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CNN LATE EDITION WITH WOLF BLITZER

Interview With Ryan Crocker; Interviews With Jon Corzine, Bobby Jindal

Aired June 29, 2008 - 11:00   ET

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


CANDY CROWLEY: It is 11 a.m. in Washington, 8:00 a.m. in Los Angeles, and 6:00 p.m. in Baghdad. Wherever you're watching from around the world, thanks for joining us for "Late Edition."
As oil hit a record $140 a barrel this week, the high price of gas and what to do about it was front and center in the U.S. presidential campaign and in Congress.

A short while ago, I spoke about that and more with the Senate's top Republican, Mitch McConnell.

(BEGIN VIDEOTAPE)

CROWLEY: Senator Mitch McConnell from Kentucky, we're delighted to welcome you here.

I want to start, right out, with energy policy. I bet you get an earful, down there, about gas prices.

I took a look at your bill, gas price reduction act, and saw that it calls for exploration in the deep sea, western state oil shale exploration, and strengthening commodities markets.

What in that bill; what in anything Congress is doing would halt the march of gas prices and/or reduce it?

MCCONNELL: Well, it's the biggest interest in the country, as you indicated. Here in Louisville today, the average is $4.22 a gallon. People are outraged, and with good reason.

What we need to see here is some indication that America, which is, by the way, the third largest energy producer in the world, is willing to do something, not only to find more but to use less.

That should be the theme: find more and use less.

Our bill, that you referred to, would open up parts of the Outer Continental Shelf, where states want to do that -- for example, Virginia, which would like to open its Outer Continental Shelf but has been denied it.

It would get rid of the moratorium that this new majority put in, last year, on oil shale. Oil shale is an enormously -- has enormous possibility. We have, in three or four states, out west, as much oil as Saudi Arabia times three. CROWLEY: But, Senator, if I could ask you, does finding more stop those gas prices, reduce those gas prices?

That's so far down the line. What about tomorrow, or the rest of this summer?

MCCONNELL: Yes, well, you know, the markets need to see some optimism. Right now, they don't see any optimism. We've got a no -- we've got an off-limits sign on all of our Outer Continental Shelf except a small percentage of it. Eighty-five percent of our Outer Continental Shelf is locked up; 100 percent of our oil shale is locked up.

We need to move on the conservation side, as well. And we provide incentives for battery-driven cars.

You know, candy, it's not going to be in the very distant future when we'll be plugging in our cars overnight to get them ready for the next day.

I think, any signs of optimism, the market would respond favorably to, and that's the best thing we can do, in the short term, is indicate we're going to do something about this problem, rather than putting ourselves in a position simply begging the Middle East to increase production.

CROWLEY: So It really is what Senator McCain said. You're counting on the psychology of the marketplace, really, to look at what you're doing, saying, well, they'll do something about the long term, and that will drive down oil prices?

MCCONNELL: Well, it would certainly help. I mean, the excuse has always been nothing would happen immediately. That was the excuse when President Clinton vetoed opening up a small portion of the Alaskan wilderness 10 years ago.

I mean, the excuse always is nothing, would happen immediately. But you have you to begin. And beginning would be something that the markets, I think, would respond very favorably to.

CROWLEY: Bottom line, is there anything that you foresee that is going to bring down gasoline prices by the end of the year?

MCCONNELL: Yes, signaling to the markets and to the rest of the world that we're going to do something, here in the United States, to get a handle on this problem.

We just got -- I just got a letter yesterday from some Democrats and Republicans indicating that they wanted to come together and get a solution. There's at least five Democrats that I'm aware of that want to join us doing something, not just on the conservation side, but production side as well. Again, the theme ought to be "find more and use less."

CROWLEY: I want to play you, real quick, something that Senator McCain said. He was talking, here, about ANWR, the Arctic National Wildlife Reserve (sic).

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN, R-ARIZ.: I understand the attractiveness of it, but I would also say to you, I would not drill in the Grand Canyon. I wouldn't drill in the Everglades. And I believe that this area should be kept in pristine preservation.

(END VIDEO CLIP)

CROWLEY: You also have Governor Schwarzenegger saying, I don't want offshore oil drilling.

So, even within the Republican Party, there is not agreement on this long-term finding more.

MCCONNELL: Yes. Well, we left ANWR out of the proposal, the Alaskan wilderness, because we know it is controversial. We left that out of our proposal, in order to reach out, to get a broad bipartisan compromise.

And with regard to California, as I just indicated, under our proposal, the Outer Continental Shelf would be opened only if states wanted to. And if California doesn't want to, they don't have to. But Virginia, for example, would like to open its Outer Continental Shelf.

CROWLEY: I want to turn to politics, now, because we can't help it, here, and play something that John McCain said the other day about the outlook that he sees right now for the Senate and the House Republicans.

(BEGIN VIDEO CLIP)

MCCAIN: Right now, if the election were tomorrow, we Republicans would lose seats in both the House and Senate. I mean, that's just a fact.

(END VIDEO CLIP)

CROWLEY: So he says "just a fact" that, right now, Republicans would lose seats in the Senate; they would also lose seats in the House.

This is a very grim year for Republicans. You're down in money. The political zeitgeist out there is very anti-Republican.

When you look ahead, do you see anything other than losing seats in the Senate?

MCCONNELL: Well, the numbers are daunting. There are 23 Republicans up and only 12 Democrats. That's because we had a very good year, six years ago.

So the numbers are against us. But I'm very optimistic, Candy, that we'll going to stay roughly where we are. We're not going to be back in the majority in the Senate next year. The numbers make that impossible. But I'm optimistic we can stay roughly where we are. And, of course, in the Senate, the only legislative body in the world where a majority is not enough, the minority is not irrelevant, provided it's a rather robust minority. And right now, we have a robust minority. And I think we can stay pretty close to where we are.

CROWLEY: So you don't think you're going to lose any seats in the Senate?

I mean, that would put you, kind of, in the minority, I think.

MCCONNELL: Well, you don't lose seats in June. The election is yet to occur. We have good candidates who are well funded. Senator McCain, for example, was here in Louisville last night, and we had a Kentucky record fund-raiser of $2 million to be chaired by his campaign and the Republican National Committee and the Republican Party of Kentucky.

He's having that kind of success all over the country. Our candidates are excited about run with Senator McCain. I don't have to tell you, he's within the margin of error, or according to the Gallup poll, dead even with the Democratic nominee.

So we think we have a very strong candidate at the top of the ticket, and I'm pretty optimistic that we can stay roughly where we are in the Senate.

CROWLEY: I want to read you something. This has to do with Iran and Iraq. Sy Hersh has written a new article in the New Yorker with some pretty explosive things in it, mostly about special operations going on, deep into Iran.

So I want to read you something from this article, where he says, "Late last year, Congress agreed to a request from President Bush to fund a major escalation of covert operations against Iran, according to current and former military, intelligence, and congressional sources. The Democratic leadership's agreement to commit hundreds of millions of dollars for more secret operations in Iran was remarkable, given the general concerns of officials like Gates, Fallon, and many others."

Do you know anything about secret ops going into Iran, you all approving hundreds of millions of dollars for that?

MCCONNELL: Well, I haven't seen Sy Hersh's article, and really wouldn't have any comment on that.

CROWLEY: Well, you would recall, though, if you had in fact agreed to special ops operations into Iran, wouldn't you?

MCCONNELL: I really wouldn't have any comment on that, Sandy -- Candy, excuse me.

CROWLEY: OK. Listen, one last question on the politics of it all. You said recently that you think that people will want to go ahead and campaign with Senator McCain. I've spoken to a lot of your colleagues who think that this really is a kind of every man, every woman for herself this year for Republicans, that you really ought to go after local and state issues.

MCCONNELL: I think Senator McCain is running well virtually everywhere, even in the so-called blue states. He runs a lot better than you would expect. So in my state, for example, Kentucky, I'm not even sure the Democratic nominee for president is going to be competitive.

So he's a big asset in this fall's election, an independent- minded Republican nominee who can reach out to Reagan Democrats and independents. We're pretty excited about running with him.

CROWLEY: Senator Mitch McConnell, out of Kentucky, thanks for your time today.

MCCONNELL: Thank you.

(END VIDEOTAPE)

CROWLEY: Just ahead, a very different view on the energy crisis and the Obama/McCain presidential race from the Democratic governor of New Jersey, Jon Corzine. And later, Seymour Hersh has an explosive article about U.S. covert action in Iran. He'll be here with all the details. You're watching "Late Edition," the last word in Sunday talk.

(COMMERCIAL BREAK)

CROWLEY: Welcome back to "Late Edition." I'm Candy Crowley in for Wolf Blitzer this morning.

Coming up in our next hour, a conversation with a top supporter and potential running mate of John McCain, Louisiana Governor Bobby Jindal. But joining us now from New York is New Jersey Governor Jon Corzine. He was a backer of Hillary Clinton, but is now behind the presumptive Democratic candidate, Barack Obama. Governor, it's so great to have you here. Appreciate it.

CORZINE: Thanks, Candy. Thanks for having me.

CROWLEY: Oil and gas prices, as you know, and as I'm sure you hear a lot about up there.

CORZINE: They are crushing people right now.

CROWLEY: Absolutely, absolutely. And so, there's been this argument on the campaign trail, as you know, that candidate you now are backing, Barack Obama, is opposed to offshore drilling. John McCain has changed his mind, says the time is different, and we need to start getting some of the resources out of offshore drilling.

I want to show you a Gallup poll and then ask you a question. Our Gallup poll showing that when you ask people "do you favor or oppose offshore drilling?" 57 percent of Americans now favor it, and 41 percent oppose. Do you think Barack Obama is on the wrong side of this issue?

CORZINE: Absolutely not. First of all, there is no question people want something done about getting off this addiction of oil that we have in this country. It undermines our national security, and it certainly undermines individuals' financial security.

I presume if you don't live next to a coast, you think the risks are not too high. The closer you get to the coast, the more people recognize that it can undermine your economy, the cost/benefits are not nearly as great as trying to do something about conservation or alternative energies.

We really ought to be putting all our positive movement in those areas. We've already got 68 million acres of leased land that's not even being drilled or explored that has been put out to the oil companies. I think that we ought to take and move forward on alternative energies, on conservation. Barack Obama has a very clear plan on that, and it contrasts very sharply with what I think are sort of long-term gimmick and short-term gimmick programs like gas tax holiday and offshore drilling.

CROWLEY: You're certainly right about there being a big contrast between Barack Obama and John McCain on this subject and many others, as you know. One of the things that McCain has said over the course of this week is that Barack Obama is not being proactive about actually using what resources are here for the U.S. to begin to dial back our dependency on foreign oil. I want to play a bit of a campaign commercial for you.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA, D-ILL.: John McCain is offering the same old gimmicks. I start off with the preface that nuclear energy is not optimal, so I'm not a nuclear energy proponent.

(END VIDEO CLIP) CROWLEY: He's not for nuclear energy, he is against drilling in offshore, he's against drilling in ANWR. What proactively is Barack Obama doing that would...

CORZINE: First of all, I just thought I saw you run a clip where Senator McCain was against -- not offshore drilling, but drilling in ANWR.

Senator Obama wants to make sure that we have safety and disposal of waste in place before we move forward with nuclear energy in an aggressive manner, and he is talking about alternative energies and conservation, which are the real way that we can get off of our addiction of oil. It's a very proactive view, and what we're getting from Senator McCain is just more of the same that we've had under the Bush administration for the last seven and a half years, and that has gotten us to a pretty bad place with regard to energy, both consumption and the price of oil. It speaks for itself, and I think the public understands what we're doing isn't working. We need to move in a new direction, and I think that's exactly where Senator Obama is coming from. CROWLEY: Governor, can you point to something in Senator Obama's platform and what he said about energy that would between now and the end of the year, were he president, actually bring down gasoline prices?

CORZINE: Well, I think what he's trying to do is address the overall economy. He's talked about having an additional program of rebates, a second stimulus program, if you would. He's talked about having a $1,000 tax credit for individual families. And changing the attitude about the use of oil is hopefully going to change the terms and conditions of how we think about it in the long run.

In the short run, we're going to have to deal with economic issues that are important to middle-class families and working families. That's why he's talked about tax credits and an additional stimulus program. I think it's very hard to in the short run change the price of oil.

If you were going to do anything -- and this is another thing that Senator Obama has talked about -- is recognizing there are a lot of reasons why the price of oil is up. One of them is that there is unfettered speculation in the commodities market. It's not blaming the commodities traders for the whole price that we see in oil, but one of the ingredients that has raised the price is unfettered speculation, and I think he wants to bring all of that trading of oil under an umbrella where it can be supervised and understood what's going on. That actually might change prices in the short run.

CROWLEY: I now want to turn you to politics for a second, and some pretty tough words that John McCain had to say recently about Barack Obama. And this stemmed from Obama's decision not to take public funding to fuel his campaign in the fall.

(BEGIN VIDEO CLIP)

MCCAIN: You know, this election is about trust and trusting people's word. And, unfortunately, apparently on several items, Senator Obama's word cannot be trusted.

(END VIDEO CLIP)

CROWLEY: There have been a couple of things out there, Governor Corzine, that people have said this is a change of position, but essentially what John McCain has said right here is that Barack Obama lies.

So how do you respond to people who say, listen, he was all for the public finance system, gave every indication that he was going to do that, and then he said, no, I think I'll stay outside the system. On guns, there has been a shift in position. There have been a number of things like that, which make critics charge Barack Obama looks like the same old politician rather than an agent of change.

CORZINE: Well, first of all, it's the silly season of campaigns, and so people use the lie word a little loosely. And I think that's the case here as well. The fact is that Senator Obama never committed to general election public financing, and since Senator McCain was the presumptive nominee on February 6th and has been taking money outside of the matching system non-stop for seven months up until their convention, it was an unequal playing field if Senator Obama didn't go forward with it.

I think that more than anything, Senator Obama has reached out to small donors, who are willing to ask for nothing other than good leadership out of Senator Obama, and I think has dramatically changed the playing field. And I think it is absolute campaign finance reform based on how he's raised his money.

With regard to the gun ruling out of the Supreme Court, I've heard before and after that ruling Senator Obama say that he believed it was an individual right that is managed inside the context that the states and localities still have a right to regulate. And so, I don't see it as a change, and I -- it will be a long stretch to call that a lie.

I think he's been very consistent, and I think he's actually spot on, what he's doing both with campaign finance and, you know -- I would have liked to have seen the Supreme Court come out in a different place with respect to the gun ruling, but it is their judgment. I think it's consistent with what Senator Obama has spoken about in the past.

CROWLEY: New Jersey Governor Jon Corzine, now a supporter of Barack Obama. We really appreciate your time this Sunday.

CORZINE: Thanks, Candy, for having me.

CROWLEY: Straight ahead, where do things stand in Iraq? The answer straight from a top envoy in Baghdad when we come back.

And later, Seymour Hersh has new information about U.S. covert action under way in Iran. He'll be here with all the details. A lot more "Late Edition" right after the break.

(COMMERCIAL BREAK)

CROWLEY: Welcome back to "Late Edition." I'm Candy Crowley, in for Wolf Blitzer.

While few would argue about the success of the so-called surge in Iraq, there's no shortage of criticism about the political progress there. Earlier, I spoke with the U.S. ambassador to Iraq, Ryan Crocker, about the political and security situation.

(BEGIN VIDEOTAPE)

CROWLEY: Ambassador Crocker, thank you so much for joining us. I want to get right to what we have seen in the past couple of days, and that is an increase in the violence there. As we all know, in May -- and we want to put some figures up here -- there were 19 U.S. casualties, way down. In June, 29 casualties. There were three additional overnight.

What I want to know is what's happening on the ground that has caused that?

CROCKER: Candy, we have said for some time that in Iraq, there are good days and there are bad days. Overall, we have seen a significant improvement in the security situation and a reduction in casualties, both Iraqi and American, but we've never said that this fight is over or anywhere near it. We're up against some resilient and determined enemies. They are not yet defeated. They have a capacity to hit back, and that is what we're seeing, both from Al Qaida and its allies and from extremist Shia militias.

But we're also seeing something else, which is a very sharp Iraqi reaction to these kinds of attacks. You just mentioned the one that took place in Sadr City on Tuesday that killed four Americans. Two days after that attack, the district council, members that had been the target along with us reconvened, held the election that had been scheduled for Tuesday, elected a wounded council member as their new chairman, denounced the attackers, publicly thanked the United States for its support, extended its sympathies, and expressed their determination to take their neighborhood back from the militias who carried out that attack.

So we've got more hard work in front of us. Fighting here is by no means over, but clearly we are in a different and better place than we were even six months ago.

CROWLEY: Are you in a better place vis a vis Iran? And by that I mean, you suggested a while back that you felt that there was a change in attitude among Iraqis toward Iran and its supplying of insurgents in Iraq. Have you seen any decrease in activity by Iran?

CROCKER: What we have seen, of course, is a string of significant successes by Iraqi security forces against militias that have been backed by Iran. First in Basra, then in Sadr City, and over this past week or so, in the southern province of Maysan. So what we're seeing is a significant decrease in extremist militia capability because the Iraqi security forces are literally taking them off the streets.

CROWLEY: So it sounds like you have not yet seen a decrease in activity in Iraq by Iran. I know that you've had sessions with Iran previously, had given some indications that Iran, Iraq and the U.S. might want to have another session. Had there been any progress on that? Do you expect to be having any contact at all with Iran about Iraq?

CROCKER: We keep the channel open here in Baghdad. We think it's important to have that option. But also, it's important to have talks for a purpose, not just for the sake of having another session. So we'll need to choose the timing when we think it will improve the situation, actually make some progress.

CROWLEY: I want to ask you, while we're on the subject of Iran, there is a new article in the New Yorker by Sy Hersh, and I want to read you a portion of that, which says "the United States special op forces have been conducting cross-border operations from southern Iraq, with presidential authorization, since last year.

CROWLEY: These have included seizing members of Al Qaida (sic), the commando arm of the Revolutionary Guard and taking them to Iraq for interrogation and the pursuit of high-value targets in the president's war on terror."

Has the U.S. indeed taken -- gone into Iran and come back with prisoners, either Al Qaida or Iranians?

CROCKER: I haven't seen the -- I haven't read the article, Candy. But I can tell you flatly that U.S. forces are not operating across the Iraqi border into Iran, in the south or anywhere else.

CROWLEY: I'm sorry, and I misspoke; I didn't mean Al Qaida. I meant Al Quds Forces in Iran. But you're saying that that has not happened?

CROCKER: U.S. forces are not operating across the Iran-Iraq border, no.

CROWLEY: OK. Let me ask you about the status of the agreement that you're trying to reach with Iraq that would allow U.S. forces to stay in the country beyond the U.N. agreement, or the U.N. authorization.

It seems as though the sticking point may be that Iraq wants the ability to prosecute U.S. soldiers, U.S. personnel for crimes, and that that is a non-starter for the U.S.

Where is there any room for agreement there?

CROCKER: Candy, we're negotiating a very broad set of issues with our Iraqi partners, a strategic framework that will define the whole scope of our relationship in the period going ahead, in -- not just in security terms, in economic, scientific, technical, and diplomatic as well.

We're also negotiating a more specific set of issues that will give our forces the ability to continue to operate in support of Iraq after the Security Council resolution expires at the end of the year.

You'll appreciate that, again, this is a negotiation under way, that it is not a negotiation that we can do via the media. But we're operating under some pretty fundamental principles.

And one of them is a full respect for Iraqi sovereignty, Iraqi law, the Iraqi process. Neither we nor they will put anything into this agreement that would contravene those principles.

At the same time, we do have to have the necessary protections and authorizations for our forces, to enable them to do what they to do to support Iraq.

So it's a negotiation under way, a work in progress. I can't predict what the outcomes will be, except to say that they will be in the public domain. There won't be any secret protocols or anything like that.

CROWLEY: I've got about 30 seconds left, so I want to ask you about the political atmospherics in Iraq. You have lost some civilians out there recently.

Do you think that, irregardless of the success of the surge, there has been matching political and government progress?

Are you happy with where you are right now?

CROCKER: There has been some substantial political as well as economic progress. As security has improved, the environment has changed for the better. That allows compromises to emerge that simply were not possible before.

And we've seen that through a string of legislation through much better budget execution, a dramatic improvement over just a year ago.

Is there work to be done? Absolutely there is.

But I'm increasingly confident that we are in a climate, now, where Iraqis are going to be able to progressively build their country, not just in security terms, but in political and economic as well.

And one of the major developments, looking ahead, will be provincial elections. The council of representatives is currently debating that law right now. And those elections, in the latter part of this year, will be a very significant step.

CROWLEY: Ambassador Ryan Crocker, we thank you so much, from your time, out of Baghdad. Have a good evening there.

CROCKER: Thank you, Candy.

CROWLEY: Up next, over the weekend, there have been new diplomatic breakthroughs in North Korea. We'll get the latest from CNN's Christiane Amanpour, who is standing by, live, in London.

And then we'll turn to the New Yorker's Seymour Hersh, who has new details about U.S. military action inside Iran. "Late Edition" will be right back.

(COMMERCIAL BREAK)

CROWLEY: You're watching "Late Edition." I'm Candy Crowley in for Wolf Blitzer. In a show of Democratic Party unity, some of Hillary Clinton's biggest supporters are expressing a desire to coalesce behind Barack Obama.

One of them, former secretary of state Madeleine Albright, spoke with Wolf Blitzer this week in "The Situation Room."

(BEGIN VIDEO CLIP) WOLF BLITZER, HOST, "THE SITUATION ROOM": To those Americans out there who supported Hillary Clinton, like you did, who are still uncomfortable that he has the experience, the gravitas to be commander in chief, what would you say?

ALBRIGHT: Well, I say the following thing. I think that we need a 21st century leader, and Senator McCain is going to be a third term of President Bush and a 20th century approach to this. And I think that Senator Obama offers a whole host of different approaches.

I personally think that it is very important for all Democrats to unite. Senator Clinton and Senator Obama are going to be campaigning together later this week.

And I have believed all along that the Democratic Party will unite, that we will elect a new president, because we have just gone through a disastrous period in foreign policy.

BLITZER: And sitting down with the Iranian president, Mahmoud Ahmadinejad, without preconditions, during the first year of his administration, for a president to make that kind of a commitment -- is that smart?

ALBRIGHT: He has -- as I understand it, he has said that there would need to be preparations for a meeting like that. I think it would be very interesting, for instance.

I wish that the United States had sent along an envoy with this delegation that just went from the European Union, with Javier Solana.

I think that there are ways to begin discussions at a lower level. And the part that I think has to be -- the allegations that have to be stopped is to say that just talking to the Iranians is wrong.

You have to talk to your enemies, not just your friends. And Senator Obama wants, in fact, to open up a way of dialogue with those countries that we consider major problems.

(END VIDEO CLIP)

CROWLEY: Next up, we will take you to another part of the universe, and that is to London, where Christiane Amanpour will be standing by. She is going to talk to us about a potential thaw in relationships between the U.S. and North Korea, right after this break.

(COMMERCIAL BREAK)

CROWLEY: There's been a significant change in relations between the United States and North Korea. CNN's chief international correspondent Christiane Amanpour, who has just returned from North Korea, is in London now with some late-breaking details. Christiane, what can you tell us?

CHRISTIANE AMANPOUR, CNN CORRESPONDENT: Well, Candy, just a day after the North Koreans, in full view of U.S. officials there at Yongbyon, blew up their cooling tower, now we understand according to U.N. sources that a brand new deal has been signed between the United States, North Korea, as well as the U.N. and a few other partners, on food assistance to the desperately needed North Koreans in a vast part of that country.

There's a U.S. ship that's just docked at a North Korean port of Nampho, and according to officials, it will take two days to unload and then redistributed to those who need it so critically.

Now, the important new development is that this letter of understanding has been signed with the North Koreans, and this gives a much bigger access to the U.S., to the U.N. and to others who would distribute the food.

There is, we're being told, unprecedented large area of North Korea now being opened to distribution. Unprecedented, more free access, random surveys to see that the actual beneficiaries are getting this food.

There's also much more increase in personnel. They had just 10 personnel in there. That's going to be up to 60 foreign personnel to distribute this food and to manage the distribution.

The United States, USAID has some 500,000 tons of food aid to be distributed to those who need it in North Korea, and that is the initial supply of that 38,000 is on board this U.S. ship, and it will be sent to those who need it. Population, 23 million in North Korea. It's estimated some 5 million are in severe need of food.

But just to give you an idea -- from some 50 counties that previously were allowed under very, very strict restrictions to have food distributed, now that's been upped by the North Koreans to 150 counties, taking in most of the geographical area of the country.

So this, we're told by our sources, shows a new openness by the North Koreans and a new openness to admit that they can't actually deal with their food problems and they do need outside help. And here now the USAID, the U.N. and its partners will be dealing with this need and will be doing it -- Candy.

CROWLEY: Our Christiane Amanpour, doing what she does best for us, breaking some news. Thanks, Christiane.

And you can see a lot more of Christiane's extraordinary trip and the long history mistrust between the U.S. and North Korea at 8:00 p.m. Eastern tonight. You won't want to miss it.

Up next on "Late Edition," once again startling charges about U.S. operations against Iran. We have investigative journalist Seymour Hersh with us for all the details on his new article when we come back.

(COMMERCIAL BREAK)

CROWLEY: While the Bush administration has been emphasizing tough diplomacy with Iran, it's also been escalating covert U.S. military actions against the country. That's according to investigative journalist Seymour Hersh, who reveals the details in a new article for the New Yorker magazine, titled "Preparing the Battlefield." He joins us now.

That sounds a little ominous. Let me ask you first, if you -- what is the headline that readers will take away from this article?

HERSH: Well, one of the basic points is that, no matter what we say about diplomacy, you know, carrot and stick, the stick is working pretty hard and the stick is working overtime. This president did escalate the covert war, the secret war inside Iran.

We've been doing stuff inside Iran since '05 pretty much, pretty heavily, you know, looking at the nuclear facilities, collecting intelligence, trying to undermine the regime, et cetera, et cetera.

HERSH: But there was a significant escalation this year. First of all, they got a great deal of authorization to spend up to $400 million. That doesn't mean he's spent it all yet, but he's got that kind of authorization from one of the secret committees.

Anybody who saw "Charlie Wilson's War" -- you know, Charlie Wilson was able to generate a lot of money secretly. That's what happens in Congress.

And the other major thing is, we've sent in a special task force that operates out of Afghanistan into Iran. I give notice what Ambassador Crocker said about not cross-border. And I have a lot of respect for him and I don't want to challenge him. But the fact is, we're inside; we're not necessary cross-border. We have teams inside Iran.

And these include joint special operation forces, our most elite commando unit. And basically, they're guys that go after high-value targets around the world. You know, they capture them or kill them.

So it's a significant increase in American potential for damage inside Iran.

CROWLEY: I do want to let our audience hear from Ambassador Crocker, and then I want to ask you the difference between what he's denying and what you're saying. Here he is.

(BEGIN VIDEO CLIP)

CROCKER: I haven't read the article, Candy, but I can tell you flatly that U.S. forces are not operating across the Iraqi border into Iran, in the south or anywhere else.

(END VIDEO CLIP)

CROWLEY: So they're not -- I mean, is he denying something you didn't say? I can't quite get the difference here.

HERSH: Well, you know, it's complicated. Because one of the things in the article -- it's a long article in the New Yorker -- one of the things I described is that one of the problems Admiral Fallon, the former commander of CENTCOM, who ran into trouble because he spoke about not wanting to bomb Iran.

Another factor in Fallon's problems with the White House, particularly with Mr. Cheney, the vice president, was that Fallon wasn't able to learn what was going on, all he wanted to know, about covert operations, CIA operations inside Iran and Afghanistan.

That is simply a reality, that when you run secret operations, if you're not telling the commander, the military commander of the Central Command, who is supposedly running the country -- you may not tell the ambassador everything. Sometimes it's better not to have the ambassador know.

But the other point is, we certainly are going cross-border, on short forays, grabbing Al Quds members, bringing them back. We've been doing that for a long time.

He may not know the extent to which we're operating deeply with commandos or -- not so much -- with our special forces inside Iran. So it's possible. Because he's not somebody -- he'll spin it, but he's not somebody who won't say something he doesn't believe.

CROWLEY: So what's the end game here? What are they trying to accomplish?

Is it to end the war in Iraq?

Is it to overturn the government in Iran?

Is it greasing the skids for a preemptive strike?

What are they doing there?

HERSH: That's a great question because I don't know. And, boy, do I wish -- I've been writing about Iran for about three years, almost constantly, in the New Yorker, sort of, this, you know, "Chicken Little, the sky is falling." And I sure wish I could be wrong about it.

But the end game is, as far as -- and I do have some access into some of the thinking, particularly in the vice president's office. They do not want -- Bush and Cheney do not want to leave Iran in place with a nuclear program, with, they believe, a nuclear weapons program. They simply don't believe the national intelligence estimate that came out late last year that said they haven't done anything in nuclear weapons since '03. They just don't believe it.

So they believe that their mission is to make sure that, before they get out of office next year, either Iran is attacked or it stops its weapons program.

I do believe that. I think this is another example of putting an awful lot of pressure on the Iranian government. There's been a dramatic increase in kinetic events and chaos inside of Iran. Almost every other day, there's another story in the Iranian press -- I write about this in the article, too -- about things blowing up, et cetera, et cetera.

It looks like things are falling apart, a little bit. And the central government certainly has more trouble.

And I think the goal of this operation, this incredible operation, with all this money -- and, by the way, it's the Democrats in Congress who basically looked the other way and said, take the money and run. They did not stop this money, the leadership that I'm talking about, the Democratic leadership.

So, basically, my guess is that -- I don't think we can safely say that any military action is off the table, no matter what happens. And that's -- as I say, I wish I'm going to be wrong about all that, but this is really, sort of, an amazing development.

CROWLEY: Absolutely. I want to read a graph out of your book because it goes to the oversight of the Democrats you just mentioned.

HERSH: Sure.

CROWLEY: This is from your book -- sorry -- from your article.

"'The oversight process has not kept pace -- it's been co-opted by the administration,' the person familiar with the contents of the findings said. 'The process is broken and this is dangerous stuff we're authorizing.'"

Tell me, first, what your sources say is so dangerous about this?

HERSH: The president has to give a finding on covert action, any action that's covert. In other words, when CIA goes in some place, if they get caught, there could be spies.

So he has to tell the Congress about it. And the military simply is -- the president, since 9/11, has decided anything we do militarily, we don't have to tell anybody in Congress about. That's all preparing the battlefield. That's the title of the piece.

And so what Congress gets told is something about CIA operations, and that's why they had a finding, but nothing about what the military is doing on the ground inside Iran.

And so the people in the Senate -- the House, particularly, the Defense Appropriations Subcommittee, Charlie Wilson's old subcommittee, we're talking about Congressman Obey, Congressman Murtha, some of the others are really concerned because they're approving programs about which they don't have the whole story, and they know it. And they don't know what to do about it. And it's a source of enormous tension.

The problem is it's also secret. Nobody wants to talk about it. Nobody can talk about it. It's a world that the White House controls because it's very top secret. The presidential finding that I'm writing about is a document you don't discuss on CNN. If you're the ambassador, you don't talk about it.

I understand Senator McConnell was here. And the senators are able to say -- those who know can say, "I can't talk about it."

So we in the public don't get much of a look. And for me, as a journalist, to write about this is difficult because, often, a lot of other journalists won't be able to make heads or tails of what I'm doing, because they can't simply find the people that will talk about.

CROWLEY: Right, absolutely.

I've got about 15 seconds. Can you give me, in a nutshell, why it's so dangerous?

Is it because it could prompt a war with Iran if they were to find these special-ops people?

HERSH: We have the special operations people, and they're great people. They're very loyal soldiers. They do what they're told, going around, killing people around the world without ambassadors knowing it, without the CIA station chiefs knowing it, without Congress knowing.

If that doesn't sound like -- you know, with this president, if that doesn't make people nervous, I don't know what else would, I can just tell you.

CROWLEY: Seymour Hersh, another blockbuster story, the New Yorker.

Thank you so much. You all ought to go out and get a cope. We will be right back.

(COMMERCIAL BREAK)

CROWLEY: And this is "Late Edition", the last word in Sunday talk.

(BEGIN VIDEOTAPE)

MCCAIN: I will be president of everyone. I will not be a president just of Republicans.

CROWLEY (voice over): John McCain's challenge: We'll discuss his campaign with the potential vice presidential running mate, Louisiana governor, Bob Jindal.

SEN. HILLARY RODHAM CLINTON, D-N.Y.: We stand shoulder to shoulder for the ideals we share, the values we cherish, and the country we love.

(APPLAUSE)

CROWLEY: A pitch for party unity. But will Hillary Clinton's diehard supporters follow suit?

Clinton campaign chairman Terry McAuliffe weighs in.

OBAMA: It's a choice between more of the same policies that have failed us for eight long years or a new direction for the country we love.

CROWLEY: Is Barack Obama losing some of his glamour as the change candidate? Insight from three of the best political team on television,

"Late Edition's" second hour begins right now.

ANNOUNCER: Live from CNN in Washington, this is "Late Edition" with Wolf Blitzer.

CROWLEY: Welcome back to the second hour of "Late Edition". I'm Candy Crowley. I'm in for Wolf Blitzer.

A major theme emerging in John McCain's campaign is that he is the true agent of change, while his opponent, Barack Obama, is just a conventional politician.

A short while ago, I spoke about that and much more with Louisiana Republican governor Bobby Jindal, who has been mentioned as a possible vice presidential running mate.

Governor Jindal, thanks for joining us.

JINDAL: Thank you.

CROWLEY: I wanted to talk to you first -- Senator McCain is, today, meeting with Franklin Graham, son of Billy Graham, in part of an ongoing effort to reach out to social conservatives. I know you know John McCain better than I do, but I know him well enough to know that he is not comfortable talking about these social issues.

And yet a lot of the conservatives are saying to him, if you do not talk about these social issues, you are not going to win over conservatives. How is he going to do that?

JINDAL: Well, two things. One, I think he is famous, rightfully so, for his straight talk. I don't think anybody expects him to do anything but be himself.

But secondly, I think conservatives are very interested in judicial appointments. They're not asking the senator to talk about his personal faith or his personal relationships.

What they want to know is, as president, what kind of judges would he appoint? Would he appoint judges that would interpret the Constitution or try to make laws from the bench?

This week a couple of very important rulings showing how important judicial appointments can be, both 5-4 rulings, one that impacted Louisiana directly, struck down our law that allows Louisiana to put to death those monsters that rape our children.

What was very disturbing to me -- I disagreed with the court's ruling, both because they said that the punishment was not proportional to the crime -- it certainly seems to me that, if the state's going to put to death any criminals, other than those that commit murder, certainly should be putting to death those that molest, that rape, that attack our children. Certainly the juries should have that option.

But what was really disturbing to me was part of the rationale of the ruling. The court said that it sensed emerging national consensus. It sounded to many that it looked like the court was taking opinion polls rather than reading the Constitution and interpreting the law.

So I think, for social conservatives, I think what they'd want the senator to talk about is his role as president in selecting judges, nominating judges, especially the Supreme Court. Now, certainly people don't expect them to do things that make them uncomfortable, things that aren't natural for him.

But we know that he has got a private Christian faith. But nobody is expecting him to go talk about that. I think they are expecting him to talk about what kinds of judges he would appoint, especially to the Supreme Court. CROWLEY: Well, what about things like abortion, marriage -- same-sex marriages, things like that. These are not places where he likes to go. Would you advise him to do -- to talk about those things, maybe to give a speech on some of the social issues that are so near and dear to the heart of the base of your party?

JINDAL: Well, yes, and they are important to me. I'm certainly -- I'm pro-life and I certainly support the traditional definition of marriage. But again, my advice to Senator McCain is to continue to be himself. And I think that's what people respect so much about him.

He is famous for doing these town hall meetings. These questions will come up, and I think he should be honest in addressing them. I think he should talk about the fact he is pro-life. I think he should talk about the fact that he supports the traditional view of marriage.

He and I disagree. He would leave it to the states. I think, with some of the recent court rulings, I would actually prefer a constitutional amendment. But I wouldn't advocate that he do anything other than be himself, because that authenticity is so important.

American voters aren't looking to vote for a candidate who always agrees with them or says what they want to hear. They're looking for a candidate they can trust. And certainly, Senator Obama is a very articulate, eloquent candidate, probably one of the best speakers in decades that we've seen.

And I mean that as a sincere compliment. I think he's a genuine person who believes in his beliefs. I do think he is certainly far more liberal than Senator McCain. I think there will be a contrast on the substance, on the issues. I don't think Senator McCain has to go out there and talk about these things that he doesn't want to talk about, without -- voters will already sense there is a pretty big difference between these two senators on their views on taxes, on their views on foreign policy, their views on some of these issues, the kinds of judges they would appoint.

They had very different reactions to the court's ruling on the second amendment this past week. I think voters will see there's a real substantive difference between these two candidates.

CROWLEY: Let me ask you. You probably may have noticed that the Democrats had a unity session up in Unity, New Hampshire, Senator Clinton, Senator Obama up there showing their support for one another. I want to play you a quick sound bite from Senator Clinton.

(BEGIN VIDEO CLIP)

CLINTON: In the end, Senator McCain and President Bush are like two sides of the same coin, and it doesn't amount to a whole of change.

(END VIDEO CLIP)

CROWLEY: That line, Governor, President Bush hurts John McCain.

JINDAL: Well, look, I think that they're certainly trying to make this election about the past, but it's really about the future. I think the good thing about having these two candidates face off against each other is they're two decent, honorable men with very different views of the role of government and where we should go forward.

And I think this election is about the future, not the past. Senator McCain...

CROWLEY: But if I could, just to the question, is it not true that President Bush and his relationship with John McCain, and their meeting of the minds on some issues, not all of them, really does hurt John McCain; when President Bush has the lowest rating of any president in history, it has got to be a drag on John McCain, doesn't it?

JINDAL: I don't think so, because of the independence that John McCain has shown throughout his career. He was against pork barrel spending before that became popular. He opposed things like the "bridge to nowhere." He opposed this administration on their strategy toward the Iraq War from the very beginning.

He has not been in lock-step with this administration on a number of domestic policy issues. And I think, because of his long-term independent streak and the fact that he has always stood for his beliefs, whether they were popular within his party or not, I think voters understand that Senator McCain is his own man.

Now, I know that certainly the Democrats will try to make this a referendum on President Bush. But they're four and at least eight years too late. President Bush's name is not on the ballot. This is between Senator McCain and Senator Obama.

And again, the good thing is both of the candidates represent change from where we've been for the last eight years. And I think the country is ready for change. They're ready for a new direction, a new leadership. Both of these candidates represent change.

But now that we're getting to the general election, I think voters have to look at the substance, what kinds of change they represent.

Senator Obama, unlike Senator McCain, would raise taxes. I think they've got very different views on energy production. I think they've got very different views on foreign policy.

You know, it's no mistake that Senator Obama has got one of the most liberal voting records in the Senate. I think voters now need to look at the substantive differences.

And it needs to be a good, positive, issues-oriented debate. I think it will be, given these two men. I think that's good for our country. CROWLEY: Governor, I want to turn you to something that your guy said just yesterday when he was talking about Senator Obama, take a listen here.

(BEGIN VIDEO CLIP)

MCCAIN: You know, this election is about trust, and trusting people's word. And unfortunately, apparently, on several items, Senator Obama's word cannot be trusted.

(END VIDEO CLIP)

CROWLEY: That's, sort of, political speak for Senator Obama lies. Do you go along with that?

JINDAL: Well, I think in an election that certainly people have to be accountable for the commitments they have made. And in one of the recent examples, Senator Obama made a commitment that he would abide by public financing. He has now changed his mind.

I understand it's to his advantage. And certainly, everybody understands that. But there are consequences for that. And I think Senator McCain is right to point out when his opponent says one thing and does another.

And I'm sure we'll hear a lot more about that, especially on specific policies, whether it's tax policy or second amendment policies.

I think part of a general election debate is a compare and contrast. But the nice thing is I think that you are going to see a real disagreement on the issues.

This isn't going to be fight on personalities or just name- calling or mudslinging. You've got two honorable people who have served their country, who are intelligent, patriotic, but have very different views of how do we fight the war against terrorism? How do we...

CROWLEY: Let me ask you...

(CROSSTALK)

CROWLEY: Let me ask you a question on one of the differences, and that is the economy. And what we're seeing in the polling, and what people seem to feel is that they trust Senator Obama more than they trust Senator McCain to deal with the economy, the number one issue right now.

He has a reputation, of course, based on something that Senator McCain said, that he didn't know that much about the economy. He's got to overcome this hurdle, how does he do that?

JINDAL: Well, and you had asked earlier about him talking more proactively about certain issues. I do think Senator McCain has to talk more proactively about his views on domestic issues, how he contrasts with Senator Obama.

For example, when you look at health care, Senator McCain prefers to have physicians and patients making more of these choices, rather than having more government control and bureaucracy.

When it comes to taxes, Senator McCain prefers to continue the tax cuts, whether it comes to income tax cuts or capital gains tax cuts, that will help us to grow our economy.

JINDAL: Senator McCain prefers more -- a more robust national energy policy that includes more domestic production but also more nuclear power, more renewables, more conservation that makes us less dependent on foreign sources of power, and also will help grow our economy.

I think it is important that he shows these contrasts with where Senator Obama would want to take our country.

I think he needs to ask Senator Obama, "When have you disagreed with your own party? When have you voted -- when did you think your party was wrong?"

Senator McCain has got a long career where has broken with his party across party lines. I do think he needs to find those contrasts. I think the majority of the American people agree with Senator McCain's positions, but he needs to draw that contrast so people can see the difference.

CROWLEY: Governor, we're running out of time here, so I wanted to turn my attention just to you. You have said, in Louisiana, that you will not stand in the way of a doubling of legislators' pay. You're taking a lot of heat for that back home.

How does this jibe -- allowing legislators to double their pay, how does that jibe with your role as a conservative?

JINDAL: Well, I still think the pay is excessive. We still actually have over a week before that law goes into effect.

CROWLEY: But why wouldn't you block it, then, if you think it's excessive?

JINDAL: And we're actually working with legislators to show them that this is wrong. There is still time to make sure this doesn't happen. They can still sign affidavits to turn down this pay raise. I do think it's excessive. I think it's wrong. I don't think any pay raise should go into effect until after the next election. So...

(CROSSTALK)

CROWLEY: But you could stop them, couldn't you? You could veto this.

JINDAL: Well, and there is still time to stop them. We still have a week. And we still have many options to make sure that we don't see legislators take a pay raise that would be more than double what they currently make. I think that's excessive.

Again, I don't think any pay raise should go into effect until after the next election. The good news is we still have time to stop this excessive pay raise. And we're working with legislators on many options to stop that, over the next week.

CROWLEY: Governor Bobby Jindal, from Louisiana, thanks so much for your time.

JINDAL: Thank you very much.

CROWLEY: Hillary Clinton is in Barack Obama's court, but what about her husband, the former president? We'll be getting the inside story from Terry McAuliffe, Hillary Clinton's campaign chairman, when "Late Edition" returns.

(COMMERCIAL BREAK)

CROWLEY: Just what Barack Obama had been hoping for, a display of unity with Hillary Clinton. The New York senator is making it clear that she is fully behind her former rival for the Democratic nomination.

But what about her diehard supporters?

Terry McAuliffe, one of those die-hard supporters...

MCAULIFFE: You bet.

CROWLEY: ... who still is the chairman of the Clinton campaign until it closes down. Thank you so much.

Boy, did we have unity this week, or what? MCAULIFFE: We couldn't ask for more unity. Thursday night, we had everybody together, a huge group of people that had helped Hillary raise $230 million. Now we've got them, full force, to help Barack, and, you know, then the unity event on Friday. It's as good as it gets.

CROWLEY: The unity event on Friday -- I want to play you a little bit of Barack Obama from there.

(BEGIN VIDEO CLIP)

OBAMA: I know how much we need both Bill and Hillary Clinton, as a party and as a country, in the months and years to come. We need them badly...

(APPLAUSE)

... not just my campaign, but the American people need their service and their vision and their wisdom.

(APPLAUSE)

(END VIDEO CLIP)

CROWLEY: As you know, the missing man in this formation has been Bill Clinton. Lots of talk. I know Bill Clinton. You know Bill Clinton a whole lot better.

If he wanted to stop this talk that he was angry, that there are a lot of things that he is harboring off this campaign, he could. But he hasn't. Why not?

MCAULIFFE: Well, first off, he's not angry. I've seen some of these stories, too. I still find it amazing that no one's called me. I, besides his staff, probably talk to him more than anyone else. I talk to him every day.

It was a long, hard campaign; very proud of his wife. They spoke -- Hillary and Barack spoke the other day, and Senator Obama said he wanted to speak with President Clinton. She said, absolutely.

What I think they wanted to do was, first of all, go through the event on Friday, the unity event. It was up to Hillary. She was the candidate. As Bill Clinton will say, she is the political leader of their family.

So I thought it was very important for the president that Hillary get out there first and do it Friday.

He just got back from a five-nation trip around the world. He was over at Mandela's 90th birthday party and other places. Now that he's back, I believe, in the next 24, 48 hours, they'll talk, and off we will go.

CROWLEY: Well, he could -- you know, Barack Obama -- the campaign says they reached out to him when he was over in Europe and he hasn't returned the phone calls. Yes, no?

MCAULIFFE: I don't believe that's true. I believe -- and I spoke to Hillary, also. I believe that Senator Obama said to Hillary that he wanted to speak to her husband. So I don't think it was a direct call to Bill Clinton.

But, listen, he was gone. He was back with his foundation. He's now back. Hey are going to speak in the next couple of days.

But I think he felt that it was very important that Hillary Clinton do the event on Friday, do the event on Thursday night -- she was the candidate; she got 18 million votes; she's the political leader of the Clinton family now -- for her to do that event.

Any time that Bill Clinton and Barack Obama speak, it's going to be big news. They wanted this out of the way first.

Now that that's over, they will speak. And I'll bet you they speak within the next 24 hours, 48 at the most.

CROWLEY: Because it's out of the way now, so...

MCAULIFFE: Absolutely.

CROWLEY: And you've talked to him. And he said, I'm going to call him; what is all this business about my being angry, harboring resentment?

MCAULIFFE: I did this morning. Yes, he was angry that these ridiculous stories were out here, and these supposed close friends of the president. None of the close friends ever got called.

You know, what happens, a lot of time, is people like to pretend they're close so they can tell the reporters that they're close, but, you know, they're just talking.

If you read my book, "What a Party," I talk about Bill Clinton. This man doesn't stay mad. He can get mad for 24 hours. It's his Irish ancestry.

And you know what? You can do whatever you want to Bill Clinton yesterday. Today he's back fighting.

But as it relates to the Democratic Party, as it relates to Barack Obama, he will go 24/7. He is fine.

Is he somewhat angry, as I am, and others, at some of the treatment Hillary Clinton received from the press? Sure. But, you know, that's life. We don't talk about it anymore. We're past that. We said that on the campaign trail.

But beyond that, you know, there's some things we could have done on the campaign differently. That's not Barack Obama's fault. That's our fault, the press fault. You know what? But we're past that. And we're moving on. The issues are too great.

So he is raring to go. I spoke to him today. He's ready to go. He'll do whatever Senator Obama and his team want him to do.

We've got, you know, probably four to eight seats we can pick up in the Senate, 20 to 30 seats in the House. We have 80 percent of the state legislators up this year, Candy.

Do you know what could happen if we win a big majority of those?

Redistricting reapportionment are coming up in two years. This is huge for our party. Everything that we have fought for, Bill Clinton has fought for in his life, we can make a huge dynamic change coming up in this election.

And for Bill Clinton's legacy and the things that he fought for that George Bush took back, Barack Obama can put them right back out there. So it's important for President Clinton that Barack Obama become president.

CROWLEY: Do you think there's some outstanding issues that are still, kind of, going on, in what I'm told is a friendly conversation?

Should Hillary Clinton's name be put into nomination at the convention?

MCAULIFFE: I don't think that's one of the big issues out there.

CROWLEY: What do you think, though?

MCAULIFFE: I think, by the time we get to the convention, it's about Barack Obama becoming the president of the United States of America. And for me, that's not a big issue at all.

MCAULIFFE: We've got to be focused, everybody, when we come out of that convention. We've got to come out of that thing on fire. Let's not have any deviation from what we have to do, is show the Democratic Party unified, fighting on all of those issues.

So Hillary will speak on one of the nights. People will be all pumped up. We will be a unified party.

But let's -- the focus is about Barack Obama. And I'm doing everything -- I will go 24/7. I told -- I met with Senator Obama the other day. I'm ready to go. Anything they want, we're all willing to do.

We're Democrats. I've been a party man for 30 years, and I speak for a lot of us. I was never against Barack Obama. I was for Hillary Clinton. But you know what, Hillary Clinton has told me and everybody else, let's go, Terry, let's make sure Barack Obama -- because health care, Iraq, education, all of those issues -- we just had 350,000 jobs lost in the last five months. Unemployment, highest level we've seen in two decades. We've got to move this country in a new direction.

CROWLEY: We just saw a picture of you at the fund-raiser, people who are fund-raisers event, not a fund-raising event.

MCAULIFFE: Yes. CROWLEY: Is it your sense that these -- that everybody is fully on board at this point? Because, you know, there are people out there going, no way, no how. And will it just take time for them to come along, or are some people just sitting this out?

MCAULIFFE: I think those who have said to me, Terry, I want to sit it out, I do believe by Labor Day they'll be back. But this is...

CROWLEY: Are you working on them?

MCAULIFFE: Oh, yes, every day. Myself, Jonathan Mantz, who is our finance director, he and I have probably done 35 conference calls for thousands of people around the country, saying, let's go, let's get on board. Some people are saying, I'm not going to do it or I'm not ready, but time will do that.

Listen, it was a long, hard-fought campaign. They'll all be together at the end. But I can tell you this, a majority, you know, 90 percent or whatever the number is, is ready to go. And I've been doing this a long time. This has been pretty good. We had the Unity event, we had all our donors. This is a pretty good move after one of the closest primaries ever.

CROWLEY: Has Barack Obama done enough? Do you feel -- I mean, has he come to you and said, how much of this debt can I pay off? Here's what I think I can do? Has he done enough to convince people that he does appreciate her status, he does appreciate her run. Are you happy?

MCAULIFFE: Yes. In every statement he has made, he's talked about the 18 million votes, he's talked about the constituencies that Hillary has fired up. We're all moving together, and there's negotiations going on, but that's typical.

But I'm very happy. I told Senator Obama the other night, whatever you need, we're ready to do. We need to win this White House. It is so critical for all of the issues -- on Iraq, on Iran, on Afghanistan. We have got to work hard.

Because, listen, Candy, I have no illusions, this is going to be a tough general election. Anyone who is cocky today or feels great about the Democratic chances, let me tell you, we've here before. Out of 6 million votes in Florida in 2000, we lost by 537 votes. In Ohio, 6 million votes, if John had shifted -- John Kerry -- 60,000 votes, he'd be president today.

It's going to be a tough fight. We need every Democrat out there fighting, every independent helping us. We've all got to be together.

CROWLEY: And $10 million debt -- it's actually $22, but $12 million of it, I'm assuming she's ready to suck up because it's her loan to herself. So you've got $10 million sitting there. How much of a dent have you made? How much do you expect Barack Obama to be able to help with?

MCAULIFFE: That's good. And let's deal with the debt. I think it's an important issue.

First of all, Hillary's put in $11, $12 million. She has made it clear, she doesn't want any of that money repaid to her. I think that's important. She said, Terry, I was in this thing, I had the resources to do it, that's what I wanted to do to show people I was in this thing. So that's off the table.

What I'm most concerned about, as is Hillary, is the vendor debt. We've got to make sure all of these vendors who rented us chairs and tents, they all have to be paid, 100 percent in full. We don't know what the final number will be -- $12 million to $15 million, somewhere in that range -- but that is our focus, taking care of those vendors, those folks out there. You know, $800 could be a profit or loss to their company for the year. That's what we're focused on.

I've been helping the Clintons for a long time on debt. We're going to get this taken care of. We need help to do it, but you know what, if I'm not worried about it, everyone else shouldn't be. I read all these stories, you know. Most of the people who write them have never raised a penny.

We'll do it. People want to help us, that's great, but we're going to do it.

It was a magnificent campaign. If you look -- if you were to start (ph) from March 1st on, Hillary would have won all these states right up to the end. It was great. She empowered, inspired so many people, and they're going to be now there for Barack Obama.

CROWLEY: Terry McAuliffe...

MCAULIFFE: Thank you, Candy. It's great.

CROWLEY: ... chairman still of the Clinton campaign. We thank you and...

MCAULIFFE: Well, once we get the debt done, we can get rid of the title.

CROWLEY: That's right. Have the former president call us when he and Obama...

MCAULIFFE: You bet, absolutely. All right, we'll make it a conference call with you.

CROWLEY: All right. Thanks so much.

MCAULIFFE: Thank you.

CROWLEY: And later, we'll talk about what really happened during the Democrat's big Unity event with three of the best political team on television.

But up next, what was John McCain looking for in a running mate during his first run for president? We'll look back at Wolf Blitzer's interview with McCain back in 1999. It's all part of the "Late Edition's" 10th year celebration. We'll be right back.

(COMMERCIAL BREAK)

CROWLEY: Welcome back to "Late Edition." I'm Candy Crowley, reporting from Washington.

It has been 10 years now that Wolf Blitzer has been hosting "Late Edition," and of course any occasion for a celebration, we're going to do this by showing you some of the best interviews of the past decade.

Before the historic general election of 2000 got under way, George Bush and John McCain waged a heated battle for the Republican nomination. On August 22nd, 1999, Wolf spoke with the Arizona senator, who was then, as he is now, mulling over possible running mates about what qualifications he would consider in a vice president if he captured the White House.

(BEGIN VIDEO CLIP) MCCAIN: I think you should pick a running mate on the basis of their overall qualifications for office, and this should not be a litmus test. And I feel that way also about Supreme Court justices.

I am proud of the 17-year voting record of pro-life positions, and I adhere to that position. I believe this issue of the repeal of Roe v. Wade is important. I favor the ultimate appeal of Roe v. Wade. But we all know, and it's obvious, that if we repealed Roe v. Wade tomorrow, thousands of young American women would be performing illegal and dangerous operations. I want us to be a party of inclusion. I think we can all be members of the Republican Party, whether we are pro-choice or pro-life, because we share the same goal, and that is the elimination of abortion. Because it's an unpleasant and terrible procedure.

We think -- I think that we must go back to the party platform of 1980 and '84. We include people who have specific disagreements, who share our same goals.

Ultimately, I would like to see the appeal of Roe v. Wade, but to do it immediately I think would condemn young women to dangerous and illegal operations. And we Republicans must send on this and other issues that we're the party of Abraham Lincoln, of inclusion and not of exclusion. And I hope we can all work together and maintain a dialogue within our party as we help try to resolve this very difficult issue that affects America in such a grievous way.

(END VIDEO CLIP)

CROWLEY: If you would like to see Wolf's entire interview with Senator John McCain, go to our Web site at CNN.com/lateedition.

And don't forget to tune in next Sunday for a special 10th anniversary celebration of "Late Edition" with Wolf Blitzer. We'll have the highlights from interviews with the top newsmakers from the past decade. That is next Sunday, July 6th at 11:00 a.m. Eastern, only here on CNN.

But just ahead, we'll discuss the Democrats' unity tour and more with three of best political team on television.

(COMMERCIAL BREAK)

CROWLEY: We have a great panel here to talk about the Democrats' unity week, and John McCain's pitch for Hillary Clinton backers and other developments in the race for the White House. CNN correspondent Kate Bolduan, CNN White House correspondent Ed Henry, and the "Hotline's" editor and chief and CNN contributor, Amy Walter.

OK, all together now, this week for the Democrats was about -- unity!

So just to give us a little reminder of unity in Unity, we have this from Hillary Clinton.

(BEGIN VIDEO CLIP)

CLINTON: I was honored to be in this race with Barack, and I am proud that we had a spirited dialogue. That was the nicest way I could think of phrasing it.

(END VIDEO CLIP)

CROWLEY: That really is the nicest way. Look, the question is, was it believable?

WALTER: The two of them believable? Well, they matched. Did you notice they had the same clothes, which I think was saying something too.

But I think it was very believable. They both came out, they seemed genuine, and the reality is, as we're looking at the polls too for most voters -- I mean, the hard-core backers of either one, there may still be some hard feelings, and some of these donors, et cetera -- but for most Democratic primary voters, especially women, they are moving over to Barack Obama, so that there were not really any of these deep wounds that some people had thought were sort of brewing as the two of them fought.

HENRY: And as you were pressing Terry McAuliffe, there still are some hurdles here, and I saw him in the makeup room, and he was also telling me warming up for what he told you, basically, that Bill Clinton's not angry and all that.

But let's face it, as you were pointing out, Bill Clinton still has to come forward. That's still a hurdle to see that happen. Also, the debt is a big, big issue as you pointed out. But I think big-picture wise, it was a good day for Barack Obama and Hillary Clinton. They did come together.

And I think there was so much hand wringing a few months ago, especially in the media about, they're never going to come together, this is really going to help John McCain -- in the end, they are coming together, and John McCain may rue the fact that he didn't really get his message, his own message together when the candidates were bickering. BOLDUAN: Well, and as you said, unity when they were in Unity. It was picture perfect, and they made sure it was so. But at the same time, we have to look from the voters' vantage point, where they were along that long-fought battle of the primary season, right there, and strongly behind Clinton and Obama. And it may take a little longer than Clinton -- than it does for Clinton and Obama to heal those wounds, to really get behind the Democratic nominee for president. I mean, it's hard for them, I think.

CROWLEY: Amy talked about polls. I want to show our CNN poll of polls up here on the screen. This is registered voters, their choice for president. You see right there, Obama, 45; McCain, 40; unsure, 15 percent.

I've got to tell you, that seems, for this year, it was such a blowout year for the Democrats, they got more money, they got this. I'm sorry, I think this is good news for John McCain.

WALTER: Absolutely. What we've been seeing all year long is Bush numbers, terrible; general Republican numbers, terrible; John McCain not seen as a generic Republican. There is something about him that transcends that.

The problem for him, though, you go scratch the surface a little bit and saying -- you brought this up in your interview too, which was look at issues like the economy and jobs, and those big issues that voters are concerned about. That's where the like for John McCain doesn't translate for voter's sake into thinking he's going to do a better job than Barack Obama on that issue. So on the big issues, Obama still (inaudible).

HENRY: Something that's played out under the radar a little bit is the fact that there are looking to be a lot of Democratic gains in the Senate. They could pick up five, six, seven Senate seats. The House Democrats likely to pick up some seats as well. As you mentioned, a good Democratic year. In the end, that might be help to John McCain as a check, as we get closer to November, saying look, Democrats are going to be a lot stronger in the Congress. As we've known over the years, voters tend to go for divided government. And they look at what happened in the beginning of the Bush administration, where Republicans had all this power and didn't necessarily get so much done. And you wonder whether divided government may be where we wind up.

CROWLEY: Kate, you know, you've been up on the Hill, so I want to ask you -- it's so funny to me that now all these Republicans are campaigning beside John McCain, who has not been their favorite person. Do you get the sense that they're rallying around him, that they don't quite know how to deal with the McCain nomination at this point?

BOLDUAN: I think not knowing quite how to deal with it is a perfect way of saying it. But there is a sense of the moving yourself away, the getting yourself apart from the Bush administration. I think just a couple of months ago, Congressman Tom Davis got a 20-page memo to his colleagues saying, hey, if we want to minimize our losses here come November, we need to separate ourselves and jump on the bandwagon with John McCain, because he is clearly getting more support than President Bush is.

WALTER: Except to look at Senator Gordon Smith up for reelection in Oregon, right, who is running an ad with Obama. You would think he was actually endorsed by Barack Obama. He's a Republican.

I don't think Gordon Smith has said the word Republican in any of his advertising. So it's -- he's not even willing to say, OK, look, I'm not a George Bush Republican, I'm a John McCain Republican. He's like, I'm a Barack Obama -- something. Independent.

CROWLEY: And where is George Bush on all this? Because frankly, you know, I tried to talk to Bobby Jindal about this, and said, look, it's just toxic, it's toxic to be standing up there next to George Bush. Does he just hibernate?

HENRY: I think so. We're not seeing the president very much, certainly with John McCain. I was out in Arizona a few weeks ago when they appeared together. I guess you could call it that. It was about 15 seconds of video I think we got, and they almost didn't stop walking when they shook hands. And then President Bush went up Air Force One, the steps of Air Force One. So we're not going to see too much of President Bush, I would anticipate, in these open events. We're going to see him doing a lot of closed fund-raisers, where you don't get a lot of videotape of them together. But John McCain does still need this president to raise money.

CROWLEY: Absolutely. And so, I mean, he becomes sort of the silent partner here in some ways.

WALTER: Right. It's one of those difficult things. He still, of course, is the president. We saw this, this week with North Korea. I mean, he still is out there, and the candidates are going to have to respond to everything Bush does.

What I thought was fascinating was, a couple of weeks ago, you know, when John McCain came out for his drilling plan, as a way to separate himself from the president, and then 15 minutes later the president goes in into the Rose Garden and says, "I want to do the same thing."

HENRY: And that was the same week that John McCain also put out a global warming ad, beating up on the president just ever so slightly, saying five years ago we started pressing the president -- again, to differentiate himself. But then the drilling thing brought them together. And that's another fundamental problem for John McCain, navigating how he stays somewhat close to keep -- to President Bush to keep conservatives home, but breaks ever so slightly on other issues to try to win independents. It's going to be the trick he's going to have to go through for the next few months.

CROWLEY: Please stay right here. We're going to be back, because we have lots more to talk about. But straight ahead, California Republican Governor Arnold Schwarzenegger discussed his party's future on one of those Sunday morning talk shows. We'll tell you what he had to say in our "In Case You Missed It" segment up next.

(COMMERCIAL BREAK)

CROWLEY: Now, in case you missed it, let's check some of the highlights from the Sunday morning talk shows.

On NBC, California Republican Governor Arnold Schwarzenegger discussed the prospects for his state's Republican members of Congress in the fall general election.

(BEGIN VIDEO CLIP)

GOV. ARNOLD SCHWARZENEGGER, R-CALIF.: I think that the Republicans have a good shot, though, for keeping all their seats.

I mean, it all depends on what the mood of the state or the nation is at the time of the election. So I think that the people are frustrated; people are angry, because they look at that and they say, well, wait a minute, we just changed leadership there. First it was the Republicans and we thought that they can't get anything done; let's put the Democrats power, but they can't get anything done, either.

(END VIDEO CLIP)

CROWLEY: On CBS, independent senator and former Democratic vice presidential candidate Joe Lieberman. He discussed why he decided to back John McCain.

(BEGIN VIDEO CLIP)

SEN. JOSEPH I. LIEBERMAN, I-CONN.: The party that I joined when president John F. Kennedy was its leader, a party that believed in progressive government at home and a principled, strong internationalist foreign policy, economic policy, pro-trade, that party is not represented by the leaders today.

(END VIDEO CLIP)

CROWLEY: And on ABC, independent presidential candidate Ralph Nader talked about what he described as the failure of both Republicans and Democrats.

(BEGIN VIDEO CLIP)

RALPH NADER, INDEPENDENT PRESIDENTIAL CANDIDATE: Well, I think the two parties are hurting our country. And they need more competition. As we see on our Web site, votenader.org, you will see the issues that we have on the table are majoritarian issues, single- payer health care, doing something about the wasteful military budget, labor law conform, consumer protection, living wage, et cetera. And it's off the page for McCain and Obama.

(END VIDEO CLIP)

CROWLEY: On Fox, former Republican congressman, now Libertarian Party presidential candidate, Bob Barr. He explained why he's running against his old party and its presumptive nominee.

(BEGIN VIDEO CLIP)

FMR. REP. BOB BARR, R-GA.: What's wrong with John McCain is symptomatic of what's wrong with the Republican Party in these first years of the 21st century. They talk one thing but do something different. And that's become very obvious to the American people.

And when you look, for example, at what the Republican Party in the Congress has done since losing their majorities in 2006, you see absolutely no new program, new leadership revision put forward.

(END VIDEO CLIP)

CROWLEY: Highlights from the other Sunday morning talk shows here on "Late Edition," the last word in Sunday talk.

Up next, we'll talk about what John McCain is doing to court a very important part of the Republican Party, social conservatives. "Late Edition" will be right back.

(COMMERCIAL BREAK)

CROWLEY: This is "Late Edition." And we are back with our political panel, Kate Baldwin, Ed Henry, and Amy Walter.

OK, so, Franklin Graham, son of Billy Graham and his father, Billy Graham, met with Senator John McCain today at McCain's request.

They put out a release afterward, no endorsement, but this sentence struck me, from -- again, from Franklin Graham. "I was impressed by his" -- McCain's -- "personal faith and his moral clarity on important social issues facing America today."

A little teeny bit of sentence help there, I guess?

HENRY: Absolutely. But the fact is John McCain often doesn't follow it up with the talk later on. And I think it's certainly helpful to sit down, do this meeting, get that public statement from Franklin Graham.

I seem to recall Barack Obama already sitting down with Franklin Graham, maybe not Billy Graham, recently.

And that shows you and highlights how both sides are really trying to go after the evangelical vote, number one. But, number two, I think John McCain does have an issue here, in terms of he doesn't speak out a lot on issues like same-sex marriage a lot. That's not something that he highlights, so evangelicals are still wondering.

CROWLEY: And it's not something he's comfortable with. Isn't the problem?

WALTER: Well, the thing was, he was taken to task in Ohio, right? He goes to Ohio, obviously a big battleground state, a place where the Bush-Cheney ticket did so well because, in part, for, you know, generating enthusiasm from these evangelicals.

He had a closed-door meeting with them this past week. And they basically said the same thing to him, which is, you're not talking enough about our issues; our folks aren't excited; you've got to start talking more about this.

He said, absolutely, I will. But you're right. Then he comes back and he's going to start talking about whatever else is...

CROWLEY: War.

WALTER: Right...

(LAUGHTER)

... about Iran, or he's going to talk about the economy, all those sort of things. Because, to be fair, those are the issues, of course, that most people are focusing on right now.

But getting independents is important. But if he doesn't get that base to the polls, that's going to be a big problem.

CROWLEY: Kate, you've been actually -- you've been working on a story with evangelicals.

CROWLEY: I mean, what is the political sense you took away from it?

BOLDUAN: Well, it's interesting. It seems there's a next generation of evangelicals this election season. They do subscribe to the traditional issues, the traditional values on abortion and homosexuality, but their agenda's much broader. And taking kind of a forefront of what they care about -- the government, poverty, and social justice. So it's not a lock for the Republican Party as it has been in the past. They fit into my category of ripe for the picking.

But the people I've talked to, they're still undecided. They're not moving away from John McCain, necessarily, but they definitely don't take from the leadership like the Grahams or the Dobsons. You know, they don't really subscribe to everything they say now.

HENRY: And high gas prices affect evangelicals like they affect everyone else. And if you don't have money to put gas in your tank, the other issues like abortion might not matter as much in this election.

CROWLEY: If a picture's worth a thousand words, we want to quick show you a picture, because this, again, is that meeting, Franklin Graham, Billy Graham -- seen there -- and John McCain. So that's, you could put that in a campaign commercial, couldn't you?

WALTER: Well, sure. But you've got to believe the leadership or the folks actually who are on the ground have to believe that you're really pushing forward on those issues.

BOLDUAN: And that's what we're really seeing. They're looking for authenticity. He's making all the right steps, and so is Barack Obama, but it's really -- the voters are looking for authenticity and not just, I'm making the right choice right now, having the right photo op.

CROWLEY: Want to talk about another voting block that John McCain is going after, and it sort of shows his problem, because of course he has to go towards the middle. Here's what he said recently.

(BEGIN VIDEO CLIP)

MCCAIN: I do think that we are able to attract some of Senator Clinton's supporters. I think that this election, obviously, we have -- I have to get Republican votes, independent votes, and the old and new Reagan Democrats. (END VIDEO CLIP)

CROWLEY: I am fascinated by the idea that Hillary Clinton voters would go to John McCain. Hillary Clinton up in Unity went, OK, if you're thinking about going to John McCain, I need you to think again. I mean, how realistic is that?

HENRY: I think there are going to be some women who might want to go with McCain, but I think, you're right, by and large, on the issues that Hillary Clinton really spoke out on, I think they're going to tend towards Barack Obama. There are, though, going to be some women who may stay home. And that's a factor we just don't know yet. There's still a few months to go, and that's why it's so important for Barack Obama to close the deal. He's taking the initial steps with Hillary Clinton, eventually getting Bill Clinton fully onboard and all that will help move it. But yes, I think in the long run, when you look at the actual poll numbers, it's unlikely a vast number of female voters are going to go to John McCain.

CROWLEY: But in the middle, I mean, isn't that where the battle is, as it always is?

WALTER: Well, and it's that ubiquitous -- the white, working class voter. Where are they going to go? Are issues like we're talking about here, abortion or guns -- obviously we had the ruling this week -- maybe those folks move over to McCain on some of those issues. But I think Ed's right, which is when you talk about really the keys to this election, the economy and gas prices, those voters are going to agree with Barack Obama.

Where they're not -- where they have some hesitancy still is this issue we've heard a lot now, we're seeing it in the polling, is Barack Obama a safe enough choice? Yes, I may agree with him on the issues, but I don't know enough about him and I don't know if I'm going to feel comfortable enough today saying he gets my vote.

BOLDUAN: And if you're a tried and true Democrat and you were strongly behind Hillary Clinton, I mean, when they go into the polling booth, I think there is a sense that I might not agree with him on 100 percent of the issues, but I'm going to go with the Democrat. I mean, I think there is some element of that, that they're not -- once the wounds heal, once a little more time passes and Hillary Clinton really shows in a long-term sense that she supports Barack Obama, I think they'll probably win over -- win back the people, and John McCain will have to fight very hard to get them.

CROWLEY: I just want to end on a laugh, OK. So John Cornyn, Texas Republican, has an ad up. We've got to give people a look at this.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: The Senate wasn't ready, said pay your dues. That John sits down, friend, I've got some big news. You see, I'm from Texas, where we do things quick, and the way this place is run is about to make me sick. Big John. Big John.

(END VIDEO CLIP)

CROWLEY: I mean, honestly, anything to say here?

WALTER: Well, anything to say, you know what, you don't see pictures of him with George Bush, and this is somebody who is a big Bush supporter in the Senate. I mean, that's what these guys are doing now, is they are spending so much time trying to rebrand themselves to voters.

CROWLEY: You can see the ad man going, OK, not George Bush, let's get a horse.

(CROSSTALK)

HENRY: The president has recently expressed regret for using things like "bring it on" and that kind of rhetoric. So maybe -- I'm not sure it will work for John Cornyn.

CROWLEY: We've got to go. Thank you so much, everybody, we really appreciate it.

And if you would like a recap of today's program, you can get highlights on our "Late Edition" podcast. Simply go to CNN.com/podcast. "Late Edition" will be right back.

(COMMERCIAL BREAK)

CROWLEY: Let's take a look at what's on the cover of this week's major U.S. news magazines.

Time explores the real meaning of patriotism. U.S. News looks at the myths and realities of the American revolution. And Newsweek has their mostly big thoughts edition.

Don't forget, coming up right after "Late Edition" at 1:00 p.m. Eastern, "FAREED ZAKARIA GPS" takes a comprehensive look at international affairs with world leaders, policy experts and journalists. This week, Fareed has an exclusive interview with British Prime Minister Gordon Brown. They talk about a wide range of topics, including the political turmoil in Zimbabwe.

(BEGIN VIDEO CLIP)

FAREED ZAKARIA, CNN: Does he sound like a man who's ready to give up power?

GORDON BROWN, BRITISH PRIME MINISTER: I believe there will come a time when he will realize that the rest of Africa, leaders that he's worked with over the years, are no longer prepared to support the brutality and the violence and the oppression of his regime.

(END VIDEO CLIP)

CROWLEY: Stay tuned for the entire interview with British Prime Minister Gordon Brown. That is coming right up.

And that is your "Late Edition" for this Sunday, June 29th. Please be sure to tune in next week for a very special celebration of 10 years of "Late Edition" with Wolf Blitzer. We'll show you the best interviews and the best moments of this past decade, plus Wolf will share his personal thoughts on the stories that shaped the past 10 years. That is next Sunday, July 6th, at 11:00 a.m. Eastern, and that is only here on CNN.

Until then, we want to thank you very much for watching. I am Candy Crowley in Washington. And once again, you need to stay tuned, because "Fareed Zakaria GPS" is about to start right now.

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