPOKESMAN: Rescue Squad One, using rescue techniques, were able to get to this individual, secure him, get him outside where his injury was treated.

TODD: His hand laceration was the only injury. But the smoke was so thick, some people needed help from firefighters just to make it through the building before being evacuated. Everyone made it out.

CYNTHIA BALL, EEOB EMPLOYEE: You really just don't have time to think. You just move. And it's more scary now that I'm out here and think about it in retrospect, obviously. But, you know, when something's going on, you just -- you just react and you just move. TODD: The only actual fire damage on the second floor, where the fire broke out.

D.C.'s fire chief talked about the challenges of battling flames in a nearly 120-year old structure that houses the National Security Council and White House communications officials.

RUBIN: Its size, as well as its age and the amount of combustibles also would add another dimension of the tremendous amount of security that goes along with the building.

TODD: So much security that Secret Service officers had to respond with firefighters -- who got a hearty thanks from their commander-in-chief for saving most of the building.

(END VIDEO TAPE)

TODD: Secret Service and fire officials tell us that some employees were back into this building by this afternoon.

Now, on the cause, officials originally said it's believed that the fire originated in an electrical closet or a phone bank, possibly on the second floor. That was earlier today. But as of now, they're saying nothing really definitive on the cause, other than they're investigating it -- Wolf.

BLITZER: Brian, there's been some construction going on over there. Renovations have been going on.

Are they suggesting that could have played a role?

TODD: That was discussed earlier today. The D.C. fire chief acknowledged, yes, there's a lot of construction here. It's always going on, he said. But right now they do not believe there is a link between that construction and what happened earlier today. They're still looking into all possibilities.

BLITZER: Brian Todd, thanks very much.

Brian reporting from the White House.

So while this blaze next door was a close call, the White House has had its own brushes with fire.

In 1814, it was looted and torched, largely destroyed by British troops during The War of 1812. It had to be rebuilt.

In 1929 on Christmas Eve, fire broke out in the West Wing while Herbert Hoover was president. The charred interior was rebuilt and remodeled.

Last month, the federal government announced a series of steps to try to ease flight delays during the holidays. Now the FAA is unveiling a longer-term plan for making air travel smoother. Let's hope they succeed.

CNN's Jeanne Meserve is following the story for us.

She's joining us with the latest details -- Jeanne, what are they about to do?

JEANNE MESERVE, HOMELAND SECURITY CORRESPONDENT: Well, Wolf, three quarters of the air travel delays last summer were because of congestion in one place -- New York. And if you thought air travel was bad last summer, the forecast for this summer -- even worse.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: We sat for three hours on a plane and then we sat for two more hours in an aisle.

MESERVE (voice-over): If the summer of 2007 brought us air travel hell, the summer of 2008 promised to be air travel hell part two -- bigger and badder. Anticipating another howling chorus of complaints from the traveling public, the federal government and the airlines have agreed to limit the number of flights at New York's JFK Airport to 82 or 83 per hour, starting next March. It will not reduce the number of flights per day, just space them out more evenly to avoid runway and air space traffic jams at rush hour.

MARY PETERS, U.S. TRANSPORTATION SECRETARY: We'll still be able to get as many planes in and out of there, but in a much more orderly, dependable pattern.

MESERVE: In fact, Peters predicts the cap could ultimately create more capacity at JFK. Any new slots will be auctioned to the highest bidding airline.

Still in the works, a similar cap for Newark and a long-term solution, under the guidance of a newly appointed czar for New York aviation issues.

JIM MAY, AIR TRANSPORT ASSOCIATION: We want a real czar with real power and real authority. We want somebody who can do more than just throw sharp elbows. We want somebody that can cross across jurisdictional lines and get these changes made that are so necessary.

MESERVE: Though reaction from Congress was mixed, one air passenger group was ecstatic.

KATE HANNI, AIRLINE PASSENGER ADVOCATE: And I believe that this is a really great day for airline passengers.

MESERVE: And one aviation expert said it was about as good a temporary solution as you're going to get.

(END VIDEO TAPE)

MESERVE: And if you are worried about travel next week rather than next summer, over the holidays, officials say military air space on the East and West Coasts is going to be open to civilian traffic. That will help airlines work around bad traffic and, Lord forbid, delays. Back to you -- Wolf.

BLITZER: We can only hope.

Jeanne, thanks very much.

Checking the numbers from last year, last December was the worst month of the year for air travel. More than a quarter -- more than a quarter of all flights were late taking off. And even more -- nearly a third of all flights arrived late. Also, about 3 percent of flights were actually canceled altogether. The worst airports to travel to last December -- last December -- Aspen, Colorado; Telluride, Colorado; and El Centro in Southern California. At all three, less than half of all flights arrived on time.

Coming up, no strings attached -- Democrats preparing to give the president what he wants to pay for the war in Iraq.

And a hellish inferno -- that's what one fire official is calling that powerful explosion that ripped through a Florida chemical plant. Three people are dead.

Stick around.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Carol Costello is off today.

Zain Verjee is monitoring some other important stories incoming into THE SITUATION ROOM right now.

What's going on -- Zain?

ZAIN VERJEE, CNN STATE DEPARTMENT CORRESPONDENT: Wolf, a dramatic development from Northern California. The fears have been for the worse, but there's a very happy ending for a family that's been found safe. A family and his three teenage children have just been airlifted out of the rugged region of snow-covered hills three days after they disappeared. They were looking for a Christmas tree to cut down. More than a foot of snow had fallen in the area since they entered the woods wearing just jeans and light jackets on Sunday afternoon. But one police official says that they all appear to be OK. We'll have more on that story coming up shortly.

At least 58 people are dead in Pakistan after a speeding express train packed with holiday travelers derailed just north of Karachi. Authorities say about 150 survivors are hospitalized at this hour. The train was reportedly traveling at high speed when about 12 to 16 cars came off the track. There's no official word on the cause of the accident, but one railway official says that he suspects sabotage.

Police in Puerto Rico say that tests show that pepper spray was used to douse the clothes of a beauty pageant contestant last month. Despite the attempted sabotage, Ingrid Maria Rivera was able to maintain her composure in front of the judges and went on to win the Miss. Puerto Rico Universe crown. Police say that they're focusing their investigation on a volunteer at the pageant, not a rival contestant.

And no doubt it's hard to outdo your older sister, especially when that sister is Britney Spears. But when it comes to scandalous news, Jamie Lynn Spears seems to be giving her prodigal sister a bit of a run for her money. A publicist for the 16-year old star of cable TV hit "Zoey 101" is confirming that she is three months pregnant. The younger Spears says that she's got no plans to marry the 18-year old father and wants the child to have "a normal life" -- Wolf.

BLITZER: Zain, thanks very much.

Coming up, Rudy Giuliani's words about Hillary Clinton. You're going to want to hear just what he said.

And then you're going to hear what Howard Dean, the chairman of the Democratic Party, thinks about it. The head of the DNC, he's standing by to join us live here in THE SITUATION ROOM.

Also, Congressional Democrats fail to force a change, of course, in Iraq. Their latest setback concerns war funding that has no strings attached at all. You're going to find out what happened.

And one person described it as "a hellish inferno" -- an explosion in Florida that sent up a thick plume of smoke that could be seen for miles. And it's left people dead.

Stick around.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: To our viewers, you're in THE SITUATION ROOM. Happening now, three dead in an a explosion at a plant that makes a gasoline additive in Jacksonville, Florida. Authorities say the area is being evacuated. At least 14 people have been transported to local hospitals. A spokesman for the fire department calling it -- and I'm quoting now -- "a hellish inferno."

President Bush signs off on raising fuel economy standards. The president says the sweeping new energy bill will increase the use of alternative fuels and make America more oil independent. Provisions that would have eliminated tax breaks for oil companies were removed from the bill under threat of a veto.

And condemnation from the Vatican -- a stinging editorial in the Vatican newspaper accusing the film "The Golden Compass" of promoting a cold and hopeless world with no hope for salvation.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

They were elected on promises that they'd bring an end to the war.

This just coming into THE SITUATION ROOM.

The Democrats, though, have been unable to change the president's Iraq war policy. And word now that they've voted in the House and in the Senate to approve billions in new war spending with no strings attached.

Let's go to CNN's Brianna Keilar. She's got all the latest for us -- Brianna, tell our viewers what has just happened.

Wolf, the House just made this final vote, 272-142, to send this massive spending bill to President Bush.

Now, in it, spending for the war in Iraq -- a disappointment for Democrats. But they are still pledging to keep the pressure on Republicans and the president.

(BEGIN VIDEOTAPE)

KEILAR (voice-over): The latest in a series of setbacks for Democrats, who have spent the year trying to force President Bush to change course in Iraq. A massive spending bill complete with about $70 billion for war funding, no strings attached. This is not where Democrats thought they would be while on the campaign trail back in 2006, as they appealed to voters unhappy with the war.

SEN. CHARLES SCHUMER, (D) NY: For Americans who want a change in course in Iraq, there's only one answer, whether you're Democrat, independent or Republican. It's to vote for Democratic candidates in the Senate and in the House.

KEILER: Voters agreed, giving Democrats a majority in Congress.

SEN. MITCH MCCONNELL, (R) MINORITY LEADER: As of last night we had 34 votes on Iraq this year.

KEILAR: As Republicans are quick to point out, not a single Democratic effort has forced a president to change his policy, even as measures passed the House they hit a brick wall in the Senate. The explanation from Democrats, simple math.

SEN. CARL LEVIN, (D) MI: The U.S. Senate is a peculiar place. It's the only congress or parliament in the world where a majority doesn't rule, you've got to get a super majority or 60 votes in order to overcome the filibuster.

KEILAR: But Republicans say Democrats wasted time, pursuing legislation that had no chance of passing.

MCCONNELL: This effort to kind of constantly score political points by putting up measures that are going no where, making no compromises, taking them down and accusing the other side of obstruction is not going it work.

(END VIDEOTAPE) KEILAR (on camera): Now, despite democrats failing to force a change through legislation, one government expert that I spoke with told me that they have changed the political debate about the war in Iraq and that's a measure of success that can't be discounted, Wolf.

BLITZER: Brianna, thanks very much. Brianna Keilar up on the Hill.

The Democrats find themselves clearly unable to block President Bush when it comes to the war. At the same time, Republican presidential candidate Ron Paul today blasted both sides as big spenders saying the nation is "going broke."

(BEGIN VIDEO CLIP)

REP. RON PAUL, (R) PRESIDENTIAL CANDIDATE: The executive branch, the Republicans want more money for this warfare state. More money for the military industrial complex and the Democrats want more money for welfare. That's the problem. But they say they don't work together in Washington, that is not true. They work together very well. They've come up with a neat little compromise, they're going to increase both.

(END VIDEO CLIP)

BLITZER: Ron Paul speaking out on the campaign trail earlier in New Hampshire.

Other news we're following. The case of a woman who says she was drugged and gang raped while working in Iraq is putting the spotlight back on private American contractors and who has jurisdiction over them. The House Judiciary Subcommittee held a hearing on the case today. Let's go back to Zain. She is following this story for us. What is the latest, Zain?

ZAIN VERJEE, CNN CORRESPONDENT: She's taking on her attackers, her old employer and the U.S. government, suing them all. Jamie Leigh Jones says she can't get justice after allegedly being drugged and gang raped in Iraq by her co-workers two years ago.

JAMIE LEIGH JONES, ALLEGED RAPE VICTIM: There has been no prosecution after two and a half years.

VERJEE: So she's turned to congress for help, testifying before the House Subcommittee on Crime, Terrorism and Homeland Security.

REP. JOHN CONYERS, (D) MI: Any wonder this is a tragedy and when our own Department of Justice can and does fail to take action ...

VERJEE: The Department of Justice stayed away saying its investigating her charge so they won't have any comment. The hearing was emotional with Democrat John Conyers of Michigan taking up her cause.

CONYERS: I'm going to call the attorney general, I'm going to call the secretary of defense, too, Gates. They're stiffing all the Jamie Joneses that have come and gone before and they're stiffing us right now.

VERJEE: Jones was working for Kellogg, Brown & Root, a major U.S. private contractor in Iraq and has filed a civil lawsuit against them. KBR says the allegations are "without merit" and it's committed to providing a "safe working environment for all employees."

Private contractors in Iraq operate in a legal twilight zone because it's unclear if or who can prosecute them. A problem that surfaced after 17 Iraqis were allegedly killed by U.S. contractors in Iraq. Jones' congressman says private contractors in Iraq operate like it's the Wild West.

REP. TED POE, (R) TX: We need a new sheriff in Iraq to enforce our federal laws.

VERJEE: Jones says she's not the only victim.

JONES: Numerous other women have contacted me who were assaulted and raped and where then retaliated against for reporting those attacks. There are at least 11 others that my attorneys are aware of.

(END VIDEOTAPE)

VERJEE (on camera): Lawmakers say that they're going to be holding more hearings on this case. Wolf?

BLITZER: Zain, why did it take the Department of Justice so long to investigate this case?

VERJEE: Well, it's not really clear. The biggest problem from a legal point of view is that this is all a big gray area. Who holds the private contractors accountable, whose jurisdiction does this fall under? Different agencies, as well, Wolf, may not really communicate that well with one another so there's a lot of delay and confusion and passing the buck. Even saying, well, this isn't my problem. Wolf?

BLITZER: Very evident in this case, all right, thanks very much, Zain, for that.

He was once a presidential campaign front-runner but now he's the head of the Democratic Party, I'll be speaking live about this campaign with Howard Dean, the chairman of the DNC standing by live to join us.

And they went looking for a Christmas tree in a remote California mountain range. Three days later, new word about a father and his three children. Stay with us, you're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Welcome back. Two weeks ahead of the vote in Iowa, the Obama campaign is courting younger voters, but can it count on these so-called caucus kids? Our senior political correspondent Candy Crowley is out on the campaign trail in Iowa with more. Candy?

CANDY CROWLEY, CNN: Wolf, Hillary Clinton is going after middle- aged women. John Edwards targeting proven caucus goers and Barack Obama, according it one strategist, is looking for a ton of support from the under 30 set.

(BEGIN VIDEOTAPE)

CROWLEY (voice-over): Josh Mahoney a junior at University of Northern Iowa is caucusing for Obama. It's a logistical nightmare.

JOSH MAHONEY, UNIVERSITY OF NORTHERN IOWA STUDENT: I'm going to drive four and a half hours from Sioux Falls, South Dakota in my Toyota Camry 1993 model - I know, it's terrible, and I'm embarrassed. I'm going to come all the way down here and I'm going to caucus.

CROWLEY: If they'll be 18 by the 2008 election and are registered to vote where they will caucus, Iowa college students, regardless of where they're from can participate.

SEN. BARACK OBAMA, (D) PRESIDENTIAL CANDIDATE: If you're going to be out of state for the holidays, come back on January 3rd.

CROWLEY: Counting on students to trek back to college in the middle of winter break two days after two year's is an iffy proposition. Even in-state students who can caucus at home are a tough get.

PROF. ARTHUR SANDERS, DRAKE UNIVERSITY: You have to identify where they're going to be on January 3 and somehow communicate that to your field offices there. Here are some people who you won't be able to contact now because they're not there yet but they're going to get there soon.

CROWLEY: Barack Obama is a hit on college campuses. He's young, he's new and he campaigns against status quo politics. More than any other campaign, Obamaville counts on the Joshes of Iowa.

MAHONEY: And I think we're at the right age where kind of get onboard with a new strategy.

CROWLEY: One Obama strategist says the under 30 crowd is possibly the most highly motivated block of Obama supporters. The campaign has spent the better part of the year collecting cell numbers and e-mail addresses.

Some Iowa colleges are planning to open up part of campus over the break so students can caucus.

OBAMA: Thank you so much, Cornell.

CROWLEY: At Camp Obama, they believe they hope, if colleges open, they will come.

(END VIDEOTAPE)

CROWLEY: A cautionary note of which the Obama campaign is well aware. In 2004, just 17 percent of caucus goers were under 30. Wolf?

BLITZER: Candy, thanks very much.

Coming up next, Howard Dean, the chairman of the Democratic Party. He will respond to my exclusive interview with Rudy Giuliani.

Also, found alive. A family rescued after three days in the freezing cold. Lost after looking for a Christmas tree.

And he stands dead last in fund-raising among the Democratic presidential candidates and he doesn't even register in most polls in Iowa or New Hampshire. So, can the Internet help former Senator Mike Gravel of Alaska keep his campaign alive? We have the answer. Stick around. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: They are rivals at home and in New York as well as on the national stage as presidential candidates. I'm referring to Hillary Clinton and Rudy Giuliani. They could possibly end up facing each other in November. I asked Giuliani about the rivalry in my exclusive interview aboard the CNN Election Express. Has Hillary Clinton been a good senator for New York State.

(BEGIN VIDEO CLIP)

RUDY GIULIANI, (R) PRESIDENTIAL CANDIDATE: Not from my point of view. From the point of my ideology and my thinking, the things I would like to see, which would be smaller government, tax cuts, she made the right vote on Iraq in having to deal with Saddam Hussein. I think her backing away from that vote y know that was popular within the Democratic Party. To me, that was very disappointing. She's worked hard, if that's what you're saying. Has she been a hard- working senator, absolutely?

And for the short time when we overlapped when I was the mayor, I was able to work with her and she was always cooperative in doing what the city needed. But her ideology is so different. Her wanting to move toward mandated government medicine. Socialized medicine.

BLITZER: If you became president would you be able to work with her other and Democrats?

GIULIANI: Of course. I ran a city that was 45 Democrats on the City Council and only six Republicans. A city that was five to one Democratic. I think one of the reasons that I should be the nominee of the party is I'm the only Republican candidate that can carry on a 50-state campaign. It's somewhat similar to this primary campaign that we're carrying on. I look at it as the day I get nominated, we're going to be campaigning all over the country. We'll be campaigning in New York and Connecticut and New Jersey and Delaware and Pennsylvania and California and Michigan.

(END VIDEO CLIP)

BLITZER: Let's get a little reaction now to this interview with Rudy Giuliani from a man who knows a thing or two about presidential campaigns and he knows about his fellow democrats, as well. Joining us from Washington, the Democratic National Committee Chairman Howard Dean. Governor, thanks very much for coming in. How, how much do you fear Rudy Giuliani, if, in fact, he became the Republican presidential nominee, precisely because of the points he just made that he does appeal to potential Democratic voters?

HOWARD DEAN, DNC CHAIR: I think the biggest problem that any Republican has is that they're following one of the most unpopular presidents in history and they're all, as they campaign, swearing loyalty to them. They're all in favor of staying in Iraq. The Democrats believe we shouldn't be there. They're all in favor of pardoning Scooter Libby and we were proud that we passed an ethics bill that essentially required Trent Lott to retire before New Year's if they wanted to get on the K Street gravy train.

They all thought it was great when the president vetoed health care for kids. Our candidates all believe that we ought to have healthcare for kids.

So, there are some pretty stark differences. I welcome this race. I am looking forward to giving ...

BLITZER: But Giuliani suggests, but Giuliani suggests he can be competitive let's say in New York State. He was twice elected in a heavily Democratic city like New York. He says he could be competitive in California where a similar Republican Arnold Schwarzenegger gets elected twice in a heavily Democratic state. Does he have a point there that he would be competitive in states where some of the other Republican candidates would not necessarily be competitive?

DEAN: He's making the same argument Mitt Romney is making. Those were the old Giuliani and Mitt Romney. That's when they got elected in states that were pretty Democratic. Now, they're all talking a different game. The question is, do you want a president that would shift their views and say anything to get elected? I think the answer to that is you probably don't want a president who will do that.

BLITZER: How frustrated are you that the Democrats have now been the majority in the House and the Senate, but even as we speak, only within the past few moments the congress has passed funding for the war with no strings attached whatsoever. That's upsetting a lot of the Democratic Party base, as you well know.

DEAN: Yeah, I'm frustrated as all the other Democrats are, but I'm also a realist and the truth is we tried to end the war in Vietnam when Nixon was president and Nixon's numbers were about as bad as Bush's were and he, like Bush, stubbornly refused to do the bidding of the American people.

The solution to getting out of Iraq is to elect a Democratic president. Every single one of our candidates for president thinks we shouldn't be in Iraq. Every single one of their presidents, except Ron Paul thinks we should be in Iraq. And, so, it's pretty clear if you want to get out of Iraq, you have to have a Democratic president because these Republican candidates aren't going to go anywhere. They are going to stay in Iraq for as long as it takes to screw up America, spending a trillion dollars over there where we could be spending that at home. I think you'll get a fresh start with a Democratic president.

BLITZER: But, Congress has not been able to do anything to really affect this war, has it?

DEAN: The rules of the Senate are you need 60 votes and the Republicans under Mitch McConnell have decided they don't want to do anything.

I think it's a disgusting display it be honest with you. The Republicans have put their own politics ahead of the politics of the country. We can't get anything done in terms of the war. We passed a watered down energy bill that continues to allow the oil companies to rip off the American taxpayers. This is the Republican doing. The pollsters, excuse me, the pollsters are showing that people are frustrated that the Democrats can't get us out of Iraq. By about a 20-point margin they know that this is the Republicans being obstructionist and they would prefer a Democratic Congress and to elect more Democrats to Congress and I think that's the solution. More Democrats in Congress and a Democratic president so we can finally have a party in charge that puts the interest of America ahead of the interest of our party.

BLITZER: The Republican minority in the House and the Senate, they keep going after the Democrats as the do nothing.

DEAN: Sure. That's their plan.

BLITZER: The do nothing majority in the Congress. They passed an increase in the minimum wage. They passed this energy bill today and an ethics bill, but what else have they done over the past year?

DEAN: Well, we've increased veterans' benefits, which the Republicans refuse to do. We increased to the tune of $20 billion help for middle class college students after the Republicans cut it way back. We've passed an energy bill, which nothing of the sort happened except for giving the president's friends in the oil business big tax cuts. And, so, I think we have accomplished things. The thing that we haven't accomplished that we'd like to accomplish is get us out of Iraq in a thoughtful, reasonable, timely way.

And the American people have a stark choice. If you like us in Iraq, you should vote for republican. If you think it's time to leave, you need to vote for a Democratic president. Here's a president ...

BLITZER: I see a campaign slogan in the works. Go ahead.

DEAN: Wolf, here's the deal. The Republicans decided that they would cut health care from kids under 18 in this country and then spend 10 times as much money on one year in the war in Iraq. These guys have the wrong priorities for America and the Democrats have the right priorities. Most Americans, by a large amount, believe that we ought to have health care for everybody under 18 and we could easily pay for that 10 times over if we weren't in Iraq. That is the difference. If you want to pay for a war in Iraq instead of health care for your kids, then you should vote Republican, but we think the Democrats will stand for real change and we think we have a better alternative.

BLITZER: Governor Dean, thanks very much for coming in.

DEAN: Wolf, thanks for having me on.

BLITZER: Coming up, long shot Democratic presidential candidate Mike Gravel is at the bottom of the polls and a new fund-raising e- mail suggests the former Alaska senator's campaign is in dire straits. Let's go right to our Internet reporter Abbi Tatton. She is watching the Mike Gravel story for us. What's he asking for, Abbi?

ABBI TATTON, CNN CORRESPONDENT: Wolf, the latest campaign e-mail basically just says, help, Mike could literally run out of funds it reads. When it comes to Gravel's fund-raising, he is at the bottom of the chart. Same for polling.

And if you're searching online for news mentions of his name, you're more likely to get stories about gravel, as in the road covering. But elsewhere on line where he is getting attention. On YouTube there is a succession of unorthodox supporter generated video getting views and in some of them they have the 77-year-old former senator appear in them. Take a look at one of the latest.

(BEGIN VIDEO CLIP)

MIKE GRAVEL, (D) PRESIDENTIAL CANDIDATE: Good luck. I don't want to stand in your way.

GRAVEL: Thanks. I'm going to need it.

(END VIDEO CLIP)

TATTON: But popularity on YouTube doesn't necessarily pay the bills and is this latest fund-raising e-mail a sign that they're getting out? I spoke to the campaign today and they said not at all. All our fund-raising e-mails are urgent and they said they're going to New Hampshire next week. When asked how much money they have actually on hand to do that, the field director responded, well, it's a little bit less than Ron Paul. Wolf?

BLITZER: Abbi, thanks very much. I want to go back to Jack, he has got the Cafferty File in New York. Jack?

JACK CAFFERTY, CNN ANCHOR: What possesses someone who has no money and no standing in the polls to stay in the race?

BLITZER: It's a good question. There's no clear answers, but sometimes they just like to do it.

CAFFERTY: Well, yeah, I guess that's an answer good as any.

All right. Our question this hour is what does Hillary Clinton have to do in the last two weeks in order to win the Iowa caucuses. It's very close in Iowa.

Franco writes, "Stop reading from scripts and listen to Bill. Speak from your heart, unscripted, face the nation. People are looking for anyone who is genuine, truthful, concerned."

Travis writes, "We all know what's at stake here in this election. Hillary needs to show people that she can be a likable president. And if Obama and she don't fix their little quarrels, she'll fail to do that. We know she can get things done, we know she is determined. She just needs to show us Hillary the person, not Hillary the politician."

Shelley writes, "Let's not give her any ideas and isn't she the one with all the experience."

Robert says, "She needs to stop talking about the fact that she has the most experience to lead. Her only real experience is a failed health care program and filling the valuable post of first lady. She's never run a business, has minimal experience as a legislator with no meaningful legislation in her name. Biden, Dodd, Richardson and even Kucinich all have more legislative and business experience than she does. This only alienates more Americans because they all know she's lying."

Danny writes, "I'd tell her you're the one seeking the nomination, not Bill. Leave him in New York to take care of your mom and Chelsea."

Jason in Atlanta differs. "Hillary must do what she's done all campaign season. Stay strong, consistent, continue to insist she's the Democrat who can win in November, oh, and keep her strongest weapon at her side, her husband. The Clinton political machine will be impossible to defeat next year."

And Elaine offers this from Bell Acres, Pennsylvania. "Convince Iowa voters she'll stop shopping for pant suits at Wal-Mart when she becomes president." Wolf?

BLITZER: Thanks very much, Jack. Very funny.

Found alive, a father and his three kids lost in the mountains after looking for a Christmas tree. Tonight, a very, very happy ending.

Also, my exclusive interview with Rudy Giuliani. Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: The search is over for a father and his three children who disappeared three days ago in a rugged, snowy wilderness in Northern California. CNN's Randi Kaye is joining us now with details of this dramatic survival story. Randi, how did it happen?

RANDI KAYE, CNN CORRESPONDENT: Imagine this, Wolf. A family outing couldn't go much worse than this but the good news is the Dominguez family is alive and well. All they wanted to was go into the woods and cut down a Christmas tree.

Well, then they vanished in the deep snow. It was such a relief for friends and family and search teams to see this family arrive safely by helicopter this afternoon. First came a couple of the kids, then Fredrick (ph) Dominguez, their 38 year old father and the remaining child arrived, Christopher, 18, Alexis 14, Joshua 12 and their dad all said to be doing OK.

They got some warm blankets, some hugs and kisses. And the kids should be reunited with the mom tonight. The family first went missing Sunday about 100 miles north of Sacramento. Dominguez's pickup truck was found Monday night parked along the road. The weather in the area has been pretty rough for them. Apparently more than a foot of snow has fallen. Snow drifts reportedly as high as seven feet. Another storm bringing even more snow is heading that way.

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