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The Situation Room

10 Marines Killed in Iraq

Aired December 02, 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 ANCHOR: You're in THE SITUATION ROOM, where new pictures and information are arriving all the time. Standing by, CNN reporters across the United States and around the world to bring you the day's top stories.
Happening now, it's 3:00 a.m. in Iraq, a devastating attack on U.S. Marines, and new allegations about a pre-war campaign of disinformation.

In Los Angeles, it's 4:00 p.m. Is there a nurse in the house? It's a crisis across America, but California hospitals resorting to some desperate measures.

And it's 7:00 p.m. in New York, The shock jock's comments sent out shockwaves a decade ago. Is Howard Stern finally saying he's sorry?

I'm Wolf Blitzer, you're in THE SITUATION ROOM.

It was a stunning blow for U.S. forces in Iraq. A roadside bomb ripped through a foot patrol in Fallujah, killing 10 United States Marines and wounding 11 more. Shortly afterward, a chilling new threat from hostage takers.

Let's go live to senior international correspondent, Nic Robertson. He's joining us with all the details from Baghdad. Nic?

NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Wolf, we know that seven of those Marines injured in the roadside bombing attack have returned to active duty, four remain injured. It was several large artillery shells packed full of explosives that were detonated, as that foot patrol passed by, 10 Marines killed. And as we've seen many times, when Marines patrol here, they are quite spaced out on the roads -- each Marine covering the other Marine. So that gives an idea that this must have been a very large blast to catch 21 troops killing 10 of them in its blast.

Twenty-five miles away, U.S. troops today say they have discovered bomb making material. In the town of Ramadi -- Operation Shank, 300 U.S. Marines supported by 200 Iraqi army troops have been going through parts of the town of Ramadi to make it safe for the elections coming just a couple of weeks.

Wolf.

BLITZER: Is there a sense these improvised explosive devices, these other bombs that these insurgents are using, are becoming so powerful that a brand new and more lethal threat is out there right now to U.S. Military personnel?

ROBERTSON: Well, one of the things the military has noticed is that the IEDs, the roadside bombs, the numbers of them decreased over the past few weeks. But they've also noticed, as the insurgents get better capability, they have become more able to make more destructive bombs. One in Baghdad recently had a double charge in it. It was fired into a vehicle full of a private security detail and it had two explosive charges that ripped through the vehicle. So, they are becoming more complex. They are becoming better -- the insurgents are becoming better able to improve the lethality, if you will.

Wolf.

BLITZER: And Nic, tell us briefly about this new video broadcast on Arab television about these hostages -- these Western hostages who have been taken over the last few days?

ROBERTSON: Well on that video some of the hostages can be seen speaking, but it's not clear what they are saying. The audio part wasn't broadcast. There is, with this video, a new death threat. If the demands of the hostage takers, the insurgents are not met, they say, by the 8th of December, then they say they will kill these hostages -- one of them a U.S. Citizen, Tom Fox, 54 years old, a British citizen and two Canadians.

Wolf.

BLITZER: Nic Robertson on the scene for us in Baghdad. Nic, thank you very much.

The United States death toll, so far this month in Iraq -- and it's a short month so far, December -- stands at 14. Seven hundred and ninety-two American servicemen and women have died there since the beginning of the year. And the overall death toll from the war in Iraq now stands at 2,127.

The Pentagon is taking heat over allegations of a secret U.S. military operation to plant favorable news stories in the Iraqi news media.

Let's go live to our senior Pentagon correspondent Jamie McIntyre. Jamie?

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT: Well Wolf, Senator Ted Kennedy calls it -- the Pentagon -- accuses the Pentagon of having a devious scheme to put propaganda in the Iraqi newspapers. U.S. military commanders say they're just countering in the information battle space with what they call truthful and reliable information.

(BEGIN VIDEOTAPE)

MCINTYRE (voice-over): The Pentagon is not denying the basic charge that a U.S. funded public relations firm took news stories written by the American military, translated them into Arabic, and then paid to get them into Iraqi newspapers. But Pentagon officials told the chairman of the Senate Armed Services Committee in a private meeting, that while U.S. commanders in Iraq who approve the stories are still gathering the facts, there was no intent to deceive.

SEN. JOHN WARNER (R-VA), CHAIRMAN, ARMED SERVICES COMMITTEE: You pick up our papers here in America, you'll see a number of articles, carried in there and there is usually the byline paid for and requested by this organization. And that's generally what they have been trying to do.

Now, it's been discovered in some areas there's an omission of that reference that it's been paid for. And that's -- they're looking into that.

MCINTYRE: The company in question, Washington-based Lincoln Group, has a $6 million contract to place favorable stories in the Iraqi media. In a statement the company says, "The Lincoln Group has consistently worked with the Iraqi media to promote truthfully reporting across Iraq. We counter the lies, intimidation, and pure evil of terror with factual stories."

At issue is the fact that the Pentagon has one standard for routine public relations and another for what it calls information operations.

KEN BACON, FORMER PENTAGON SPOKESMAN: There is a natural tension between the military wanting to use information operations as a weapon in warfare and others who want to protect the press as a channel for accurate legitimate information.

(END VIDEOTAPE)

MCINTYRE: In the press release, the U.S. military defended information operations as -- quote -- "an effective and valuable tool." It also acknowledged that some articles had been published in newspapers in return for purchasing advertising -- something it said was a customary practice in Iraq.

U.S. military personnel promised that it would review the appropriateness of the process and take action if they found any improprieties. Senator Ted Kennedy is calling for a I.G. investigation, the Pentagon's inspector general to review the whole contract with the Lincoln Group.

Wolf.

BLITZER: Jamie, thank you very much. Jamie McIntyre at the Pentagon.

And coming up, accusations of other U.S. government propaganda efforts. Who was behind the so-called selling of the Iraq war. I'll speak live with James Bamford, the author of a provocative article in the new issue of "Rolling Stone" magazine.

In a moment, a CNN exclusive with the director of National Intelligence. But first let's go to CNN's Betty Nguyen at the CNN Center in Atlanta with a closer look at some other stories making news. Hi Betty.

(NEWSBREAK)

BLITZER: All right Betty, thank you very much. We'll get back with you shortly.

Is America safer now? After 9/11 there were urgent demands to reform the nation's spy agencies. Last year Congress created a new position aimed at doing just that.

Our national security correspondent, David Ensor, is joining us now with a CNN exclusive. David.

DAVID ENSOR, CNN SENIOR NATIONAL SECURITY CORRESPONDENT: Wolf, in an exclusive first broadcast interview, the nation's top intelligence officer said the nation is safer since 9/11.

(BEGIN VIDEOTAPE)

ENSOR (voice-over): The post 9/11 U.S. intelligence community includes a state of the art national counter terrorism center and a new director of national intelligence, the cabinet level job created almost a year ago and filled with Ambassador John Negroponte. But some critics charge the director has yet to fully exert his authority and is off to a slow start.

NEWT GINGRICH (R), FORMER HOUSE SPEAKER: There you're four words missing, I think, from the way I sense the systems' currently operating with the new director of National Intelligence. Those are speed, intensity, urgency, and accountability.

JOHN NEGROPONTE, DIRECTOR OF NATIONAL INTELLIGENCE: Well, I think the story is quite the contrary.

ENSOR: For the first time since he became the president's top intelligence adviser, Negroponte, agreed to a broadcast interview. He says major changes are well under way.

NEGROPONTE: We've created in the collection area a national clandestine service. We have created an open source center. We have created a national security branch in the FBI.

ENSOR: Critics argue Negroponte has not been forceful enough. Some even say legal changes may be needed to give him more power.

JOHN BRENNAN, FMR. ACTING DIR., NATIONAL COUNTERTERRORISM CENTER: It's up to Ambassador (ph) Negroponte to really push the limits of his authority. He needs to exert it.

ENSOR: The intelligence director hints he has exerted more power than the public may know.

NEGROPONTE: I'm not at liberty to go into all the details, but we've taken some tough decisions that have implications for substantial amounts of money and resources.

ENSOR: At a White House meeting Negroponte attended this week, though, sources say the issue was the CIA secret prison story. What should Secretary of State Condoleezza Rice tell angry European governments next week about whether al Qaeda prisoners, Khalid Shaikh Mohammed and the like, may be on European soil under harsh CIA interrogation?

NEGROPONTE: I would say this is a collective effort that involves the intelligence community and the state department and other interested agencies, but I suggest that it might be best to just stay tuned for Miss Rice's trip.

(END VIDEOTAPE)

ENSOR: No doubt about it, Negroponte is in the hot seat, Wolf, dealing with critics, controversy and a war on terror that is by no means over.

Wolf.

BLITZER: David Ensor, good work, as usual. David Ensor with a good exclusive. Thank you very much. And remember stay tuned to CNN day and night for the most reliable news about your security.

Let's go up to New York now, Jack Cafferty standing by with a little question for this hour. Hi, Jack.

JACK CAFFERTY, CNN ANCHOR: Yeah, we got a little question, speaking of security. How about those nice secure borders we have? Mexican politicians are hitting the campaign trail in the United States. That's because there are millions of Mexican voters living here that could help sway next year's presidential election down there. The Associated Press reports members of President Vicente Fox's party are going to visit four states to try to convince Mexican voters, here in the U.S., to keep his party in office.

The tour was scheduled to begin today in Dallas and San Antonio Texas. They also plan to campaign in California, Illinois, and New York. Also for the first time this year Mexicans living abroad will be ale to vote by absentee ballot. They used to have to go back to Mexico to vote, not any more.

So here's the question, should Mexican politicians be campaigning in the United States? You can email us at CaffertyFile@CNN.com and we'll share some of your thoughts a bit later.

BLITZER: You know, Jack, that a lot of American politicians have to campaign in Europe or elsewhere because of Americans living around the world can vote absentee in U.S. elections.

CAFFERTY: That's true. I wasn't aware that they actually physically went there to campaign.

BLITZER: I have seen some candidates actually go to various places where there are congregations of American voters, potentially, and try to get their vote absentee.

CAFFERTY: Those got to be desperate politicians running way behind in the polls.

BLITZER: That's true.

CAFFERTY: They have to run off to Belgium to try to run up eight votes.

BLITZER: You know, sometimes in London there are a bunch of Americans. When I was a young reporter in Israel, in Tel Aviv, they use to be -- some politicians would go over there to campaign for American votes in Israel.

CAFFERTY: Well, and there are a lot of Americans in Israel at any given time and of course, there are what, 11 million Mexicans here in the United States...

BLITZER: So, it may not be that unusual for Mexican politicians to be campaigning here.

CAFFERTY: Well, it may not, but...

BLITZER: See what our viewers think.

CAFFERTY: Will be interesting what the viewers might think about it, yeah.

BLITZER: All right. Thanks, Jack.

CAFFERTY: Yep, see you later.

BLITZER: Coming up, is it the end of a desperate quest? A mother waits for the answer.

Plus David Duke outraged. The former Klansman and wannabe politician gives an anti-Semitic speech in Syria. We have the tape.

And a little bit later, nursing crisis: Will someone be there when you have to go to the hospital? A reality show trying to end the national shortage.

Stay with us.

(COMMERCIAL BREAK)

BLITZER: For more than two years a grieving mother has been on a quest. Today what she's been looking for may have been found, the bodies of her murdered children.

CNN's Keith Oppenheim is joining us now from our Chicago bureau with more. Keith?

KEITH OPPENHEIM, CNN CORRESPONDENT: Hi, Wolf. And it does appear to be a promising discovery for this mom who has spent the last two and a half years trying to find out where her murdered children are buried.

In Hudson, Ohio, police have not positively identified two bodies that were discovered. All they told us really was a woman who was walking her dog discovered the bodies and that the general details of the location pretty closely match what investigators had been looking for in the Gehring case.

It was in July of 2003 that Sarah and Philip Gehring were last seen. She was 14, her brother was 11. Their father, Manuel, was arrested in California. And upon arrest he admitted that he shot and killed his two children. He gave a lot of general details as to where the bodies were buried, but never gave a precise location and then seven months after that, he hanged himself in jail.

Last summer I did a story with Terry Knight, when she came to the Midwest, and she was trying to get volunteers in several Midwestern states to help her find the dead bodies of her two children. And today, she was still trying not to be too hopeful that a positive identification had been made.

(BEGIN VIDEO CLIP)

TERESA KNIGHT, MOTHER OF MISSING CHILDREN: I'm not going down the road yet that this is definitely it, because it just sets yourself up for disappointment. So, I'm going to wait and take it one step at a time.

(END VIDEO CLIP)

OPPENHEIM: She'll be waiting for a forensic examination, which will be done soon, so we may have an identification soon.

One of the interesting things about this case is that the woman who found the bodies, police said this, Wolf, that they wouldn't identify who she was, but that was actually a volunteer specifically looking for the Gehring children. So if there is a positive I.D. in this case, then Terry Knight's efforts to get volunteers to help find her deceased children may have paid off.

Wolf.

BLITZER: All right, a shocking story. Thanks very much, Keith, for that. Keith.Oppenheim reporting.

And there's a disturbing story coming out of Mexico right now, as well -- a homemade DVD that allegedly shows four drug hitmen confessing to their gruesome crimes, then one of the men being killed.

Let's bring in our Thelma Gutierrez. She's joining us from Los Angeles. Thelma?

THELMA GUTIERREZ, CNN CORRESPONDENT: Wolf, that graphic DVD was put in an unmarked envelope and then sent anonymously to a small newspaper in Washington state. Eventually the DVD made its way to a news agency in Dallas, who posted it -- it posted a small excerpt on its Web site. (BEGIN VIDEOTAPE)

GUTIERREZ (voice-over): It was a brutal revelation, caught on tape. Seven minutes of alleged confessions by members of Mexico's so- called Gulf Cartel, played on the Dallas Morning News Web site believed to have been recorded on May 16.

On the tape, you see four bloodied men sitting in front of a window covered with black plastic garbage bags, they are handcuffed. Mexican authorities say the men appear to have been tortured. On tape, the men confess that they are enforcers for the Gulf Cartel, responsible for kidnapping, torturing, and killing their enemies. The men also claim responsibility for the recent high-profile murder of reporter Guadalupe Escamia. Escamia had been investigating drug cartel violence along the Texas-Mexico border when she was gunned down outside of the radio station where she worked.

But who's responsible for making this tape and beating the confessions out of the men? The attorney general's office in Mexico recently announced the arrest of 10 people including eight federal agents who worked for the AFI, the Mexican equivalent of the FBI, and a close partner in the war on drugs.

As for the fate of the four bound men, authorities say at least one was executed, shot in the head.

(END VIDEOTAPE)

GUTIERREZ: The Mexican officials say they are still investigating the whereabouts of the men on tape and they are looking into other claims made on the tape. Two of the men said that they are former members of the Mexican army who often recruited among their ranks for the Gulf Cartel -- Wolf.

BLITZER: Thelma Gutierrez thank you very much for that. Thelma reporting from Los Angeles.

Still to come here in THE SITUATION ROOM. It's an explosive allegation within the pages of rolling stone magazine. Was a PR firm involved in the run-up to the Iraq war? I'll ask the author of the article, Jim Bamford. He's standing by.

(COMMERCIAL BREAK)

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

Hi, Anderson.

ANDERSON COOPER, CNN ANCHOR: Hey Wolf, at 10:00 tonight reports of patients euthanized at a New Orleans hospital. It's a story we've been following Katrina. Tonight, new details, could nearly a hundred people have been euthanized -- murdered by staff at local New Orleans hospitals? We'll take a look.

Plus, we're looking to why the scientologists in New Mexico have apparently built a secret compound that houses an elaborate volt. What's more, there are giant crop circle-like symbols next to the compound, only visible from the air. We send our Gary Tuchman to investigate. We'll bring you all that at 10:00.

Wolf.

BLITZER: Sounds good, Anderson, thanks very much, looking forward to it.

A U.S. soldier had one of Saddam Hussein's uniforms auctioned online. Is he allowed to do that? For the answer let's turn to our Internet reporter Jacki Schechner. Jacki?

JACKI SCHECHNER, CNN INTERNET COREESPONDENT: Well the short answer, Wolf, is he -- his fiance did. Now, take a look at this. This says "Saddam Hussein's Uniform." It turned up on this auction site last week. Just last night, it went to a Washington collector for $16,000. Now, Manion's is an online auction house. They were able to verify the authenticity. Taking a specific look at the epaulets there, you can see Saddam's rank is depicted by what's on the sleeve.

Now Manion's says that this is not the first uniform by Saddam Hussein that they have sold. There was one that was sold back in July of 2003 that went for $24,000.

Now the way this specific one got here is kind of interesting. It was recovered at a tailor shop in an assault on the Baghdad International Airport back in 2003. The soldier gave it to his fiance, who brought it to the auction house in order to raise money for a new house. So, after the 15 percent fee that Manion's gets, the couple walked away with $14,000.

Wolf.

BLITZER: It's interesting, indeed. Thank you very much, Jacki. Just ahead we'll try to separate fact from fiction. We'll take a closer look at a hard-hitting "Rolling Stone" article about spinning pre-war intelligence. The author is standing by to join us.

And later, being Howard Stern means almost having to say you're sorry, just once.

You're in the SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: We told you at the top of the hour about a Pentagon -- the Pentagon taking heat for allegedly planting stories in the Iraqi news media. There are also some explosive allegations that a public relations firm here in Washington did something similar to the build- up to the war in Iraq.

Let's bring in our Brian Todd. He's joining us with details. Brian?

BRIAN TODD, CNN CORRESPONDENT: Wolf, that's part of a new report that has set off a wave of reaction here in Washington and elsewhere, as the debate continues over the campaign to sell the Iraq war.

(BEGIN VIDEOTAPE)

TODD (voice over): Shock and awe, the first blitz on Baghdad. The culmination of diplomatic maneuvering and the Bush administration's carefully built case for war -- a case that, according to a best selling author on U.S. intelligence, was partially undertaken as a secret propaganda campaign by a Washington consulting firm.

JAMES BAMFORD, AUTHOR: It's a very wide ranging contract.

TODD: James Bamford in a recent edition of "Rolling Stone" magazine writes that a man named John Rendon and his firm, the Rendon Group, were secretly awarded a $16 million contract by the Pentagon in October of 2001 to target information against the regime of Saddam Hussein.

BAMFORD: And it's for basically propaganda -- creating Web sites, taking part in chat groups around the world, doing broadcasts, coming up with information.

TODD: Or, according to Bamford, misinformation. In the article, he writes -- quote -- "among the missions proposed for the Pentagon's Office of Strategic Influence was one to coerce foreign journalists and plant false information overseas."

And Bamford contends that Rendon had contracts with the CIA at least as far back as 1991, when Bamford claims Rendon had a significant role in the creation of the Iraqi National Congress and the installation of that group's leader Ahmad Chalabi.

By association, Bamford implies that Rendon Group was a catalyst in the relationship that would eventually lead to Chalabi passing along questionable and often discredited information about Saddam Hussein's weapons programs -- information passed to reporters and the Bush administration.

John Rendon was not available for comment, but his group issued a statement saying -- quote -- "for the record, the Rendon Group had no role whatsoever in making the case for the Iraq war, here at home or internationally. Mr. Bamford's contention to the contrary is flatly untrue." The group also says it does not produce or disseminate false information, and denies Bamford's charge that it participated in chat rooms.

A Rendon Group official would not comment when asked about Bamford's claim that John Rendon has access to the most secret files at the Pentagon.

As for the claim that Rendon's group took part in the establishment and even the naming of the Iraqi National Congress, we spoke to Francis Brooke, an adviser to Chalabi, who says he worked for Rendon's Group in the early '90's.

FRANCIS BROOKE, ADVISER TO AHMED CHALABI: Those arguments are false. Mr. Rendon was a consultant. The Iraqi National Congress was founded independently by Dr. Chalabi, and Mr. Rendon provided consulting services during that period.

(END VIDEOTAPE)

TODD: The Rendon Group would not comment when asked if Francis Brooke ever worked for them. Pentagon officials would not comment when we asked them if the Pentagon ever awarded Mr. Rendon a $16 million contract.

A CIA official tells CNN the agency will not discuss who it does or does not do business with.

Wolf.

BLITZER: Brian Todd reporting for us. Brian, thank you very much.

And the author of that article, James Bamford, is joining us now here in THE SITUATION ROOM. Jim, thanks very much for joining us.

BAMFORD: My pleasure, Wolf.

BLITZER: All right. Well, let's get to some of the specific denials. The denial from the Rendon Group, what you have reported is flatly untrue. The Rendon Group had no role whatsoever in making the case for the Iraq war.

BAMFORD: Well, actually, you know Bob Baer, who was with the CIA for a very long time...

BLITZER: Former CIA officer.

BAMFORD: Exactly. In the Middle-East, worked with Chalabi, was in Iraq for a very long time, different missions, his quote is he was responsible for selling this war. I mean, that's what he said.

There's no question that this war was being sold right from 1991 on. That was the primary goal of Ahmed Chalabi to take INC and make it the new government of Iraq, overthrow Saddam Hussein and get the United States to launch a war against Iraq. And that was John Rendon's creation.

BLITZER: But there was legislation in the U.S. Congress to support the removal regime change of Saddam Hussein, that was passed, what, in '98 during the Clinton administration.

BAMFORD: That's right. But, it goes -- the actual INC was formed back in the early '90s.

BLITZER: Right after the liberation of Kuwait.

BAMFORD: That's right.

BLITZER: But what you're saying and what Francis Brooke is denying is that the Rendon Group came up with the whole INC, including the naming of the Iraqi National Congress, and you're sticking by what you wrote.

BAMFORD: John Rendon didn't deny that at all. I mean, he hasn't denied...

BLITZER: You met with him the course of doing your reporting?

BAMFORD: Yes. He never denied it.

BLITZER: Did you ask him directly, did you come up with the name Iraqi National Congress?

BAMFORD: Yes. And he had no -- he basically said, yes. I mean he said he was a senior adviser to that whole group from the very beginning. He was the one who helped create the meeting in Vienna. That was where the whole INC was created.

BLITZER: And what you're also saying and you have written in the article is that the U.S. Government, we taxpayers, were paying the Rendon Group to do all this? Were they doing this on behalf of the Kuwaitis, the Saudis or other foreign interests?

BAMFORD: They were doing it on behalf of the CIA. The CIA was paying the Rendon Group.

BLITZER: When did the CIA start funding the Rendon Group?

BAMFORD: Around 1991, I think it was '92. Somewhere around there.

BLITZER: Because, as you know, at one point the CIA lost interest in Ahmed Chalabi and the INC.

BAMFORD: That's right. That was around 1995. And then the Pentagon started paying Chalabi...

BLITZER: This is during the Clinton administration.

BAMFORD: Exactly. That's right.

BLITZER: And so, what about leading up to the war after 9/11? Who is paying the Rendon Group? According to your research to go ahead and create a climate that would justify the overthrow of Saddam Hussein.

BAMFORD: Well the Pentagon had 35 contracts with the Rendon Group over the last four years totaling between 50 and $100 million. And that was for a lot of media work basically creating an information war room for the Pentagon.

BLITZER: Here's what the Rendon Group said, in part, about your suggestion that Rendon, himself, had access to these really top secret information

Mr. Rendon does not have access to classified material in his home or via Internet, and his limited access to such material is no different from that of thousands of other DoD contractors who work for the U.S government.

BAMFORD: Right. What he's saying is he doesn't have access to it in his home, which I completely agree with. He has access to it once he gets in to his office. His clearance, according to the contract with the Pentagon, is enormous clearance. It's one of the largest I have ever seen. It's top secret with about five code words after it, indicating he has access to the most secret information from imagery signals intelligence and human intelligence. I mean, that's right in the contract.

BLITZER: And you're saying you have a copy of this contract?

BAMFORD: Of course, yes.

BLITZER: So you have the actual documents in your possession that you could back up...

BAMFORD: He's not denying that doesn't have the clearance. He's denying that he reads the classified documents in his house.

BLITZER: At 3:00 a.m. when you say he wakes up in the morning and starts reading the computer.

BAMFORD: Exactly, yes. I don't have any problem with that at all. Sure.

BLITZER: They also -- you also write this. You write, the Bush administration took everything Rendon had to offer. Between 2000 and 2004 Pentagon documents show the Rendon Group received at least 35 contracts with the Defense Department, worth a total of $50 to $100 million.

In their statement, the Rendon Group says the GOP, the government accounting office, the general accounting office and other watchdogs, inspector generals look at how much money they are getting and it's appropriate.

BAMFORD: Well, let the public decide whether -- he actually gets $311 an hour. It's about over $12,000 a week as part of his contract to do public relations work. I mean, if the public thinks that paying $100 million for public relations work in which much of it is secret is fine, then that's fine.

BLITZER: But, as you know, as a student of the intelligence community, hiring outsourcing, if you will, private contractors to do some of the -- quote -- "dirty work", that's been going on in the U.S. government forever.

BAMFORD: But not to this extent. I mean, as I point out in the "Rolling Stone" article, the CIA now is 50 percent subcontracted. Fifty percent of what used to be the full-time CIA is now -- half of it is all subcontracted out to contractors.

BLITZER: Fascinating material as usual from James Bamford. You're going to be watched and you're going to be criticized as you have been many times over the years. But we appreciate you joining us in THE SITUATION ROOM.

BAMFORD: Great. Thanks, Wolf.

BLITZER: Thanks very much, James Bamford Here in THE SITUATION ROOM up next, help wanted. Can a Web-based reality series help hospitals find more nurses?

And later, get this, Howard Stern, is it possible that he said something even he thinks is outrageous?

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Here's a look at some of the "Hot Shots" coming in from our friends over at the Associated Press, pictures likely to be in your hometown newspapers tomorrow. Check these out.

In Puerto Rico, a fallen soldier. The family of 22-year-old Antonio Mendez embrace at his funeral. Mendez was killed in a car bomb attack in Iraq.

In Saadah, Iraq now where a young boy and a Navy corpsman check each other out from a distance. Ten Marines from the same division were killed yesterday by a roadside bomb.

Brazil where a vampire bat is caught in a net by researchers. The deforestation of the Amazon region has displaced thousands of bats and set them carrying rabies across northern Brazil. They have bitten over 1,000 people in just the past two months. Twenty-three of those people died.

Nashville, Tennessee, the big winners. Betty Taylor (ph) and her husband Bill collect their million dollar Powerball prize. That's about $750,000 after taxes.

Those are some of today's "Hot Shots", pictures often worth a thousand words.

The U.S. is facing a nursing shortage that's likely to get even worse. Let's go to CNN's Chris Lawrence. He's joining us from Los Angeles with the story. Chris?

CHRIS LAWRENCE, CNN CORRESPONDENT: Wolf, almost every week I've heard you talking about companies closing and people getting laid off. This is an industry that is so desperate for people, some students coming out of school here in California can make up to $30 an hour. And some nurses are getting thousands of dollars in signing bonuses to go to a particular hospital. The shortage is getting worse, not better. And companies are going to some pretty extreme measures to try to recruit good nurses.

(BEGIN VIDEOTAPE)

LAWRENCE (voice-over): For 12 hours a day, Nurse Amy Morrison is in her scrubs on her feet.

AMY MORRISON, REGISTERED NURSE: Want me to clean her up? Come here, sweetie. LAWRENCE: But this is what she comes home to, a $10 million mansion Morrison shares with five other traveling nurses right on the ocean in Orange County, California. It's all set up as part of a reality show on NurseTV.com. It follows the cast in the hospital and out of airplanes, to show potential recruits that nursing is an exciting, important career.

MORRISON: Nurses don't walk down a red carpet and get an award, you know, for the best labor nurse of the year.

LAWRENCE: Morrison has an idea what is going to happen if the shortage doesn't shop.

MORRISON: You're not going to get the care you deserve. You're not going to get the care you need.

LAWRENCE: California pays the highest wages in the country, but the state still has one of the lowest number of nurses compared to its population.

(on camera): Do you see that ratio getting better or getting worse?

ALAN BRAYNIN, ACCESS NURSES: It's getting worse. As the baby boomers age, more nurses are needed.

LAWRENCE (voice-over): Problem is, the average age is nearly 50 years old. That means nurses will be retiring right along with the baby boomers who need them most.

BRAYNIN: A simple example is you go into the E.R. with a broken leg, and you have to wait longer and longer and longer.

MORRISON: Mom's ready to see you again.

LAWRENCE: Morrison says she could have been working even sooner.

MORRISON: I remember when I was actually going through nursing school, I had to wait two years to get into a program.

LAWRENCE: And that's the other problem. Not enough nurses leads to not enough nurses like this who have the qualifications to teach and not enough nursing schools where students can get the training.

(END VIDEOTAPE)

LAWRENCE: Yes, a lot of schools shut down their programs about 10 years ago when there was a nursing surplus. Now they are restarting them, like UCLA next fall. It will help, but this is a bigger, national problem that's probably going to be with us for some time.

Wolf.

BLITZER: Chris Lawrence, doing important work for us. Thanks, Chris, very much. An important story. Some members of Congress are taking note of the looming crisis. They met this week with representatives from the nursing industry.

In our look at news around the world, a notorious former member of the Ku Klux Klan and his fiery words while traveling abroad.

Let's bring in CNN's Betty Nguyen once again from the CNN Center in Atlanta with details. Betty?

BETTY NGUYEN, CNN ANCHOR: Wolf, we're talking about David Duke, the former Klan leader and Louisiana legislator who once ran for Congress. Now, he traveled to Syria recently where he praised that country's government, met with its members of parliament, and led an anti-Israeli rally. Hundreds of people believed to be Syrian nationalists were on hand, cheering, waving flags as Duke told them Zionists control much of the U.S. government and media.

(BEGIN VIDEO CLIP)

DAVID DUKE, FORMER KLAN LEADER: It hurts my heart to tell you that part of my country is occupied by Zionists, just as part of your country, the Golan Heights, is occupied by Zionists.

(END VIDEO CLIP)

NGUYEN: Now Duke also accused the U.S. of falsely portraying Syria as a terrorist country. State-run TV covered parts of his trip. The reports did not mention his white supremacist activities or the time he spent in federal prison for mail and tax fraud.

Wolf.

BLITZER: All right, Betty. Thank you very much. Betty Nguyen, at the CNN Center.

Up next, Howard Stern unplugged. Hear why he prayed that the FCC cancer would spread and what he's saying now.

Stay with us.

(COMMERCIAL BREAK)

BLITZER: It's not exactly an apology but it might be the closest thing to one that Howard Stern can muster. The radio shock jock is offering an explanation for comments he made more than a decade ago that were shocking by any standard.

CNN's Adaora Udoji has the details.

(END VIDEOTAPE)

HOWARD STERN, RADIO TALK SHOW HOST: I blurt out anything.

ADAORA UDOJI, CNN CORRESPONDENT (voice-over): It's no white flag, but Howard Stern's reflections to CBS News on wishing a former FCC chairman's cancer to spread are surprising.

UNIDENTIFIED MALE: Al Sikes, the Federal Communication Commission, "I pray that his prostate cancer spreads into his lungs and his kidneys. I pray to you Jesus, answer my prayers."

STERN: Yes, that is me being outrageous.

Breast implants, girls? No? Well, hello.

UDOJI: Outrageousness is exactly what Howard Stern's empire is built on, from sexually explicit talk to comments critics say are derogatory towards women and gays. He's said something to offend just about everyone and his fans love it.

STERN: If you're going to be strong on the radio, you got to let it all out, even the ugly stuff. And you can't apologize for it.

UDOJI: Letting it all out has kept him at the top.

STERN: The point is that I am the star of the radio station. I have the highest ratings on this station. I own this station.

UDOJI: With his show drawing in 12 million people every day, and revenues of $100 million a year.

(on camera): But over the years, the shock jock has also drawn the wrath of the FCC which has repeatedly fined his employer, Infiniti Broadcasting, for what regulators say is indecent material.

STERN: There's something going on with the FCC.

UDOJI (voice-over): That crackdown triggered Stern's prayer for the chairman's cancer to spread. Turns out it didn't, and Sikes recovered. More than a decade later, Stern has mixed feelings about what he said.

STERN: You know what? I don't know that I would do that now. I'm older. But I'm on the air five hours. And I blurt out anything in my head. Dangerous? Maybe. You know, do I say things afterwards that I regret? No, because those are the thoughts in my head, and I share that with the audience.

UDOJI: He's counting on that audience to follow him next month when his show moves to Sirius Satellite Radio. Since he won't be on public airwaves anymore, he won't be subject to FCC oversight.

STERN: I know that some people find this hard to believe ...

UDOJI: Stern couldn't be more thrilled. He's even put a countdown clock on his Web site ticking off the seconds to what he calls freedom.

STERN: Did you ever wish anyone dead?

UDOJI: And for those who think Stern is shocking now, just wait.

STERN: When I get really angry and fired up and I feel like my back is up against the wall, I will say vicious things. And rather than hide that, I would rather put that out on the radio and let someone see the full range of emotions. UDOJI: Stern says good-bye to the public air waves December 16.

Adaora Udoji, CNN, New York.

(END VIDEOTAPE)

BLITZER: The Bush administration is trumpeting a positive unemployment report as a sign of a robust economy. But how is the economy really doing? Ali Velshi is here in THE SITUATION ROOM with the "Bottom Line." Ali.

ALI VELSHI, CNN ANCHOR: Wolf, there are so many different ways to measure how the economy is doing. But really for most Americans the way that matters most is how you're feeling financially.

(BEGIN VIDEOTAPE)

VELSHI (voice-over): To spend money, you have to have money, and to most people that means having a job. Just a few months ago things looked pretty rough. Hurricane Katrina put more than half a million people out of work. But 215,000 jobs were created in America in November alone.

ANDREW BUSCH, FINANCIAL STRATEGIST: What 215,000 jobs means is that 215,000 more people are employed in America. And that's a good thing.

VELSHI: But the economy is not flying all that high. This year has seen some big names declare bankruptcy: two major airlines, and the country's largest auto parts maker. And tens of thousands of layoffs have been announced this year, 30,000 at General Motors alone; 25,000 at Kodak,

Even if you didn't get laid off just the fear of losing your job could slow down your spending. Making money off of your big investment, your home, for instance, makes you feel good, but that could be changing.

BUSCH: We're starting to see that sector cool off a little bit. So that's a major area of concern.

VELSHI: Mixed messages. So can President Bush really claim that things are doing well?

BUSCH: He'll certainly do it when it's a good economy. Overall, the great thing about the United States, and I can't underscore this enough, is the ability for us to create jobs and destroy jobs.

VELSHI: The bottom line? Feeling good about your job, you'll probably keep spending. Businesses will keep hiring and even more people will get jobs. So if you think the economy is doing well, you may have no one to thank but yourself.

(END VIDEOTAPE)

VELSHI: But in the end, if it's doing well, you'll thank the president. And when it's not doing well, the president might want to be looking for cover.

BLITZER: Good point. Thanks very much. Welcome to Washington.

Again, still ahead, is it good politics or looking for votes in all the wrong places? Jack Cafferty has your answers when we return.

(COMMERCIAL BREAK)

BLITZER: Let's end the week as we began it, with Jack Cafferty here in THE SITUATION ROOM. Jack?

CAFFERTY: Mexican politicians, Wolf, are hitting the campaign trail in the United States because there are millions of Mexican voters here who could help sway next year's presidential elections down there. The Associated Press reporting members of President Vicente Fox's party will visit four states to try to convince Mexican voters to keep his party in the office.

The question we asked is, should Mexican politicians be campaigning in the U.S.?

Garrett writes: "Absolutely. Circle the political rally crowds with INS officials. And upon leaving the rally, everyone who can produce valid documentation can stay here. The rest can get on a slow boat to southern Mexico."

Sven writes: "Of course Mexican politicians should be allowed to campaign in the U.S. We should support democracy in all its forms everywhere."

Master Sergeant -- pardon me? Somebody just said something to me, and I didn't hear what it was.

Master Sergeant Ellis Flores (ph), retired U.S. Air Force: "I see nothing wrong with it. Don't forget, Iraqis were voting here in the U.S. not very long ago."

And Gabriela in Brookline, Massachusetts: "We don't need any more politicians in this country. We're all stocked up here. Haven't we suffered enough?"

Finally, Louise in Montana wrote this about THE SITUATION ROOM theme song: "The reason some of you are having trouble with the music is that it isn't made with musical instruments. It's from an old reel- to-reel cassette of the sound of a washing machine from an era before you were born, and I believe it was meant to be a nostalgic reminder of the good old days."

BLITZER: That was not the music. I think that was something else. Here it is, let's listen. I want you to go away on your vacation, Jack. I know you're going on vacation in the next few days. You're not going to be here next week. But think about this music while you're gone. Have a great time, Jack. We've got to go.

CAFFERTY: Thank you, and good night.

BLITZER: Jack Cafferty.

And to our viewers, don't forget, from now on we're in THE SITUATION ROOM weekdays, 4:00 to 6:00 p.m. Eastern, as well as 7:00 to 8:00 p.m. Eastern.

I'll be back this Sunday for LATE EDITION, the last word in Sunday talk. Among my guests, the president's national security advisor, Stephen Hadley.

Until then, thanks very much for joining us. I'm Wolf Blitzer in Washington.

PAULA ZAHN NOW starts right now. Paula is in New York.

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