Return to Transcripts main page

The Situation Room

Iraq May Be On Verge of Civil War; Senate Panel Grills Administration Officials Over Port Deal; Interview With Lieutenant General Russel Honore; Wal-Mart Changes Healthcare Policy; White House Releases Report On Hurricane Katrina Response; Olympic Update

Aired February 23, 2006 - 17:00   ET


WOLF BLITZER, CNN ANCHOR: It's almost 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, Iraqi versus Iraqi. Sunnis and Shiites locked in a deadly battle after the bombing of a sacred Shiite shrine. Dozens are dead, dozens of mosques attacked. Is it the spark to set off a civil war?

President Bush offers an assurance over the deal to give management of six U.S. ports to a Middle Eastern company. If you're worried the deal will make you less safe, President Bush says fear not.

And lessons learned. The White House puts out its own report on Hurricane Katrina. It says the storm required a remarkable response but that the government didn't rise to the challenge. I'll speak with a man who led the charge during the storm, U.S. Army Lieutenant General Russel Honore, right here.

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

There's a rash of sectarian violence across Iraq after the bombing of a sacred shrine. Now Iraq is on the brink of a nightmare. Shiites are battling Sunnis, and many fear an all-out civil war.

Our Barbara Starr is standing by at the Pentagon.

Let's go to Baghdad first. There are some late-breaking developments.

Aneesh Raman joining us live -- Aneesh.


Iraq's government now in a desperate situation, trying to prevent a ratcheting up of sectarian strife.


RAMAN (voice-over): This is a country struggling to stay together. In Baquba, the cries of Sunnis, suffering reprisal attacks nationwide that have killed at least 53 people. Dozens of Sunni mosques attacked in the past two days, at least five destroyed, as sectarian strife edges near the breaking point, as Sunni pain mixes with Shia anger.

Thousands poured on to the streets.


RAMAN: In Samarra, demonstrators stood atop the ruins of the revered Shia mosque hit in Wednesday's attack.

In the holy city of Najaf, they carried posters of the country's Shia spiritual leader, the Grand Ayatollah Ali al-Sistani, who, a day after making a rare television appearance calling for peaceful protests, sparked indirect and unusually strong criticism from a prominent group of Sunni clerics enraged at the revenge attacks.

"We point the finger of blame at certain Shiite religious authorities," says a spokesman, calling for demonstrations while they know Iraq cannot control the streets.

From the people, to the clerics, to the politicians, divides are only getting deeper. Iraq's largest Sunni political bloc Thursday suspended all negotiations with the Kurds and the Shia on forming a new government, after, they say, notable silence from the country's leaders in condemning the string of reprisal attacks against Sunnis.

But there are isolated and important signs of unity. In the city of Kut, tens of thousands of Sunnis and Shias joined together, carrying the Iraqi flag, finding, as well, a common foe, chanting, "No to America."


RAMAN: And Wolf, late tonight, Iraqi police upping the number of bodies found in the wake of Wednesday morning's attacks. It now stands at at least 75 -- Wolf.

BLITZER: Friday is the day of prayer in Muslim world. What's the latest on this curfew that's being announced to try to stop some of this violence on this holy day?

RAMAN: Wolf, this is a very major significant development here. Iraq's government has extended a nighttime curfew in Baghdad and three surrounding provinces to cover all day tomorrow until 4:00 p.m.

As you just pointed out, noon prayers are the most important prayers of the week for Muslims here. That is where they get spiritual guidance from the imam. So it is unclear how Iraqis will react to their inability to walk the streets and go to noon prayers.

Also, a key element in all of this was to hear from those imams, to hear what they are saying about the situation. Again, it could be huge strife tomorrow as Iraqis find out about this curfew being extended -- Wolf.

BLITZER: Aneesh Raman. Be careful over there.

Aneesh is in Baghdad.

Let's go right to the Pentagon. Barbara Starr standing by.

Barbara, I assume U.S. officials, Pentagon brass very nervously watching all of this.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Wolf, U.S. military commanders indeed taking a very sober-minded approach to developments in Iraq.


STARR (voice over): Demonstrators gather at the Shia mosque in Samarra, nearly destroyed in the Wednesday attack that now has set off a wave of violence across the country and concern from U.S. military commanders that the country could slip into civil war.

BRIG. GEN. MARK KIMMITT, U.S. ARMY: I don't think we're anywhere near that, but I don't think we can -- neither do I think we can sit back and suggest that it couldn't happen.

STARR: Sources tell CNN that at the highest levels of the U.S. military the situation is being carefully watched to see if Iraqi security forces can take control across the country. U.S. forces expect to remain in the background so their presence does not spark more violence. There have been demonstrations of Shia-Sunni unity, but dozens have been killed.

MAJ. GEN. RICK LYNCH, U.S. ARMY: We're also concerned about the killings that we have seen. We have seen a Sunni imam killed in Basra and we've seen a Sunni imam killed at the vicinity of Baghdad.

STARR: The next 24 to 48 hours are considered critical by U.S. commanders. They will watch to see the role Iraqi forces play, what religious leaders say at Friday prayers, and whether the violence spreads.


STARR: And Wolf, here is the obvious question: What about U.S. troops? Well, do not expect to see any more U.S. troops being sent to Iraq to deal with the violence. It will be the major responsibility of Iraqi security forces.

But, Wolf, that is not to say that both the Bush administration and Pentagon officials know that the families of 136,000 U.S. troops now in Iraq are watching these pictures with great concern about their loved ones serving in that country -- Wolf

BLITZER: Barbara Starr, thanks very much.

Much more on this Iraq story coming up this hour here in THE SITUATION ROOM. We'll move on to our CNN "Security Watch" now, the storm brewing over the nation's ports. There's widespread doubt and dismay over the deal to hand over control of six major U.S. ports to a Dubai-based company. Members of Congress on both sides of the aisle worry it might compromise national security. But at the cabinet meeting today, President Bush said, fear not.


GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Port security in the United States will be run by Customs, U.S. Customs, and the United States Coast Guard. The management of some ports which here before has been managed by a foreign company will be managed by another company from a foreign land.

And so people don't need to worry about security. This deal will would go forward if we were concerned about the security for the United States of America


BLITZER: Despite the president's assurances, his top political adviser, Karl Rove, now says the president may accept a delay of the port deal. The deputy White House chief of staff says the president might agree to a delay if it gives lawmakers what he calls more of a comfort level.

While the president says don't worry, lawmakers are fiercely debating the wisdom of letting a company from the Middle East manage American ports.

Let's turn to CNN's Andrea Koppel. She's watching this story for us -- Andrea.

ANDREA KOPPEL, CNN STATE DEPT. CORRESPONDENT: Wolf, today, President Bush and Senator John Warner, a key Republican ally, ramped up their attempts at damage control, and for the first time since lawmakers on both sides of the aisle raised flags about the deal, key administration officials briefed the Senate Armed Services Committee on Capitol Hill. Of the five senators who showed up, four were Democrats who focused their questions on what they perceive as a lack of administration concern about national security, leaving Senator Warner on his own to defend the president.


SEN. HILLARY CLINTON (D), NEW YORK: If 9/11 was a failure of imagination and Katrina was a failure of initiative, this process is a failure of judgment.

SEN. JOHN WARNER (R-VA), CHAIRMAN, ARMED SERVICES COMMITTEE: I don't find at this point in time there was a breach of the procedure that would have in any way resulted in a lessening of our security considerations.

(END VIDEO CLIP) KOPPEL: For much of the two and a half hour briefing, Democrats Clinton and Carl Levin of Michigan hammered away at the administration's witnesses, who they accused of ignoring the law by failing to launch more than what was really considered a routine investigation of the Dubai-based company. Administration officials responded that they were not aware of a single national security raised that had not been part of the original review process -- Wolf.

BLITZER: Andrea, thanks very much.

And coming up later this hour, we'll examine the security measures that currently exist that are not provided by the Department of Homeland Security. Many local agencies screen and register port workers.

Our Mary Snow is watching this story.

Stay tuned to CNN day and night for the most reliable news about your security.

Jack Cafferty is in New York, and he's standing by with "The Cafferty File" once again.

Hi, Jack.


In the end, it pains me to say, President Bush just might get his way on this port deal. Although the outrage continues on Capitol Hill, the initial heat may have cooled a little. Over the last couple of days the administration has put its spin machine into high gear, and it might be working.

Thomas DeFrank wrote in "The New York Daily News" this morning that delay is now Bush's best tactical weapon. He suggests a strategy that would push back next week's decision date by a month or two.

This would give the White House time to try to sell the deal to Congress and to the public. DeFrank, the writer for the news, says it seems unlikely a Republican-led Congress would humiliate the president on this deal.

Of course, some people don't look on it as humiliating the president. They see it as protecting the country.

Here's the question: Do you think the port deal will eventually go through?

E-mail us your thoughts at We'll read some of your answers in a half hour or so -- Wolf.

BLITZER: You see that Karl Rove already suggesting they might be willing to let it simmer a little bit, let it delay, if it gives a greater comfort level to members of Congress.

CAFFERTY: You know what? Well, we don't have time. It's only a three-hour show.

Back to you, Wolf.

BLITZER: All right. Thanks very much, Jack.

Up ahead, what did Hurricane Katrina teach the government about how to handle disasters? There's a new report on the lessons learned. It says federal, state and local governments have plenty of blame to share.

Also, he's the military man who dramatically took charge in the face of chaos during Hurricane Katrina. U.S. Army Lieutenant General Russel Honore, he's here in THE SITUATION ROOM. I'll ask him about today's report on the storm.

And Wal-Mart has recently been under pressure to expand its healthcare to its employees. Now the company does something about it.



BLITZER: Let's check back with Zain at the CNN Center in Atlanta for a closer look at other stories making news.

Hi again, Zain.


You're looking at pictures -- look at these -- of a perilous aerial rescue over Los Angeles' construction site today. The operator of this 300-foot crane become stranded in the cab after experiencing chest pains.

Rescuers climbed up to him, put him in a harness like you see here, and used a helicopter to hoist him slowly and smoothly, as you see there, to safety. He was flown to the UCLA Medical Center for treatment. At last report, he was in stable condition.

A new poll of Americans shows that an outbreak of bird flu could have severe economic consequences. The Harvard University poll is the first in-depth survey of Americans concerning the disease.

More than two-thirds of respondents say that if there's an outbreak, they and their families would stay home. An even higher number say that they would just avoid travel and stay away from public events. But only about a third of those polled expect the virus to show up in the U.S. this year.

And Saddam Hussein will reportedly be permitted to meet with his defense team on Sunday. That's really for the first time in nearly a month. That's according to defense lawyer Ramsey Clark.

Clark and other team members are boycotting the trial and demanding a new judge. They say the current judge is unfair and is bias because he's from the Kurdish town of Halabja. Saddam Hussein has refused to accept a new court-appointed legal team either -- Wolf.

BLITZER: Zain, thanks very much.

Coming up here in THE SITUATION ROOM, he was in charge of the Katrina task force. What does he make of the new White House report on the government's response? Lieutenant General Russel Honore here in THE SITUATION ROOM.

Plus, under pressure. Wal-Mart makes a major announcement on healthcare. Our Ali Velshi will have "The Bottom Line."

Stay with us.


BLITZER: Let's go right to CNN's Ali Velshi in New York. He's got "The Bottom Line" -- Ali.


In the face of some stinging criticism, Wal-Mart is expanding some of its healthcare coverage for its workers. Now, Wal-Mart has about 1.3 million employees. It likes to say that its healthcare covers more than a million people. But those aren't all employees. They are the families of the far fewer employees who are actually covered.

Some critics say that up to half of Wal-Mart's employees are part time. Now, I can't tell you the answer to that because Wal-Mart wouldn't tell me. They just said less than half are part time.

What we do know is that until now, part-timers at Wal-Mart have had to wait two years to get health insurance coverage. Wal-Mart is now bringing their waiting time in line with full-time employees, just six months. That's still longer than the American average, which is a little less than two months, and the retail industry average, which is a little less than three months.

The company will also allow its part-time employees to buy into its $11-a-month low-cost value plan for their families. That wasn't allowed previously, although by some standards that's a pretty bare- bones plan.

A lot of anxious thumbs across America tonight, including mine. We're standing by for a judge's ruling tomorrow morning in the epic BlackBerry versus some little company that's suing them case. Blackberry could be ordered to shut down its U.S. service.

Now, don't worry. Most folks feel that if the ruling does go against BlackBerry, the two companies involved will settle. And the worst-case scenario is that BlackBerry will probably get a month to sort the matter out.

Get out a pencil and paper, add up everything you own, Wolf, then subtract all of your debt. And if you come out with more than $93,000, congratulations, because that makes you richer than half of all American households. That's from a Federal Reserve study that also says that half of all American households earned less than $70,000 in annual income in 2004, half earned more than that. That was the medium -- the median.

The report says that wages dropped between 2001 and 2004. And that means that a lot of folks are looking for other ways to make money.

Discount broker Charles Schwab has reported an almost 40 percent increase in stock trades by individual investors between December and January. They say 63,000 new accounts have been opened. The company says it got most -- it got the most new money invested in mutual funds in a single month in six years.

Why is everybody so excited? Well, the Dow, as you know, Wolf, above 11,000. It's around its highest point that it's been at in four and a half years. Not today, however. For the first time this week the Dow has closed down about 70 points to 11,069. The NASDAQ, as you see there, down just a handful to 2,279 -- Wolf.

BLITZER: Ali Velshi with "The Bottom Line."

Ali, thanks.

Coming up, an Arab company poised to take over U.S. ports. Why some industry insiders say all the controversy is misguided.

And coming up in our 7:00 p.m. Eastern hour of THE SITUATION ROOM, they may be offensive, they may be hateful, but they're apparently perfectly legal. Why a church group is demonstrating at funerals of U.S. soldiers and what some are doing to make sure they don't get their message across.

Stay with us.


BLITZER: Today the White House released a report on the lessons learned by the federal government in the aftermath of Hurricane Katrina. It says when Katrina roared ashore, federal, state and local governments were simply ill-prepared to handle it. The report is packed with recommendations for trying to improve the government's disaster response in the future.

Yet, amid all the chaos in the days just after Katrina struck, one man stared down the ensuing calamity and took charge, Lieutenant General Russel Honore.


BLITZER: General Honore, thanks very much for joining us. Let's talk about some of the lessons learned from Hurricane Katrina.

One of the lessons was that the U.S. military, specific the National Guard, are well-qualified to get involved in these major disasters. What do you take away, the major lesson you learned for the U.S. military from what happened in the aftermath of Hurricane Katrina?

LT. GEN. RUSSEL HONORE, U.S. ARMY: Well, we know that early on planning, preparation, and integration and execution is key. What threw all that off was the enormity of this storm and the after- effects of the flood that was created.

We had similar situations in Mississippi. What we did not have -- we had equal destruction and devastation in Mississippi. What we did not have to deal with was the aftermath of flooding which created and overwhelmed the capability of the local National Guard, thereby creating National Guardsmen who expertly and swiftly deployed to New Orleans, considered an amount of distance in the number of troops moved, and did a superb job of getting there.

Again, the dynamics of the search and rescue mission was to get enough helicopters there to complete that mission. But early on integration, compatibility, enduring communication, ability to tap into the satellite network because the cell towers and the fixed communications were down is some big lessons. And the report reflects that.

We've gotten our homework. And we'll go about getting it done so we'll be prepared for the next hurricane season -- over.

BLITZER: Are you recommending that the National Guard be better trained, assuming that that down the road they're going to be playing a much more active roles in these kind of affairs, specifically trained for these kinds of disaster response?

HONORE: Well, that is the traditional role. The primary role of the Guard is to respond to natural or any disaster inside their state. And, of course, the other role is a federal role for which they have done a superb job of doing their global war on terrorism.

What we have found is that, through making available or issuing to them more modern satellite communications and the ability to collaborate through portable command and control suites, is -- are headquarters is a thing that they need. And I won't speak to that.

The National Guard is putting their list on the table. But we know those capabilities. But many of those capabilities are resident in the Department of Defense.

It's a function of going through and following up what's in the lessons learned report for which we participated in the Department of Defense. And many of those are observations that we have provided to this report. And we will get on with it and get the work done because we have the capacity in DOD -- over.

BLITZER: One of the conclusions in the House report on Katrina that came out last week was this -- I'll read it to you -- "Whenever the task force commander of Hurricane Katrina, General Honore, came onto the scene, he was also operating independently with little regard whatsoever for the Joint Field Office, which should have been the only unified command." In other words, what people were suggesting is that you were doing what you were doing, they only learned about it from time to time based on what they were seeing, in that report, sometimes based on what they saw on television.

HONORE: Well, there are a lot of things in that House report that we are writing back to them. I didn't get the chance to speak to the House representative. I wasn't asked. And we are writing a response to that exact comment.

It's -- I don't think it's true. And those in the field office, I think Admiral Allen would attest to that. We spoke frequently.

I had two brigadier general headquarters embedded with the Joint Field Office. I'm not quite sure what we could have done under the conditions we were operating in to collaborate more after the crisis occurred.

But again, there are many aspect of that report that I take -- we take big issue with. And we will be providing response to set the record from what we saw and what we were doing on the ground -- over.

BLITZER: The House report also wrote this: "The failure of initiative cost lives, prolonged suffering, and left all Americans justifiably concerned our government is no better prepared to protect its people than it was before 9/11, even if we are."

We're less than 100 days now, General, from the next hurricane season. Are we better prepared right now to deal with a hurricane?

HONORE: Yes, I think so, from the perspective of the awareness of the American people on the importance of evacuation, the importance and -- local and state government to ensure evacuations happen, the importance of, early on, moving special-needs patients, to include those from old folks' home and from hospitals, and the effects of the flood, to try and to mitigate that, as much as we can.

But, as far as the Department of Defense, we're prepared to respond. We have gotten our homework. We will go back. And, then, the department will deal with it, in conjunction with Northern Command. But we must not forget, this was a storm -- we had not experienced one of this type before.

And it stretched every aspect of our government, and it set back technology 80 years. And we have an over-reliance on technology. Our ability to communicate to our people, our ability to move was hindered by -- it tore the roads up and bridges. It closed all the airports.

We couldn't communicate by normal telephones. So, this storm had a vote. Now, we can continue to beat ourselves up. But this was one big bad storm. And those of you that witnessed it and the survivors, our people who were affected by the storm, know that.

So, we would want to get there quicker, and provide as much assistance as we can. That has been laid out in our after-action reports. It's a function of us taking the action from what the leadership has given us, and tying all that together before the next hurricane season. But people should not discount that this was one enormous storm that created enormous damage. Over.

BLITZER: The former FEMA director, Michael Brown, who was forced to design under pressure, was interviewed by an independent documentary filmmaker the other day. We ran some of that interview here in THE SITUATION ROOM.

Listen to what he -- what grade he gave you when he was asked how you did. Listen to this exchange.




I like the guy. You know, he's the American Rambo. But he gets it. He understood the difference between civilian authority and military authority and how those had to work together.


BLITZER: He gives you A-plus. How do you feel about that?

HONORE: Well, I think, if there's A-plus, it's to those privates, sergeants, lieutenants, and first-responders, who really got the work done.

And our job, with the senior leadership on the ground, with the TAG and the parish presidents, and the mayor, was to help collaborate that and make sure everybody understand the priority of work that was laid out by the governor of Louisiana and Mississippi. And we got the work done.

But I -- we accept that grade, but we accept it on behalf of those great National Guards troops and the first-responders, who made it happen. And it didn't take whole lot of encouragement. Those troops were motivated, working with the police department, and volunteer first-responders from across the nation, who really got the work done.

But we have had a longstanding relationship working with FEMA. And they have done this job for our nation for all of this time. And we're going to tighten it up. We are going to take what we got from the lessons-learned report, the homework we got today. And you will see the department, through the leadership of Admiral Keating in Northern Command, will put this into action. Over.


BLITZER: And we're going have much more of my interview with General Honore. That's coming up in our 7:00 p.m. Eastern hour. Among other things, we will talk about Iraq. He's training troops to go to Iraq right now. That's coming up, 7:00 p.m. Eastern, right here in THE SITUATION ROOM.

We will take a quick break.

When we come back, body armor on sale online. Our Internet reporters will show you who's selling it and how they got it.

Plus, it's one of the richest robberies ever -- tens of millions of dollars stolen in a well-orchestrated and brazen heist. We will have a details of the sizable reward now being offered.

Stay with us.


BLITZER: The White House released its report today on the Hurricane Katrina response. And, while we already knew much of what it contains, there are some very surprising parallels to the report by the 9/11 Commission.

CNN's Brian Todd is joining us now for this part of the story -- Brian.

BRIAN TODD, CNN CORRESPONDENT: Wolf, the subtitle of that White House report on Katrina is "Lessons Learned."

But, comparing it to the 9/11 Commission report, we found at least two lessons missed.


TODD (voice-over): Two calamities, two massive bureaucrat failures, and now word that two major lessons from 9/11 weren't followed in the response to Hurricane Katrina -- lesson one, the need for one agency, or one leader, to take charge during a disaster.

The White House Katrina report says -- quote -- "The entire federal response structure should be reporting through one unified command, using the same terminology."

Rewind 19 months, this recommendation in the 9/11 Commission report: "When multiple agencies or multiple jurisdictions are involved, they should adopt a unified command."

RICHARD FALKENRATH, CNN SECURITY ANALYST: There has not been universal adoption of this template. And, in the heat of the moment, during a crisis, sometimes, agencies come in and just do their own thing, in way that they're able to do most quickly.

TODD: Lesson two, communications -- from the Katrina report -- quote -- "Updated communications guidance must also emphasize the ability of emergency responders and private security officials to share information."

From the 9/11 report: "Compatible and adequate communications among public safety organizations at the local, state and federal levels remains an important problem." Translation: On 9/11, many first-responders weren't on the same radio frequency. And it slowed down rescue operations. During Katrina, some first-responders still weren't on the same frequencies. Some had no communications at all.

FRANCES TOWNSEND, WHITE HOUSE HOMELAND SECURITY ADVISER: We will develop a more comprehensive national emergency communications system that ensures survivability, operability, and interoperability.

TODD: Despite the assurances, a 9/11 commissioner is outraged.

TIMOTHY ROEMER, FORMER 9/11 COMMISSION MEMBER: When we send people to Iraq, we give them the equipment to communicate, because we know they're going to be attacked. We don't give our same first- responders the opportunity to communicate, whether they get hit by terrorists or a level-four hurricane.


TODD: Our Homeland Security expert, Richard Falkenrath, says that remains a federal and local problem. There is still no federal standard, he says, for so-called interoperable communications. And, in the end, it's up to state and local governments to buy all that compatible equipment. Some have done that. Some have not -- Wolf.

BLITZER: Brian Todd, in the newsroom -- thanks, Brian, very much.

Our Zain Verjee once again joining us from the CNN Center with a closer look at other stories making news -- Zain.

VERJEE: Wolf, Serbia is denying reports that Bosnian Serb war crimes fugitive Ratko Mladic has been arrested.

And the Dutch foreign minister says, news reports that he told legislators that a surrender might be in the works were inaccurate. This follows similar rumors yesterday about possible surrender negotiations.

Belgrade says the reports are designed, essentially, to apply pressure on the government to catch -- Mladic, and to hand him over to the U.N. for prosecutor. The Serbian government has been under pressure to hand him over by Monday next week, or else face a possible freeze in negotiations to join the European Union.

Ratko Mladic has been charged by an international tribunal with genocide over his role in the Bosnian War from 1992 to 1995. Mladic has also been accused of orchestrating the 1995 massacre of some 8,000 Muslim men and boys in the eastern enclave of Srebrenica.

Secretary of State Condoleezza Rice made a surprise stop in Beirut, where she has reaffirmed U.S. support for Lebanon's independence, and said she's confident in the future of democracy in the country. She's calling on Syria to cooperate with a U.N. investigation into the assassination of the former Lebanese Prime Minister Rafik Hariri. Rice has now moved on to the United Arab Emirates.

In Russia, rescue teams and dogs are combing through debris, after a roof collapse at a busy Moscow market. Dozens of bodies have been recovered. But authorities say that they have been in cell phone contact with survivors trapped in the rubble. Cold temperatures and a night of heavy snow may have contributed to the collapse.

And British police have arrested two people and are looking for others in connection with an audacious heist that netted as much as $88 million in cash yesterday. Authorities are linking the robbery to organized crime. And they're saying that it was carried out with military-style precision. The thieves raided a cash depot outside London, abducted the manager and his family, tied up guards, and, then, just made off with the cash.

Police are offering a three-and-a-half-million-dollar reward for information on the case -- Wolf.

BLITZER: Zain, thanks very much.

Several U.S. Marines from Camp Pendleton, California, have been arrested for stealing military-grade body armor and conspiring to sell it online. The stolen Kevlar vests and ceramic chest plates were originally destined for U.S. troops in Iraq.

Our Internet reporter, Jacki Schechner, has more on this ongoing investigation -- Jacki.


The -- according to the Immigration and Customs Enforcement, also known as ICE, there is a woman named Erika Jardine who thought she could make some money by selling these vests and then the ceramic- plate inserts that go inside of them. You can see that there.

Now, it's illegal to do this. These are U.S. government-, law enforcement-, and military-grade equipment. You're not allowed to sell these. There's absolutely no market for them.

But what she did is, she put an ad in the "Scout" newspaper at Camp Pendleton. And she got some takers. So, she took the equipment she got, and she put it on eBay. And investigators in Philadelphia, with ICE, found out about it. They posed as European arms dealers.

They ended up corresponding with this woman. They ended up arresting her. She cooperated with them. And that led to the arrest of eight people associated with Camp Pendleton -- some of those being Marines, some of them civilians that are affiliated with the camp.

Now, ICE tells me today, they anticipate even more arrests. Some of the people are currently deployed in Iraq. Some of them are still at the base at Pendleton.

I want to reiterate -- we went online today, by the way, and found that there are other things like this available online -- and I want to tell you, it is illegal to sell things, both here in the U.S., and to try to sell them to someone abroad -- Wolf.

BLITZER: Thanks very much, Jacki.

Lou Dobbs getting ready for his program that begins right at the top of the hour -- Lou, what are you working on?

LOU DOBBS, CNN ANCHOR: Wolf, thank you.

We're working on, as you might guess, the port story. We will have, of course, all of the day's news coming up. We will be reporting on new elements on this Dubai ports world that -- actually, those details raise even more questions. We will be telling you tonight about the connection between P&O, the company Dubai Ports World is buying, and the U.S. military.

And we will be telling you why the Committee on Foreign Investments appears to have violated U.S. law in their handling of the Dubai Ports World deal.

And just why is the U.S. government giving commercial interests the same weight as the national interest? We will have that special report tonight. We hope you will be with us -- Wolf, back to you.

BLITZER: Thanks very much, Lou. We certainly will.

Up ahead, Jack Cafferty has discovered that a lot of you are passionately opposed to the administration's port deal. But do you think those feelings would really make a difference? He has your e- mail.

And, in our 7:00 p.m. Eastern hour, we will be joined once again -- more of my interview with General Russel Honore, the no-nonsense general who brought some order to the post-Katrina chaos. He will also weigh in on the White House report on the lessons learned, also on what is happening in Iraq right now.

Stay with us.


BLITZER: Back to our CNN "Security Watch" and the controversy over an Arab company running American ports -- critics of the deal cite security concerns. But some industry insiders say, that's misguided.

CNN's Mary Snow is joining us live now from Port Newark in New Jersey. She has got more on this story -- Mary.

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, Dubai Ports World is set to take over about half of the operations at container terminals like this one here in Newark.

And some of those closest to the operations are not as critical when it comes to security issues. That's because officials here in New Jersey and New York say that they have an extra layer of security. And that is that they screen workers here. (BEGIN VIDEOTAPE)

SNOW (voice-over): Whether it's workers unloading cargo from ship containers or luggage handlers at cruise ships, the Waterfront Commission says, all of the estimated 6,500 workers must be screened before setting foot on New York and New Jersey's ports.

THOMAS DEMARIA, EXECUTIVE DIRECTOR, WATERFRONT COMMISSION: We are the gatekeeper, or the spigot, if you will.

SNOW: Thomas DeMaria is the executive director of the Waterfront Commission. It was set up in the 1950s to weed out mob corruption, and has since expanded to look for terrorist links.

(on camera): Have you had to reject any licenses because of any kind of alleged terrorism links?

DEMARIA: No. That hasn't come -- hasn't come before us.

SNOW: DeMaria says, workers, from longshoremen to company executives with business on the ports, have to go thorough background checks with the FBI, and be registered with the commission.

DEMARIA: There's no entity, whether they're Arab, or foreign, or domestic, or anyone, that is going to come in here and put additional workers on, without our permission. And every one of the workers that we do allow will be screened by us before they get registered.

SNOW: Shipping industry officials in New York reject fears that Dubai Ports World would dramatically change the way things are done.

EDWARD KELLY, EXECUTIVE DIRECTOR, MARITIME ASSOCIATION OF THE PORT OF NEW YORK AND NEW JERSEY: All of the labor comes from the union, the International Longshoreman's Association, which are people that live and work in your communities. They're local people.

SNOW: And veterans in the U.S. shipping industry say, fears about Dubai Ports World are misguided.

KIM PETERSEN, PRESIDENT, SEASECURE: The real problem is that we have -- we are -- we have spent less a billion dollars in security grants to the ports industry over the past several years. But we're spending almost $20 billion on aviation security.


SNOW: And officials here in New York and New Jersey also point out that any company would have to go by the rules set by the Coast Guards and Customs. And officials here in Newark also point out that containers leaving here all go through radiation monitors -- Wolf.

BLITZER: Mary, and rank-and-file workers that you have been speaking with at the port there, what are they saying to you?

SNOW: You know, Wolf, despite all the ways that officials are trying to ease fears about security, still, workers here say that they are concerned about security, that this is not a deal that they are feeling very comfortable with. And no matter what kind of screening processes are in place, they're not at ease about this deal.

BLITZER: Mary Snow in Newark, New Jersey -- thanks, Mary.

Stay tuned to CNN day and night for the most reliable news about your security.

Jack Cafferty is once again standing by in New York with "The Cafferty File" -- Jack.

CAFFERTY: Thanks, Wolf.

The administration says they spent three months reviewing this thing. Earlier today, President Bush said -- quote -- "People don't need to worry about security" -- unquote. That isn't what he told us during the last presidential campaign.

When it comes to the deal, which is set to close next week, we're interested in what you think, which is, do you think this thing is going to eventually go through?

Kevin in Sandy Hook, Virginia writes: "No, not until after the 2006 elections. The congressional Republicans can not wiggle out of this self-made fiasco and maintain power. By the way, this is what they get, and deserve, for surrendering their oversight responsibilities for the last five years."

Dee in Lehman, Pennsylvania, writes: "Foolish you. Of course the port deal with go through. Someone is making a lot of money, and, if you think a little thing like national security will stop it, you are mistaken."

Judy in Mesa, Arizona: "I hope not, but, if it does, we need to send a message to our employee, President Bush: You're fired."

Joe in Tampa, Florida: "Yes, I believe the port deal will go through. However, Bush better not count on a Republican-controlled Congress after the midterm elections."

Bill in New York: "Hmm. Door number one is a nuclear device in a container. Door number two is embarrassing the president. Get real, Jack. Of course the Republican Congress will allow the deal go through."

Mark in Colleyville, Texas: "No. Even if the deal is on the 'up- and-up,' the outrage being expressed by all and the fact that Bush exploited national security for his campaign platform will bring about its death."

And Matt in Amherst, New Hampshire: "No, I don't think so. Congress is a lot of things, but not suicidal" -- Wolf.

BLITZER: Jack, thanks very much. See you in an hour, in THE SITUATION ROOM.

Let's go to the White House right now -- our Dana Bash getting some new information on this port deal.

Dana, what are you picking up?

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, we were talking last hour about what Karl Rove, the deputy chief of staff, said earlier today about the concept, or the possibility, of delaying this deal.

I just talked to a senior administration official, who says -- tried to clarify what Karl Rove said, and said that the White House believes that, if these two private companies, DPW and P&O, determine that, in this environment, it's better to voluntary postpone this deal from going -- from going through, in order to give Congress more time, the time that many people are asking for, this official said, that is scenario where everyone wins.

So, what we're hearing from the White House now is that the president will still veto legislation, if he has to, it comes to that point. But they are signaling that perhaps they hope it doesn't come to that point, join perhaps that two companies who are dealing with this right now, and with whom the transaction is all about, that they, perhaps, could decide not to -- at least to postpone this deal.

They're getting a lot of advice, Wolf, as you know. Bob Dole, for example, is -- has -- has been hired -- a lot of the -- a lot of advice from people around town. Perhaps, that is something that could be a possibility.

BLITZER: Dana, all right. We will get more information on this. Thanks very much.

Just ahead, mash-ups -- it's a new online term. And, once you find out what it means, you just might like it.

Also, this is not just another anti-gay protest. The demonstrators are doing their chanting at the funerals of U.S. troops killed in Iraq. Why? And what, if anything, is being done to counter it?

Find out, 7:00 p.m. Eastern, right here in THE SITUATION ROOM.


BLITZER: We want to update you now on how team USA is doing at the Winter Olympics Games.

CNN's Larry Smith joining us now live now from Torino with more -- Larry.

LARRY SMITH, CNN CORRESPONDENT: Well, Wolf, I can tell you what. I just got through watching this event.

It was a phenomenal women's figure skating championship. I understand we are going to kind of have some fun with your viewers. And, so, we're not going to reveal the winner right here. But I will give you this nugget. The winner has a world championship and now also an Olympic gold medal as well to her resume.

And we tell her congratulations. And that's all we will say.

There we go. There she is. And that's all we will go. I am scared to say more.

So, I will move on to some other -- to the big winner on -- in women's parallel giant slalom. The bronze medal -- Rosey Fletcher of the U.S. taking a bronze medal.

Jeret Peterson, "Speedy" Peterson, in the men's freestyle aerials, was leading at one point early in the competition, but he came up just short. He finished in seventh place. And I will leave it there, before I give anything else away.

Wolf, let's go back to you.


BLITZER: I -- maybe I'm missing something on that picture.

Let me show it again to our viewers.


BLITZER: And, Larry, I know we don't want to give away the big secret, because a lot of people are going to want to watch tonight, and not necessarily for us to tell them.

But what is the point you're trying to make here?

SMITH: What is the point I'm trying to make?


SMITH: I don't know. I'm following instructions.

But I know it was a phenomenal event. You had some falls and some surprises. And I guess I probably shouldn't say more than that.

But it was a very excellent competition -- excellent competition.

BLITZER: All right. Well said.


SMITH: How is that?


SMITH: Is that -- is that safe?


BLITZER: That is safe. You did a good job, Larry.

SMITH: All right.

BLITZER: Thank you very much for that.


BLITZER: Larry Smith is on the scene in Torino.

The next time, by the way, you want to go online to book a flight or go shopping, you may want to look beyond Travelocity or There's a new category of online tools called mash-ups, Web sites aimed at giving you exactly what you need.

Here with some of the award-winners, our Internet reporter, Jacki Schechner.

SCHECHNER: Real quickly, Wolf, mash-ups are taking two programs and smooshing them together.

For example, you take a Google map, you put in craigslist housing information, and you get There was a camp this week that was all Google mash-ups -- or mash-ups of different kinds. And the big winner here was something called Podbop. It take event listings in your area and mashes it up with downloadable or streaming music available online.

Another big winner this week was We have featured it on the show before, Wolf. It's crime statistics and Google maps.

BLITZER: All right. Thanks, Jacki.

Let's go to "LOU DOBBS TONIGHT." That starts right now.