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Spitzer's Sex Scandal & IRS Involvement; Admiral Fallon's Resignation; Awaiting Results from Mississippi Primary; Should John McCain's Health be a Concern for Voters?

Aired March 11, 2008 - 17:00   ET


WOLF BLITZER, CNN ANCHOR: And to our viewers, you're in THE SITUATION ROOM.
Happening now, caught in a sex scandal -- New York Governor Eliot Spitzer gets an ultimatum -- resign or face impeachment. We're going to find out how the Feds followed a money trail. And I'll speak with Spitzer defender, the Harvard law professor, Alan Dershowitz.

In a stunning move, the top U.S. military commander for the Middle East calling it quits after a magazine portrays him as being at odds with the president's tough stance on Iran.

Desperate for every delegate, Democrats do battle in a red state. It's primary day in Mississippi. Our first exit poll numbers only minutes away.

I'm Wolf Blitzer at the CNN Election Center. You're in THE SITUATION ROOM.

We're going to have full coverage of today's Mississippi primary just ahead from the best political team on television.

But we begin with an extraordinary tale of politics, power and personal disgrace. At this hour, New York Democratic Governor, Eliot Spitzer, is said to be weighing resignation a day after he was linked to a prostitution ring.

Republicans are demanding that the ethics crusader step down and are threatening impeachment. A Democratic source says the resignation is only a matter of time. Aides to Spitzer and the New York's lieutenant governor are said to be planning a transition.

If Spitzer steps down, David Paterson would become New York's first African-American governor. Sources tell CNN the federal agents got on Spitzer's trail when a bank reported some suspicious money transfers to the IRS. The FBI linked the transfers to a prostitution ring.

So how did Eliot Spitzer get himself into this mess? Let's go straight to our justice correspondent, Kelli Arena. Kelli has been following this story.

It's quite a tangled tale that you've been following. What are you picking up -- Kelli? KELLI ARENA, CNN JUSTICE CORRESPONDENT: Well, Wolf, most officials are now really clamping down on this one, distressed by the amount of information that's gotten out to the press. But we were able to get a pretty clear picture of how Spitzer ended up where he is.


ARENA: For a guy with as sharp a legal mind as Eliot Spitzer, the allegations against him are mind-boggling. Sources with knowledge of the investigation say to allegedly make payments to the prostitution ring, he started shifting around money among his bank accounts.

That's where he ran into trouble. The suspicious activity raised red flags at the bank, which filed a report with the IRS, which opened an investigation. The money allegedly ended up in shell accounts set up by the prostitution ring. And if shuffling money is a legal red flag, sending money to shell companies is a five alarm file.

SCOTT MICHEL, TAX ATTORNEY: This was done to conceal the true nature of the prostitution operation that was going on. And if somebody transfers money into a fake company account knowing that that is a fake account, that person can be engaged in a money laundering conspiracy.

ARENA: Sources say investigators are focused on where Spitzer got the money for the alleged sexual encounters. So far, there's no indication he used anyone's cash but his own. Investigators are also looking into what he may have done to conceal the movement and source of those funds and whether Spitzer engaged in a crime known as structuring.

ROSCOE HOWARD, FORMER U.S. ATTORNEY: The premise of structuring is that you're trying to take a large transaction, make it look like multiple smaller transactions that are unrelated.

ARENA: Sources say Spitzer spent more than $15,000 for several encounters. That may be chump change for the wealthy governor, but probably hard to hide from his wife.


BLITZER: All right. Remember, he hasn't been charged with anything yet. Spitzer also says that he is weighing all of the possibilities very, very closely.

That report from Kelli Arena, our justice correspondent.

Eliot Spitzer made some powerful enemies first as a crusading attorney general, then as a governor who pledged to clean up the state's bureaucracy.

Let's bring in CNN's Deborah Feyerick. She's watching the story for us.

What's the reaction from Spitzer's enemies -- Deb. DEBORAH FEYERICK, CNN CORRESPONDENT: Well, Wolf, it may just be the initial shock of it, but there's a sense both on Wall Street and in Albany that what goes around comes around. The governor, who had really held everyone to a higher standard, himself allegedly paying prostitutes.


FEYERICK: Spitzer built his reputation as a knife in the gut, take no prisoners attorney general -- targeting Wall Street corruption, going after distinguished business leaders at top firms, like Merrill Lynch, Citigroup, AIG, even the head of the New York Stock Exchange. He made enemies -- lots of them -- not afraid to dig up dirt if he had to.

KEN LANGONE, FORMER NYSE DIRECTOR: He's a hypocrite. He destroyed reputations of people who had good reputations and deserved reputations.

FEYERICK: Ken Langone, interviewed on CNBC, was the former director of the New York Stock Exchanged. Spitzer accused him of wrongdoing in awarding a $187 million golden parachute to Dick Grosso, who Spitzer also sued. Close Grasso friend Andrew Sabin said there's no love lost on Wall Street for Spitzer.

ANDREW SABIN, PRESIDENT, SABIN COMMODITIES: I think he overreached himself -- too overzealous, in my opinion. I think that's the way Wall Street feels. And I got a call from a couple of big -- very, very big houses on Wall Street today telling me about the celebrations inside their offices when they got the news.

FEYERICK: But Spitzer didn't care if Wall Street feared him -- the public loved him.


FEYERICK: Sixty-nine percent voting him into the New York's governor mansion after his pledge to shake up government and restore fairness and integrity. Once in Albany, he used the same combative style, threatening to steamroll anyone standing in his way. That included his chief rival, Republican leader Joe Bruno, the target of a smear campaign in which a close Spitzer aide misused state police to dig up dirt on the state Senator.

JOSEPH BRUNO (R), NEW YORK SENATE MAJORITY LEADER: The important thing for the people of New York State is that people in office do the right thing.

FEYERICK: And despite his promises to reform Albany, Spitzer's style seemed to block any meaningful reform, leaving him with few defenders.

REP. PETER KING (R), NEW YORK: He was giving thousands and thousands of dollars to a criminal enterprise. So this goes far beyond whatever Governor Spitzer did or didn't do. It's the consequences of his actions. (END VIDEOTAPE)

FEYERICK: Now when news first broke yesterday, work at financial and legal firms on Wall Street virtually came to a standstill. One lawyer telling me the complaint was e-mailed like wildfire, people running in and out of each other's offices. The volume of business e- mails dramatically, though, temporarily dropping away, as people reacted to the scandal allegedly involving a governor who had put fear in the heart of Wall Street during his time as attorney general -- Wolf.

BLITZER: Deb Feyerick, thanks very much.

He's been in charge of all U.S. forces in the Middle East -- the point man for any U.S. military showdown with Iran. But suddenly, Admiral William Fallon is resigning as the head of the U.S. military's Central Command after a magazine article suggested he's at odds with the Bush administration's tough stance on Iran.

Let's go to our senior Pentagon correspondent, Jamie McIntyre. He's following this story for us.

Was he forced out -- Jamie?

JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT: Well, Wolf, some people will have to decide that. But Admiral Fallon's 41 year career in the military came to a crushing halt because of a profile in "Esquire" magazine that portrayed him as opposing military action against Iran.

Here's an except from the article. It says: "He is the rarest of creatures in the Bush universe -- a good cop on Iran. He might not get away with it for much longer," the article says. "President Bush is not accustomed to a subordinate who speaks his mind as freely as Fallon does."

Now, Fallon's boss, Defense Secretary Robert Gates, insists there was no pressure from the White House and that he only informed President Bush after he decided to accept Fallon's resignation.


ROBERT GATES, SECRETARY OF DEFENSE: Admiral Fallon reached this difficult decision entirely on his own. I believe it was the right thing to do, even though I do not believe there are, in fact, significant differences between his views and administration policy.


MCINTYRE: Fallon issued a statement from his Central Command headquarters in Tampa saying, in part: "Recent press reports suggesting a disconnect have become a distraction at a critical time. And although I don't believe there have ever been any differences, the simple perception that there is makes it difficult for me to effectively serve." While Fallon says his decision to step down is aimed at removing a distraction, it, in fact, does much the opposite -- reinforcing the perception that he was pushed out because of his opposition to attacking Iran.

In fact, Senate Majority Leader Harry Reid has already issued a statement that says: "I'm concerned the resignation of Admiral Fallon is yet another example that independence and the frank, open airing of experts' views are not welcome in this administration."

Wolf, insiders say what got Fallon into trouble was not so much his private views expressed to the president, but public statements, he said, that often made him look like he was at odds with the administration -- Wolf.

BLITZER: Thanks, Jamie for that. We're going to stay on top of this story -- an important story for all of us.

Let's bring back Jack. He's got "The Cafferty File." He's here in New York -- Jack.

JACK CAFFERTY, CNN ANCHOR: All right, thanks, Wolf.

Vice President Dick Cheney is on his way to the Middle East to do something about skyrocketing oil prices.

We'll pause here to give you a chance to stop laughing.

Cheney is going to meet with the leaders of Saudi Arabia, Oman and Turkey. The White House says it wants OPEC to increase oil production. This is the same Dick Cheney who was chairman and CEO of Halliburton before becoming vice president. The same Dick Cheney who headed up the administration's highly secretive energy task force.

The administration's energy policy, such as it is, was crafted with the help of oil industry executives and lobbyists, including former Enron chairman Ken Lay. These meetings were held behind closed doors and the records from them remain secret to this day.

Here is what has happened since Cheney's secret energy meetings. When George Bush was sworn in as president in January of 2001, a gallon of gas cost $1.47 and a barrel of crude oil cost $30. Today, gasoline costs an average of $3.22 a gallon. Many experts predicting it will touch $4 a gallon this spring. And this morning, the price of a barrel of crude oil nearly hit $110.

And while ordinary Americans suffer with increasingly crippling energy costs, the oil companies rake in record profits. ExxonMobil earned more than $40 billion last year. Oh, and they get tax breaks, too -- all courtesy of your friends at 1600 Pennsylvania Avenue.

Here's the question: Is Vice President Dick Cheney the right person to go to the Middle East to try to bring down skyrocketing oil prices?

It's hard to even read that with a straight face. Go to You can post a comment there on my blog.

BLITZER: Jack, thanks very much for that.

Moments away, the first exit polls from Mississippi. They're going to give us a good sense of what the voters are thinking as they cast their ballots in today's Democratic primary.

Also, will the candidates come clean -- from Obama's indicted friend and former fundraiser to Clinton's tax records and McCain's melanoma? They're all under growing pressure to be more forthcoming.

And what were they thinking -- powerful men caught up in risky behavior and then caught in the spotlight.

Stay with us. You're in THE SITUATION ROOM.


BLITZER: Powerful public figures caught up in a fantasy life then caught in the spotlight. What drives the self-destruction?

Let's go to Carol Costello. She's been looking into this part of the story.

Does this Spitzer sex scandal fit some sort of pattern -- Carol? What are you seeing?

CAROL COSTELLO, CNN CORRESPONDENT: Actually, it does, Wolf. Eliot Spitzer had it all -- an Ivy League education. He had money. He had power, a supportive wife, three lovely daughters. And he risked it all to allegedly buy sex, surely knowing he might end up on the cover of the "New York Post" with this headline.

Can you see it? The question is, why would he do something so incredibly stupid?


COSTELLO: Eliot Spitzer has one thing going for him -- he's not alone. Powerful men allegedly paying for illicit sex is the stuff Hollywood movies are made of. "Pretty Woman," anyone?



RICHARD GERE, ACTOR, "PRETTY WOMAN": I'm going to be in town until Sunday. I'd like you to spend the week with me.


COSTELLO: And if the woman Spitzer allegedly paid one thousand bucks an hour for, from the Emperors Club really did look like this and really would perform unsafe sex acts, like the felony complaint suggests, well, as one psychologist told me, if Spitzer was involved wow -- what a rush.

JUDY KURIANSKI, CLINICAL PSYCHOLOGIST: He's being ruled by the limbic system back here, the sex drive, the urge for excitement and for life force, not the thinking part that reasons about right and wrong.

COSTELLO: Dr. Kurianski says Spitzer wouldn't be the first powerful guy to get so caught up in the fantasy, he's able to disassociate his illicit life from his home life. That's why so many drag their mortified wives onto the public stage to sincerely say...

UNIDENTIFIED MALE: I love my wife.

KOBE BRYANT, NBA BASKETBALL PLAYER: Yes, I love my wife with all my heart.

JIM MCGREEVEY, FORMER NEW JERSEY GOVERNOR: ... And the grace of my wife.

SPITZER: I must now dedicate some time to regain the trust of my family.

UNIDENTIFIED MALE: I'm so very, very sorry.

COSTELLO: But Spitzer was supposed to be different. As New York's attorney general, he was Mr. Law and Order, Mr. Integrity. He ran for governor on ethics.

SPITZER: Some public officials may not want to face stricter ethics rules and more competitive elections, but all citizens will win when we finally get a government that puts the peoples' interest, openness and integrity first.

COSTELLO: Again, Dr. Kurianski says integrity is an important part of Spitzer's personality. But what she calls that other part, that arrogant, intense, daring part -- it drew him into a world he fought against as New York's attorney general.

KURIANSKI: When you are overly interested in a particular area, it's your mind and it seeps into your whole being.

COSTELLO: And, she says, might have lured him to the pliant women of the Emperors Club and enabled him to go back to his Harvard- educated wife and three teenage daughters without a thought.


COSTELLO: But Heidi Fleiss -- you know, that Heidi Fleiss -- gave an exclusive interview to "Newsweek" magazine. And she says there is nothing complicated about men like Spitzer. She says he allegedly did it because he wanted to have sex -- Wolf.

BLITZER: Carol Costello, thank you.

He touted his relentless fight against corruption, but in the end, it looks like Eliot Spitzer didn't practice what he preached and that may be why he's coming in for more than his share of anger and criticism.

Let's bring in the noted criminal defense attorney, the author, the Harvard Law professor, Alan Dershowitz.

Professor Dershowitz, thanks for coming in.


BLITZER: You're one of the few that's come out and defended Eliot Spitzer. Tell us why.

DERSHOWITZ: Well, Eliot Spitzer has done what presidents and governors have done since Thomas Jefferson and Franklin Roosevelt and John Kennedy and Lyndon Johnson and Bill Clinton have done. And in those cases, it didn't affect their ability to perform in public.

John Kennedy was saving us from a Cuban missile crisis by day and behaving like an adolescent child in the evening. And I think we make much too much of private sexual peccadilloes involving public figures.

I also worry that the federal government has too much power to look into bank transactions that are really private in nature and sexual activities that are private in nature. It lies around like a loaded gun to be used by prosecutors against people who have made enemies, like Eliot Spitzer did.

BLITZER: The suspicion was raised -- initially the source of this investigation, at least according to "The New York Times" and other reports that we're reading about today, was when they're -- somebody noticed some bank transfers he was making from his private bank account to some shell companies -- some sort of fake companies.

And there's a federal statute called structuring which carries with it a five year prison sentence, where you move money around to conceal its purpose. Are you familiar with that?

DERSHOWITZ: Oh, I'm very familiar. I've done many, many cases, money laundering structuring cases. They're designed to get terrorists. They're designed to get organized crime people. They're designed to get drug dealers. They're designed to get people who pass millions and millions of dollars. The purpose of that statute was not to prevent some poor guy from moving his own money to hide it from his wife and from his accountant.

I, frankly, do not believe the story that is being put out as to how they came upon this case serendipitously. I just don't believe it. Most criminal lawyers I've spoken to, former prosecutors, think this is a cover story designed to protect an informant.

When the computerized programs are used, they don't generally find $2,000 or $3,000 or $5,000 transactions to a corporation which wasn't itself suspect, which is the story "The Times" printed today. I think -- stay tuned. We'll see there's more to this than meets the eye.

BLITZER: If you were representing him right now -- and I know you're old friends with him, going back to Harvard Law School -- what would you be telling him? What would you be advising him to do?

DERSHOWITZ: Well, first of all, I don't know what the full facts are -- nobody does -- whether they're trying to make a deal to have him resign in order to avoid criminal prosecution. I worry a lot, of course, about Republican prosecutors threatening a Democratic governor with leaving office with prosecution unless he resigns.

I would say the same thing, by the way, about Larry Craig. I have no brief for Larry Craig. I don't know him. But I was not happy when he was being pressured to resign because of private sexual conduct in a men's room.

So I would recommend to him that he not resign. I think he has more power and more authority if he does what Bill Clinton did after being impeached -- stay on, fight, do your job, be a good governor, deal with the criminal case. Nobody has ever been prosecuted as a John under The Mann Act and this is not a case for structuring.

I think if he has good lawyers, he can avoid any federal prosecution. Maybe he'd have to pay a $50 fine as a misdemeanor, the way Larry Craig had to do. And I would recommend that he stay in office and fight.

BLITZER: Alan Dershowitz, thanks very much for coming in.

DERSHOWITZ: Thank you.

BLITZER: Voting underway right now in Mississippi's Democratic primary. Now we're about to get the first exit polls. You're going to find out what they're telling us about the race between Hillary Clinton and Barack Obama.

And she's talked about picking him, but would Obama pick Hillary Clinton to be his running mate? I'll ask one of his top advisers.

Stay with us. You're in THE SITUATION ROOM.


BLITZER: Carol Costello is monitoring some other important stories incoming into THE SITUATION ROOM right now.

Carol, what's going on?

COSTELLO: Well, Wolf, in news around the world, the fate of a gay Iranian teenager who says he may fact execution in his homeland is uncertain. The Netherlands has rejected the 19-year-old's request for asylum. The country's highest court, citing European Union law, is throwing the case back to Britain, where the teenager initially sought asylum -- a request that was rejected.

It's a country accused by the United States of denying human rights, harassing journalists and torturing prisoners. It's also the host of this summer's Olympic Games. An annual State Department report on human rights singles out China for human rights abuses that also include censorship, forced relocation and the country's one child policy. Other countries singled out include Russia, Cuba, Iran, Syria, Sudan and North Korea.

Much of the United Kingdom is under a severe weather warning. Heavy rain has already caused flooding in Southern England. And now powerful winds are moving across the country. Gusts of up to 80 miles an hour are forecast, along with blizzard conditions in the north. Air traffic at Heathrow and Gatwick Airports already being affected.

That's a look at the headlines right now -- Wolf.

BLITZER: Carol, thanks for that.

We're getting the first exit polls coming in right now from the latest Democratic primary battleground in Mississippi. We're going to show you the numbers and what they mean potentially for Hillary Clinton and Barack Obama.

Also, what the candidates aren't telling us. You're going to find out why both Democrats and Republicans are under pressure for full disclosure and on what issues.

Plus, John McCain's battles with the most serious forms of skin cancer. Should voters be concerned about his health? We're going to show you what we know and the unanswered questions. Dr. Sanjay Gupta standing by.

Stay with us. You're in THE SITUATION ROOM.


BLITZER: To our viewers, you're in THE SITUATION ROOM.

Happening now, the Federal Reserve is taking even more drastic action to ease the credit crisis. It's arranged for $200 billion in loans to banks and investment houses, which will be allowed to be used for risky mortgage-backed securities as collateral for the first time.

Wall Street was ecstatic -- the Dow closing up more than 416 points. That's its best day in five years.

Presumptive Republican presidential nominee John McCain is calling on his Democratic rivals to stop what he calls "protectionist NAFTA bashing." He says Hillary Clinton and Barack Obama could undermine U.S. trade relations.

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

Right now, we're getting some breaking news on the Eliot Spitzer sex scandal and the IRS connection. Drew Griffin of CNN's special investigations unit is joining us right now.

You've been working your sources Drew. What are you picking up?

DREW GRIFFIN, CNN SPECIAL INVESTIGATIONS UNIT CORRESPONDENT: Wolf, something that is very curious in the least. But certainly interesting at most and may explain why the IRS got on in this in the first place. Mark Brenner, he is the alleged ringleader of the Emperors Club, this prostitution ring that Eliot Spitzer, the governor, has been wrapped up in. We've just confirmed with the IRS that Mark Brenner, the supposed ringleader, was or is an enrolled agent with the IRS.

This is somebody who represents taxpayers in front of the IRS. That means he either studied IRS law and took the test or is possibly an ex-IRS agent with the tax company.

It certainly adds to the intrigue as to how the IRS actually began this investigation with money transfers and looking at how this money was going and eventually got to the point where they identified client number nine as being the governor of New York. But we are now confirming that Mark Brenner, the ringleader, is an enrolled agent with the IRS -- Wolf.

BLITZER: What an intriguing part of the story, Drew. Thank you very much. Drew is going to continue to work the story. I expect we're going to be learning a lot more about this investigation.

Let's get to the race for the White House right now. Clinton and Obama were campaigning in Pennsylvania today which holds its primary in six weeks. They took swipes at each other over several issues including the war in Iraq.


SEN. HILLARY CLINTON (D-NY), PRESIDENTIAL CANDIDATE: I've been saying I will start to withdrawal our troops within 60 days. My opponent says he'll have them all out within 16 months. Then one of his top foreign policy advisers tells the foreign press, well don't pay any attention to that. That's just talk during a campaign.

I got to tell you, there's a big difference between talk and action. But if you're going to talk, then you ought to mean what you say so people can count on it.



SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: It's a Washington where decades of lopsided trade deals like NAFTA and China have put Wall Street ahead of Main Street and cost us millions of jobs, including more than 40,000 jobs here in Pennsylvania.

It's a Washington where the right to organize and unionize has come under assault for the last eight years. It's a Washington where too many ignored the warning signs and voted for a war in Iraq that should have never been authorized and should have never been waged.


BLITZER: Let's get more now on the Democratic race for the white house. For that we're joined by Greg Craig. He's a senior foreign policy adviser to the Obama campaign, a well-known super lawyer in Washington. He's joining us now from our Washington bureau.

Greg, thanks very much for coming in.

GREG CRAIG, SR. OBAMA ADVISER: Good afternoon, Wolf.

BLITZER: Some have suggested, including yourself, and correct me if I'm wrong, that you're not sure, or you don't know if Hillary Clinton is ready on her first day to be commander in chief. Explain what you mean by that. Do you believe she's ready to be commander in chief?

CRAIG: I think both candidates are ready to serve as commander in chief. The point I have been making recently is if you're running on the basis of your experience and your foreign policy experience to be president and commander in chief, it's worth testing the experience.

Senator Clinton says she's had 35 years of experience. Well, I don't think that's true. She's 60 years old. When she was 25, she hadn't even gotten to Arkansas. I think you can't count, for example, being first lady as Arkansas as preparing her to be commander in chief.

So, a fair analysis would say, if you give her credit for being first lady, that's eight years and seven years in the senate. So she may have 15 years of experience. She's claimed she was responsible for bringing peace to Ireland. I think that's an over statement.

BLITZER: Let me interrupt, Greg. Let me interrupt for a second.

CRAIG: Sure.

BLITZER: Does she have more experience in the senate than Barack Obama? She's been in the senate since 2001. He's been in the senate since the start of 2005.

CRAIG: There's no question that she has more years in Washington, D.C. than Barack Obama, and if longevity in Washington, D.C. was a test of wisdom and judgment, you would have a different argument. But our point is that longevity in Washington, D.C. shouldn't qualify you and doesn't qualify you for either good judgment or wisdom.

Otherwise, we would be happy with the performance of Dick Cheney, who has had more national security experience and years in Washington, D.C. than anyone, or Don Rumsfeld, the secretary of defense. That kind of experience doesn't necessarily do the nation well.

BLITZER: She says she would consider him as a vice presidential running mate. Is he ready to say the same thing about her?

CRAIG: First of all, that is a political ploy to tell people in the state of Mississippi you don't have to choose between us because we're really together. You know that's the old politics. It's playing games with a very serious process. People are not taking that seriously. BLITZER: Would he be ready to consider her, just as she claims she's ready to consider him?

CRAIG: The whole process is premature, Wolf. At the moment, he is running ahead in the number of delegates, in the number of voters, in the number of states he has won.

If he's the nominee he will in due course make a decision as to who the running mate should be. But it's premature for him to do that now. He's said that.

BLITZER: It looks like they're very close to having a deal of a set of makeover set of elections in Michigan and Florida right now. Is that acceptable to your campaign?

CRAIG: Well, the campaign is negotiating that right now. I'm sure they're very eager to look at proposals that have come from the states. The campaigns themselves should not be the ones deciding how this is resolved.

The basic principle should be that if there is a do over in Michigan or in Florida, there should be freedom of campaigning. The candidates should have a full opportunity to campaign, and the voters should have a free opportunity to vote. That didn't happen in either place beforehand.

BLITZER: Is a mail-in ballot OK as far as you're concerned?

CRAIG: I think if the candidates -- if the DNC comes forward and proposes that, all we care about is it be fair and that it be free and it have the principles that I just talked about.

BLITZER: So what I hear you say you're not afraid that you might lose in Michigan and Florida. You're ready to go to bat there.

CRAIG: Sure. Absolutely. We've gone to bat in every other state in the country. You know everybody is focusing on Pennsylvania. There's seven more states and you know Puerto Rico after Pennsylvania. There's a lot to be done yet.

BLITZER: All right.

Here's a quote from Geraldine Ferraro. She's a Clinton fund- raiser. She was the Democratic vice presidential nominee back in 1984 under Walter Mondale -- "If Obama was a white man he would not be in this position. If he was a woman he would not be in this position. He happens to be very lucky to be who he is and the country is caught up in the concept."

Should Hillary Clinton dump her from her campaign?

CRAIG: You know, that's a decision that they're having to decide themselves. It seems to me it was an inappropriate comment. It's a regrettable comment. It's unfortunate. I think what is exciting about these two candidates is that they're trying to put behind us the era of group politics, where people only vote on the basis of group identity.

What's happening in this campaign is white people are voting for Barack Obama in huge numbers. Males are voting for Hillary Clinton. So I think Gerry Ferraro, as much as I have enormous respect and affection for her, is way off base in that analysis and I think the Clinton campaign should agree with me and say so, too.

BLITZER: Well, they have disassociated themselves from the remarks. But they haven't done to her what your campaign did, for example, to Samantha Power, a top foreign policy adviser who worked very closely with you who called Hillary Clinton a monster.

CRAIG: I'm aware of that. She regretted it. She apologized about it. And the campaign -- she resigned because of it. That's a past story, Wolf.

BLITZER: All right. But I'm just -- but you're not saying that the Clinton campaign should do to her, or force her to do what your campaign apparently recommended Samantha Power do.

CRAIG: That's up to them. I'm not going to tell them what they should or shouldn't do. I thought the comments were inappropriate. I think the era of group politics is over. People are coming in and voting for the candidate on the merits.

BLITZER: I think a lot of people will agree with you. Greg Craig, thanks very much for coming in.

CRAIG: Thanks, Wolf.

BLITZER: We're getting the first exit polls numbers right now from the battleground state of Mississippi. We're going to share the numbers with you in a moment.

Also, under pressure to come clean from Barack Obama's former fundraising friend to Hillary Clinton's tax records, is it time for the candidates to go public about their past with new documents?

And John McCain's medical records; he's battled cancer, the most serious form of skin cancer, melanoma. He's won. What do we know though about his latest check-up? Dr. Sanjay Gupta standing by with more on that.

Stay with us. You're in THE SITUATION ROOM.


BLITZER: Just about two and a half hours or so until the polls close in Mississippi, but what we've been talking about involves the primary voters. We've been talking all day to those voters as they emerge from the ballots. Our exit polls are coming in, the exit poll numbers.

Let's bring in CNN's Soledad O'Brien. She's got the latest from us.

What are we learning from these actual voters, Soledad?

SOLEDAD O'BRIEN, CNN ANCHOR: Hey Wolf. One of the things we're seeing in a nutshell is essentially that the race is getting uglier and also the lines in the sand are definitely getting more definite.

First and foremost, we asked Obama voters what would their opinion be if Clinton was, in fact, the nominee. Here's what they said. Forty-four percent said they would be satisfied, 55 percent said no, they would be dissatisfied.

Clinton voters were asked the same exact thing opinion, if Obama is the nominee. Twenty-six percent of Clinton voters said they would be satisfied, 72 percent said no, they would not be satisfied. That's more actually, Wolf, more divided than we have seen when that same question has been asked in the past.

An area where you've seen the classic dividing lines, we've seen it before, same trends, in fact Wolf, that we've seen since Iowa. Vote by age -- 17 to 29 category Obama, they're going for him, 67 percent to Clinton 32 percent. That's very typical, as you know. Vote by age, if you look at the 65 plus category, Wolf, Clinton leading there. I think it is 56 percent, 44 percent in that particular category.

Now where you see Democrats united it's in their dislike actually, Wolf, of John McCain. When we asked what is your opinion of John McCain, favorable rating only 37 percent. Unfavorable came in at 59 percent.

And I think, Wolf, as you well know, turnout will be really critical here. Black turnout, white turnout; it's something we have to watch carefully. '88 Jesse Jackson won in Mississippi. The turnout was around 350,000. The last time around though in '96 what we saw was somewhere around 100,000. So we're going to be watching that tonight as well as we watch the exit polls -- Wolf.

BLITZER: All right, Soledad, thanks. A lot more numbers coming up, I know you and your team are crunching those numbers all the time.

They attack each other over full disclosure but it turns out each of the Democratic candidates is accused of withholding some information, information people want to know more about.

Let's go back to Brian Todd. He's watching this part of the story for us.

What's the information, Brian, in question?

BRIAN TODD, CNN CORRESPONDENT: Well Wolf from tax information to medical records. Some information has come out in drips and drabs. Some hasn't come out much at all. But each candidate is under more pressure now to release what they've got.


TODD: For Barack Obama it's his dealings with indicted former fund-raiser, Tony Rezko.

OBAMA: The notion that we haven't been forthcoming, I would dispute.

TODD: For Hillary Clinton, it's those elusive tax records.

CLINTON: I will certainly you know work toward releasing. We will get that done and in the public domain.

TODD: For John McCain, it's his melanoma surgery several years ago.

Each major candidate now under extraordinary pressure to be more forthcoming about at least one aspect of their past. A "USA Today" op-ed says, "Voters aren't getting the information they need to make informed choices." The campaigns all dispute that.

Senator Clinton's promised to release her tax records next month. Same general timeframe for McCain and his medical files. Obama and his advisers say they've answered all questions about the candidate's relationship with Rezko as they come up.

Some information like medical and tax records is often released after a nominee is selected but with the Democratic race so tight, some observers say now is the time for all white house hopefuls to get it all out there.

MARK HALPERIN, "TIME" MAGAZINE: Things like taxes, your real estate transactions have become controversial, those things are generally revealed and candidates who don't reveal them, potentially face a price with the voters.


TODD: Now this is certainly not the first time issues like this have come up in campaigns. Bill and Hillary Clinton released some of the information on their Whitewater land deal during the 1992 campaign and that of course came back to hit them later -- Wolf.

BLITZER: Brian Todd, thanks very much for that.

He's battled cancer and he's come out on top but what does his latest medical check up tell us about the health of the presidential candidate John McCain? Dr. Sanjay Gupta standing by.

And Barack Obama takes a swipe at CNN's Lou Dobbs. Lou is standing by to join us live. We'll get his response.

Stay with us. You're in THE SITUATION ROOM.


BLITZER: The candidates' health always a source of concern. That's especially true of Senator John McCain. He's fought and won a dangerous battle against the most serious form of skin cancer. That would be melanoma. The senator had a full medical work up only this week.

Our chief medical correspondent, Dr. Sanjay Gupta, is joining us with more on what we know about Senator McCain's battle with cancer.

What do we know, Sanjay?

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Well you know, McCain says he's fine. It was a routine checkup. He's made a point of that. He also that he's had a cancer screening with his dermatologist in the past few weeks. Now both these things are important, Wolf. As you know, McCain is 71. And he is a cancer survivor.


GUPTA: A lot of people have been asking Senator McCain about his health lately.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: Everything is fine. In fact, I got the full cancer check a couple of weeks ago with my dermatologist.

UNIDENTIFIED MALE: Do you do it now just because --

MCCAIN: No, I just went to a regular routine that I go to my doctor all the time.

GUPTA: Frequent doctor visits are important for McCain, not only because of his age but because he's a two-time survivor of malignant melanoma. That's the most dangerous form of skin cancer. First in 1993 on his shoulder. And in 2000 on his left temple.

MCCAIN: I'm having a lot of exposure to the sun when I was young from having fair skin.

GUPTA: The Arizona senator had a dime size melanoma on his temple removed in 2000. His surgeon also removed some of the lymph nodes in his neck in case the cancer had spread.

His doctor at the time said it hadn't and the operation was successful with one notable side effect. Take a look here. Senator McCain's left cheek is still puffy. That's a result of the operation. McCain has also had two of the least serious forms of skin cancer. One removed from his upper left arm in 2000, another from his nose in 2002.

MCCAIN: Just get in shape.

GUPTA: On the campaign trail, McCain is very careful to wear hats and sunscreen and stay out of the sun. The thing is, the candidate has not released his medical records since his bout with skin cancer in 2000. So we have no way of independently assessing this prognosis.

But based on what his campaign staffers have told us, Senator McCain suffered from what's called a Stage IIA melanoma. That was eight years ago in 2000. To put that in perspective, stage four is the most serious.

And according to the American Cancer Society, the ten year survival rate for State IIA melanoma is 66 percent. That means on average only two-thirds of people with the type of cancer McCain had lived ten years after their diagnosis.


GUPTA: Of course, Wolf, this is an average. You can be sure the senator and his dermatologist are watching very closely to catch any recurrence of his skin cancer, if it happens, early.

BLITZER: What about, Sanjay, Senator McCain's medical records?

GUPTA: We've been digging into this, Wolf, for some time. And Senator McCain has promised to release those next month. That will, for the first time, really allow us to independently evaluate the man. If he would be elected, would be the oldest first-term president ever, Wolf.

BLITZER: He's 71 now. He would be 72 if elected president of the United States. Sanjay, thanks very much.

Let's get back to Jack. He's got "The Cafferty File" -- Jack?

CAFFERTY: Is Dick Cheney the right person to go to the Middle East to try to bring the down skyrocketing oil prices? Believe it or not, that's where he's been sent. That's what he he's supposed to do.

Sean writes: "I can't believe he's seriously going to the Middle East to discuss oil costs. He is part of the reason that we pay what we pay right now, now he wants to be the savior? Your typical politician. This administration has to have other countries laughing out loud."

Anthony in Ohio writes: "You're kidding, right? Again the details of the meeting will be kept secret from the general public and again will result in yet another increase in gas prices and probably an increase in Cheney's wallet as well."

Lee Anne writes: "I'd write a comment but I'm laughing so hard I can barely see the keyboard."

Janet in Arizona: "We ought to send 50 citizens over and let them represent the United States, one person from each state. No politicians, period. The citizens are the ones who are suffering, not those fat cats in D.C."

Daniel writes: "The administration is the biggest joke the United States has ever seen. The fact that they think the American people are stupid enough to accept Dick Cheney as the diplomat to bring down oil prices is laughable. I'm counting the days that they have left in office."

Kent writes from Illinois: "Cheney will ask them to bring down the prices just before November. Then, after the election, the prices will skyrocket back. The current administration is knee deep in oil. They know what is going on, and helped create it. This will not work anymore. The public is on to you Bubba Bush."

Angela writes: "ROFLMAO & PMP! In case you don't speak IM," she writes, "That means rolling on the floor laughing my arse off and peeing my panties!"

And Alan writes: "Sending Cheney to the Mideast to bring down oil prices is like sending Eliot Spitzer into a brothel to shut it down" -- Wolf.

BLITZER: Jack, thank you for that.

Barack Obama's remark, talking about our own Lou Dobbs. Now Lou is getting ready to respond. He's standing by live. We'll speak to him in a moment.

Also, the up roar over a remark about Obama by a Clinton supporter. What should Hillary Clinton do about that?

Plus the latest on the Mississippi primary and why it's not the only Democratic contest playing out right now.

Stay with us. You're in THE SITUATION ROOM.


BLITZER: Let's bring in Lou Dobbs. he's got a show coming up in one hour. But I want you to respond to this Lou, Barack Obama singling you out earlier.

Listen to this.


OBAMA: When I hear Rush Limbaugh or, you know, Lou Dobbs, or some of these people talking about how we need to send them all back. We're not going to send them all back.


BLITZER: All right. Go ahead and respond.

LOU DOBBS, CNN ANCHOR: Go ahead and respond. What is he thinking about? This is a guy who says he wants to be president of the United States. Now Rush Limbaugh doesn't need any defense. But as far as I know, he's never called for deportation of illegal aliens but let me tell you. I certainly have not.

He is either - his people are either misinforming him or he's simply not informed and I think one of the primary characteristics of anyone seeking to lead this nation should be they're well informed and the other part of that is, which he obviously is not, and secondly, these people and referring to illegal aliens as 'them' in some sort of condescending way. I mean this is to me an atrocious moment for a senator who is trying to pander on the issue of illegal immigration.

Let me tell you what Senator Obama. May I take a moment and talk to Senator Obama directly?

BLITZER: You have 15 seconds. Go ahead.

DOBBS: Fifteen seconds. I raise you one on pandering Senator Obama. You say you won't send them all back? I wouldn't send any of them back. Now it's your turn.

BLITZER: Throwing the ball into his court.

DOBBS: Well you know he wants to pander. Let's do it right. He's taking half measures here.

BLITZER: We'll see. I know you're going to have more on this in an hour on "LOU DOBBS TONIGHT." We'll be watching, Lou. Thanks very much.

DOBBS: Appreciate it.