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The Situation Room

Jordan Bombings Death Toll Rises; Dean Sounds Off

Aired November 10, 2005 - 19:00   ET

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

WOLF BLITZER, CNN HOST: You're in "THE SITUATION ROOM," where new pictures and information are arriving all the time.
Happening right now, the number of Americans dead from the bombings in Jordan rises. And although officials haven't confirmed who did it, enraged Jordanians think they know who's responsible, shouting for Jordanian-born terrorist Abu Musab al-Zarqawi to quote, "Burn in hell."

It's 7:00 p.m. here in Washington, where Karl Rove, the president's top political adviser is getting ready to talk. He's been mum, mostly mum, at least since the indictment of his former colleague, Lewis "Scooter" Libby and since his own name was thrown into the CIA leak scandal. What will Rove say? We'll have his speech live. That's coming up this hour.

And Howard Dean is also speaking out about the Democrats' prospects, about the Republican's problems and how he hopes his party moves from minority to the majority.

I'm Wolf Blitzer. You're in the "SITUATION ROOM".

We're following word of higher number of Americans dead in the terror bombings in Jordan. We'll get to that in a moment.

First though, another developing story we're following. Questions right now involving a mutual fund company in which the U.S. Supreme Court nominee, Samuel Alito, had a large investment, and a ruling he made as an appellate judge.

A top Senate republican urged Alito to address this potentially explosive issue. Now Judge Alito has responded.

Let's bring in our congressional correspondent, Ed Henry. He's got new details -- Ed.

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: That's right, Wolf. The judge knows the heat is on right now. He has finally sent this letter to Senator Arlen Specter, the chairman of Judiciary Committee, just in the last hour.

Very interesting. This Vanguard case suddenly has bought a little bit of a speed bump to this nomination that had been breezing along. The quick background is that back in 1990, before he got on the 3rd Circuit, Judge Alito told the Senate Judiciary that he would make sure and recuse himself from involvement with Vanguard because he has a six-figure investment there. Major questions now being raised by Democrats up here on the hit about why he then got involved. And basically Judge Alito and two other judges upheld a lower court's dismissal, back in 2003, of New Jersey woman's lawsuit against Vanguard.

Arlen Specter, as you mentioned, the Republican chairman said today, when asked if the Vanguard is now spiraling out control and could endanger Alto's nomination, Specter responded, quote, "I'm concerned that it has potential. It may."

Specter though also put out a letter of his own to Judge Alito, saying that he believes that he did not do anything personally wrong. But he had to finally answer these charges. He has done that. We have that response for the first time on the record, Judge Alito says, quote, "I have been committed to carrying out my duties as a judge in accordance with both the letter and spirit of all applicable rules of ethics and canons of conduct." Judge Alito added that in 1990, he only agreed to assess these conflicts during his initial service on the bench. And he notes that this was some 12, 13 years after he got on the bench.

In any event, he says in 2003 case, it inadvertently slipped through the recusal process. There's a special screening process with computers and other methods as well to make sure that he would get such a case. He got it.

But he says once it was pointed out he shouldn't have gotten the case, he checked all of the applicable rules and felt that he did not have a financial interest that it would impact him and that he could stay on the case.

But nevertheless, because of the questions, he says in this letter, he decided to voluntarily recuse himself and then take the extra step of quote, "I took the extra and unnecessary step of requesting that a new panel of judges be appointed to rehear the case. The new panel of judges reached the same unanimous conclusion as the prior panel."

The White House telling us tonight, they believe this is going to close the book on this matter. The top Democrat on the Judiciary Committee, though, Patrick Leahy, saying he won't respond tonight. He wants to review this letter, two-page letter a little bit more. But also he wants s a response from the Judge Alito to the letter that Democrats sent. But I'm hearing they're not going to get a response, Wolf.

BLITZER: What was the exact sum of that investment?

HENRY: It was six figures. I don't have the exact figure in front of me. It was six figures. But basically people close to Alito are saying that this lawsuit wasn't going to impact his investment enough that it would be a windfall for him.

BLITZER: All right, I had heard it was close to $400,000. We'll check that. Thanks very much. Ed Henry reporting. Moving on to Jordan terror bombing. We've just learned of a rise in the number of Americans killed in the attacks. Two Americas confirmed dead. Four other Americans injured. That according to State Department officials who also say one of those killed was a Syrian American. The other, a Jordanian American.

Meanwhile, officials don't know yet who set off the three blasts that killed 56 people. Al Qaeda says they deserves what they call credit.

We have three reports. Our senior Pentagon correspondent, Jamie McIntyre, is standing by here in Washington. CNN's Zain Verjee is at the CNN Center in Atlanta.

But let's go the Amman first. CNN senior international correspondent Brent Sadler is standing by with the latest -- Brent.

BRENT SADLER, CNN SENIOR INTERNATIONAL CORRESPONDENT: Wolf, we saw here for the past several hours, thousands of Jordanians on the streets of the capital, Amman. Demonstrating against, what they say, was the involvement, one way or other, of wanted terrorist, Abu Musab al-Zarqawi. As far as the Jordanian streets are concerned, around the hotels that were targeted, the three hotels, they believe it's a Zarqawi cell that was involved in the attack.

The demonstrators were supporting the monarchy, defying the bombers. They were also out at, not just the hotel behind me, the Radisson, where there was heavy loss of life, but the other two hotels as well.

In addition, the Jordanian king, Abdullah, has made a statement, an address to the nation, underlining the severity of what happened here, promising that the perpetrators would be brought to justice.

Queen Rania of Jordan visibly shaken when she saw some of the survivors in hospital today, broke out in tears when she saw some of the badly injured children.

As far as the investigation inside Amman is concerned, Iraqi security forces rounding a number of Iraqis for questioning. It's understood that the man who detonated a suicide belt, inside the lobby of Grand Hyatt, spoke with an Iraqi accent before detonated his device. A suspicion that there is an Iraqi element inside Jordan possibly involved in this -- Wolf.

BLITZER: All right, Brent Sadler. Let's get more specific information. What we're picking up here in Washington. Let's head over to the Pentagon. Our senior Pentagon correspondent, Jamie McIntyre. What have you been hearing, Jamie?

JAMIE MCINTYRE, CNN PENTAGON CORRESPONDENT: Well, Wolf, al Qaeda in Iraq has claimed responsibility for this attack. Saying that the hotels were quote, "were filthy entertainment centers for traitors." And the Pentagon says, while they can't verify that, they believe that's accurate." A source close to investigation in Jordan tells CNN, it's believed at least two of the bombers were Iraqis. They wore suicide belts of explosive devices containing ball bearings. Similar to some used in Iraq.

The Pentagon says they're continuing to put the pressure on al- Zarqawi. They are trying to find him. the latest sweep that went through the area has been looking for him. But they say he's a very elusive person.

BLITZER: All right, Jamie. Thank you very much.

Two families were especially hard-hit by the terror bombings. One, which hit just as they were about to celebrate a wedding. Our Zain Verjee is joining us now live from the CNN Center in Atlanta with more.

How sad is this story, Zain?

ZAIN VERJEE, CNN CORRESPONDENT: So sad, Wolf. Three hundred people had filled the room at the Radisson hotel for the wedding of Ashraf Ad'as and Nadia Alalami.

(BEGIN VIDEOTAPE)

VERJEE (voice-over): The bride and groom were just making their entrance into the ballroom when the suicide bomber struck.

ASHRAF AD'AS (through translator): I was getting married it was my wedding.

VERJEE: This 32-year-old, Ashraf Ad'as saw the happiest day of his life turned into the worst. He and his bride, Nadia, had been planning this day since March. They were nearing the finale of their wedding. The traditional Arab ceremony called Bazephar (ph). They never got the chance to greet the friends and relatives who came to the hotel for the celebration. Surrounded by cheering, singing well wishers, the bride and groom were just inside the door, when the bomb went off.

AD'AS (through translator): The moment the explosion happened, it was immediately after we got into the hall. As people were getting into the hall, the explosion happened.

VERJEE: There was chaos and confusion as part of the ceiling collapsed. That gave way to horror as the deadly results became evident.

The fathers of both the bride and the groom were killed along with 27 other relatives including many cousins according to As'as.

He says 14 close friends also died. This, he says, is not Islam. Suicide bombings are new to Jordan. The timing and the ferocity of the attack caught everyone off guard.

OSAMA RASHAD AL-SALEH (through translator): The minute the groom was entering the hall, I heard a very loud explosion. It is the first time that I had heard this kind of explosion and the first time Jordan has had such a terrorist attack.

VERJEE: The attack sent waves of grieve all the way to the Westbank, were relatives of the groom are in mourning. The men in one room the women in another. Many of the wedding parties have roots here having fled to Jordan during the 1967 war.

Decades later, tragedy has once again come to call.

ZIAD AD'AS: This is a crime. A cowardly act, hurting innocent people who have nothing to do with anything.

VERJEE: The groom spent the day after his wedding burying relatives that were killed. Several more friends and relatives are in hospital. Still the groom said, it could have been worse, many of the guests were still making their way to the ballroom when the bomb went off.

(END VIDEOTAPE)

BLITZER: Zain, thank you very much.

FBI agents are on the way to Amman to help Jordanian authorities in this investigation.

Let's head up to the New York; Jack standing by for his question of this hour.

JACK CAFFERTY, CNN ANCHOR: How are you doing, Wolf? We're going to talk about Arnold. The walking barbell that currently occupies the governor's office out there in California. He's toast.

California votes handed Arnold Schwarzenegger his head Tuesday, defeating all four of his ballot proposals. He held a news conference today. He said he took full responsibility. It's not going to help. What a difference a year makes. Twelve months there were serious people in this country who weren't confined to a mental institution. talking about changing the U.S. Constitution so that Arnold Schwarzenegger could run for president. Well, the governor's approval rating down to 40 percent now from 69 percent a year ago. Look for Schwarzenegger's next project after he's voted after office next year to be Conan the Geriatric or maybe the toothless terminator.

Here's the question -- Is Arnold Schwarzenegger's political career over? Here's a hint. Yes. E-mail us at caffertyfile@cnn.com or CNN.com/CaffertyFile.

BLITZER: All right. Jack, thanks very much. Jack Cafferty here in THE SITUATION ROOM. Coming up, Howard Dean, one on one. He's fighting back against the GOP and the war in Iraq. He's our guest in THE SITUATION ROOM.

Plus, Karl Rove, the president's top political adviser. He was at the center of that CIA leak case. He's speaking for the first time since the indictment was handed out days ago. We'll be carrying his remarks live.

Plus the Reverend Pat Robertson tells residents of Pennsylvania town; they have turned their back on God. They'll be punished. We'll find out. Stay in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: In just a moment Howard Dean in the situation room. We'll find out why he thinks Republicans are up against the rope. Plus Karl rove speaking out publicly for the first time. First though, CNNs Zain Verjee joining us once again from the CNN Center in Atlanta with a closer look at some other stories making the news. Hi, Zain.

VERJEE: Religious broadcaster, Pat Robertson, is warning the citizens of Dover, Pennsylvania, God may punish them for voting out a school board that supported a curriculum that included intelligent design as an alternative to evolution. That's the theory that evolution can't account for the planet's complexity and it must have been created by higher power.

In a broadcast today, Robertson told voters and this is quoting, "If there's a disaster in your area don't turn to God, you've just rejected him from your city. And don't wonder why he hasn't helped you when the problems begin, if they begin."

Congressional investigators say there's not enough evidence to charge baseball star Rafael Palmeiro with perjury. Testifying before a congressional hearing on steroids in March, Palmeiro said that he never used such drugs. He tested positive for steroids six weeks later and was suspended by Major League Baseball for 10 days.

New data: Fewer and fewer Americans are lighting up. The Centers for Disease Control and Prevention report that just over 20 percent of Americans surveyed describe themselves as regular smokers last year. That's down about two percent from 2002. That the largest two-year drop since the 1980s. Smoking bans, cigarette taxes and prevention programs are credited for the decrease -- Wolf.

BLITZER: Zain, thank you very much. Zain Verjee reporting for us.

Democrats are savoring their off-year election victories this week. And they're now eagerly looking ahead to next year's key congressional elections. That's what they say. After the votes were in, I spoke with the former presidential candidate and current Democratic National Committee chairman, Howard Dean. I asked him if he's worried about the possibility that his party could blow this opportunity before next November.

(BEGIN VIDEOTAPE)

HOWARD DEAN, CHAIRMAN, DEMOCRATIC NATIONAL COMMITTEE: It's always out there. The Republicans are really battling this headwind of corruption and incompetence and Iraq and all these budget problems and jobs, high oil prices. They got their work cut out for us. What we need to do is come across with a message that people will appreciate.

One is that we can do better in America if we're together. And we will be. Two, we need a healthcare system that will work for everybody. We want jobs that will stay in America if we're going to have a strong public education system. If we stick with that message and reach out to people and talk about our values, we'll be the majority party 2006.

BLITZER: Here in THE SITUATION ROOM, I interviewed New Mexico's governor, Bill Richardson. Listen to what he said.

(BEGIN VIDEO CLIP)

GOV. BILL RICHARDSON (D), NEW MEXICO: What we need to do as Democrats is we have to enunciate positive policies. We can't be negative on the president. There's plenty of problems that the Republicans have caused. At the same time, unless we as Democrats have a policy on national security, on Iraq, on defense, on healthcare, on making our schools better, on a lot of national issues, the public's going to stay where it is.

(END VIDEO CLIP)

BLITZER: Do you think he makes a good point there?

DEAN: I think we need to have a positive message. We're going to have jobs that stay in America. A big energy policy. Reducing our enormous fuel plans. Secondly, we're going to have a health care system that will cover everybody. Like all 40 other industrialized countries.

BLITZER: Let me ask a question on healthcare, how do you plan on doing with the Republicans in control of the House, the Senate, the White House. How are the democrats going to make that happen?

DEAN: That's why Americans need to put Democrats back in the Congress and the White House. So we can make that happen. We we're going lay out a positive agenda. And if people like it they'll support us, just like they supported Tim Kaine and Jon Corzine.

BLITZER: Here's the new "Washington Post" ABC News poll that you saw a lot of bad numbers for the president. When it comes to a party with strong leaders only 35 percent of those who responded say Democrats had a party with strong leaders, 51 percent thought the Republicans have strong leaders. That seems to be a serious problem that the Democratic party has.

DEAN: I don't think it's a serious problem. We have planned to do deal with that. And I think we'll win in the end because the Republicans don't have any leadership. They led us in the wrong direction; strong leaders harming America is not a prescription for a winning message.

We're going to do some fundamentally different things. We're going to have to put ethics back in Congress again and ethics in our government again. Second thing we're going to do is talk about the values that we hold as Democrats. We think it's a moral value that kids don't go to bed hungry at night. We think it's a moral value that if you work hard, you have health insurance and a pension that you can look forward to.

Fundamental changes in America. We're going the wrong direction in this country. I think we can go in the right direction.

BLITZER: You want to maintain the governorships in New Jersey and Virginia. But New York City, arguably the most Democratic city in the country, the bluest city in the country, Bloomberg gets almost 60 percent of the vote, the Republican. Fernando Ferrer, 39 percent of the vote. What happens in a big city like New York?

DEAN: Well, first of all he spent $100 million; that buys a lot of votes. I think Mike spent about $147 per vote. Second is a great quote I saw in an AP story that said, "I don't really think he's a real Republican. If he was, I couldn't really vote for him in good conscience." And I think there are a lot people in New York that haven't figured out that Mike's a Republican yet.

BLITZER: So you're not worried about the trend in New York City that he gets reelected, the Republican?

DEAN: No. I think the most important election -- there are two really important elections. Obviously, Jon Corzine a great person and he's going to be a great governor. From the national point of new, having George Bush land in Virginia 24 hours before the election and having Tim Kaine win overwhelmingly is a big national message, not just a local message. And defeating all of Governor Schwarzenegger's initiatives of California, people are sick of what's going in California. They're frankly sick of what's going on in Washington. They want a change and we're going to give them the change in 2006.

BLITZER: Listen to what Republican Senator John Cornyn of Texas said on Monday on the Senate floor. Because I keep hearing this from other republicans. Raising, in effect, the patriotism of Democrats. Listen to this.

(BEGIN VIDEO CLIP)

SEN. JOHN CORNYN (R), TEXAS: Merely venting angry without proposing alternative solutions is not the work of serious people. It's a sad commentary on our public discourse, when politicians seek to use the sacrifice of our men and women in uniform to advance a political agenda.

(END VIDEO CLIP)

BLITZER: Senator Pat Roberts, Republican of Kansas made basically the same point. And other Republicans are raising that now. How worried are you that they're coming after you, you Democrats and raising this issue of you're undermining the moral, you're endangering the troops by raising questions about the war in Iraq?

DEAN: There's only one person that's endanger to the troops and that was the president when he sent them to war without telling the truth to the American people.

They have some nerve with some 256 brave Americans dead to even begin to speak like that and they ought to be ashamed of themselves.

The truth is, the Democratic Party is never going to send troops aboard without equipping them properly before they go. It's a disgrace, for troops families to have to have bake sales to raise the money to buy the adequate equipment to protect them.

Frankly the people who are running this war from the White House, don't know what they're doing. Most of them haven't served a day in their life, in uniform abroad. We shouldn't be there. We are there now. It's going to be up to the Democrats to figure out how to get out of there in one piece and saving the respect of the United States of America. We will respect not just the United States of America; we'll respect the troops and we'll do it. First of all, by telling the troops and telling their parents why they're going, in an honest way.

BLITZER: We're out of time, Governor. Thanks very much for joining us.

DEAN: Thanks very much.

BLITZER: And this note. We interviewed the Republican Party chairman, Ken Mehlman, during our 5 pm eastern hour of the 'SITUATION ROOM" earlier today.

Coming up, he's been keeping a very low profile in recent weeks and months, but Karl Rove, the president's top adviser, he's back in spotlight tonight here in Washington. We'll show you where. We'll take you there live.

Plus, she was at the center of scandal that rocked CBS News and cost her her job, now, Mary Mapes is telling her side of the story. My interview with the former CBS News producer. That's coming up.

(COMMERCIAL BREAK)

BLITZER: Let's check in with CNN's Anderson Cooper for a preview of what's coming up on his program later night -- Anderson.

ANDERSON COOPER, CNN ANCHOR: Wolf, thanks very much. Later on 360, the levees of New Orleans. You remember their dramatic failures during Hurricane Katrina. Killed hundreds of people. Well today, we learned there is a criminal investigation into those failures. Were faulty materials knowingly used to build the barriers in the first place? Also trying to keep them honest, if they didn't work the first time, why are the levees being rebuilt almost the exact same way? We'll search for answers tonight.

We'll also bring you this story of the alleged Gatorade Killer. Did a radio talk show how really kill his wife by diluting her Gatorade with antifreeze? It a bizarre tale. Bring you all of the angles. Wolf --

BLITZER: All right, Anderson Cooper, 360, that airs tonight, 10 p.m. Eastern here on CNN. Thanks very much, Anderson.

CNN's Zain Verjee, once again joining us from the CNN Center with a closer look at some other stories making news around the world.

VERJEE: Wolf, at least 34 people are dead in the latest suicide bombing in Iraq. It happened this morning at a restaurant in central Baghdad that popular with Iraqi police who were changing their shifts at that time. They are among the victims, many of them. Al Qaeda in Iraq claimed responsibility for the attack on a Web site; saying that it was revenge for U.S. led offensive against insurgents along the Syrian border.

French President Jacques Chirac is speaking publicly for the first time about the root of the rioting that's shaken his country for two weeks now. He's calling far a strong and a rapid response to what he calls the undeniable problems of the poor immigrant neighborhood where most of the violence has taken place.

The situation has calmed somewhat since a state of emergency was declared this week.

China's agriculture ministry is reporting two new bird flu outbreaks among poultry in the northeastern province. Officials have quarantined more than a hundred people as a precaution. The new outbreaks make a total of six in the past month in China alone. No human cases have been confirmed in China so far. The World Health Organization is sending experts to southern China where bird flu is suspected in the death of a 12-year-old girl.

Wolf, it could change the way we fly anywhere in the world, nonstop between two cities. Take your pick. Now, talk about a long flight. How about 22 hours and 43 Minutes? It sets record for a commercial airliner set up by a Boeing 777. Flying more than 13,000 miles from Hong Kong to London, it went the long way over North America instead of over Russia. Boeing is trying to highlight its new generation of jets in the face of some stiff competition from rival airbuses. And the pilot of that long flight, Wolf, was an American woman.

And the question for a lot of people now is, would you really want go on a flight that lasts 22 hours and 43 minutes? It's pretty long but, you know, you avoid the crowded Airports. That's what they're grappling with.

Would you?

BLITZER: No. But if you have to you have to. Congratulations to that pilot. A terrific job.

Zain, thanks for very much.

Just ahead, Karl Rove speaking out publicly. The president's top strategist still under investigation in that CIA leaks case. But he's about to address a big banquet right here in Washington We'll be listening tonight. And the voters have terminated some pet proposals of the California governor, Arnold Schwarzenegger and made his special election less than special. Is his political career over? Jack Cafferty going through your e-mail. We'll hear what you think. Stay with us.

(COMMERCIAL BREAK)

BLITZER: We haven't heard from him since the indictment of Lewis "Scooter" Libby and Karl Rove himself remains under investigation in the CIA leak case, but Rove the top political adviser to President Bush is now speaking to the annual convention of the Federalist Society, a conservative legal group meeting here in Washington. He has just started speaking. He got a standing ovation.

KARL ROVE, WHITE HOUSE DEPUTY CHIEF OF STAFF: A movement of confident, principle driven, egghead lawyers. So I say good evening fellow federalists.

I got to say I'm mighty impressed that you found out I was one. After all, you know, it's not a well-known secret that I am. How did you find the records from the 1968 Utah Boy State (ph) to find out I was member of Federalist Party. We're talking about the same federalism, aren't we.

You know, every conspiracy needs a leader, a vision who thinks long into the future, who plays the game and has had many moves ahead, and your of course have that in your president, Gene Meyer (ph), international chess master I found in his biography. Now you understand how the guy thinks ahead that far.

Every conspiracy needs that kind of person, you got one. Every conspiracy needs an agent provocateur. You got one in your executive vice president, Leonard Leo (ph).

Every conspiracy needs a great eminence. And tonight I understand you're honoring your great eminence, Ed Meese.

It was great to be with other members of your executive committee that came by the white house today. There are only four to five pieces of silverware missing from the Roosevelt room. Steve Calibrisi (ph), Gary Lawson (ph) and Ken Cribb (ph), who I have known longer than either of us wants to admit.

As I was looking around the crowd here tonight, I see that virtually everybody in this audience falls into three classifications of people. First of all, honored to have members of the federal judiciary here, and the state judiciary. We have a bunch of judges. I saw a couple of our nominees to the bench. Bret Cavanaugh (ph) and I paths here recently.

BLITZER: As Karl Rove, the president's top political adviser, welcomes so many at this dinner for the Federalist Society here in Washington. Let's talk a little bit about Karl Rove. Joining us is someone who has been watching him closely for many years, he is the co-author of the book "Bush's Brain," Wayne Slater is joining us now from Austin, Texas.

We'll keep this picture up. We'll go back there and listen once he gets to some substantive comments.

How is important Wayne Slater, is Karl Rove to this president of the United States?

WAYNE SLATER, CO-AUTHOR "BUSH'S BRAIN": He's crucial to this president. This president hasn't made any major policy decisions since the time he first ran for governor of Texas in 1994 without running them by Karl. Karl has been confidant. His key adviser. He is the architect by the president's own words of his reelection last year as president.

And he was a guy, back, 15 years ago, in Austin, Texas Karl sat with a friend and said, I know how I can make George Bush the governor of Texas, president of the United States. No one trusts Rove better than George Bush. No one has more important for political trajectory, no one is closer to this president than Karl Rove.

BLITZER: You've been covering him for a long time. Let me read from your book, "Bush's Brain." "The influence of Karl Rove on the president may raise constitutional questions but there is little doubt about the practical implications of this position. Rove has a more profound influence on American lives than most officeholders. He is the co-president of the United States."

Those are incredibly powerful words. The co-president of the United States?

SLATER: And I know it sounds like an overstatement. Look, the president of the United States is the president. George Bush makes the final decisions. But we have rarely seen in our lifetime, certainly we haven't seen in the last half century, a political adviser whose portfolio has expanded into policy matters in quite the same way we have seen with these two men. George Bush's entire presidency, strategically, is at the genius of Karl Rove.

Now the president obviously comes to the case as a remarkable political figure, he has his own decision making. He's in charge of what goes on in the White House. And he has in the very beginning, in fact, before he even considered running for governor in Texas, when he talked to Karl about the political implications, with Rove, relied on Karl's judgment in every decision -- important decision he's made.

BLITZER: Karl Rove, immediately after the Scooter Libby indictment seemed to be off the hook. He could breathe a lot easier. But since then there have been sort of conflicting reports that he's not completely off the hook yet, that he remains under investigation. What are you hearing?

SLATER: Well, I'm hearing from people inside the White House, who don't want to say this very loudly because they don't want to provoke the prosecutor, that they think Karl may be safe. But it isn't a done deal. There were some indications even as late as this week, I think a day or two ago, the prosecutor clearly still looking at Rove as a possibility. As a person could be indicted.

But I think the sense inside the White House some people I'm talking to, some people here in Texas who know Karl is that they think he and his lawyer have been successful in having him avoid an indictment.

BLITZER: But there's other reports that were getting he may be politically radioactive. Even if he's not indicted still an effort to get rid of him from the White House. Because he's become such a lightning rod. Where do you come down on those reports?

SLATER: I have to say, knowing the president as I have for 15 years and knowing Karl even longer, this relationship, is so close, so tight, the need for the president to have Karl around to offer the kind of key advice, trusted advice that this president has always felt he's gotten from Karl Rove is so strong that I don't see Rove, absent an indictment would leave this White House.

I can remember, Wolf, you were there in the 2000 primary where George Bush got in trouble, where Karl Rove had some bad judgments about was going to go. Everybody said needs to be thrown aside, it's going to be Karl thrown overboard.

He wasn't thrown overboard. Many things have happened along the way with the relationship between these two men and they have remained close. I think it would take dynamite to blow this guy out of the White House.

BLITZER: Let's listen in once again as he speaks to this group of conservative lawyers here in Washington, the Federalist Society.

ROVE: We're the majority. And it's clear today that many ordinary men and women, non-lawyers, believe our courts are in crisis and our concerns are well-grounded.

I have seen this phenomenon myself for several decades. In the 1980s in my home State of Texas our Supreme Court was dominated by justices determined to legislate from the bench, bending the law to fit a personal agenda. Millions of dollars from a handful of wealthy personal injury trial lawyers were poured into Supreme Court races to shift the philosophical direction of court.

It earned the reputation as "The Dallas Morning News" said, as quote, "the best court that money could buy."

Even "60 minutes" was troubled. It takes a lot to trouble CBS. In 1987, it did a story on the Texas Supreme Court titled "Justice for Sale."

Ordinary Texans had had enough. And they took it upon themselves to change the court. In a bipartisan reform effort, they recruited and then elected to the Texas Supreme Court, Tom Phillips, Alberto Gonzales. John Cordin (ph), Priscilla Owen, Nathan Hecht and Greg Abbott.

And for those of you who know something about Texas politics, this is pretty significant, all of whom were Republicans. After all, Texas had gone 150 years without electing a Republican to the Supreme Court. And then all of the sudden we were blessed with these extraordinarily able people.

I saw this public reaction to judicial activism again in Alabama. The state legislature passed tort reform legislation in 1987. However, activist judges on the Supreme Court, the trial lawyer friendly Supreme Court, struck it down prompting a period of jackpot justice in Alabama through the mid 1990s. Where the median punitive damage award in Alabama reached $250,000, three times the national average.

"Time Magazine" labeled Alabama tort hell. Like in Texas, this led to a popular revolt against judicial activism. It began in 1994. When Republican Perry Hooper challenged city chief justice and trial lawyer favorite Sonny Hornsby.

Hooper pulled off a stunning upset, outspent, out worked, he won by 262 votes out of over 1.2 million votes cast. And then the day after the election, several thousands of absentee ballots mysteriously surfaced. None of them witnessed or notarized as required by Alabama law. And Sonny Hornsby tried to have them counted.

It took a year of court battles before Hooper was finally seated. His groundbreaking victory would not have been possible without the work of many Alabamians, including the young dynamic lawyer I got to know by the name of Bill Pryor. And isn't he doing a terrific job?

BLITZER: All right. We're going to break away from Karl Rove speaking to Federalist Society. Wayne Slater has been helping us. He wrote the book, "Bush's Brain." You know Karl Rove. You've covered him for a long time.

This sounds like vintage Karl Rove before these conservative attorneys.

SLATER: Let me tell you, these are races -- What he didn't say as clearly, was in the case of Texas and Alabama, he was the key figure behind the rise of the Republican Party judges who began to win these races. And in Texas, he was the architect if you were of an efficient Republican takeover of state politics, which by the time he and Bush left Texas in 200 was all Republican at the statewide level.

The key to Karl always has been among other things, the ability to communicate directly to the heart of George Bush's base, here in Texas and certainly nationally. Those have included both business conservative and social conservatives. And sometimes getting those two fractions to work together -- tonight, he's in front of a very friendly audience.

BLITZER: Wayne Slater, thanks very much for joining us.

We'll continue to monitor Karl Rove, go back there as necessary, but up next -- Hurricane Wilma worse than most of us realized. Thousands are still feeling the effects of the storm. We'll take you live to Miami for an update. Much more here on the situation room right after this.

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BLITZER: Hurricane Katrina raised the bar for disasters in the United States. With all of the hurricanes following paling in comparison. So after Hurricane Wilma beat a path across Florida it quickly dropped off the national radar.

But it turns out now that Wilma was much worse than many people thought and the storm's effects are still being felt right now.

CNN's John Zarrella is joining us now live from Miami with more on this story.

John.

JOHN ZARRELLA, CNN CORRESPONDENT: Wolf, that's exactly right. No one will ever tell you here on the east coast of Florida there's any such thing as a minimal hurricane. That's not the case here.

We're in Davie, Florida in Broward County. They had the right side of the eye. The worst part of the storm came through here. The power has just now, the last people getting power. Seventeen days after the hurricane. FPL says the final people who where to get power got it today. State officials say that Wilma impacted 42 counties and 7 million people in the state. This is home of Rich and Jeff Garrison (ph), neither were here during the hurricane and Rich kind enough to join us here.

You rented here. Did you have insurance?

UNIDENTIFIED MALE: No, sir, I did not.

ZARRELLA: No insurance. So what are you going to do now?

UNIDENTIFIED MALE: We really don't know. We're getting some help from FEMA. We are going to meet with them tonight about temporary housing. And then make a plan from there what we're going to do. We don't know.

ZARRELLA: Plan to give you travel trailer.

UNIDENTIFIED MALE: Yeah. They do.

ZARRELLA: That's the hope. Well, actually, the Garrisons are in better shape than a lot of people here. For instance, still eight shelters open in nine counties. In those shelters about 1,300 people with no place to live. On top of that, 100,000 people, so far, have lined up to get food stamps on a one-time only basis; 100,000 so far.

Those centers are going to be open the next few days. And finally, all of the distribution centers are closed now. The trucks loaded with supplies heading to warehouse for next year, just in case.

Wolf? BLITZER: All right, I dread to think about next year. Already we've had such a bad hurricane season this year. John, thank you very much. John Zarrella Reporting for us from Davie in Broward County in South Florida.

Still ahead here in THE SITUATION ROOM, a movie star, he always had heroic endings when he was a movie star, but as governor, will his story be like Hollywood end? We're asking you about Governor Arnold Schwarzenegger's political future. Jack Cafferty standing by with your thoughts.

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BLITZER: CNN's Zain Verjee joining us once again from the CNN Center in Atlanta with a closer look at some of the business stories making news tonight. Hi, Zain.

VERJEE: Hi, Wolf. You fed up with me yet?

BLITZER: Yes.

VERJEE: A mild flu season so far suffering the impact of isolated shortages of vaccines in some areas. That's according to the director of the Centers of Disease Control and prevention. The director said that so far there is no widespread flu activity anywhere in the country and that 10 million more doses of vaccine could be available by the end of month.

Eleventh hour changes to the budget bill have spared the Arctic National Wildlife Refuge from oil exploration at least for the time being. A provision opening the Alaska refuge to drilling was removed from the House version of the budget after a group of moderate Republican lawmakers threatened to withhold support if it remained.

That's another big setback for President Bush who has made Arctic drilling an energy priority.

Stocks surged today, helped by falling oil prices and declining bond yields. The three major stock indices closed roughly one percent higher. The Dow Jones Industrial Average shot up 94 points while the S&P 500 gained more than 10 points and the tech heavy NASDAQ added almost 21 points.

Wolf?

BLITZER: Zain, we could never be sick of you. Never enough of Zain Verjee.

Thank you very much. See you tomorrow.

Still ahead, a stinging defeat as Californians reject all of his reform measures. Is Arnold Schwarzenegger political career over? Jack Cafferty's standing by with your answers to the question of the hour.

(COMMERCIAL BREAK) BLITZER: Let's go back to New York. Jack Cafferty's been going through your e-mail. Jack?

CAFFERTY: California voters handed Governor Arnold Schwarzenegger his head on Tuesday. Defeating all four of his ballot proposals. At a news conference today, the governor said he took full responsibility for that election. Of course it will cost the taxpayers probably $50 to $60 million.

The question is this -- Is Arnold Schwarzenegger's political career over?

Theresa in Stone Ridge, New York. "Yes, God willing. It's like Californians got plastered one evening, woke up the next morning with a massive hangover only to realize they had Arnold in their beds."

Lee in Toronto, Ontario "Arnie never had a political career. He rode the Gray Davis hate train all the way to Sacramento. So let's strike the set and get someone in there who might know something about politics."

A buddy of mine in Japan, Dave writes, "Put it this way, Jack, Arnold is now doing for politics, what he once did for acting."

Amy writes "California's economy is so messed up that no Governator can save it. The people of that great state will have one failure after another until they suck it up. They need to tighten their belts, loosen their grip on their wallets if they want the government to be effective."

Randy in Los Angeles writes, "No way Arnold's political career is over. Remember, we once had another mediocre actor who became an average governor and then became a president." That would be Reagan.

And Joe in Palo Alto, California, "We're calling Arnold the one- terminator."

BLITZER: The one term - I get it, one-terminator. Very clever, Joe, in Palo Alto.

CAFFERTY: We do a lot of real snappy material here on the "Cafferty File." You've got to pay close attention.

BLITZER: We will and we'll do it again tomorrow. Jack, see you tomorrow. Thanks very much.

To our viewers, don't forget we're in SITUATION ROOM weekdays, 4:00 to 6:00 p.m. Eastern as well as 7:00 to 8:00 p.m. Eastern. Until tomorrow. I'm Wolf Blitzer in Washington. Paula Zahn is picking up our coverage.

Hi, Paula.

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