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The Situation Room

Interview With John McCain; Interview With Barack Obama; Oil Spill Still Cripples The Mississippi River and the Economy

Aired July 25, 2008 - 18:00   ET

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

WOLF BLITZER, CNN ANCHOR: In our "Political Ticker": new developments from the campaign trail.
The presumptive Republican presidential nominee, John McCain, has just met with the Dalai Lama. The 71-year-old met with the 73-year- old Dalai Lama in Aspen, Colorado. The exiled Tibetan spiritual leader is in Aspen to speak about Tibetan culture. McCain has called the Dalai Lama a -- quote -- "transcendent national role model."

And, to our viewers, you're in THE SITUATION ROOM.

Happening now: One of them will wind up in the White House. Both join us here in THE SITUATION ROOM. John McCain vows, U.S. troops will leave Iraq forever. Barack Obama says your security depends on America's allies -- interviews with both candidates, plus the best political team on television.

An airliner rips open in flight. As the oxygen masks drop, the pilot makes an urgent dash for a place to land.

And a quarter-billion dollars a day, another blow to America's economy after a massive oil spill shuts down the Mississippi River.

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

An extraordinary day here in THE SITUATION ROOM, interviews with both major presidential candidates.

We want to welcome our viewers in the United States and around the world.

Iraq, terrorism and the economy, a sharp exchange of ideas on the critical issues that affect you.

First up, my interview with Republican Senator John McCain.

(BEGIN VIDEOTAPE)

BLITZER: Let's talk a little bit about some national security issues. You're president of the United States, you've vowed that you will capture Osama bin Laden and bring him to justice.

Now we know that President Bush since 9/11 has been doing the best he can. What would you do differently?

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: Well, I'm not going to telegraph a lot of the things that I'm going to do because then it might compromise our ability to do so. But, look, I know the area, I have been there, I know wars, I know how to win wars, and I know how to improve our capabilities so that we will capture Osama bin Laden -- or put it this way, bring him to justice.

BLITZER: All right. If you capture...

MCCAIN: We will do it, I know how to do it.

BLITZER: If you capture him alive, what do you do with him?

MCCAIN: Of course you put him on trial. I mean, there are ample precedents of -- for that. And it might be a good thing to reveal to the world the enormity of this guy's crimes and his intentions, which are still there and he's working night and day to destroy everything we stand for and believe in.

BLITZER: Do you do him a regular civilian trial here in the United States or is it a war crimes tribunal, a military commission, what kind of legal justice would you bring him toward?

MCCAIN: We have various options, but the Nuremburg trials are certainly an example of the kind of tribunal that we could move forward with. I don't think we would have any difficulty devising an internationally-supported mechanism that would mete out justice and there's no problem there.

BLITZER: All right. Let's talk about the war in Iraq right now. Charles Krauthammer, "The Washington Post" conservative columnist, he writes that the prime minister of Iraq, Nouri al-Maliki, in recent days, -- quote -- "voted for Obama, casting the earliest and most ostentatious absentee ballot of this presidential election."

If you were president, and Nouri al-Maliki is still the elected prime minister of Iraq, and he says he wants all U.S. out, what do you do?

MCCAIN: Well, first of all, I know Prime Minister Maliki rather well, I know that he is a politician and I know that they are looking at upcoming elections. I know that he knows and every -- and the other leaders know there that it has to be condition-based.

Any withdrawals which will withdraw, we have succeeded, the surge has succeeded, and we are on the road to victory, and we will be out of there, and we may have a residual presence of some kind, as I have always said, but the fact is, the surge has succeeded.

BLITZER: What -- but if Maliki persists, you're president and he says he wants U.S. troops out and he wants them out, let's say, in a year or two years or 16 months, or whatever, what do you do? Do you just -- do you listen to the prime minister?

MCCAIN: He won't. He won't. He won't, because he...

BLITZER: How do you know? How do you know? How do you know this? MCCAIN: ... knows it has to be condition-based. Because I know him, and I know him very well. And I know the other leaders. And I know -- I have been there eight times, as you know. And I know them very, very well.

BLITZER: So why do you think he said...

MCCAIN: And the point is...

BLITZER: Why do you think he said that 16 months is basically a pretty good timetable?

MCCAIN: He said it's a pretty good timetable based on conditions on the ground. I think it's a pretty good timetable, as we should -- or horizons for withdrawal. But they have to be based on conditions on the ground.

This success is very fragile. It's incredibly impressive, but very fragile. So we know, those of us who have been involved in it for many years, know that if we reverse this, by setting a date for withdrawal, all of the hard-won victory can be reversed.

We're not ready to do that. Too many brave young Americans and their families have sacrificed too much. But we will be out and the difference is we'll be out with victory and honor and not defeat.

Senator Obama has said there is a possibility under his plan we may have to go back. I guarantee you, after they withdraw under what we are doing, we'll never have to go back.

If Israel were to decide its existence or its security were threatened and bombed Iran's nuclear facilities, would you as president stand with Israel?

MCCAIN: I can only tell you I will not discuss hypotheticals and I can't but I will tell you this. The United States of American is committed to making sure that there is never a second Holocaust. That will be what I will do as president of the United States.

BLITZER: If you were president, would you move the U.S. Embassy from Tel Aviv to Jerusalem?

MCCAIN: Yes.

BLITZER: When?

MCCAIN: Right away.

BLITZER: Like as soon as you're inaugurated, right away, you would order the State Department to do that?

(CROSSTALK)

MCCAIN: I have been -- I have been committed to that proposition for years.

BLITZER: All right, we have got a few more quick questions.

MCCAIN: Sure.

BLITZER: If you were president, would you take steps, would you work to repeal Roe v. Wade?

MCCAIN: I don't agree with the -- I don't agree with the decision. It's a decision that's there. I will appoint judges to the United States Supreme Court that -- that do enforce, strictly, the Constitution of the United States and do not legislate from the bench.

BLITZER: Do you support a pathway to citizenship for millions of illegal immigrants in the United States?

MCCAIN: Once we have secured the borders -- and I have not changed my position -- we tried twice in the United States Senate with comprehensive immigration reform, which meant securing our borders, a temporary worker program that works, and a path to citizenship for many, not all, but certainly many of the people who are already here illegally.

Americans want the borders secured first. We can do that. And we can establish a truly temporary worker program through the use of biometric tamper-proof documents. And we can put some people -- or a lot of them -- on the path to citizenship, requiring they pay fines, learn English, do all the things necessary, but the principle that they cannot have any priority of those who either waited or came to this country legally.

(END VIDEOTAPE)

BLITZER: All right, let's discuss what we just heard from Senator McCain.

Joining us, our senior political analyst Gloria Borger, our CNN analyst Jeff Toobin, and Stephen Hayes, the senior writer for "The Weekly Standard."

Gloria, I guess this is sort of a sensitive question. He thinks some sort of Nuremberg-type justice for Osama bin Laden might be appropriate. What do you think?

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: I think it sounds like a fine idea.

This presumes, of course, that, if you captured him, you wouldn't do something else to him first. But if you were to have some kind of a trial, why not have one that shows the depth of the depravity, as well as the serious national security issues that someone -- that he raised and continues to raise and put him on trial for all the world to witness? I have no problem with that.

BLITZER: Steve, you got a problem with that?

STEPHEN HAYES, "THE WEEKLY STANDARD": Well, no. What I thought what was interesting about that answer is it sounds remarkably like the answer that Barack Obama gave to a similar question about a month ago. What McCain didn't say in his interview with you, which he often says on the campaign trail, is that we will put him to trial and we will execute him. There's always sort of a two-part answer from McCain.

He didn't say that this time. And when he doesn't say that, he sounds actually a lot like Barack Obama.

BLITZER: Jeff?

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: Well, Wolf, that was actually a very different position than the Bush administration's position, because the Nuremberg trials were an international trial. It was the Russians, the French, the English, and the United States tried the Nazi war criminals jointly.

The Bush administration has said from the beginning they don't believe in international tribunals, they don't believe in the International Criminal Court. They believe in the United States alone trying Osama bin Laden and all the other people accused in the war on terror.

So, I don't know if McCain was just sort of using Nuremberg as a sort of catch-all phrase. But if he really meant Nuremberg itself, that would be a dramatic change from the Bush administration.

BORGER: But this isn't the first time that he has disagreed with the Bush administration, for example, Jeff, as you well know, on the definition of torture, right?

BLITZER: And he wants to shut down Guantanamo Bay as well.

(CROSSTALK)

BORGER: Exactly.

BLITZER: All right, Steve, listen to what Senator Obama said the other day when Charlie Gibson of ABC News asked him this question.

(BEGIN VIDEO CLIP)

CHARLES GIBSON, ABC ANCHOR: If you were president, would you move the U.S. Embassy to Jerusalem?

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: Charlie, I think that we're going to work through this process before we make these kinds of decisions.

(END VIDEO CLIP)

BLITZER: It's really a sensitive issue, as you well know, Steve. But John McCain, he didn't hesitate as all. He said, yes. I said, when? He said, right away. And that's been his position for a long time. But if he does become president and he does it right away, that is going to cause an uproar out there, as you could imagine.

HAYES: It could.

I think it was interesting in your interview -- or his answer in your interview was interesting for two reasons. One, obviously, this is something that will appeal to Jewish voters. It's an area that Barack Obama is having some trouble with, I think, right now.

But the second thing it does, is John McCain seems resolute and he seems to know what he was talking about. He gave you a firm answer. And I think the McCain campaign liked that John McCain. And Barack Obama had said in front of AIPAC that it would be an undivided Jerusalem. He has since classified that answer. In his interview with Charlie Gibson, he seems to sort of fudge it.

The McCain lights that contrast, where McCain seems resolute and assured of himself and Obama seems more complicated.

BORGER: This also places him at odds with President Bush, who has delayed moving on this, just as President Clinton delayed moving on this, both of them citing so-called national security reasons. But the reason of course is that they believe that it would adversely affect negotiations for peace in the Middle East. And that's why neither of them have done it.

(CROSSTALK)

BLITZER: It would also deeply anger a lot of the Arab world and even some of the non-Arab world. The Saudis for example have made it clear they would be completely opposed to moving the U.S. Embassy from Tel Aviv to Jerusalem.

TOOBIN: Politicians in the United States have been pandering to Jewish voters on this Jerusalem issue for literally generations. And I don't think it's going to sway any votes at this point. People know that this is a complex subject. And it's not going to -- I don't think it's going to sway many votes.

BORGER: And by the way not all Jewish voters agree.

TOOBIN: Absolutely not.

BORGER: I think lots of Jewish voters would rather have serious negotiations for peace in the Middle East, rather than just move the embassy to Jerusalem.

BLITZER: All right. I'm going to ask all three of you to stand by. We have got a lot more to assess coming up.

Jack Cafferty, by the way, has the day off today.

We have an interview, though, coming up with Senator Barack Obama here in THE SITUATION ROOM, why he says America's allies may hold the key to your security and even the amount of taxes you pay -- that interview coming up. And a shattering noise and a sudden drop in cabin pressure. A plane makes a desperate flight for safety with a gaping hole in its side.

And it's more than just an oil spill. It's another blow to New Orleans and to the nation's economy. Brian Todd is live -- Brian.

BRIAN TODD, CNN CORRESPONDENT: Wolf, there is a massive recovery operation under way. It's costing hundreds of millions of dollars in lost revenue and cleanup costs, and it's causing real tension between the cleanup teams and the people responsible for commerce on this river.

(COMMERCIAL BREAK)

BLITZER: The interview with Barack Obama coming up, but, first, this.

A quarter billion dollars a day, that's how much that huge oil spill on the Mississippi River at New Orleans is costing the U.S. economy. We're hearing now that the river is once again opened, but there's a huge backlog of about 200 ships.

Let's go to CNN's Brian Todd. He is joining us from New Orleans with more on this story.

First of all, Brian, how is the cleanup going?

TODD: Very slowly, Wolf. And it's a pretty tough job.

Just a few minutes ago, I talked to the owner of the salvage operation that is excavating that barge right there. That's the Biso (ph) salvage operation. I talked to Beau Biso (ph) and asked him just how tough this is. He says, it is very difficult. He's got dive teams down underneath excavating the damage of the capsized barge.

I said, are they kind of trying to patch up any holes? He said, oh, there are no holes to patch up. You can drive a truck through that hole. He said in several days, they are going to bring a massive barge, so much bigger than that barge, that it's going to extend all the way up to the near the top of the Crescent City Connection Bridge.

So, this is a very difficult, problematic operation and it's getting more costly by the day.

(BEGIN VIDEOTAPE)

TODD (voice-over): One of the most expensive traffic jams you will 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.

GARY LAGRANGE, PORT OF NEW ORLEANS: And the huge consequence to that is that the detrimental effect to the U.S. economy is $275 million a day as long as the Lower Mississippi River and the Port of New Orleans is not open. Somebody's got to move a little quicker.

The Coast Guard captain heading the recovery says he's got to put safety and security first, but admits:

CAPT. LINCOLN STROH, U.S. COAST GUARD: There's 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 have 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.

(voice-over): Idle crew members take home video. A frustrated captain cannot 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 boons to sweep the oil to the banks, 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 actually will take them, put them on the surface of the water, and work them across the surface, because the oil is floating up on the top there. And when they get dirty, they will bag them up and they will cart them off for disposal. So, you can see, it's very labor intensive.

(END VIDEOTAPE)

TODD: And that is a major reason why these ships can't move right now. Their huge wakes spread the oil further away from where those crews are working. They also drag the oil further upstream in places where it wasn't before. So, Wolf, that gives you an idea of just how tough this job is. And it's going to take a long time to clean it up.

BLITZER: The last thing New Orleans needs after Katrina. They were just beginning to get some progress over there and now this. How said is that? Brian, thanks very much.

TODD: Right.

BLITZER: 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. How scary is that?

Let's go to Carol Costello. She's working the story for us.

What do we know? What happened?

CAROL COSTELLO, CNN CORRESPONDENT: Oh, my. Can you imagine being on that plane? The oxygen mask drops down and you hear this loud bang. Well, wait until you see why.

(BEGIN VIDEOTAPE)

COSTELLO (voice-over): This is no small hole. It's roughly nine feet wide. But the 346 passengers on board 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.

ROB HENSHAW, TOOK VIDEO INSIDE DAMAGED JET: Look, it was very scary, because, you know, we were just about to have our lunch. And suddenly the plane lurched to the left. It was quite a loud banging explosion going off. And then the cabin depressurized.

COSTELLO: Oxygen masks dropped from the ceiling and the pilots began an immediate descent to 10,000 feet, an altitude that would allow passengers to breathe without masks. Passenger Rob Henshaw shot these pictures as the plane dropped.

HENSHAW: And there was just a lot of pain in the ears, roaring sounds of the wind, and stuff sort of flying around, and the stewardesses kind of running to their seat. So, we kind of knew it was serious.

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

OWEN TUDOR, PASSENGER: No one knew really what was going on. But it didn't seem that -- the staff weren't panicking and 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.

(on camera): What can you tell me from looking at this shot?

PETER GOELZ, FORMER MANAGING DIRECTOR, NATIONAL TRANSPORTATION SAFETY BOARD: Well, you look at this, you see that the panel that came off has come along the rivet lines, the fastener lines, right along here. And it separated cleanly along those lines.

COSTELLO (voice-over): Goelz says it's hard to tell whether the plane had been damaged before the flight or in midair.

(on camera): If something did hit that to cause that hole, what would that something be?

GOELZ: At that altitude, it's certainly not going to be a bird. What will happen is, they will 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 will listen to see if the fraction before the event happen, whether there was any preceding sound.

COSTELLO: Investigators are already looking into that.

(END VIDEOTAPE)

COSTELLO: And, again, amazingly enough, no one was injured. The NTSB is now assisting Australian investigators to try to find out why this happened.

And one more thing. Passengers thought that hole might have brought the plane down. Not so. Experts say jumbo jets are like tanks. They can fly just fine with holes in the fuselage.

BLITZER: That's encouraging, reassuring, because a lot of us have been on those 747s over the years.

COSTELLO: Well, and the pilots did a great job, too. They carefully dropped the plane to 10,000 feet so everyone could breathe without their masks and then they made their emergency landing in the Philippines. So, everything worked.

BLITZER: Good work in this part case. Thank you, Carol.

Senator Barack Obama has been making the rounds in Europe. But back home, there is some controversy right now about a stop the senator didn't make at a U.S. military hospital in Germany. Part two of our interview, that is coming up as well.

Also, push comes to shove in Beijing, a stampede, as the last tickets for the Olympic Games go on sale.

And first it was tomatoes, now certain kinds of hot peppers. Finally, the FDA tells us what you should be doing to make sure it's safe to eat and what you shouldn't be doing.

(COMMERCIAL BREAK)

(NEWSBREAK)

BLITZER: We heard from John McCain. Now a one-on-one interview with Barack Obama. He's responding to critics calling his overseas tour a premature victory lap.

And we will also look at the controversy over what some say was Senator Obama's snub of wounded U.S. troops.

Plus, the growing cost of protecting the candidates. The Secret Service wants more money right now.

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

(COMMERCIAL BREAK)

BLITZER: To our viewers, you're in THE SITUATION ROOM. Happening now, Senator Barack Obama facing a growing chorus of critics who accuse him of snubbing wounded U.S. troops. We get to the bottom of the controversy.

And other critics of accusing the candidate of looking too presidential. We'll ask him about it in our one-on-one interview. That's coming up.

Plus, the island paradise that some say is also helping Americans avoid millions in taxes. Now, a crackdown.

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

Barack Obama just arrived in London for the last leg of his European tour. But there is a new controversy swirling around him and about what he did not do during a trip to Germany.

Let's go to CNN's political analyst Bill Schneider. He's got the details for us.

Tell us why this decision that was made is causing some controversy, Bill, right now.

WILLIAM SCHNEIDER, CNN POLITICAL ANALYST CORRESPONDENT: Well, because there are some things you can do as a senator or citizen, but not as a candidate.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): In what capacity did Barack Obama speak in Berlin?

OBAMA: Tonight, I speak to you not as a candidate for president, but as a citizen. A proud citizen of the United States and a fellow citizen of the world.

SCHNEIDER: A controversy broke out after Obama canceled plans to visit wounded members of the U.S. military in Germany. His campaign issued a statement saying, "The senator decided out of respect for those service men and women that it would be inappropriate to make a stop to visit troops at a U.S. military facility as part of a trip funded by the campaign."

The McCain campaign was quick to respond. "Barack Obama is wrong," the McCain spokesman said. It is never inappropriate to visit our men and women in the military."

In fact, Obama did visit the troops elsewhere with the congressional delegation, which he call the highlight of his trip.

OBAMA: Everywhere we went in Afghanistan and Iraq, they were just really eager to tell their story and what they were doing. It was moving.

SCHNEIDER: Bloggers immediately picked up on the canceled visit to the military hospital in Germany. An Obama adviser issued a statement that, "We learned from the Pentagon Wednesday night that the visit would be viewed instead as a campaign event. Senator Obama did not want to have a trip to see our wounded warriors perceived as a campaign event."

A Pentagon spokesman says that Obama was welcome to go to the hospital as a sitting senator, not as a candidate. Asked why they canceled the visit, Obama's spokesman said, "He was far more willing to take the criticism from some political people or political opponents in a political atmosphere than to put our troops in the middle of our campaign back and forth. That is the decision we made and we are comfortable with it."

(END VIDEOTAPE)

SCHNEIDER: Obama's spokesman said just as the candidate has been criticized for not visiting the troops in Germany, he would have been criticized if he had met with them. It's probably true. That's what happens in a campaign -- Wolf.

BLITZER: We're going to discuss this with the best political team on television. That's coming up. Thank you.

An apology for U.S. foreign policy under President Bush. Our senior political correspondent Candy Crowley put that and other questions to Barack Obama in a one on one interview today in Berlin, Germany.

(BEGIN VIDEOTAPE)

CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT: Right now, you're up about three or four points up in the poll. You're a month away from the convention. We're three months away from this election. 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 mistake sure we're creating a climate where nuclear weapons can't fall into the hands of terrorists.

CROWLEY: What's the message to Americans? Because if they're sitting back there going, what is my foreclosure on my house, the gas prices have to do with him giving a speech in Berlin? Does it -- 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 that we're spending fewer billions of dollars. Which means we can invest those billions in dollars in making sure we're providing tax cuts to middle income 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 these issues that 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 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.

CROWLEY: You talked yesterday in your speech, saying, look, I recognize 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 happened in the past seven and a half 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. 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.

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

CROWLEY: You had two lines to walk really. Short 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.

OBAMA: Yes.

CROWLEY: Did you cross the line? Were there times that you were aware of that? Wow, he already looks like 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: 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 that it's a pretty smooth ride. I gathered 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: Oh. Absolutely.

CROWLEY: Does it make you want to change the role as president and 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 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: Thank you.

CROWLEY: Thank you.

(END VIDEOTAPE)

BLITZER: You heard Senator Obama respond to all the media coverage. Coming up, our panel of analysts, they'll join us for their assessment of the Obama interview and the European tour.

Plus, one building home to 18,000 companies. Congress now investigating. We have new details right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Here's a question: Does Senator Barack Obama risk turning off some voters by simply looking too presidential on his overseas tour?

Let's discuss with our senior political analyst Gloria Borger, our senior analyst Jeff Toobin and Steve Hayes, the senior writer for "The Weekly Standard."

What's the answer, Gloria? BORGER: Honestly, I think the jury is still out on this. I noted in his -- Candy was asking him the questions in her interview. Don't you look a little presumptuous here? Some people say you're looking a little bit too much like you think you won the election.

He said, there's nothing wrong with reasserting respect in the world for this country. He was very careful to say, and I don't want to criticize the president when I'm abroad. I think if you're inclined to think that he's presumptuous, you will. If you're inclined to think this was a good trip and you liked seeing folks abroad waving American flags, again, then you think it's a good step.

BLITZER: Steve, that news conference in Paris today with Sarkozy, it looked almost like a news conference that President Bush had with Sarkozy when he was in Paris.

HAYES: Which is exactly the point. I mean, the fire side chat, I think it was, that he had with Maliki in Iraq made him look very presidential. This trip is about images I think as much as anything. Pictures that are being sent back to the United States that are on the front pages of newspapers, that are flashed on the screened here. That is what the Obama campaign hopes get out of this was a bunch of images that show Barack Obama as someone who can stand toe to toe, shoulder to shoulder with world leaders.

BORGER: He got it.

BLITZER: And, Jeff, nobody is forcing those foreign leaders, whether King Abdullah or Prime Minister Ehud Olmert of Israel, or Sarkozy, for that matter, or Angela Merkel, or Nouri al Maliki nobody is forcing them to do this. They're doing it because presumably they want to do it, Jeff.

TOOBIN: Certainly. The image of this campaign, of this trip was 200,000 people in the Tiergarten in Berlin listening to Barack Obama. And frankly, I would have a hard time imaging there are American voters out there saying, gosh, 200,000 people, that's a terrible thing. I'm not going to vote for that guy. I just don't see how this is in not a positive trip for Barack Obama.

BLITZER: Steve, do you agree?

HAYES: No. I don't think so. Look, everybody thinks that having 200,000 people show up at the Tiergarten is a plus. The bigger question is, I think, for Obama. How does it look if -- it doesn't seem presumptuous? It is exactly the question that Wolf raised at the beginning. Does this seem presumptuous?

I think when you look back at some of the other things that the Obama campaign has done, the presidential seal they quickly abandoned. The problem for the Obama campaign is there has become sort of a pattern of presumptuousness. That could be the issue.

BLITZER: Gloria, I want to change subjects for a seconded because we have a limited amount of time. You heard Bill Schneider's report on this controversy that Senator Obama had time to do a lot of stuff in Germany, including work out, but he decided it wasn't a good idea to meet some of the wounded troops at Landstuhl in Rammstein in Germany. This is causing an uproar, especially among the conservative bloggers out there. His explanation is, you know what, it would have been a political event and it was really probably not appropriate.

BORGER: You know, the Obama campaign tells you that they were discouraged from going over there because it was a campaign event. And the Pentagon says, we didn't discourage him. We just discouraged bringing the campaign. He could have gone by himself. Of course, the McCain campaign is saying, it's never inappropriate to go visit the troops. I think this is one of those situations where we need to kind of know the full story here. But it's one of those damned if you do and damned if you don't situations. Because you never want to make going to visit the troops look like a political photo opportunity ever.

HAYES: This is one of those things where just in terms of its effects on the campaign that we don't need to know the fact. The problem, I think, for the Obama campaign, it looks like the Obama campaign versus the Pentagon. The risk for the Obama campaign is that it looks like a pattern. There was a story a couple of weeks ago talking about commanders on the ground in Iraq worried about an early withdrawal. You had the chairman of the Joint Chiefs of Staff saying it was very dangerous to leave early and Obama admitting he had disagreements with Petraeus. The Obama campaign is in trouble if this is seen as an Obama versus the uniform military conflict.

BORGER: You think so?

TOOBIN: Steve, if I may, I think we always do need to learn the facts. I think the facts are very important here. This was a flawlessly advanced trip except for this last day. Because they either shouldn't have scheduled the trip in the first place, or scheduled the trip and done it. But to schedule it and then take off the schedule, I do think made them look bad.

HAYES: Let me just clarify quickly. I'm not saying we don't need to know the facts. I'm just saying in terms of perception the facts matter less.

BLITZER: We'll leave it there and we'll continue to investigate the story and see what we come up with.

Guys, thanks very much. Have a great weekend.

TOOBIN: You too, Wolf.

BLITZER: Sun, sand, and tax havens. U.S. senators say offshore tax abuses are costing all of us billions. Others say it's not that simple.

And everything is going up. Gas, food. Now the Secret Service says it can't make ends meet either. They need more money and they need it right away. We'll tell you what's going on right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Lawmakers right now are targeting offshore tax abuses they say are costing the U.S. billions of dollars and they're vowing to crack down. Others say it's not necessarily all that black and white. CNN's Mary Snow has been looking into the story for us.

What are you learning, Mary? What's the true picture here?

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, at a time when so many Americans are struggling, two Senate panels are targeting tax havens. And to make their point, lawmakers are focusing on one example in the Cayman Islands but they are also finding out there are difficult challenges when Uncle Sam has to collect taxes in a global economy.

(BEGIN VIDEOTAPE)

SNOW (voice-over): Inviting beaches and serene settings are what most picture when it comes to the Cayman Islands. But this single building in the Cayman Islands serves as an address for more than 18,000 companies and according to a government report five percent are U.S. owned. The building, known as the Ugland House, is under scrutiny by members of Congress cracking down on tax havens.

An international law firm is the sole occupant in the building. It says it's not uncommon for companies to be registered in one place but operate from another. It denies suggestions of tax evasion, saying that international companies are trying to avoid being taxed twice. They add, U.S. taxes are paid when earnings are distributed to U.S. citizens.

But Senator Carl Levin, who has been cracking down on offshore tax havens, sees many Cayman Island businesses in a different light.

SEN. CARL LEVIN, (D-MI): This is all about secrecy and no one should make any mistake about that. It's about these offshore tax havens keeping secret information from tax authorities in order to help people avoid paying taxes.

SNOW: Levin says offshore tax abuses cost the U.S. about $100 billion a year. As chair of the U.S. Senate Permanent Subcommittee on Investigations, he's finished a probe involving banks in Switzerland and Liechtenstein, a tiny nation run by the Liechtenstein royal family. He compares the cases to spy novels.

LEVIN: There are companies whose the only purpose is to funnel money from one place to another in a matter of seconds.

SNOW: Levin and others are vowing a crackdown with pending legislation. But those who track offshore companies say it's a game of cat and mouse.

DAVID MARCHANT, OFFSHORE ALERT: What is legal one day might well be illegal the next day. It's a huge gray area where very smart people are trying to continually outfox, really, the politicians and the people who write the laws of major countries that rely on tax revenues to fund everything that they're engaged in. (END VIDEOTAPE)

SNOW: Now one of the proposals Senator Levin is making is to require U.S. banks to stop dealing with overseas banks that don't cooperate with the IRS. A lot easier said than done.

BLITZER: You're absolutely right, Mary.

Thank you. Mary's working that story for us.

So have you ever seen the world's oldest Bible? Guess what? You can see it online. Our Internet reporter Abbi Tatton has been sifting through the digital pages -- Abbi.

ABBI TATTON, CNN INTERNET CORRESPONDENT: Wolf, the manuscript is from the fourth century. Pieces are held in four different countries and now it's being pieced back together online. Codex Sinaticus, handwritten in Greek, it contains the oldest known copy of the New Testament and also parts of the Old.

I'm scrolling through parts of it here right now online. The Web site lets you go page by page. I'm on the Book of Psalms which contains an English translation. You can go to Psalm 23 or 22 as it's numbered in the Greek, "The Lord will shepherd me, I shall never lack anything."

This is part of a painstaking project undertaken by the British library and other institutions that hold parts of this manuscript. It's not all online yet and much of it is not translated, but seems there's worldwide interest already. Five million hits to this Web site in the first 24 hours -- Wolf?

BLITZER: Abbi, thank you.

A House committee insists it was not an impeachment hearing, but led by Democratic Congressman Dennis Kucinich the accusations against President Bush were flying today on Capitol Hill.

And the pope and the prime minister are next in our "Hot Shots." Stay with us.

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BLITZER: The Secret Service wants some more money to protect the presidential candidates. The agency is asking for another $9.5 million to pay for things like the candidates' international travel and Senator Obama's convention speech next month at an open air stadium in Denver. The 2008 campaign is the longest in Secret Service history by about five months. Congress considering the funding request.

The House Judiciary Committee held a hearing today that it insists was not about impeachment, but at the hearing, critics took a whack at President Bush with a long list of impeachable quote "high crimes and misdemeanors." Democratic Congressman Dennis Kucinich led the way describing Iraq as an unprovoked and unjustified war. Republicans called the hearing impeachment-like and an anger management class that would only hurt Congress' credibility.

Here's a look at some of the "Hot Shots" coming in from our friends at the "Associated Press."

In Madrid, Spanish presidential guards prepare for the visit of the Venezuelan President Hugo Chavez. Pope Benedict meets with Iraqi Prime Minister Nouri al Maliki at the pontiff's summer residence.

In Ecuador, national assembly members celebrate the approval of a new constitution and in Pennsylvania, two Australian shepherds are groomed for a kennel show. Some of this hour's "Hot Shots," pictures worth a thousand words.

I'm Wolf Blitzer in THE SITUATION ROOM, Sunday on LATE EDITION, we'll have the next president of the United States. That's right, both of the candidates Sunday a special "LATE EDITION," 11:00 a.m. Eastern. Until then, thanks for watching.

Let's go to LOU DOBBS TONIGHT. Kitty Pilgrim sitting in.

KITTY PILGRIM, CNN ANCHOR: Thanks, Wolf.