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The Situation Room
Armed Fatah Supporters Protest Loss to Hamas; Democrats Against Alito; Fizzling Filibuster?; Possible Bird Flu Vaccine Developed; Hamas Win May Affect U.S. Aid To Palestine; Hamas Winning Could Be Intelligence Blunder; Troops Do Relief Work In Ethiopia; James Frey Lie Rocks Publishing World
Aired January 27, 2006 - 17:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
WOLF BLITZER, CNN ANCHOR: It's 5:00 p.m. here in Washington, and you're in THE SITUATION ROOM, where news and information from around the world arrive at one place at the same time.
Happening now, it's midnight in Gaza. Fires and gunfire as thousands protest the victory by the rival, Hamas. Will a worried White House protest by cutting off payments to the Palestinians?
It's an uphill battle on Capitol Hill, where senators Kerry, Kennedy, Clinton, others hope to stall Samuel Alito's Supreme Court confirmation. Will a filibuster, though, go bust?
And it's 5:00 p.m. in Dearborn, Michigan, where Ford employees are told in no uncertain terms to either drive a Ford to the factory or face a longer walk to work. Is that adding insult to injury?
I'm Wolf Blitzer. You're in THE SITUATION ROOM.
Push came to shove in a shootout tonight in Gaza, where the shock of the election upset is wearing off and anger is setting in. Thousands from the losing Fatah party took to the streets, blaming their own leaders for the victory by the militant Islamic group Hamas. In an ominous sign, gunmen from the rival factions actually started to exchange fire.
The Bush administration has again called Hamas a terrorist organization but hasn't decided yet what to do about it.
Our White House correspondent, Dana Bash, is standing by. But let's go to Gaza right now and begin our coverage with our Ben Wedeman -- Ben.
BEN WEDEMAN, CNN INTERNATIONAL CORRESPONDENT: Yes, Wolf, this was a very noisy day here in Gaza. Until today, much of the talk had been about Hamas' victory. But now, of course, the focus is on the trouble within the Fatah faction, which of course lost in a very big way in Wednesday's elections.
We watched as thousands of Fatah faithful, gunmen and otherwise, unarmed people, headed to the house of Mahmoud Abbas, the Palestinian president and also the head of the Fatah movement. Now, they were demanding that he -- he resign. Many people blaming him and the old leadership of Fatah for basically running an authority that was corrupt and managed to really alienate so many Palestinians to the point that they actually voted in Hamas.
Later, they went to the Palestinian parliament, Wolf, where they set cars on fire. There was a lot of shooting in the air, a lot of pushing and shoving, and much more anger being expressed there.
Meanwhile, in other parts of Gaza, we saw in the town of Khan Yunis gunmen from Fatah and Hamas exchanging fire. Several people wounded there.
So there's several conflicts going on between Hamas, between Fatah, and very much within Fatah itself. So this election has in many senses opened up a whole new range of possibilities, many of them, Wolf, violent.
BLITZER: A quick follow-up. You see these pictures. You see what's going on in Iraq. And it raises the question, is it possible there could be a civil war within the Palestinian community?
WEDEMAN: There is concern about that. Many ordinary Palestinians are worried that there are too many men, too many people running around with guns, too many conflicts among the Palestinians themselves.
Now, this evening, we have seen Fatah leaders trying to calm the situation down, telling the rank and file that they've got to put down their weapons and essentially accept the fact that Hamas has won the election. But there are a lot of people that have material interests involved.
There are jobs at stake for many of these young men who are in some way affiliated, paid for by Fatah. So if they can somehow manage to iron that one out, it's possible.
So it's still a bit premature, Wolf, to talk about civil war. By civil strife is a definite possibility.
BLITZER: Ben Wedeman in Gaza.
Be careful over there. Thanks very much for your good reporting, as usual.
Ben will be back with us in our 7:00 p.m. Eastern hour
The White House today sent a veiled warning to Hamas saying -- and I'm quoting now -- "You can't have one foot in politics and one foot in terror." But will the United States hit Hamas where it's most vulnerable; namely, in the pocketbook?
Let's go to our White House correspondent, Dana Bash -- Dana.
DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, that all depends, they say here at the White House, on whether or not once the government is formed Hamas really is in charge of that new government. But they did make it clear here at the White House, as you said, at the State Department, and certainly they're making it clear where they hold the purse strings in this government, and that is the United States Congress, that if that happens, the money will certainly stop flowing.
You know that over the past several years, really, historically, the United States never gave direct funding to the Palestinian government, primarily because they thought that there was corruption and for a time Yasser Arafat was in charge and many in the United States believed that he was still very much involved in terrorism. But they started -- the United States started to give indirectly to the Palestinians in about 1993.
Over the years it's been $1.5 billion in indirect funding. But over the past few years direct funding has been going, like last year, $50 million. But as I mentioned, the money probably will not be going if the government is formed with Hamas.
But Wolf, as you very well know, funding is just one of the many very complicated, unanswered questions that this White House is grappling with. Still pretty stunned about these results that happened in the Palestinian government, the Palestinian parliament. And, of course, it also wraps -- asks the big question about what this means for the United States, for the Bush policy about pushing democracy and whether this is really a backlash and whether that is a policy that's backfiring -- Wolf.
BLITZER: Dana Bash at the White House.
Thanks, Dana, very much.
We'll have much more on this story coming up this hour. The former acting director of the CIA, John McLaughlin, he'll be joining us.
Other news we're following.
Some of the Democrats' biggest names are banding together today in the uphill battle to try to block Samuel Alito's confirmation to the U.S. Supreme Court. Senator and former presidential candidate John Kerry is continuing to urge his fellow Democrats to filibuster the Alito nomination.
His fellow senator from Massachusetts, Ted Kennedy, quickly backed Kerry's call even though Democratic leaders publicly acknowledge they don't have the votes to keep Samuel Alito off the court. And now look who's joining in, Senator and possible presidential hopeful, Hillary Rodham Clinton. Her office says she will support -- support a filibuster.
Is the filibuster threat going anywhere, though? Let's bring in our congressional correspondent, Ed Henry. He's got the latest assessment from Capitol Hill -- Ed.
ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Wolf, Senator Kerry was back on Capitol Hill briefly this afternoon after a long flight home from Switzerland. He was trying to pump some new life into this filibuster.
Even as there are signs that this move may help Kerry's prospects and picking up liberal support for the 2008 presidential primaries, there are other signs, though, that there are Democrats who are worried that it could really hurt them in the so-called red states, turn off moderate voters. That's why today we saw Senator Kent Conrad, who's up for election in North Dakota, say he's not on board for this filibuster.
And even as Senator Clinton and Senator Harry Reid, the Democratic leader, got on board and said they will support this filibuster, Reid made clear right away that the votes are not there to sustain the filibuster, it will end on Monday night. But Kerry is forging ahead even as the White House decides to lampoon his trip to Davos.
Take a listen to the debate back and forth.
(BEGIN VIDEO CLIP)
SEN. JOHN KERRY (D), MASSACHUSETTS: I know this is flying against some of the sort of political punditry of Washington. I understand that. But this is a fight worth making, because it's fight for the lifetime appointment on the Supreme Court of the United States.
(END VIDEO CLIP)
(BEGIN VIDEO CLIP)
SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: I think even -- even for a senator, it takes some pretty serious yodeling to call for a filibuster from a five-star ski resort in the Swiss Alps.
(END VIDEO CLIP)
HENRY: Now, a Democratic aide fired back this afternoon that the Bush administration actually has several officials at Davos. There are also several Republican senators, including John McCain there. Of course Republicans would say the difference is, they're not leading a filibuster against Judge Alito -- Wolf.
BLITZER: Ed Henry. Thanks very much for that update.
Let's turn to CNN's Zain Verjee now. She's at the CNN Center in Atlanta. She has an update on another important story we're following.
Hi, Zain.
ZAIN VERJEE, CNN ANCHOR: Hi, Wolf.
His family is elated, his doctors are encouraged, and millions of Americans praying for his recovery are enthusiastic. Doctors say the only worker to survive the West Virginia accident at the Sago Mine has reached several medical milestones.
(BEGIN VIDEOTAPE) DR. LARRY ROBERTS, WEST VIRGINIA UNIV. HOSP.: Randy is a wake. He responds to his environment. He yesterday, in physical therapy, with great deal of assistance, was actually able to stand for the first time in three weeks. I will acknowledge he required a great deal of support to do hat.
VERJEE (voice-over): Doctors say that Randy McCloy is making significant progress from what they call an unprecedented ordeal.
ROBERTS: When offered food, he can actually take food in, chew it and swallow.
VERJEE: McCloy's most acute physical issues are said to be mostly resolved. And there's progress on another front.
ROBERTS: We do detect emotion, most commonly when his wife is at the bedside. It appears at times he seems to be smiling. There are times when he seems saddened. There are times when he's withdrawn.
VERJEE: McCloy's now moving into a new phase. Yesterday he was transferred to a rehabilitation hospital in West Virginia. There, teams of doctors will continue his care. Physical therapists will try to stimulate him, and speech pathologists will try to revive his speech.
One of the center's doctors explained the process.
DR. RUSSELL BIUNDO, REHABILITATION SPECIALIST: The rehabilitation involves putting the pieces back together and having this young man go back home with this family. That's the key.
VERJEE: McCloy was the only survivor of the mine accident earlier this month that left 12 of his co-workers dead. The crew was exposed to deadly carbon monoxide gas for more than 41 hours.
(END VIDEOTAPE)
VERJEE: And Wolf, doctors said McCloy still has a long road ahead. There are unknown effects of psychological trauma, and the carbon monoxide poisoning may have caused him brain damage. But family members are still, nonetheless, encouraged by his progress and are comforted all of the time by get-well wishes. They say that they receive some 40 e-mails, letters and packages a day -- Wolf.
BLITZER: We wish him a speedy recovery. I know I speak for all of us when I say that.
Thanks very much, Zain, for that report.
Let's go back to New York and Jack with "The Cafferty File" -- Jack.
JACK CAFFERTY, CNN ANCHOR: Thank you, Wolf.
If they don't come back, the character of one of the world's truly unique cities will be changed forever. A new study shows that as a result of Hurricane Katrina, New Orleans could lose up to 80 percent of its black population. If the most damaged neighborhoods aren't rebuilt, and if there isn't more government assistance to help the poor people come back, they probably won't.
Here's the bad news. The most heavily storm-damaged parts of New Orleans were 75 percent black. Twenty-nine percent of the people live below the poverty line. Ten percent were unemployed, and 53 percent were renters.
Some lawmakers want more aid. One Republican representative from Louisiana wants a type of federal buyout. But the Bush administration says it's against that idea because it would be too expensive and would create more bureaucracy.
Here's the question then: Whose New Orleans will be rebuilt?
E-mail us at CaffertyFile@CNN.com -- Wolf.
BLITZER: All right. Thanks, Jack, very much. We'll see you soon.
Up ahead , an unusual, very unusual move by Ford in the middle of a massive downsizing. We'll show you what it's doing at one plant to encourage employee loyalty.
Also, an accused shoplifter who investigators say has a very different method of operation. We're going to show you the surveillance tape.
Plus, word of a potentially major bird flu breakthrough, why some researchers are celebrating, others, though, are warning it's too soon to celebrate.
You're in THE SITUATION ROOM.
(COMMERCIAL BREAK)
BLITZER: With a massive downsizing in the works, you might think Ford has more important things to worry about than what kind of cars its employees drive. Well, apparently not.
Ali Velshi is joining us now. He's in Washington with "The Bottom Line" -- Ali.
ALI VELSHI, CNN CORRESPONDENT: Wolf, good to see you.
This is an unusual story. This starts on Wednesday, apparently at the Ford Dearborn truck factory which makes the F-150 truck. It's been the best-selling vehicle in America for over a quarter century.
They've got a new rule starting on Wednesday that if you're an employee there and you don't drive a Ford vehicle or -- it doesn't have to be Ford-branded, but one of their other brands, you don't get to park in the parking lot at the plant. You have to go across the road. Now, we were at one of these plants the other day. They're big parking lots. There are a lot of people who work there. So that's quite a distance. It's a bit of a penalty.
This was decided on by the plant manager, but Ford says it supports the move. Apparently, so does the union.
They had a union meeting. The union officers voted that this would be a good idea. We did hear from some union members who said, "I don't know why they're dictating what it is I drive. I've got to buy the best thing for my money."
I would suspect most Ford workers drive Ford vehicles because they get a fairly substantial discount when they buy one. But, you know, people buy different vehicles for different reasons, and you'd think in the same week that they announced 30,000 layoffs and 14 plant closures across North America, they might just let the workers come to work in whatever it is they feel like driving to work.
But right now, Ford's saying at that one plant in particular, staring Wednesday, if you don't have a Ford, park across the road and walk in, in Detroit winter.
BLITZER: All right, Ali. Thanks very much.
Ali Velshi with "The Bottom Line."
Zain Verjee once again joining us from the CNN Center with a closer look at other stories making news.
Hi, Zain.
VERJEE: Hi, Wolf.
In California, a big rig tanker crashes into a house. Officials say the tanker was carrying (INAUDIBLE) and it rolled over into a back yard, releasing hazardous fumes and forcing evacuations. Officials say the tanker's driver was pinned in the cab. He was eventually extracted by emergency workers.
Reports say the air in the area is hard to breathe.
In Kentucky, the Ohio River's now open for barge traffic again. That, after an accident involving a runaway barge.
Yesterday, the tow of three barges separated. Two of them slid over a dam. The third bumped up against a railroad bridge. That one carried liquid asphalt and diesel fuel, creating a potential hazardous situation.
And the operator of the Queen Mary avoids a passenger protest by offering them a full refund. At issue, a decision by the ship's operator to cut stops in Barbados and Kitts and Salvador, Brazil, to make up for lost time because of a damaged motor. Passengers had planned to protest that decision.
The Queen Mary is the world's largest and most expensive passenger liner.
And officials say a New York woman set several fires in clothing stores. Why did she do that? Well, as a way to cover up her shoplifting.
Today, New York's fire commissioner said the 49-year-old woman is now in custody. Video surveillance shows the woman on the tape stealing the clothes and then using a cigarette lighter to set fire to a whole rack of clothes. Among the charges the woman faces, arson in the second degree and possession of stolen property -- Wolf.
BLITZER: Those video cameras, those surveillance cameras, they catch almost everything, Zain.
Thank you very much for that.
Coming up, as Hurricane Katrina unleashed its wrath along the Gulf Coast, many managed to ride out the storm. But not quite like the people you're going to see shortly. We have some never-before- seen images of shrimp boat crew riding out the storm
You're going to want to see this.
And in our 7:00 p.m. Eastern hour, should Michelle Kwan be allowed on the U.S. Olympic team despite having missed the qualifying competition? Officials make a decision, and we'll tell you what it is.
Stay with us.
(COMMERCIAL BREAK)
BLITZER: Let's go right to our Justice correspondent, Kelli Arena. She's getting word on, what, the first federal prosecutions results from Katrina?
What's going on, Kelli?
KELLI ARENA, CNN JUSTICE CORRESPONDENT: That's right, Wolf.
Two FEMA contractors were arrested today, criminally charged on bribery charges. These two men, Andrew Rhodes (ph) and Lloyd Hollman (ph), they're both from Colorado. They were working in New Orleans, managing a base camp. It's a place where hurricane refugees were staying.
They managed the camp, and they also contracted to provide meals and so on. Well, these two men, according to this complaint, approached the person who was providing the catering, and they said to him, we will inflate the head count, we'll say that you're providing more meals then you are so you can get paid, and you give us $20,000.
Then they had a few more discussions and said, you know what? And if we keep this going, we want $2,500 a week.
This case was brought to the Department of Homeland Security Inspector General's Office to the task force who started an investigation in late December. The businessman came forward with an envelope for $20,000. He obviously was cooperating with authorities. The minute that envelope was handed over, these two men were arrested.
They've been charged with bribery, of course, and with program fraud, Wolf. So the first -- the first of what we expect to be several arrests this kind as this task force continues to look into, you know, possible fraud. You know, a lot of money out there.
BLITZER: People always looking to make a quick buck. And they do it illegally.
ARENA: That's right.
BLITZER: Thanks very much for that, Kelli. We'll continue to monitor the story
Staying on the aftermath of Hurricane Katrina, this is an incredible story, and some incredible images of survival and rescue during the horror of the hurricane.
CNN's Sean Callebs reports now from Louisiana.
(BEGIN VIDEOTAPE)
SEAN CALLEBS, CNN CORRESPONDENT (voice-over): Never-before-seen pictures of Hurricane Katrina's fury. It's the way Kent Frelich and his crew of three saw it, riding out the hurricane aboard a shrimp boat in southeast Louisiana, near the town of Empire.
(On camera): The full fury of Katrina hit in the wee hours, about the time the 39-year-old remembered he had a video camera on board.
KENT FRELICH, BOAT CAPTAIN: And this is debris coming down the canal. It's kind of hard to see in the dark, but you can see big pieces of debris coming down the canal as the water's coming in.
CALLEBS: At this point, (unintelligible) losing their house?
FRELICH: Oh yes.
CALLEBS (voice-over): Others that night were moored near Frelich, including a small boat that he saw sink. He thought the two men on board had surely drowned, until daylight.
FRELICH: This is when we realized they were alive. Right here. There -- that's them. They were on that boat and they made their way up to the top of the ice machine and that's where they spent the storm.
CALLEBS: Then, exhausted and covered in diesel fuel, the two swam and crawled toward Frelich's boat.
FRELICH: These are the guys making their way back to the boat. They were on that ice machine, and he's just in debris -- that's debris that's piled up against the boat.
CALLEBS: Both men survived. Later, a different rescue operation.
FRELICH: And this is -- that's a dog on top of my forklift. He made it.
CALLEBS: The dog is now called Empire.
About an hour later, calm from the eye of the storm gave way to strong westerly winds.
FRELICH: You can hear the ropes cracking actually in the background. See the waves coming in?
CALLEBS: But the crew knew they'd weathered the storm.
FRELICH: We had then been the worst and we knew we had it made at this point.
CALLEBS: Hours later, when the rain stopped, the crew couldn't believe the widespread devastation. At this point, they were running on adrenaline. Awake for nearly 40 hours. Frelich knew he had a great story, a videotape; but most importantly, he was still alive.
Sean Callebs, in Plaquemines Parish, Louisiana.
(END VIDEOTAPE)
BLITZER: And we want to remind you Jack Cafferty's e-mail question this hour is about rebuilding New Orleans. A new study shows that as a result of Hurricane Katrina, New Orleans could lose up to 80 percent of its black population.
Jack's question this hour: Whose New Orleans is being rebuilt?
You can e-mail Jack at CaffertyFile@CNN.com, CNN.com/caffertyfile. He'll read some of your e-mail later this hour.
Coming up, a vaccine for bird flu? Researchers say they may have one that works, but there's a catch. And it's a big one. That's coming up next.
And something you can only see here on CNN. We're with Special Forces on a hearts and minds mission right in the heart of Africa. We'll tell you what's going on.
(COMMERCIAL BREAK)
BLITZER: Welcome back.
A bird flu vaccine? Researchers in Pennsylvania say they developed the first effective weapon against the spread of bird flu in just weeks. But is this news too good to be true?
Let's bring in our Brian Todd. He's standing by in the newsroom. He's got the story -- Brian.
BRIAN TODD, CNN CORRESPONDENT: Wolf, it's at least exciting news because we're in race to combat a very deadly strain. Now, what experts do agree on regarding this latest advance is that it's an important but incremental step.
(BEGIN VIDEOTAPE)
TODD (voice-over): Using a genetically engineered human cold virus, scientists at the University of Pittsburgh produce a bird flu vaccine that is 100 percent effective in mice and chickens. We spoke to the lead researcher.
DR. ANDREA GAMBOTTO, UNIVERSITY OF PITTSBURGH MEDICAL CENTER: So, if this is showed to be an effective vaccine, then we can move to the next step, to -- which is to try to mass-produce this vaccine for an immunized large population.
TODD: But Dr. Andrea Gambotto and other top experts on avian flu say that's a long way away. Experts say, if bird flu mutates and spreads further west, a new and likely very different vaccine will be needed. Plus ...
DR. ANTHONY FAUCI, DIRECTOR, NATIONAL INSTITUTE OF ALLERGY AND INFECTIOUS DISEASE: We have to be careful that we don't make a jump from a study that shows effectiveness in animals to one that's going be the answer to the problems that we have with the H5N1, that we hope will never become efficient in going human to human
TODD: Still, these researchers took only a month to prepare the vaccine. That's six weeks quicker than under current methods. Why does that matter?
UNIDENTIFIED MALE: If we had a pandemic that was similar to the one that happened in the United States in 1918, roughly 90 million people would be ill.
(END VIDEOTAPE)
TODD: The Pittsburgh researchers say human trials of their vaccine could begin in about six months. But Dr. Anthony Fauci from the National institutes of Health says it's pure folly to think about when, or even if, this vaccine will be on the market -- Wolf.
BLITZER: All right, Brian, thanks very much -- Brian Todd reporting.
The surprising Hamas victory in this week's elections is raising serious questions about U.S. aid to Palestinians.
Our Ali Velshi is joining us now. He has got the "Bottom Line" -- Ali.
ALI VELSHI, CNN ANCHOR: Wolf, this is an interesting story, because a victory at the polls for Hamas could be clouding a bigger problem for the organization. And that's money. Now, Hamas, as you know, may have attracted some votes in part because it has long been able to use funding from other countries to build badly-needed schools and medical clinics in the West Bank and Gaza. Now, the Palestinian Authority, which has -- which has been governing there for the last decade, has attracted about $1 billion a year from Western nations, like the United States.
Last year, the United States provided about $275 million in financial support. The E.U. gave about $600 million. And that $1 billion a year is the lion's share of the economy there. Now, both of those organizations, both the E.U. and the U.S., are talking about choking off aid, unless Hamas publicly renounces terrorism and recognizes Israel.
Well, most of the money that we're talking about goes toward infrastructure, water pipelines, sewage treatment plants, public libraries, things like that. And they have got the USAID logo alongside the seal of the Palestinian Authority. But with Hamas in charge, the U.S. has a problem with that arrangement.
The State Department today says, it -- it doesn't do -- it doesn't fund terrorist groups. And unless Hamas changes the way it does things, the money might stop. They Palestinian territories need that money. They are far from being self-sufficient. As you know Wolf, more than a quarter of the population, conservatively, is unemployed. More than half live below the poverty line. And the meager trade that it does do is with Jordan, Egypt and Israel. They make -- they grow olives, citrus fruits, other foods.
If U.S. or European Union cuts off aid, Hamas could turn elsewhere for the money. Back in 2000, Saudi Arabia conducted two highly publicized telethons in support of the Palestinians. Some analysts we spoke to said the West needs to tread very carefully now not to create a vacuum in the territories that the Saudis or the Iranians might rush to fill -- Wolf.
BLITZER: Ali, thank you very much.
And this important note to our viewers: Our Ali Velshi hosts "ON THE STORY" every weekend here on CNN. "ON THE STORY" takes you behind the scenes with our CNN reporters on the big stories of the week. You can tune in tomorrow night, 7:00 p.m. Eastern, Saturday night, 7:00 p.m. Eastern, here on CNN, also, 1:00 p.m. also on Sunday. Ali will have his program before a studio audience at George Washington University here in the nation's capital.
The Palestinian political upheaval has the militant Hamas group on the verge of taking charge. The United States today called once again on Hamas to stop its efforts to be a terrorist organization. The U.S. regards Hamas as a terrorist organization. For its part, Hamas is not backing away from its call for the destruction of the state of Israel.
Joining us now, a key member of our Security Council, our CNN national security adviser John McLaughlin. He's a former deputy director of the CIA. I have already heard rumblings. And you have been out of the government for a while, so maybe not necessarily directed at you. Was this an intelligence blunder, the fact that no one in the U.S. government apparently foresaw that Hamas would win this election?
Months ago, when the president of the Palestinian Authority, Mahmoud Abbas, said, let's go ahead and have an election, let Hamas participate, the U.S. seemed to acquiesce and go along with this, and -- and not put any obstacles -- the argument being, well, they're not going to win anyhow, so let's not make a big deal out of it.
(CROSSTALK)
BLITZER: Do you see an intelligence blunder here on the part of the U.S. government?
JOHN MCLAUGHLIN, CNN NATIONAL SECURITY ADVISER: Actually, I don't, Wolf.
I think, as an intelligence officer, I would tell you that elections are the hardest things to predict. Consider our own country, for example, where we have 24-hour news coverage, perfect polling, access to the candidates. And, often, we have surprises here.
So, surprises in elections are one of the perils of intelligence. And I don't think the United States could have credibly kept the Hamas out of this election, for a number of reasons.
They won some municipal elections last year. And they have proved themselves, despite their record as a terrorist group, as capable administrators in those municipalities. Second, if we had -- or the Palestinians had chosen to keep them out, there would have been a violent reaction on the part of Hamas.
I mean, this is a group, after all, that since 1993, has killed 500 people in about 350 attacks, suicide attacks, mortar attacks, and so forth. And, finally, I think it would have been difficult, given the posture of the United States about bringing democracy to the Middle East, to have, effectively, argued that they shouldn't participate.
BLITZER: One of the arguments being that Islamic Jihad was kept out of the political campaign.
MCLAUGHLIN: Right.
BLITZER: ... another group...
MCLAUGHLIN: Right.
BLITZER: ... the U.S. regards as a terrorist organization.
MCLAUGHLIN: But Islamic Jihad is different from Hamas. It's an offshoot of Hamas. And it doesn't have, for example, the humanity institutions that Hamas provides, schools and hospitals and soup kitchens and so forth. One of the wild cards in this equation, though, is the -- the jihad, the Palestinian Islamic Jihad.
BLITZER: Islamic Jihad.
MCLAUGHLIN: The PIG -- PIJ, because they're connected to Iran, for example and...
BLITZER: Is Hamas connected to Iran?
MCLAUGHLIN: Hamas gets about $20 to $30 million a year from Iran.
So, we need to think about Iran's role in all of this. As Ali just pointed out, a cutoff of aid to Palestinians would raise the prospect of someone like the Iranians stepping in and giving more. They already provide that to Hamas, which has about a $70-million-a- year budget.
BLITZER: The argument that the U.S. government has made is that the U.S. is not going to have anything to do with this Palestinian Authority...
MCLAUGHLIN: Yes.
BLITZER: ... if Hamas is part of it, because Hamas is a...
MCLAUGHLIN: Right.
BLITZER: ... terrorist organization. And they're going to be the dominant party.
But the U.S. dealt over the years with Fatah, the other political party, even though one of its offshoots, the Al-Aqsa Martyrs Brigade, was intimately, deeply involved in terrorist attacks against Israel as well. So, the question is this.
(CROSSTALK)
BLITZER: What's the difference between Fatah and Hamas?
MCLAUGHLIN: Well, I think everyone at this point is recalculating everything, in Washington, in Israel, and, it must be said, in Hamas.
I don't think they expected to win with the margin they did. The difference between Fatah and Hamas is that Hamas has -- combines Palestinian nationalism with Islamic fundamentalism. And the Fatah really doesn't do that. It has a more secular cast.
And that's the real difference here, plus, of course, the Palestinian -- the -- the Hamas has a militant wing, with about 1,000 members, that are responsible for the deaths, very directly, of about 500 people. But, you know, Hamas is going to have to take a deep breath here and recalculate also, because, why were they elected? They were elected on a platform that they would bring all of these social services to the people in the West Bank and Gaza. And they really can't do that without the kind of assistance that -- that the Palestinians have come to expect from the United States and Europe.
And, Ali just said, all sort of conditions are being put on that now.
BLITZER: And that assistance might go away.
All right, this is a critical moment in the Middle East right now. We will be watching together with you. Thanks very much.
MCLAUGHLIN: Very broad implications.
BLITZER: Enormous implications for all concerned, including the United States.
MCLAUGHLIN: Right.
BLITZER: John McLaughlin -- we will continue to stay on top of this story.
Still to come, coming up, a story you will see only here on CNN, U.S. troops in Africa taking on a very unique mission, fighting famine with their hearts and minds. Our Pentagon correspondent, Barbara Starr, is going to take you there and show you what is going on.
And this note: In our 7:00 p.m. Eastern hour, figure skater Michelle Kwan missed the competition to qualify for the U.S. Olympic team, yet, her supporters have been lobbying to get her on the team. Should she be allowed to compete? Officials are about to make a decision. And we're going to tell you what it is.
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BLITZER: Welcome back.
Our Pentagon correspondent, Barbara Starr, has been visiting U.S. troops in the Horn of Africa, where a special forces team is taking on a very different kind of mission -- Barbara.
BARBARA STARR, CNN PENTAGON CORRESPONDENT: Wolf, many people may not realize, but there are about 40 U.S. troops here in Ethiopia. They're conducting humanitarian relief work. They're working on medical projects, on irrigation, and even helping with veterinary care for the animals in this region.
What the soldiers tell us, this is all part of their heart-and- minds campaign -- that is their words -- to try and influence events out here, so terrorism doesn't take hold. Here, in Gode, times are very tough. This, as with much of Africa, is a place where drought and famine is beginning to take hold -- Wolf.
BLITZER: Barbara Starr, reporting for us -- thank you, Barbara, very much.
Zain Verjee is joining us once again from the CNN Center in Atlanta with a closer look at other stories making news around the world -- Zain.
VERJEE: Wolf, almost nine months later, conspiracy theories still persist about the death of Princess Diana.
Right now, in Britain, there's an investigation hoping to put some of them to rest. Today, the official leading the probe said it's more complex than expected, with many questions to be answered. Princess Diana died in a car crash in 1997 with her companion, Dodi Fayed.
He didn't create the song "Happy Birthday," but his fans are singing it to him anyway. Today is Wolfgang Amadeus Mozart's 250th birthday. In Salzburg, Austria, where Mozart was born, there are concerts and celebrations. And Vienna will be holding three days of performances. Mozart composed more than 600 works in his 35 years alive.
And ice skater Michelle Kwan's Olympic hopes now depend on a five-person monitoring committee. In California, the group will watch Kwan do short and long programs to decide if she's fit enough to compete in the upcoming Olympics in Turin. We are going to bring you all the details on this story and, most likely, the results as well. That's coming up in a live report in our 7:00 p.m. hour -- Wolf.
BLITZER: Zain, thank you very much.
Up next here in THE SITUATION ROOM, Hurricane Katrina hit some parts of New Orleans harder than others. A new study shows the city could lose most of its black population. Whose New Orleans is being rebuilt? We will hear from you.
And Angelina Jolie tells starstruck leaders at a summit in Switzerland to stay focused on the world's problems. That's coming up in our 7:00 p.m. Eastern hour of THE SITUATION ROOM.
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BLITZER: Welcome back.
A nation at war, a domestic threat, searches and surveillance without warrants, eerie echoes of decades past for the former leader of a radical American underground group and his former FBI pursuer.
Let's go to our justice correspondent, Kelli Arena. She has this story -- Kelli.
ARENA: Wolf, we are going to take you back to '60s tonight.
The group was the Weather Underground. And one of its leaders, Bill Ayers, got to relive a part of his past last night. He met for the very first time the FBI agent who had hunted him down for years at a very appropriate venue, the Spy Museum here in Washington. (BEGIN VIDEOTAPE)
ARENA (voice-over): It was a time of rebellion, over the Vietnam War, social reform and civil rights. Bill Ayers was part of that rebellion, a leader of the group called the Weather Underground, responsible for about 40 bombings, including the 1971 explosion at the nation's Capitol.
BILL AYERS, FORMER WEATHER UNDERGROUND LEADER: The point was to draw screaming attention to the fact that our government was murdering 2,000 people a day.
ARENA: Ayers went underground, a fugitive for about a decade, wanted by the FBI. Don Strickland, an FBI special agent at the time, was part of the squad hunting for him.
DON STRICKLAND, FORMER FBI AGENT: He always managed to keep a step or two ahead of me.
ARENA: Ayers and another leader, Bernardine Dohrn, surfaced in 1980. By then, federal charges against them had been dropped, due to questionable law enforcement tactics.
BERNARDINE DOHRN, FORMER WEATHER UNDERGROUND LEADER: The nature of the system has not changed.
ARENA: Ayers, who married Dohrn, is now a college professor. He sees a lot of similarities between then and now.
AYERS: Like illegal wiretapping, like the imperial presidency. These are things that we have been through before more than once in our history. And they are things that are upsetting and -- and that must be changed.
ARENA: And so it seems fitting that, just this week, he came face to face for the first time with the man he eluded for years. Age has not brought them ideologically closer.
AYERS: If today, you're organizing a non-violent, direct-action, warrior movement against the war in Iraq, I will join you.
STRICKLAND: A bomb planted in a public place is a message of hate addressed to whom it may concern. I felt that way in the '60s. I feel that way today.
(END VIDEOTAPE)
ARENA: Well, the men offer a different take on history. But they agree on one point. The nation's as sharply divided now as it was then -- Wolf.
BLITZER: Excellent piece, Kelli. Thanks very much for sharing that with our viewers -- Kelli Arena, our justice correspondent.
A new worm has already infected hundreds of thousands of computers worldwide and is spreading right now. It may be quietly sitting on your system. But when the payload hits, the virus will locate and delete all of your most precious computer files.
Our Internet reporter, Jacki Schechner, has the latest on this malicious worm.
What's it called, first of all,?
JACKI SCHECHNER, CNN INTERNET REPORTER: It's called the Kama Sutra worm.
And the reason why is because it comes to your e-mail with a subject line that references sex or pornography, Wolf. Now, it's set to hit on February 3. That's how the worm that already sits on your computer, or could be, is programmed to unleash. And what happens when that happens?
Well, take a look. That term paper you worked on all night, or the big file, the presentation for work, instead of it being there, it's going go blank. And you're going to get something that looks like this.
This can affect a lot of things, your Word documents, your Excel documents, your PowerPoint presentations, your Adobe PDF files, all vulnerable to this worm that could unleash on the 3rd. That's how it's programmed, the third of every month.
Now, there is good news. What can you do? First of all, don't download of any of these files from these unsolicited e-mails with sex in the subject line. Or go to a company like Symantec or F-Secure. This is one of the companies that helped identify this worm, by the way. They're offering you free anti-virus software to help clear up the problem -- Wolf.
BLITZER: All right, good advice, Jacki. Thank you very much. I hate those worms.
Jack Cafferty is in New York. I know he hates those worms, too, don't you, Jack?
CAFFERTY: Did you -- did you ever get that Kama Sutra worm, Wolf?
BLITZER: I hope not.
(LAUGHTER)
BLITZER: I hope I...
(LAUGHTER)
BLITZER: I hope I never got it. How about you?
(LAUGHTER)
CAFFERTY: I'm glad. And I have got no nothing, nothing. I...
(LAUGHTER) CAFFERTY: A new study shows, that a result -- speaking of worms, we will tell you about the start of the Enron trial in a minute.
A new study shows, as a result of Hurricane Katrina, New Orleans could lose up to 80 percent of its black population. If the most damaged neighborhoods are not rebuilt, if there is isn't more government assistance to help the poor people come back, they probably won't.
The question is, whose New Orleans will eventually be rebuilt?
J. in Brighton, Michigan, writes: "I just came back from New Orleans Tuesday. The multimillion-dollar homes are being repaired rapidly, while the Ninth Ward is nothing but scattered rubbish and no repairs in sight."
Ruby in Chattanooga, Tennessee: "New Orleans won't be the same. And that is a crying shame. They are trying to help themselves, but they just don't have the resources they need. And FEMA won't produce a plan for rebuilding. Read their newspaper online and you can see and feel the frustration in the editorials and letters to the editor"
Dick in Camarillo, California: "One might hope that whatever is eventually rebuilt won't be as corrupt as that which has run rampant in New Orleans and Louisiana since the days of Huey Long. Until the state and city can guarantee ethical government, there is no reason for Americans to throw their tax money into a known cesspool."
Dexter in Pennington Gap, Virginia: "It didn't take the Republican Party long to figure out that Katrina had taken care of the necessary redistricting in Louisiana."
Donnie in Raleigh, North Carolina: "Instead of a chocolate city, the city will likely become a high-end vanilla suburban sprawl."
And Dave in Olney, Maryland, writes this: "As a former resident of New Orleans and a former employee of the Army Corps of Engineers, I can state without question that some of the poorest areas were built at the bottom of the bowl, as in below sea level. If any areas might not be rebuilt because our U.S. Army cannot build Category 5 levees, then those poor black areas will suffer the most. This means that our nation's reputation for forgetting the poor blacks in the south will be reinforced."
And, as promised, on "IN THE MONEY," this weekend, jury selection set to begin next week in the trial of those two former Enron executives Ken Lay and Jeff Skilling. We're going talk on the program about how the case may actually be a difficult one for the prosecution to prove.
"IN THE MONEY" airs tomorrow at 1:00, Sunday at 3:00 Eastern on CNN. It might be difficult to prove, but it's my fervent hope, Mr. Blitzer, that these two worms, Ken Lay and Jeff Skilling, are convicted and marched off to prison for the rest of their natural lives for what they did to the stockholders and the employees and the confidence in this country in -- in corporate honesty in general. What mutants these two are.
BLITZER: All right, Jack, we will be watching. Jack Cafferty, hosting...
CAFFERTY: Was that -- is that prejudicial pre-trial publicity?
BLITZER: No. No. It's a -- a good assessment.
(LAUGHTER)
BLITZER: Jeff, thanks very much.
Up next, the publishing world is rocked by the best-selling author who now admits he lied in his memoir. We are going to show you the fallout.
You're in THE SITUATION ROOM.
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BLITZER: The publishing industry is being rocked by author James Frey's confession that he lied and exaggerated in his best-selling memoirs, "A Million Little Pieces."
Mary Snow joining us from New York with the fallout on what is going on -- Mary.
MARY SNOW, CNN CORRESPONDENT: Well, Wolf, that fallout continuing.
Yesterday, the shockwaves centered on author James Frey. Today, they have turned to publishing industry, as it takes a look inward at how it does business. For starters, the publisher of Frey's sequel to "A Million Little Pieces, titled "My Friend Leonard," says it's reevaluating future contracts with Frey, one day after he admitted fabricating details in his memoir.
On future contracts, Riverhead Books says -- quote -- "The ground has shifted. It's under discussion."
And whether there will be any disclaimers added to his book, "My Friend Leonard," it says, "These are very serious issues, and we are treating them that way. No decisions have been made."
Now, those issues were raised yesterday when Oprah Winfrey grilled Frey on national television, and he admitted that parts of his account about his recovery from drug addiction were actually fiction. Also called out on the carpet, Frey's publisher, who admitted there were no fact checkers to check out Frey's claims.
Publisher Nan Talese said editors relied on Frey's word.
(BEGIN VIDEO CLIP)
NAN TALESE, PUBLISHER: As an editor, do you ask someone, are you really as bad as you are? OPRAH WINFREY, HOST, "THE OPRAH WINFREY SHOW": Yes.
(CROSSTALK)
TALESE: ... someone, or...
(CROSSTALK)
(APPLAUSE)
WINFREY: Yes. Yes. Yes. Yes. Yes, you do.
(APPLAUSE)
(END VIDEO CLIP)
SNOW: Doubleday and Anchor Books says, from now on, it will include a note from the publisher and author in future printings of "A Million Little Pieces." And industry watchers say, expect other changes.
(BEGIN VIDEO CLIP)
SARA NELSON, EDITOR, "PUBLISHERS WEEKLY": I think that publishers are going to be reevaluating what they're doing. They -- they will -- they will change the way whether or not they put disclaimers on books and that kind of thing.
(END VIDEO CLIP)
SNOW: Now, one big question, will the books be classified differently? We placed calls to "The New York Times" about its best- seller list and to the publisher of "A Million Little Pieces." We don't know yet whether the book will be changed from the non-fiction to the fiction category -- Wolf.
BLITZER: Mary Snow, thanks very much.
We are going to have much more on this story, coming up, 7:00 Eastern, here in THE SITUATION ROOM. That's one hour from now.
Remember, we are in THE SITUATION ROOM weekdays afternoons, 4:00 to 6:00 p.m. Eastern, back at 7:00 p.m. Eastern. Again, that is just an hour or so from now.
Until then, thanks very much for joining us. I'm Wolf Blitzer in Washington.
Christine Romans filling in for Lou Dobbs tonight.
Christine standing by in New York -- hi, Christine.
CHRISTINE ROMANS, CNN ANCHOR: Hi there, Wolf. Thanks.
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