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Bill Clinton's Speech Highly Anticipated; U.S. Troops to Turn Over Anbar Province; Hillary Clinton Delivering Big in Denver: 'No Way, No How, No McCain'

Aired August 27, 2008 - 10:00   ET

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

SOLEDAD O'BRIEN, CNN ANCHOR: And good morning. Welcome back, everybody. Soledad O'Brien here at the CNN Election Center in New York with our continuing coverage of the Democrats in Denver.
Taking a look at that convention hall in Denver. It's named, you may or you may not know, after a soft drink company that was once run by a guy name John Scully. A long time ago, Scully was recruited by a guy named Steve Jobs to run Apple. And Jobs won him over by asking him, do you want to spend your life selling sugared water or do you want to take a chance to change the world?

Tonight, inside that hall now named for the soft drink company, Pepsi, they'll be nominating a man for a job where changing the world is always a possibility with the job. We begin with what happens tonight. The roll call, the nomination, Bill Clinton, Joe Biden and Hillary Clinton's speech. Well, the fallout from last night. Let's get back to CNN's Dana Bash. She's in Denver for us. The goal, I know, Dana, was to change the tone, so people would stop talking about disunity and a soft opening and talk about unity. Listen to a little clip and then I'll ask you a question on the other side.

(BEGIN VIDEO CLIP)

SEN. HILLARY CLINTON (D), NEW YORK: Even in the darkest moments, that is what Americans have done. We have found the faith to keep going. I have seen it. I have seen it in our teachers and our firefighters, our police officers, our nurses, our small business owners and our union workers. I've seen it in the men and women of our military. In America, you always keep going. We're Americans. We're not big on quitting.

(END VIDEO CLIP)

O'BRIEN: The refrain, I remember during the campaign, was we're Clintons, we're not big on quitting. And now it's we're Americans.

Significant? And has the tone changed do you think?

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Well, she certainly did went a long way to trying to change the tone. I've got to tell you, Soledad, being inside that hall last night, it was absolutely crackling. And talking to some Clinton die-hard supporters, and there are lots of them here at the convention, they sort of looked at that and said, you know, maybe if she would have given that speech with that kind of passion, she would be giving the acceptance speech tomorrow night, maybe not giving the speech she did last night.

But she really did what she had to do. Because she started out making very clear, she said, I'm a proud supporter of Barack Obama. She called him "my candidate." But then she pivoted to making the argument not just, not necessarily for Barack Obama in terms of his personal qualities but against John McCain and his policies. And that was what Clinton advisers said that she wanted to do and what Democrats in general say that they wanted to hear from Hillary Clinton and from Democrats across the board in terms of framing the debate against John McCain.

O'BRIEN: So tonight everyone will be watching Bill Clinton. And it's not exactly a secret that there's not a lot of love lost between the two of them. I think that's fair to say. What do you think we're going to hear from Bill Clinton about Barack Obama tonight?

BASH: Well, it would be very surprising if he didn't explicitly endorse Barack Obama. That is something that he definitely will do, but he intends to use his speech much the way Hillary Clinton did last night, but perhaps giving more specifics. Again, to try to frame the debate the way he thinks it should be framed between Barack Obama and the Democrats and John McCain.

Now, really can't find anyone in politics, you know this, Soledad, who doesn't think that Bill Clinton is perhaps the best communicator of his generation. But even tonight, even for him, this might be a tough one for him to make clear that he really means it.

(BEGIN VIDEOTAPE)

BASH (voice-over): Bill Clinton's friend insists, like his wife, he's ready to bury the hatchet.

TERRY MCAULIFFE, FMR. CHMN. HILLARY CLINTON CAMPAIGN: I speak to the president frequently, almost every day. And I know, you know, his mindset now, the past is of the past and we've got to move forward.

BASH: Yet on the eve of his convention speech, the former president raised a question that raised eyebrows about whether he's really ready to push for Barack Obama.

WILLIAM JEFFERSON CLINTON, FMR. PRESIDENT OF THE UNITED STATES: Candidate X agrees with you on everything, but you don't think that person can deliver on anything. Candidate Y disagrees with you on half the issues, but you believe that on the other half the candidate will be able to deliver. For whom will you vote?

BASH: Whether or not that was one last lament that Hillary was better, associates promised tonight he'll play the dutiful role of unifier in chief.

MCAULIFFE: Make the case that it's important for the Democrats to win the White House, House, Senate and we have to get behind Barack Obama.

BASH: But some Clinton confidantes tell CNN that he is frustrated that Obama has not done more to seek his counsel in battling Republicans. He plans to use his public address to offer some advice, draw parallels with criticisms about inexperience he faced as a young candidate.

GEORGE H.W. BUSH, FMR. PRESIDENT OF THE UNITED STATES: My dog Millie knows more about foreign affairs than these two bozos.

BASH: And not so subtly urge Obama to step up the tactic he used successfully in his campaign of change -- pound away at Republicans for a broken economy.

MCAULIFFE: Get this economy moving again and the differences between Senator Obama and Senator McCain. That's what he's going to focus on.

(END VIDEOTAPE)

BASH: Now, one of the many reasons tonight's speech from Bill Clinton is going to be incredibly fascinating to watch is because in the two-and-a-half months since the Democratic primary ended, we really haven't seen or heard Bill Clinton talk much about Barack Obama at all. And one of the reasons according to confidantes of Bill Clinton, Soledad, is because they say he simply hasn't been asked by Barack Obama to do that. That is part of the reason why there is this lingering tension between the two. But we are told now by Obama advisers that they are going to have Bill Clinton go out and campaign for Obama in battleground states after the convention.

O'BRIEN: Let's talk about Joe Biden for a moment. I forget which political analyst is telling me that because he's worked very closely with McCain. There's that old Senate trick of putting your arm around somebody so you can pull them closer and then stick the knife in them. You sort of give them a little praise and then you have twist the knife and make the point you're trying to, back to the red meat thing we've been talking about.

Does he have to walk a line, or can he just go for it in his speech tonight?

BASH: I think he has to walk the line. I think, frankly, he wants to walk the line. Actually, you know, my regular non-campaign year job is to cover the Senate. And I watch these two men together and they actually do genuinely like each other. However, he understands what he has to do and really what he wants to do, putting the personalities and the friendships aside.

But just in terms of the very, very different perspectives in terms of policies when this comes to foreign policy and domestic policy and economics. The other things that he's going to do I'm told by somebody who is involved in preparing his speech, Soledad, is he's got to introduce himself to the country.

Obviously I cover him in the Senate. You've probably interviewed him umpteenth times because he's been a staple on television for a long time. But polls show people really don't know him that well. So he has to introduce himself, explain that he's somebody from blue collar roots and sort of talk about the kinds of things that will give him the character that people will like. But he is also, you mentioned, the fact he knows John McCain, obviously, very well. I'm told that he's going too talk about the fact that he knows both of them and why, because of those relationships, he thinks Barack Obama is a better candidate.

O'BRIEN: Interesting speech to hear tonight as well. Dana Bash for us.

Thanks, Dana. Appreciate it.

The theme, of course, is national security tonight. Coming up next, we're going to speak with Susan Rice. She's a foreign policy adviser to the Obama campaign. That's right after these short messages. Stay with us.

(COMMERCIAL BREAK)

O'BRIEN: Bill Clinton there watching his wife last night. Tonight he's on the agenda, but as Dana Bash just told us a moment ago, he might be a little less than happy, grumbling a bit about his talking points tonight, national security. He prefer, we hear, that he talk about the economy instead. My next guest has no reservations talking about national security. She's a senior foreign policy adviser to Barack Obama.

Before we get to Susan Rice though, a couple of CNN polls to tell you about first. The question is this, who would better handle terrorism? 60 percent of people polled said John McCain, 36 percent said Obama.

With those numbers as a backdrop, let's get to Obama adviser, Susan Rice. Thanks for being with us. With those numbers, that's a gap, that's a big gap, how does he address that gap as a candidate trying to reach out to people?

SUSAN RICE, OBAMA'S NATIONAL SECURITY ADVISER: Well, Soledad, good to be with you. First of all, the reality is that John McCain represents four more years of George Bush's failed policies that haven't dealt effectively with the terrorism challenge. Osama bin Laden remains on the loose. In Afghanistan and Pakistan, the security situation is deteriorating. Al Qaeda has reconstituted its safe haven. The Taliban is attacking Afghan and Pakistani targets and indeed American and coalition targets were abandoned. And that's a function of the failed policy choice that John McCain and George Bush made to divert our attention after 9/11 from Afghanistan and Pakistan and go to Iraq.

O'BRIEN: All that said, then the number -- shouldn't they be higher for Barack Obama? I mean, people out there saying, yes, yes, yes to everything you said. So why aren't those numbers higher for Barack Obama?

RICE: I think they will be. Barack Obama will continue to convey that he represents change from the failed foreign policy of George Bush and John McCain. And when the American people turn their focus to the fact that George Bush has left us less safe by diverting our energy and attention to Iraq, a policy fully supported by John McCain, now John McCain wants to continue and intensify those failed policies. It wasn't until last month, Soledad, that John McCain woke up and realized that we have a real problem in Afghanistan. But it's been all this time and Osama bin Laden and his cronies are on the loose and we are not dealing effectively with this terrorist challenge. So we need to shift gears.

Barack Obama has been a leader saying first of all the Iraq war was a strategic blunder. Secondly, we never should have turned our attention from Afghanistan and Pakistan. We've got to go after al Qaeda. We've got to rebuild our military. We've got to strengthen and renew our alliances. We've got to renew our leadership in the world. And John McCain will not do that. He will take us back to the cold war and failed foreign policies of George Bush that we can ill afford.

O'BRIEN: During the campaign, Hillary Clinton said, I know Senator McCain has a lifetime of experience. You know the quote I'm talking about and Barack Obama has a speech. And then John McCain has effectively taken that and turned that into an ad. Last night in her speech she didn't say you know, I didn't mean that or I said that in the heat of the battle I said stuff that I didn't mean. She didn't address it at all. Is that a problem?

RICE: Not at all. Look, Hillary Clinton gave a phenomenal speech last night, and her endorsement and support of Barack Obama could not possibly be stronger. We are a united Democratic Party behind a leader who will bring us genuine and effective change who will be strong and smart and tackle the challenges that we face in the world. Hillary Clinton was incredibly clear last night about her support for Barack Obama. She has enormous confidence in his leadership, and we will together defeat John McCain in the fall and get America back on the path of respect, of effective leadership and toward the national security policy that actually makes us safer.

We need to responsibly redeploy our forces, Soledad, from Iraq so we can rebuild and repair our military. Our military families, our service men and women have been asked to do so much. And they've performed brilliantly. But they're overstretched. We also need to put additional effort, troops and resources into Afghanistan and Pakistan so we can finally go after the al Qaeda and Osama bin Laden and the Taliban who had been ignored and allowed to grow under the policies of George Bush and John McCain. And we need to renew our relationships and our partnerships in Europe.

You know, John McCain called our allies France and Germany adversaries in the run-up to the war in Iraq. When you call your allies adversaries, you're not in a position to have the kind of constructive relationships and partnerships that we so badly need to deal with 21st century threats. We've got to deal with Iran. We've got to deal with Iraq. We've got to ask for our European partners to do more in Afghanistan.

O'BRIEN: That's a lot of questions and a long list of 'we've got tos' that you have there. And also I would imagine raise some of those whole numbers too.

Susan Rice, we're out of time. Thank you very much. Appreciate it. And that's it for me at the CNN Election Center in New York. We'll see you back here in about 15 minutes continuing our non-stop coverage from the convention.

Back to CNN NEWSROOM right after these short messages.

(COMMERCIAL BREAK)

HEIDI COLLINS, CNN ANCHOR: Good morning, everybody. I'm Heidi Collins. Tony Harris is on assignment.

Stay informed all day in the CNN NEWSROOM. Here's what's on the rundown now.

It was once Iraq's badland. American troops now set to turn over Anbar Province to Iraqi security forces. Breaking news on that.

And Gustav grabs the attention of the Gulf coast. The storm stalls over Haiti for now. Floods and mudslides lead to death.

The number of problem banks soars. Our personal finance editor tells us whether your cash is safe today, Wednesday, August 27th.

You are in the CNN NEWSROOM.

Hand-over about to begin in Iraq. We are just getting word now, in five days U.S. troops will turn over Anbar Province to the Iraqis. The area was once the heartland of the Sunni insurgency. Let's get straight to CNN Pentagon correspondent Barbara Starr with the very latest.

Hi there, Barbara.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Hello to you, Heidi.

The latest word from U.S. military officials in Iraq, Anbar Province, once the heartland of Sunni insurgency where so many U.S. troops lost their lives, that province on Monday is now scheduled to be turned over to Iraqi security forces for their control in Anbar Province. This turnover has been delayed twice during the summer, it is now scheduled for Monday. It was both symbolic and real as the sign, officials say, of the real progress that is coming in Iraq but nobody is missing the point. This turnover will come in the middle of the Republican National Convention here in the United States, of course, and will be set against that political backdrop -- Heidi.

COLLINS: All right. We also know that Petraeus is leaving his post in September in Iraq, and then will be recommending more troop withdrawals. So what will that mean for the next president?

STARR: Well, this is really what's on the table right now. While the political conventions are going on, the plate is being set for whoever is the next president of the United States. The turnover of Anbar and General Petraeus we are now told is within days of making his recommendations to President Bush about withdrawing additional forces from Iraq over the next six to eight months.

A senior official in Iraq, military official with knowledge of the situation, says Petraeus' recommendations could come as soon as August 31st and any time before he leaves Iraq, which is now scheduled for September 15th or 16th. So this will all be, again, the next shoe to drop in the political campaign back here at home -- Heidi.

COLLINS: All right. CNN's Barbara Starr from the Pentagon this morning.

Thank you, Barbara.

And joining us on the phone now, CNN military analyst former Brig. Gen. David Grange. He is the president and CEO of the McCormick Foundation, one of the countries public charities. He lectures on leadership at army bases across the country and is a nonpaid board member of the security company that has some Pentagon contracts.

General Grange, thanks for being with us. Let's talk for a moment, if we could, about these delays and why they happened. There is some talk, of course, about the timing of all of these handover. But the first delay was because of a sand storm, was it not?

VOICE OF BRIG. GEN DAVID GRANGE (RET.), CNN MILITARY ANALYST: Well, there are several delays. You know, that's kind of a physical aspect. I'm sure there were also some moral aspects. In other words, just the perceptions or the dialogue between the different entities, if things were OK, if there may be some issues that came up that they're not really talking much about. But the good news is it's going to happen.

COLLINS: Yes. And remind us also, Barbara already touched on it quite a bit, but, you know, this was really the center of the insurgency in this province. It was a horrible place to be in the beginning of this conflict. And then it turned into quite a success story. Is this finally it? I mean, how much will the U.S. still be involved in this particular province?

GRANGE: Yes, it's hard to say anything in Iraq or Afghanistan is finally it, as you well know. But here's a couple of things that I believe will happen. One, that the U.S. military will continue with dialogue and connectivity with the Iraqi security forces after the transfer occurs. I believe that we'll keep an eye on the area very closely, both human and intelligence as well as technical intelligence, to make sure we have the intel we need to see if things go sour.

The third item probably is that we will provide a backup capability to the Iraqi secure forces in case there's a re-emergence of al Qaeda or other influences or let's say a splinter insurgency element that breaks off from the Anbar leadership. And the last two is that you'll have special operation forces on standby if action is needed and I think you'll still see a lot of civil support, for instance, provisional reconstruction teams employed, to help that aspect of more of the non-kinetic type military support in that area. COLLINS: OK. It will be interesting to see if it goes well, if it could spread then to other former hotbeds in the country. We sure do appreciate it.

Retired Brig. Gen. David Grange, always appreciate your analysis.

Our Rob Marciano is watching Gustav from the weather center and joins us now with the very latest on that.

Hey there, Rob.

ROB MARCIANO, CNN METEOROLOGIST: Hi, Heidi.

Yes, winds of 60 miles an hour. We're going to get an update from the National Hurricane Center within the next half hour, and they'll probably not going to show a lot of change in intensity. It's still kind of hovering over the western peninsula of Haiti. About to emerge into the open waters. And at that point, it should begin to strengthen. Waters are pretty juicy here and temperature-wise. And the official forecast track does bring it westward and not so much over Jamaica, not so much over Cuba, which has a ton of really high mountains to kill this thing.

If it stays offshore, it will strengthen rapidly to a Category 1 and a 2. This forecast has it by a Category 3 early Saturday morning and then stretching through the Yucatan Channel into the Gulf of Mexico over the weekend. So this certainly has a lot of folks concerned anywhere from the Florida panhandle back through southeast Texas that we could be looking at the potential for a U.S. landfall, potentially a major hurricane in any one of those spots as early as Sunday night and as late as Tuesday morning.

Across parts of the southeast, just want to highlight a couple of things. We have a tornado watch in effect until 7:00 p.m. for a good chunk of the Carolinas. This is all remnants of Tropical Storm Fay, drenching rains, in some cases good rains for parts of the drought- ravaged southeast.

COLLINS: Yes. We're certainly experiencing some of that here. That's for sure.

All right. Rob Marciano, thank you. We'll check back later on.

MARCIANO: Yes. OK.

COLLINS: Right now, we want to check the big board, looking at the Dow Jones industrial averages. There you have it in the positive. That's good. 37 points up, cresting now at 11,450. Yesterday, we ended the trading day also to the positive by just about 26 points or so though. A big story today, a lot of troubled banks out there on the government's watch list. We'll be talking about all of that coming up shortly.

In fact, how about right now. More banks are in trouble according to federal watchdogs. So is your bank next on the list? CNN personal finance editor Gerri Willis is one step ahead of me and is joining us today with more on this information.

Boy, it's a great question because when we heard about some of these larger banks having major trouble, people obviously began to take stock, if you will, of their own bank.

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: As they should, Heidi.

Well, you want to understand the numbers first here. The FDIC reported that the number of banks on this problem list grew to 117 during the second quarter. Now, that is the highest level since the middle of 2003. Now, there were 90 banks on this list in the first quarter of the year. See, it's growing like topsy. The FDIC chairman also said the list will continue to grow. Some analysts saying that 150 bank failures are on the horizon.

Keep in mind that banks include on the problem list aren't just doomed to fail. Some 13 percent of banks on the list have failed on average. So it's actually a minority. But let's put this list in perspective. The FDIC insures over 8,000 thrifts and banks. This is nothing like what we saw during the late 1980s to early 1990s where more than 1,000 financial institutions failed amid this savings and loan crisis, very different situation here.

COLLINS: OK. Very good point too. So what banks are at risk?

WILLIS: Probably the small and medium-sized banks. That's what the experts say because they're not able to raise enough money if they get in trouble. Now, the FDIC doesn't release the names of the banks that are in trouble. But you can check the health of your own bank. Go to bankrate.com, the site has the safety and soundness rating system that can help you get a picture of your bank's health. And for more detailed information, go to ambest.com. You really drill down and get more details.

COLLINS: OK. What are some of the red flags, though, that you should look for if you're kind of worried about your bank?

WILLIS: Well, sure. You know, it's not just the environment right now. You want to pay attention to massive job layoffs or cutbacks in services. Look, if your bank doesn't accept new loan submissions, that is a red flag. And if you start to see generous CD yields, way above everybody else, that's a sign the bank is really trying to bring in money. They're having troubles. Heidi.

COLLINS: What happens if you have, you know, like a large chunk of money in your bank, I'm guessing something like over $100,000, would be sort of a different scenario for some people?

WILLIS: Well, and you'd be very lucky to have over $100,000, right?

COLLINS: Yes.

WILLIS: Look, don't panic. As long as you have $100,000 or less in one account, you're covered, covered by FDIC Insurance. And in some cases if you have more than that amount you're still OK. For example, your share of any joint accounts at a bank is insured up to $100,000 separately from accounts you hold in your name alone. So the devil is in the details here. Just look for the FDIC Insurance logo. That's your signal that you're going to be covered if the worst happens. And, of course, if you have any questions, send them to us at toptips@cnn.com. We love to hear from you.

COLLINS: All right. Gerri, thanks so much. Appreciate that.

WILLIS: My pleasure.

COLLINS: Bill Clinton cheering on Barack Obama. He takes center stage tonight at the Democratic Convention. CNN and the best political team on television has you covered.

Also, a stellar baseball player kicked out of the league.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Why don't they want you to play?

UNIDENTIFIED: Because they say I'm -

(END VIDEO CLIP)

COLLINS: Huh? A league of his own. Baseball scouts, you watching this?

(COMMERCIAL BREAK)

O'BRIEN: Welcome back, everybody. I'm Soledad O'Brien at the CNN Election Center in New York with our continuing coverage of the Democrats in Denver.

A big night ahead after a big night that's just past -- Bill Clinton expected to talk tonight. Hillary Clinton spoke last night. She gave a rallying cry for Barack Obama. He, the former president that is, some people say it's believed to be harboring a grudge going in to the convention. So the question tonight is -- can he be the unifier in chief that the party is going to need?

Then there's Joe, running mate Joe Biden. He'll be taking the podium in prime time. He's widely expected to do what running mates are picked to do, and that is land a few punches. On top of all of that, a roll call vote and the intrigue surrounding that. And then, if all goes as planned, Barack Obama will emerge the nominee.

So getting to all of that and much more from Denver is CNN's Melissa Long.

Hey, Melissa. You were there last night. What was the atmosphere like after Hillary Clinton's speech?

MELISSA LONG, CNN CORRESPONDENT: Well, I'd say the atmosphere was certainly one of a resounding effort of support. I should point out that there was clapping going on and great applause and great anticipation even before Hillary Clinton stepped to the stage last night. These are some of the coveted tokens from last night -- Hillary and HillaryClinton.com -- this was paid for by. Obama for America, tucked in the lower right hand corner.

And as Hillary Clinton was giving her all-important address last night focused on unity, bashing and really criticizing John McCain. These were the signs that emerged, Hillary on one side and Unity on the other. Soledad, really an evening of emphasizing just how important unity is to the Democratic Party and also a moment for her to thank those 18 million supporters during that robust and demanding primary season and the 18 million cracks in that proverbial glass ceiling, as Michelle Obama referred to on Monday.

O'BRIEN: The cheers at every turn really in her speech.

I know you've been writing a lot about the blogosphere. I'm curious to know how you think that the bloggers attending this convention are changing or affecting the coverage.

LONG: Totally changing the landscape of politics and certainly of the convention. In fact, there are separate entries here just for the bloggers. There's a bloggers tent where you have hundreds of people gathering on a daily basis in order to write, in order express their thoughts on what's going on. Some people have official credentials to get into the arena and some people don't so they are there. They paid $100 and they have access to obviously Internet coverage and Internet access but also access to some food so they can keep some energy up so they can keep generating the ideas.

O'BRIEN: Got to feed them.

LONG: And I want to mention, as well, we've been having live blog conversations on our Web site as well on CNN.com in the afternoon hours of 4:00 p.m. Eastern time, getting the pulse, getting the voice of the blogging community here at the DNC.

O'BRIEN: And what is that pulse and what is that voice? How has it been?

LONG: The pulse, the voice has been one of excitement, one of the feeling I think for all of them that they are changing the way that media presents politics, that they feel more and more that they are becoming as mainstream as the mainstream media and the mainstream press has been in the past conventions.

O'BRIEN: Give me a sense of what it's like in the hall there. I mean, do you run -- I know you've been writing also about celebrity sightings, et cetera. Do you run into celebrities? Are they hired to be working the convention? Do they go just to kind of wander around and be part of the experience? What's that about?

LONG: I think some of them are here to be part of the experience. Some of the younger celebs, like Rosario Dawson or Charlize Theron, seen here by many of their fans. And then you have the people that are here to do work. Someone Pete Wentz, of Fall Out Boy, we talked to him earlier in the week. He was here -- one of the headline performers of Rock the Vote, which of course is trying galvanize the younger voters, galvanize the 44 million people between the ages of 18 and 29.

Yesterday I had a chance to speak with Death Cab for Cutie and one of their performers -- one of their guitarists. His name is Chris Wall and he's actually blogging while he's here meeting with lawmakers from his home state. He's actually blogging for rollingstone.com.

So, some of these performers really involved and really passionate about politics.

O'BRIEN: Seems like it's a very interesting time there.

Melissa Long for us.

Thanks, Melissa. Appreciate the update.

LONG: Sure.

O'BRIEN: Coming up next, God, politics, and Barack Obama. We'll take a look at that and much more straight ahead. Stay with us.

(COMMERCIAL BREAK)

O'BRIEN: Welcome back, everybody. You're taking a look right there at the convention hall in Denver, Colorado, where every night the proceedings begin and end with prayer. And rightly or wrongly, whatever you believe about the proper role of religion in politics, to many, the Republican Party have come to be seen as more religiously attuned than the Democratic Party.

So with us to talk about that this morning is the Reverend Leah Daughtry. She's the Chief of Staff to Democratic National Chairman Howard Dean, she is also the CEO of the convention.

It's nice to see you, Reverend. Thanks for talking with us.

What does it mean to be CEO of the convention? I know what the speakers are supposed to do. What's your job?

REV. LEAH DAUGHTRY, CEO, DEMOCRATIC NATIONAL CONVENTION: My job has been, for the last two years, to really put the nuts and bolts and the logistical planning of the convention together. So that's everything from the bus systems, to the design and buildout of the set here that you see behind me, to where the delegates are staying, to the look and feel of the hall. Knitting all of those pieces together has been my task.

O'BRIEN: That's many hats you're wearing then. And the set looks great. So congratulations on that front.

DAUGHTRY: Thank you very much.

O'BRIEN: You're welcome.

The "New York Times" did a profile on you. And the question they asked in the profile they did was -- can Leah Daughtry bring faith to the party? So, that's a question I'll pose to you. Can you? Have you?

DAUGHTRY: Well, I don't think that's my job. I think faith is already inside of the party. There are millions of Democrats who are people of faith and millions of people of faith who are Democrats. It's really not about me bringing faith to the Democratic Party, but really highlighting the people who are already part of our party and their voices and their views. And I think we're doing a pretty good job of that.

O'BRIEN: Because for many people, and I think it's fair to use that word, many, there's a sense that the Democratic Party is secular. And I know that one of your goals has been to change that image. Have you succeed in changing that image?

DAUGHTRY: I think we have. I think, as I said, there are millions of us -- I've always been a Democrat. I'm a fourth generation pastor. I've always voted for the Democratic Party. So this is not about changing my mind, it's about highlighting the folks who are inside of our party, their voices, their values, their vision. It's really -- I'm a Democrat because of the values of my faith lead me to the Democratic Party . My concern for community, my concern for the environment, my concern about how we're treating our neighbors, how we're treating our fellow Americans, our fellow citizens of the world, comes from a place of faith for me. And there are millions of people like me all across this country who come to the Democratic Party because of that.

And we've come to a place now where we're making our own voices heard inside of the party and bringing others along with us, bringing others who may be outside of the party into the party because of the shared values that we have.

O'BRIEN: You've been called a part-time preacher and a full-time political operative. Is that a difficult balance to strike?

DAUGHTRY: Well -- no, it's not. I do pastor a church, but, again, the values that I bring and part of why I love my party so much is because it mirrors the values of my faith and I find in the Democratic Party a home that, for me and for the concerns that I have as a Christian, and for the concerns that I have as a pastor for how we're loving and caring and respecting each other inside of the American community, inside of the world community. So it's not a difficult balancing at act at all. My faith is an intrinsic part of who I am and helps to inform my values and the decisions that I make on a day to day basis.

O'BRIEN: And helps you with all those 10 million hats you're clearly wearing.

Leah Daughtry -- Reverend and CEO of the convention. Thanks for talking with us this morning. We appreciate it.

DAUGHTRY: Absolutely.

O'BRIEN: Now that I know how busy you are, I really, really appreciate your time this morning. Thank you so much.

DAUGHTRY: Thank you for having me.

O'BRIEN: My pleasure.

That's it for now. I'm Soledad O'Brien at the CNN Election Center in New York. I'll see you back here in just about 15 minutes, continuing our nonstop coverage of the convention.

Let's get right back to CNN NEWSROOM right after these short messages.

(COMMERCIAL BREAK)

COLLINS: Hand-over about to begin in Iraq. A senior U.S. military official confirms to CNN U.S. troops will turn over Anbar Province to Iraqi security forces on Monday. The province was once the heartland of the Sunni insurgency. More than 25,000 American forces are still in that region. The plan is for the troops to stay for the time being, but their duties will shift. They will support Iraqi forces when need.

Pulling into port. A U.S. Coast Guard cutter bringing humanitarian aid to the Republic of Georgia this morning, but changing direction on where exactly to dock. CNN senior international correspondent, Matthew Chance, is joining us now live from Sochi, Russia this morning.

Matthew, good morning to you.

MATTHEW CHANCE, CNN SR. INTERNATIONAL CORRESPONDENT: Good morning to you, Heidi.

That aid being delivered to Georgia by U.S. Coast Guard ship and a U.S. destroyer under the watchful eye of the Russian Black Sea Fleet. There had been a plan, according to the U.S. Embassy in Georgia, to deliver the humanitarian aid to a different port, the port of Poti. But because Russian forces are still around that port, still have checkpoints there, a decision was clearly taken at the highest level in the Pentagon to avoid any kind of contact with Russian forces and U.S. forces that could have escalated the already simmering tensions between the two countries at the moment. So they decided to move to Batumi, a port to the south, to deliver that humanitarian aid.

All this after the Russian president, Dmitry Medvedev, took the dramatic step of recognizing as independent states two breakaway regions of Georgia, Abkhasia and South Ossetia, despite warnings from the United States for him not to do so. I sat down for an exclusive interview one on one with President Medvedev yesterday. I asked him whether his move was a snub to the United States.

(BEGIN VIDEO CLIP)

PRES. DMITRY MEDVEDEV, RUSSIA (through translator): This is not any kind of challenge, by no means. That was our deliberate position. For 17 years Russia has done its best to help restore Georgia's territorial integrity at all levels and within all international frameworks. This was the only opportunity to prevent the further escalation of the conflict, further blood shed and killing of civilians. That's the first reason.

The second reason is that all people have the right to self- determination. Our colleagues have repeated (ph) on more than one occasion, Kosovo is a special case. That's fine. But then South Ossetia and Abkhasia are special cases, too.

(END VIDEO CLIP)

CHANCE: This is a newly assertive Russia, Heidi. President Medvedev underlining very clearly that he intends to follow an independent foreign policy line, even if that means antagonizing the West. Back to you.

COLLINS: All right, CNN's Matthew Chance.

Sure do appreciate that, Matthew. We'll keep our eye on that story.

Also, a green light for air traffic in the U.S. this morning. The flight status map on the FAA Web site shows delays are running less than 15 minutes across much of the country. Pretty amazing, given what happened yesterday. A software glitch at an FAA facility near Atlanta held up hundreds of flights. The FAA says there were no radar outages and there was no loss of contact with planes at any time.

A wind-whipped wildfire that tore through a Boise, Idaho, subdivision is now under control. Investigators are trying to find out, though, how it started and if it killed a Boise state professor whose body was found inside one of the homes there. More than 100 residents allowed to go back to their homes right now. Some are returning only to rubble, though. Ten homes reduced to ashes. Several police and firefighters suffered minor injuries.

A tuberculosis warning now for almost 1,000 new moms and their babies. Kaiser Permanente says they may have been exposed to the respiratory illness at a San Francisco Hospital. According to the HMO, a former maternity ward worker was diagnosed with TB. The hospital says it's a common strain that can be easily treated by antibiotics. It says patients have a low infection risk.

A narrow escape for one Cleveland-area family. A car barrels into their dining room. Police say an 18-year-old was on the run from officers and was going at least 80 miles an hour. It hit a curb and flew 80 feet into the house. Luckily, the homeowner and her children had gone upstairs just minutes before. Police say the driver was not drunk but panicked because he had beer in his car. He was not injured but he is facing plenty of legal trouble now.

A legendary senator -- before he faces a jury of 12, he wins the support of thousands. Alaska's Ted Stevens beat back two other Republicans to win a primary vote and move ahead to the general election in November. Stevens is awaiting federal trial. He is accused of not reporting a quarter million dollars worth of gifts. He has denied any wrongdoing. Over the years, Stevens has been both praised and vilified for funneling huge amounts of federal money into Alaska projects.

The Democrats have their national convention, but Republican John McCain has the suspense. Who will he choose as his vice presidential running mate? Our i-Reporters have some ideas. We want to hear them. CNN's Josh Levs is watching all of that traffic.

Hey there, Josh.

JOSH LEVS, CNN CORRESPONDENT: Hey there.

Yes, so last week we were looking at what voters saying about who should Obama choose. Now we're looking at the other side of the ticket. Who should McCain choose to be his No. 2?

I'm going to start off with an i-Report. We're going to put it on this screen over here behind me. And let's get right to it. Someone pushing for Mitt Romney -- "I think Mitt Romney would be a great VP. McCain doesn't have a really have a strong economic side to him and Romney is outstanding when it comes to economics. It makes sense." That's from Chris in California.

Let's go to the next one now, pushing for Pawlenty -- "Let's face it, John McCain is about as exciting as Bob Dole. He is a great guy and a true hero but old and not very charismatic. He also has some issues with his conservative base. McCain needs a young conservative, Washington-outsider, and preferably governor of a battleground state. The answer is Minnesota governor Tim Pawlenty." That's from Tim Barham.

All right. Next, somebody pushing for Huckabee -- "Mike Huckabee has already shown us he can win southern states. These states are needed to win. Mike is a man of integrity honor. Also, McCain and Huckabee have a mutual respect." That's from Eileen Simes (ph) in Exeter, New Hampshire.

Finally, this one for Boehner now -- "My selection is John Boehner of Ohio. Name recognition is key, good looks helps, and no one is even considering him. Is this a surprise on the way?" That's from Abrahem Hamadeh over there in Arizona.

Now if you want to know who some of the top players are, just go to CNNPolitics.com. You can see everyone we just talked about except Boehner actually, because he's not considered one of the most likely. You can also learn about some of the more dark horse candidates like Joe Lieberman, maybe an independent on that side of the ticket. Also, there's still some talk about Bobby Jindal, Louisiana governor, even though he keeps saying he's not going to do it, it's not him.

You know how it works, Heidi. The speculation doesn't go away no matter what they say.

COLLINS: Definitely not. We heard the same thing from Joe Biden. LEVS: Yes, we did.

COLLINS: All right. Thanks so much, Josh Levs. Appreciate that.

Tropical Storm Gustav picking up steam and heading towards one of the most oil-rich areas of the U.S. Stephanie Elam is at the New York Stock Exchange this morning with a look at how energy traders are reacting to it all.

Hi there, Stephanie.

STEPHANIE ELAM, CNN CORRESPONDENT: Hi, Heidi.

Yes, oil prices are indeed moving higher right now, up close to two-and-a-half dollars, so that's putting it nearly at $119 a barrel. This comes amid fears that Tropical Storm Gustav, which is headed for the Gulf of Mexico -- and that's really a region that's home to a quarter of all of the U.S. crude oil production. Accuweather.com even says Gustav could intensify into a Category 4 or 5 hurricane. And remember back in 2005, Hurricanes Katrina and Rita, both Category 5 storms, damaged hundreds of oil platforms and refineries and pushed prices up to then-record highs. Expect energy prices to be pretty volatile this week as we learn more about Gustav's path.

Even with higher oil prices, stocks actually modestly higher. We'll take that.

(STOCK MARKET REPORT)

COLLINS: OK, so on to a completely different topic, this other storm, if you will, that we've talked about before in the courtroom. I hear Bratz is actually going to end up paying for Barbie's next wardrobe change.

ELAM: Yes. The pint-size soap opera here. It's been a win for Mattel, but the fight is just not over yet. A federal jury has awarded Mattel, the maker of Barbie dolls, $100 million in damages in its lawsuit against MGA, the maker of Bratz dolls. The damage phase comes a month after a jury decided that a former Mattel worker came up with the concept for Bratz dolls while still working for Mattel. The next phase will decide which company has the right to make the Bratz dolls.

And that's where the real big money could come from. Mattel was asking for nearly $2 billion in damages since Bratz has cut into sales of Barbie dolls. So, it's not over just yet, Heidi.

COLLINS: No, it's sure not. There are so many jokes I could make.

ELAM: So many.

COLLINS: But I'm not going to.

ELAM: No, we're going to leave them all to people's imaginations.

COLLINS: That's right.

Stephanie, thank you. Appreciate it.

ELAM: Thanks, Heidi.

COLLINS: Too good to play. That's the controversy sweeping a kid's baseball league in New Haven, Connecticut. Get this. 9-year- old pitcher Jericho Scott throws 40 miles per hour. Parents of kids on other teams were afraid he might hurt someone. The league asked the boy's coach to put him at another position or let him play with older kids. His coach and mother balked at the idea.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Why aren't you playing a baseball game right now?

JERICHO SCOTT, 9-YEAR-OLD PITCHER: Because the other team -- because the league doesn't want me to play baseball, so they kicked us off the game (ph) and they told us that they're not showing up.

NICOLE BUONOME-SCOTT, JERICHO SCOTT'S MOTHER: There are other kids in this league older than him, throw harder than him, and have hit players. What doesn't seem fair to me is the president of the league, that's his team. Seems like a big conflict there.

(END VIDEO CLIP)

COLLINS: Scott has never hit any other kids, but league officials said his mother did threaten umpires at one game. His team has been disbanded. The family may sue.

Hillary Clinton's hard sell. Did she close the Democrats' unity gap? Convention coverage from CNN, the best political team on television.

And Olympic swimmer Dara Torres in surgery today. Our Dr. Sanjay Gupta will be reporting live from the O.R. at 2:00 p.m. Eastern.

(COMMERCIAL BREAK)

O'BRIEN: Welcome back, everybody. I'm Soledad O'Brien at the CNN Election Center in New York with continuing coverage of the Democrats in Denver. Taking a look at a hall that is still crackling from electricity from last night, from Hillary Clinton's remarkable speech. Tonight it will be Bill Clinton's turn at the podium. Will he do what his wife did last night and rally the troops for the man who beat her? Or, is he still carrying a grudge? Lots of drama surrounding that.