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Arrest Made in Virginia Interstate Shootings; Fiery Collision on Massachusetts Interstate; Clashes in Iraq Between Government and Militia Fighters; Hard Times in the Heartland; President Bush and Prime Minister Rudd News Conference

Aired March 28, 2008 - 11:00   ET

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

(COMMERCIAL BREAK)
TONY HARRIS, CNN ANCHOR: And good morning again, everyone. You are in the CNN NEWSROOM. I'm Tony Harris.

FREDRICKA WHITFIELD, CNN ANCHOR: And I'm Fredricka Whitfield in for Heidi Collins.

HARRIS: Developments keep coming in on Friday, March 28th. Here's what's on the rundown.

WHITFIELD: A possible arrest in the Virginia interstate shootings. Police plan a news conference any time now. Live coverage.

HARRIS: Fighting in Iraq. Militants strike the office of an Iraqi vice president. Apparent retaliation for a crackdown in Basra.

WHITFIELD: And no nominee in sight, so should the party panic? Experts air it out on the divided Democrats in the NEWSROOM.

HARRIS: We've been telling you about a news conference scheduled to happen any moment. It is under way in Virginia. And news of an arrest. Let's get there right now.

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COL. STEVE FLAHERTY, SUPT., VA STATE POLICE: This case is still ongoing and additional information probably has been developed since we left the building. I know that you have your sources of information and I know that you've been reporting some of that. We're sharing you information that we know to be accurate, so please understand.

Shortly after 5:00 a.m. this morning, the Albermarle County Police and Virginia State Police took 19-year-old Slade Allen Woodson of Afton, Virginia, into custody following an execution of a search warrant in Crozay (ph). The Albemarle County police and the state police executed the search warrant this morning at 4:48 a.m. The warrant was executed at Yonder Hill Farm.

As the tactical teams from these two agencies maid entry into the residence, they were confronted by an armed individual. He was armed with a handgun. The man was subsequently shot. He was flown to UVA hospital in Charlottesville and is undergoing treatment as we speak. Chief Miller, chief of the Albemarle County Police Department, asked the Virginia State Police to assign their police shooting team to investigate that incident.

There were a total of five people in the residence, including the armed individual and Slade Woodson. Woodson was taken into custody without incident. No one else at the residence was injured. Investigators are still on the scene, processing the residence. At this time, Woodson has been charged only on Waynesboro police warrants relating to yesterday's shootings in that city.

Woodson has been charge with one felony count of shooting into an occupied building and one felony count for destruction of property. The charges stem from a shooting of a residence in the 200 block of North Commerce Avenue in the City of Waynesboro and the shooting of the Dupont Community Credit Union on Lucy Lane in that city.

Both incidents occurred in the early morning hours of Thursday. Woodson is considered a suspect in the Interstate 64 shootings that took place during the overnight hours of March 27th.

We are still awaiting ATF results of the analysis of the ballistic evidence that was collected at each of the scenes along I- 64. Woodson is also the owner of an orange 1974 AMC Gremlin that's similar in appearance to the vehicle that was captured in the surveillance video at the credit union in Waynesboro.

The vehicle was located yesterday afternoon. It was abandoned along Route 29 in Albermarle County just south of the Greene County line. The vehicle was processed by police overnight and ballistic evidence recovered from the car was also taken to the ATF lab in Maryland for analysis where it's going to be compared to the other evidence that we've collected and recovered from the shooting scenes and vehicles.

At this time Slade Woodson, as I said, is in custody and is considered a suspect in the six confirmed shootings that took place on and near I-64 in the Charlottesville region.

To recap a little bit. Yesterday afternoon state police confirmed that there was a sixth vehicle that was struck by bullets while traveling westbound on I-64 near the Route 690 overpass. That brings a total of four vehicles that were struck by bullets at that location. A fifth vehicle that was struck near a High-V at the onramp and the v-dot vehicle that was struck at the v-dot maintenance shop.

Investigation is still ongoing. We have no additional press conferences scheduled that the point because of the nature of the investigation. As the investigation progresses and more information has developed and we can verify the accuracy of that information, we'll get back together with you as that occurs and we'll notify you.

We will attempt to answer a few questions now. Yes, sir?

QUESTION: In terms of the bank shooting and the (INAUDIBLE), any idea about motive? FLAHERTY: I don't think we can share with you right now what we know about that incident.

QUESTION: Describe Yonder Hill Farm and suspect in relation to it and this location?

FLAHERTY: Not at this particular point in time.

QUESTION: Is that a rental house?

FLAHERTY: I don't know.

OK. The chief tells me there's two home on that property, and we're not sure if that's a rental property he was residing in or not.

QUESTION: Is there another suspect?

FLAHERTY: We have not identified another suspect at this time. We have no one we have categorized as a suspect.

QUESTION: (INAUDIBLE)

FLAHERTY: We haven't identified the person shot nor do we have a relationship.

QUESTION: (INAUDIBLE)

FLAHERTY: Well, we still believe, based on the information we gave you yesterday, that there was more than one person involved.

QUESTION: (INAUDIBLE)

FLAHERTY: There was ballistic evidence found in the car that we sent to the ATF lab to be compared with the evidence we collected yesterday.

QUESTION: (INAUDIBLE)

FLAHERTY: At this particular point in time we have no evidence that connects him to any of the shootings.

QUESTION: Are all the officers involved at this point that raid the house still on duty and still working?

FLAHERTY: John, do you want to comment on that?

UNIDENTIFIED MALE: The officer involved in the shooting was an Albemarle County police officer. The police officer is on administrative leave with pay at the current time. At this time I'm not going to release his name.

QUESTION: Chief, could you tell us why the person pulled a gun? Is there any particular thing you can tell us about why?

FLAHERTY: Not at this time. And you know, our police investigative team is on the scene and processing evidence and has been interviewing folks.

QUESTION: How many shots were there?

FLAHERTY: I don't know but more than one. There were multiple shots but I don't know how many. I'm sorry?

QUESTION: All by one police officer?

FLAHERTY: All by the individual police officer? I'm not positive at this time. I think so. I don't know.

QUESTION: (INAUDIBLE)

FLAHERTY: I don't know. He has been interviewed. I'm sorry? Yeah, it was one count of destruction of property. That was a felony. And it was one count of shooting into an occupied dwelling, also felony. I don't know.

QUESTION: (INAUDIBLE)

FLAHERTY: I'll try. It's Slade S-L-A-D-E. His middle name is Allen. A-L-L-E-N. And last name Woodson, W-O-O-D-S-O-N.

QUESTION: (INAUDIBLE)

FLAHERTY: I don't believe so, no.

QUESTION: Did he live at that farm or did he live elsewhere?

FLAHERTY: Well, the address we have at this time is Afton. The address we have at this time is Afton. In that residence, yes. Yes, sir.

QUESTION: (INAUDIBLE)

FLAHERTY: We've been investigating since 12:10 yesterday morning so it's just an accumulation of interviews and, you know, physical evidence that we've been able to uncover. Yes?

QUESTION: Colonel, does he have a prior record?

FLAHERTY: He was familiar to police.

QUESTION: Any gang activity going on last night?

FLAHERTY: There's no link to any gang activity to this incident.

QUESTION: Married, single, race, what can you tell us about him?

FLAHERTY: He's a white male. But I don't know -- I don't know what his marital status is. His age, 19.

QUESTION: Is that where he lived?

FLAHERTY: I don't know. The address we have is Afton.

QUESTION: What is the status of the shooting victim's injuries? Life threatening?

FLAHERTY: He's being treated at this particular time. I am not sure what the status is.

HARRIS: Let's give you a quick wrap on this, Virginia State Police wrapping up a news conference where they announced they made an arrest of 19-year-old Slade Allen Woodson. He is being held on one felony account of shooting into an occupied building for something unrelated to the I-64 shootings but he is being held as a suspect in connection with those shootings.

As you'll recall, six vehicles were hit by gunfire before daybreak yesterday. Two people were injured but not seriously. The arrest comes after State Police searched a home in Albemarle County overnight and in pursuing that arrest police were confronted by an armed man in the house. That armed man was shot and is now being treated at a local hospital.

Once again, an arrest, 19-year-old Slade Allen Woodson, arrested now and being held as a suspect in the I-64 shootings and police are waiting for the results of ballistics tests to make a determination as to charge Woodson with the I-64 shootings.

More information to come on this story. We'll keep on that for you right here in the NEWSROOM.

WHITFIELD: Tony, also happening right now. A crash and a fiery explosion on a Massachusetts interstate. This is the scene on Interstate 91. At least it was a bit earlier, near Chicopee in the western part of the state. Police say a tanker truck loaded with diesel fuel and three cars were involved in a collision.

A reporter with affiliate WWLP told us minutes ago that witnesses saw the tanker fall off an overpass onto cars below. Several people got out of their cars and actually rushed to the burning vehicles to try to help those inside. No word of the fate of anyone who may have been in those vehicles. The driver of the tanker taken to a hospital. Reportedly in serious condition. And we'll bring you more information as we get it.

HARRIS: Also breaking this hour, word of a possible riot at a federal prison in Texas. CNN affiliate KST reports as many as 30 inmates may have been stabbed. Medical helicopters being dispatched there right now. The riot at the Federal Correctional Institution in Live Oak County. That's about 80 miles south of San Antonio.

The Lake County Sheriff's Department said the riot broke out at 7:00 a.m. local time. The prison holds medium security male inmates. We will update you on this story as we get more information.

WHITFIELD: Living and dying in Iraq's Green Zone. Deadly rockets and mortars rain down on the fortified area where Americans are said to be at their safest. Well, some of those explosives fell short and exploded outside the office of Iraq's vice president. Two guards were killed. Several injured. The vice president reportedly was not there at the time. Meanwhile, clashes are flaring between government forces and Shiite militia fighters. It's considered a major test for Iraq's government and their troops. Over night, U.S. led coalition planes bombed militia positions in Basra.

And in Baghdad, Iraqi civilians aren't allowed on the streets until Sunday morning. The government is trying to defuse rising anger among followers of radical Shiite cleric Muqtada al Sadr. They say U.S. and Iraqi forces are targeting the movement, unfairly taking advantage of the seven-month-old cease-fire.

A U.S. military contractor is in deep trouble for reportedly supplying old degraded Chinese munitions to the Afghan army. The Miami-based company called AEY is run by this man right here, 22-year- old Efraim Diveroli. He is accused of providing Chinese made ammunitions to the U.S. military to sell to Afghanistan. That would be a violation of the company's contract and U.S. law.

The Army has suspended AEY's contract. And the company is under criminal investigation for claim they were made in Hungary. A House committee plans a hearing next month.

HARRIS: The White House says North Korea shouldn't be testing missiles while nuclear talks are stalled. North Korea reportedly fired off a series of missiles overnight. The show of force comes during increased tensions between the north and south. South Korea's they are dismissing this as just ordinary military training.

The presidential campaign trail runs through several states today. On the Democratic side, Hillary Clinton has stops in Indiana. She attends a town hall meeting this morning in Mishawaka, Indiana at the Mishawaka High School. A live picture there right now. Indiana holds its primary May 6th. Pennsylvania is the next big contest for the democrats.

Barack Obama begins a six-day swing through the state today. He has a stop in Pittsburgh this morning where he picks up an endorsement of Pennsylvania Senator Bob Casey. On the Republican side, John McCain attends a fund-raising luncheon in Las Vegas. McCain also launches his first TV ad of the general election today. Tough issues, political infighting. How the presidential race is shaping up. We will bring in the experts for some sideline strategy minutes from now.

Right here in the CNN NEWSROOM.

WHITFIELD: And more now on that horrible fiery collision between a tanker truck and three vehicles there in Massachusetts on the interstate where traffic is at a standstill in both directions.

Chief Charlie Vangordon is the fire chief of this Massachusetts department, Westover Fire Department. Tending to this fire You were there at the start of the fire trying to put it out. Give me an assessment, your best assessment.

CHARLIE VANGORDON, WESTOVER AIR RESERVE FIRE DEPT: We were actually requested by the Chicopee Fire Department, the local community here, because of our excellent working relationship with the local fire departments, they asked for our specialized equipment. We have crash trucks that carry foam which is specifically to deal with aircraft fires because we have the C-5s here at Westover. We responded with two trucks to help them out with our specific equipment. And it does work very well on fuel fires.

WHITFIELD: So you're able to help in dousing, controlling the fire, oftentimes fire departments also are the ones who are doing rescue operations as well. Can you give me an idea on how you all were involved in trying to tend to or get to the passengers or drivers of these vehicles that collided?

VANGORDON: Out piece was merely for the suppression of the fire. The Chicopee Fire Department being the lead on this was tending to the other issues. Our capabilities are specifically for running fuel fires, things of that nature. So we were extinguishing the fires and the Chicopee Fire Department was tending to the driver and rescue of any other.

WHITFIELD: What was the key in trying to extinguish the fire for you?

VANGORDON: The key for us was the AFFF foam that is on our trucks. That works very well at extinguishing fuel fires.

WHITFIELD: That's probably what we were seeing being sprayed, not water because you're talking about a fuel fire, but instead this foam.

VANGORDON: Correct. What you saw on the TV, the white stuff was the AFFF foam which basically smothers the fire.

WHITFIELD: This is pretty extraordinary. We heard from a reporter earlier from the area who is familiar with Interstate 91 saying that this location where the fire -- where this fiery collision took place is dad Chicopee curve, that it's notorious for being really the bane of existence for a lot of tankers, trucks, etc. What do you know about this being a hazardous area? Is this an area that you have had to tend to a lot of fiery collisions just like this because of this curve?

VANGORDON: No. This is -- this is actually the first one that Westover has participated in at this piece of the highway. We've never been there before for an accident or a fire.

WHITFIELD: OK. Fire Chief Charlie Vangordon, thanks so much for your insight. And I know the folk there's on the ground are really grateful of you all participating in this trying to get this fiery explosion under control. Thank you so much.

HARRIS: Still to come in the NEWSROOM this morning, snapshot of hard times, rubber plant workers get bounced in Ohio.

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UNIDENTIFIED MALE: Frustrated. What do you do? We've got guys in here that have been here 50 years.

(END VIDEO CLIP)

HARRIS: Closing up shop. In the NEWSROOM.

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HARRIS: Hard times in the heartland. The blue collar meltdown taking a toll on one small Ohio town. Jim Acosta joins us now.

Jim, why is Ohio getting hit so hard?

JIM ACOSTA, CNN CORRESPONDENT: Some experts blame trade agreements such as NAFTA. Other economists say U.S. factories simply cannot compete with China's cheap labor. Whatever the reason, one thing is clear. Blue collar workers are hurting in America's industrial heartland.

(BEGIN VIDEOTAPE)

ACOSTA (voice-over): For many, the lifeblood of blue collar America is fading away. And nobody knows that better than Wally, Gene and Mary all soon to be laid off from the Johnson Rubber Company.

GENE WEAVER, JOHNSON RUBBER COMPANY EMPLOYEE: People are angry, upset, frustrated. I mean, what do you do? We've got guys in here that have been here 50 years. Guys that have a lot of seniority here.

ACOSTA: Johnson has called Middlefield, Ohio, home for over 30 years but their doors will close at the end of April. Putting 500 people on the street.

WALLY EVANS, JOHNSON RUBBER COMPANY EMPLOYEE: Northeast Ohio is a tough place to work. Tough place to be out of a job right now.

UNIDENTIFIED FEMALE: We didn't get rich but we made a living here.

ACOSTA: Company officials say they simply could not keep up with rising energy and health care costs, make it impossible to compete with cheap labor overseas.

MARK WELCH, JOHNSON RUBBER COMPANY: The company ran out of money, basically.

ACOSTA: Mark Welch is what the industry call as chief restructuring officer. He was brought in to try to save Johnson Rubber.

Looking forward, there's no saving this place.

WELCH: So far, no. There is no saving this place. Unfortunately.

ACOSTA (on camera): It's not just the Johnson Rubber Company. This state has hemorrhaged 236,000 manufacturing jobs over the last seven years. A staggering number not seen in Ohio since the Great Depression.

AUGGIE TANTILLO, MANUFACTURING TRADE ACTION COALITION: As manufacturing has gone through this serious decline, the pain is wide and deep in Ohio.

ACOSTA (voice-over): To make matters worse, Johnson Rubber stopped payments to its health care provider in July of 2007, before signing with a new provider in August. That lapse left unwitting workers like A.J. Johnson with hefty, unresolved medical bills.

What kind of billing are we talking about?

A.J. JOHNSON, JOHNSON RUBBER CO. EMPLOYEE: The biggest one I've got is 22,500.

ACOSTA: Twenty two thousand dollars.

JOHNSON: Correct. Yes.

ACOSTA: How are you going to pay that?

JOHNSON: Oh, I don't have the money to pay that.

ACOSTA: Company executives say they have a plan to make sure they're paid. But for now the factory is still humming with busy workers, but not for much longer.

MARY FOOR, JOHNSON RUBBER CO. EMPLOYEE: I put two children through college working here. To find a job at my pay rate now, I'm not going to find one in the area.

ACOSTA: The question these blue collar workers face is where they go from here. Ohio is not alone.

(END VIDEOTAPE)

ACOSTA: And Ohio is not alone. Pennsylvania has lost one-fifth of its manufacturing jobs since 2000 which is why some are calling the upcoming primary in that state an encore to Ohio. Fredricka?

WHITFIELD: All right. Jim Acosta. Thank you so much for that update.

Well, keep watching CNN. Our money team has you covered whether its jobs, debt, housing or savings. All of the above, in fact. Join us for a special report called "ISSUE #1," the economy, all week at noon.

HARRIS: The economy crumbles, Iraq heats up, the presidential candidates try to tackle it all and each other at the same time, it seems. How are they doing and how long can they do it?

CNN special correspondent Frank Sesno and "USA Today" Washington bureau chief Susan Page with us from Washington for some sideline strategy.

Good to see you both. Good Friday to you both.

SUSAN PAGE, "USA TODAY": Nice to be back.

FRANK SESNO, CNN SPECIAL CORRESPONDENT: Hi, Tony.

HARRIS: Let's start with issue number one, the economy here, all three candidates made speeches on the economy this week. What did you hear? Did anyone stand out in your mind?

PAGE: Well, you certainly saw a different philosophy between the Democrats and the Republicans.

HARRIS: That's true.

PAGE: McCain was talking about how we don't want to rescue borrowers and banks that have made irresponsible decisions where what you heard from Barack Obama and Hillary Clinton was what can we do to help homeowner what's are pressed.

I have got to say in the past couple of days, I've been in North Carolina which votes on May 6th, the questions from voters both Barack Obama and to Hillary Clinton, they were entirely about the economy. No questions about Iraq that I heard. The questions were housing prices, health care, gas prices, what's happening to the cost of food. Those were the issues on voters' minds.

HARRIS: And Frank, I know you've been on the road as well. What did you hear in your travels?

SESNO: Reality check. Flat out a reality check. Here's what happens, you lose your job, got to have health care coverage to get this cobra (ph) thing going. It's going to cost you 6, 7, $800, $1,000 a month. That's what I heard from people who had been working and aren't working anymore.

I heard from one mom, had a couple of kids, paying over $600 a month for her health care coverage. She says she can't afford the $10 co-pays when she takes them to the doctor. That's how real it gets for people. These candidates with talk about $30 billion rescue funds and all the rest but they've got to zero in on this.

HARRIS: From the people that you heard from, did they identify any particular candidate as speaking directly to their concerns?

SESNO: No. They're angry. And they're furious, in fact. They want to know what's going to happen to their health care, who is going to bring the jobs back. The problem is that they probably the only person who talk real truth to power on that is John McCain when he was campaigning and said we're not going to bring the jobs back.

HARRIS: Yeah, and the other thing that John McCain said they thought was interesting was, look, if we're going to help folks, let's help the homeowners, let's not help the speculators in all of this. Susan, let's move on the issue, too, here, may be issue two is running a close second to issue one here. We're talking about Iraq. General Petraeus and Ambassador Ryan Crocker in Washington next week for an update on the war in Iraq. And let me ask you, as Iraq heats up, how might this impact the campaign?

PAGE: Absolutely, it makes - if the violence in Iraq continues to get worse as we've seen in recent days as we saw just 15 minutes ago on this program in Basra and in Baghdad, that's going to result in U.S. casualties and that's going to put that issue back on the front burner in American politics. You know it's taken -- it's taken a step back because the violence went down. Americans weren't being killed, not as many Americans were being killed. There was a sense of perhaps some progress being made there.

That sense of progress, I think, is quite in peril now as we see the violence going up, the fighting between the government forces and the Shiite militia in Basra for instance. That kind of turmoil, the lack of political progress could make this more of a salient issue especially if we end up with General Petraeus saying next week we should keep 140,000 or 130,000 U.S. troops there's for some time. You know we had been on a path to reduce those numbers. And I think a lot of Americans would be concerned if those levels are going to stay so high.

SESNO: And guess what, this circles back, Tony, to what we were talking about a moment ago, the economy. When I was on the road talking to people who had jobs or barely have jobs or had jobs, I heard a lot of them saying on their own, not prompted, look, I can't afford my health care but we're spending billions and billions of dollars in Iraq. They're making that connection.

HARRIS: Boy, all right. You know there's been a lot of talk about this drawn-out Democratic nominating process. Some thoughts from DNC Chairman Howard Dean on AMERICAN MORNING and then a couple of questions.

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HOWARD DEAN, DNC CHAIRMAN: Personal attacks demoralize the base. We need to focus on Iraq. We need to focus on gas prices, on mortgages. We need to focus on the economy. Those are the things that people care about. They don't care about bickering over pastors and who said what in Bosnia.

(END VIDEO CLIP)

HARRIS: What do you think about that comment and is the campaign, in your estimation, turning personal?

PAGE: Well, I think it has turned more personal, and quite nasty between the candidates and especially between their campaigns. In part because there are not big policy differences between them. So they're left discussing whether Hillary Clinton mischaracterized the scene when she landed in Bosnia. You know, years ago. Or over the dispute over that Reverend Jeremiah Wright.

I think it has gotten pretty personal. I heard from voters at the Hillary Clinton rally I went to yesterday say if Hillary Clinton doesn't get the nomination, they'll vote for John McCain. Twenty eight percent of Hillary Clinton supporters said in a Gallup poll recently they would vote for John McCain if she doesn't get the nomination. Quite concern to a lot of Democrats.

SESNO: If the Democrats are going to make a movie out of this campaign they call it the year of living very, very dangerously because they've got two very historic characters here who are locked in this, what, right now anyway, looks like a death lock, and it's no fun.

And there are some real issues here. For example, in one of the recent polls, the Pew poll 52 percent of independent voters aid they're now convinced that John McCain will take the country in a different direction. They're not seeing John McCain as Bush warmed over, and that's a real threat to the Democrats who are trying to make the case that he is.

HARRIS: Well, all right, let's leave it there for now. Can we please agree to get back here on a more regular basis. Susan, it's great to see you. Frank, it's always great to see you. Have a great weekend.

SESNO: Call collect, what can I say.

HARRIS: There you go.

WHITFIELD: All right, Tony. Momentarily, we're waiting for President Bush, who will be emerging with the new Australian Prime Minister, Kevin Rudd, a joint news conference expecting the East Room of the White House.

It'll be interesting to see just how candid the new prime minister just might be, given his position on pulling out Australian troops in Iraq. We're going to find out about, maybe, they're revealing a meeting there at the White House, straight ahead here in the NEWSROOM.

(COMMERCIAL BREAK)

WHITFIELD: Breaking news out of Virginia: a suspect taken into custody in an interstate shooting spree. Within the past few minutes Virginia State Police say a 19-year-old man was arrested overnight, an arrest after state police searched a home in Albemarle County overnight. The suspect, Slade Allen Woodson.

(BEGIN VIDEO CLIP)

FLAHERTY: He is considered a suspect in the Interstate 64 shootings that took place during the overnight hours of March 27th. We are still awaiting ATF results of the analysis of the ballistic evidence that was collected at each of the scenes along I-64.

(END VIDEO CLIP)

WHITFIELD: He was arrested for shooting into a residence and a business in Waynesboro. He has not been charged in the shooting actually on Interstate 64 west of Charlottesville. Police have been seeking at least two people. Six vehicles were hit by gunfire before daybreak yesterday. Two people were injured, but not seriously. A twenty-mile stretch of I-64 was closed for about six hours yesterday while police searched for the shooter.

HARRIS: And word just coming in to CNN of several children injured in a charter bus accident in Alabama. It happened on Interstate 59 near Birmingham, Alabama. The bus carrying elementary students overturned. State police say at least 25 people injured. The extent of those injuries not yet known. Reportedly, the bus was headed to the Tennessee aquarium in Chattanooga. Traffic at the accident site now being rerouted, and we will brink you more information as we get it.

WHITFIELD: All right. We want to take you straight to the White House, because we understand the president and new Australian Prime Minister Rudd have been meeting and will soon be emerging in the East Room. Our Ed Henry is already there, poised in position.

Ed, let's talk a little bit about what these two generally talked about. Likely Iraq. Australia has been part of the coalition forces, has had its forces there. This prime minister said, I want them out as soon as he took office.

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: That's right. The whole point here, is Mr. Bush is going to try to stress he can work with the new prime minister, Kevin Rudd, because he was such a close ally of John Howard, his predecessor. And Obviously John Howard was a close ally on Iraq and Afghanistan. And because Kevin Rudd beat John Howard, in part saying he would pull Australian troops out of Iraq, that has raised a lot of concerns about whether this alliance will continue.

So we can expect these two leaders to try to stress on issues like Afghanistan, global warming and others that they can still work together. We're expecting them to come out in the next few seconds here. But clearly coming out of that very tough-fought election between John Howard and Kevin Rudd, we're going to see Mr. Bush try and stress that alliance is still strong and that they can still work together, Fred.

WHITFIELD: And on the position of Afghanistan, kind of what some people have called the kind of forgotten war, what has been Prime Minister Rudd's position on Afghanistan?

HENRY: Well, the White House is waiting to let him speak for himself on that, but there has been an expectation that Australia wants, in concert with the U.S., to have more allies step up in Afghanistan and provide more troops and money to the war there. We can see the two leaders walking out now, laughing and smiling. You can see they're trying to project that image that image that they, can, in fact, work together -- Fred.

WHITFIELD: All right, well, we will find out momentarily exactly what they have to say and talk a little bit, expound more on their relationship. The president and prime minister Kevin Rudd of Australia.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Thanks for that rousing ovation. (LAUGHTER)

Mr. Prime Minister, welcome. I'm so glad you're here.

And, Therese, thank you for joining us as well. Laura and I are thrilled to welcome you here to the White House. And I appreciate the opportunity to visit with a leader of one of America's closest allies and friends.

And one thing is for sure: That friendship will strengthen and endure under the leadership of Kevin Rudd. I have found him to be a straightforward fella. Being from Texas, that's the way I -- that's the way I like it.

He is thoughtful, he is strategic in thought, and he is committed to the same values that I'm committed to: rule of law, human rights, human decency.

And we're sure proud you're here.

We spent a great deal of time talking about the economies. One thing we spent time on is talking about the benefits of trade between our two nations and the benefits of a world that trades freely and fairly.

And the prime minister was asking me about, you know, my views on Doha. I said it's possible to achieve a Doha round. He, too, believes we should work to achieve a Doha round. However, I informed him that we're willing to make serious concessions on the agricultural front but we expect other nations to open up their markets on manufacturing as well as services.

And to this end, Prime Minister Rudd, Kevin Rudd, said that he would be more than willing to help. And that's -- very grateful.

On the bilateral front, not only is the free trade agreement working, but next Monday we'll be signing an Open Skies agreement that will further our friendship and further our commercial ties.

And I think it's a great success of your administration and ours as well.

We talked about the environment and energy. There's an interesting moment for all of us to recognize that we can become less dependent, in our case on foreign oil, and at the same time be good stewards of the environment.

And we talked about the need to work collaboratively to achieve an international agreement in which the United States is at the table, along with developing nations like China and India.

In order for their to be an effective international agreement, China and India must be participants.

Now, we talked about the need to help developing nations improve their environment. And one way that we can do so is to commit ourselves to tariff-free trade and technologies that promote low- carbon energy.

And this is something we're spending a lot of money on in the United States, and we'll will continue to do so because I happen to believe technologies will enable us to be good stewards of the environment and change our energy habits, which we need to do here in the United States.

So I want to thank you very much for our discussions thus far on our economic interests and our responsibilities. But we also talked about freedom and the need to promote an ideology based on hope and decency. And that's an ideology of liberty.

And I want to thank very much the Australian government and the Australian people for their willingness to help a young democracy such as Afghanistan.

The prime minister and I discussed how Bucharest can become a success. And I can't thank you enough for going and I appreciate very much your strong commitment to helping the Karzai government succeed and thrive. It's in our national interests that we do so.

I also want to thank you very much for being a good loyal ally on Iraq. Obviously, the prime minister kept a campaign commitment which I appreciate. I always like to be in the presence of somebody who does what he says he's going to do. And, oftentimes, politicians go out there and they say one thing on the campaign trail and they don't mean it. Well, this is a guy who meant it.

But he also acted like you'd expect an ally to act. And that is, he consulted closely with his friends. His military commanders consulted closely with our military commanders.

But the commitment of Afghanistan is not to leave Iraq alone. It's to change mission.

And so, he told me about an interesting story. He met with the prime minister, Maliki. And Prime Minister Maliki says to Kevin Rudd -- or Kevin Rudd says to Prime Minister Maliki, "What can we do to help you?" It wasn't, "What can we do to abandon you?" He said, "How can we help you?"

And he said, "Well, how about training some farmers in dryland farming?"

Something we know something about in West Texas, by the way, Mr. Prime Minister.

(LAUGHTER)

And I want to thank you for that.

I want to thank you for stepping forward to help Iraq develop a civil society and a strong economy that will enable this young democracy to thrive and help yield peace.

People can -- I'm sure the press corp's going to say, "Well, aren't you mad at the prime minister for fulfilling his campaign pledge?" And the answer is, no, just so you don't even need to ask the question now.

(LAUGHTER)

We talked about Iran and our joint commitment to continue to work together to see to it that the Iranians do not develop the capacity to develop a nuclear weapon.

We talked about Burma.

I want to thank you for your commitment to a free Burma.

And finally we talked about North Korea and six-party talks and Australia's support for those six-party talks.

We going to have a good lunch, too.

And we'll continue our discussions on a variety of subjects. He's an easy man to talk to. I appreciate his visions. I particularly appreciate his consultations on China. He's an expert on China, and it's clear when you talk to him he is an expert on China. And, you know, all and all we've had a good start to this important trip.

And we want to welcome you again, Kevin, to the White House, and the podium's yours.

KEVIN RUDD, AUSTRALIAN PRIME MINISTER: Thank you. Thanks very much, George. And it's a pleasure to be here in Washington with my wife, Therese. And it's great to be here at the White House.

And thanks for your hospitality in having us at Blair House. We really appreciate that.

Our alliance doesn't simply reflect our shared past. Our alliance defines our common future as two of the world's great democracies.

I was thinking about this, this morning, about the number of presidents and prime ministers who have been party to this alliance, both Republican and Democrat, and both in our country, Labor and Liberal. This alliance has been supported by 12 American presidents, Republican and Democrat. It's been supported by 13 Australian prime ministers, Labor and Liberal, and I'm the 14th. And I'm confident that this alliance has a strong, robust future.

And the reason I'm confident of that is because it's rooted in shared values. We actually take the idea of democracy seriously. It's not a casual thought. It's not a -- it's just not a passing observation. It's something which is part and parcel of who we are as peoples.

So when you have an alliance which is rooted in a common set of values, it tends to mean that alliance is going to last for a bit. And there's the things we've done together right from the Second World War to the present, and there's been many of them. And we've been in the field together, and there are many other areas in wider foreign policy where we cooperate as well.

Turning to the future, the president indicated we discussed the current challenges facing the global economy, and this is, for us, in Australia, a global challenge.

Obviously, the United States, as the world's largest economy -- is fundamentally significant in the way in which this thing plays out.

But our response, and we discussed this at some length, is looking at how we can get some better transparency out there in financial markets on some of these particular products which are causing problems around the world.

There's an upcoming meeting of the International Monetary Fund, and we'll be working on our common positions toward that end.

As the president has just indicated, we also spoke about the Doha round. And my own view is that if ever the global economy needs a psychological injection of some confidence in the arm, it's now, and that can be delivered by a positive outcome on Doha.

It takes more than two to tango. It takes a lot of people to tango when it comes to the Doha round. Combinations of ourselves and the Cannes group, the United States, the Europeans, Brazil, India, others.

But what we have agreed, again, is strong, long-term supporters of free trade around the world, as one of the best drivers of global economic growth is to work very closely together in the months ahead to try and get a good, positive outcome for Doha. Good for our economy, good for the American economy, good for the global economy.

On foreign policy, the president and I also discussed, of course, Iraq and Afghanistan. I thank him for his remarks in relation to Iraq. And what he said is absolutely right in terms of my discussions with Prime Minister Maliki in Baghdad in December.

I've confirmed today to the president, as we will be confirming to the government of Iraq in Baghdad, an assistance package of some $165 million, a large slice of which will go to how we assist Iraqis train their people better in agriculture and in the wider economy.

Prime Minister Maliki said: This is a big need for us; we are a dry continent. We know a fair bit about dry land farming. So we'll be spending a lot of money training a lot of Iraqi farmers and agricultural scientists in the year ahead.

On Afghanistan, I confirmed to the president that we're in Afghanistan for the long haul. It's a tough fight, but we intend to be there with our friends and partners and allies for the long haul. And I look forward to being with the president in Bucharest soon so we arrive at a common civil and military strategy with our friends and partners in Europe and elsewhere.

On the other matters which were raised in our discussions, the president has run through them neatly. I won't elaborate on them. But I'd just conclude with this.

It was reminding of me -- for me -- when I saw the guestbook this morning at Blair House, and one of the first entries back in 1944 was a page dedicated to the visit by Labor Prime Minister John Curtin to Blair House. FDR was president of the United States at the time.

It goes back to remind me how much this alliance has been the product of common nurturing by presidents and prime ministers for a long time.

Mr. President, you said that you had a warm regard for me because from a Texan point of view you found me to be a reasonably straight shooter. I therefore designate you as an honorary Queenslander.

(LAUGHTER)

In the great state of Australia, I come from the great state of Queensland. It may surprise you that it's bigger the Texas.

(LAUGHTER)

But could I say...

(LAUGHTER)

But I can say, quickly...

(LAUGHTER)

BUSH: Can you recover nicely?

(LAUGHTER)

RUDD: The recovery point is this: Queenslanders and Texans have a lot in common, and they get on well. And so from one Queenslander to one Texan, one Australian to one American, I appreciate the relationship that we're forming, part and parcel of the relationship between two great democracies.

BUSH: Thank you.

A couple of questions a side.

QUESTION: Mr. President, thank you very much.

I'd like to ask you about Iraq. Yesterday in Dayton in your remarks you said that the Iraqi offensive against criminals and militants in Basra was a sign of progress, but it's also triggered clashes with supporters of Muqtada al-Sadr. And this morning U.S. were again fighting the Mahdi Army in Sadr City.

What does this say about progress in terms of reconciliation in Iraq among the various factions? And what can the United States do, what can you do, what can your administration do to help Prime Minister Maliki make progress in that area?

And, Mr. Prime Minister, if I could ask you, when you're in Bucharest next week at the NATO summit, what's going to be your message to the European allies to try to bring them along to have the same sort of commitment you just stated here and a commitment to have military operations with their forces in Afghanistan?

BUSH: Any government that presumes to represent the majority of people must confront criminal elements or people who think they can live outside the law. And that's what's taking place in Basra and in other parts of Iraq.

I would say this is a defining moment in the history of a free Iraq. There have been other defining moments up to now, but this is a defining moment, as well.

The decision to move Iraqi troops into Basra talks about Prime Minister Maliki's leadership.

You know, one of the early questions I had to the prime minister was, would he be willing to confront criminal elements, whether they be Shia or Sunni? Would he, in representing people who want to live in peace, be willing to use force necessary to bring to justice those who take advantage of a vacuum or those who murdered the innocent?

His answer was, "Yes, sir, I will." And I said, "Well, you'll have our support if that's the case, if you believe in even-handed justice." And his decision to move into Basra shows even-handed justice, shows he's willing to go after those who believe they're outside the law.

This is a test and a moment for the Iraqi government, which strongly has supported Prime Minister Maliki's actions. And it is an interesting moment for the people of Iraq, because in order for this democracy to survive, they must have confidence in their government's ability to protect them and to be even-handed.

The other thing that's interesting about this, by the way, this happens to be one of the provinces where the Iraqis are in the lead, and that's what they are in this instance. And the United States, of course, will provide them held if they ask for it and if they need it.

But they are in the lead. And this is a good test for them.

And of course routing out these folks who've burrowed in society, who take advantage of, you know, the ability, you know, to be criminals or the ability to intimidate citizens is going to take a while. But it is a necessary part of the development of a free society.

RUDD: In answer to your question on Afghanistan, the message I would take to our friends and partners in Europe when we get to Bucharest, is all of us have got to share the burden. And it's built on an assumption that all of us share a common strategy. So the first message, I think, for all of our friends and partners there in Bucharest is, we have to sign up to a common script, both military and civil, in terms of how we actually prosecute and succeed in this conflict. And I believe we can. No point being there unless you believe you can.

And then the second thing is, once you've signed up to a common script, a common strategy, which has both civilian and military dimensions to it, in an integrated fashion, to then say to all our friends and partners, "Let's all step up to the plate to make this work. And across the country in Afghanistan, not just in parts of it."

I'm optimistic that we're going to make some progress in Bucharest. I know the president has put in a lot of effort with a lot of European leaders up until now. We've been talking to some ourselves.

And I think we should look forward to a good outcome because the people of Afghanistan deserve a good outcome.

If I could ask Mark Kenny for his question.

QUESTION: Mark Kenny from The Advertiser.

Mr. President, both sides have stressed that the alliance is in perfect working order and good nick. But how can that be the case? How can the alliance remain unchanged, given that Australia has signaled new foreign policy with quite different positions from yours on things like Iraq, climate change and potentially over China?

BUSH: I guess it depends if you're a half-glass empty guy or a half-glass full guy.

(LAUGHTER)

It sounds like to me our foreign policy interests are aligned. You know, after all, we've committed to an international agreement that will be effective when it comes to greenhouse gases. The prime minister just defined his desire to help this young democracy in Iraq succeed. That's what we're for.

So I don't see differences when it comes to foreign policy. As a matter of fact, I see common agreement.

And one reason why is is because we share the same values. And those values are more important than the people who actually occupy the office, by the way. Those are the values that allowed 12 U.S. presidents and 14 Australian prime ministers to be united in common goals.

And so, I disagree with the assessment of whatever expert laid that out.

QUESTION: Thank you, Mr. President. I wonder if you could talk a little bit more about Iraq and how -- you mentioned criminal elements that are being fought against now. How concerned are you that with the violence now reflects, in fact, a deepening political and civil, even ethnic, conflict inside of Iraq? How much now are American forces being drawn into the fighting in the last just few hours even? And how is it going affect your decision looming on the way ahead?

And if I could ask you both, please, to talk a little bit about the crackdown in Tibet and how you see that affecting relations in China.

Thank you.

BUSH: Any other subjects you want to wedge in there?

(LAUGHTER)

OK.

Repeat some of those things? You had about five different things. I'm getting old.

Wait a minutes, look, yes, I've talked about criminal elements. And one of those things that's been well-known is that Basra has been a place where criminality has thrived.

You know, it's a port. A lot of goods and services go through there.

And there was -- from the beginning of liberation, there have been criminal elements that have had a pretty free hand in Basra. And it was just a matter of time before the government was going to have to deal with it.

And, you know, I haven't spoken to the prime minister since he's made his decision, but I suspect that he would say, "Look, the citizens down there just got sick and tired of this kind of behavior."

Most people want to have normal lives. Most people don't like to be shaken down. Most mothers want their children to go to school peacefully. And, yet, that wasn't the case in Basra.

And so, you know, I'm not exactly sure what triggered the prime minister's response. I don't know if it was one phone call. I don't know what -- whether or not the local mayor called him and said, "Help, we're sick and tired of dealing with these folks."

But, nevertheless, he made the decision to move. And we'll help him.

But this was his decision, it was his military planning, it was his causing the troops to go from point A to point B. And it's exactly what -- you know, a lot of folks here in America were wondering whether or not Iraq would even be able to do it in the first place. And it's happening. Now, they're fighting some pretty tough characters, people who kill innocent people to achieve objectives. And, yes, there's going to be violence. And that's sad.

But this situation needed to be dealt with, and it's now being dealt with, just like we're dealing with the situation up in Mosul. I have said in my remarks there's been substantial progress, and there has been. But it's still a dangerous, fragile situation in Iraq.

And, therefore, my decision will be based upon the recommendations of Secretary Gates, the Joint Chiefs, as well as General Petraeus and Ambassador Crocker, all aiming to make sure that we have enough of a presence to make sure that we're successful in Iraq.

And the reason why it's important to be successful in Iraq, because, one, we want to help establish a democracy in the heart of the Middle East, the most volatile region in the world; two, we want to send a clear message to Iran that they're not going to be able to have their way with nations in the Middle East; three, that we want to make it clear that we can defeat al Qaeda. al Qaeda made a stand in Iraq. They're the ones who said this is the place where the war will take place.

And a defeat of al Qaeda will be a major victory in this war against extremists and radicals.

Four, we want to show what's possible to people. There are reformers all over the Middle East who want to know whether or not the United States and friends will stand with these young democracies.

And so this is vital for our national interests. And I'm confident we can succeed unless we lose our nerve, unless we allow politics to get in the way of making the necessary decisions, which I have vowed to our military and our civilians in Iraq that that's not going to be the case so long as I'm the president.

And I'm -- as I told you, this is a defining moment, and it's a moment of, you know, where the government is acting. And it's going to take a while for them to deal with these elements. But they're after it, and that's what's positive.

He wants to talk to you about Tibet.

(LAUGHTER)

RUDD: I'll say one or two things about Tibet and then we'll flick to an Australian.

It's absolutely clear that there are human rights abuses in Tibet. That's clear cut. We need to be up front and absolutely straight about what's going on. Shouldn't shilly-shally about it.

We've made our positions clear on the public record, the Australian government has, about the need for restraint in the handling of this. I think it would be appropriate for the Chinese government to engage the Dalai Lama or his representatives in an informal set of discussions about future possibilities when it comes to internal arrangements within Tibet. We recognize China's sovereignty over Tibet.

But it is difficult and it's complex, and it certainly be matters which I'll be raising when I visit China myself at the end of this visit abroad.

BUSH: Mr. Prime Minister, excuse me. He is anxious on my view on Tibet.

He couldn't have said it better, and that's exactly what I told Hu Jintao a couple of days ago, that it's in his country's interest that he sit down again with representatives of the Dalai Lama.

He -- not personally, but to have representatives do so -- and that we urged restraint.

And I appreciate the prime minister's view and advice on dealing with this issue.

QUESTION: As you noted, Australia will begin withdrawing 500 combat troops from southern Iraq. And I heard that you accept this decision, which did, as you say, play out in our election.

But how does it fit with your view, expressed quite strongly again yesterday, that to withdraw troops at this time would be to retreat?

And you've described our former prime minister as a man of steel. I'm wondering how you'd describe Mr. Rudd.

BUSH: Fine lad. Fine lad.

(LAUGHTER)

First of all, I didn't exactly say that.

And by the way, we are withdrawing troops. It's called return on success. And our intention is to pull down five -- you know, five battalions by July. Troops are coming out -- five brigades, excuse me.

Troops are coming out, because we're successful. And so, I would view the Australian decision as return on success -- returning home on success.

That's fundamentally different from saying, "Well, it's just too hard to pull them all out." This sends a different signal.

This is a signal in which we're working collaboratively with the Iraqi government. They know our intentions and they know we're not going to leave them.

In the very same speech, I talked about developing a long-term strategic relationship with Iraq as well. And for those who didn't listen to the full speech, I will remind you that it's in our interest that we enter into such an arrangement. But a long-term strategic arrangement does not commit any future president to any troop level, nor does it talk about permanent bases. But it does talk about a joint strategic relationship to make sure that the Iraqi people know and the Iraqi government knows that we're not going to leave them in the lurch.

And so, we are taking troops out, just like the Australians are, because we're being successful.

And his question -- the question was, "Well, are you going to bring any further out?" Not, "Are you going to bring any out?" "Are you going to bring any further troops out?" from that which we committed to do earlier.

And the answer is, it depends on what our commanders say and the folks in Washington say, and it depends upon conditions on the ground.

His real question was, "Have the conditions changed such that you believe your commander's going to make a different recommendation than he might have two days ago?" and I can't answer that question. I can only tell you what I'm going to do after -- after we get back from NATO.

Thank you for coming.

(LAUGHTER)

I have enjoyed it.

(CROSSTALK)

Yes. Heck yes.

(LAUGHTER)

Thanks for coming.

RUDD: Good. Thank you.

BUSH: I appreciate your time.

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