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Ron Paul Addresses Charges of Racism; F-15s Grounded Forever?

Aired January 10, 2008 - 17:00   ET

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


BLITZER: And to our viewers, you're in THE SITUATION ROOM.
Happening now, Ron Paul may be a popular new phenomenon on the presidential campaign, but some old racist rants published under his name a long time ago are now surfacing.

Who is responsible?

What does Ron Paul have to say about all of this?

He's standing by live. We're going to be speaking with him and getting his explanation.

They're counted onto defend America's skies. But after a chilling midair break up of an F-15 jet fighter, many of these war planes may be grounded now forever.

And FBI wiretaps cut off by the phone companies because the Bureau failed to pay its bills. Undercover operations under investigation for mismanagement right now.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

They've been grounded since a horrifying midair disaster. Now we're learning more about the 175 F-15 fighter jets that may never return to service. The reason -- a potentially deadly manufacturing flaw. The ramifications of this story very significant, especially during a time of war.

Let's go straight to our CNN senior Pentagon correspondent, Jamie McIntyre -- what are we learning, Jamie?

JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT: Well, Wolf, we've known for a while that there are big problems with the F-15. But what we learned today is that some of these old war birds may have their wings clipped for good.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Eject! Eject! MIG 2, Eject! MIG 2, Knock it off! Knock it off!

MCINTYRE (voice-over): The Air Force never knew it had a problem until two months ago, when an F-15 snapped in two during an aerobatic turn in the skies over Missouri. UNIDENTIFIED MALE: MIG 2's jet plane just broke in half.

UNIDENTIFIED MALE: (INAUDIBLE). Eject! Eject!

MCINTYRE: MIG 2 was Major Stephen Stilwell. The veteran pilot was almost cut in two himself by the jet's canopy, but escaped with a dislocated shoulder and crushed left arm after punching out at 18,000 feet.

MAJ. STEPHEN STILWELL, AIR NATIONAL GUARD: It was very violent. I initially got slammed forward to the right side of the cockpit between the HUD and the wind screen. Then I got slammed back over to the left. And that's when I broke my arm.

MCINTYRE: Stilwell's F-15 was one of 442 older models that were immediately grounded. Sixty percent have since been cleared for takeoff. But 40 percent -- about 170 planes -- have a manufacturing defect that may be too expensive to fix.

(on camera): This is the fatal flaw -- a key piece of the fuselage called a longeron. The problem is some of these were made too thin or, in some cases, too rough. It was a defect built into the plane that took 30 years to show up.

GEN. JOHN CORLEY, U.S. AIR FORCE: You may be able to fix a part of it, Jamie. You will not be able to fix all of these airplanes.

MCINTYRE: So some of these airplanes will never return to flight?

CORLEY: Some of these airplanes will never return to flight.

MCINTYRE (voice-over): Air Force General John Corley is the commander in charge of defending America's skies.

CORLEY: Right now, with the absence of that 40 percent of the fleet, we're using F-15Es. We're using F-16s. We're using F-22s to cover for the 40 percent that's lost. But those airplanes, too, have missions they have to accomplish. Those F-15Es are in preparation to go to places like Afghanistan and Iraq.

MCINTYRE: What Corley says he needs now is F-22s -- the most expensive fighter plane ever, at somewhere around $200 million a copy.

CORLEY: I would look for an F-22.

MCINTYRE (on camera): But isn't that really expensive?

CORLEY: Jamie, some things are priceless. Defense of the homeland is. America needs to have its skies defended.

MCINTYRE (voice-over): But suggest the Air Force is using the F- 15 crisis to win funding for the gold-plated F-22 and the general's blood begins to boil.

CORLEY: Jamie, that one makes me angry. That makes me just outraged. (END VIDEO TAPE)

MCINTYRE: One unanswered question is whether Boeing will have any liability in this. Boeing took over for McDonnell Douglas, which built the F-15s back in the '70s and '80s. In a statement, the company says it's working with the Air Force and has not yet seen the final accident report -- Wolf.

BLITZER: Jamie McIntyre reporting for us from the Pentagon.

Thanks.

We're getting these live pictures just coming into THE SITUATION ROOM right now. They were held for more than five years by rebels in the jungles of South America. Now two Colombia women, former political prisoners, are free -- their release orchestrated by, the Venezuelan president, Hugo Chavez.

Let's go straight to CNN's Karl Penhaul in Colombia.

He's watching this pretty fancy reception for these former prisoners -- Karl.

KARL PENHAUL, CNN CORRESPONDENT: In fact, Wolf, it's been a day of high emotions and very dramatic pictures. In fact, the day started for these hostages -- their route to freedom began a short distance from where I am, in Eastern Colombia. Two helicopters piloted by Venezuelans under Red Cross insignia swooped into a jungle clearing. The rebels -- the Colombia rebels were waiting there to hand those two hostages off to a Venezuelan delegation -- a Red Cross delegation. They were flown then into Venezuela, across the border, and then flown back to Caracas, where we saw dramatic reunions with the families. There were tears all around. There were exchanges of flowers. And mothers and daughters came together and kissed for the first time in more than six years, Wolf.

Clara Rojas, the vice presidential candidate, had been held for almost six years. Consuelo Gonzalez, a former congresswoman, had been held for almost six-and-a-half years.

Tremendous joy for these two people to return to freedom, for their families. They are being greeted by President Hugo Chavez, who brokered the deal with the FARC guerrillas. But, of course, don't forget, this is just the tip of the iceberg, because the Colombia government estimate that the FARC guerrillas are still holding 750 hostages here in Colombia -- Wolf.

BLITZER: And we see Hugo Chavez holding a baby over there -- obviously, taking credit for this release.

Karl Penhaul, thanks very much for that.

President Bush today made his first ever visit to the West Bank, met with the Palestinian president, Mahmoud Abbas. That followed earlier meetings with Israeli leaders in Jerusalem. By the end of the session, the president was ready to make a bold prediction. (BEGIN VIDEO CLIP)

GEORGE BUSH, PRESIDENT OF THE UNITED STATES: I believe it's possible -- not only possible, I believe it's going to happen -- that there will be a signed peace treaty by the time I leave office. That's what I believe.

(END VIDEO CLIP)

BLITZER: The odds are daunting. But Mr. Bush forcefully said Israel should end what he flatly called its occupation. He told the Palestinians to dismantle what he called a terrorist infrastructure. The president may return to the region several times over the next year to try to keep up the pressure and negotiate a deal.

Let's go to Jack Cafferty in New York.

He's got The Cafferty File -- Jack.

CAFFERTY: Wolf, "a superb talent" is how Democratic Senator John Kerry described Barack Obama in his endorsement of him earlier today. It's a huge endorsement for Obama. Kerry, of course, lost to President Bush in 2004.

Today, in Charleston, South Carolina, Kerry told a cheering crowd he thinks Barack Obama can help our country turn the page and get America moving by uniting and ending divisions.

The endorsement has to come as a bit of a blow to John Edwards, who was Kerry's running mate in 2004. But Edwards was gracious. He said he respects Kerry's decision. And it's probably safe to say that Hillary is not real thrilled with the Kerry announcement, either.

But the Obama campaign is ecstatic -- as well they should be. You see, the Kerry campaign in 2004 put together this huge data base of voters, their addresses, contributors -- three million names in all -- and that is priceless stuff for someone who is running for president.

Obama is expected to pick up a key endorsement from Senator Tim Johnson of South Dakota. He recently was endorsed by two major labor unions in Nevada, and, as well as Atlanta Mayor Shirley Franklin.

So the question this hour is as follows -- how important is John Kerry's endorsement for Barack Obama's presidential campaign?

Go to CNN.com/caffertyfile, where you can post a comment on my new blog.

You know, there's room for disagreement on that endorsement, since Kerry blew what many experts believe was a golden opportunity to beat President Bush in 2004. We'll see.

BLITZER: We'll see what our viewers think.

Jack, thanks very much.

Did I mention that I've got a little blog going on CNNPolitics.com?

CAFFERTY: You did, but I've forgotten the details. Fill me in.

BLITZER: I'm going to have the viewers go there. They can read it. They can check it out. You've got your blog, CNN.com/caffertyfile. CNNPolitics.com -- that's me.

CAFFERTY: My blog is bigger than yours.

(LAUGHTER)

BLITZER: OK, Jack.

Thanks very much.

An airliner hits very violent turbulence, terrifying passengers and tossing them around.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I fly a ton. And so you realize quickly that it was more than that. And the plane probably was on about, say, a 60 degree angle that way. Shoes, jackets, people screaming "bloody hell," "bloody murder," you know, on the plane.

(END VIDEO CLIP)

BLITZER: We're going to give you some more details about that frightening flight and the emergency landing.

Also, presidential candidate Ron Paul now about to respond to some racist rants that were published in newsletters many years ago bearing his name. My interview with Ron Paul. That's coming up live shortly.

And phone companies pull the plug on FBI wiretaps. It seems the bureau -- guess what -- forgot to pay its bill. Why some agents may be in some hot water.

Stay with us.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: The United States today formally protested to Iran over what it says was a hostile provocation that nearly led to a shootout between U.S. warships and Iranian vessels. But Iran today is putting out its own very, very different version of the incident.

Let's go to our Middle East correspondent, Aneesh Raman -- Aneesh.

ANEESH RAMAN, CNN MIDDLE EAST CORRESPONDENT: (AUDIO GAP) the battle has now moved to the airwaves.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: This is coalition warships.

RAMAN (voice-over): Iran is calling the U.S. version of what happened early Sunday in the Strait of Hormuz a blatant lie.

UNIDENTIFIED MALE: I am coming to you.

RAMAN: Disputing American officials who said five Iranian speedboats challenged coalition warships in waters and ultimately issued this ominous threat.

UNIDENTIFIED MALE: You will explode after a few minutes.

RAMAN: The situation got so serious, U.S. spokesmen said, that at least one coalition ship was only seconds away from opening fire when Iranian speedboats suddenly turned back -- averting a potential skirmish at sea.

But Iran is now taking the fight to the airwaves, claiming the U.S. video was made up of old footage with fake audio.

(BEGIN VIDEO CLIP, COURTESY PRESS TV)

UNIDENTIFIED MALE: The audio is fake.

(END VIDEO CLIP)

RAMAN: And on Thursday Iran released its own video of what happened.

UNIDENTIFIED MALE: Coalition warship 73, this is the Iranian navy patrol boat. How do you copy, over?

UNIDENTIFIED MALE: This is coalition warship 73. I read you loud and clear, over.

RAMAN: The clip lasts five-and-a-half minutes. But for most of the time, the Iranian speedboats are idle -- not moving -- leading U.S. officials to suggest something has been cut out. Not lost on anyone, though, is that with Iran and the U.S. at odds on so many levels and with both maintaining a military presence in the Persian Gulf, just one incident, analysts fear, could spark war.

If there was any doubt, this was President Bush on Wednesday.

GEORGE BUSH, PRESIDENT OF THE UNITED STATES: There will be serious consequences if they attack our ships, pure and simple. And my advice to them is don't do it.

(END VIDEO TAPE)

RAMAN: The leading theory about what triggered Sunday's incident, according to analysts, is that Iran was perhaps testing U.S. definitive tactics -- a test Iran officially denies, but one that, if true, almost forced the two countries into battle -- Wolf. BLITZER: Aneesh Raman reporting for us.

Thank you.

A day after six U.S. soldiers were killed by a booby-trapped, the U.S. military continues a major assault on what it calls al Qaeda safe havens in Iraq. That includes a massive air strike -- one of the biggest of the war.

Let's go right to our Pentagon correspondent, Barbara Starr.

She's watching this story for us.

What's the goal of this operation -- Barbara?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Wolf, defense officials here at the Pentagon say the goal is to take out Al Qaeda once and for all.

(BEGIN VIDEOTAPE)

STARR (voice-over): On the Southern outskirts of Baghdad, near the town of Arab Jabour, U.S. war planes dropped 40,000 bounds of bombs in just 10 minutes on insurgent targets.

UNIDENTIFIED MALE: Go! Go! Go! Go!

STARR: Nearby, soldiers from the 3rd Infantry Division were in a fierce firefight. It's part of a massive military offensive to clear out what the U.S. hopes are some of the last Al Qaeda strongholds.

Thousands of U.S. troops are involved, many in Diyala Province. It was exactly one year ago when President Bush announced the troop surge that sent 30,000 additional forces into Iraq.

BUSH: The new strategy I outlined tonight will change America's course in Iraq.

STARR: The surge was supposed to improve security and buy time for the Iraqi government to get its act together.

So why, a year later, are there still Al Qaeda strongholds -- especially deep in Northern Iraq and south of Baghdad?

ROBERT GATES, SECRETARY OF DEFENSE: General Petraeus anticipated this, in the sense of that they would move. And the key is to do -- in these provinces and where this offensive is underway -- what -- what he has accomplished elsewhere, and that is to clear and then hold.

STARR: But it's been tough going. In Diyala, six U.S. soldiers were killed and four wounded Wednesday when a booby-trapped house exploded. More heavy casualties are likely, but Gates is hoping this offensive will turn a corner against al Qaeda.

GATES: Frankly, after these places, there's not much place -- not much else -- not many places they can go. (END VIDEO TAPE)

STARR: Secretary Gates very hopeful there, but, also, Wolf, nobody here at the Pentagon is yet ready to declare light at the end of the tunnel -- Wolf.

BLITZER: Thanks very much, Barbara, for that report.

A Republican presidential candidate repudiating an old newsletter bearing his name. We're going to show you the articles about race that are now dogging Ron Paul's campaign. He's standing by to join us live to explain what happened.

Also, you won't believe the claim filed against the U.S. government by a victim of Hurricane Katrina. It dwarfs all the other claims combined.

Stay with us.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Stunning news coming out of a Justice Department audit. An FBI wiretap of a possible terrorist or spy is cut off by the phone company because the agency failed to pay its bill on time.

Let's go to our justice correspondent, Kelly Arena.

She's watching this story for us -- Kelli, how could this happen?

KELLI ARENA, CNN JUSTICE CORRESPONDENT: Wolf, you know, it's really hard to believe. But as you said, the inspector general report shows that telephone companies literally cut off wiretaps because the Bureau did not pay its bills. So undercover surveillance of suspected criminals was stopped in the middle of investigations.

Now, the report says that at least one of those cases was a FISA case. And, as you know, Wolf, those are subpoenas are reserved for terrorists and spy investigations.

BLITZER: So walk us through the process.

What happened?

ARENA: Well, the audit blames the FBI's lax oversight of money for undercover investigations. One FBI office alone owed $66,000 in phone bills.

Now, the probe was actually started when an FBI employee stole $25,000 in undercover funds. Now that incident was also largely blamed on this poor oversight.

Now, much of this report, Wolf, was not publicly released, so I only read the unclassified summary. They were no details on how long those wiretaps were cut off or how many investigations were affected. We did pose those questions to FBI. It would not provide specifics, but it does say that it was a minimal number of cases affected -- none of them, it says, adversely.

It also says that there's an effort underway to better control financial programs and that it's working to make the changes that the report suggests.

BLITZER: All right.

Pretty shocking stuff, Kelli.

ARENA: Unbelievable.

BLITZER: Yes.

Thanks very much for that.

Kelli Arena.

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

CAROL COSTELLO, CNN CORRESPONDENT: A couple of things, Wolf.

A half cut point in interest rates now looking more likely when the Federal Reserve meets at the end of the month. Chairman Ben Bernanke says the Fed is standing by to take what he calls "substantive action" to keep the economy out of recession. Wall Street was happy to hear the news. The Dow gained more than 117 points today.

The victims of Hurricane Katrina filing an unprecedented claim against the government seeking -- get this -- $3 quadrillion. That's quadrillion, with a Q. The amount is more than three times the entire U.S. gross domestic national product. The Army Corps of Engineers says it received almost half a million Katrina-related claims so far, including more than 200 claims seeking at least a billion dollars each for the failure of levees and flood walls.

The air traffic controllers union is declaring a staffing emergency in some of the world's busiest air space -- Atlanta, Chicago, New York and Southern California. The union says there aren't enough experienced personnel to safely handle the volume of traffic in those regions. Part of the reason -- veteran controllers are retiring at a record pace -- much faster than projected.

International track and field officials are posting a highly anticipated announcement. It's about whether a Paralympics star can compete in the summer's Olympic Games using his high tech prosthetic legs. There's concern the shock absorbing carbon fiber limbs may give Oscar Pistorius an unfair advantage. An announcement was expected today, but officials say they want to give Pistorius more time to look over their report.

That's a look at the headlines right now -- Wolf.

BLITZER: Carol, thanks very much. The newsletter bears his name, but Ron Paul says he didn't write the racist articles that went out more than a decade ago. Ron Paul, the Republican presidential candidate, he's standing by live to explain what's going on.

Plus, we're going to show you what the New York City mayor, Michael Bloomberg, is now doing that's fuelling new speculation about a possible Independent run for the White House.

Plus, plane passengers hit the ceiling -- a rocky ride that landed some people in the hospital.

Stay with us.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

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

Happening now, U.S. senators pushing to allow people to carry guns into national parks. Forty-seven lawmakers are asking the Interior Department to lift the Reagan-era law requiring firearms to be inaccessible.

we're watching this story.

Also, a suicide bomber strikes outside a courthouse in Lahore, Pakistan. At least 23 people are reported dead -- most of them police officers. Dozens of people are wounded.

And investigators in North Carolina are preparing to question the roommate of a missing pregnant Marine, 20-year-old Lance Corporal Maria Lauterbach hasn't been seen in almost a month. Her roommate, a male Marine sergeant described as a person of interest, is returning from California to be interviewed.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

A flight so rough passengers actually hit the ceiling. A midair crisis forced an Air Canada jet to make an emergency landing so that the injured could be take to the hospital.

Carol Costello is following the story for us -- Carol, walk us through what happened.

COSTELLO: This is so scary, Wolf.

You know, at first, it felt like violent turbulence -- you know, when your plane is flying along at 30,000 feet and all of a sudden it feels like you hit this humongous pothole in the sky?

But then passengers say the plane dropped altitude two more times and then the plane tilted to the right and to the left. Now, those who were not wearing seat belts hit the ceiling -- and I mean that literally. They hit the ceiling. They hit the floor. They hit the wall. It was such a horrific drop, half a dozen people hurt their heads and their spines and their fingers. You can see them there on stretchers being taken away of the Air Bus 319 made an emergency landing in Calgary, Alberta.

Listen to the passengers who were on board that plane.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: The lady in front of me bounced a couple of times, hit the floor and banged her hand up pretty bad.

QUESTION: Is she (INAUDIBLE)?

UNIDENTIFIED MALE: No. No. She woke up. But she was definitely in shock, because she was showing off her dislocated finger to everybody.

UNIDENTIFIED MALE: I'm pretty sure I was asleep when it started. And then it just kind of shook me awake. And I put my feet against the seat in front of me and kind of held myself that way. And I just saw all these people that didn't have seat belts on going -- flying out of their chair and right back down.

UNIDENTIFIED FEMALE: At first, it just felt like turbulence. And then it felt a lot -- obviously, you realized suddenly that it was a lot more than that. I fly a ton and so you realized quickly that it was more than that. And the plane probably was on, about, I would say, a 60 degree angle that way. Shoes, jackets, people screaming "bloody hell," "bloody murder," you know, on the plane. And the service cart like hit the roof. And oxygen masks dropped out. And it kind of felt like you've been rear-ended in a car accident or like a mini earthquake, is kind of what it felt like to your body or your physical self.

(END VIDEO CLIP)

COSTELLO: Ninety passengers and crew were aboard that plane. They were on their way to Toronto from British Colombia.

Now, I talked with a passenger on board that Air Canada flight. She said there was no warning of turbulence from the pilot. Food service had actually begun. And it took a few minutes for the pilot to inform the passengers after it was all over that the plane's computer had been knocked out and he was now flying the plane manually and that everything was going to be OK. Half an hour later, Wolf, that plane landed. It made an emergency landing in Alberta.

BLITZER: Well, thank God everybody turned out to be OK. But what a scary, scary flight. Thanks very much, Carol, for that story.

New controversy over old newsletters, that is, published in the name of Republican presidential candidate, Ron Paul. They contain some shocking statements about blacks, gays and other minorities. Ron Paul adamantly, though, denying writing those statements. Ron Paul is standing by to join us live in just a moment. But first let's get some background. Brian Todd is taking a closer look at this story. Brian?

(BEGIN VIDEOTAPE)

BRIAN TODD, CNN CORRESPONDENT (voice-over): He's not considered a presidential front-runner. But Ron Paul has raised tens of millions of dollars from a devoted base. Many of them young people who love his libertarian straight talk.

REP. RON PAUL, (R) PRESIDENTIAL CANDIDATE: The role of course is to return the country to sanity.

TODD: But how is this for straight talk? June 1992, right after the L.A. riots, in a copy obtained by CNN of the "Ron Paul Political Report," one of several news letters published in his name during the 1980s and '90s. Quote, "Order was only restored in L.A. when it came time for the blacks to pick up their welfare checks." Another excerpt, "the criminals who terrorism our cities in riots and on every non-riot day are not exclusively young black males, but they largely are. As children they are trained to hate whites and believe that white oppression is responsible for all black ills. To steal as much money from the white enemy as possible."

None of the articles we found say who wrote them.

(on camera): Ron Paul spokesman says those words published between Paul's two stints as a U.S. congressman from Texas were not written by Paul, and he finds them abhorrent.

(voice-over): Not good enough for one political veteran.

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: These stories may be very old in Ron Paul's life but they're very new to the American public and they deserve to be totally ventilated. I must say, I don't think it's an excuse in politics and have something go out under your name and say, oh, by the way, I didn't write that.

TODD: In some excerpts the reader may be led to believe the words are Ron Paul's. In the "Ron Paul Political Report" in October of 1992 the writer describes car-jacking as "the hip-hop thing to do on the urban youth who play unsuspecting whites like pianos." Writes about advice from others on how to avoid car-jacking. Then, "I frankly don't know what to make of such advice, but even in my little town of Lake Jackson, Texas, I've urged everyone in my family to know how to use a gun in self-defense. For the animals are coming."

Paul's spokesman says Paul has lived in Lake Jackson for years but says Paul never wrote that. Is saddened that someone took advantage of him, and points to Paul's statement saying, "I have publicly taken moral responsibility for not paying closer attention to what went out under my name."

We spoke to the editor of "Reason," a libertarian magazine which shares some of Paul's beliefs on big government. He says he's never heard Paul speak like that. But ... MATT WELCH, "REASON MAGAZINE": But, what he has not done and what I think some people are looking for him to do is to say OK, who wrote what? There's 20 years, give or take, worth of newsletters there.

TODD: Newsletters that rant against Martin Luther King, the Israeli lobby, gays and AIDS victims. Many of them were reported this week by the "New Republic" magazine. There's one news addressing American militias, ranting against the federal government. Saying, "If they mean to have a war, let it begin here." That's from January 1995, just as Paul was getting set to take office in his second stint in Congress.

Paul's spokesman says the candidate doesn't know who wrote them. When we asked if Mr. Paul would try to find out, the spokesman said, no, what's the point? This is 15 years old. It's time to move on." Brian Todd, CNN, Washington.

(END VIDEOTAPE)

BLITZER: Candidate Ron Paul is joining us now live from the campaign trail in Myrtle Beach, South Carolina. Congressman, thanks very much for coming in.

PAUL: Thank you.

BLITZER: All right. Let's talk about it. How could this happen? Because I have gone through some of these old Ron Paul newsletters. It has your name bannered on the top. And some of these comments as we've just heard from Brian's piece are pretty shocking.

PAUL: It is. And of course it's been rehashed for a long time and it's coming up now for political reasons. But everybody in my district knows I didn't write them. And I don't speak like that. Nobody has ever heard me say anything like that. I've been reelected time and time again. So everybody knows I don't participate in that type of language.

But the point is when you bring the question up you're really saying, you're a racist or are you a racist? And the answer is no. I'm not a racist. As a matter of fact Rosa Parks is one of my heroes. Martin Luther King is a hero. Because they practiced the libertarian principle of civil disobedience, nonviolence.

Libertarians are incapable of being a racist because racism is a collectivist idea. You see people in group. A civil libertarian like myself see everybody as an important individual. It's not the color of their skin that is important. As Martin Luther King said. What is important is the character of the people. What's really interesting, though, and this might be behind it because as a Republican candidate I'm getting the most support from black voters and now that has to be undermined.

And I do this because I attack two wars that blacks are suffering from. One, the war overseas. And all wars minorities suffer the most. So they join me in this position I have against the war in Iraq. And what about the war on drugs? What other candidates will stand up and say I will pardon all blacks, all whites, everybody who were convicted for non-violent drug acts and drug crimes.

And this is where the real discrimination is. Let me finish this. Because I've got to get my message back because you put the other message out. I got to get my message back. Now, if you want to look for discrimination, it's the judicial system. Fourteen percent of the inner city blacks commit drug crime. Sixty seven percent of blacks are in prison. That's discrimination. That's the judicial code that I'm attacking. That's not racism.

What I defend the principle of libertarianism where we never see people who belong to a group, and every individual is defended and protected because they're important as an individual, not because of the color of their skin, but because of their character. So I am the antiracist because I am the only candidate, Republican or Democrat who were protect the minority against these vicious drug laws.

BLITZER: Congressman, there's a lot of material there. Let me just try figure out, how did this stuff get in these Ron Paul newsletters? Who wrote it?

PAUL: I have no idea. Have you ever heard a publisher of a magazine not knowing every single thing? The editor is responsible for the daily activities. People came and gone. And there were people who were hired. I don't know any of their names. I absolutely honestly do not know who wrote those things. But I do know they was a transition, there were changes around and, to me, it's been rehashed. This is the politics of it all. If it were important enough, why didn't the people in my district who have heard this for these 10 years or so that this came up and people believe me. Why don't you believe me and just say look, it's in there. It's bad. I recognize that. I had a moral responsibility.

But that doesn't mean that you can indirectly charge me as being a racist. That's what is being done, and yet, I am the most anti- racist because I don't see people in collective groups. And I practice. Right now, even before this thing broke, guess when our next fundraising day, our next super day, we raised four million one day, six on the next, the next one is on Martin Luther King holiday. I mean, this is it. Martin Luther King, Rosa Parks, Gandhi, they are the heroes in practice of civil disobedience to try to get the burden of government off our backs.

And that's why I am the one that protects the individual blacks who are in the city who are so unfairly being treated and thrown in prison. That's the message that needs to be heard and I appreciate somebody help and bring that out rather than nitpicking over something done many years ago which I did not write.

BLITZER: Did you used to read these newsletters? Congressman?

PAUL: Not back then. There may have been at times that I would. At times. I was in a medical practice. I traveled a lot. I was doing speeches around the country. Very frequently I never did see these. A lot of the things you just read, I wouldn't have recognized them.

And the point is it's not part of my character. The point also is when people get charged they usually have a clip. They have a clip of somebody saying something. A slip of the tongue or something. And then they're blasted to kingdom come. Nobody has ever heard me say that. They know those are not my thoughts. Therefore the people have not rejected me in Texas.

In a way this is a bit of a witch hunt. I know there is reason, I don't say you are unjustified in asking the question but you also have to think of the motivation behind this. Maybe this is part of the anti Ron Paul deal. I got excluded from the debates the other night. Maybe this is knock down on Ron Paul because he's gaining grounds with the blacks. I'm getting more votes right now and more support from the blacks because they understand what I'm talking about and they trust me.

BLITZER: I've got to tell you, congressman, you and I, we have talked a lot over these past several months. And when I saw these newsletters, I didn't know anything about them until I saw that article in "The New Republic," I was pretty shocked. Certainly didn't sound like the Ron Paul that I've come to know and our viewers have come to know all this time.

I just want to be clear because this is a chance for you to respond. Because this is a chance for you to respond. You repudiate all of these racist comments, all of the slurs, that are contained even though it contains the name Ron Paul in these news letters.

PAUL: Well, the most important thing is anything I've ever said in my life has repudiated that for years and years. So I do repudiate everything that is written along those lines and I heard tonight, and like I say, I've never read that before. If you asked me to dig up a copy of that I wouldn't have the vaguest idea. That's how unimportant it was to me.

But obviously it is important. It needs to be ironed out. In many ways, Wolf, I should thank you for bringing it up so I can clarify this and make sure everybody knew where I stand on this issue. Because it's obviously wrong. People who know me, nobody is going to believe this. Absolutely nobody just like you said. You've known me for a good many years and a good many interviews and that's just not my language.

That's not my life. I honor and respect the civil rights movement and the civil disobedience. And right now I really think that people have to think about the real discrimination in this country today has to do with the drug laws. What other candidate would take it upon himself to challenge this whole system of the judiciary, which is so unfair to the minorities?

Talk about that. That's what I want to people to hear. Out of fairness, that message needs to get out.

BLITZER: Ron Paul joining us from South Carolina. Thanks very much. You want to be president of the United States, you're going to have to expect a lot of scrutiny. All the candidates go through it. You're going through it right now yourself.

PAUL: Understood.

BLITZER: Thanks very much for joining us.

PAUL: OK.

BLITZER: He's worked closely with Clinton, Obama and Edwards, so what does the Senate Majority Leader Harry Reid make of the Democratic race for the White House? I'll ask him one-on-one. He is standing by live.

And how important is John Kerry's endorsement of Barack Obama for president? It's our question this hour. Jack Cafferty has your e- mails. Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Barack Obama continues to bounce back from his loss to Hillary Clinton in New Hampshire. His latest boost, an endorsement from 2004 Democratic presidential nominee, Senator John Kerry. Joining us now, another top Democrat. The senator majority leader, Harry Reid. His home state of Nevada hosting an important contest among the Democrats in the coming days. Thanks very much, Mr. Leader, for coming in.

SEN. HARRY REID, (D) NV: My pleasure.

BLITZER: Let's talk a little bit about John Kerry's endorsement of Barack Obama. What do you think about that?

REID: Well, over the last several months we have had a number of my 51 Democratic senators endorse either Clinton or Obama. And, I guess they're keeping track of who is doing which, but they both have some endorsements. And it indicates to me how fortunate we are to have this caucus in Nevada. This is a close election, as indicated by those two great senators vying for attention as to endorsements.

So I talked to John Kerry several times during the break. And I know that Senator Kerry, this is not easy for him. Any time you work with somebody as we do so closely, it's very difficult. But they've both had a lot of endorsements from individual senators.

BLITZER: You haven't endorsed anybody. And you're not planning on endorsing anyone, right?

REID: This has been really a trying time for me in the sense that I had four Democratic senators running for president. Now of course it'd down to two but of course I served in the Senate with John Edwards. I haven't heard yet from Bill Richardson but I understand he is dropping out of the race. He and I came to Washington together.

So this has been all very, very interesting to me, but I've stayed out of it. I'm doing everything I can to be neutral.

BLITZER: And don't forget, John Edwards, a former U.S. senator, he is going to be in Nevada as well.

REID: Indicated I served with him. I said that.

BLITZER: Yeah, and Governor Richardson has dropped out. Here's what Karl Rove wrote among other things wrote in the "Wall Street Journal" today. He said "Mr. Obama has failed to rise to leadership on a single major issue in the Senate." You've worked with him over the past few years since he has become a U.S. senator. Is Karl Rove right?

REID: No, he's absolutely wrong. I'm neutral in this race, but the most sweeping ethics and lobbying reform in the history in our country was the first bill we took up and I assigned Obama to be the lead person on that. So Karl Rove, as usual, is wrong.

BLITZER: Your son, Rory, has endorsed Hillary Clinton. What if anything should we read from that?

REID: I'm very proud of my son. I have five children. My son is more than 40 years old. I can't tell him what to do. He's involved in this. He's chairman of the Clarke County Commission. He's in a major law firm here. He does what he thinks is right. I'm so happy. All five of my children love politics. So it would be totally wrong for me to tell him he couldn't get involved in an election. And he knows above all else I've stayed out of this. He doesn't get advice from me.

BLITZER: You know these candidates, the Democratic candidates. Very quickly, I'm going to mention all three names. Tell us something we don't know about them. First Barack Obama.

REID: Well, I think if I could just jump a little bit. I think one people don't know about Obama and Clinton is they both, great writers. They are very good. She got a Grammy. He was on "The New York Times" best sellers list for the books they've done. John Edwards, the thing I would say about him is the devotion that he has to his children. A lot of people center on Elizabeth. I had correspondence going with Emma Claire, his little girl. I used to send her presents. He's really focused on the little children. I'm confident the reason is because he lost that boy in an accident.

But most people see him with Elizabeth all the time, but it's his children. So those three senators, that's what I would say about them.

BLITZER: And you like all three of them? You've got a big race coming up in ...

REID: Wolf, I don't like them. I admire, respect, and I hope this doesn't sound too maudlin, but I love them. They are great individuals and any one of them have been wonderful senators. They would be tremendously good in the white house..

BLITZER: Senator leader Harry Reid, good luck with your caucus out there. The caucuses in Nevada. It's a new operation for you, but we'll be watching it. It could be very, very exciting. Appreciate you joining us.

REID: You bet, Wolf.

BLITZER: John Kerry chose John Edwards to be his running mate back in 2004. But this year Kerry is endorsing somebody else. We have more details on this part of the story. How important is the support for Barack Obama? Jack Cafferty has asked you that question. Your e-mail is coming up.

Plus his lips say no, but his actions say maybe. New signs that New York City Mayor Michael Bloomberg may run for president. Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Check back with Jack Cafferty. He has the "Cafferty File."

CAFFERTY: Hi, Wolf. The question this hour is how important is John Kerry's endorsement for Barack Obama's campaign.

Patricia says, "Not too important. If I'm John Edwards or Hillary Clinton, I wouldn't want the endorsement wrapped around my neck. John Kerry lost an election he should have won in a landslide. If I am any Democratic candidate, I don't want a loser's brand name stamped on my forehead."

Ryan writes, "This is almost as significant as Pat Robertson endorsing Rudy in that it's completely meaningless in the eyes of most voters. They view Kerry as a horrible failure and product of the establishment that could not do what most people thought any idiot could do. Beat Bush in 2004."

Carol says, "Kerry's endorsement gives balance to the Obama campaign. John Kerry lends his name to the long list of established politicians who support Obama's bid for the presidency."

Richard in Louisiana, "Could be the kiss of death. We all remember how Kerry failed in 2004. Nobody loves a loser. He never thought for his name. He caved in. Some warrior."

Cathy in West Fargo, North Dakota, "His endorsement is not important to me, neither is Oprah's or Barbara's. I'm totally capable of choosing a candidate on my own. I do my research and I go from there."

Brian in Chicago. "Barack Obama has made me an extremely proud American in recent weeks. Obviously, John Kerry is very proud of him too. His endorsement is huge for the average American voter who sees it as another validation of Obama's candidacy."

And Phil writes from Colorado, "Kerry will help Obama if he does not campaign for him. He endorsed Obama, got a nice speech. Now Kerry needs to go back to the Senate and not let anyone take a picture of him windsurfing." Wolf?

BLITZER: Phil, got a good sense of humor there. Thanks very much, Jack.

Another move by the New York City major is creating new buzz about a possible independent run for the White House. We're going to show you what he's doing. That's coming up next right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: New York's billionaire Mayor Michael Bloomberg has consistently denied he's a presidential candidate. But he is conducting right now some nation-wide polling to test whether he should jump into the presidential race. Let's go to CNN's Jim Acosta who is watching this story for us in New York. Independent voters, they could have impact on what this mayor decides, Jim.

JIM ACOSTA, CNN CORRESPONDENT: Well, Wolf, a source inside the independent movement says voters who don't consider themselves Republicans or Democrats are starting to feel ignored by Bloomberg.

(BEGIN VIDEOTAPE)

ACOSTA (voice-over): As Michael Bloomberg talked the talk at this week's bipartisan forum in Oklahoma ...

MAYOR MICHAEL BLOOMBERG, NEW YORK CITY: Our government is dysfunctional.

ACOSTA: Leading independent political organizers across the country wondered whether the mayor of New York would ever walk the walk. So says the woman who ran Bloomberg's campaign for the independent vote in his last two mayoral victories, Jackie Salit.

JACKIE SALIT, "THE NEO-INDEPENDENT": He's working on the presumption, it would seem, that independent voters would automatically support him or support an independent presidential candidacy if that were to come to pass.

ACOSTA: And that's not the case?

SALIT: I don't know that that's necessarily the case.

ACOSTA: While Bloomberg is currently polling voters to assess his chances, there is few signs he's organizing a national campaign. Salit says the well over 100 independent organizations across the country she's in contact with have yet to hear from Bloomberg. Those voters won't stay on the sidelines for long.

SALIT: Is a Barack Obama, is a John Edwards going to reach out and say, hey, we're about build a new coalition that's going to go up against the establishment? That's a big question on the table. I think, frankly, that Mike is a little bit behind the curve right now.

ACOSTA: The train is leaving the station.

SALIT: The train is leaving the station. ACOSTA: That's not stopping Bloomberg supporters who are organizing initiatives outside of the Big Apple, in places like Virginia.

CAREY CAMPBELL, BLOOMBERG SUPPORTER: We're doing everything we can to make sure that Michael Bloomberg can get on the ballot and can and does run for president. I believe heart and soul that Michael Bloomberg will run for president.

(END VIDEOTAPE)

ACOSTA (on camera): Bloomberg's aides are still staying quiet on the subject of a run but the mayor still has plenty of time to get on the ballot in all 50 states, the first deadline comes up in May in Texas, Wolf.

BLITZER: And there is no doubt that this polling and all of the other research he's doing sort of reminiscent of how a CEO of a corporation would undertake a new product, if you will. Isn't that right, Jim?

ACOSTA: That's right but a lot of big name independents around the country are saying, that's fine, do all the polling that you want but you have to get that ground campaign in place but at this point a lot of independents say they're not seeing that yet, Wolf.

BLITZER: Thanks very much, Jim Acosta reporting for us from New York. We'll continue to watch this story closely.

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