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Obama's Auschwitz Mis-Claim Criticizes; MoveOn.org Ad Slams McCain; The Candidates and National Security; Floods are Feared After China Earthquake

Aired May 27, 2008 - 17:00   ET

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

WOLF BLITZER, CNN ANCHOR: To our viewers, you're in THE SITUATION ROOM.
Happening now, Barack Obama goes West, trying to turn some battleground states from red to blue. There are some skirmishes, though, along the way. We're going to update you on what's going on.

It's MoveOn.org versus McCain. But this time, the ad targets one of his key advisers, accusing him of lobbying for tyrants.

And it used to be that former presidents were seen and not heard, at least when it came to voicing open criticism. But now Jimmy Carter and Bill Clinton are changing that unwritten rule.

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

Barack Obama is facing criticism tonight for a remark he made about his uncle serving in World War II. Take a listen to this.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: I had a uncle who was one of the -- who was part of the first American troops to go into Auschwitz and liberate the concentration camps. And the story in our family was is that when he came home, he just went up into the attic and he didn't leave the house for six months.

(END VIDEO CLIP)

BLITZER: All right. Let's go to Candy Crowley. She's covering this story for us.

Candy, all right you, you heard what Barack Obama said about his uncle as a U.S. soldier helping to liberate Auschwitz. The Soviets, as a lot of historians, of course, know, liberated Auschwitz during World War II.

What's the Obama campaign now saying about this?

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: It's now saying that he got the name of the camp wrong. First of all, this was a great uncle, not an uncle, according to the Obama campaign. And he helped liberate Ohrdruf, which was a subcamp of Buchenwald, which was in Germany.

So they say that the story itself is true, but he got Auschwitz mixed up with this subcamp of Buchenwald, so it happened in Germany.

And that's -- obviously the Republicans have come out and hit Barack Obama, saying there's no way this could be true because the Soviets, as you mentioned, Wolf, indeed, were the ones that liberated Auschwitz. So this is now their clarification of what Obama said.

Interesting that when the RNC put out its reaction, what they said at the end was this just proves that Barack Obama is not ready to be commander-in-chief because of the misstatement of fact.

So, again, they're going to what they believe is John McCain's strength here in their criticism of Barack Obama. But again, the Obama camp says he got the name of the camp wrong.

BLITZER: All right. We're getting some new insight into his likely campaign, assuming he gets the nomination, against John McCain today.

What's the latest, Candy?

CROWLEY: Well, what's been interesting is you saw, again, John McCain today talking about nuclear proliferation. Yesterday, McCain hit Barack Obama on foreign policy again. There was the suggestion from Lindsey Graham, a McCain supporter, saying well, perhaps, John McCain should take Barack Obama to Iraq and show him what's going on there, this sort of effort by the McCain campaign to show Barack Obama is naive. Because what the McCain campaign wants to do is focus on foreign policy, because that is where John McCain's strength is.

Now what we saw today here in Nevada with Barack Obama is that he is focusing on domestic policy today, hitting McCain, first of all, on not having cameras show him with George Bush. But, second of all, saying that John McCain took three times to come up with some sort of mortgage crisis plan.

So what they're trying to do is, of course, establish their C.V. on economic issues. So what we're seeing is the two camps kind of struggling for the agenda here, Wolf.

BLITZER: Candy, stand by. We're going to be getting back to you.

Candy's is in Las Vegas for us covering this campaign.

It's MoveOn.org versus John McCain with a twist. The liberal group is out with a new ad slamming a key figure in the Republican's campaign.

Let's go back to Brian Todd. He's working this story for us, as well.

What's this ad all about -- Brian?

BRIAN TODD, CNN CORRESPONDENT: Well, Wolf, this is an ad that's been out for about a week now. MoveOn.org says it's about John McCain's judgment, but the ad goes right after one of his top advisers. (BEGIN VIDEOTAPE)

TODD (voice-over): As attack ads go, this is unusual -- going after not a candidate, but a campaign aide. Charlie Black, one of John McCain's top campaign advisers and a man who has done extensive lobbying, is the target of a new ad from the group MoveOn.org.

(BEGIN VIDEO CLIP FROM MOVEON.ORG AD)

UNIDENTIFIED MALE: But the firm of his chief political adviser, Charlie Black, made millions lobbying for the world's worst tyrants. Ferdinand Marcos, who executed thousands of his own citizens in the Philippines. Zaire's Mobutu, who publicly hanged his opponents and looted his country's vast mineral wealth. And rebel leader Jonas Savimbi, a mass murderer.

(END VIDEO CLIP)

TODD: Viewers are then asked to call the McCain campaign and tell them to fire Charlie Black.

Black did not respond to our calls and e-mails. The McCain campaign referred us to the Republican National Committee, which issued a statement saying: "MoveOn.org made a ridiculous ad that is backward looking and belittles the seriousness of this election. It's clear MoveOn.org does not want this election to be about who has the experience and judgment necessary to lead us into the future."

(END VIDEOTAPE)

TODD: The RNC also pointed out that MoveOn.org has endorsed Barack Obama. And we called Barack Obama's campaign. They say that they are not involved with this ad. And it, in fact, would be illegal if they were. MoveOn.org is a liberal activist group formed during the impeachment of President Bill Clinton.

Now, federal election law says that groups like MoveOn.org are not allowed to coordinate ads with campaigns. CNN checked the records of Black's former firm and found that it do work for those leaders. But as Howard Kurtz of "The Washington Post" and CNN's "RELIABLE SOURCES" pointed out to us, this ad only tells part of the story. At the time that Charlie Black's firm was doing work for Ferdinand Marcos, Mr. Marcos was a staunch ally of the U.S. And, of course, you don't see that in this ad.

Advocacy ads are, of course, designed to be one-sided by nature.

Very important to point out here that this ad has appeared on CNN's air since it was released, we think about this time last week. And also another very important note, Wolf. According to "The New York Times," which reported this last week, Charlie Black has stepped down as the chairman of his firm. He did so apparently in March and has apparently essentially recused himself of all the firm's business. It's very important to point that out, since he has no official connection with that firm right now.

BLITZER: Brian Todd, thanks very much for that.

Let's go back to Jack for "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: John McCain has a dilemma of presidential proportions. That is, how exactly should he use President Bush out there on the campaign trail?

The president's popularity ratings are at record lows. He's going to appear on behalf of McCain this week for the first time since formally endorsing him almost three months ago. Mr. Bush will attend three fundraisers over the next two days. The fundraisers will all be in private homes and they'll be no press allowed. McCain is expected to join the president tonight in Phoenix. That event was originally scheduled to be held in the Phoenix Convention Center. The "Phoenix Business Journal" reported that poor ticket sales and fear of anti-war protesters prompted the switch to a much smaller private home.

It's clear McCain is walking a fine line using President Bush to raise money without alienating too many Democrats and Independents. For example, the only on-camera appearance of President Bush and Senator McCain together is set to happen at the Phoenix airport sometime after 9:00 Eastern time tonight. That would be long after the network newscasts.

No pictures there.

McCain has gone out of his way in recent weeks to separate himself from President Bush on Hurricane Katrina, the Bush administration's arrogant foreign policy and President Bush's out of control spending. But on other issues, like tax cuts, health care and the war in Iraq, well, the two are just joined up at the hip, aren't they?

So here's the question: Will President Bush be a bigger asset or liability to John McCain's campaign for the White House?

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

BLITZER: Jack, thank you.

The presidential candidates and national security -- we'll see how they rate. The former White House counterterrorism adviser, Richard Clarke, joins us here in THE SITUATION ROOM.

Also, an airline pilot shocked by what he saw streaking past his plane. Now there's an investigation. We'll have the latest.

Plus, should ex-presidents be seen and not heard? Some suggest Bill Clinton and Jimmy Carter may be hurting their legacies.

Stick around. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: John McCain today called for the scrapping of a significant portion of America's nuclear arsenal. And that got a quick response from Barack Obama's campaign, which suggested the Republican was late to the nonproliferation game.

As the presidential hopefuls wrestle over nukes, terror, Iraq, a lot more, let's hear how they stack up on national security.

(BEGIN VIDEOTAPE)

And joining us now, the government's former top counterterrorism adviser, Richard Clarke. He's the author of a brand new book entitled "Your Government Failed You: Breaking the Cycle of National Security Disasters".

Mr. Clarke, thanks for coming in.

RICHARD CLARKE, FORMER U.S. COUNTER-TERRORISM ADVISER, AUTHOR, "YOUR GOVERNMENT FAILED YOU": Wolf, It's good to be back.

BLITZER: All right. We're going to talk about some of the specific complaints you raised in this book. But let's take the big picture right now. Of these three remaining presidential candidates who are out there, from your perspective, who would best at protecting the United States from terrorism?

CLARKE: Well, the point I'm trying to make in the book is that the president doesn't matter as much as the system, as the bureaucracy underneath him or her.

BLITZER: But the president can make a difference.

CLARKE: The president can make a big difference by making mistakes. But even with the best president in the world, if the system breaks down -- as it has been breaking down now for 10 years or more -- then you're going to have these national security disasters that we've had one after the other.

So what I'm trying to ask is, what is it about the system that's broken, because it's not just Bush. It's not just Cheney.

BLITZER: But is it -- is it your conclusion that McCain, Obama or Clinton -- it really doesn't make any difference who is the president?

CLARKE: It makes a big difference. But they are sufficient -- they're are not sufficient. They have to change the system. And any one of them could change the system in the right way -- bring back professionalism, get the politics out of national security. Unfortunately, so far in the campaign, we've seen the national security issues are becoming, again, as they were in 2004, politicized.

BLITZER: McCain says that the best way to deal with terrorism is right now in Iraq and to defeat al Qaeda.

Listen -- listen to a theme he often raises.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R)-AZ, PRESIDENTIAL CANDIDATE: To walk away now, before the Iraqi government can fully protect its people from ruthless enemies which strengthen al Qaeda...

(END VIDEO CLIP)

BLITZER: All right. Do you agree with him on that?

CLARKE: No, I don't.

I think the best thing that we could do to hit al Qaeda's attractiveness to the Muslim world is, in fact, to get out of Iraq in an orderly way over the course of the next two or three years. His idea of the end of his first term in 2013, still having almost half of our troops there, which is what I think he said, in 2013 most of our troops would come out, that's too slow. Our being in Iraq helps al Qaeda.

BLITZER: Because he says -- and he refers to audiotapes from Osama bin Laden and from Ayman Al-Zawahiri that says that the al Qaeda operation in Iraq right now is at the forefront, the center of their war against the U.S.

CLARKE: Well, that's, of course, what they say. But, in fact, al Qaeda in Iraq has been reduced to a relatively small operation. And al Qaeda in Iraq never was the al Qaeda that came after us on 9/11.

BLITZER: Wouldn't that be seen as a great victory for al Qaeda if the U.S. unilaterally withdrew and they could then do their dastardly deeds in Iraq?

CLARKE: Well, Wolf, some day the United States is going to withdraw unilaterally. And the question is, does it start next year or does it start five years from now or a hundred years from now?

BLITZER: And you want it to start now.

CLARKE: I'd like it to start as soon as possible, because I think our being in Iraq really strengthens the al Qaeda movement writ large. And the original al Qaeda movement is reconstituting itself in Pakistan and is once again training people, bringing them in from around the world, training them and sending them out around the world.

BLITZER: Here's what you write in your book, "Your Government Failed You": "Much of what we need to do dry up support for al Qaeda is stop doing some of the stupid things we have been doing."

And one of those stupid things is what?

CLARKE: Is the war in Iraq. But also, giving the impression to the Islamic world that the United States is at war with Islam. We're not fighting Islam. We're -- most of our friends in the region are Islamic. We need to make a very clear message to the Islamic world that the United States is not fighting Islam. And this whole notion of a global war on terror, it's not global. It's largely in the Islamic world. It's not usually a war, although it is in Afghanistan. And it's not terrorism we're fighting, it's the fundamentalist Islamic movements that use terrorism as part of their overall approach, most of which is ideological. And we have to beat them in the ideological struggle. Getting out of Iraq will help that.

BLITZER: You go through some specific recommendations. And you write this: "Even now, in 2008, we have not reduced well-known vulnerabilities in our commercial aviation system."

Like what?

CLARKE: The screening machines that we're using still don't pick up significant threats. We're not screening yet 100 percent on cargo. We're not using I.D. checks that we could be using, that would be far more reliable. You know, they've only recently begun really looking at your driver's license with a magnifying glass, because people were using fake I.D.s for years and they weren't catching it.

All of our homeland security vulnerabilities that we outlined after the 9/11 attack, every single one of them is still unfixed. Some of them have been addressed a little. But no significant vulnerability in homeland security has been removed, despite the fact that we've spent hundreds of billions of dollars on homeland security, most of it in pork barrel operations around the country.

BLITZER: That's a pretty depressing thought.

CLARKE: It's a very depressing thought. And what I'm trying to say in the book is government can work. It's worked in the past. But if you're going to make government work on national security issues, you've got to get the politics out of it. You've got to raise the professionalism of people involved in national security. We're spending a trillion dollars a year, Wolf, on national security. And yet time after time, on Iraq, on al Qaeda, homeland security, on cyber security, on global warming, things are disastrous.

BLITZER: And we're out of time. But very quickly, the fact that we have not had a major terror attack on U.S. soil since 9/11, what does that say?

We're just lucky?

CLARKE: It's, in part, luck. It's, in part, what the al Qaeda people think we're good at. Unfortunately, we're not as good as they think we are. And the terrorists could get into the United States again relatively easily. Millions of people cross our borders with Mexico and Canada every year undetected.

BLITZER: Richard Clarke's book is entitled "Your Government Failed You: Breaking the Cycle of National Security Disasters".

Mr. Clarke, thanks for coming in.

CLARKE: Thank you, Wolf. (END VIDEOTAPE)

BLITZER: They're rewriting the role of ex-presidents. But not everyone is happy with the way Jimmy Carter and Bill Clinton are doing it. We're going to be taking you inside the controversy.

Plus, Tony Soprano's role could help veterans. We have details of the "Sopranos" auction.

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

(COMMERCIAL BREAK)

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

Carol, what's going on?

CAROL COSTELLO, CNN CORRESPONDENT: Well, Wolf, get a load of this. A Continental Airlines' pilot got a big surprise when he saw a rocket whiz past his cockpit window. It happened yesterday morning shortly after takeoff from Houston. The plane wasn't damaged and did not change course. An FAA spokesman said it sounded like a model rocket. And they can fly as high as 40,000 feet. And, by the way, they are subject to FAA regulations. No sign of the rocket right now, though.

New home sales were up slightly last month, just over 3 percent, to 526,000. But that's still down 42 percent from the year before and the second lowest rate in 17 years. One analyst sums it up this way: "The momentum is down and the numbers are weak."

An all out battle is looming in tomorrow's Exxon Mobil shareholders' meeting in Dallas. Members of the founding Rockefeller family want Chairman and CEO Rex Tillerson to give up one of his jobs, with an independent director assuming the chairmanship. Tillerson has held both jobs since 2006 and he made $21 million last year.

Fans of the hit HBO series "The Sopranos" have the chance to bid on some mob mementos. Actor James Gandolfini is auctioning off 24 outfits he wore playing Tony Soprano. They're expected to fetch about $25,000, with all the proceeds going to a charity that helps wounded war veterans. Tony Soprano does have a heart -- Wolf.

BLITZER: Yes, he certainly does. Thanks very much.

I hope they raise a lot more money than that, though.

Barack Obama's camp is releasing plenty of information on his great uncle and his service in World War II after a misstatement by the candidate. We're going to have more on this story coming up.

Pointed jabs between Obama and McCain, and they're getting sharper. You're going to find out the latest. Who's winning their war of words right now.

And tens of thousands of people evacuated, as China's so-called quake lakes threaten catastrophic floods.

And there's an effort to ban one particular kind of toy in Iraq right now. You're going to find out why.

Those stories and a lot more coming up right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

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

Happening now, international condemnation of Myanmar's ruling junta, who are once again extending the house arrest of the opposition leader, Aung San Suu Kyi. The Nobel Peace Prize laureate has been confined for 12 of the last 18 years.

Also, Congressional investigators are questioning port security efforts. A new report says the Customs and Border Protection Agency is having problems verifying security practices designed to keep terrorists from smuggling weapons of mass destruction inside cargo containers.

And a small glitch for the Phoenix Mars lander. NASA had planned to unhook its eight foot robotic arm today, but communications problems are now interfering.

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

It's one of the world's most exclusive clubs and now Jimmy Carter and Bill Clinton seem to be rewriting some of those rules -- rules for ex-presidents.

Let's bring back Carol. She's looking at this story for us.

So what exactly are they doing that may be outside of those rules?

COSTELLO: Well, I guess they're being completely themselves and sometimes that's not a good thing. You know, past ex-presidents -- and I'm just talking modern day -- were kind of quiet; certainly, not controversial.

Those days are gone. It's kind of like ex-presidents unplugged now. And some say that's a bad thing.

(BEGIN VIDEOTAPE)

COSTELLO (voice-over): It has long been an unwritten rule past presidents don't criticize sitting presidents. But Jimmy Carter did, saying the Bush administration was the worst in history.

QUESTION: You didn't say it's the worst in history.

JIMMY CARTER, FORMER PRESIDENT OF THE UNITED STATES: Not intentionally. COSTELLO: And they don't normally meet with the leader of an organization the U.S. government considers one of the biggest terrorist threats in the world.

CARTER: The wrong thing is for Israel and the United States to refuse to have any relationships with Hamas and Syria.

COSTELLO: Or, as he did Monday, let loose what the United States has never confirmed -- that Israel has 150 nukes.

ALAN DERSHOWITZ, HARVARD UNIVERSITY: It is absolutely not the proper role of a past U.S. president to interfere with the foreign policy of the United States.

COSTELLO: But critics say Jimmy Carter has defied that tradition to carve out a new role for ex-U.S. presidents -- global statesmen unafraid to criticize U.S. policy abroad.

Douglas Brinkley is Carter's biographer.

DOUGLAS BRINKLEY, RICE UNIVERSITY: I think if you start trying to muzzle what ex-presidents can or can't say, you're getting down a very slippery slope. So I think people that like what Carter is doing will applaud him, and those that don't are just going to have to ignore him.

COSTELLO: Carter is not alone in his quest to change the unwritten rules of how an ex-president ought to act.

WILLIAM JEFFERSON CLINTON, FORMER PRESIDENT OF THE UNITED STATES: Jesse Jackson won South Carolina twice.

COSTELLO: Bill Clinton has done it, too -- not so much as campaigning for his wife, but for criticizing his opponent, a fellow Democrat -- and doing it in a way that's tarnished his legacy of beloved elder statesman.

W. CLINTON: Shame on you.

UNIDENTIFIED MALE: Thanks, guys.

W. CLINTON: Shame you on.

BRINKLEY: People are feeling after his heart problem perhaps that he just seemed angrier, that he blows up at reporters more, that he shakes his fingers at people constantly. That he seems a little bit holier than thou.

COSTELLO: Brinkley says after Hillary Clinton's run for president is over, Bill Clinton will work to repair his image and may return to a more traditional role for an ex-president.

As for Carter, Brinkley said he's risen the war and he's on a mission to think about people to look at global matters in a different way, to achieve what he's long wanted, peace in the Middle East.

(END VIDEOTAPE)

COSTELLO: Brinkley also said because President Carter is saying and doing so many controversial things, sometimes his voice is not heard and people do ignore him, so in that sense he's kind of shooting himself in the foot.

BLITZER: All right, Carol. Thanks very much.

Carol Costello reporting.

Carter's recent meetings with Hamas leaders and his remarks about Israel's reported nuclear arsenal raise this question, how much baggage will Carter be for Barack Obama if Obama winds up with the Democratic nomination?

Going to talk about that, and more, with two of our analysts. The Democratic strategist and CNN political contributor, Paul Begala. He's a Clinton supporter. And Republican consultant and CNN political contributor Alex Castellanos. He was an adviser to the Romney presidential campaign. He's a partner at a media firm that has corporate clients and specializes in Republican political ads. There, we got it all out.

Thank you very much for joining us.

Some have suggested that Jimmy Carter could be a burden for Barack Obama in a general campaign against John McCain, what do you think?

PAUL BEGALA, DEMOCRATIC STRATEGIST: Yes, I think Senator Obama shifted that burden off of himself. It was a smart move. He won't to Boca Raton, Florida, and spoke at a synagogue and publicly distanced himself from President Carter for meeting with Hamas. So Obama is right where the majority of the Democrats are and the majority of Americans are. We don't want to dignify Hamas; we want to work with the legitimate Palestinians but not Hamas. I don't think that's a big risk.

The baggage here is George W. Bush. That GWB monogram is every piece of luggage that John McCain has. McCain is closer to "w" than "x," "y," and "z" put together. That's the baggage we'll be looking for going into the election this November.

BLITZER: Alex?

ALEX CASTELLANOS, REPUBLICAN STRATEGIST: I think the baggage is there. Jimmy Carter is better known as a carpenter than he is president. And ordinarily you would think that would make him irrelevant in the debate.

But I think Paul is right in the sense that now Carter's legitimizing Hamas, meeting with them, raises questions Barack Obama does not want discussed. And he is having a problem in states like Florida, bringing the Jewish vote to the table which ordinarily a Democrat gets and needs in a close election. BLITZER: What about your former boss, Bill Clinton? He's obviously supporting his wife for the Democratic nomination, but could he be a burden to Obama in a general campaign against John McCain?

BEGALA: You know, first, the last dog hasn't died. But if Barack is my party's nominee, I could not imagine Bill Clinton hurting him. Most people believe if Al Gore had used Bill Clinton more in 2000, the election would not have been as close.

BLITZER: Some suggested after his heart surgery, his personality sort of changed. He speaks much more bluntly. He gets angrier much more quickly. Have you seen a change in his personality since then?

BEGALA: I worked for him, he spoke very bluntly. It's hard to separate the public from the private, because I worked for him 17 years now. No, I don't think so at all. One thing that was different, he really was, he told us in a meeting, he said I'm like one of the Baby Huey punching bags with sand in the bottom, I just keep popping up. It never bothered him personally when he was attacked. It bothers him when he's wife is attacked. He's a good husband. He loves his wife and he does not like seeing her attacked.

BLITZER: They used to say he had a bad temper and he got over it quickly.

CASTELLANOS: Evidently it's tougher being a campaign spouse than the other. We've seen something the past three or four weeks and that is the share of Hillary Clinton voters who say that they will vote for Barack Obama in a general election has been decreasing. He was getting -- Barack Obama was getting half of that vote a few weeks ago. Now only a third of them are saying, yes, I'll vote for Barack Obama. So the Clintons keeping the wound open is hurting.

BEGALA: There's plenty of months to close that wound and I think no matter who the nominee is, you'll see Bill Clinton out there all of those places. He carried 33 states plus the District of Columbia twice. So I think there will be a big help.

BLITZER: There was a misstatement that Senator Obama said about his great uncle having participated as a soldier in World War II in the liberation of Auschwitz.

That was not factually correct and a statement was just released by the Obama campaign spokesman Bill Burton and I'll read it to you. "Senator Obama's family is proud of the service of his grandfather's grandfather and his uncles in World War II especially the fact that his great uncle was proud of liberating one of the great concentration camps at Buchenwald. Yesterday he mistakenly referred to Auschwitz instead of Buchenwald, in telling of his personal experience of a soldier in his family who served heroically."

Is this a big deal or a little deal? Because Republicans are pouncing on him for embellishing.

BEGALA: First of all, he's not embellishing or exaggerating at all. He's misstating long ago family history by just a little bit. Keep in mind Ronald Reagan a blessed memory who so many Americans admire, falsely stated that he helped liberate those camps, that he helped film the liberation of the death camps. He was making "Hell Cats in the Navy" on a sound studio in California. That's a problem when the president of the United States misstates his own role. This is -- this is -- if there's something smaller than a tempest in a teapot, this is it.

BLITZER: The Soviets, as you know, liberated Auschwitz, the Americans liberated Buchenwald.

CASTELLANOS: This little slipup is nothing. It should be treated as such. I think Republicans lose credibility when you attack somebody for something that is basically irrelevant. Barack was probably landing under enemy sniper fire at the time when he misspoke.

I think the real question for Barack Obama here is not this kind of thing, but does he have the experience, the gravitas to deal with foreign policy affairs. When you're talking about somebody that voted present a lot when he was in the state knot and I think it was only a few years ago, he does have to demonstrate his seriousness on foreign policy.

BEGALA: I will point out that George W. Bush was not present when he was in the Alabama National Guard. He was liberating some of the finest bars in Mobile, Montgomery.

BLITZER: All right, guys, we'll continue this conversation. We got weeks and months to go. Thanks very much.

Shocking allegations about some aid workers and peacekeepers. The world's most vulnerable children abused by those who are supposed to help them.

Also, it was years in the making, a world-record jump from an astonishing height until one critical thing went wrong.

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

(COMMERCIAL BREAK)

BLITZER: In news around the world, China's earthquake disaster zone was rocked today by powerful aftershocks which the official news agency says have collapsed hundreds of thousands of additional houses. Two weeks after the quake struck the death toll now estimated at 67,000. Meantime, millions may be threatened by dammed up water in so-called quake lakes and mass evacuations are now under way.

CNN's Hugh Riminton is now in the hard-hit Sichuan Province.

(BEGIN VIDEOTAPE)

HUGH RIMINTON, CNN CORRESPONDENT: It's a new tide of people on the move. "We're going to high ground" he says. "The water's coming. The government wants us to move."

The fear is driven by this -- the largest of the quake lakes, created by landslides in the May 12 earthquake is now so huge, the water is 725 meters, nearly half a mile, deep. It is held back only by a wall of unstable rock. Millions of people from tiny hamlets to the major provincial city of Yin Yang live downstream. Many are fleeing.

Efforts to dig, even blast a safe run off continue but with two further five plus magnitude aftershocks Tuesday, the potential evacuation of over 1 million people is now being considered. The gravest fear, a total catastrophic collapse of the rock wall, sending a mighty deluge on the people below.

And so this earthquake disaster has now spawned a second wave of homeless, people's whose houses were not necessarily damaged in the May 12 earthquake but who nevertheless now find themselves sleeping rough with so many others.

The old, the young, the relaxed, the anxious. The mother and son we found on the road earlier have arrived at a tent they had already built, to be greeted by his wife and their 3-month-old daughter.

"I'm not afraid," says Joe Young. "This is high ground. Our family is still together. So I'm not afraid."

Hugh Riminton, CNN, China.

(END VIDEOTAPE)

BLITZER: As we reported, China is bending its one-child rule for earthquake victims. The government says parents with the only child killed or severely injured or disabled in the quake can get a certificate to have another child. Meanwhile many families have expressed interest in adopting children orphaned by the earthquake. Officials in the Sichuan Province say the earthquake resulted in more than 5,000 orphans and more than 20,000 families or individuals have expressed a desire to adopt.

They come to help, but a small number wind up taking advantage of some of the world's most helpless children.

CNN's Paula Hancocks has the latest on these shocking allegations of abuse -- Paula?

PAULA HANCOCKS, CNN CORRESPONDENT: Wolf, it is very disturbing reading. Children in conflict zones being abused by the very people drafted in to try to help them. Today's save the children report uncovers an unacceptable truth that it hopes to eradicate.

(BEGIN VIDEOTAPE)

HANCOCKS: They're traumatized and vulnerable. Children living in a conflict zone are often totally dependent on aid agencies and peacekeepers. But a tiny number of those who should be helping are abusing.

JASMINE WHITBREAD, SAVE THE CHILDREN: Wherever you've got a situation of crisis, you've got local communities, utterly powerless, dependent on outsiders, for food, protection, that's where you're going to have the risk of a tiny proportion of perpetrators carrying out this abuse.

HANCOCKS: Save the Children spoke to hundreds of children in Ivory Coast, southern Sudan, and Haiti, and their findings are disturbing. They say children as young as 6 have been forced to have sex with aid workers or peacekeepers in return for food and money. Others talk of rape and trafficking of children for sex. It's anyone's guess how many victims are still suffering in silence.

WHITBREAD: In order to stop the underreporting, to give children and their families the confidence to come forward and report when there has been an abuse, we need a global watchdog, and local faith mechanisms at the country level where children and their families can come forward and safely report the cases without fear of reprisal.

HANCOCKS: Other charities and the United Nations are supporting the call for a global watchdog, aware that with a work force of hundreds of thousands, there will always be a tiny number willing to abuse their power.

UNIDENTIFIED FEMALE: We do not believe that it is plausible for anyone to claim they do not know what the standard is. So, if there's -- this still goes on and it is going on, could we continue to have reports through our own mechanisms as inadequate as they are, we still have to take action.

HANCOCKS: The abuse is shocking, but not new. The United Nations has been dogged by this problem since the early 1990s. When a number of U.N. peacekeepers in Cambodia were charged with sexually abusing girls. Similar cases emerged in Congo in recent years. The hope now is if all major aid agencies and the United Nations join in vetting volunteers and peacekeepers, the world's most vulnerable will be safer from abuse.

(END VIDEOTAPE)

HANCOCKS: Save the Children says it has already fired three of its employees in the past year, for breaching its code of conduct. And it's calling on other aid agencies to take a similar hard look at its workers -- Wolf.

BLITZER: Paula Hancocks in London. Thanks for that story.

A move to ban toy guns in a place where children are surrounded by weapons of terror and forced to learn the ways of war. That story's coming up.

And Jack Cafferty is asking this question, will President Bush be a bigger asset or liability to John McCain's campaign?

Stick around. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: In Iraq where children are surrounded by weapons of terror and quickly learn the ways of war, there's now a move afoot to ban the import of toy guns.

CNN's Arwa Damon is in Baghdad -- Arwa.

ARWA DAMON, CNN CORRESPONDENT: Wolf, Iraqi troops recently made a chilling arrest. In the north, they detained six teenage boys whom they suspect al Qaeda was forcibly training to carry out suicide attacks. Whether they were being forced into it or not, the impact that the violence has had on Iraq's children is undeniable.

(BEGIN VIDEOTAPE)

DAMON: On the streets of Baghdad, children's games reflect reality; soldiers on patrol, carjacking, Americans versus insurgents, and here, barely visible through the crowd, an execution. Children are growing up watching most of the adults around them turning to bullets and bombs to resolve their differences.

UNIDENTIFIED FEMALE (through translator): The horrors that they see, the loss of their fathers, they express what they have building up inside by beating up and hitting their friends and punching their sisters.

UNIDENTIFIED MALE: Fire, fire, fire, fire!

DAMON: She won't be buying this for her little boy, but both toy and real guns are plentiful in Baghdad. To lessen the children's exposure to violence, psychiatrist Haidar Abdul Mohsin push the government to pass a bill banning the import of toy guns. It's currently under discussion in parliament.

DR. HAIDAR ABDUL MOHSIN, CHILD PSYCHIATRIST: We want a generation to play with computers, to play -- to read, to write, not to play with these guns. You know, because if they became adolescent, they may use the real ones.

DAMON: Among his patients is Yassid (ph), age 12. His mother says a year ago, something in him snapped.

"There were gun battles near his school," she says. "He saw a car bomb explode in their street. There were other explosions and mortars. Now Yassid can barely formulate a sentence."

Muhammad, also 12, was hit by shrapnel. His physical wounds have healed, but the psychological trauma was so severe, he has trouble walking, regularly runs fevers and faints. He's on medication, but his seizures are only getting worse.

As early as three years into the war, the Iraqi Association of Psychologists estimated more than 90 percent of the country's children suffered learning disabilities brought on by the constant fear and insecurity.

MOHSIN: Of course, after five years of invasion and after all the resources of bombs and kidnappings, our children are becoming very violent. Now we have educational program for these children. We have social problem with these children. They deal badly with their peers. They deal badly with their teachers.

DAMON: Psychiatrists here say that what is at stake in Iraq goes beyond stabilizing the country. It's about preventing the next generation from perpetuating the violence.

(END VIDEOTAPE)

DAMON: And, Wolf, psychiatrists say that the problem really needs to be addressed at home and at school. Otherwise, Iraq risks breeding a next generation of leaders that will be as violent as the ones in this country's past.

BLITZER: Arwa Damon, thank you.

Arwa Damon's in Baghdad for us.

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

CAFFERTY: Quite a plan? We get aid workers sexually exploiting and abusing kids.

We've got these children in Iraq who are watching their parents get killed in the streets with this ongoing war, suffering psychological damage that will probably never be cured. It's -- it's all a bit much some days.

The question this hour: will President Bush be a bigger asset or a liability to John McCain's campaign?

Frank writes from Phoenix, McCain's home state: "I can't imagine anyone could be a bigger liability than Bush standing next to you for a photo op. If I tried real hard maybe I could think of someone. Nope. I tried. Can't think of anything worse."

Kerry in Florida writes: "Bush is an asset to the people that matter to McCain -- the top two percent in income. Money matters, and Bush/Cheney supplied more of it to the rich. They are the ones who want Bush's legacy to continue and McCain is going to go after them wholeheartedly."

Allen writes: "John McCain's in big trouble. He needs the money that President Bush can bring in but aligning himself with President Bush will be the kiss of death in November. It will be fun to watch John McCain in this tug of war with himself. We're about to find out just how good a politician he really is."

Jason writes from Orlando: "He is most definitely an asset to McCain. He should be out there doing all he can for McCain in the general election. Signed, Democratic voters."

Carol writes: "The only way the American people can pay back President Bush for what he's done to this country is to not vote for McSame."

And Brenman writes in Melbourne, Florida: "Jack, Senator McCain is treating President Bush like a mistress. He wants to receive all the benefits pleasure (ph) from him but he doesn't want to be seen too much in public with him. This shows the true character of McCain. He'll do or say anything to become president."

If you didn't see your e-mail here, you can go to my blog at CNN.com/CaffertyFile and look for yours there, along with hundreds of others -- Wolf.

BLITZER: All right, Jack. Thank you.

Months of planning, millions of dollars, but one critical thing derailed an attempt at a world record. We're going to show you what happened. I think you're going to want to see this.

Plus, serious new concerns about port security. Lou Dobbs joins us to talk about it, standing by live right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: On our Political Ticker, he's fought for health care legislation his entire career. Now Senator Ted Kennedy's own battle highlights a cause he took up decades ago, the nation's war on cancer. Kennedy had started work overall in the 1971 National Cancer Act when his brain tumor was diagnosed. Advocates say they hope Kennedy's fight will draw new support.

Remember for the latest political news at any time, check out CNNPolitics.com. That's where you can download our new political screen saver and where you can check out my latest blog post as well.

Let's check in with Lou Dobbs. He's got a show coming up in one hour.

But I want to pick your brain, Lou, on port security right now. We spoke earlier with Richard Clarke, the former counterterrorism adviser. He seems to suggest you know what, there hasn't really been enough progress in making sure all these containers that come in to the United States are safe.

LOU DOBBS, HOST, "LOU DOBBS TONIGHT": Well, he's exactly right. But the General Accountability Office today reported straightforwardly, only 5 percent of those containers coming into this country are being inspected. This is almost seven years, Wolf, after September 11. And the Department of Homeland Security still cannot assure reasonable inspection of 95 percent of them.

BLITZER: What's taking so long?

DOBBS: Well, what's taking so long is an administration that's indifferent to the challenge, that has a Department of Homeland Security that's dysfunctional, a lack of commitment on the part of the Democratic on the part of the Democratic leadership in this Congress. Both political parties are responsible.

Think about this, Wolf, 95 percent of the cargo is uninspected, leaving us wide open to chemical, biological and nuclear weapons. Our borders remain wide open, leaving us absolutely vulnerable to precisely the same threat. In addition to which, add illegal immigration, and the smuggling of illegal drugs. Mexico, Wolf, is still the principal source of methamphetamines, cocaine, heroin and marijuana entering this country. I mean it's outrageous.

BLITZER: So in terms of we've been lucky since 9/11 that there hasn't been a major terror attack on U.S. soil?

DOBBS: I will say to you given the vulnerabilities that have been exposed, we've been talking about vulnerable ports and borders, have you to say without question we've been fortunate, without question, we've been fortunate without any question whatsoever. And we have been negligent in securing the safety of the American people.

BLITZER: Lou will have much more on this story coming up in an hour.

Thanks, Lou.

DOBBS: You bet. Thank you.