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Detroit Mayor Pleads Not Guilty; Hillary Clinton Holds Press Conference; Nancy Reagan Endorses John McCain

Aired March 25, 2008 - 15:00   ET

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

BETTY NGUYEN, CNN ANCHOR: All right. So, what he said may be used against him, not just Kwame Kilpatrick's sworn testimony, but all those steamy text messages with his former chief of staff. Now a big- city mayor could face major prison time.
DON LEMON, CNN ANCHOR: And words can't kill, but this man's clear-eyed confession to a young woman's kidnapping and murder will make your blood just run cold. We have got the tapes for you.

Hello, everyone. I'm Don Lemon, live at the CNN World Headquarters here in Atlanta.

NGUYEN: Hi, everybody. I'm Betty Nguyen, in today for Kyra Phillips who is on assignment. And you are in the CNN NEWSROOM.

So, let's get you the latest on what's happening right now and take you to the newsroom. CNN's T.J. Holmes has been working on a developing story.

You have been watching this accident for some time now, T.J.

T.J. HOLMES, CNN CORRESPONDENT: Yes, we have been watching it a little over an hour since it happened now, Betty. And we can report now that at least one person has been killed in this crane accident in Miami.

You are looking at a live picture where the work continues to secure a crane that has collapsed on top of a building at a construction site. The construction site was that for a high-rise condominium building. The crane, part of it broke off, fell on to a home, an unoccupied home, that the contractor was actually using as an office there that was still on the site.

We got word that at least five people have been injured. We understand that two were critically injured, but now one person confirmed dead to us by the Miami Fire and Rescue.

Now, the search continues to go through the rubble here. But they're having a difficult time and that's going slowly, because, first, according to officials, they wanted to secure the crane. You can see that crane to the right of your screen there. They were nervous that this crane, parts of it still more could collapse. So, that would obviously put in danger the people who were down there searching to possibly save others who might have been trapped in that rubble. But, according to officials, they thought that possibly at least one person could be trapped under that rubble. So, they are trying to find at least one other, but, at the same time, want to make sure those rescuers are safe and that crane is secure.

Now, we were able to find out that the place here, according to our Chad Myers, who used some of the Google Map technology and also other of his topographical technology over there to identify what this building is. It's a high-rise condominium building, Betty, with some 360 units supposed to open this year, ranging in price from about $600,000 to $2 million homes.

So, that certainly is going to be delayed. We don't know what is going to happen there. But that's what the site was. Still more information coming in to us, Betty, but one dead, several others injured in this crane accident, which of course people will recall just a week ago or so, we were talking about that accident up in New York where seven people were killed in a crane accident.

NGUYEN: Absolutely. All right, T.J., we do appreciate it.

HOLMES: Sure thing, Betty.

LEMON: A not guilty plea from the mayor of Detroit in court this afternoon on multiple felony charges. Kwame Kilpatrick and his former top aide are now gearing up for what could be a long and grueling legal battle. As a matter of fact, our legal experts say it will be a long and grueling battle.

Our Susan Roesgen at the courthouse, and she was there for both those arraignments -- Susan.

SUSAN ROESGEN, CNN GULF COAST CORRESPONDENT: Yes, it's going to be a long and grueling time for the people of this city to watch it all unfold. After just a short five minutes in the courtroom, that arraignment for the mayor lasted no more than five minutes, but it was an unprecedented amount of time, an unprecedented event in this city's history.

The mayor is accused of this affair with his chief of staff and lying about it under oath and then costing this city millions of dollars to try to cover it up. People in Detroit were watching on television at this live feed from the courtroom when the charges against the mayor were read loud and clear.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Misconduct in office, penalty five years and/or $10,000. Count five, perjury, court proceeding, penalty 15 years. Count six, perjury, court proceeding, penalty 15 years. Count nine, perjury, other than court proceeding, penalty 15 years. Count 10, perjury, other than court proceeding, penalty 15 years. Defendant is present.

(END VIDEO CLIP)

ROESGEN: And when you add it all up, the mayor is facing, if he's convicted on all of those charges, 90 years in prison -- Don.

LEMON: All right. Susan Roesgen there for us in Detroit -- Susan, thank you so much for your reporting.

And later on, we will hear from one of Detroit's top radio voices on what all this means for the city of Detroit.

NGUYEN: John McCain is in Southern California talking to business leaders about issue number one, that being, of course, the economy.

And he admits it is not his best subject. Earlier today, he addressed the mortgage crisis. And McCain generally opposes taxpayer bailouts of lenders or borrowers. He says he won't play politics with the issue.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: Any assistance must be temporary and must not reward people who were irresponsible, at the expense of those who weren't. I will consider any and all proposals based on their costs and benefits. In this crisis, as in all I may face in the future, I will not allow dogma to override common sense.

(END VIDEO CLIP)

NGUYEN: Well, McCain spent last week meeting with leaders in other countries, emphasizing what he considers to be his strength, foreign relations.

LEMON: All right, everyone is talking the economy today. John McCain did earlier. Hillary Clinton is now. She gave a speech earlier and now she is taking questions, Greensburg, Pennsylvania.

Let's listen in.

(JOINED IN PROGRESS)

SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: ... which is much more in crisis and in Deserves closer attention.

QUESTION: Now that Senator Obama has released his tax returns, will you release yours prior to April 15 and will you release the entire documents along a schedule and itinerary (ph).

CLINTON: Well, I anticipate being able to release them shortly, I hope, within the next week. And I am pleased that Senator Obama has released his tax returns. I think that's a good first step.

Now he should release his records from being in the state senate and any other information that the public and press need to know from his prior experience, because I think that, you know, we should continue to make available the information that we have. And I will be releasing my tax returns.

QUESTION: Should Barack Obama have left his church after Jeremiah Wright made the comments that he did?

CLINTON: Well, I answered a question in an ed board today that was very specific about what I would have done. And I'm just speaking for myself. And I was answering a question that was posed to me.

But I think, given all we have heard and seen, he would not have been my pastor. I gave a speech at Rutgers about a year ago that was triggered by the Don Imus comments. And I said that it was time for standing up for what is right, for saying, enough is enough, for urging that we turn a culture of degradation into a culture of empowerment, for saying that, while we of course must protect our right to freedom of expression, it should not be used as a license or an excuse to demean and humiliate our fellow citizens.

Senator Obama spoke eloquently at that time as well. You know, we don't have a choice when it comes to our relatives. We have a choice when it comes to our pastors and the churches we attend. Everyone will have to decide these matters for themselves. They are obviously very personal matters. But I was asked what I would do if he were my pastor. And I said I think the choice would be clear for me.

QUESTION: (INAUDIBLE) Senator Obama's explanation about his relationship with his pastor and speech then?

CLINTON: I was asked what I would do.

QUESTION: (INAUDIBLE)

CLINTON: Well, that's a question that goes to him. I was asked what I would do. And I answered what I would do.

QUESTION: Now that you are talking about this a little more publicly than you have, does this mean this is on the table when you talk to superdelegates. Is it on the table in the Democratic primary?

CLINTON: I was asked what I would do. And I answered the question.

QUESTION: I'm with the student newspaper. And we had a mock election here. And Obama took it. Why do you think that your numbers are not as strong with young people. And why do you think young people should vote for you?

CLINTON: Well, I think they're getting better. You know, I was very pleased at the reception that I have gotten here in Pennsylvania. And, you know, I did very well with young people in Ohio, Massachusetts, California.

I think, in the course of this campaign, over the next month, we will be reaching out to young people.

And this is an exciting election. It's wonderful that more young people are getting involved. I understand that there was an increase in registration for young people in Pennsylvania. So I intend to do everything I can to win as many votes as possible. But I think I have put forth very specific plans as to what I would do as president to deal with a lot of the problems that young people talk to me about, whether Social Security will be there, whether they will be able to afford health care when they're no longer on their parents' policy, assuming that their parents have health insurance, how they will afford college, what's going to happen in Iraq.

So, I have been very specific and I will continue to do so because I don't think that this should be just about the next election; I think it should be about the next generation.

QUESTION: You misspoke regarding your trip to Bosnia, presumably about the sniper fire and running into the cars. After looking at the CBS video, that didn't -- exactly wasn't what happened. But on February 29, when we were in Waco, you gave a similar account saying that there was sniper fire and that you were running into cars.

Did you misspeak again, and what exactly -- how are Americans supposed to, sort of, take what happened here?

CLINTON: You know, I made a mistake in describing it. I have said many times, I have talked about this many times that we were, you know, very much told by the Secret Service and the military that we were going into a war zone and that we had to be conscious of that. I was the first first lady taken into a war zone since Eleanor Roosevelt.

And, you know, I think that the military and the Secret Service did a terrific job. But we certainly did take precautions. There is no doubt about that, and I remember that very clearly.

But I did make a mistake in talking about it the last time and recently. But, look, this is really about what policy experience we have and who's ready to be commander in chief. And I'm happy to put my experience up against Senator Obama's any day.

QUESTION: The people of Pennsylvania really support Ed Rendell and a lot of people are wondering what you think of him and if there's a possibility this he may be one of your choices for a running-mate, if you would secure the nomination.

CLINTON: Well, it would be premature for me to talk about something like that but I am a big fan of Ed Rendell. I have been an admirer of his work when he was mayor of Philadelphia, now as governor. He has been visionary, effective, strong, provided the kind of leadership that Pennsylvania clearly has responded to very positively.

And he's been ahead on a lot of the issues that are important from home foreclosures to energy. And I just think that he is an exceptional leader and I'm proud to have him on my team and leading my campaign in Pennsylvania.

QUESTION: Republicans now saying that it's a pattern of exaggeration on Bosnia with the three events that they sent out with the same kind of story. How do you respond to that claim, that this is sort of a pattern that's developed?

CLINTON: Well, I just disagree with that. You know, look, I made a mistake. And, you know, I had a different memory. And, you know, my staff and others have, you know, all kind of come together trying to sort out. So I made a mistake. That happens. It proves I'm human, which, you know, for some people, is a revelation.

(LAUGHTER)

QUESTION: Senator, the ed board meeting this morning was with Richard Mellon Scaife's newspaper. I'm curious what it was like to be inside the right-wing conspiracy?

(LAUGHTER)

CLINTON: It was actually very pleasant. We had a wide-ranging discussion about a lot of domestic and foreign policy issues. And, you know, I said in the beginning when I arrived that it was obviously, somewhat counter intuitive for me to be there but it was a good discussion.

QUESTION: You know, there are some in Washington who are saying the race is over. And some in the media are saying the race is over. And you made to say that you're going on.

Are you receiving pressure to get out of the race or are you feeling --

CLINTON: No, but I hear it in the atmosphere. But the most common thing that people say to me, it happened here, it happened last night, it happens everywhere now, is, "Don't give up, keep going. We're with you." And I feel really good about that because that's what I intend to do.

QUESTION: Senator, can you talk about Tibet at all? Are you concerned about what's going on there?

CLINTON: I am.

QUESTION: And specifically, should the U.S. consider not going to China for the Olympics as a result of this?

CLINTON: Look, I think that what's happening in Tibet is deeply troubling. And this is a pattern of the Chinese government with respect to their treatment of Tibet. I actually raised that issue with Chinese leadership going back a number of years.

I don't think we should wait until the Olympics to make sure that our views are known. And I think we should be speaking out through our administration now in a much more forceful way and, you know, supporting people in Tibet who are trying to preserve their culture and their religion from tremendous pressure by the Chinese.

QUESTION: (OFF-MIC)

CLINTON: Let's wait on that. I don't have an opinion about that.

QUESTION: (OFF-MIC) home foreclosures and said that -- I don't know if you have seen the quote, but he said it is not the duty of the government to bail out and reward those who act irresponsibly, whether they be big banks or small borrowers. He basically was saying we should wait until the government steps in.

We certainly heard your remarks yesterday, but what do you think about Senator McCain's?

CLINTON: Well, it sounds remarkably like Herbert Hoover. And I don't think that's a good economic policy. You know, we have a framework of regulation. It needs to be updated and modernized.

The government has a number of tools at its disposal that are well-suited for just this situation. And I think that inaction has contributed to the problems we face today. And I believe further inaction would exacerbate those problems.

So I laid out what I would do, and I don't think it's an adequate response to say the government shouldn't be helping either banks or people. Because I think that would be a downward spiral that would cause tremendous economic pain and loss in our country. And I don't see why we should wait by for that to happen.

QUESTION: Your campaign and your -- you and your campaign have been talking about Florida and Michigan, saying that Obama wants to disenfranchise voters there by not backing re-votes.

If this ends up going to the convention and the superdelegates decide, how is that not disenfranchising voters?

CLINTON: Well, look, I think that what we have to wait and see is what happens in the next three months. And there's been a lot of talk about what-if, what-if, what-if. Let's wait until we get some votes.

People are going to vote, over the next months. Millions of people are going to vote. And we should wait and see the outcome of those votes.

QUESTION: (OFF-MIC)

CLINTON: No, no, I didn't say that.

QUESTION: (OFF-MIC)

CLINTON: I was joking. I mean, you know, gosh, lighten up, guys. I mean, obviously, come on. I say millions of words every week, and there's a lot more, you know, room for error when you're talking as much as I'm talking, but, no.

QUESTION: For the government to buy mortgages or even guarantee them, that's going to cost money. How do you do that and still be fiscally responsible, without, you know, increasing the deficit? CLINTON: Well, there are two things about that. One is, you know, the fund that I have proposed would be part of the stimulus package. Because I think we need a second stimulus, because we didn't do anything about housing, despite, you know, my strong urging that we do.

And then it's important to realize that the plan that Barney Frank and Chris Dodd have talked about could very well be self- financing over time, so that, you know, within a certain number of years, the Treasury -- the budget would not be out any money.

But that's why I want to bring in some outside experts, like I suggested yesterday, to help plan this.

CLINTON: Because, obviously, this is uncharted waters. We haven't done anything like since the Great Depression when an agency was created and it did buy mortgages. We're not at that point yet. The congressional proposal is to auction them off to private buyers. I have my doubts as to whether that would work, so we need a backstop for some kind of a government purchasing potential as well.

But I think you could do this over time in a way that was not damaging to the federal budget.

Now, obviously, we have a lot of other damage we have to clean up inherited from President Bush and the Republican Congress. But I think this could be managed effectively.

QUESTION: (OFF-MIC) a step further, though, by saying that the federal housing authority could buy mortgages.

CLINTON: Right. Well, what I said is that I think that should be considered. You know, I support what Senator Dodd and Congressman Frank have proposed, but I'm just not convinced that it alone will work. I think it's part of a plan, but not the complete plan. That's why I want to get this emergency working group to come in and try to give us the best suggestions about how to proceed.

I personally think we will have to have as a backstop the ability of the FHA or some federal entity to be able to buy, because you don't even know how many buyers are out there.

And, remember, what we're asking is that people come in and bid in an auction on buying these mortgages. They have to believe, the people bidding, that they can make money out of it.

The way you would have to make the money is that you would have to negotiate with homeowners to help them get a payment plan that would actually keep them in their homes and give you a revenue stream that would be profitable.

A lot of the potential buyers have no capacity to do that. You know, a hedge fund doesn't have people who can go out and talk to home buyers. they would have to put that together. Whereas, the FHA and the government would be able much more easily to provide those services. So I think that the number and type of potential buyers in such an auction might not be sufficient for what it is we're facing.

CLINTON: And that's why I thought there should be the back-up from the government to be able to buy and work out those mortgages by the government.

QUESTION: Questioning or discussing someone's relationship with their pastor is a very personal matter. And as you know, there are some Democrats who are concerned about the tone of the campaign being negative, being personal. Are those concerns justified?

And do your remarks which you carefully -- which you are careful to read...

CLINTON: Right.

QUESTION: Do you think those concerns are justified?

CLINTON: Well, as I said, it is a very personal matter. And I was asked a personal question. And I responded as to what I would have done. And, you know, everybody has to answer that for themselves because it is a personal consideration. And obviously, you take into all -- into account all kinds of factors.

But when asked a direct question, I gave a direct answer. And I feel very comfortable with that. I don't think that's negative. That's what I would have done. And other people can evaluate that for themselves and make their own conclusions as to what they would have done.

Thank you.

QUESTION: (OFF-MIC) state that is very similar demographically to Virginia and South Carolina.

CLINTON: One state at a time.

LEMON: OK, Hillary Clinton, Greensburg, Pennsylvania.

This was really an interesting press conference. She spoke about things that she really had not answered questions on before. Number one, in particular -- we are going to get to the Bosnia thing -- but she spoke out about Reverend Wright for the first time. This is the first time I remember her saying that, saying what she would have done, she would have left the church, that she would not have attended that church, and also saying it's the same message that she gave during the Imus and the Rutgers scandal, when she said, enough is enough, that it's not a license to discriminate or to embarrass.

It's not license or an excuse to demean or humiliate our fellow citizens. And that's she's saying, that freedom of speech is not. And in any case, you cannot do that.

Let's get to the Bosnia thing, which has dogged her over the last couple of days. She said, hey, I made a mistake in describing it. I'm human, which may be a surprise to some people. So, that's what she said. I still put my policy experience up against Barack Obama's. What is really important here is who is ready to be commander in chief. I put mine up against his any time, is what she said.

So, Hillary Clinton answering questions there, also talking about the economy. But, for the first time, she spoke out about Reverend Wright and also about the Bosnia scandal, which has been dogging her over the last couple days.

We want to tell you this. If you would like to watch any of the candidates today, just go to CNN.com/live to see their rallies and their events live. And it is unfiltered. Again, that's at CNN.com/live.

The economy, of course, issue number one. And we will bring you all the latest financial news all week at noon Eastern. It's information you need on the mortgage meltdown, the credit crunch and more, "ISSUE #1," 12:00 p.m. Eastern, only here on CNN.

NGUYEN: And we are following very closely a crane accident down in Miami. There has been reported another death associated with this.

We will get you an update right after the break.

(COMMERCIAL BREAK)

NGUYEN: All right, this is what is happening right now. There has been a crane accident in Miami. We have a couple of deaths associated with that.

Let's get you the latest now and CNN's T.J. Holmes, who has been watching it.

Hey, T.J.

HOLMES: Yes. Hey there, Betty.

Unfortunately, we have two deaths to report now. This crane accident in Miami happened a little over an hour-and-a-half ago now. We have been watching this thing, at first, just reports of injured, but now confirmed to CNN that two people have been killed after this crane, part of it fell and broke off and hit the top of a home that was there on the construction site.

This home was not occupied by a family or anything. Instead, it was used as an office there. The work still is going on to possibly find others who are trapped in that rubble. However, those efforts have been hindered because the crane, officials believe, is still unstable and other parts could break off. So, that has slowed some of the search and recovery efforts. So, we don't know if people are still trapped.

But, yes, Betty, right now, two people confirmed dead, both of them construction workers. Another four have been injured. We're keeping an eye on it.

NGUYEN: This does remind you of the accident a couple weeks ago in New York, where seven people were killed, just a tragic situation.

HOLMES: Yes.

NGUYEN: T.J. Holmes joining us live -- thank you, T.J.

HOLMES: All right, Betty.

LEMON: Got a question for you: What could be wrong with passengers' rights? A federal appeals court has struck down a New York law aimed at keeping air travelers comfortable while stranded on planes.

Our Allan Chernoff is in New York with the details on that.

OK, Allan, you travel just as much, maybe more, than me. What's wrong with passengers' rights? Everyone gets frustrated when they're sitting on a tarmac or you're stranded somewhere with no repercussions it seems to the airlines.

ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT: And there's nothing wrong with passenger rights.

This is all a matter of legal precedence and who has the right to administer rules over the airline industry. Let's go back to Valentine's Days ago, and, of course, it will be one that many passengers will never forget.

Here in New York, at JFK airport, some passengers were stranded for hours and hours on end, some as much as 10 hours or even longer. JetBlue, you will recall, is the airline that got the most attention, but other airlines also suffered horrific delays.

In response, New York State passed a passengers bill of rights, which required airlines to provide snacks, water, clean bathrooms for any delays of more than three hours, not that they should do it for less than three hours, but that was the rule.

Anyway, just today, a federal appeals court has rejected that state law, saying New York State does not have the authority to oversee the airline industry. That is the right of the FAA.

And let me just quote quickly from the opinion. The court said, "Although the goals of the passengers bill of rights are laudable, and the circumstances motivating its enactment deplorable, only the federal government has the authority to enact such a law."

The Air Transport Association, which represents the airlines, is calling this a decisive victory for airlines and their customers -- Don.

LEMON: OK. So, if they're saying that, then how is New York going to respond to this?

CHERNOFF: Well, the office of Michael Gianaris, who is the assemblyman who's the prime backer of this bill, told me that he has been talking with the attorney general of New York State, and they are thinking of possibly appealing this to the Supreme Court.

They are also thinking about, well, is there another way that we can pass some type of law that will not run into this block by the court, perhaps a round end to somehow actually get rules that can actually protect passengers.

LEMON: All right, Allan Chernoff in New York -- Allan, thank you very much for that.

Let's take a look now at Wall Street. We are going to talk about the closing bell. Let's see. Well, four points, yes, not much, but we will see.

You are watching CNN, the most trusted name in news.

(COMMERCIAL BREAK)

LEMON: Well, as fighting continues to rip her country apart, one Iraqi artist is finding inspiration from the war. Our Kyra Phillips, who's on special assignment in Baghdad, joins us now with this remarkable story.

Kyra, how is she finding inspiration?

KYRA PHILLIPS, CNN ANCHOR: Well, Don, when I met Azhar, she was very soft-spoken. She was very shy. And then I saw her paintings and I realized, OK, this is where her voice cries out.

(BEGIN VIDEOTAPE)

PHILLIPS (voice-over): Her paintings need no explanation. If you understand the meaning of war, you will feel every stroke of Azhar Basa's brush.

(on-camera): Tell me about this piece.

"Iraq has become a huge prison for all of us, old and young. They all suffer."

Any of your family, any of your loved ones, have they been put in jail?

"My brother is in prison right now."

Why is your brother in jail?

"I don't know why he's in jail. He was walking in the street when he was picked up."

When you look at this piece do you think about your brother do, you think about your nephews?

"Of course, I do. This is what I feel. My pain and suffering is expressed right here in this piece."

(voice-over): Every painting has a personal story. Azhar's reality is her portrait.

(on-camera): The emotion in this one is very powerful.

"These Iraqi women are of different ages, but have the same pain and grief. They've all lost a husband, a father, a son. And behind them, the cemetery and the sky is red -- the color of blood -- blood from all the innocent people killed in the explosions for no reason."

Are these your friends? Is this your family? Is this you?

"Yes, this is me. My brother was killed and we don't know why."

(voice-over): But Azhar says it is the new generation that is suffering the most.

"The baby's bottle is full of blood instead of milk. And these are the feet of the occupation that's walking on our land and taking our innocence away."

(on-camera): Now, when I looked at the spider I thought nightmares. What does that mean to you?

"Occupation. As you can see its legs, they're all over our lives. The cage imprisons our dove, which represents peace. And the rose, when it's picked, it starts to die. This is the generation that has nothing right now."

(voice-over): Azhar started painting as a little girl -- no formal training, just a natural gift. Now, at 31, she is the first female painter in battle-torn Fallujah to ever be showcased in an art gallery.

(on-camera): Are these paintings your voice?

"They are a part of my soul."

(voice-over): It's amazing to me that even within all of this darkness, Azhar, like so many Iraqis, find light.

"This represents the origin of Iraq, its roots. But the occupation cut the roots. But a new tree grows and that represents the new Iraq."

(on-camera): Do you remember the moment that you were inspired to paint this?

Did something good happen to you that day?

"I was thinking of our people and how I want them to be united. I used the color green because, to me, green means hope. And the strength of the arms is holding the strength, and that tree is the united Iraq I want to see."

PHILLIPS: And until Azhar sees it, she will paint it.

(END VIDEOTAPE) PHILLIPS: And, Don, you may have picked up that Azhar kept mentioning occupation. And I said why do you say occupation, what do you mean by that? Are you talking about U.S. troops?

And she said, Kyra, I don't want to answer that. I can't get political. I live in Fallujah and I'll risk my life getting into that discussion.

As you may remember, it was in Fallujah that those contractors were burned shot and hanged right there on that bridge. And that's what created a tremendous offensive in that area with U.S. troops.

LEMON: And it is amazing out of where you can find yourself and what's right even in the worst situation and create art like that. Her art work is beautiful, Kyra. Did you look at a lot of it?

PHILLIPS: It was amazing just to look at the pieces and talk to her about why she painted them, the moments that triggered those thoughts. I felt she was really good at explaining the depth of the paintings.

But then you step away from that and she's so reserved and so quiet. And, you know, when her paintings went on display at that gallery, one of the visitors was her grade school teacher. And she said you know what, Azhar, I remember when you first started painting as a child. And I still have one of your first paintings hanging up in the elementary school. So that meant a lot to her. She's 31 years old now.

LEMON: And that is a lesson for all of us. OK, Kyra Phillips, on special assignment in Baghdad.

Kyra, thank you very much for that.

We want to get now to Washington, D.C.

Our Kelli Arena is working on a story about a scam that the government is following.

And this involves homes, isn't that correct -- Kelli?

KELLI ARENA, CNN JUSTICE CORRESPONDENT: That's right, Don. You know, yet another scam, but you've to be ready for this one. The FBI just put out a notice about a scam called house stealing.

Now, basically, a con artist starts by picking out a house that he wants to steal -- say yours, Don. Then they steal your identity by getting a hold of your name, your personal information -- oftentimes on the Internet. And they use that to create fake IDs, like Social Security cards, etc.

Then they get forms to transfer properties -- forge your signature, use the fake IDs and file deeds with the proper authorities. And -- they own your home. Sometimes they even sell it without the owner knowing. I know it sounds crazy. Luckily, the FBI says that it's not too common. But officials are keeping an eye out for any developing trends.

And so, of course, you say well, what can we do to prevent this? And, unfortunately, not a heck of a lot. The FBI says if you get a payment book or information from a mortgage company that's not yours, don't just say ah, this isn't mine and throw it out, thinking it's a mistake. Follow up with the company that sent it.

And then they say, from time to time, you should go to your county deeds office to make sure that all of the paperwork pertaining to your home is in order.

LEMON: You know what, and you -- weren't you covering a story -- was it yesterday or the day before -- on a two -- what was it, two different...

ARENA: Another --

LEMON: Yes.

ARENA: Right. Another scam, right, that the FBI -- there were actual indictments in that scam. And that, actually, the owner was aware.

LEMON: Oh.

ARENA: They were involved.

LEMON: OK.

ARENA: And they, you know, signed papers thinking that they were getting an investor on board to help them, you know, if they were in stress of paying their mortgage, they were facing financially. But, in effect, that, you know, the title of the house is being transferred to that investor and people thought that they were just getting help with that. But this is -- this new scam is something that you don't even know about.

LEMON: Yes. You have no idea.

ARENA: Right.

LEMON: The hits just keep on coming when it comes to mortgage...

ARENA: They sure do.

LEMON: ...and the housing crisis.

OK, Kelli Arena, our justice correspondent. Thank you, Kelli.

ARENA: You're welcome.

NGUYEN: Well, until now, we could really only imagine the horror of Georgia hiker Meredith Emerson's last few days. But a taped conversation with her killer lets us in on her nightmare and her amazing courage. Gary Hilton's account came as he led authorities to the murder scene. And CNN's Susan Candiotti joins us now with more.

Susan, looking at some of this stuff, it's really disturbing.

SUSAN CANDIOTTI, CNN CORRESPONDENT: It is. And not only is what he said disturbing, but the tone of his voice as he describes what happens to Meredith Emerson. You know, she apparently tried to fight him off as best she could, stunning even her confessed killer. It's heartbreaking to hear what she went through.

(BEGIN VIDEOTAPE)

CANDIOTTI (voice-over): His voice chills. Admitted killer Gary Hilton nonchalantly tells a police investigator his victim, Meredith Emerson, was doomed from the start.

GARY MICHAEL HILTON, ADMITTED KILLER OF MEREDITH EMERSON: I'm going to tell you right now, there was never any plan to let her go.

CANDIOTTI: Maybe not, but for the first time we hear details about Meredith Emerson's brave attempts to survive after Hilton kidnapped and raped her on New Year's Day.

HILTON: It didn't seem real. It doesn't seem real looking back on it.

CANDIOTTI: Hilton says Emerson disarmed him twice when he tried to grab her during a hike with her dog Ella near the Appalachian Trail.

HILTON: And she fought. And she grabbed the knife, OK? I lost control of the knife. And then I produced the baton. OK. She fought that and I lost control of the baton. And I'm good, too. But this girl -- one of the -- I think it was you, probably, or one of the GBI said that little 120-pound girl about probably close to whipped your (EXPLETIVE DELETED). Well, she about did.

CANDIOTTI: Hilton says he punched Emerson's face repeatedly to shut her up. While searchers tried desperately to find her, Hilton told the 24-year-old martial arts student that all he wanted was her ATM card and PIN number. She kept giving him the wrong code as they drove from machine to machine, apparently to buy time.

JOHN BANKHEAD, GEORGIA BUREAU OF INVESTIGATION: Meredith Emerson put up a valiant battle for her life over the three or four days she was with Hilton.

CANDIOTTI: Hilton tried to make it sound as though he cared before he killed her.

HILTON: She was not in any pain other than a headache. I offered her and gave her aspirin.

CANDIOTTI: On the day he was named a person of interest, a close call. From his van, Hilton claimed he waved to a police officer while he drove Emerson to her death. He said he tied her to a tree, walked away, then came back, pummeled her with a tire jack handle and decapitated her.

HILTON: I don't know what it was. I was just in, you might say an altered state. It was hard. It was hard.

CANDIOTTI: Hilton led police to Emerson's body in return for a promise not to seek the death penalty. He is serving a life sentence.

(END VIDEOTAPE)

CANDIOTTI: Now, after his arrest, police tied him to another murder in North Florida. You might remember hearing about this. He was indicted for the kidnapping and murder of a nurse by the name of Cheryl August. She was found murdered last December in the Apalachicola National Forest under similar circumstances. And police are also considering Hilton a suspect in the murder of an elderly couple in North Carolina. No additional details on that one -- on that investigation yet.

NGUYEN: Well, what we've heard so far is just chilling.

Susan Candiotti join us live. Thank you, Susan.

He has battled charges that he's not conservative enough and now John McCain is about to pick up a major endorsement from the widow of a conservative icon. You're going to find out what our political roundtable has to say about Nancy Reagan's decision to support the Arizona senator.

(COMMERCIAL BREAK)

LEMON: OK, it is a conservative coup for John McCain. A McCain senior adviser says Nancy Reagan will endorse the Arizona senator today at her home in California.

Joining me now from Washington to talk about the day's hot political issues, Democratic strategist Maria Cardona.

Hello, Maria. Welcome aboard.

MARIA CARDONA, DEMOCRATIC STRATEGIST: Hey, Don, how are you? Thank you.

LEMON: Republican strategist Cheri Jacobus.

And in New York, Democratic strategist Jamal Simmons.

Hey, I'm going to totally redirect you. We're going to go a little bit backward here, because I want to talk about Nancy Reagan first and I told them we were going to talk about it last.

LEMON: But Nancy Reagan, from her home in California, basically -- I don't have to read it -- saying that she endorses John McCain.

Cheri, I want you to talk about this one.

CHERI JACOBUS, REPUBLICAN STRATEGIST: Oh, you know, there's absolutely no down side for this. I mean, clearly, Republicans support John McCain. But the Reagan name means so much to Republicans and a lot of Democrats, too. So this will be a great photo-op. It's a good little news story for John McCain -- certainly not unexpected, but very, very welcome.

LEMON: OK, very, very welcome. All right, let's move on.

Welcome. Good news for him. He also talked about, real quickly let's -- we'll get John McCain out of the way and then we'll talk about the Democratic side, as well.

John McCain making a speech today on the economy. Some people are saying he's not offering many specifics in that, Jamal.

Did you agree?

JAMAL SIMMONS, DEMOCRATIC STRATEGIST, OBAMA SUPPORTER: Yes. It sounds like he's trying to stay out of using any government action to try to fix America's problems regarding the economy. And one thing that's happening with both Hillary Clinton and Barack Obama, they both want to get troops out of Iraq so that we can get back to spending the money that we need at home. But they also want to deal with the mortgage crisis and all the other problems that we face.

LEMON: OK.

SIMMONS: And as for Nancy Reagan -- like I'm shocked that there are Republicans endorsing Republicans today.

(LAUGHTER)

LEMON: Maria --

CARDONA: Yes?

LEMON: Did you find any -- Hillary Clinton's plan seemed to be much more specific than John McCain. Did you find that?

CARDONA: Yes, absolutely. And, look, what I'll say, Don, is that John McCain finds himself from the start at a huge disadvantage. He has said before that the economy is not his forte. He said it more than once. He talked about how he's not "smart enough" to come up with a solution on the mortgage crisis. So how in the world can voters trust him on what is now their number one issue?

LEMON: Yes, the buck has to stop with him, right?

CARDONA: Exactly.

LEMON: OK.

CARDONA: And Hillary Clinton has offered specifics on all of these.

LEMON: All right, let's move on now --

JACOBUS: You know, well, real quick, though --

LEMON: Hey, we've got to --

JACOBUS: McCain says no, he's not bailing everybody out. He's not pandering to people during an election year. I think he gave a very reasoned, adult...

LEMON: OK, Cheri.

JACOBUS: And opposed (INAUDIBLE).

(CROSSTALK)

LEMON: OK, Cheri.

All right, guys. OK. Point taken.

Let's talk about Hillary Clinton now. We've been talking a lot about Bosnia in the news lately. Her account of this trip -- I think it was like 12 years ago, am I correct on that? And then the -- what actually happened.

So, let's get what she said -- her account of what she said before she realized she made a mistake. And then I want to hear what she said today.

(BEGIN VIDEO CLIP)

CLINTON: I remember landing under sniper fire. There was supposed to be some kind of a greeting ceremony at the airport, but instead we just ran with our heads down to get into the vehicles to get to our base.

(END VIDEO CLIP)

LEMON: OK. So then moments ago -- not that long ago in Greensburg, Pennsylvania, she had a very different response.

Let's take a listen.

(BEGIN VIDEO CLIP)

CLINTON: I made a mistake in describing it. I have said many times -- I have talked about this many times, that we were, you know, very much told by the Secret Service and the military that were going into a war zone.

(END VIDEO CLIP)

LEMON: OK. And then at the end of that, she goes, I made a mistake so I'm human and it may be a surprise to everyone.

Cheri Jacobus, I mean, the Republicans are going to jump all over this. She just said it, but don't you think this is going to be a huge, huge thing for them?

JACOBUS: Republicans don't even have to jump all over it, it's a huge thing by itself.

(LAUGHTER)

JACOBUS: Look, this wasn't just a mistake. She clearly says she remembers sniper fire and she had her daughter with her? Chelsea was just a little girl...

LEMON: Yes.

JACOBUS: ...I mean a teenager then or an adolescent. I doubt very much the Secret Service would have allowed Chelsea Clinton to go on that trip if there was really sniper fire. So she's got a problem with the truth. I don't think this is just a mistake.

LEMON: Yes.

JACOBUS: This goes a little bit deeper. It could follow her around for a while.

LEMON: Jamal, Barack Obama, what do you think they're going to say to this response, their campaign?

SIMMONS: You know, I don't know there's much that they should say. This one sort of takes care of itself.

LEMON: Yes.

SIMMONS: But the issue here goes back to, you know, who has the judgment and the trust of the American people to be the commander-in- chief. And now we find that even the experiences Hillary Clinton claims to have had, she didn't have.

LEMON: Yes.

SIMMONS: I mean I actually was reminded today that I flew into that same base in 1996 on a separate government mission. And, you know, you remember when there's some big security concern.

LEMON: You remember sniper fire, I'm sure.

(LAUGHTER)

LEMON: Hey, Jamal...

SIMMONS: And so this is --

LEMON: ...hang on.

SIMMONS: -- this is more than just a...

LEMON: Hang on.

SIMMONS: ...bad memory here.

LEMON: OK, hang on, real quickly.

Also, the story that I said yesterday won't go away -- Reverend Jeremiah Wright. Hillary Clinton responding to that controversy today.

(BEGIN VIDEO CLIP)

CLINTON: When it comes to our pastors and the churches we attend, everyone will have to decide these matters for themselves. They are obviously very personal matters. But I was asked what I would do if he were my pastor. And I said I think the choice would be clear for me.

(END VIDEO CLIP)

LEMON: OK. She goes on to say that freedom of speech -- talks about what she did during the Imus controversy: "It's not a license or an excuse to demean or humiliate our fellow citizens."

She would not be a member of the church.

Maria?

CARDONA: First of all, let me just make one comment about Bosnia. Look, she misspoke.

LEMON: Well, I know. I know.

CARDONA: And she has said that.

LEMON: Hey, we're talking about Wright. We have moved on from Bosnia. Done. We want to talk about this story.

SIMMONS: Well, Don --

LEMON: What's your response to that?

SIMMONS: Don, it's important because it's very interesting that today, when this story about Bosnia comes up, is the day she decides to talk about Jim Wright -- talk about Reverend Wright again and it's getting out of the news. I think the timing is very appropriate for the Clinton campaign.

LEMON: Well, she was asked about it.

CARDONA: Well, right. She was asked about it. But she was also asked about Bosnia. And I do need to point out that this does in no way belittle the other foreign experiences that she has. And, frankly, the Obama campaign has not been able to come up with a compelling or a convincing argument as to why he should be commander-in-chief and his foreign policy experiences.

LEMON: Yes.

CARDONA: And I would compare Senator Clinton's to his any day. And she will come out on top.

LEMON: And I think the response from the Republican side is going to be just what Cheri Jacobus is doing, and that is remaining quiet on this issue. (LAUGHTER)

JACOBUS: No, actually, I'm just waiting...

(CROSSTALK)

JACOBUS: ...just waiting my turn. Look, on the Reverend Wright situation, what Hillary Clinton said was politically smart, to point out that her beliefs are very different and morally smart, to separate herself from the comments.

LEMON: OK.

JACOBUS: She did a better job of it, certainly, than Barack Obama did.

LEMON: All right.

SIMMONS: The question, though...

LEMON: Cheri, hey --

SIMMONS: ...is why did she talk about it today when she refused to talk about it for an entire week?

LEMON: I hate to be the person that has to cut everybody off...

CARDONA: She doesn't need to.

LEMON: ...but I'm going to have to do it anyway.

(LAUGHTER)

LEMON: All right.

So, Maria Cardona...

CARDONA: Thanks, Don.

LEMON: ... Jamal Simmons and Cheri Jacobus, thank you all for joining us today.

SIMMONS: Thank you.

JACOBUS: Thank you.

And as we talk about the politics of this country, 4,000 U.S. service members have given their lives in Iraq. Behind that number are names and faces and grieving families left behind.

In March of last year, Army Specialist Michael D. Rivera was killed by a roadside bomb in Iraq. His family says he recently became a father to a daughter named Joycelin. His daughter shares a name and a birthday with Michael's mother. She's seen here at his funeral in New York. Twenty-two-year-old Marine Lance Corporal Julian Ramon was killed in Iraq in July of 2006. He was involved in combat operations in Ramadi. At his funeral, his grieving mother is comforted by her two remaining sons, Juan and Sebastian.

Forty-year-old Army Specialist First Class Schuyler Haynes was killed in November of 2006 by an improvised explosive device. At this picture -- in this picture at his memorial service, Haynes' mother and sister embrace each other as the flag over his coffin is folded.

Today's "New York Times" gives us a powerful illustration of U.S. losses in Iraq -- four full pages of photographs of the most recent 1,000 service members to die in the war.

(COMMERCIAL BREAK)

LEMON: It's time now to check in with CNN's Wolf Blitzer.

NGUYEN: Yes. He is standing by and he joins us live -- what do you have coming up in "THE SIT ROOM" -- Wolf?

WOLF BLITZER, CNN ANCHOR: All right, guys. Thanks very much.

Hillary Clinton -- she's now on the offense against Barack Obama. She's speaking out on his pastor controversy. You're going to hear what she had to say just a few moments ago and what the reaction is. If you were watching live, you saw it.

Barack Obama releases seven years of tax returns. What they show and how he's using them as new ammunition against Hillary Clinton.

Plus, the Air Force now answering very difficult questions after parts of American nuclear weapons were actually shipped halfway around the world by mistake.

All that, guys, coming up right here in "THE SITUATION ROOM."

NGUYEN: That is quite a story, Wolf. We'll be watching. Thank you.

LEMON: The closing bell coming up.

(COMMERCIAL BREAK)

NGUYEN: The closing bell is about to ring on Wall Street. Susan Lisovicz has the latest.

Hey, there.

SUSAN LISOVICZ, CNN CORRESPONDENT: Hey, there.

(STOCK MARKET REPORT)

LEMON: All right, Susan, thanks. Have a good one.

NGUYEN: Let's take you to "THE SIT ROOM" and Wolf Blitzer. TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.voxantshop.com