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President Obama Set to Address the Nation; U.S. Troops Attacked in Iraq

Aired February 24, 2009 - 15:00   ET

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


RICK SANCHEZ, CNN ANCHOR: We got a couple of breaking news stories that I'm just now finding out about as we begin this newscast. Let me let you know, we're now working the possibility that five people have been shot. This is in New Orleans, at Mardis Gras. Once we confirm that, we're going to bring that to you.

Also, we have got unbelievable video that's coming into us right now. It's video of a -- of a bishop who is described as a Holocaust denier getting kicked out of Argentina. You're going to see that. He actually raises his fist at the reporter.

And the big story we're following out of Washington is Roland Burris. Is he about to get kicked out, or will he be allowed to stay as a senator, but with conditions? He's meeting right now with Dick Durbin, and they are both going to be coming out any minute.

And, as soon as they do, we will have it for you.

Here's what else we have got.

(BEGIN VIDEOTAPE)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We are addressing the worst economic crisis we have seen in decades.

SANCHEZ: It is the president's big night, big speech before Congress. And he's got another new and very big problem. We will tell you what it is.

SEN. CHARLES SCHUMER (D), NEW YORK: I was deeply saddened.

SANCHEZ: Senator Charles Schumer joins me live to tell governors, no, you cannot cherry-pick from the stimulus plan. It's all or nothing. Don't want it? Give it to New York.

Avoiding an Imus scenario, "The New York Post" apology for a controversial cartoon goes all the way to the top, from owner Rupert Murdoch. You will hear it in full.

Right now, U.S. soldiers injured in Iraq, the question is, who fired on them? And the bigger question, why are we still there?

A police officer caught on his own dash-cam referring to three citizens as "F'ing N's" in a rental car. We are all over it.

What you say about all of this, participatory journalism, your national conversation begins right here, right now.

(END VIDEOTAPE)

SANCHEZ: Yes, it's breaking news. We're hearing now -- and we have been following for some time and trying to put this story together -- the possibility that five Iraqi soldiers may have injured or shot at as many as four U.S. soldiers.

Again, think about this. The people that the U.S. soldiers are there to protect may have attacked them today in Iraq. We want to try and break this one down. I want to do this by going to Arwa Damon.

She's standing by for us right now in Baghdad.

Arwa, I have heard today, over the last couple of hours, about four or five different versions of this country. We're trying to see if you can make some sense of this for us.

What are you hearing there?

ARWA DAMON, CNN CORRESPONDENT: Well, Rick, the latest information that we have from the U.S. military is that at 2:00 p.m. in the northern city of Mosul during a meeting at an Iraqi police station where U.S. soldiers were meeting with the Iraqi police, some sort of small-arms-fire attack took place. Initial reports were that one Iraqi interpreter was killed, another one was wounded, along with four U.S. soldiers.

We have, however, just received information from the U.S. military that one of those soldiers did indeed die. Now, the spokesman for Iraq's Ministry of Interior is telling us, though, that it appears that the attacker was an Iraqi police officer, saying that they know who this individual is and that there's currently a manhunt trying to track him down.

But this has been really a tragic last 48 hours for U.S. troops operating here. Yesterday, in Diyala Province, during combat operations, three U.S. soldiers lost their lives, this very much a clear indication that this still remains a very, very dangerous environment.

SANCHEZ: Yes, well, it's a dangerous environment because it's a war. But you're not supposed to get shot by the people that you're there to help.

If Iraqi police officers are shooting at U.S. soldiers, we have got an even bigger problem perhaps than we thought. And it's probably going to push the Obama administration toward getting those troops out sooner. Agreed?

DAMON: Well, Rick, that really depends on how you look at it. There are those that will argue that, you know, the U.S. military should stay here until the job is done, until the Iraqi security forces are cleared, cleaned out of all of those infiltrators.

Remember, when the U.S. military was putting the Iraqi army and the Iraqi police together, it was done very quickly. People were recruited with very little screening. So, it's very likely, as we're seeing today, and as we have in fact seen in the past, that some of those wearing uniform do have associations, do have loyalties that quite obviously do not lie with the Iraqi government or with the U.S. military and America's efforts that are happening here in Iraq.

What is risky, when we're talking about a quicker drawdown of U.S. troops, is that it could destabilize this entire country and the entire region as a result of that. If the U.S. military leaves here, and leaves behind a power vacuum, who is actually going to move in to fill that? And what sort of implication is that then going to have for global security?

SANCHEZ: Unbelievable story. And, Arwa Damon, as usual, you're doing a great job covering it for us. We thank you.

DAMON: Thank you.

SANCHEZ: Let us know if anything changes in that situation.

I want to bring in Mark Preston, Mark Preston of often called "Preston on Politics."

There's a lot going on today. It's a big day stateside. This is one of the most important speeches that Barack Obama has given as president of the United States. Really, this is a State of the Union speech that he's going to be giving tonight.

Would you not say, if not by name, it is in fact a State of the Union speech by this president?

MARK PRESTON, CNN POLITICAL EDITOR: Well, Rick, he's not only going to be addressing Congress tonight, a joint session of Congress, but he's going to be speaking to the American people.

And there is a lot riding on this speech. He really needs to restore confidence, not only to the American people, but to the markets and also our foreign allies.

But, Rick, we decided to talk to the American people. We did a poll. We wanted to find out really what was on their minds. And, first and foremost, because the speech will be focusing on the domestic economy, we posed this question to them, if we could take a quick look at this.

How much -- how confident are Americans that the Obama administration will right the -- will make the right economic decisions?

(CROSSTALK)

SANCHEZ: That looks pretty good.

PRESTON: Look at that number, Rick, 75 percent.

Now, I will tell you a couple of reasons why. First of all, Barack Obama spoke a lot about hope, he spoke a lot about change during this campaign. And that's what the American people are looking for. Also, you're looking at somebody who's coming in, a new face, someone who is a little bit different than the eight years of Republican rule that we have seen in the White House.

SANCHEZ: How do they feel about the Dems and the Republicans in Congress, though? Do we know that?

PRESTON: We do know that.

And let's look at how they feel about the Republicans right here, Rick. Same question, how confident are Americans right now, Rick, in will -- will the Republicans make the right economic decisions?

They come in at 53 percent, of course about 20 points lower than President Obama, but still not too bad. And the reason for that, Rick, is because there probably is some residual trust in Republicans to make the right economic decisions.

Of course, they are for tax cuts and they are for less government. Now, even though we have seen from Republicans in the past eight years, Republican consultants, strategists, lawmakers will all say that they might not have been for smaller government and they might have done very well on the tax cut side of things, what they're telling me anyway is, do as we say, not as we did.

Congressional Democrats, Rick, come in a little bit higher than the congressional Republicans. They come in at 66 percent. So, they seem to be riding a little bit of the wave from Barack Obama. And, really, it really boils down to this, Rick -- it really does -- is that the American people are looking to the public sector. They're looking to the federal government for help. They have no confidence in private sector.

(CROSSTALK)

SANCHEZ: Seventy-five percent for Barack Obama, 66 percent for the Dems, 53 percent for the GOP, interesting breakdown.

I want to bring in Patricia Murphy now.

As I bring in Patricia Murphy, there's something I want to talk to you about. Ben Bernanke today, the Fed chair, he said the following, that it looks good for 2010, that we could be in recovery mode by 2010.

I'm smiling. I imagine most Americans are as they hear that. He said, maybe by this end of this year, we're going to start getting things fixed, that we will be out of the problems that we're having now.

From his lips to God's ears, right? Let's listen to him as he said this now.

(BEGIN VIDEO CLIP) BEN BERNANKE, FEDERAL RESERVE CHAIRMAN: If actions taken by the administration, the Congress and federal government are successful in restoring some measure of financial stability, and only if that is the case, in my view, there is a reasonable prospect that the current recession will end in 2009 and that 2010 will be a year of recovery.

(END VIDEO CLIP)

SANCHEZ: 2010 will be a year of recovery. Woo-hoo. That sounds great. But there's an awful lot we have got to get through before we get there, isn't there?

PATRICIA MURPHY, EDITOR, CITIZENJANEPOLITICS.COM: There's a lot we have to get through.

And Ben Bernanke really is somebody who is known to focus on the best-case scenario and not the worst-case scenario. At this same hearing a year ago, he predicted that the U.S. could avoid a recession. And that certainly didn't happen.

But his job -- we heard about Mark saying that the president's job is to restore confidence of the American people. Ben Bernanke cannot harm the confidence, what confidence there is left in the market. Anything he says and does right now is parsed fully.

And if he were to come out with a very, very negative statement, it would do incredible damage to the markets. And he knows that. So, if you're looking for straight talk on the economy, I wouldn't listen to Bernanke in front of a Senate hearing.

SANCHEZ: Well, here's what the president has today. He has got a plate that's real full. How full? Let's talk about a couple of things that the president is being challenged by right now.

He wants to redesign health care. He wants to get us off of oil. He wants to spend more on education. He wants to revive housing. He wants to fix the banks. He wants to reinvent the energy sector. He wants to fix Afghanistan and he wants to get us out of Iraq. And he's doing all this all at the same time, like juggling all these balls.

Is there a danger that he's taking on or trying to do too much here?

MURPHY: There's not a danger in trying to do too much, because so much is broken, both at home and abroad.

The danger is that this doesn't feel like a cohesive effort, that it's just -- he is just throwing spaghetti against a wall and he hopes something that sticks and something works. So, tonight, we will hear an overall theme of his, that he's trying to right this ship, basically.

But the reality is, all of these issues are interconnected. They're like two-way dominoes. If you touch the banks, you touch housing, you touch the car, you touch the auto industry, you touch energy, you touch our dependence on foreign oil. None of them are isolated. So, you have to deal with all of them at the same time.

SANCHEZ: Murph, Mark, we thank you both for being with us. Good stuff. We appreciate it.

MURPHY: Thank you.

SANCHEZ: A school's going to be switching over to a four-day week to save money, your kids going to school for four days. Well, the secretary of education, Arne Duncan, is going to join me next. He's taking that question and several others that you have been sending to us.

(BEGIN VIDEO CLIP, "THE DAILY SHOW WITH JON STEWART")

JON STEWART, HOST, "THE DAILY SHOW": Yes, it's Bobby Jindal, Louisiana governor, rising star in the Republican Party and leading anti-stimulus voice. His state has been offered $3.8 billion in federal aid. But Jindal has said, no, he's only agreed to take a little over $3.7 billion.

(LAUGHTER)

(END VIDEO CLIP)

(COMMERCIAL BREAK)

SANCHEZ: Watch the fist. Watch the fist. You see him put his fist in his face? That's the bishop from -- the British bishop, Richard Williamson, literally getting kicked out of Argentina. He is infamous for the anti-Holocaust statement he has made -- or, I suppose, not anti-Holocaust -- let me rephrase that. He is a -- described as a Holocaust denier.

Obviously, this has been a huge problem for the pope and for the Catholic Church. The latest move is this. This video coming in to us right now, breaking news of Richard Williamson getting literally kicked out of Argentina for the comments and the positions that he has held in the past. We're going to stay on top of that story.

By the way, as you come back to me, let me welcome you back and tell you that we have just gotten information that there's a good possibility we are going to be talking to an Iraqi official to try and nail down once and for all that story we told you at the beginning of the newscast as to whether U.S. soldiers, one of them killed, possibly three others shot, by Iraqi police -- Iraqi police. How could that have happened?

So, as soon as we get that, we're going to be breaking that down for you.

Joining us now -- and we welcome him to our 3:00 show, this national conversation that we have every day -- is your secretary of education, Arne Duncan, former CEO of Chicago Public Schools, boy genius and great basketball player, as he's described.

Mr. Secretary, thanks so much for being with us, sir. ARNE DUNCAN, EDUCATION SECRETARY: Good afternoon, Rick. Thanks for having me.

SANCHEZ: We appreciate it.

We have got a lot of questions coming your way from a lot of the folks who are watching our newscast right now. Many of them are parents and students in college. And they want to know what's going to happen with the educational system in this country.

The first question, let's -- let's go over here to MySpace, if we can. And this is an interesting question that a lot of people have been talking about. "Is there a possibility that this nation will go to a four-day school week? Is it acceptable?"

Mr. Secretary?

DUNCAN: Not if I have anything to do with it.

I think we're fighting for more time, not less. And I think, across the country, our school day is too short, our school week is too short, our school year is too short. And our students are at a competitive disadvantage with places like India and China. So, we have to be doing everything we can to add more time to the day and the week and the year, not less. So, I think that would be a step in the wrong direction.

SANCHEZ: That's interesting, because, in some school districts, they are seriously considering it.

And let me bring you this question now. It comes to us from Twitter. This is Jack. He's watching. He says: "Listen, this is my question. What does the secretary plan to do about the mass dropping of arts and music programs in schools?"

DUNCAN: Well, this relates to the first question of, again, fighting for more time.

And we need to do the basics, reading, math and science and social studies. But we need all our students to be engaged in the arts, in P.E., in music, in chess, in drama, all those things that are considered extra. I don't think they're extra.

We have to give our students the opportunities to development their skills and interests and grow up in a healthy manner. And the more we're expanding opportunities, not taking them away, the better our children are going to do.

SANCHEZ: Here's a high school student. You know, we have a very young demographic watching this newscast. So, there's kids in high school, kids in college who are watching us. One of them is writing this question, and he wants you to answer.

Confidential says: "I am a high school student. I want to see the No Child Left Behind Act removed. What will you do to it?"

There you go, Mr. Secretary.

DUNCAN: Yes, well, No Child Left Behind did some things very well and some things very poorly.

The best thing it did was it put a real spotlight on the achievement gap. And we talked about disaggregating data. And that's not something we want to walk away from. We want to continue to really dramatically improve the performance and the opportunities for students that have been historically underserved.

Other parts didn't make sense. The idea of moving children around; choice before you try and improve what's going on; more tutoring doesn't make sense. It was also largely underfunded.

And with the stimulus package, the president, thanks to his extraordinary leadership in Congress, there's an additional $100 billion coming in to education, so Title I for poor students, IDA for special education students, dramatic increase in funding for college students, over $30 billion in increases in Pell grants and tuition tax credits.

And so there's a huge opportunity for us, as a country, to get dramatically better. And I think, frankly, we have to do it. We have an economic imperative, as well as a moral imperative, to do dramatically better for our children and to do it now.

SANCHEZ: Secretary of Education Arne Duncan, thank you, sir, for taking the time to talk to us and our viewers today. We certainly appreciate it. And maybe we will do it again.

DUNCAN: Sounds great. Thanks so much for having me. viewers today.

SANCHEZ: All righty.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Smells funny (EXPLETIVE DELETED) in a rental car. And ain't none of them on the...

(END VIDEO CLIP)

SANCHEZ: That beep that you just heard there was covering up the words "F'ing N's" in a rental car, as in N's, as in the N-word. And you know what F stands for. That's how an Oklahoma officer refers to three suspects. That's how he refers to them. And it's recorded in his own dash-cam. Should this guy keep his job? We're going to be following that for you.

Also, is Afghanistan going to become President Obama's Iraq, President Obama's Iraq? Secretary of State Hillary Clinton is meeting with foreign ministers. And CNN is there.

I'm going to be right back.

(COMMERCIAL BREAK) SANCHEZ: Well, you know that Mardi Gras is taking place. And now we're getting some information, some serious information about something going on there in New Orleans.

This is breaking news coming to us now. Let me share the information. I had mentioned this to you at the beginning of the newscast. We now are getting reports confirmed by police in New Orleans that five people have been shot at St. Charles Avenue and 2nd Street. Apparently, two apprehensions have been made at this time.

And at least one person has already been transported to the hospital, again, this coming from one of our affiliates there, and now confirmed to police by CNN, at least five people shot at the Mardi Gras celebrations there in New Orleans, two apprehensions, at least one person transported to the hospital.

Obviously, as we get more information on this story, I will bring it to you.

Now the other breaking story that I told you about that we were following at the beginning of the newscast, which is bothersome, to say the very least, the idea that four American soldiers would be potentially shot, one of them killed by U.S. -- or, pardon me -- by Iraqi police, Iraqi police, the very people that we're supposed to be working alongside with, many would argue protecting.

We have been trying to nail this story down. And we might get closer to do that, because we now have on the phone joining us Major General Hussein Ali Kamal. He is a deputy minister of intelligence in Iraq.

General, are you there?

Yes. Thank you very much.

SANCHEZ: Thank you, sir, for being with us.

Can you confirm -- can you confirm to us that indeed an Iraqi police officer shot an American soldier?

(CROSSTALK)

GEN. HUSSEIN ALI KAMAL, IRAQI DEPUTY MINISTER OF INTERIOR: Yes.

(INAUDIBLE) for what happened in Mosul (INAUDIBLE) Also, the minister of interior is very concerned (INAUDIBLE) That person who shooting the American army in Mosul, he is civilian, really taken -- wearing clothes from police.

SANCHEZ: So, wait, he was -- wait, wait, wait, wait. I'm going to stop you right there, because we're having a hard time listening to you. But I think you just heard you say that he was a civilian, not a police officer? Was he wearing a police officer's uniform?

ALI KAMAL: Yes. (INAUDIBLE) And we checked that, that this is a terrorist wearing the police uniform and do this accident and shooting the Americans. The result of this terrorist operation is for Americans (INAUDIBLE) also injured and one (INAUDIBLE) die.

(CROSSTALK)

SANCHEZ: Now, either -- either -- either way, sir -- and I don't want to keep you for a long period of time, but many Americans would argue, then, how it's possible that someone could this -- someone like this could infiltrate your police department. And doesn't that make a very unsafe situation for U.S. soldiers?

ALI KAMAL: You know, the Mosul (INAUDIBLE) big city. And to control this area is difficult.

SANCHEZ: Yes.

ALI KAMAL: And the situation in (INAUDIBLE) is very (INAUDIBLE)

(CROSSTALK)

SANCHEZ: That's...

ALI KAMAL: The terrorists continue in this city. And this is not the first time wear the clothes from police or for army and doing some accidents from the Iraqi or for the American army in the city.

SANCHEZ: We thank you, sir, for taking time to clear this matter up.

Of course, there will still be questions. But the story on the record from Major General Hussein Ali Kamal is that this was not a police officer, that it was a, according to him, a civilian, an insurgent, he said, I believe -- quote -- "a terrorist" perhaps posing as a Iraqi police officer. Again, we thank the deputy minister of intelligence.

We're just -- I have just been handed more information. Let me go through this. Apparently, there's more information coming in from that breaking story we told you about in New Orleans. It may actually even involve an infant now, we understand. Let's see if we can confirm this. And then we will let you know.

Meanwhile, this: Remember AIG, AIG, AIG ? The rescue went viral when we reported it. Guess what? We're hearing they may need to be re -- re-rescued. Here's a question. What did they do with the first $150 billion, $150 billion? Stick around for that.

And guess what. It's Carnival time in Brazil, costumes, music, and a prophylactic-throwing Brazilian president. Huh?

(COMMERCIAL BREAK)

SANCHEZ: Welcome back. We have got some more information now. I told you moments ago that I had been handed some information. Let me share it with you, sad as it is.

Five individuals, according to -- this is WWLTV.com. And, by the way, I think we have got a Google Earth that we can show you exactly where this area is now. Let's go ahead and zoom into New Orleans, and you will see the area right there. That's St. Charles. That's where Mardi Gras -- the Mardi Gras parade goes down.

According to WWLTV, five individuals, including a baby, an infant, have been apparently injured in this Fat Tuesday shooting in St. Charles -- in the St. Charles parade route. One says it happened on the corner of Washington. The other one seems to be indicated on the corner of 2nd. Either way, two suspects are currently in custody.

And as more information comes in to us on this breaking news story during Mardi Gras, we will be sharing it with you.

The other story we have been talking about is AIG. We have talked about them in the past. And now there's this bit of news coming in to us.

AIG, that you might recall got $150 billion as part of that rescue that we had originally talked about, AIG being one of the most important insurers in the world, there's a story that they now need rescuing again, that they have gone through that money.

Joining us now is Bob Lenzner. He's the "Forbes" editor.

Wow. What gives, Bob? This is going to make a lot of people angry.

BOB LENZNER, NATIONAL EDITOR, "FORBES": Well, AIG is a $1 trillion company, and its -- the value of its assets keep going down. So, it's about to report a record loss for a quarter of an American corporation of $60 billion, OK? Sixty billion dollars. I will repeat that.

SANCHEZ: Wow.

So, because it owns these crummy mortgages and these different derivative contracts that -- that they didn't get any insurance on, they didn't protect themselves on, as the value of those things go down, and they owe their counterparties money, they have to -- they have to pay that money out.

So, two things are happening to them. Their assets are losing value, and they owe debts to their counterparties. And, so, they're going to need more money. They're probably going to need a lot more money. It's probably going to end up costing us at least a quarter of a trillion dollars to keep AIG actually running. And the (INAUDIBLE)...

SANCHEZ: Do we have to do that?

LENZNER: Well (INAUDIBLE)...

SANCHEZ: What happens if they go -- if they go under, who do they take with them?

LENZNER: You know, right now, I don't know that. What's happening right now is that just as the government is talking about going up to 40 percent ownership of Citigroup, they're talking about swapping assets -- operating assets of AIG -- for the government taking shares in return. The government would then end up owning part of AIG.

But what I think is wrong here, Rick, is that we're doing this all, again, on a piecemeal basis, institution by institution. It's terribly demoralizing to the markets, to individuals that don't understand all this stuff across the country -- ordinary people.

And I think what they should do is figure out what this is going to cost on the four largest banks, the largest insurance company -- probably General Electric coming down the road, because it's -- half of it is a finance company.

SANCHEZ: Oh, boy.

LENZNER: The stock is selling at $8 a share.

SANCHEZ: And do what with those?

LENZNER: Figure out what the total amount it's going to take to stabilize these institutions and do it all in one step. In other words, get everybody together, sit down with the banks' CEOs, with the people who are running AIG, with General Electric and anybody else that's tottering and figure out what this is going to take and do something about it at once, instead of doing it piecemeal every time.

SANCHEZ: Yes, which worries everybody.

And, by the way, the market today is not as jittery. The market was up 250 when last we checked.

LENZNER: Right.

SANCHEZ: Which is a good sign.

LENZNER: Well, the markets...

SANCHEZ: I mean, you know, you can't go day by day on this stuff, I know.

LENZNER: Well, it's because Bernanke said he hoped that we would turn the corner in 2010.

SANCHEZ: Recovery.

LENZNER: Recovery. But he also said that it was going to take at least two to three years -- longer than two or three years to have a complete recovery and that this was, you know, an incredible downturn in the economy. So... SANCHEZ: You know, there's something else I want to ask you about. You know what's interesting, you're talking about all the money that just needs to be given to some of these agencies. Look at all the people out there who are saying that if we give them that much money, we might as well either control them or own them. I mean I'll just give you some names.

LENZNER: Yes, I know.

SANCHEZ: Alan Greenspan, Lindsey Graham, Republican Christopher Dodd...

LENZNER: Yes.

SANCHEZ: Chuck Schumer, Stiglitz -- who's a Nobel economist. Krugman said it. Blinder said it. Roubini, who was the first guy who predicted the financial meltdown.

LENZNER: Well, I...

SANCHEZ: Gordon Brown, prime minister of Britain.

Are these guys Bolsheviks for saying something like this?

LENZNER: No, no, no, no. But -- I have a lot of confidence in Roubini.

But I think nationalization -- who's going to run them, then?

I mean, in effect, the government is running Citigroup right now. They can't make a decision that involves more than $100 million of capital without asking the government's permission.

But I think nationalization -- it's going to create even more chaos. It sounds great. It sounds like it would be some kind of antidote -- some kind of medicine to take and then everything is going to be OK. But I don't -- I don't agree with that at all.

SANCHEZ: You are the one of the best economic guys we talk to, because you say it straight and you say it like you think it.

LENZNER: Well, I appreciate that coming from you, because I think you're one of the smartest guys I've ever talked to.

SANCHEZ: I appreciate that, Bob.

I appreciate that a lot.

LENZNER: Yes.

SANCHEZ: All right. We'll get you back.

LENZNER: Thank you.

SANCHEZ: And we'll say nice things about each other.

(LAUGHTER)

SANCHEZ: Secretary of State Hillary Clinton's plate is getting very full -- Pakistan, Afghanistan, the Middle East.

And why would U.S. soldiers be shot by Iraqi police?

Again, that's the thing that we've been nailing down. You just heard the foreign minister or one of the officials there in Iraq say well, he wasn't a police officer, he was somebody pretending to be a police officer. We'll continue drilling down on that for you.

And Rupert Murdoch says that he's sorry for that "The New York Post" cartoon. I'll tell you exactly what he said.

(BEGIN VIDEO CLIP FROM "THE DAILY SHOW WITH JON STEWART," COURTESY COMEDY CENTRAL)

UNIDENTIFIED FEMALE: Republican governors are insisting that they will not take the stimulus money.

JON STEWART, HOST: You know, money from Democrats can still be exchanged for goods and services.

(LAUGHTER)

STEWART: You know that, right?

(LAUGHTER)

STEWART: Now, I know...

(LAUGHTER)

STEWART: I know it's not worth as much as Republican money. But it's no peso.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

SANCHEZ: Hey, welcome back.

I'm Rick Sanchez.

You know, as an American, I don't think you can kind of help but be troubled somewhat by this report that we're getting out of Iraq -- the idea that a police officer -- at least the original report.

And let me bring Jim into this now -- the idea, Jim Clancy, that a police officer -- an Iraqi police officer shot at American troops and killed one. Or now we've got this Iraqi minister of intelligence, General Hussein Ali Kamel, who comes in and says no, no, no, that wasn't an Iraqi police officer, that was a terrorist posing as an Iraqi police officer.

Well, either way, it's not good. JIM CLANCY, CNN INTERNATIONAL: It's not good either way. And we don't know what it was. I doubt that he knows what it was. I think that we have to understand it's the culture in Iraq, Rick, that's going to say this embarrasses me, to have an Iraqi security officer shoot an American.

But I'm going to tell, Rick -- I'm going to tell you that this guy was somebody else.

SANCHEZ: Yes.

CLANCY: He's not one of our guys, because it's embarrassing...

SANCHEZ: Because it wouldn't look good. I mean, it wouldn't...

(CROSSTALK)

SANCHEZ: No. In fact, it would look horrible. I mean the idea that we are protecting Iraqis in that country. We're supposed to be working side by side by Iraqi police and Iraqi soldiers.

CLANCY: (INAUDIBLE).

SANCHEZ: If Iraqi police and Iraqi soldiers are turning on our soldiers, we've got a serious problem and we should get the hell out of there.

CLANCY: Well, we've always had a serious problem. I can tell you, we've had CNN journalists...

SANCHEZ: A more serious problem.

CLANCY: ...CNN journalists going out with armed guards and the Iraqi police see that there's Iraqi guards in the first car and they say, how much do you want for your Westerners?

SANCHEZ: Really?

CLANCY: You know. So they're not on your side -- not all of them. Maybe for money. Maybe there was some words exchanged. We don't know.

SANCHEZ: Will we ever know what really happened here?

CLANCY: Probably not.

SANCHEZ: Really?

CLANCY: Probably not. But you're right, it's disturbing.

SANCHEZ: Afghanistan becoming really, many fear, Barack Obama's Iraq -- or what, you know, what Iraq became for George Bush, Afghanistan could become for Barack Obama. So Senator Clinton -- pardon me -- Secretary of State Clinton, envoy Richard Holbrooke, they're going to be meeting with Pakistani officials and Afghanistan officials.

To what end?

CLANCY: Well, a lot of finger pointing, I would think, in that meeting, from the Pakistanis toward Afghanistan and vice versa, certainly. We've seen that in public. But I think what you're looking at here, Rick -- and you asked the right question, which is what are we doing before we get in here?

SANCHEZ: Yes.

CLANCY: We're jumping in with both feet. You know, George Friedman of Stratfor says we don't need more troops in Iraq. Look, the Russians are now going to blackmail us for favors in order to get our supplies in there. Lighter troops with what they can carry on their backs.

SANCHEZ: Well, wait. Let me share something...

CLANCY: (INAUDIBLE).

SANCHEZ: Let me share something with you right now. And this is the same kind of statistics we were getting out of Iraq that bothered us.

Ready?

Fifty percent of Afghans say they hate us. They hate us. Twenty- five percent of those say attacks on a U.S. soldier is justified. It sounds like Iraq. It's not the kind of situation we should be dealing with.

And, again, the average American watching this newscast right now would say, if that's true, Mr. Clancy, why do we want to be there?

Why do we want to help them?

CLANCY: Well, because it's neighboring -- first of all, we want to go after Osama bin Laden.

SANCHEZ: Right.

CLANCY: But you've got to realize, Rick, going into Afghanistan is like walking into the 14th century. This is not your normal place for a conflict. You want to pay each one of those in that 50 percent a buck, you're going to have 50 percent more that like you. You know, there are ways to work this out. There are ways to move it ahead.

SANCHEZ: But the reasons are more geopolitical than anything else.

CLANCY: Oh, absolutely.

SANCHEZ: In other words, we need to control the region. We're afraid that it's a powder keg...

CLANCY: You need to deprive...

SANCHEZ: ...Pakistan...

CLANCY: ...Al Qaeda of a safe haven. But it looks like the Paki -- this is going to come up in that meeting with Hillary. It looks like the Pakistanis are creating that safe haven there in the valley -- in the Swat Valley...

SANCHEZ: By doing deals with Taliban.

CLANCY: ...a hundred miles from the capital.

SANCHEZ: By doing deals with the Taliban.

CLANCY: They've got a deal with the Taliban. The Taliban says, sure, we'll extend this cease-fire. We'll...

SANCHEZ: How can they...

CLANCY: What is...

SANCHEZ: ...do a deal with the Pakis -- how can they do a deal with the Taliban if the Taliban is our energy -- enemy and they're our allies?

CLANCY: Well...

SANCHEZ: It doesn't make sense.

CLANCY: Well, it does from the Pakistani point of view, because they say, look it, we can't be at war with ourselves. We've got to find peace with these people. Now here's what we're going to do, America. We're going to disarm them in exchange for we stop this conflict between us.

Well, if they're disarmed, they can't go into Afghanistan. Big problem here. They're not disarming. And they're swearing they're going to keep going into Afghanistan, Rick.

SANCHEZ: And...

CLANCY: That's what Hillary has to face down.

SANCHEZ: Yes. And that's what Secretary of State Hillary Clinton...

CLANCY: That's right.

SANCHEZ: It's interesting to say that all of a sudden, as opposed to Senator Hillary Clinton -- is going to be dealing with today...

CLANCY: Tough job.

SANCHEZ: ...in meetings today and tomorrow.

CLANCY: Yes. Holbrooke will really have to be at his best.

SANCHEZ: He's a smart guy. Thanks for being with us, Jim.

We appreciate it.

CLANCY: Always.

(BEGIN VIDEO CLIP FROM SEPTEMBER 10, 2008, COURTESY KTUL)

UNIDENTIFIED MALE: Smells funny. (EXPLETIVE LANGUAGE) (INAUDIBLE).

(END VIDEO CLIP)

SANCHEZ: That's amazing. I mean this is an officer who's caught on tape using the "N" word -- I mean this is pretty despicable stuff -- about the people that he's just pulled over. I guess he didn't know that his dash cam was recording him while he was saying it.

Next, what Rupert Murdoch is saying about the cartoon that one of his papers raised -- or ran, which is now raising some serious questions.

(COMMERCIAL BREAK)

SANCHEZ: And we welcome you back to the World Headquarters of CNN.

I'm Rick Sanchez.

A rocking show -- a lot of rocking comments that are coming in from you. And this -- something else that we want you to take note of on this day. It's an apology -- an apology, from Rupert Murdoch, no less. An interesting apology coming from Rupert Murdoch. It comes as a bit of a shocker to most that Murdoch, owner of Fox News and "The New York Post," would personally apologize for the insensitivity of that newspaper.

That is exactly what he is doing today. He is apologizing for a controversial newspaper cartoon showing a chimp being shot twice in the chest and referencing the president's stimulus package. You've seen it.

Well, here it is -- the apology: "Last week, we made a mistake. We ran a cartoon that offended many people. Today, I want to personally apologize to any reader who felt offended and even insulted," writes Rupert Murdoch.

Since coming to New York more than 30 years ago, Murdoch has, according to "The Village Voice," delighted in throwing gasoline on every racial fire they could spot -- stop quote -- again, according to "The Village Voice".

So what's different now?

Is it that Murdoch is no longer interested in making money on tabloids because he now owns, also, "The Wall Street Journal?" Or is it because he's afraid some -- like Al Sharpton did on this show last week -- will successfully challenge whether Murdoch should be allowed to own so many media outlets?

In New York, they're betting on the latter.

What do you think?

You can tell us, by the way, at CNN.com/ricksanchez.

I'll be right back.

(COMMERCIAL BREAK)

(VIDEO CLIP)

SANCHEZ: Carnival -- this is what takes place in South America on these days. It's what's happening right now.

Glenda Umana is in our CNN En Espanol.

She's following this.

I understand the president -- that leftist Lula da Silva -- showed up at one of these events the other day.

Is that true?

GLENDA UMANA, CNN EN ESPANOL: Yes. It is the first time, Rick -- buenos tardes, by the way.

It's the first time in 15 years in Brazil that a president goes to the carnival. It's one of the biggest and longest parties in the world, where millions of people get together in Rio de Janeiro to party before the Lent season. It's a 100-year-old tradition.

And as we can see, it's a mixture of all cultures. There's an official competition at a stadium where tickets can cost as high as $1,000. But the real party is outside in the streets, where there are drums and dances, where everybody -- poor or rich -- together.

SANCHEZ: Thanks so much.

Always fun to look at those pictures.

Thanks so much, Glenda.

UMANA: We wish we were there, right?

SANCHEZ: Yes, exactly.

(LAUGHTER)

SANCHEZ: Ciao.

UMANA: Bye. Ciao.

SANCHEZ: All right. Let's do this. Let's talk to -- oh, there's some video I want to show you now. This is video out of Oklahoma. This is the police officer that I've been telling you about, interestingly enough, who has used some words he probably shouldn't have used. And he recorded it himself with his dash cam in -- in his cruiser.

Let's take a listen.

(BEGIN VIDEO CLIP FROM SEPTEMBER 10, 2008, COURTESY KTUL)

UNIDENTIFIED MALE: Smells funny. (EXPLETIVE LANGUAGE) none of them (INAUDIBLE) in a rental car.

(END VIDEO CLIP)

SANCHEZ: I mean that was -- that's some racist stuff that we're listening to right there. I think -- if you didn't catch it, he says, the three f'ing "N" words in a rental car and none are on the rental agreement.

Ashleigh Banfield joining us from "Banfield & Ford" on the network In Session.

Thanks so much for being with us, Ash.

ASHLEIGH BANFIELD, ANCHOR, IN SESSION: Hi, Rick.

SANCHEZ: Look, this guy sound like a racist and I think he's been fired, right?

BANFIELD: Either fired or resigned. I've seen reports saying he resigned. Either way, he's not with that force anymore.

SANCHEZ: And that's appropriate?

BANFIELD: I mean, yes. If you ask me personally, sure. Anybody who uses the "N" word on the job is breaking a whole lot of rules. We should note, though...

SANCHEZ: But he's a public servant. I mean the guy is...

BANFIELD: He's a public servant.

SANCHEZ: I mean the guy -- he's not just like you and me.

BANFIELD: Correct.

SANCHEZ: I mean if we work with somebody who's that way and they do -- you know, whatever. But this guy is being paid by black people.

BANFIELD: Right. Exactly. And no one should be using that word in any circumstance, least of which on a public payroll.

SANCHEZ: Right. BANFIELD: But we should note, also, Rick, he said this to his fellow officer, not to the people that he was stopping.

SANCHEZ: I guess that makes a difference. But, you know, people...

BANFIELD: Little. Very little.

SANCHEZ: People watching right now are -- you know what bothers them?

They think to themselves -- and especially, you know, if they're an African-American or a minority -- how many other police officers talk like this amongst themselves?

How prevalent is this amongst, you know...

BANFIELD: Partners?

SANCHEZ: ...police officers in the United States?

BANFIELD: You know, here's -- here's what I'm going to say to that. I don't think that the racism necessarily is any higher among police departments than, say, anybody else. But they also have been involved in racial profiling over the years in their departments.

SANCHEZ: Wow!

BANFIELD: And they've had to go through sensitivity training.

SANCHEZ: Hey, Ash hold on.

BANFIELD: And perhaps it affects them a little more than, say, doctors, lawyers, nurses, librarians.

SANCHEZ: And hold on. We've got some breaking news coming in. Apparently -- I know this is something you've been following -- another legal story. Burris -- Roland Burris has been asked to resign by Dick Durbin.

Let's see if we can turn that around.

Do we have the tape?

All right, let's go to -- let's go to Brianna Keilar.

She's standing by right now in Washington.

What's the scoop, Brianna?

Bring it to us.

BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: Hi there, Rick.

Well, actually, talking -- listening to what Senator Dick Durbin -- number two Democrat in the Senate -- what he said was not that he was calling on Senator Burris to resign, because he was asked repeatedly by a bunch of reporters, are you calling on him to resign?

And what Durbin said was a very carefully worded statement. He said, I told Senator Burris that under these circumstances, I would consider resigning. He was asked many times to clarify that.

SANCHEZ: Oh. Hey, Brianna, we've got...

KEILAR: He was asked to clarify that.

But let's listen exactly Senator Durbin in his words.

SANCHEZ: Cool.

(BEGIN VIDEO CLIP)

SEN. DICK DURBIN (D-IL), DEMOCRATIC WHIP: I had an opportunity to meet with Roland Burris in my office for the first time in the last 10 days, for a face-to-face conversation about the disclosures that have come to light. We talked about the entire process, from his selection by Governor Blagojevich to his appointment and what has happened since.

Harry Reid and I made it very clear from the outset that there were two conditions to Roland Burris' appointment.

First, that he file the same paperwork required of every senator ever appointed to the United States Senate, which ultimately happened.

But secondly, that he appear before the Illinois House impeachment committee in Springfield and answer their questions completely, honestly, under oath relating to his appointment by Governor Blagojevich to the Senate seat.

That was the only way that we felt -- Senator Reid and I felt that we could bring out as many facts as possible and protect the integrity of the United States Senate and during the course of this -- this whole appointment.

We talked about that today and I told my colleague, Senator Burris, that I was disappointed -- disappointed that his testimony in Springfield was not complete and it required a second affidavit to be filed; disappointed that he didn't make a clear, accurate disclosure of all the circumstances surrounding his appointment until several weeks after the fact.

The fact that he did not volunteer -- volunteer the names of people like Rod Blagojevich's brother, who contacted him, and others, was troubling to me, because I considered that to be one of the conditions for him to go forward and to secure this appointment.

That's why the disclosures in the last 10 days have been so troubling, because we had certainly asked for more and hoped for more and we didn't receive it.

I also talked about my disappointment over his efforts, whether they were successful or unsuccessful, to raise money for Governor Blagojevich, because we know this is a critical element here. Governor Blagojevich -- the former governor has been charged with trying to sell the Senate seat. And so raising money or trying to raise money for him was, in fact you know, a very important fact that should have been brought forward. It was not.

I asked him if he would be a candidate in 2010 and he said he had not made up his mind as to whether he would be a candidate. I told him I thought it would be extremely difficult for him to be successful in a primary or a general election under the circumstances.

We talked about some of the pressure he and his family are under because of this, involving the pressure of a lot of legal fees. He estimates that the legal fees to date are substantial -- hundreds of thousands of dollars. And he's personally put a lot of money into this, as well.

I told him that under the circumstances, I would consider resigning if I were in his shoes. He said he would not resign and that was his conclusion.

And so at this point, I suggested to him he had to do everything in his power to bring all the facts out as completely as possible. He told me he was limited in some respects, in terms of speaking to the press and making other public statements. But he still has to deal directly with the Senate Ethics Committee, which is considering this matter, as well as the same with the Illinois Sangamon County, Illinois state's attorney, John Schmidt, who has been given evidence to consider whether a prosecution should be followed there for a variety of different charges.

Those are the situa -- that's the situation as I know it. And it's now up to Senator Burris to deal with the facts and challenges before him.

QUESTION: Senator, do you wish a special election, in light of everything that's happened happened?

You originally suggested a special election.

Is that really what should have happened here?

DURBIN: Well, I think a special election was the right way to go. I'll tell you the problem. And the problem relates to the economy as much as politics. It's a $40 million or $50 million undertaking in our state. And a lot of units of government and the City of Chicago would have been on the hook for $5 million or something to hold a special election.

We tried to sync it up with some local elections and couldn't get it done.

With Blagojevich being impeached, with debate in the general assembly, the timing didn't work. It would have been a clean break with the past and a clean effort to fill the seat.

QUESTION: So do you support a resignation and another -- and an appointment by Pat Quinn?

DURBIN: What I've done is I've made my recommendation to Senator Burris and he's told me clearly that he will not resign. Now there are a lot of people, including a lot of editorial writers, who think that I have a persuasive way about me with Mr. Burris. And I will just tell you that is not the case.

He contacted me before he was appointed by Governor Blagojevich and I advised him don't do it. He did it anyway. So my advice obviously doesn't move him.

(CROSSTALK)

QUESTION: ...some of your Democratic colleagues, as far as their feelings about Senator Burris?

Do your views necessarily reflect those of other Democrats, of leadership?

How would you qualify it?

DURBIN: I won't speak for anybody but myself here, other than just to say in the most general terms, members are concerned about this.

Again, it raises, sadly, a specter of political controversy in my home state. I'm telling you, our people of Illinois are bone weary of this stuff. They want this Blagojevich burlesque to end and they want to move on. We have a lot of things that need to be done with our new governor in the general assembly.

As far as my colleagues here in the Senate, they're grasping, as I am, to try to get to the truth of this situation. They are confused and concerned about disclosures that have been made. But, you know, each of them will have to speak for themselves.

QUESTION: Senator, one more...

(CROSSTALK)

QUESTION: ...he is going to be here for a while.

How do you -- what -- is there a working relationship?

How will you deal with each other in -- in the future?

DURBIN: I'm going to do what's best for the state and working with Senator Burris on some issues is absolutely essential. There are some appointments that require the signature of both senators, for example. So we will find ways to cooperate and work together. I don't want the people of Illinois to lose anything because of this controversy.

(CROSSTALK)

QUESTION: Senator Reid has said that he will work with Senator Burris.

How are we to read the difference in your position with Senator Reid?

DURBIN: There's no difference. I will work with him. He is the senator from Illinois.

(CROSSTALK)

QUESTION: But you're calling on him to resign, right?

So...

(CROSSTALK)

QUESTION: Do you think he can actually weather this?

DURBIN: I said what I said.

(CROSSTALK)

UNIDENTIFIED MALE: Get the quote carefully.

(CROSSTALK)

DURBIN: No, I can't force him out.

The -- what I said was, you know, if I were in your shoes, I would consider resigning.

(CROSSTALK)

QUESTION: Do you think that he should resign?

DURBIN: Excuse me?

Excuse me. If I were in your shoes, I would consider resigning. And he said, I'm not going to resign.

QUESTION: But do you think he should resign?

DURBIN: I gave the answer.

QUESTION: So you're not saying it's a matter of for the public good that he should resign?

QUESTION: Do you think he can weather this?

DURBIN: What I'm saying is that I believe that what -- with what he faces, if I were in that position, I would resign.

QUESTION: Senator, how well do you think he can represent (INAUDIBLE)?

DURBIN: I think we found that there are limits when he can't travel to certain places because of media questions, I don't know. Maybe this is some indication of the interest. But he is limited in what he can do.

(END VIDEO CLIP)

SANCHEZ: So there you have it.

We basically -- you know, what do you -- what do you tell a guy, Ash, if you say, look, I think you should resign and the guy says, I'm not going to resign?

BANFIELD: Well, you hold a news conference and you start talking about criminal charges. I don't think there's a perjury case against him, personally, based on the testimony I heard in front of the state committee.

But this is serious. I mean, you know -- and I think that if Senator Durbin doesn't think he's persuasive, we'll see how his -- how his constituents feel.

SANCHEZ: Wow!

Ashleigh Banfield, my thanks to you. They're going to continue this conversation in "THE SITUATION ROOM".

Here is Suzanne Malveaux.