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What's Next for Eliot Spitzer?; Governor George Pataki Discusses Spitzer's Plight; Democrats & Racial Politics

Aired March 12, 2008 - 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: Happening now, resigned and disgraced. New York's Governor Eliot Spitzer calling it quits over a sex scandal. Now will the former prosecutor be prosecuted? And will his state suffer? I'll ask a former New York governor, George Pataki.
Plus, Barack Obama rejects the idea that his race got him where he is today. The former vice presidential nominee Geraldine Ferraro is defending her provocative remarks. Will Hillary Clinton pay a price for what Ferraro said? My interview with Barack Obama coming up.

And Mitt Romney is hinting, but is John McCain biting? The all- but-certain Republican nominee talks about his search for a running mate.

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

For the second time this week, Eliot Spitzer went before the cameras, his wife at his side, and apologized for letting so many people down. This time, he also offered his resignation as the governor of New York. His exit on Monday may defuse the political crisis over his alleged use of a high-priced prostitution ring, but his legal problems may not be going away any time soon.

Our Mary Snow is following this story. She's joining us now from Albany with what's next -- Mary.

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, as for what's next on his legal front, a rare statement today from the U.S. attorney's office saying that no deal had been reached between prosecutors and Eliot Spitzer. There has been a lot of speculation that perhaps his resignation would be used as a bargaining chip for -- in exchange for no charges, but again, the U.S. attorney's office saying no deal. As for the political future, transition teams are at work here in Albany on a day that some here are just calling surreal.

(BEGIN VIDEOTAPE)

SNOW (voice-over): With his wife Silda by his side, New York Governor Eliot Spitzer, the man once known as "Mr. Clean," addressed his fall from grace.

GOV. ELIOT SPITZER (D), NEW YORK: In the past few days, I've begun to atone for my private failings with my wife, Silda, my children, and my entire family. The remorse I feel will always be with me.

SNOW: Spitzer did not specifically address accusations he spent thousands of dollars on a high-end prostitution ring for several months.

SPITZER: To every New Yorker and to all those who believed in what I tried to stand for, I sincerely apologize.

SNOW: And he offered his resignation after 14 months as governor.

SPITZER: I look at my time as governor with a sense of what might have been. There is much more to be done, and I cannot allow my private failings to disrupt the people's work.

Over the course of my public life, I have insisted, I believe correctly, that people, regardless of their position or power, take responsibility for their conduct. I can and will ask no less of myself. For this reason, I am resigning from the office of governor. At Lieutenant Governor Paterson's request, the resignation will take effective Monday, March 17, a date that he believes will permit an orderly transition.

SNOW: David Paterson was home at the time of the announcement. He released a statement saying, "Like all New Yorkers, I am saddened by what we have learned over the past several days. My heart goes out to him and his family at this difficult and painful time."

The 53-year-old former state senator from Harlem will become the state's first African-American governor. Paterson received praise from Democrat and Republican lawmakers, including Joe Bruno. The senate Republican leader now becomes the lieutenant governor. Bruno is well known in New York politics. He and Spitzer were fierce political enemies.

JOE BRUNO (R), NEW YORK SENATE MAJORITY LEADER: As for Eliot Spitzer, my heart goes out to his wife and to his family at this time. He must deal with his own problems in his own way, but it is now time for us and all New Yorkers to move forward.

(END VIDEOTAPE)

SNOW: Lawmakers stressing the need to look ahead. David Paterson, again, becoming the governor on Monday. And Wolf, even though lawmakers are looking ahead, they say they are still in shock over what has happened over the last 48 hours, and they describe the capitol really coming to a standstill as everyone watched Eliot Spitzer speaking from New York.

BLITZER: They are saying nice things about the lieutenant governor who will become, as you point out, the governor on Monday, David Paterson. It looks like there seems to be a little bit more cooperative spirit in working with him. He doesn't necessarily bring the friction that Eliot Spitzer clearly has brought to the state capitol. SNOW: Yes. You know, across the board, lawmaker after lawmaker had very positive things, as you said, about David Paterson. And I was talking to one Democratic assemblyman who said that the time for, in his words, confrontation, is over, and said that the tone really needs to be changed. Because it was so confrontational in the time that Eliot Spitzer was governor, and there really seems to be a looking forward to working together and more cooperation.

BLITZER: Mary Snow in Albany for us. Mary, thanks very much.

Let's talk about what lies ahead, what has just happened involving the New York governor, Eliot Spitzer, a successor in New York politics. Joining us now on the phone is the former New York governor, George Pataki.

Governor, thanks very much for joining us.

VOICE OF GEORGE PATAKI (R), FMR. NEW YORK GOVERNOR: Thank you, Wolf. Nice being on.

BLITZER: Let's talk about your reaction. Are you happy this has played out the way it has?

PATAKI: Oh, I don't think anybody's happy. This is a tragedy. It's a tragedy for New York State, for the Spitzer family, and for those of us who think public office is so important.

But it was a necessary day. It had to happen. We need to have confidence in the integrity of the governor of the state of New York. And we will now have, as of Monday, David Paterson as governor.

And I can tell you, he's a person of intelligence, integrity, someone I served with in the legislature and as governor. And he gives me great cause for hope that the challenges facing New York will be met well.

BLITZER: Did you have any clue about Spitzer? Did you have any notion that this could happen?

PATAKI: Wolf, I was as shocked as anybody else. This just came totally out of the blue. And I don't think anyone had any inkling at all that this was possible.

And when it happened, obviously without the trust of the people, it's impossible to lead the state. And the governor has to lead the state. So today is a sad day, but it was a necessary day, and now we move forward.

BLITZER: Here's a technical question that only you can answer, given you've served as governor of New York. Aren't there always state troopers who protect the governor, who are always with the governor? How does this happen when you're supposed to be always protected by state troopers?

PATAKI: You know, Wolf, I don't understand that. The 12 years I was governor, you know, whether I was out running in the woods or just sleeping at home, there was a trooper somewhere very nearby. But you know, that's something for others to answer. It's just something I find hard to understand.

BLITZER: What about the political fallout, first in New York and then nationally? Do you see any from this?

PATAKI: I think this is a personal tragedy and the failings of a human being, and not reflective of the political system, or certainly any political party. And I think we just have to understand that individuals in public office are very important, but they are just that, they're individuals. And when their failings from time to time are disclosed, it shouldn't reflect poorly on public officials or on the nature of our system.

The vast majority are out there serving hard with integrity in both parties, and I just think we have to understand that this is a personal tragedy. It's a tragedy for the people of New York, who now have to go through this tough transition, but New Yorkers have been challenged before by far greater challenges like September 11th, and I'm confident that Governor Paterson will lead the state, lead the state well, and we will be fine.

BLITZER: Governor, thanks very much for joining us.

PATAKI: Thank you, Wolf. Nice being on with you.

BLITZER: Thank you.

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

JACK CAFFERTY, CNN ANCHOR: Last night on this program we were talking about Geraldine Ferraro's racial remarks about Barack Obama. I mentioned that I had known the congresswoman for a long time and that she used to have more class than that. Apparently, I was mistaken.

Thanks to some excellent digging by Ben Smith at politico.com, we find out that the woman who helped Walter Mondale lose 49 states in 1984 has been saying offensive things about blacks for longer than I had realized. In a piece that originally appeared in "The Washington Post" back on April 15, 1988, written by our friend, Howie Kurtz, Ferraro said this: "If Jesse Jackson were not black, he wouldn't be in the race," which sounds a lot like what she's saying about Obama now, that if he was a white man, he wouldn't be in this position.

This kind of rhetoric ought to be beneath a former congresswoman and the first woman ever to run for vice president on a major ticket. Sometimes you can learn more about someone by watching what they don't do than by observing the actions that they actually take.

For example, when Samantha Power, a top adviser to Barack Obama, called Hillary Clinton a "monster," she was gone the next day. Yet, Geraldine Ferraro makes racial remarks about Barack Obama and retains her seat on Hillary Clinton's campaign finance committee. She also refuses to apologize. This is the kind of ugliness that threatens to tear the Democratic Party apart.

So here's the question: Should Hillary Clinton remove Geraldine Ferraro from her campaign finance committee for her remarks that Ferraro made about Barack Obama?

You can go to CNN.com/caffertyfile and post a comment on my blog.

BLITZER: Jack, thank you for that.

Something else for the Democrats to spar about, Hillary Clinton and Barack Obama squaring over possible revotes in Florida and Michigan. We're going to tell you what they're saying right now.

Plus, it might be called a Republican dream ticket. Is John McCain considering Mitt Romney as his vice presidential running mate?

And it's hard to imagine what she's going through. We're going to take a closer look at Eliot Spitzer's wife Silda and how she's responding to the scandal.

Stick around. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Barack Obama has yet another primary victory under his belt today after a very impressive win in Mississippi. Now he and Hillary Clinton are looking ahead to the April 22 primary in the delegate-rich state of Pennsylvania, but for a second day the Democratic race has taken a detour into some uncomfortable territory. That would be the politics of race.

Let's bring in our senior political correspondent, Candy Crowley. She's watching this story for us in Chicago.

As Jack just mentioned, Candy, it involves some controversial remarks from Geraldine Ferraro.

CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT: Absolutely. And today, Barack Obama responded to them. He said this is a kind of slice-and-dice politics that in fact keep America from actually getting solutions to the very real problems that are out there. But he seems quite willing to pass this off as the remark of a single individual, as opposed to a plot by the Clinton campaign.

(BEGIN VIDEOTAPE)

CROWLEY (voice over): As the combustible issue of race threatened to detour the '08 Democratic campaign, Barack Obama tried to cool it down.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: I don't think that there is a -- there is a directive in the Clinton campaign, let's heighten the racial elements in the campaign. I don't think that.

CROWLEY: Race is the fuse lit beneath the Democrat's road to the White House. Sometimes there's an explosion. Most notably in South Carolina.

The campaign trail seemed close to the danger zone again when Geraldine Ferraro, a fundraiser for and supporter of Hillary Clinton, was quoted saying this of Obama's campaign success: "If Obama was a white man, 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."

Obama aides jumped on it, calling the remark inappropriate, offensive, divisive, part of an insidious pattern of negativity. Camp Clinton fired back implying the Obama campaign is the one injecting race into the conversation with "...politically calculated attacks..." Clinton stepped into the ruckus with far less edge, but with a response some Obama supporters found tepid.

SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: Well, I don't agree with that. And I think it's important that, you know, we try to stay focused on the issues that matter to the American people.

CROWLEY: By today, on ABC's "Good Morning America," Ferraro was pushing back.

GERALDINE FERRARO, FMR. VICE PRESIDENTIAL CANDIDATE: And I'm hurt, absolutely hurt, by how they have taken this thing and spun it to imply that in any way -- in any way I'm a racist.

CROWLEY: Obama says no one suggested Ferraro was a racist, nor does he think that was her intent. Choosing words carefully, he settled on ridiculous.

OBAMA: The notion that it is of great advantage to me to be an African-American named Barack Obama in pursuit of the presidency I think is not a view that has been commonly shared by the general public.

(END VIDEOTAPE)

CROWLEY: Obama says if he cannot woo voters by himself, well, then that's on him, not on his race -- Wolf.

BLITZER: I'll have my interview with Barack Obama, Candy, coming up later here in THE SITUATION ROOM.

Thanks very much.

Let's get an update now in the all-important delegate count in the presidential contest. Here's CNN's up-to-the-minute estimate. Barack Obama leads with a total of 1,611 delegates. Hillary Clinton has 1,480. John Edwards, who's dropped out, has 26 -- 2,025 delegates are needed to clinch the nomination, 207 of Obama's delegates, by the way, are the so-called superdelegates, party officials who could switch sides if they want to.

Clinton has 237 superdelegates. She is down one since Clinton supporter Eliot Spitzer resigned, lost his distinction as a superdelegate -- 251 superdelegates still have not backed a Democratic candidate. That's by our estimate.

Hillary Clinton is making a new push today to try to make sure delegates from both Florida and Michigan will count toward deciding the Democratic nominee. She won primaries in both states, but those delegates are not being counted because of Democratic National Committee rules. She says voters there should not be disenfranchised because the party stripped Florida and Michigan of their delegates as punishment of moving up their primaries.

(BEGIN VIDEO CLIP)

CLINTON: The results of those primaries were fair and they should be honored. Over the last few weeks, there's been a lot of discussion about what we should do to ensure that the voters in Florida and Michigan are counted. Well, in my view, there are two options -- honor the results or hold new primary elections.

(APPLAUSE)

I don't see any other solutions that are fair and honor the commitment that two and a half million voters made in the Democratic primaries in those two states.

(END VIDEO CLIP)

BLITZER: Barack Obama's campaign is expressing some reservations today about the prospect of holding revotes by mail, saying the process would be complicated. Obama himself told me last night he's open to finding a compromise.

(BEGIN VIDEO CLIP)

OBAMA: We believe that there should be some way of arriving at a fair settlement that respects the fact that there were rules in place but also makes sure that the Michigan and Florida voters are seated.

(END VIDEO CLIP)

BLITZER: Coming up, we're also going to have a full report on the Florida and Michigan dilemma. That's coming up as well.

John McCain is today back in the state that set him firmly on the path to the Republican presidential nomination. That would be the state of New Hampshire, where McCain's primary win represented a remarkable, very impressive comeback. Dana Bash is back in New Hampshire, and she's watching this story for us.

It seems almost like a victory lap for Senator McCain, but there are challenges, serious challenges, and reminders of that that he's facing -- Dana.

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: You're absolutely right, Wolf. This definitely was a trip of nostalgia. He was trying to make the point, according to his campaign aides, that he intends to approach this general election the same way he did the primary, and use the tools that he got here in New Hampshire, those town hall meetings, in order to really keep what he called a conversation going with the voters throughout the fall campaign. But even as he did that, there was a reminder of the challenges that he does have.

When he arrived here, he arrived to protesters outside, people holding signs saying that he is McSame (ph), or that he -- they were saying also that "Bush/McCain, more of the same," trying to make the point at least -- these are clearly Democratic protesters -- that they think he would simply provide a third Bush term.

The other thing that was very interesting, even as McCain tried to take a walk down memory lane here, is that he clearly -- a story that has been in the newspapers has clearly gotten under his skin. And that is a suggestion that -- or actually news that some of his campaign aides did some lobbying work for Airbus, and Airbus just recently got a contract -- it's been controversial -- a contract for a tanker. And that contract happened, it was a bidding process that happened in part because John McCain pushed for an open bidding process.

So McCain clearly is very upset at a suggestion that he did that because of any connection to people on his staff who might have worked for one of the big companies like Airbus. Listen to what he said.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: The rather bizarre aspect of it is that I killed off a program that was going to cost the taxpayers an additional $6.2 billion. Executives went to jail. CEOs were fired because of a corrupt practice that I fought against and fixed. And I have a long record of fighting against the special interests. I'm proud of that record.

(END VIDEO CLIP)

BASH: So there you hear John McCain, unsolicited, unsolicited, coming out talking to the press and making clear that he pushed for this controversial contract, or at least pushed for an open bidding process that led to Airbus, a non-U.S. company, getting this contract because he felt that was the right thing to do. And also making the point that the paper trail suggests that these people who work for him, they actually, at least for the most part, were not officially lobbyists for Airbus until after he first got involved with this process -- Wolf.

BLITZER: Dana, what's all this talk about McCain/Romney, a possible ticket? What's going on?

BASH: What's going on, Wolf, is that Mitt Romney last night suggested that he would be honored to be on a ticket with John McCain, saying that there are no hard feelings. That clearly was a very interesting kind of comment from somebody who used to be his bitter, bitter rival. Well, today, John McCain was asked about that on his plan, and he had a little bit of fun with it. Take a listen.

(BEGIN VIDEO CLIP)

MCCAIN: I was watching his interview last night. I got that impression, yes.

UNIDENTIFIED MALE: Have you started thinking about that yet?

MCCAIN: We're just starting the process. You know, the mechanics of the process, just beginning that.

(END VIDEO CLIP)

BASH: So there, clearly, John McCain suggesting that he thought Mitt Romney might have been asking for -- asking to be on the ticket with him.

It was really interesting, Wolf. Here in New Hampshire, the neighboring state of the state that Mitt Romney obviously was the governor of, he was asked two or three questions by local reporters about whether or not he would consider Romney. And just like he did on the plane, he said that he's not even there yet.

One interesting tidbit, John McCain is heading to Boston right now for a fundraiser. And Mitt Romney won't be there, though. Apparently, it's his birthday. So he sends his regrets.

BLITZER: Happy Birthday.

Thanks very much, Dana, for that.

Would you pay for thousands of dollars for a teapot museum or millions of dollars for an indoor rainforest? Well, Congress has. It's paid for it with our taxpayer dollars.

What's happening in the presidential race though could put a potential stop to all of this. We have a report coming up.

And crude reality. Oil prices hitting yet another record, giving many people fears about where gas prices are heading next.

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

(COMMERCIAL BREAK)

BLITZER: Happening now, he says he's deeply sorry, but federal prosecutors may not be in a forgiving mood. Eliot Spitzer's resignation will save him some more political pain, but it may not necessarily save him from legal problems.

And while some people are outraged over this scandal, others are outraged it's actually become a big deal. They say the allegations certainly are embarrassing, but they -- they wonder if it's too much.

And the abrupt resignation of the commander of the U.S. military forces in the Middle East has some people asking this question: Does the White House tolerate dissent?

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

His good deeds could not save him from scandal. The weight of Eliot Spitzer's alleged involvement in a prostitution ring was too much to bear, causing his stunning political collapse.

Yet, it's also affecting his wife. When Spitzer was sworn in just over a year ago, they were the picture of youthful enthusiasm. Looking at the couple right now, though, some say it's clear the scandal has taken a heavy toll on Spitzer's wife.

CNN's Brian Todd is joining us now.

Brian, you're taking a closer look at what is going on. And what are you picking up?

BRIAN TODD, CNN CORRESPONDENT: Well, right, Wolf. And, specifically, we're looking at how Silda Wall Spitzer helped him deal with this scandal. It appears that she played a critical role behind the scenes and in front of the camera.

(BEGIN VIDEOTAPE)

TODD (voice-over): By his side when the news broke on Monday and when he announced his departure as governor less than 48 hours later.

SPITZER: In the past few days I have begun to atone for my private failings with my wife Silda, my children and my entire family.

TODD: Why did Silda Wall Spitzer remain stoically next to him through it all? Dina Matos McGreevey, whose husband resigned as New Jersey governor after admitting an extramarital affair with a male employee, stood in the same spot, and says it's hard to criticize Mrs. Spitzer if you haven't been through it.

DINA MATOS MCGREEVEY, ESTRANGED WIFE OF FORMER NEW JERSEY GOVERNOR JIM MCGREEVEY: I loved him. I had a daughter that, you know, one day -- will one day look back and recognize that this was one of the most difficult experiences in her father's life. And I wanted her to know that I was there for her father. So, we all do it for very personal reasons.

TODD: "The New York Times" and a Spitzer biographer say, after the news broke of Eliot Spitzer's alleged links to a prostitution ring, Mrs. Spitzer urged her husband not to resign.

BROOKE MASTERS, AUTHOR, "SPOILING FOR A FIGHT": Her first reaction was, let's stay and fight. You wanted to be governor because you wanted to do something and accomplish something. Stay and fight.

TODD: Our efforts to reach Silda Wall Spitzer were not successful. But a friend tells us, when he e-mailed the Spitzers to show support, she responded in a very generous manner, indicating she wasn't in a bunker mentality.

Silda Wall Spitzer was a successful attorney who left her practice to raise children and support her husband's political career. Associates and journalists who have covered the family describe her as a private person, never totally comfortable with the rough-and-tumble of her husband's job, but they say she did adjust. MASTERS: The change you could see from, say, the beginning of the campaign to maybe a year in was really amazing. I mean, she really forced herself to become a really good public speaker. She's really charming.

(END VIDEOTAPE)

TODD: And on those first hours after the news broke, other observers say that, as an attorney, she may have thought his bargaining position with federal authorities would be stronger if he would have remained as governor.

But, as the reported evidence piled up, it's not clear how that all turned out. The U.S. attorney's office says no agreement has been reached with Governor Spitzer relating to possible prosecution and his resignation -- Wolf.

BLITZER: Brian Todd, thank you for that.

My next guest says Spitzer's private problems should have never caused such a huge public spectacle. Joining us now is professor Alan Dershowitz of the Harvard Law School.

Professor Dershowitz, thanks for coming back.

ALAN DERSHOWITZ, AUTHOR, "PREEMPTION: A KNIFE THAT CUTS BOTH WAYS": Thank you.

BLITZER: You didn't think he should resign. He didn't take your advice. What do you think about what happened today?

DERSHOWITZ: Well, I certainly don't think he should have resigned, and I surely don't think he should have resigned without a deal. I think what's happened is, the federal government has decided to pile on these incredibly elastic statutes.

A friend of mine talks about them as being shaped like Silly Putty. You can -- you can frame them around almost any act of sexuality that involves payment, and any irregularities, in fact, even if they don't amount to anything, can become 10-year or five-year criminal offenses.

I suspect that the driving motivation are not his dropping poll numbers or his unpopularity in New York. I think it's the fact that he fears a criminal prosecution. And his lawyers, for better or worse, advised him that probably his chances increase of getting a better deal if he resigns.

(CROSSTALK)

DERSHOWITZ: I don't know enough about it to say that that's wrong, but I -- my instincts are that to go -- would have been to go the other way.

BLITZER: He was your student at Harvard Law School. And she was your student at Harvard Law School. So, they presumably have excellent legal advice. They have got some of the best lawyers, I take it -- he has some of the best lawyers in New York helping him, right?

DERSHOWITZ: Right, and the same law firm that made the deal for Spiro Agnew to get him out of very serious predatory criminality, bribery, that kind of thing, by giving up his vice presidency of the United States.

So, the law firm, Paul, Weiss, is a superb law firm. The lawyers the are representing him are excellent lawyers. Lawyers have different approaches and different styles.

His chief counsel is a former U.S. attorney. They're used to going in and kind of asking for a deal. Other lawyers are -- try to use as much leverage as they can to demand a deal, to try to have equal power on both sides. You almost never do when you're bargaining with the federal government.

But different lawyers have different approaches to this kind of problem, and I'm not going to second-guess the approach he made. I just hope it works out well for him. The idea of somebody actually going to jail because he went to a prostitute in Washington, D.C., is preposterous.

BLITZER: Well, that's not necessarily the charge that they were looking at. We spoke to another one of your former students, Jeff Toobin, from the Harvard Law School...

DERSHOWITZ: Right.

BLITZER: ... our senior legal analyst, and this whole notion of structuring or concealing the transfer of funds, he disagrees with you on the potential ramifications, legal problems that Spitzer could face.

Listen to what he --

DERSHOWITZ: Well --

BLITZER: Listen to what Toobin said. Listen to this.

DERSHOWITZ: Sure. Right.

(BEGIN VIDEO CLIP)

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: Dershowitz is clearly right. That was the intent of the law. But he's wrong that it can't be applied elsewhere. And it, in fact, has been implied -- applied elsewhere to all kinds of white-collar criminal investigations.

It is, in fact, a routine part of white-collar criminal investigations to see if -- if transactions were structured.

(END VIDEO CLIP)

BLITZER: You had suggested it was -- the intent was to go after drug dealers or mobsters, not necessarily a guy who -- who spent the money on a prostitute.

DERSHOWITZ: There's no question about that. I don't disagree with Jeffrey that it could be used that way. It would be absolutely wrong to use this to go after somebody who had these financial maneuvers in order to keep his wife from learning about his expenditure of money. That's just not the purpose of the law. And federal law should be narrow. Most criminal law should be state law.

The idea that the federal government, octopus-like, comes in and takes over every financial transaction, every sexual transaction, Thomas Jefferson would be turning over in his grave. This was supposed to be a federal system, where law enforcement is left to the states, and the only thing the federal government does are going after the kind of major violators that involve massive interstate commerce or dangers to the United States.

A guy going to Washington, and having a hooker, and using bank accounts to keep it from his wife, that's just not what Congress intended.

BLITZER: Well, let me ask you a final question, professor. They say $80,000 may have been moved in the course of -- over several -- several months.

And, potentially, this structuring charge, if it's put forward, carries with it a crime -- a punishment of five years in jail. Would you be stunned, would you be surprised, if Eliot Spitzer winds up in jail?

DERSHOWITZ: Absolutely. It would be outrageous for this to happen. People's financial accounting is none of the federal government's business, unless it's part of concealing drug proceeds, concealing something else.

It's designed primarily to affect money that you deposit in the bank, not money that you withdraw. If it's your own money, but you're using it for an illicit purpose of committing primarily state crimes, it's just not the way federal law should be used.

BLITZER: Alan Dershowitz of the Harvard Law School, thanks, professor, for coming in.

DERSHOWITZ: Thank you.

BLITZER: It's taxpayer dollars, but it also is their pet projects -- lawmakers spending billions of -- billions of dollars on things like a teapot museum or an indoor rain forest. But they -- that may soon be coming to an end, partly because of the presidential race. We will explain the latest developments.

And Mitt Romney says he would be honored to be picked as John McCain's number two. But would McCain grant Romney that honor? We will discuss in our "Strategy Session."

And Barack Obama speaks with CNN. Is he worried that the increasingly nasty rivalry between him and Hillary Clinton will hurt whoever gets the nomination?

My interview with Barack Obama, that's coming up -- right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: It's taxpayer money, but you don't always control exactly where it's spent. Now there's a push to ban what some people call a huge waste of those funds.

Let's bring in CNN's Kate Bolduan. She's on Capitol Hill in Washington.

KATE BOLDUAN, CNN CORRESPONDENT: And it a sensitive subject, Wolf. Earmarks, you said -- and they're also called pet projects. But this is one of those rare cases here on Capitol Hill where it's not divided down party lines, the high-profile vote, one bringing presidential candidates even back here. And you will find there are supporters and opponents on both sides of the aisle.

(BEGIN VIDEOTAPE)

SEN. JIM DEMINT (R), SOUTH CAROLINA: Funding the world toilet summit for $13.5 million.

A study to determine if poultry litter can generate electricity, $225,000.

Cowgirl Hall of Fame, $90,000, indoor rain forest, $50 million.

BOLDUAN: A long list of pet projects, billions of dollars in so- called earmarks, critics say they are a waste of taxpayer money and are calling for a one-year ban.

DEMINT: When you got a problem, when you got an addiction, you have to agree you have a problem, and you have to get into rehab. Congress needs to get into rehab.

BOLDUAN: More than $18 billion went to nearly 13,000 congressional earmarks this year, according to watchdog group Taxpayers For Common Sense. Opponents have been tried before to curb earmark spending, but now they say they have presidential politics on their side.

MCCAIN: I want to eliminate this wasteful and outrageous earmark and pork barrel spending.

BOLDUAN: Senator John McCain is a longtime critic of earmarks. Senators Hillary Clinton and Barack Obama have recently signed on as well, even though they both have directed tens of millions of dollars in earmarks to their home states.

But, even with that support, it's shaping up to be a showdown in Congress. Opponents of the ban include powerful Democrats and Republicans. SEN. JUDD GREGG (R), NEW HAMPSHIRE: I think an outright abolition of earmarks is an abolition of the authority of the Congress.

BOLDUAN: They also say anti-earmarkers only point out the worst abuses, and a ban could throw out good projects, along with the bad.

SEN. RICHARD DURBIN (D), ILLINOIS: When it comes to projects around my state and the rest of the nation, I don't think it's unreasonable for Congress to have some input in that discussion.

BOLDUAN: Democrats insist they have already slashed the number of earmarks since they took over Congress, and require full disclosure of spending requests.

SEN. HARRY REID (D-NV), MAJORITY LEADER: If there is a congressionally directed spending, the senator that asked for that name is listed. You have to list there's no conflict of interest, how much money. It's really in some detail.

(END VIDEOTAPE)

BOLDUAN: Now, so what does this mean for taxpayers? Well, some lawmakers say this is a way to regain their confidence in Congress, while other lawmakers say this would mean the loss of thousands of home state projects that are so critical to lawmakers' communities -- Wolf.

BLITZER: All right, Kate, thanks. Stay on top of this story for us on the Hill -- Kate Bolduan reporting.

In our "Strategy Session": John McCain seems to think Mitt Romney's interested -- and he is -- but should McCain be interested in Mitt Romney?

(BEGIN VIDEO CLIP)

MCCAIN: Millions of Republicans voted for him. And, so, obviously, I think he would be a consideration for a lot of different roles in a Republican administration.

(END VIDEO CLIP)

BLITZER: Would a McCain/Romney ticket be the winning ticket -- winning ticket, that is?

And Barack Obama says the Clinton campaign is focusing on what divides the two sides. But is either camp really practicing the politics of division?

Peter Fenn and John Feehery, they're standing by for our "Strategy Session" -- right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Mitt Romney wants John McCain to know, since McCain is looking for a vice presidential candidate, he is available. That tops our "Strategy Session" today.

Let's discuss with Democratic strategist Peter Fenn and Republican strategist John Feehery.

John, you're a Republican. What do you think about a McCain/Romney ticket?

JOHN FEEHERY, REPUBLICAN STRATEGIST: Well, you know, I think Mitt Romney brings a lot of strengths to the ticket. First of all, he's good on the economics. He's a young guy. He's vigorous.

He has, as John McCain said, got a lot of votes in the primary. And I think he brings a lot of assets on the campaign. Also, he brings some liabilities, one -- chief of which would be the fact that McCain and Romney don't really get along that well.

And, you know, that's been overcome in the past with Kennedy and Johnson. And perhaps it can be overcome this time. But there's a lot of other good vice presidential candidates out there. And I don't think McCain is going to make his choice known for quite a while.

BLITZER: I don't think any of us will forget that debate out in California at the Reagan Library, where they exchanged some nasty words.

Despite that, Mitt Romney said this last night. He said, "I think any Republican leader in this country would be honored to be asked to serve as the vice presidential nominee, myself included."

Peter, what do you think?

PETER FENN, DEMOCRATIC STRATEGIST: Well, he didn't spend $40 million of his own money for nothing, Wolf. Look, of course, he would like to be vice president. Running for vice president is a little hard to do, though. Another Massachusetts governor years ago, Chub Peabody, tried it. Didn't do too well with it.

But I think -- I think, basically, John's right, that one of the things he does bring to the table here is economics, Mr. Fix-It on economic issues. And I think that is -- is something that, no question, that a candidate who says he doesn't know much about economics needs if that is going to be the number-one issue before the American people in November.

BLITZER: John, what would be a stronger ticket, McCain/Romney or McCain/Huckabee?

FEEHERY: Boy, well, that's a tough one. You know, I think what McCain brings -- I mean, Huckabee gives you is real strength in the South to give McCain the opportunity to really go after the rest of the country. What -- what Romney brings with you is that strong economic voice that McCain sorely needs, as Peter points out.

And I think both would be equally strong in their own ways, but they would have different attractions. You know, that's a real tossup, as far as I'm concerned. BLITZER: Let me move on and ask Peter about this dust-up involving Geraldine Ferraro, the whole issue of race coming in.

I want to play this little clip, Peter, of what Obama said today. And then we will discuss.

(BEGIN VIDEO CLIP)

OBAMA: I do think that -- that the Clinton campaign has talked more during the course of the last few months about what groups are supporting her and what groups are supporting me.

(END VIDEO CLIP)

BLITZER: Suggesting that there's a -- could be potentially a -- what, a racial element involved. I mean, what do you make of this?

FENN: I will tell you, Wolf, I absolutely love Gerri Ferraro. She was one of my very first clients when I became a consultant, after working on the Hill.

But I will tell you, I think that it is time for a lot of these surrogates, a lot of these advisers, to zip it. I mean, they're creating more problems for their candidates than they're helping in some of these cases.

And I think Barack Obama, on this one, is absolutely right, that this -- there's no place for this kind of discussion in -- in this campaign. I You know, mean, Gerri said, look, if I were -- if I were a man, and my name was, you know, Gary Ferraro, I never would have been chosen. Well, that was true when she ran.

But that doesn't mean that, because he's an African-American, that that's the basis of his candidacy. It is not. So, I think -- I think this is -- this is not helpful. It's not -- it's not good for Democrats or Republicans.

And I -- you know, I have to hand it to John McCain's campaign manager, Rick Davis, who said in a memo to all of the staff today, lay off this stuff. I don't want any more personal discussion. Anybody who does this kind of stuff is going to be out of there.

BLITZER: What do you --

FENN: We should do the same thing on the Democratic side.

(CROSSTALK)

BLITZER: But, looking down the road, if Obama were to get the nomination, facing McCain, McCain could maybe control his own team, his own staff, but he can't control all the Republicans out there, John, who are going to support him.

FEEHERY: Well, he can't. And I don't think he can be expected to. But the fact of the matter is, right now, this kind of discourse really hurts Obama. If you look at his votes, his votes have really been diminishing amongst white Americans.

He's got to get back on talking about issues that -- that actually people care about. And this surrogate bashing on both sides has been very destructive for the Democrats and actually very helpful for Republicans, which -- which I kind of like.

BLITZER: We will leave it there, guys. Thanks for coming in.

FENN: Thanks.

BLITZER: The man known as Dr. Death apparently has his sights set on public office. We are going to tell you what Jack Kevorkian might be doing next.

And he faced the music by resigning as governor, but will Eliot Spitzer face criminal charges? Our justice correspondent, Kelli Arena, is standing by to tell us what she's learning.

Stick around. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Checking our political ticker, in Michigan, assisted suicide advocate Jack Kevorkian, once dubbed Dr. Death, plans to run, yes, for Congress.

An associate says Kevorkian hopes to run without a party affiliation for a seat representing Detroit's suburbs. He needs to collect 3,000 signatures to get on the ballot. Kevorkian was released from prison last year and remains on parole, but that would not prevent him from seeking office.

Remember, for the latest political news any time, you can check out CNNPolitics.com.

Jack Cafferty is here. He has got "The Cafferty File" -- Jack.

CAFFERTY: The question this hour is: Should Hillary Clinton remove Geraldine Ferraro from her finance committee for the remarks that Ferraro made about Barack Obama?

Ron writes from Pennsylvania: "The whole Clinton campaign should be dumped for race-baiting. Ms. Ferraro's comments were those of a country club racist, the type who goes to all of the charity events for the underprivileged, but believes that every black who ever got ahead did so through affirmative action. They stand around the bar at the club complaining about blacks who are getting into the Ivy League schools, while good white kids can't."

Rocky in Texas: "Don't think so. She only said what everyone else already knows, but is too politically correct or afraid to admit. If you tell the truth, you are somehow a racist. And, if you're a Democrat and aren't supporting Obama, you're all of a sudden a racist. This primary is completely about race and, to a smaller extent, about gender." Marion in Iowa writes: "It's telling that, while one of Obama's advisers referred to Hillary as a monster and was fired within a day, Hillary has taken no action against Ferraro for her belittling racial comments toward Obama. To merely say these comments were unfortunate doesn't cut it. It was a hurtful reflection on all blacks. And, if Hillary was sincere in caring about black people, other than for her own gain, she would feel this hurt immediately."

Angelo in Simi Valley, California: "Ferraro's comments are an outrage. Making statements like that only reveals the latent racism that exists just beneath the surface in our society. If Hillary had any decency, she would not only denounce and reject Ferraro's statements, but remove her from her campaign immediately."

Jan writes: "Hillary Clinton has already said she disagrees with the statement. What do you want, blood? The media are the ones who have made this a race and gender issue. Come on, Jack, fess up. I didn't hear this hue and cry from you when all the nasty things were said about Hillary. Ferraro has a right to her opinion."

And one of the best we have gotten in a long time. Jack (sic) writes from Hattiesburg, Mississippi: "You are old and tired and an angry man. You belong with those two old men who sit in the balcony of 'The Muppet Show,' and continually gripe about everything they view from their seats in the balcony. Shouldn't you be playing shuffleboard in Florida or something? I told my wife, if I ever get as old as Jack Cafferty and start mumbling nonsense, just put me away in a home."

(LAUGHTER)

BLITZER: Friend of yours.

(LAUGHTER)

BLITZER: Jack, thanks very much. Stand by. We have got news coming up.

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

Happening now, breaking news. The governor of New York resigns in disgrace, a man who built his reputation on law and order toppled by a prostitution scandal. And Spitzer is hardly alone. We are going to show you other political careers ended by similar scandals and why some say it's no big deal.

Plus, a major new development on safety concerns grounding dozens of planes belonging to one of the country's busiest airlines.

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