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The Situation Room

Presidential Candidates Sit Down for In-Depth Interviews; Oil Spill Closes Mississippi River with Staggering Costs

Aired July 25, 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: Happening now, Barack Obama and John McCain in THE SITUATION ROOM. We have in-depth interviews with both major presidential candidates.
Also, a jumbo jet with hundreds of passengers onboard plunges thousands of feet as a giant hole rips open in the fuselage.

And another blow to the company's economy. The staggering cost of a giant oil spill that's closed the Mississippi River.

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

One of them will be the next president of the United States. Today both of them are here in THE SITUATION ROOM. We have very important interviews with both John McCain and Barack Obama. We're talking about all aspects of their increasingly competitive contest, including Senator McCain's latest assertion that Senator Obama would rather lose the war in Iraq in order to win the White House.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: I am stating the facts. And the facts are, that I don't question Senator Obama's patriotism. I'm sure that he's a very patriotic American. I question the - his judgment, because he lacks experience and knowledge, and I question his judgment. I'm not prepared to see the sacrifice of so many brave young Americans lost because Senator Obama just views this war as another political issue, which he can change positions.

(END VIDEO CLIP)

BLITZER: And here's how Senator Obama responded when we asked if he feels the need to apologize to the world for U.S. foreign policy under President Bush.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: No, I don't believe in the U.S. apologizing. We've made some mistakes. As I said, I think the war in Iraq was a mistake. We didn't keep our eye on the ball in Afghanistan. But hindsight is 20/20. And I'm much more interested in looking forward rather than looking backwards. So the point of my speech yesterday was, you know, for Europe to recognize that whatever mistakes we do make, we have been overwhelmingly a force of good in the world.

(END VIDEO CLIP)

BLITZER: More from both of the candidates, including the full interview with Senator Barack Obama. That's coming up shortly here in THE SITUATION ROOM.

But first, a jumbo passenger jet with a gaping hole in the side. The Qantas 747 was one hour into a flight from Hong Kong to Melbourne, Australia, when a five-foot section of the fuselage fell off, forcing the pilot to plunge thousands of feet.

Carol Costello is working this story for us. An amazing story it is.

So, walk us through, Carol, what happened.

CAROL COSTELLO, CNN CORRESPONDENT: Oh, it was so frightening. Imagine being on that plane, that Qantas flight from Hong Kong to Melbourne. Had to make an emergency landing in the Philippines. 300 passengers onboard felt that plane dive. They saw the oxygen masks drop down, and wait until you see what happened next.

(BEGIN VIDEOTAPE)

COSTELLO (voice-over): This is no small hole, it's roughly nine feet wide. But the 346 passengers onboard and even the pilots didn't realize the enormity of what had happened until they got off the plane. The only clue, at around 30,000 feet, was an almighty blast.

UNIDENTIFIED MALE: It was very scary. Because, you know, we were just about to have our lunch. And suddenly the plane went to the left. Quite a loud ringing explosion going off. And then the cabin depressurized.

COSTELLO: Oxygen masks dropped from the ceiling and the pilots began an immediate descent at 10,000, an altitude that would allow passengers to breathe without the masks.

This passenger, Ron, shot these pictures as the plane dropped.

UNIDENTIFIED MALE: It was just a lot of pain in the ears. Roaring sounds of the wind. And debris flying around. And the stewardesses kind of running for their seats. We kind of knew it was serious.

COSTELLO: Passengers had told a door had popped and to stay calm. They were about to make an emergency landing.

OWEN TUDOR, PASSENGER FROM THE U.K.: No one knew really what was going on. But it didn't seem - the staff weren't panicking, they were looking after us.

COSTELLO: Passengers were calm until they got off the plane and took a look at that gaping hole near the plane's baggage hold. They wondered how it happened. We did, too. We showed the damage to Peter Goelz, a former NTSB investigator. What can you tell me from looking at this shot? PETER GOELZ, FORMER NTSB MANAGING DIRECTOR: You look at this, and you see that the panel that came off has come along the rivet lines. The fastener lines, right along here. And it's separated cleanly along those lines.

COSTELLO: Goelz said it's hard to tell whether the plane had been damaged before the flight or in mid-air.

If something did hit that to cause that hole, what would that something be?

GOELZ: Well, I mean, at that altitude, it's certainly not going to be a bird. What will happen is, they'll listen very carefully to the voice recorder, the cockpit voice recorder. And in a plane like this, there's probably five or six mikes in the cockpit. They'll listen to see if the fraction before the event happens, whether there was any preceding sound.

COSTELLO: Investigators are already looking into that.

(END VIDEOTAPE)

COSTELLO: And again, no one was injured in this. The NTSB is now assisting Australian investigators to find out why this happened. And one more thing, passengers thought that hole might have brought the plane down. Not so. Jumbo jets are like tanks. They can fly just fine with holes in the fuselage.

BLITZER: That's good to know. I didn't know that. Is anyone looking into the possibility of, you know, some sort of bomb or explosion or terrorism? Anything, foul play like that.

COSTELLO: Well, Qantas says it's not terrorism related. And they don't know if an explosion was involved. But when you look at that damage it doesn't seem to have been an explosion. But of course, investigators will know more, probably not more for months though. You know how the investigations go.

BLITZER: They always take months. These NTSB investigations take months. Carol, thank you very much.

Problems on another jumbo jet. More than 250 people had to evacuate this Airbus A-330 because of a fire. The Air Mauritius flight was taking off from New Delhi, India, when the flames broke out on the plane's exterior underside. No one was hurt. But the cause of the fire is still isn't known.

Quarter billion dollars a day, that's how much that huge oil spill in the Mississippi River at New Orleans is now costing the U.S. economy. We're hearing now that the river is open again. But there's a backlog of about 200 ships.

CNN's Brian Todd is working this story for us. He's joining us now live.

Brian, how is the cleanup going? BRIAN TODD, CNN CORRESPONDENT: The cleanup is going very slowly, Wolf. There is a limited opening here, but it's very, limited. Only a couple of ships have passed upriver, and even they can't go very far. I mean, to give you an idea of just how serious the situation is, our cameraman Bill Starling (ph) is going to pan down this wide sweep of the river.

Normally this is a scene of very heavy traffic, ships moving up and down the river. You can see it is empty, save for a couple of cleanup boats. This is a major setback for the economy. This area serves 62 percent of the consumer spending population of the U.S. and it's essentially frozen, all because one tiny barge collided with a tanker.

(BEGIN VIDEOTAPE)

TODD (voice-over): One of the most expensive traffic jams you'll ever see. More than 200 commercial vessels are stuck in place or have to be diverted from the Mississippi River. All because one small capsized barge is spilling 400,000-plus gallons of fuel. The head of the Port of New Orleans is fuming.

UNIDENTIFIED MALE: And the huge consequence of that is the detrimental effect to the U.S. economy is $275 million a day as long as the lower Mississippi and the port of New Orleans is not open. Somebody's got to move a little quicker.

TODD: The Coast Guard captain heading the recovery says he has got to put safety and security first.

UNIDENTIFIED MALE: There is a lot of pressure. This is a major artery for the whole United States on goods and commodities.

TODD (on-camera): That's the Overseas New York, a big oil tanker. It is the only ship so far allowed to move up the Mississippi River but it didn't get far.. It's being decontaminated right now. We're told it takes about three or four hours to decontaminate each vessel before it can move again. But in the meantime you've got more than 200 other vessels like this one, the Seaboard Pride, a small container ship, it got stuck here when the oil spill happened. And she's not going anywhere.

TODD (voice-over): Idle crew members take home video, a frustrated captain can't let us on the ship. He's using the time to fix the chain on his anchor. This is what they're waiting on. Crews all along the river waiting for booms to sweep the oils to the bank so they can mop it up by hand, slow, grinding, low-tech work. Coast guard chief petty officer Steve Carlton takes us through the cleanup zone.

CHIEF PETTY OFFICE STEVE CARLTON, U.S. COAST GUARD: They would actually put them onto the surface of the water and work them across the surface because the oil is floating up to the top there. And when they get dirty they'll bag them up and cart them off for disposal. You see, it's very labor intensive.

(END VIDEOTAPE)

TODD: That's a major reason why none of the ships can move right now. The huge waves kind of spread the oil from where those crews are working. Also, Wolf, the wakes, which are very considerable now, they drag the oil further upstream in places where it wasn't even there before. So, that's another major setback. This is a slow process. And it is causing tension between the head of the port authority and the guys in charge of cleaning this up, Wolf.

BLITZER: But there's enormous pressure, Brian, to get business as usual back going, to open up this river, allow these ships, these vessels to go back and forth. There's tons and tons of stuff that has to move and a lot of money at stake.

TODD: There is, Wolf. After the news conference today, I talked to the Captain Lincoln Strew (ph) of the U.S. Coast Guard. He's heading up this whole clean up and recovery operation. I asked him, look, can you give me any kind of a timetable of when traffic might resume in full? He kind of shook his head, he said, look, I can't really give you that. And believe me, I'm feeling the heat, he said. I'm getting calls all the time from as high up as at the White House asking when this is all going to resume.

BLITZER: All right. Brian is working the story in New Orleans. Thank you.

Senator Barack Obama's already being treated like a head of state overseas. But how does the candidate feel about all the media attention, the hype and the massive crowds. It's coming up, just part of Candy Crowley's one-on-one interview with him. The full interview with Senator Obama, coming up next.

And John McCain closer to picking a vice president. We'll have the latest on his selection process from people on the inside.

And it looks like an ordinary building. But it's the Cayman Island's address for more than 18,000 companies. Why? There's a congressional investigation under way right now. We'll tell you what we know.

(COMMERCIAL BREAK)

BLITZER: Now the full one-on-one interview with Senator Barack Obama. He's defending himself against criticism of his recent trip to the Middle East and Europe. The delicate diplomacy between the Israelis and the Palestinians. And this call for more NATO troops in Afghanistan.

The presumptive Democratic nominee sat down with CNN's senior political correspondent Candy Crowley earlier today in Berlin, Germany.

(BEGIN VIDEOTAPE)

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: First of all, I know you've been a little busy, so thanks for taking some time. Appreciate it. Right now, you're about three, four points in the polls. We are a month away from your convention. We're three months away from this election, and we're sitting in Berlin. Why is that?

OBAMA: Well, obviously the priority in this trip was traveling to Afghanistan and Iraq where we've got enormous commitments, and we've got to get that right. Part of getting that right is having the Europeans engaged and involved in this same battle that we're involved with, against terrorism, to make sure that we're creating a climate where nuclear weapons can't fall into the hands of terrorists, dealing with a situation in Iran, trying to broker peace in the Middle East.

All those issues are ones where we can lead, but only if we've got serious partners. And so it was very important for me to have a chance to meet with Merkel. I'll be meeting with President Sarkozy of France today, Gordon Brown tomorrow. Just to deliver the message that Americans want to partner with these countries in order for us to be successful. And also to relieve some of the burden on our fighting men and women in Afghanistan and Iraq.

CROWLEY: What's the message to Americans? Because if they're sitting back going, what is my foreclosure on my house, the gas prices have to do with him giving a speech in Berlin? I mean, they don't see any relationship.

OBAMA: Well, it's very specific. If we have more NATO troops in Afghanistan, then that's potentially fewer American troops over the long term, which means we're spending fewer billions of dollars, which means we can invest those billions of dollars in making sure that we're providing tax cuts to middle class families who are struggling with higher gas prices.

If we've got serious commitments from Europeans to deal with these energy issues in the same ways that we need to deal with them, that will have an impact on our economy. Issues of trade. Issues of the economy. All of these issues are now connected in this globalized economy. And so - but I also wouldn't underestimate the degree to which people in Ohio or people in Michigan or people in Missouri recognize that our long-term safety and our long-term security is going to depend on how we can interact with key allies. And, you know, it's amazing how often I get questions from people about, when are we going to be able to reassert respect in the world? And that's part of the message that we're sending here.

CROWLEY: Let me go back a couple of days to your visit to Israel. We are learning that a defense committee in Israel has now given a green light, has to go through several more steps, but given the green light for 20 new homes in the West Bank. And your advice on that is what? Is that OK, as far as the U.S. is concerned?

OBAMA: You know, as you said, we haven't seen the whole process move forward. But as a general proposition, the Israelis sitting down with the Palestinians in Annapolis, and in previous agreements, have recognized that these settlements are not helpful. And I think it's important for Israelis to abide by their commitments when it comes to settlements, in the same ways that the Palestinians abide by their commitments for cracking down on terrorists in the West Bank and previously in Gaza, obviously now Hamas controls Gaza, and so it makes more difficult for Abbas to assert himself there.

But the key is for both parties to do what they say, and build trust and confidence so they can move forward. And the United States has to be a significant presence in that process.

CROWLEY: So President Obama would say don't do this?

OBAMA: President Obama would say follow your commitments.

CROWLEY: Let me also talk now because you're talking about the even-handedness. When you were in Israel, about an hour in the West Bank, with Abbas, you were in Sderot talking about Israeli suffering. Why not go to a Palestinian camp? Why not go to a clothes factory? Why not even go to Bethlehem to also focus on Palestinian suffering?

OBAMA: Well, look, there's no doubt we tried to jam as much as much as we could in a very short period of time.

CROWLEY: But you took a lot of time with the Israelis.

OBAMA: Well, I had a day. And obviously, you know, you make some judgments in terms of where you're going to allocate the day. But I don't think that if you look at my statements and my positions when it comes to Israeli and Palestinian peace talks, that I could be more clear about the belief that the Palestinian people are suffering, partly because of the failures of their government to provide leadership for them, and that one of the reasons that we need to bring about this kind of lasting peace is so that Palestinians can have economic opportunity, send their kids to school, enjoy the kinds of, you know, the sort of prosperity that I think is so important for them as well as the Israelis.

CROWLEY: But I know you understand that symbolism is important in the Middle East. And without the symbolism of, I also understand always I did in Sderot about the Palestinian suffering. What does that say about Palestinians who have really never seen the U.S. as an even-handed broker in this?

OBAMA: Well, keep in mind that this is my second trip to the region. The last time I was there, I was visiting to in addition to Mahmoud Abbas, also Palestinian young people in Ramallah, and having a wide ranging discussion with them about the issues and concerns that they had. So, you know, I think it's important to not isolate just this single trip, but to look overall in terms of how I've projected the approach that an Obama administration would take.

CROWLEY: I know that the subject of Muslim has been a tough one for you to kind of balance because of the internet and people believing that you're a Muslim. And you've always said, but listen, this is nothing to do with the Muslim community. There are those who also wonder in the Arab world, why not go to Hamas at this point? You gave a speech yesterday that said, listen, Christians, Jews, Muslims. Again, where symbolism is so important, why don't you go to mosque while you're over here?

OBAMA: You know, I can't do everything, Candy. You know, we have jammed about as much as we could in a week. But in terms of our Muslim outreach back in America, in terms of my consistent message, it's always been that I had the deepest respect for the Muslim community, and I think that one of the things I want to do in my first year in office is convene a summit of Muslim countries. So that some of the suspicions and mistrust that's developed between the United States and the Muslim worlds can be broken down. We're going to need the help of all people of good will. Especially Muslims of good will if we're going to solve some of these problems.

CROWLEY: NATO, I want to talk about your speech yesterday. You said, listen, we've got to step up to the plate. We need more NATO troops, more German troops in NATO. You know sort of preliminarily how many troops, how many brigades you would put in Afghanistan. What does the U.S. need from NATO?

OBAMA: Well, we definitely are going to need a couple of additional brigades. Every commander that I spoke to in Afghanistan confirmed the need for more troops. It's a vast country.

CROWLEY: A couple of brigades from NATO?

OBAMA: A couple of brigades from the United States to begin with. What we need in addition is not only more NATO troops, and keep in mind that the Germans, for example, are sending additional troops, and another 1,000 troops, that will be helpful, we also need to make sure that rules of engagement for those troops are such where they can carry some of the load in terms of fighting. Some of the countries have a lot of restraints on what they do. And this was a topic of conversation with commanders on the ground in Afghanistan.

And in addition, I think we've got to figure out how the command structure in Afghanistan works, because right now we have, unparallel tracks, NATO troops, some troops under U.S. command, we don't always have the kind of unified command that will maximize what we get out of the troops that we do have. And I think all those parts, combined with a more aggressive posture when it comes to training police, building infrastructure, making sure that we've got a judiciary that is not corrupt, and maybe most importantly having a counter narcotic strategy that works and that gives Afghans options in their economy, other than poppy.

All those things have to come in a single cohesive hold. But the most important thing that I wanted to communicate when I spoke to Chancellor Merkel and that I'll mention when I meet with President Sarkozy of France and Gordon Brown, is just to understand that we're going to have to have a sustained commitment in Afghanistan. That, you know, it's not going to be a situation where we can do this on the cheap. It's going to be a tough job. We're going to have to get Pakistan on the right side of dealing with border issues there. NATO can be extraordinarily important in that overall process.

(END VIDEOTAPE)

BLITZER: Senator Obama's also answering critics of his meetings with world leaders.

(BEGIN VIDEO CLIP)

OBAMA: John McCain, after he won the nomination, met with all the leaders that I'm meeting with. That he's made speeches in Colombia, and Canada, and Mexico.

(END VIDEO CLIP)

BLITZER: And does Senator Obama think the U.S. should apologize for the Bush administration's foreign policy? His answer coming up. Part two of our interview right here.

Plus lawmakers call on a U.S. military contractor to explain why so many U.S. troops in Iraq are being electrocuted.

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

(COMMERCIAL BREAK)

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

More of our interview, Candy Crowley's interview that is with Senator Barack Obama in just a moment.

Also happening now. We're going to show you how the Canadian Navy is trying to keep you safe by intercepting drug smugglers. Stand by for that.

And with the Pentagon paying billions of dollars to private contractors, why are U.S. troops dying from electrical hazards on bases in Iraq?

And he showed millions how to achieve their dreams. Now the Carnegie Mellon professor whose last lecture became a youtube phenomenon has died.

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

An apology for U.S. foreign policy under President Bush: Senator Barack Obama answers that and more in his interview with our senior political correspondent, Candy Crowley.

(BEGIN VIDEOTAPE)

CROWLEY: You talked yesterday in your speech saying, look, I recognize that there are people in the world who think that the U.S. has been part of what has gone wrong in the world. Do you think that there's anything that's happened in the past 7 1/2 years that the U.S. needs to apologize for in terms of foreign policy?

OBAMA: No, I don't believe in the U.S. apologizing. We've made some mistakes. Always I said, I think the war in Iraq was a mistake. We didn't keep our eye on the ball in Afghanistan. But, you know, hindsight is 20/20. And I'm much more interested in looking forward rather than looking backwards. And so the point of my speech yesterday was, you know, for Europe to recognize that whatever mistakes we do make, we have been overwhelmingly a force of good in the world. That Europe and the European Union would not exist as we understand it, had it not been for the enormous sacrifice of U.S. troops and taxpayers.

CROWLEY: So this trip, particularly the event in Berlin, you don't see as a rebuke to U.S. foreign policy under George Bush?

OBAMA: You know, that is not my job on this trip. I think that if you look at how we've tried to conduct this trip, that I've tried to abide by a rule that has been historically I think very important, which is that whatever political differences we have, we have one government at the time, and that when public officials like myself who are not the president travel overseas that we're not in the business of spending a lot of time second-guessing our president.

CROWLEY: You had two lines to walk really. Sort of showing yourself on the international scene as someone who can go toe-to-toe with world leaders and sending that image back without seeming like you already think that you're president. And you also had to just not seem too presumptuous, as they say.

OBAMA: Right.

CROWLEY: John McCain has said that this really looked like a premature victory lap. Did you cross the line? Were there times were you really aware of that, you know, that sort of, wow, he looks like he already thinks he's got it?

OBAMA: I'll leave it up to the pundits to theorize on that. I would point out that John McCain after he won the nomination met with all the leaders that I'm meeting with. That he's made speeches in Colombia, and Canada, and Mexico. So it would be -- I would be hard pressed to find a big difference between what I've done over the last week and what John McCain has been doing since he won the nomination.

CROWLEY: Just you got more attention?

OBAMA: I did.

CROWLEY: So let me turn you just to the domestic policy, or politics. I've done this a number of times, these campaigns, and I look at the calendar and understand that we are very close to your announcement about who you would like as a number two. I am assuming we are within two weeks, just when you look at when the Olympics start, when your convention starts. Give me an idea of where you are? Have you got a short list? Have you talked to people?

OBAMA: Candy, I have told you and everybody else, the next time I talk about my vice presidential selection, it will be to introduce that selection.

CROWLEY: Have you done any talking about it on the phone while we've been on this trip?

OBAMA: No.

CROWLEY: Really? That's what we figured you were doing on the plane the other day, you were taking so long to get off the plane. We all assumed that's what you were doing. In terms of the convention, is that set? Have you got a keynote speaker? There's been some talk that you want Teddy Kennedy to do the key note. Is that true?

OBAMA: We are still putting together the calendar. We've been spending a lot of time when it comes to the convention just thinking about how to use the convention to organize party activists and organize grass roots activists. One of the hallmarks of our campaign has been people have been getting engaged and getting involved. That's part of the reason why we're having my acceptance speech in the football stadium as opposed to in the convention hall, because we want people who aren't necessarily the typical delegate to get engaged in this. So that's actually where we're devoting a lot of time. We want to see if coming out of the convention we have further built the kind of grass roots, 50-state strategy that will not only help us, but help congressional candidates, help Senate candidates, help local races as well.

CROWLEY: So I got the 30-second notice of two quick questions. If I were to say to you it's going to be Teddy Kennedy on Monday, Hillary Clinton on Tuesday and the veep on Wednesday and you on Thursday, how far off is that for what you want for the convention?

OBAMA: It sounds like a good lineup, Candy. But I've got to say that we haven't made any decisions yet.

CROWLEY: No final decisions?

OBAMA: No final decisions.

CROWLEY: And then the question we all want to know. What the heck did you and King Abdullah talk about in that Mercedes ride from the palace to the airport?

OBAMA: Well, I won't share any confidences between myself and King Abdullah, but I will say it was a pretty smooth ride. I gather he was going faster than it felt while I was in the car. That was the report I was getting from the Secret Service afterwards.

CROWLEY: They loved that ride, right?

OBAMA: Absolutely.

CROWLEY: Does it make you want to change the roles of the president just sort of take over the driving as the Secret Service does now?

OBAMA: I would love to drive. I miss driving. Like I miss a lot of stuff. But I think, you know, when you're in Jordan, when the King of Jordan says he wants to drive, he gets the keys. It doesn't work that way in the United States.

CROWLEY: No, it doesn't. Off to Paris.

OBAMA: Right.

CROWLEY: Thank you.

OBAMA: Thank you.

BLITZER: There's the war on terror, and it's taking to the high seas right now. Efforts to block what's been dubbed the hashish highway. Why it could damage al Qaeda. We have an exclusive report coming up.

Also, there's some news out there on the vice presidential front. Why John McCain might be getting closer to making a decision.

Plus, it struck a note with millions and millions of people around the world. Now a final note on the lecture that swept the internet.

(COMMERCIAL BREAK)

BLITZER: The war on terror has a new front on the high seas. The U.S. and other coalition allies are tracking down drug smuggling ships in the Arabian Sea. They aim to cut off a flood of illicit funding to terrorists. CNN's Wilf Dinnick is aboard one of the coalition vessels.

(BEGIN VIDEOTAPE)

WILF DINNICK, CNN CORRESPONDENT (voice-over): These waters have been dubbed the hashish highway. Canadian sailors are out to cut it off. They've been tracking this vessel for the last 12 hours. Now time for a closer look. This specially trained boarding party from HMCS Calgary is part of a coalition of several navies, from Britain, the U.S. and other nations. Kelly Larkin is the captain.

CMDR. KELLY LARKIN, HMCS CALGARY: The smuggling networks will use particular routes to move their contraband to generate revenue, and those revenues go directly back to the organizations that we're trying to counter. The Taliban, al Qaeda and the terrorist organizations.

DINNICK: The coalition believes drugs are moving from Afghanistan to Iran and Pakistan to the coast, and then out to the Arabian Sea. By using intelligence from other navies in the coalition, they track the ships with radar.

(on camera): They also have a high-powered camera onboard. They're able to see great distances. They can follow boats to make sure they're not throwing anything overboard once they've been spotted. They can also use it to gather intelligence to decide whether even to board the boat.

(voice-over): Earlier this year, off the coast of Pakistan, sailors from the Canadian ship HMCS Charlottetown boarded this boat. Officials say they uncovered 4.3 tons of hashish hidden in the fuel tanks. Part of a larger operation, officials say, to cut off possible funds to terrorists. Bob Davidson is the commander of the coalition.

COMMODORE BOB DAVIDSON, CMDR., COMBINED TASK FORCE 150: If we can counter some of that, we can find some of it, counter it, capture it, dump the drugs or even hand over any of the people, then we can reduce the amount of funding that will buy IEDs, guns, weapons, hire people in places like Afghanistan. So that's a good thing.

DINNICK: Back on the vessel that was spotted earlier on this day, this specially trained boarding party is at work. A Canadian translator tries to put the boat's captain at ease, a friendly exchange searching for any suspicious sign. After several hours, they determine nothing to worry about here, just a small businessman shipping fruit. He has all the right paperwork. So the vessel sails on and the coalition sailors move on. Continuing to keep watch, taking the war on terror to the seas. Wilf Dinnick aboard the HMCS Calgary in the Arabian Sea.

(END VIDEOTAPE)

BLITZER: Production of hashish in Afghanistan by the way has been increasing steadily since the fall of the Taliban and opium production has been a consistent problem in the country. Take a look at these staggering numbers. Last year 8,200 metric tons of opium were produced in Afghanistan alone. That's 92 percent of the production worldwide. In 2007, more than half a million households were estimated to be involved in opium poppy cultivation. That's about 14 percent of Afghanistan's entire population. Wow.

Now to the race for the White House. Just a short while ago I spoke to Senator John McCain about his search for a vice president. I asked him about reports he was going to announce a decision before the Olympic Games start in Beijing on August 8th.

(BEGIN VIDEO CLIP)

MCCAIN: I can't comment on the process that we're going through. And I'm sure you understand. And every nominee of the party has gone through this, and I appreciate you asking the question. But I can't comment on the process. I thank you, though. And I know you understand.

(END VIDEO CLIP)

BLITZER: Let's head out to CNN's Dana Bash. She's working her sources right now on this story. A lot of buzz out there, Dana. What are you hearing?

DANA BASH, CNN CORRESPONDENT: What I'm hearing, Wolf, from senior McCain sources with knowledge of this process is that there is internal discussion about announcing McCain's running mate soon, before the August 8th Olympics. But they insist they may also wait until later in the summer. But the concern about waiting, I'm told, is that it would be after the Democratic convention which is Labor Day. Many people out there are just tuned out.

One of the reasons aides say that they want to do it soon, at least some of them, in the hopes also of limiting any Obama bouts that he may get from his overseas trip. One really interesting nugget, Wolf, I'm told that the list has been whittled down and the potential picks, they're vetted. And actually sources tell me that McCain has the data that he needs and he's been reviewing it, all he has to do right now is make a decision, which really could happen at any time.

BLITZER: One of the names that's been mentioned is a woman, Carly Fiorina, the former head of Hewlett-Packard. She's been out there. She's been speaking for him. Making a case. What are you hearing about her?

BASH: I actually spent some time with her yesterday, Wolf. I was in Atlanta with her while she was lobbying women to vote for McCain. We'll actually bring you a story about that next week. But since I had time with her, and I had heard that McCain's list had been pretty much vetted, I asked her if she had been. Listen to what she said.

(BEGIN VIDEO CLIP)

BASH: Have you had any -- do you have any indication that you are being vetted formally or informally?

CARLY FIORINA: I wouldn't even know what I looked like or felt like.

BASH: But you would know if somebody asked for financial information that's not public, or other basic information which is --

FIORINA: I guess I would know that, yes.

(END VIDEO CLIP)

BASH: So there you have it. A pretty strong suggestion that she has not been vetted. And given what we're hearing about how far the process is right now, Wolf, that means we can probably take it to the bank she's not on John McCain's short list.

BLITZER: We'll look forward to your report in any case next week, Dana. Thanks very much for that. Dana's covering the McCain campaign for us.

U.S. troops dying overseas, electrocuted because of safety hazards. Now one U.S. contractor is answering to Congress.

His last lecture has been seen by millions and millions of people on the internet. The book version was a huge, huge best seller. The legacy now of an amazing professor.

Plus, one building in the Cayman Islands home to 18,000 companies. There's an investigation into this one. You'll learn what we know right here in THE SITUATION ROOM.

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BLITZER: Carol's monitoring some other important stories incoming into THE SITUATION ROOM right now. Carol, what's going on?

COSTELLO: Wolf, fighting in Lebanon ends in four dead today. The gun battle was between Sunni supporters of the western bank majority and members of a sect loyal to the Hezbollah-led opposition. A unity cabinet was announced earlier this month to help stabilize the country. The Lebanese army said sporadic gunfire still continues.

New developments on a story we brought you yesterday in THE SITUATION ROOM. The Iraqi government is sending representatives to the international Olympic committee's headquarters in Switzerland. It hopes they can reach an agreement to allow now banned Iraq to participate in next month's Olympic summer games. Iraq was banned after it suspended the country's existing Olympic committee and formed a new entity in May.

A tornado is to blame for widespread damage in New Hampshire. Firefighters say about a dozen people were hurt and one person killed. A baby was saved thanks to his cries who led firefighters to him. The infant was staying with his grandparents when the storm struck. His grandmother was killed, however. The storm destroyed several homes and damaged at least 100 others. That's a look at the headlines right now. Wolf?

BLITZER: All right Carol, see you in a few moments.

Now to the investigation into U.S. troops being electrocuted in Iraq, and the fallout over a major U.S. contractor there. Let's go to CNN's Kathleen Koch, she's following this story for us. What's the latest? Because I understand there is a hearing on the Hill today.

KATHLEEN KOCH, CNN WHITE HOUSE CORRESPONDENT: Yes, well, actually, there was a meeting on the Hill, Wolf. But as many as 16 U.S. service members have died in Iraq from electrocution since the war began, but most of them from touching power lines, from working on ungrounded equipment. But today the focus was on one of two service members who died simply taking a shower.

(BEGIN VIDEOTAPE)

KOCH (voice-over): Staff Sergeant Ryan Maseth stepped into the shower at his army base in Iraq on January 2nd and was electrocuted. According to army documents, the water pump was improperly grounded and short circuited. An inspection 11 months earlier by contractor Kellogg Brown & Rbot which maintained the building found quote, "Several safety issues concerning the improper grounding of electrical devices." The KBR CEO William Hudd met with lawmakers from Maseth's home state of Pennsylvania to personally explain why the problems were never fixed.

REP. JASON ALTMIRE, (D) PENNSYLVANIA: It's KBR's contention under level B their responsibility was merely to find the problem but it was somebody else's problem to fix.

KOCH: KBR told lawmakers that under their contract, they were only responsible to repair what the military told them to. Pentagon spokesman Brian Whitman said he wasn't sure that was "an accurate characterization." But wouldn't comment any further because it's an open case. Some senators are concerned that KBR has been hired to evaluate the safety in all Iraqi buildings used by U.S. forces. SEN. BYRON DORGAN, (D) NORTH DAKOTA: Do you think that's an appropriate way to do a review of what's happening, to have the contractor that's the subject of the allegations go back and take a look at whether the work is good work?

UNIDENTFIED MALE: My understanding is we're not going to just do that. We actually are going to have a group that will go out and independently audit at least on a sample basis to make sure that this work is being done appropriately.

KOCH: Maseth's mother wants that and more.

CHERYL HARRIS, MOTHER OF ELECTROCUTION VICTIM: I want KBR to be exposed. More than anything I just want them to step up and take care of what they're being paid to take care of. To do the work that they are contracted to do.

KOCH: In a statement, KBR says it is quote, "Not aware of any link between the work the military directed KBR to perform and Staff Sergeant Maseth's death.

(END VIDEOTAPE)

KOCH: While the KBR CEO would not talk to cameras today. The company is due to testify next week before the house oversight committee -- Wolf?

BLITZER: Kathleen Koch, reporting for us from the Pentagon. Kathleen's working the story.

He impacted the lives of millions of people around the world with a simple lecture he gave when he learned he was dying. Now the very sad, final note.

Also, trouble in an island paradise. Congress is cracking down on one offshore tax haven.

John McCain meeting with the Dalai Lama. New details are coming in of their face to face meeting. Stay with us, you're in THE SITUATION ROOM.

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BLITZER: It was intended as a lesson for his three young children. But the lecture by a terminally ill college professor struck a chord in everyone who heard it and thanks to the internet millions of people around the world did. This morning, however, Randy Pausch died, leaving an impressive legacy of what's come to be known as "The Last Lecture." Let's go to Carol Costello, she's working this story. Very sad story. Update our viewers on what happened today.

COSTELLO: Well Wolf, Dr. Randy Pausch was a world-renowned computer scientist. But many of us will remember him for his last lecture. One month after being told he had months to live, Dr. Pausch made a YouTube lecture and it was a sensation millions of people saw it online. "ABC News" made him person of the year. Time magazine named him one of the most influential people. He wrote a top-selling bock. It went top selling internationally.

It was amazing for a man who was clearly dying. On his YouTube video, The Carnegie Mellon computer scientist talked about what he'd accomplished in life. Things like experiencing zero gravity and creating Disney attractions and his love of simple things like stuffed animals. It was the kind of lecture that inspired you to live life fully. He repeated that to the Carnegie Mellon class of 2008.

(BEGIN VIDEO CLIP)

DR. RANDY PAUSCH, PROFESSOR, CARNEGIE MELLOW: We don't beat the reaper by living longer. We beat the reaper by living well and living fully. For the reaper will come for all of us. The question is, what do we do between the time we're born and the time he shows up? Because when he shows up, it's too late to do all the things that you always are going to kind of get around to. So I think the only advice I can give you on how to live your life well is, first off, remember it's a cliche, but I love cliches. It is not the things we do in life that we regret on our death bed, it is the things we do not.

(END VIDEO CLIP)

COSTELLO: After that speech, he picked up his wife. Just how joyful he was even in his weakened state. Dr. Pausch was just 47 years old. But he became famous in the last months of his life for all the right reasons. The official cause of death, pancreatic cancer. He leaves behind his wife and three children -- Wolf?

BLITZER: Really is an amazing lecture. It's an amazing book and our deepest condolences to his family. What a guy. Thanks Carol very much.

New information about that salmonella scare. The government now knows just what was tainted and where it came from. Details coming up.

Plus, John McCain here in THE SITUATION ROOM on the issues that matter to you. What he'll do about Osama bin Laden and the war in Iraq. You're going to hear in his own words. That's coming up right here in THE SITUATION ROOM.

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