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THE SITUATION ROOM

Facebook Organizes PAC; Social Media Companies Increase Lobbying to Congress; Trial of Michael Jackson's Doctor Commences; A Close Look at Propofol; 'Darkest Day' for Shanghai Subway; 'Strategy Session'

Aired September 27, 2011 - 17:00   ET

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


WOLF BLITZER, HOST: Drew, thanks very much. Happening now, the deadly attack on the United States Embassy in Afghanistan may be pushing the Obama administration to dramatic new action. This hour, new signs the dangerous Haqqani network will officially be designated by the United States government as a gang of terrorists.

Plus, the presidential speculation surrounding the New Jersey Governor is building to a fevered pitch. Just hours before a major speech by Chris Christie, why are some Republicans fixated on a man who insists he's not a candidate and won't be a candidate.

Plus, Michael Jackson's doctor in tears as prosecutors accuse him of gross negligence. Dr. Conrad Murray now on trial in the pop star's death. Our own Dr. Sanjay Gupta is studying the medical evidence. I'm Wolf Blitzer. You're in The Situation Room.

Coming up first this hour the United States weighs new action against a very dangerous militant group that may be as big a threat to the United States in Afghanistan as Al Qaida or the Taliban. The Obama administration appears ready to formally call the Haqqani network what so many people believe it is, a terrorist organization. Our foreign affairs correspondent, Jill Dougherty, is over at the State Department. She has been digging on this story. Jill, what are you learning?

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: Well, Wolf, you know, the political pressure in the United States has been building to put the Haqqani network on that list of terrorist organizations but what really put force behind the argument is the violent action behind the group itself.

(BEGIN VIDEOTAPE)

DOUGHERTY: Violent attacks in Afghanistan, American blood spilled.

ADMIRAL MIKE MULLEN, JOINT CHIEFS CHAIRMAN: Haqqani planned and conducted that truck bomb attack as well as the assault on our embassy.

DOUGHERTY: Now, U.S. officials tell CNN Secretary of State Hilary Clinton is on the verge of designating the Al Qaida linked Haqqani network as a foreign terrorist organization. One official says I think you'll likely see some action fairly soon.

UNIDENTIFIED MALE: This step is long overdue.

DOUGHERTY: Behind the scenes, U.S. officials tell CNN the decision has been debated for months. The Treasury Department, already, has targeted individual members of the terrorist group for sanctions, freezing their assets.

Publicly, the State Department says the Secretary has been pushing Pakistan to break its links with the Haqqani network.

VICTORIA NULAND, STATE DEPARTMENT SPOKESWOMAN: We've made absolutely clear that the Haqqani network is job one, that we want to do it together and that's the conversation that we're having.

DOUGHERTY: Some in the military, they say, pushed for that terrorist designation. But, others in the administration argued it could hurt efforts at splitting the Haqqani's from Al Qaida, a process called reconciliation, even push the Haqqani's away from a possible peace deal. But, says one expert, few in the administration now have much hope for any reconciliation.

MATTHEW LEVITT, THE WASHINGTON INSTITUTE: Every indication is that the Haqqani Network is getting more extreme, not less extreme, and that it's not the case that they are mostly affiliated with the Taliban and maybe a little bit affiliated with others but that they are affiliated with whichever radical element is most active at the time.

DOUGHERTY: What's more, some officials tell CNN economic sanctions could do little to an effort that has almost no assets in the U.S. Another concern, potential damage to the already strained U.S. relationship with Pakistan which American officials have accused of supporting the Haqqani network.

(END VIDEOTAPE)

DOUGHERTY: Now, putting individuals and not organizations on that terrorism list actually has been done before. In fact, one official pointed out that the Taliban themselves are not on the list of foreign terrorist organizations although individuals who are members of the Taliban are on the State Department list of designated terrorists. Wolf?

BLITZER: Jill, if the U.S. does designate the Haqqani network as a terrorist organization and the Pakistani government, it's intelligence agency, continues to cooperate and support the Haqqani network, would that automatically force the Obama administration to sever that $2 billion a year aid package to Pakistan?

DOUGHERTY: You know, it could have repercussions because absolutely when, you know, that's one of the difficulties in holding some of this up -- this decision, is that the repercussions of making that determination that they are a terrorist organization would lead you to say that the ISI is supporting it, which could lead you to that -- that step and it could be a radical and important step. BLITZER: I write about all of this on my blog at CNN.com/SituationRoomblog on the -- the enormous stakes involved right now in U.S./Pakistani relations potentially at a turning point. Check it out. Jill, thank you.

Let's get to another important story we're following, the man who's creating a lot of buzz in the Republican presidential campaign even though he's not a candidate. We're talking about the New Jersey Governor Chris Christie. He's giving a high profile speech to the party's faithful later tonight and that's ratcheting up the hopes of some Republicans who say Governor Christie is something that's missing from the race. Jim Acosta is here. He's working this story for us. Why are so many people fixated right now on Governor Christie?

JIM ACOSTA, CNN CORRESPONDENT: Wolf, perhaps it's due to some of the renewed hand-wringing over the GOP field or perhaps it's because Chris Christie continues to give speeches, as he is tonight at the Reagan Presidential Library. Whatever it is, there are new signs the Governor may be changing his mind about running for president.

(BEGIN VIDEOTAPE)

BARBARA WALTERS: Please welcome back to The View the Vice President of the United States, Joe Biden.

ACOSTA: It's safe to say the Chris Christie craze has shifted into overdrive when the ladies on the daytime talk show, The View, are asking Vice President Joe Biden for his view on the New Jersey Governor.

JOE BIDEN, VICE PRESIDENT OF THE UNITED STATES: Christie is a good guy. New Jersey is a big important state. He's doing -- he's at the top of his game right now.

ACOSTA: If the game is who can generate the most presidential speculation, Christie is certainly winning, despite repeatedly telling audiences he's not running. Take last week...

CHRIS CHRISTIE, GOVERNOR, NEW JERSEY (R): It's got to be something that you and your family really believes is not only the right thing to do but, I think, what they must do at that time in your life both for you and for your country and, for me, the answer to that is it isn't.

ACOSTA: ...or last February...

CHRISTIE: I threatened to commit suicide. I did. I said, what do I have to do short of suicide to convince people I'm not running. Apparently, I actually have to commit suicide to convince people I'm not running.

ACOSTA: This week it was former New Jersey Governor Tom Kean who ratcheted up the Christie chatter when he told the National Review online it's real. He's giving it a lot of thought. I think the odds are a lot better now than they were a couple of weeks ago.

TOM KEAN, FORMER NEW JERSEY GOVERNOR: He was for standing up for Rowe v. Wade before he was against Rowe v. Wade.

ACOSTA: But it may all be wishful thinking for Republicans who cringe at the idea of choosing between Rick Perry and Mitt Romney and long for Christie's combative yet competent style.

CHRISTIE: It's people who raise their voices and yell and scream like you that are dividing this country. We're here to bring this country together, not to divide it.

ACOSTA: But Christie is hardly a cure all for conservatives. He believes man-made climate change is real.

CHRISTIE: It's time to defer to the experts.

ACOSTA: Last summer he blasted critics in the religious right who objected to his appointment of a Muslim judge.

CHRISTIE: This Sharia law business is crap. It's just crazy. And I'm tired of dealing with the crazies.

ACOSTA: That was a major turnoff for Christian conservatives.

UNIDENTIFIED MALE: He's made some very questionable appointments of some key positions. He has some backing from individuals who are clearly on the other side of most social issues. So, I -- I think he would have a difficult time gaining a lot of support among social conservatives.

(END VIDEOTAPE)

ACOSTA: Back to those tea leaves, Christie's brother told a New Jersey newspaper he is sure the Governor is not running but a close advisor to Christie tells CNN the storm of speculation is incredible but this is a decision that "Will come from Chris Christie on his terms. As you know, Wolf, that is not a yes but it's also not a no. It seems right now that the only person who knows what Chris Christie is doing is Chris Christie.

BLITZER: Yes, it's going to be hard for him to -- to run after he, himself, has said he's not ready, he's not qualified to be President of the United States and all of a sudden to change his mind on that. That's going to be difficult to him -- for him to walk away from so I assume he's not going to run -- let's be honest about why there's all of this pining for Chris Christie because a lot of Republicans out there are nervous about Rick Perry.

They know -- they've -- they've been disappointed in his debate performance and, as you know, the -- even the President of the United States went after Rick Perry the other day saying, you know, his state is on fire, referring to Texas, yet he's raising questions about global warming.

ACOSTA: That's right, and we did a little digging on that. You'll remember the president took that swipe at Perry over the weekend at a fundraiser saying, you know, as you just said, Wolf, that here you have a governor who's state is on fire denying climate change. It turns out scientists from several federal agencies have said the fires are largely due to La Nina weather patterns and not global warming. We even found this YouTube video featuring a Department of Agriculture meteorologist summing it up this way and talking about the La Nina effect on the drought in Texas.

(BEGIN CIDEO CLIP)

UNIDENTIFIED MALE: The cause of the dry weather is a La Nina system in the Pacific Ocean that is affecting U.S. Weather.

BRAD RIPLEY, USDA METEOROLOGIST: We're at least at a 50/50 chance that we will slide back into at least a moderately strong La Nina event and that could have even more devastating consequences for Texas and Oklahoma and other drought-ravaged areas.

(END VIDEO CLIP)

ACOSTA: Now, the Perry campaign released a statement calling it outrageous that the president would use the wildfires in a political attack. Heard from the Obama re-election campaign and they're standing behind the attacks saying that there is a strong consensus from scientists that climate change does cause changes in the weather so they're sticking with this one.

BLITZER: We'll monitor Governor Christie's speech at the Reagan Library later tonight. Jim, thanks very much.

ACOSTA: You bet.

BLITZER: Right now, President Obama is wrapping up his western tour with a visit to the critical swing state in the 2012 election. Listen to some of his remarks in Colorado.

(VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The Republicans in Congress, they call this class warfare. You know what, if asking a millionaire to pay the same tax rate as a plumber makes me a class warrior, a warrior for the working class, I will accept that, I will wear that charge with a badge of honor.

(APPLAUSE)

The only warfare I've seen is the battle that's been waged against middle classed families in this country for a decade now.

(END VIDEO CLIP)

BLITZER: These days the president's speeches often blur the lines between official White House business and political campaigning and that's raising some questions about who's paying for these presidential trips, like the one he's on right now. We asked our White House correspondent Brianna Keilar to take a closer look. What did you find out Brianna?

BRIANNA KEILAR, CNN WHITE HOUSE CORRESPONDENT: You are paying for it, I'm paying for it, taxpayers, for the most part, are paying for it. Wolf, as you know, it's standard practice for presidents, Democratic and Republican to be fair, to go on what are predominantly fundraising trips on the taxpayer's dime rather than having their campaign pay for it. Why, you might ask.

Well, it's a formula. There's some official White House business on the trip and that means the president's re-election campaign and the party pay very little of the cost.

(BEGIN VIDEOTAPE)

KEILAR: On the president's three day western swing he fielded questions at a town hall meeting in northern California and visited a high school in Denver, two official events to promote his jobs plan. Compare that to the seven fundraisers he headlined on the trip. He raised at least $7.5 million for his re-election coffers and the Democratic National Committee and you, the taxpayer are footing the bill for most of the trip which also costs millions of dollars. Pete Sepp is with the National Taxpayers Union, a nonpartisan group against wasteful government spending.

PETE SEPP, EXECUTIVE VICE PRESIDENT, NATIONAL TAXPAYERS UNION: Usually a political party only covers a fraction of the costs of presidential travel, usually in the single digit percentages. Most of the money raised really comes at a free cost to the parties. They only reimburse for a few hundred thousand dollars on a given trip if taxpayers are lucky.

It's expensive for the president to travel. Air Force One costs about $180,000 per hour to operate, according to the Air Force. There's a support plane for the president's limousines, sometimes another for his helicopter Marine One, and the Secret Service detail, hotel rooms and meals for dozens of White House staffers and don't forget, local security costs, like overtime for police officers in the presidential motorcade.

BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: Not for me but for you.

KEILAR: Previous presidents, Democratic and Republican, have done the exact same thing. In September of 1995, President Clinton attended eight fundraisers in four days on a cross country swing. And then there's the campaign events that don't raise money but rally support, like this one.

President Bush's dramatic entrance into a campaign event at a Florida baseball stadium less than a month before his re-election and taxpayers picked up almost the entire tab. Call it a perk of the presidency, something a mere candidate does not enjoy.

SEPP: That's the point, when the parties themselves have to pay for the costs of the pomp and the circumstance, well, the pomp and the circumstance gets a lot smaller, a lot more modest.

(END VIDEOTAPE) KEILAR: Now, there's actually not a lot transparency in how much it costs for the president to travel. We asked the White House but, as other administrations have done, they don't disclose the costs citing security concerns, namely, they don't want to reveal secret service cost.

But, a report done by a Democratic Congressional committee during President Bush's tenure put the cost as divided 97/3. That's 97 percent paid by the taxpayers, 3 percent paid by the party, not necessarily a totally unbiased report but it's really all there is to go by, Wolf.

BLITZER: I'm sure the Republicans will take --do another report right now, taking a closer look. We'll see if they come up with a different number than 97 to 3. We'll watch that closely. Good report. I learned something

KEILAR: Thank you Wolf.

BLITZER...from you and I covered the White House, as you know, for almost eight years during the Clinton administration. I didn't know it cost, what, $180,000 an hour to fly Air Force One?

KEILAR: That's right, when you factor in the maintenance costs and you're talking about sort of averaging all of those things out and the fuel and everything all in one thing in operational hours it's almost 200 grand.

BLITZER: Wow, Brianna, thanks very much.

Facebook is wrapping up its political networking. We're taking a closer look at why social media companies are trying to make a bigger impression on the 2012 election and on Washington.

And what brought Michael Jackson's doctor to tears today? Stand by for a report on Dr. Conrad Murray's trial. And our own Dr. Sanjay Gupta will give us some perspective on the drug that killed the pop star.

(COMMERCIAL BREAK)

BLITZER: Let's get right to Jack Cafferty for "The Cafferty File" - Jack.

JACK CAFFERTY, CNN CONTRIBUTOR: President Obama has made racism worse in America, those words from African-American actor Morgan Freeman. He told CNN's Piers Morgan the other night that the Tea Party's opposition to President Obama, the nation's first black president, is rooted in racism.

Freeman claims Tea Partiers will do whatever it takes to, quote, "get this black man out of here," unquote. Freeman adds that the Tea Party shows the weak, dark underside of America and that, quote, "We're supposed to be better than that," unquote.

Well, the only black Republican candidate for president pushed right back. Businessman and Tea Party member Herman Cain says most of the people who criticize the moment, the tea party moment, have never been to a tea party rally. Cain says name calling will continue because opponents don't know how to stop the Tea Party movement.

Meanwhile, with black leaders grumbling Mr. Obama hasn't done enough about staggering black unemployment, the president evoked language that sounds a whole lot like the civil rights era. He told the Congressional Black Caucus to march with him, quote, "Take off your bedroom slippers, put on your marching shoes," unquote.

Americans are split on how Mr. Obama's presidency has changed race relations in this country. A recent "USA Today"/Gallup poll shows 35 percent of those surveyed say race relations have improved while 23 percent say they've gotten worse under President Obama. 41 percent see no change.

Back in 2008 when the nation voted for hope and change, Americans had a much rosier view of what the president would do for race relations. Gallup found that day after Mr. Obama was elected a whopping 70 percent predicted race relations would improve.

So here's the question, has president Obama made racism worse? Go to CNN.com/CaffertyFile, post a comment on my blog or our post on THE SITUATION ROOM Facebook page, a location that a growing number of you are going to. Lots of people going to the Facebook page.

BLITZER: And they should, for good reason. Jack, thank you. Good question. We'll see what our viewers think of very provocative.

As the 2012 campaign heats up, one of the most influential internet companies in the United States is creating a whole new vehicle to try to influence elections. We're talking about Facebook. Lisa Sylvester is here looking into this story for us. It's got some significant ramifications.

LISA SYLVESTER, CNN CORRESPONDENT: It does. Wolf, Google has had a pack since 2006 and Facebook is now getting in on the action and for all of its grassroots origins it's important to keep in mind that Facebook is actually a multibillion dollar corporation with a lot at stake in Washington.

(BEGIN VIDEOTAPE)

SYLVESTER: Facebook is friending people in high places. The Internet company that CEO Mark Zuckerberg started in his Harvard dorm room has formed a political action committee to financially back political candidates.

MARK PRESTON, CNN SENIOR POLITICAL EDITOR: I think people are surprised because they look at Mark Zuckerberg and say this young kid has so much money and so much influence, and now he's going to go to Washington and try to exert himself on the lawmakers.

SYLVESTER: In a statement, a Facebook spokesman said, quote, "FB PAC will give our employees a way to make their voice heard in the political process by supporting candidates who share our goals of promoting the value of innovation to our economy while giving people the power to share, make the world more open and connected.

Facebook joins the ranks of other tech companies moving into politics. Google co-hosted a Republican presidential debate last week. Linked- in held a town hall style meeting with President Obama.

At the same time, Congress is starting to pay more attention to internet companies. Google's CEO Eric Schmidt was called to testify before a Senate panel last week on anti-trust issues. Other issues that might invite lobbying by internet firms, intellectual property, patents, taxes, and the biggie, for Facebook, privacy.

DAVID KIRKPATRICK, CEO, TECHONOMY MEDIA: They are playing a unique role as a company in terms of all of the privacy and personal data that they control. And there's no question that they are going to be dealing more and more with legal overtures and regulatory challenges that are going to require extensive governmental interaction.

SYLVESTER: Disclosure forms show Facebook, which had almost no presence in Washington a couple years ago, has been ramping up on the political front, hiring big guns like Erskine Bowles, President Clinton's former chief of staff, and former Clinton press secretary Joe Lockhart.

SHEILA KRUMHOLZ, CENTER FOR RESPONSIVE POLITICS: With all these tech companies we're seeing a spike in activity in their campaign donations and lobbying.

SYLVESTER: Facebook so far has spent more than $550,000 on lobbying this year, almost as much as it spent in the past two years combined. Google has spent about six times as much, or $3.5 million on lobbying this year.

(END VIDEOTAPE)

SYLVESTER: Now last year, Facebook had two lobbyists in Washington. This year it has more than two dozen lobbyists.

BLITZER: We can only imagine how many it will have next year if that growth continues. They tried to hire the former White House press secretary Robert Gibbs, but that didn't work out.

SYLVESTER: Yes. They are really going for the big names here. That's the point. It's not just two dozen random lobbyists. These are people well connected, a number of people who have been through the revolving door, who used to work in government, now working for the private sector. We saw it with Joe Lockhart, Erskine Bowles and other names. Expect Facebook to be a significant presence in Washington.

BLITZER: I assume they'll hire a bunch of Republicans as well. Good lobbying group in Washington, Republicans and Democrats at a time of divided government like this. Thanks very much. Good report, Lisa.

Chilling images of Michael Jackson after his death as his doctor goes on trial for manslaughter. Stand by for a full report. And Coca-Cola's CEO says Washington gridlock is forcing him to do business with China. How might that attitude affect the presidential campaign? Stand by.

(COMMERCIAL BREAK)

BLITZER: The trial for the doctor charged in the death of Michael Jackson started off with a chilling and emotional beginning today. Right now on the stand, Kenny Ortega, the man who produced Jackson's world tour at the time of his death. Earlier, jurors heard opening statements from the lawyers of both defending and prosecuting Dr. Conrad Murray. CNN's Ted Rowlands has the latest.

(BEGIN VIDEOTAPE)

TED ROWLANDS, CNN CORRESPONDENT: In his opening statement, prosecutor David Walgren started showing jurors this photo of Michael Jackson's partially covered body after he was pronounced dead more than two years ago. He then took nearly an hour and a half, laying out the state's case against Jackson's doctor, Conrad Murray. Walgren took the jury through Jackson's final hours, from his final rehearsal where he showed a photo of Jackson on stage to Jackson's bedroom, where he say Murray gave Jackson the overdose that killed him and then left the room.

DAVID WALGREN, PROSECUTOR: Conrad Murray figuratively and literally abandoned Michael Jackson.

ROWLANDS: Walgren told jurors that Murray had purchased hundreds of bottles of Propofol and had been giving it to him with other drugs on a daily basis in the months before Jackson's death. He then played this audio that he says Murray recorded of Jackson while he was extremely drugged. Listen carefully. Jackson is trying to talk about his upcoming concerts.

(INAUDIBLE)

ROWLANDS: Murray's lead defense attorney Ed Chernoff told jurors that Michael Jackson caused his own death taking a large amount of Lorazepam and the lethal dose of Propofol when Murray left Jackson's room to use the bathroom.

ED CHERNOFF, DEFENSE ATTORNEY: When Dr. Murray left the room, Michael Jackson self-administered a dose of Propofol. That with the Lorazepam, created a perfect storm in his body that killed him instantly.

ROWLANDS: Chernoff argued yes, Murray was giving Propofol to Jackson for months as a way to get him to sleep but he says Murray was trying to wean Jackson off the drug which triggered Jackson to self- administer the fatal dose.

CHERNOFF: The evidence is not going to show you that Michael Jackson died when Dr. Murray gave him Propofol for sleep.

ROWLANDS: At times, in the courtroom, Jackson's family broke down in tears. Even Murray broke down at one point, as Chernoff talked about Murray's relationship with Michael Jackson.

(END VIDEOTAPE)

ROWLANDS: A dramatic day inside the courtroom. Outside the courtroom, fans of Michael Jackson have been a staple here as well. This is just day one, Wolf, of a trial that is expected to last four to six weeks -- Wolf.

BLITZER: Ted Rowlands, I know you'll be watching, and we'll stay in close touch with you. Thanks very much.

Our chief medical correspondent, Dr. Sanjay Gupta, is also standing by at the courthouse with a closer look at the key drug in question right now, Propofol.

Sanjay, the defense told us that Conrad Murray was not necessarily a perfect man, but he's not a killer. Based on what you know about this drug Propofol, this other drug that was apparently administered at the same time, give us your initial thought on the defense argument.

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: I think what they are alluding to, Wolf, is this idea that Propofol being used outside the hospital, outside of an intensive care unit or operating room, is -- was obviously a mistake, it's something that's not conventionally done. And that's probably what they're referring to in terms of the imperfections of Conrad Murray. But I think what they were also saying is that the dosing of Propofol that we're talking about here, 25 milligrams, is a relatively small amount.

Now, you know, you're hearing -- you're already starting to hear some pushback on that, was it Propofol in combination with other drugs? Could these two things together have caused what they call a perfect storm within the body, causing someone's ability to breathe on their own essentially top stop.

And so, you know, that's where you're sort of hearing that defense argument going. But I think that they're sort of conceding, look, giving Propofol outside the hospital, that is a strange, bizarre thing, not adequate monitoring equipment, not adequate resources, should someone have problems, but it wasn't the lethal problem here -- Wolf.

BLITZER: But would that be enough, though, for I guess malpractice, if you will? The notion that he was administering this drug, which really should only be administered with a whole team of doctors, anesthesiologists, physicians, in a hospital, that he was doing this on his own in someone's bedroom.

GUPTA: Yes. It's, I think, for sure, and I think that's probably going to be -- you know, this is obviously a criminal case that's ongoing now, but that's going to be something that may be looked into as well. But I think you're absolutely right, Wolf.

I mean, the idea that you would use a substance like this and not have all the adequate equipment, but more to the point, there's concession that he stepped outside the room. And that's sort of, you know, anesthesiology 101. When using a medication like this, the patient has to be continuously monitored, someone has to be there with the patient at all times, because they can have sudden changes in their respiration.

One thing I found interesting, though, Wolf, is there's something called the Controlled Substances Act, and we've heard about people violating this act in the past, even with Anna Nicole Smith, for example. Propofol, at that time, and still, is not considered a controlled substance, which I think is surprising to a lot of people. But in hospitals it's not a medication that's locked up like, for example, a lot of narcotics are.

So this is a drug, a known drug of abuse, for example, among anesthesiologists, among hospital personnel, but it's not a controlled substance -- Wolf.

BLITZER: We're all going to be a lot smarter at the end of this trial on all these drugs and the combination, the mixture. Sanjay, I know we're going to stay in close touch with you as well. Thanks very much.

Sanjay Gupta, our chief medical correspondent.

A notorious fugitive nabbed after more than 40 years on the run. Ahead, where he was found, how authorities were able to track him down.

Plus, iPhone fans, get ready for iPhone 5. We have details on Apple's big announcement. That's coming up.

(COMMERCIAL BREAK)

BLITZER: A notorious fugitive nabbed after more than 41 years on the run.

Lisa Sylvester is monitoring that and some of the other top stories in THE SITUATION ROOM right now.

What's going on here?

SYLVESTER: Yes. Well, this is a pretty remarkable story.

The FBI has announced the arrest of George Wright in Portugal. Wright was serving a 15-to-30-year jail sentence in New Jersey for the 1962 murder of a World War II veteran before escaping eight years later. Authorities then tied him to an infamous 1972 hijacking involving a $1 million ransom. They're seeking his extradition now from Portugal.

Australia is about to become one of only a few countries in the developed world with no restrictions for women in combat. Under a new plan to be phased in over a five-year period, Australian women will be able to serve alongside men in front line combat roles, according to the Australian Defense Ministry. The United States formally excludes women from direct ground combat units.

And speculation is swirling that the iPhone 5 is just around the corner. Apple has now confirmed a press event next Wednesday, where the much anticipated device is expected to be unveiled. The phone could feature upgrades like longer battery life and more memory.

And there's new scientific evidence that a morning cup of coffee may help brighten the day, at least for some women. According to a new study, women drinking caffeinated coffee were less likely to become depressed. And the more they consumed, the more that risk of depression goes down.

But researchers say there's no indication that drinking a cup after cup would prevent depression altogether. So, another reason why I reach for my coffee.

BLITZER: It will prevent you from getting depressed, but it will also keep you up.

SYLVESTER: I know. That's a good reason.

Are you a coffee drinker?

BLITZER: I like a couple cups in the morning, sure.

SYLVESTER: Yes. Well, I do, too.

BLITZER: Everybody does.

SYLVESTER: It's nice to get started.

BLITZER: Thank you.

A terrifying moment in China today. Stand by for details on that.

And CNN's Erin Burnett shares her impressions from her recent visit to China.

Plus, engineers scale to new heights to inspect earthquake damage at the top of the Washington Monument.

(COMMERCIAL BREAK)

BLITZER: It's being called the darkest day in the history of the subway system in China's largest city. More than 260 passengers were hurt when two trains collided in a tunnel in Shanghai. Authorities say faulty equipment was to blame and apologized to passengers.

Let's bring in CNN's newest anchor, Erin Burnett.

Erin, you recently went to China to do some reporting for your news show. There are some who say these terrible accidents are happening because China is simply growing too quickly, with very little regulation.

What was your impression?

ERIN BURNETT, HOST, "ERIN BURNETT OUTFRONT": You know, it's interesting, Wolf. You see that. You know, driving through China, every time I go, one thing strikes me, especially when you're driving through any area with mountains, is how many tunnels they have built, how brand new the roads are. Everything there is new and under construction, and this unfortunate accident today in Shanghai, you know, two months ago we heard the same thing, it was a signal failure that caused a high-speed train to collide in July made by the same company.

So there certainly is something to the fact that China's growing too quickly. Obviously, you have the government in control of a lot of the companies that are doing the signals and building the roads, which is another challenge, and it could be getting a little bit ahead of itself.

You know, today -- you know the term "BRIC," Brazil, Russia, India, and China, the four fast-growing new economies in the world -- the man who invented that term today actually said, Wolf, that he thinks inflation in China is a much bigger risk to the growth of the world and the United States than a default in Greece. And no one really paid attention to that comment because we've got so much going on in Europe. But China remains the most important growth opportunity and risk to America that we've got.

BLITZER: It's amazing, Erin, that so many companies are really expanding in China -- Ford, the CEO of Coca-Cola. You probably saw he said they're expanding their business in China because he's worried about what's going on here in the United States.

What do you make of this?

BURNETT: It's true. I mean, China is a real area of growth.

You look at Ford saying they're going to be rolling out all these cars in China, already the biggest auto market in the world. Coca-Cola, every company, you name it, for them China is a big opportunity. And they have a lot of issues with how the government structures the deals they do, but if they didn't have China right now, they wouldn't have a whole lot else, because the U.S. economy is in such a tough spot.

One thing I would say, Wolf, though, is that China still has a really, really long way to go. When you look at their economy right now, the second biggest in the world, it's still only about $6.5 trillion. Ours is more than $15 trillion, and we're not number one. So the difference between number one and number two is huge and is going to remain huge for a long time.

BLITZER: What's the reaction in China to the downgrading of the U.S. credit rating since China, as you know, owns so much of the American debt?

BURNETT: You know, it's really interesting, Wolf. We went on the streets of Shanghai, which I should emphasize, is the wealthiest city in China, and asked people what they thought. We were there after the downgrade, and part of the reason we picked that is we wanted to ask the questions in English. And if you go across China, a lot of people don't speak any English at all, even though, Wolf, very interesting anecdote, you have more English speakers in China than people in the United States. So that is an interesting statistic.

But we asked them, and most of them said with pride that they thought we were now living in a two superpower world where we'd have China and we'd have the United States. Some people, though, that were a little less sophisticated when I asked them, well, who's stronger now, China or America, they went more on the military route, and they said, well, we only have one aircraft carrier and America has a lot. So America is still stronger.

So, there's still, I would say, a lack of sophistication in how they see this versus how Americans see it. But definitely pride, that they think it's a two-horse race now.

BLITZER: I know you're going to be reporting extensively on your show about this and a lot more. Erin, good luck.

BURNETT: Thank you, Wolf.

BLITZER: Monday, that's when your new show kicks off. We're all going to be watching.

And I want our viewers to know, Erin's show begins this coming Monday, 7:00 p.m. Eastern. THE SITUATION ROOM moves up an hour. We'll be on from 4:00 to 6:00 p.m. Eastern instead of from 5:00 to 7:00. All that begins this coming Monday.

Erin, good luck with the new show.

BURNETT: All right. Thank you, Wolf. Excited, and we'll see you Monday.

BLITZER: See you then. Thank you.

So who's to blame for broken government in Washington? You're going to want to hear what -- why one columnist says it's you, the voters.

Our "Strategy Session," that's coming up next.

(COMMERCIAL BREAK)

BLITZER: Let's get right to our "Strategy Session." We're taking an in-depth look at the politics of broken government here in Washington.

Joining us now to discuss, our CNN political contributor, the Democratic strategist, Donna Brazile. Also joining us, Republican strategist Rich Galen. He's the publisher of Mullings.com.

Guys, let me read to you what Muhtar Kent, the CEO of Coca-Cola, said. And I'll put it up on the screen.

"If you talk about an American company doing business in the world today with its Chinese, Russian, European or Japanese counterparts, of course we're disadvantaged. When a country is in trouble, you can't have a polarized political process."

So, Rich, the breakdown of this cooperation in Washington is hurting the United States. Not only the economy in the U.S., but around the world as well.

RICH GALEN, REPUBLICAN STRATEGIST: Well, that was part of the statement. The other part was that we need to have a better tax system and a whole bunch of other things. And as Erin was just reporting in the last segment, we also have to remember that doing business in places like China isn't all rosy. I mean, you've got to put up with --

BLITZER: But he was suggesting in that interview in "The Financial Times" it might be easier right now to do business, open a Coca-Cola plant in China, that it is in the United States.

GALEN: Yes, if you want to do business with dictatorships, and the dictator likes you, that's better. But putting that aside, I think he's right about the polarization.

This thing we just saw again Friday and again just yesterday on a, relatively speaking, small amount of money on a FEMA bill, the Federal Emergency Management Agency, to give them more money, the fact that tied everybody in knots up for four days, is just insane. There are big problems to be solved, and devoting so much time and attention to these little granular issues is just killing us.

BLITZER: Do you agree with the premise, Donna, that the government in Washington right now, the executive and the legislative branch, is broken?

DONNA BRAZILE, CNN POLITICAL CONTRIBUTOR: Absolutely, Wolf. Every time we think things are getting better in Washington, D.C., things absolutely get worse. The problem with polarization is that every time we talk about it, we just contribute to it, because we lack the type of leaders that we often had in the past that could sit down and iron out their differences.

The truth of the matter is, Wolf, is that the electorate is very interested in divided government, but they don't like dysfunctional government. And what we've been experiencing is dysfunctional government, and that needs to stop.

BLITZER: When you say we lack the leaders, are you including the president of the United States?

BRAZILE: Well, you know, the president has reached out, he has tried to work with Republicans. But the only thing the Republicans want is to basically force the president's hand.

(CROSSTALK)

GALEN: (INAUDIBLE) got caught there.

BRAZILE: No, no. But look, the truth is, is that he has reached out, he has offered the olive branch. They don't want an olive branch. They want him out of office. They want him out of Washington, D.C. That's not going to happen.

GALEN: Unlike the Democrats when President George W. was at the end of his first term.

BRAZILE: Yes, but you know what? Look at tax cuts. Look at the things that the Democrats worked with the Republicans on.

GALEN: The Democrats wanted Bush out just as badly as Republicans would like to have the White House.

Now, but the bigger problem is that, forget about assigning blame. There's plenty of blame for everybody to go around.

Stephanie Cutter is leaving the White House. I tweeted when I read that, and she's one of the best people in White House.

It's bad news for the U.S. government, good news for the campaign, but it's bad news -- people like have that have stay around because she's very smart, she understands how this thing works. And having people like that move into the campaign I think is dangerous.

BRAZILE: But, Rich, President Obama just put forward a job proposal that contained almost 90 percent of the things that Republicans once used to support. But the moment he puts his name on it, they oppose.

GALEN: That's not correct. The moment he said we're going to pay for it by going back, reneging on the deal he made last December on taxes, they were opposed.

BLITZER: Here is a question a lot of people are asking me. Why -- and the other day when I was out there, people were asking me, why could Ronald Reagan reach a deal, work across the aisle with Tip O'Neill, the Democratic Speaker -- they reached a serious compromise, but President Obama can't reach a deal with Speaker John Boehner?

BRAZILE: In large part because John Boehner is basically listening to his caucus. And his caucus, they are the most active, they are most energized. And President Obama, again, I mean, go back to why Democrats are upset. Many Democrats, as the president said the other night, were whining and complaining. I disagree with that, but they're mad because they believe the president has given up too much.

BLITZER: The president did try to play golf with John Boehner. Apparently, it didn't work out that great.

GALEN: Well, they did play golf.

BLITZER: They did play gold, but he hasn't reached an agreement.

GALEN: Well, golf diplomacy sometimes works --

BLITZER: Sometimes it helps.

GALEN: But here's what -- I don't disagree with Donna on that particular point, but I think there's a bigger issue, and we're part of it, the three of us and the other people that do what we do. We are in a 24/7 campaign mode. People are never not campaigning.

When you talk about the Reagan and Tip O'Neill days, different era. You know, the three networks. There was no blogging, no Internet. They could catch a breath, they could kind of say, OK, let's put this off until Thursday. Now you put something off for two days, and everybody wants to know why nothing is going on.

BLITZER: CNN was in business in the '80s, I hate to tell you.

GALEN: You weren't where you are. You were just --

BLITZER: It was CNN -- it was three networks, plus CNN in those days.

BRAZILE: I want to agree with the gentleman's remarks, and it is true, that this partisan environment is fueled by the 24/7 news cycle as well.

BLITZER: Blame the news media.

GALEN: That's exactly right.

BRAZILE: Well --

BLITZER: You know what?

GALEN: Me and Newt.

BLITZER: OK, guys. Thanks very much.

Shocking cruelty in Syria. A man's parents are beaten because of his musical protest against the Bashar al-Assad regime.

And if you think you pay through the nose for health insurance right now, you're certainly not alone. Stand by for some stunning new figures and the reasons prices are skyrocketing.

(COMMERCIAL BREAK)

BLITZER: Jack Cafferty is back with "The Cafferty File" -- Jack.

CAFFERTY: The question this hour is: Has President Obama made racism worse?

Rick writes, "Not really, but a lot of people have grown weary of all the race card excuses for Obama's poor performance. Those critical of his performance are sick of being labeled 'racist.' Presidents are subject to criticism of their actions, policies and relationship with Congress. This president gets no get out of jail free card for being black."

Charles writes, "Yes and no. He's made racism better by allowing us to talk about the issues, debate them, and see a black man as a man. We're not there yet completely, but we're closer. And yes, he has made it worse."

"Just look at the type of president he's been -- awful. I say this is as a black man who voted for him. Maybe we as a nation and we here in the black community might have been better if Hillary had won or if Colin Powell had been our first black president."

Debbie on Facebook, writes, "No, the president has not made racism worse. People were already racists, and when a man of color became president of their country, then they stopped trying to hide what was already there."

Barbara writes, "Somehow his being elected brought the worst out of people. They are having a hard time hiding their racism, just the opposite of what I had hoped would happen. It's a very sad state of affairs. Nobody can convince me that his race doesn't have a lot to do with the Republicans' hatred. A lot of the good Christian family values people are indeed racists."

Bob writes, "Obama has made everything worse. I think he does it on purpose."

Billy writes, "Herman Cain's success is proof that the economy is more of an enemy than racism. So, in a weird and unanticipated way, Obama has actually made things better."

And M. writes, "You've got to be kidding me with this loaded question. Short answer, no."

"He's biracial. I think many of the Caucasian people, Republicans and Tea Partiers, have a problem with his skin color. He didn't make it worse by running for president. This is one of the worst questions you have ever asked."

If you want to read more of the responses to the worst question I ever asked, go to my blog, CNN.com/caffertyfile, or through our post on THE SITUATION ROOM'S Facebook page.

It's 6:00, Wolf, in the East.

BLITZER: Thank you very much, Jack.