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New York Man Has Case Of Naturally-Occurring Or Accidental Anthrax; Congress Continues Port Dispute; Officials Warn Of Economic Fallout If Port Deal Does Not Go Through; Robert Kimmitt Interview; South Dakota Senate Considering A Bill To Ban Most Abortions

Aired February 22, 2006 - 16:00   ET

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

WOLF BLITZER, CNN ANCHOR: Thanks very much, Ali. And to our viewers, you are now in THE SITUATION ROOM, where new pictures and information from around the world are arriving all the time.
Happening now, a New Yorker hospitalized with anthrax symptoms. New details this hour on his case and what may have caused it.

Plus, the White House steps up its defense of the port deal and admits to political blunders. It's 4:00 p.m. here in Washington, still swept up in the port security storm. Could the administration have prevented a revolt by fellow Republicans?

Also this hour, election insecurity. Is the port deal robbing the president's party of its 2006 trump card? We'll examine the political backlash and the battle for Congress.

And is Iraq nearing the brink of civil war? It's midnight in Baghdad, one of the cities where anger is now boiling over after a bombing of a sacred shrine. Religious divisions are leading to bloodshed and threatening democracy.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

Up first this hour, a developing story out of New York. A case of what authorities are calling naturally-occurring or accidental anthrax. The mayor's office held a news conference just a short while ago.

Our medical correspondent Elizabeth Cohen is standing by, but let's begin our coverage with CNN's Allan Chernoff. He's in New York -- Allan.

ALLAN CHERNOFF, CNN CORRESPONDENT: Wolf, the 44-year-old New Yorker is hospitalized with an anthrax-like symptoms, but New York City officials want to reassure the public, they are saying this is absolutely not a terrorist-related situation. In fact, they're saying it was entirely accidental and they believe it is isolated.

Here's the story. The man is a drummer and he was performing in performing in Pennsylvania last week in Mansfield University. He has been complaining of flu-like symptoms. Right after the show that he performed, he collapsed. He was brought to the hospital. He's in the hospital now in Sayre, Pennsylvania and he's said to be right now in stable condition. The mayor and other New York City officials, as well as officials in Pennsylvania, say what happened here is that the man had been working with raw cow and goat skins. He is a drummer, keep in mind, and they believe that is exactly how he contracted anthrax.

In fact, the man had purchased some of these skins in the Ivory Coast back in December. He returned from Africa in December and so they believe this is entirely accidental and, as I said, isolated. Minutes ago the mayor did try to reassure the public.

(BEGIN VIDEO CLIP)

MAYOR MICHAEL BLOOMBERG (R), NEW YORK: We have every reason to believe that this infection is an isolated, accidentally and naturally-transmitted case. No other illnesses have been reported whatsoever.

The city is working closely with local, state, and federal health and law enforcement officials to investigate this case and our Health Department is reaching out to anyone who might be at risk to provide them with antibiotics if necessary.

As of now, three other people are being treated with antibiotics and we're determining if other people need them. There is no -- let me repeat -- no evidence at this time of any criminal intent associated with this infection.

(END VIDEO CLIP)

CHERNOFF: New York City Police have secured the location in Brooklyn where this man had his workspace. As you see, they've cordoned it off over within the past few minutes and they've not yet entered, but they do plan to enter. Health officials plan to do that and make sure that this is not spread and isolate the entire area, as well as the man's vehicle and his home in the West Village of Manhattan.

But, again, what you're looking at now is in Lower Brooklyn, in downtown, right near Downtown Brooklyn in the DUMBO area, which stands for Down Under The Manhattan Bridge Overpass.

The mayor did say during his press conference that we want to make 100 percent certain that there was no effort here to produce anthrax in what he called a terrorist-type fashion, and he said that he is confident that will in fact be the case -- Wolf.

BLITZER: I take it, Allan, they've not started to give out Cipro, this drug, to those other individuals who may have been exposed or may be working in that building. They haven't started that process yet, have they?

CHERNOFF: The mayor said that three people are receiving antibiotics and one other will be receiving antibiotics. Apparently these are the only people that they've identified thus far that actually came into contact. And it appears that this really was the result of just contact with those skins. Important to note that you cannot get anthrax person to person. It would only, in this case, be a result, we believe, of contact with those animal skins.

BLITZER: Allan Chernoff, thanks very much. Let's bring in Elizabeth Cohen, our medical correspondent.

Elizabeth, how common is it for individuals to come up with anthrax through this natural occurrence, if you will?

ELIZABETH COHEN, CNN MEDICAL CORRESPONDENT: Wolf, this kind of anthrax, which is called inhalational or pulmonary anthrax because he inhaled it, is extremely rare. It hardly ever occurs in the United States.

What it is much more common, but still very unusual, is where you touch a skin, an animal skin, and you get anthrax on your skin. It's sort of like more of a dermatological issue. That's how it happens in the beginning.

So this is very, very unusual, but it is a zoonotic disease. You know, Allan was talking about are there concerns about terrorism. And when we think of anthrax, we usually think of terrorism, because of 2001. But, in fact, this is a disease that people get from animals. In fact, it is sometimes called wool sorters disease, which makes sense.

BLITZER: So how worried are people about this single case of anthrax developing in New York?

COHEN: Well, it sounds -- from the officials who talked today, it sounds like they're worried about the people who might have had contact with these skins. As Allan said, this is not a disease that's spread person to person, so they're not really worried about who this man has come in contact with since he was exposed to the skins, but who else might have been exposed to those skins.

And that's where the disease detectives come in. They have to think about, well, he had them. He brought them back from Africa. Who did he hand them to? Who else might have touched them? Who might have been in his workspace in Brooklyn.

Now, the mayor mentioned that this was not a space with a lot of public exposure. People weren't walking in and out of this man's workspace. Thank goodness he didn't happen to take them to a place where people do walk in and out of, so it really is an issue of figuring out how many other people also might have breathed in spores from those skins.

BLITZER: One more question. This individual is described as being in fair condition in the hospital right now. The treatment is, what? Ciprofloxacin or Cipro, this antibiotic, is that the best treatment to deal with this problem?

COHEN: It's -- that is one of the treatments that's used, certainly. He could be getting antibiotics. It could be Cipro. It could be another form of antibiotics. And that's what you do, you give an antibiotic. It works pretty well if it's given soon enough.

And that really is the most important thing, is if it's taken soon enough and unfortunately, with this disease sometimes people think they have the flu. They have fevers, they have fatigue and they think they just have the flu.

And it sometimes isn't for another three, four, five, six, days that they start feeling more sick. They can go into shock. They can go into a coma and then, at that stage, certainly treated with antibiotics is unfortunately often not successful.

BLITZER: Elizabeth Cohen, thanks very much.

Let's check in with our Internet reporter, Jacki Schechner. She has some more on what's being described as this naturally-occurring anthrax -- Jacki.

JACKI SCHECHNER, CNN INTERNET REPORTER: Wolf, a couple of resources for you to check out online if you want to learn more about what Elizabeth and Allan were both talking about.

First, from the National Institute of Health, they have an interactive presentation about anthrax, for example, about the inhalation anthrax we've been talking about and then about how it can be obtained, if you touch these animal skins we've been talking about.

Another good resource for you is the CDC, the Centers for Disease Control. They have a full, frequently-asked questions section all about anthrax, the fact that it's contained in these what they call wild or domestic animals, sheep, goat, cattle -- that sort of thing -- how it's possibly contracted and transmitted, and like Elizabeth was saying, they're saying it cannot be spread from person to person. So that's interesting to note according to the CDC -- Wolf.

BLITZER: Jacki, thanks. We're going to continue to watch this story, this case of anthrax in New York. We'll have more on it coming up here in THE SITUATION ROOM.

We'll move on now to our CNN "Security Watch." Here on Capitol Hill, senators are preparing to air the port deal dispute in public. An opening hearing set for tomorrow morning on this issue that has unleashed bipartisan outrage.

The White House warning again today that it would be risky business to try to block the deal giving control of six U.S. ports to a state-owned Arab firm. A day after the president's dramatic veto threat, is the controversy easing or is it only getting worse?

Our White House correspondent Dana Bash is standing by, but let's go over to Ed Henry on Capitol Hill with the latest from there -- Ed.

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Wolf, the political problem, of course, for the president has really been magnified by the fact that he's not just had high profile Republicans like Senator Frist, Speaker Dennis Hastert coming out hard against this port deal, but he's also had few if any high-profile Republicans step up and support the president.

That's starting to change ever so slightly. Two top Republican guns up here, Senator John McCain and John Warner, the chairman of the Armed Services Committee, are starting to speak out.

They're not supporting the port deal, but what they are saying, like McCain last night, a speech out in Arizona basically said it's time to give the president the benefit of the doubt, and wait until all the facts are in before everyone starts popping off about this. Take a listen to Senator McCain.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), ARIZONA: I think we ought to trust the president at least to the degree that we should have hearings and oversight and examine this issue before we make a judgment.

(END VIDEO CLIP)

HENRY: And Senator Warner to the chairman of the Armed Services Committee is going to have that hearing you mentioned tomorrow having Bush officials come up here to Capitol Hill, start testifying about this port deal. Senator Warner thinking that if more information gets out maybe public opinion will turn.

But again, he's stopping short of supporting this port deal. At this hour right now, Ted Bilkey, a top official at Dubai Ports World, the company involved here, is actually on the hill briefing House Homeland Security staffers about the deal as well. But the question, Wolf, is whether it is too little, too late.

I can tell you the criticism is still pour pouring in. Republican Sue Myrick from North Carolina, normally a stalwart of this president, put out a one-line letter today saying, "In regards to the port deal, Mr. President, quote, not just no, but hell no." Clear sign the anger up here among Republicans is still palpable.

BLITZER: Thank you very much. Ed Henry will be watching this story for us. Over at White House, the president has put himself out on a limb over this port deal. Administration officials today acknowledging the obvious. This flap could have been handled a lot better. Let's go to the White House. Dana Bash is standing by.

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Wolf, you heard Ed talk about the briefings that they're now getting on the hill from administration officials. Dan Bartlett, the White House counselor blanketed the air waves this morning.

You, I believe in a short while, will have a top treasury official on, all explaining, trying to make the case that many Republicans said they should have made quite some time ago, made the case for why they do think that this will not hurt national security and this is a deal that should go through. That is something that White House officials admitted today that it was a blunder not to have this kind of explanation early on.

(BEGIN VIDEO CLIP)

JOHN SNOW, TREASURY SECRETARY: Our failing here, if there was a failing, it was in explaining this process and having this process understood by -- by our critics.

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: Looking back in hindsight we believe members of Congress should have been briefed on it sooner, but the president is confident in the process which has been put in place to review these matters. He's confident in those who are charged with looking at these issues and looking at the national security concerns in this.

(END VIDEO CLIP)

BASH: Wolf, we're learning a little bit more about why, in fact, that process didn't happen. We reported first on Monday that the president himself didn't know in fact that this deal was approved until it was in the press that lawmakers were very upset about it.

We now are told that nobody in the president's top staff, no senior officials who would have raised the political flag, were knowledgeable about this either. People, we are told, like Andy Card, the chief of staff, the deputy chiefs of staff, Karl Rove and Joe Hagin, even Dan Bartlett, the White House counselor or Nicolle Wallace. People of that ilk, we are told by a senior administration official, did not know about this deal and certainly the details of it until it was a done deal. Until it was already approved by the 12- person committee.

That, despite the fact that there are at least three agencies or offices from the White House that sit on that 12-person committee. I can tell you that many people here hoped the process worked different. They are defending it saying that it is set up so that politics are not part of the process.

I can tell you I've talked to some former chiefs of staff, former people who worked here at the White House who say that the political process should work better. That people here who have political sensibility should have known about this and been able to brief people on the hill earlier on.

BLITZER: Are they going fire anybody, Dana?

BASH: I'm sorry?

BLITZER: Are they going fire anybody?

BASH: I don't think that's going happen at all because they say this is just the way the process works. Maybe they'll revisit the process, but it's a Congressionally-mandated process at this 12-agency panel. You will talk to somebody in the future, in the near future, who was on that panel. Some people say they are political appointees and should have the political sensibility.

BLITZER: We'll talk it Bob Kimmitt. He's coming up here in THE SITUATION ROOM. Dana Bash at the White House.

The United Arab Emirates is turning to a familiar face in Capitol Hill to try to ease some of the backlash over the port deal. CNN has learned that the UAE owned company Dubai Ports World has now signed up the former Senate Majority Leader Bob Dole to lobby here in Washington on its behalf.

We'll have much more on the port security deal. That's coming up in the next hour, including how they actually screen those containers at America's harbors. Remember, stay tuned to CNN day and night for the most reliable news about your security.

Time now for "The Cafferty File." That means Jack is standing by in New York. Hi, Jack.

JACK CAFFERTY, CNN ANCHOR: So they're out trying to sell this deal. This is a bad idea. Why are they bothering to try to sell it?

BLITZER: They think it's a good idea.

CAFFERTY: They're wrong. Listen to this. This is a quote from someone you'll recognize. Politically, for the president, it is a huge mistake for him to be defending this decision on the ports. The president will be overturned, unquote. Guess who said that? Former House Majority Leader Tom Delay. Note to the president, when Delay tells you you made a mistake, pay attention. This is a man who knows a thing or two about making mistakes.

For almost five years, President Bush has owned the issue of national security. It's why he got re-elected and he gets higher approval ratings by far when it comes to protecting this country from terrorism than his approval ratings on any other issue.

Now all of a sudden there's an appearance the president is turning his back on national security by supporting this port deal that will allow a company from the United Arab Emirates to control operations at six major U.S. ports.

We've already seen the bipartisan rage again this thing. Here's the question. How will the port controversy affect this coming November's mid-term elections? E-mail us your thoughts at caffertyfile@CNN.com or go to CNN.com/caffertyfile.

I am surprised, wolf, we were talking about this first last Friday on "The Cafferty File." I have not seen any public opinion polling out on this question yet. I'd be very interested to see what the American public thinks of this idea. They think it's such a great idea over at 1600 Pennsylvania Avenue.

BLITZER: I'm sure that CNN will be doing a poll on this very question sooner rather than later, Jack. Thanks very much. A scientific poll, also our senior political analyst, Bill Schneider, has a lot more on the politics of what's going on. That's coming up.

Also, what's the greater threat, going ahead with the Dubai Port deal or trying to block it. The deputy treasury secretary Robert Kimmett will join us live here in THE SITUATION ROOM about the security and financial implications for the United States.

Also ahead, the escalating attacks in Iraq after a bombing of a Shiite shrine. We'll have the latest on the escalating violence. We'll take a closer look at the holy site now in ruins and there are mosques, dozens of mosques all over Iraq right now, being attacked.

And what did the Bush administration learn from Hurricane Katrina? we'll have a preview of this highly-anticipated report. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: We're juggling lots of important news here in the United States today. We will get to a lot of that. Let's check in with Zain Verjee at the CNN global headquarters in Atlanta for more on some other stories making news -- Zain.

ZAIN VERJEE, CNN ANCHOR: Wolf, the early morning bombing of one of Iraq's most revered Shia shrines is escalating tensions between the country's Shias and Sunnis. Attackers posing as police commandos bombed the mosque in Samarra, destroying its famous towering dome.

Ten people are under arrest. The attack sparked retaliatory strikes on dozens of Sunni mosques all around Baghdad. Six people, including three Sunni clerics, have been killed in the violence. President Bush today condemned the bombing and he called for calm. So did the U.S. ambassador to Iraq.

(BEGIN VIDEO CLIP)

ZALMAY KHALILZAD, U.S. AMBASSADOR TO IRAQ: The terrorists led by al-Zarqawi wish to see Iraq descend into sectarian conflict. This is a critical moment for Iraq. We call on all Iraqis to unite against terror and violence. Coming together in unity to condemn this barbaric act and working for Iraq's salvation will be the right response.

(END VIDEO CLIP)

VERJEE: And just a little background on the shrine for you, Wolf. The al-Askari Shrine in Samarra is one of Shia Islam's holiest shrines. The golden mosque has existed in the center of the ancient Iraqi city for 1,200 years. The shrine houses the tombs of the 10th and 11th Shia imams that are considered direct descendants of the Prophet Mohammed.

Its religious significance is basically connected to the 12th Shia imam, Muhammad al-Mahdi, known as the hidden imam. Shias basically believe that he went into hiding under the shrine to escape persecution. And Shia tradition says that Al-Mahdi will one day reappear at the site and bring on salvation.

The shrine was then rebuilt or so over the centuries and the golden dome that was destroyed today was actually built back in 1905. Shia Muslims from around the world come to the shrine to pray and come for pilgrimage. One political scientist, though, Wolf, in Baghdad says for Shias, this is a major assault that's essentially comparable to an attack on Mecca for all Muslims. And there is a danger that it could push the country closer to civil war. Wolf?

BLITZER: All right, Zain, I don't think we can overemphasize potentially how significant this development today is. Zain, thanks very much. We're going to have much more on the story coming up later this hour, including the political strategy over Iraq. James Carville, Terry Jeffrey, they're standing by in today's "Strategy Session."

And in the next hour, a special interview, my interview with U.S. Army Brigadier General Mark Kimmitt. He'll be here in THE SITUATION ROOM. We'll talk about what's happening in the region right now.

Everyone taking a political stand on the port deal is acutely aware of the timing. This is, after all, a congressional election year. Our senior political analyst Bill Schneider is standing by with more. Bill?

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Wolf, the ports controversy raises an interesting question. Can an issue on which everyone agrees affect the outcome of the mid-term election?

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): You don't need a poll to gauge public sentiment on the port security issue, just ask any member of Congress, Democrat?

SEN. CHARLES SCHUMER (D), NEW YORK: No one can understand it. No Democrat can understand it. No Republican can understand it.

SCHNEIDER: Or Republican?

SEN. PETER KING (R), NEW YORK: I've never seen an issue that's galvanized so many people, not even angry people, just people who can't believe what they're seeing.

SCHNEIDER: When President Bush threatened to veto legislation to stop an Arab company from taking over port operations in the United States, the universal response was, what is he thinking?

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: That would send a terrible signal to friends and allies, not to let this transaction go through.

SCHNEIDER: The president was sending a signal to his international allies. The U.S. will stand by its commitments. But the domestic political signal sounded tone deaf. It sound like business interests were trumping security interests, surprising because the Bush administration successfully played the national security trump card in 2002 and 2004 and they've signaled their intention of playing the same card in 2006.

KARL ROVE, DEPUTY WHITE HOUSE CHIEF OF STAFF: Republicans have a post-9/11 view of the world. And Democrats have a pre-9/11 view of the world.

SCHNEIDER: Democrats suddenly see an opening.

SEN. HILLARY CLINTON (D), NEW YORK: It's just an example of a misplaced priority and value in this administration and a Republican majority in Congress.

SCHNEIDER: But there's a problem. Republicans in Congress are not going along with President Bush on this issue.

REP. CURT WELDON (R-PA), HOMELAND SECURITY COMMITTEE: It almost smacks of an arrogance, like it doesn't matter what the Congress says. "We're going to do what we think."

SCHNEIDER: On this issue, Republicans can score political points by defying an unpopular policy and an unpopular president.

(END VIDEOTAPE)

SCHNEIDER: If President Bush won't play the security card, congressional Republicans certainly will -- Wolf.

BLITZER: Bill, are Republican leaders trying to give the president some sort of face-saving escape route?

SCHNEIDER: Yes, they're asking the White House to delay the port takeover in order to investigate the security implications. That will get the issue out of the news for awhile and give the president a chance to do what he has not done, cover his political base. But you know, if the president vetoes legislation to stop this deal, he would be throwing away the only card Republicans have in this election and that's national security.

BLITZER: Bill Schneider, thanks very much. Bill Schneider is our senior political analyst.

And coming up, we're going to have much more on this. I'll speak with the Deputy Treasury Secretary Robert Kimmitt about how he helped put this deal together. He was one of the point people involved in making this deal possible. He'll join us live here in THE SITUATION ROOM.

Also, should the president handle the threat -- how should the president handle the threat of civil war in Iraq? James Carville, Terry Jeffrey, they're standing by to weigh in on that, a lot more in today's "Strategy Session."

(COMMERCIAL BREAK)

BLITZER: Top Bush administration officials are warning of serious financial fallout if the controversial Dubai port deal does not go through. We are joined now by the Deputy Treasury Secretary Robert Kimmitt.

Mr. Secretary, thanks very much for joining us. Senator Norm Coleman, Republican of Minnesota says it should have been painfully obvious that a sale of this type would raise serious concern in Congress and before the American public. Why wasn't the president notified, top White House officials notified? You yourself weren't even notified about this until it's now blown up into this huge political firestorm.

ROBERT KIMMITT, DEPUTY TREASURY SECRETARY: Wolf, thank you. It's good to be on. Let me say that the process of security view through the Committee on Foreign Investment in the U.S., CFIUS, is a nonpolitical process. It focuses on the security dimension.

I don't think any of us wants to politicize the security review, although as a number of people have said, I think we could have been more politically attune, particularly with regard to briefing the Congress. But let me make one point. This proposed sale started appearing in the mainline press at the end of October and it continued over the next several months.

I think that the people conducting this review were surprised that although there were stories that appeared in New York, in Baltimore, in Miami, in the "Wall Street Journal," that not a single call that I'm aware of was received either from the press or the Congress. And I think that the security people, as a result thought that they were going about this the right way, focusing on the security dimension of the deal.

BLITZER: You're a very politically attuned political operative, shall we say, here in Washington. You've been around Washington for a long time. When was your political antenna raised to the possibility that members of Congress and people all across the country could be outraged by this?

KIMMITT: Well, I learned about this deal on a Friday evening, spent the weekend garnering the information.

BLITZER: Just last Friday? Just only last Friday?

KIMMITT: No. It was Friday a week ago, just before it started appearing in the press the week following. And first thing I did was called my staff together. They gave me a briefing on how this was conducted. I talked to key counterparts in the other departments and agencies, came to the same conclusion that the president did, that this was vetted exactly the right way.

This committee, Wolf, was set up in 1975, confirmed by legislation in 1988. It comprises six departments and six offices, and we also bring in other agencies, in this case Transportation and Energy with special expertise. I would note that post-9/11, the Department of Homeland Security was brought in.

BLITZER: Let me stop you on that point, because Susan Collins, who's the chair of the Senate Homeland Security Committee says this of the whole committee, this process that reviews these kinds of deals. "I think if the process is a relic in some ways, I believe we in Congress need to take a close look at the entire process and build in congressional oversight so we don't find out at the 11th hour that a transaction that, to many of us, raises serious national security concerns is on the verge of going forward."

After 9/11, does this whole CFIUS, this committee, this process, need to be thought through once again, given the uproar right now?

KIMMITT: Think we've made the right adjustment after 9/11 to bring the Department of Homeland Security and other key security officials into the process. I do agree with Senator Collins, Chairman Collins, that we can do a better job of keeping the Congress informed.

Let me just tell you what the practice has been, and this goes to the way the law is written. We give regular briefings to the Congress on cases that have been closed. We actually had a scheduled briefing on this and other cases set even before the recent press flurry took place.

However, over 30 years, going back to Republican and Democratic administrations, it has been the process that the Congress has not been briefed on pending cases, but we do answer cases on pending questions.

Let's take the CNOOC deal last summer, the Chinese National Overseas Oil Corporation that attacked so much attention. That case was actually never notified to us. Why? Because when it started to appear in the press, we immediately started getting questions from the Congress, the press, and others. We were closely in touch with the Congress throughout that.

Again, it wasn't notified to us, but we were responding to questions. If, after those press articles started to appear last fall, long before the committee began its formal review process, we had been asked any questions by the Congress, we would have been very responsive.

We are restricted on what we can say publicly because of business confidential information. I think the question going forward is, should we or how do we go about briefing the Congress, not just on cases that are closed, but on cases that are open, consistent with the statute that they wrote in 1988.

BLITZER: Unfortunately, we have to leave it there. Robert Kimmitt is the deputy treasury secretary. Mr. Secretary, thanks for coming into THE SITUATION ROOM.

KIMMITT: Thank you, Wolf.

BLITZER: And despite all the furor over the port deal with the United Arab Emirates, many facilities at U.S. ports are already operated by foreigners. Our Internet reporter Abbi Tatton has been investigating foreign-run ports online -- Abbi.

ABBI TATTON, CNN INTERNET REPORTER: Wolf, it's not unusual for foreign companies to operate facilities or terminals in U.S. ports. The port of Seattle, for example, it's about the tenth busiest in the country. and it has four terminals, two operated by U.S. companies, the other two operated by this company in South Korea and another one based in Singapore. The busiest port in the country is the port of Los Angeles. Seven terminals there in operation. Only one of them run by a U.S. company. One of them called the China Shipping Terminal. Another one is run by this Taiwan-based company. A third run by this Danish company that also has operations in many other major ports in the country.

Now, some port dos not see this control of their terminals. A spokesman at the port of Charleston, which is one such port, tells me that it doesn't matter if it's a private or a public company, or one across the world, everyone is still under the same rules as everyone else -- Wolf.

BLITZER: Thanks, Abbi, very much.

Bush administration officials emphasize that no matter who owns a port, federal officials are responsible for security. The Coast Guard, Customs, and the FBI all play a role in inspections and protection. But security experts tell us the system is not fail-safe.

They say only about six or seven percent of cargo that arrives in the United States is open or x-rayed. Most of the containers, about 80 percent are screened in foreign ports before being shipped to the United States. Security experts say the quality of that screening is inconsistent. We'll have much more on this story in a few minutes in today's strategy session.

Up next, abortion front and center in the culture wars. We'll tell you what's happening now in one statehouse and in the highest court of the land. And the newest crisis in Iraq. The bloodshed after the bombing of a Shiite shrine. We'll talk about the situation there with Brigadier General Mark Kimmitt. That's coming up in our next hour.

(COMMERCIAL BREAK)

BLITZER: Today in our strategy session, the political fallout over a deal which would allow a Dubai-based company to run six U.S. sea ports is only getting more heated. Is there any chance a compromise can be reached at this point, and what will the political fallout be?

Plus, could the outbreak of violence in Iraq be the trigger to civil war? Joining us now, Democratic strategists James Carville, and Terry Jeffrey, the editor of "Human Events." Guys, thanks very much for joining you.

John McCain, taking a very balanced stance on this port deal, issuing a statement saying the president's leadership has earned our trust in the war on terror and surely his administration deserves the presumption that they would not sell our security short. That's John McCain.

JAMES CARVILLE, DEMOCRATIC STRATEGIST: I think McCain's running for president. I mean, he was for creationism, intelligent design, or whatever it is. He's meeting with Bush supporters in South Carolina. I think it's probably politically a pretty depth thing..

BLITZER: You think it's politically smart?

(CROSSTALK)

CARVILLE: They hate it, but he'll be able to go when all of this passes over and say, you know, "I stood with the president in a difficult time." I think that's his strategy. I can't tell you how good a strategy it is, but it is a strategy.

BLITZER: Do you think that's the strategy John McCain's trying to...

TERRY JEFFREY, EDITOR, "HUMAN EVENTS": I think he's trying to be statesman like. Obviously, he has very big credentials on national security. On the long run, I don't think what he said today is going to hurt him.

(CROSSTALK)

JEFFREY: It's not going to hurt McCain, no.

CARVILLE: Just like being with these people in Pennsylvania on this creationism thing I guess may help him in South Carolina.

BLITZER: We'll talk about that on another occasion. We're talking about ports right now. Republican Congressman Mark Foley of Florida said, "Of all the bills to veto, if he lays down this gauntlet, he'll probably have 350 members of the House ready to accept that challenge." If he goes ahead and vetoes legislation, what do you think of that?

JEFFREY: Well, I think you've got a lot of Republicans who are very worried that this administration is blowing up their best issue, which is national security. I think in the end, Wolf, that Congress is going to win. This deal is not going to go through. The United Arab Emirates are not going to be running U.S. ports.

I would just say as a conservative -- I think conservatives would be against the government of the United States purchasing a company that runs the ports on our eastern seaboard, let alone an emirate in the Persian Gulf run by seven families that has never had an election. I mean, it's really quite ridiculous.

It's against -- I saw the transcript of your conversation with Mr. Chertoff on Sunday. And he said we had to balance our national security against vigorous global trade. Since when are Republicans in favor of global trade by foreign governments? On that basis alone, this deal should be a abrogated.

BLITZER: What do you think?

CARVILLE: I think that -- two words: exit strategy. How do they get out of this? Because obviously, the thing is not -- and what they need to do is to come up with some kind of a compromise, get 34 Senate Republicans to say that they would uphold a veto, and to have this thing go through.

BLITZER: It's sort of like a Harriet Miers exit strategy, is that what you're talking about?

CARVILLE: Like a Harriet Miers thing. They have to get out of this, but at the same token, I think the president, and I'm sure his secretary of state, and Ms. Hughes is saying, "Look, if you undo this, it's going to make us look terrible." There's no way to get out of this looking good."

BLITZER: Let's talk about the situation in Iraq today. I don't think we can overemphasize what a perilous moment this is right now. Listen to U.S. ambassador Zalmay Khalilzad, what he said earlier.

(BEGIN VIDEO CLIP)

ZALMAY KHALILZAD, U.S. AMBASSADOR TO IRAQ: We denounce in the strongest terms the terrorist destruction of the golden mosque, the Shrine of the Askariya Mosque. This heinous crime is a deliberate attempt to form sectarian strife in Iraq and the region.

(END VIDEO CLIP)

BLITZER: Terry, this holy Shiite shrine is attacked, is bombed. Since then, some 90 Sunni mosques in revenge have been attacked, and some of them burned, some of them ransacked. And no wonder Zalmay Khalilzad, who knows the situation quite well, is as worried right now as he is.

JEFFREY: Well, exactly right. Back in September, Zarqawi issued a declaration declaring sectarian war against Iraq Shiites. That's what al Qaeda wants. They want a sectarian war between the Sunni and the Shia. That's what this act is intended to do. There's an intense crisis situation in Iraq today.

The Bush administration strategy is trying to separate Zarqawi out from indigenous Sunnis who now back the insurgency that maybe can be brought into the new government. This is a crucial moment. Maybe, just maybe, there will be good that comes out of this for Sunnis saying, "These guys have gone too far. We have to reach out to the Shias and make peace. We can't go further into a war."

BLITZER: Even before today, on this horrible, horrible chain of events, in our latest CNN-"USA Today"-Gallup poll, was is a mistake to send U.S. troops into Iraq, 55 percent said yes, 42 percent said no. A majority believing it was a mistake to get involved in Iraq. Presumably, if this sectarian violence escalates, that number is going to grow.

CARVILLE: Look, you are so right to ask about this because today, 90 percent of the news is about this port deal. They're going to figure a way out of this port deal. It's a lot easier to get out of this port deal than it is to figure a way out of Iraq, let me tell you.

And, you're right. By singling out this one mosque, this Shia mosque, it provoked 90 other attacks. This civil war was festering. It was happening. It was sort of a repressed civil war. It's less repressed now. Look, hopefully -- I hope Terry's right, that something comes of this. But right now, I think that this is a much bigger story than the port story because they'll figure a way out of the port story a long time before they figure a way out of this one.

JEFFREY: All Americans have a huge interest in making sure we get to the endgame in Iraq where there's stability in that country and where Sunnis and Shias are dealing with each other politically and not by blowing each other up and blowing up the religious shrines.

Good news today, though, is that the Ayatollah Sistani, who clearly is the most influential Shia in the country, seems to be trying to tap things down and keep the Shia community cool. Hopefully, he will succeed in that.

BLITZER: Let's hope he does. Thanks very much to both of you. What a mess.

Coming up, a new challenge for the mayor of New Orleans after the failures and the fallout from Hurricane Katrina. We'll tell you who is officially going after Ray Nagin's job.

And much more on our top story. Our exclusive interview with the chief operating officer of the Dubai company that's taking over operations of six major U.S. ports. We're going to speak with that man. He'll be here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Abortion in the culture wars. The South Dakota Senate is considering a bill that would ban most abortions in that state. A vote is expected today. If it's passed, the bill could be the most sweeping abortion ban approved by any state in more than a decade.

It comes as the U.S. Supreme Court is preparing to dive back into the abortion debate with two new members on the bench. The justices agreed yesterday to review the constitutionality of a law banning a certain late-term abortion procedure.

The Bush administration is appealing a lower court ruling, throwing out the ban on what critics call partial-birth abortion. This may be a critical test for the reconfigured court, and particularly for the newest justice, Samuel Alito, who replaced the swing member on the court, Sandra Day O'Connor.

On our political radar, Louisiana Lieutenant Governor Mitch Landrieu is formally a candidate for New Orleans mayor. The Democrat entered the race today, saying that new leadership is needed to restore the city's credibility. Landrieu is one of 12 candidates, including incumbent Democrat Ray Nagin, who was wildly criticized for the Katrina crisis. If elected, Landrieu would be the first white mayor of New Orleans since his father, Moon Landrieu, left office back in 1978.

Up next, President Bush is standing tough against a storm of criticism from members of his own party. It's over that controversial deal to turn over six U.S. ports to a Middle Eastern company. But how will the president's stance affect upcoming elections?

We'll hear what you think. Jack Cafferty is standing by with your email.

And meet America's newest multi-millionaires. How eight lucky winners struck it rich in the nation's largest lottery jackpot. Find out just how much fatter their wallets are now going to be. All that coming up in the next hour here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Let's go back to Jack in New York with "The Cafferty File" -- Jack?

CAFFERTY: Wolf, for almost five years, President Bush has owned the issue of national security. And now, all of a sudden, there's an appearance that he's turning his back on national security by voicing his support for this deal to sell operational control of six U.S. ports to the United Arab Emirates. The question is, how will the port controversy affect the November elections, which are not all that far away?

John in San Marcos, California, "Republicans were already jumping ship. Bush is doing a brilliant job of alienating even his conservative anti-terrorist, xenophobic base. And Republicans seeking reelection, including the entire House of Representatives, are scrambling like rats on the Titanic to abandon ship before they go down with the captain."

Bill in Madison Heights, Michigan: "No difference. We all know that come election time, the boring issues like port security, healthcare, Social Security, borders, and outsourcing, will lose out to the important things like gay marriage and abortion. The Willie Horton time scare machine is already starting."

David in Apple Valley, Minnesota: "Hopefully Americans' eyes will be open when they vote. It's time for a good fall cleaning."

C.J., St. Petersburg, Florida: "I'm a moderate who believes in voting for what's best for America. I don't necessarily believe the Democrats have gotten their act together yet, but hope they will by November."

Rebecca in Kingsport, Tennessee: "The Republicans appear to be trying to distance themselves from Bush on this one. We'll have to wait and see how long it lasts. If they eventually end up siding with him on this, they can kiss their seats goodbye. America's sick and tired of this corrupt administration, and I believe how the Republicans act on this will affect if they stay or go in November."

And finally, Curtis in Portland, Maine, "The situation won't have any effect on the November elections because the U.S. has the memory of a gnat. Jack, just wait. The president or Congress will do something equally boneheaded closer to November that will affect the elections more than this. Patience, my friend. Patience."

BLITZER: Are you still getting a lot of email there?

CAFFERTY: Yes, we are. And it's overwhelmingly opposed to what is arguably one of the dumbest ideas I've heard in all of the 63 years I've been wandering around in the wilderness.

BLITZER: Jack Cafferty, thanks very much. We'll get back to you soon.

Still to come, more on the port security flap. Is it a new twist on an old story? Jeff Greenfield looks back at America's fear of foreigners.

And the lessons learned from Hurricane Katrina. We'll have a preview of the White House's new report. That's coming up.

And is New Orleans ready for the next hurricane season now? Only 100 days away. We'll find out in our 7:00 p.m. Eastern hour of THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Critics in the controversial Dubai port deal say they believe America's security is at risk. But some defenders of the deal contend racism and fear are driving the controversy. Our senior analyst Jeff Greenfield sees a conflict that's as old as the nation itself -- Jeff.

JEFF GREENFIELD, CNN SENIOR ANALYST: Wolf it sounds like a controversy triggered by post-9/11 anxiety. Should we turn commercial operation of U.S. ports over to a company controlled by a Middle Eastern emirate? But it actually reflects a tension as old as the republic. How much do we embrace? How much do we fear foreign presence in our midst?

In the early years, founding fathers like Thomas Jefferson and John Adams debated over embracing or fearing the revolutionary government of France and the intentions of Great Britain toward its newly-independent colony.

In the first years of the 20th Century, we welcomed millions of immigrants to our shores. Then for decades, sharply restricted all but those from the right parts of the world, mostly northern Europe. When we went to war against Japan in 1941, we rounded up Japanese- Americans, citizens no less, and interned them in camps.

Four decades later in the late '80s, we worried as Japanese money, the yen, buying up American icons, Columbia Pictures, the Pebble Beach golf course, Rockefeller Center, 7-11. Where will Japan strike next, a "Fortune" magazine cover asked. When Japan's economy cratered, that fear evaporated.

And today, while politicians of both parties compete to voice the strongest objections to this port deal, we look up to find another kind of security, make that securities, is firmly held by hands across the sea, nearly $2 trillion worth of U.S. debt. Nearly 200 billion of that debt is held by communist China. Another 64.7 billion by OPEC.

Maybe this comes down to imagery. It's easy to picture a foreign foe planting something dangerous in the cargo hold of a ship. That's happened on the FOX TV show "24" a few weeks back. It's a lot harder to chin up fear over a simple, non-violent, financial decision that would send shock waves through the American economy -- Wolf.

BLITZER: Jeff Greenfield, thank you very much.

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