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The Situation Room

Baggage System Breakdown; Source of Salmonella Outbreak Discovered; Ex-Army Chief Speaks on Troop Numbers in Iraq; Israel's Prime Minister to Step Down

Aired July 30, 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, if you're flying American Airlines out of New York's Kennedy Airport today, chances are your bags simply aren't going to make it. That baggage room backup is leading to backup on the runway. It's a mess. We'll tell you what's happening right now.
Also, a breakthrough in the salmonella outbreak that has sickened more than 1,200 people. Federal investigators now say they have found the smoking gun. We're going to find out what it means for you.

And U.S. troops electrocuted on their bases in Iraq.

So here's the question -- who's to blame?

There are stunning new allegations at a Congressional hearing here in Washington today.

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

There's a truly massive baggage pile-up at New York's JFK Airport right now and it's actually leading to flight delays. Many departing passengers will have to leave their bags behind. They're hoping to hook up with them later. What is going on?

Let's go live to CNN's Mary Snow. She's working this story for us.

It's a baggage break down. You're there at JFK. And people are worried not only at JFK, but at other airports. They're wondering what's going on there and could it happen at an airport closer to them.

MARY SNOW, CNN CORRESPONDENT: Yes, Wolf, because American Airlines says this is all because of a computer glitch. And 13 hours after it happened, the problem still isn't fully resolved.

Now, a spokesman at American Airlines just told us 13 flights tonight leaving JFK have now been canceled because of this problem.

As you can imagine, some passengers are livid.

(BEGIN VIDEOTAPE)

SNOW (voice-over): It quickly became a big mess. Bags bound for American Airlines flights departing from New York's JFK Airport piled up after the airline says a software glitch shut down the conveyor belt system. Passengers could leave their bags and have American deliver them later or take a later flight.

UNIDENTIFIED FEMALE: What I'm asking you is may I have another flight at a later time when the belt is fixed so that I can travel with my baggage?

SNOW: Passenger Norman Robinson says he arrived at the airport around 6:30 in the morning and he recorded this scene on his cell phone camera.

NORMAN ROBINSON, PASSENGER: This is crazy. What makes it even worse is there is another side of the building. It's about five times worse than this.

SNOW: Robinson waited for a later flight to Bermuda because he didn't trust the airline.

UNIDENTIFIED MALE: (INAUDIBLE).

SNOW: Airline workers manually sorted through bags, but it didn't prevent confusion and delays. Pouring salt into the wound, airlines have been raising fees. American is one of five airlines charging $15 for the first checked bag. Separately, Delta just announced its upped its second checked bag fee from $25 to $50.

RICK SEANEY, CEO, FARECOMPARE.COM: Passengers in general are just beaten down right now. They've been hit with higher prices on tickets. They've been hit with nickel and dime fees across the board. I think they could live with it more if the product of getting a person off on time and arriving on time with their bags was a better product on the airlines.

SNOW: But Chuck Feinberg (ph), who's heading to France for vacation, says there's little passengers can do. He arrived at JFK 10 hours after the problem started and says he still couldn't get straight answers.

CHUCK FEINBERG, PASSENGER: It's very frustrating. And it's unacceptable to me. But there's nothing I can do about it. I can't fight them. They have you hung up to dry and c'est la vie.

(END VIDEOTAPE)

SNOW: Now, Wolf, a representative for American Airlines declined a request to go on camera to explain the problem. But American is saying that for today, for these passengers affected here at JFK, the is waiving that bag fee. And as for when this problem is going to be fixed, American Airlines is saying tonight they can't make any promises. They're telling people to come a few hours early before their flights, but they say they can't promise their bags will get on those flights.

And as you probably can see behind me, the lines are continuing to grow. This is such a busy time at the airport -- Wolf.

BLITZER: What a mess there.

What, so the stranded passengers, what are they doing?

SNOW: You know, I just talked to one woman who arrived here from Italy. She had a flight to Chicago. It was canceled. She was told the next flight she could get on would be tomorrow night. So she is going to try to go to another airport because she really doesn't have anywhere to go.

BLITZER: Mary is at the JFK.

And what a story, Mary. Thanks very much for that.

People are worried, obviously.

Meanwhile, the FDA has now come out with new information on that salmonella outbreak that has sickened more than 1,200 people across the country.

Our medical correspondent, Elizabeth Cohen, is working this story for us.

They say they found the smoking gun, Elizabeth. Have they?

ELIZABETH COHEN, CNN MEDICAL CORRESPONDENT: Wolf, it appears that they have. Since April, the FDA has been trying to figure out where did this salmonella St. Paul strain come from.

And you know where it came from, they say?

Water in Mexico -- water used to irrigate a pepper farm. So now they're looking at this farm in Nueva Leone and trying to figure out where that might have happened. That's Nueva Leone in Mexico.

This is what FDA food safety chief David Acheson had to say to a Congressional panel today.

(BEGIN VIDEO CLIP)

DR. DAVID ACHESON, FDA FOOD SAFETY CHIEF: Two hours ago, we learned that we had breaking news in this regard. We have had our investigators in Mexico and had -- they had been investigating a specific farm, taking samples, looking for signs of the salmonella St. Paul outbreak. And two hours ago, we learned that we had got a positive sample in both the water used for irrigation and a sample of Serrano peppers from the same farm that matched the outbreak strain of salmonella St. Paul.

So this is a key breakthrough.

(END VIDEO CLIP)

COHEN: Now, the FDA is warning that no one should be eating jalapenos or Serranos from Mexico -- Wolf.

BLITZER: All right. Thanks very much. A lot of worry about that story.

Meanwhile, there are some major developments in another story we've been following closely for months -- the electrocutions of U.S. troops on their bases in Iraq, where it's supposed to be safe. At a Congressional hearing today, a military contractor said the U.S. Army was to blame for one death that occurred while a soldier was taking a shower.

Abbie Boudreau is here from CNN's Special Investigations Unit.

You're looking into this story. There was some dramatic testimony today -- what's the latest?

ABBIE BOUDREAU, CNN SPECIAL INVESTIGATIONS UNIT CORRESPONDENT: A lot of dramatic testimony today, Wolf. Well, a lot of tough questions were asked. While new information came out at today's hearing, there were still enough -- not enough answers for the family of one sergeant.

(BEGIN VIDEOTAPE)

BOUDREAU (voice-over): The House Oversight Committee revealed startling new information about why 16 military personal have been electrocuted.

SEN. BOB CASEY (D), PENNSYLVANIA: Sixteen deaths do not make for isolated incidences or random occurrences. They constitute a pattern and are a genuine danger to our men and women serving in Iraq.

BOUDREAU: Most of the hearing focused on the case of Sergeant Ryan Maseth, who was electrocuted in his shower.

The committee uncovered new documents, including several work orders, from another soldier complaining about pipes having voltage and getting shocked in the shower. Those complaints were from a soldier who used the same shower as Sergeant Maseth months before. In a sworn statement, that soldier said he was shocked four to five times and sometimes used a wooden spoon to turn off the shower nozzle because the electrical current was so strong.

Today, for the first time, Congress heard testimony from a representative of KBR, the company that contracts to the government for services on U.S. bases. Tom Bruni said KBR knew about the electrical problems in Maseth's building, but the Army never gave KBR the permission it needed to fix the shower.

REP. TOM DAVIS (R), VIRGINIA: You're saying you're not responsible. I can understand that.

I mean, you know, wouldn't the Army then be responsible for this in one way, shape or form?

TOM BRUNI, KBR: I think that the Army has some responsibility in this

Who else could have it KBR? DAVIS: Well, if they have some, who would have the rest of it?

Because conceivably, who else could have it if the Army just had some responsibility?

BRUNI: The responsibility...

DAVIS: Would KBR have some then?

BRUNI: The responsibility lies with the Army (INAUDIBLE).

DAVIS: That's all I'm asking.

BOUDREAU: The military has its own investigation into the electrocutions. But Chairman Waxman questioned its thoroughness.

REP. HARRY WAXMAN (D), CALIFORNIA: I can't say after this hearing that I feel assured that the Pentagon, KBR, the inspector- general or any of you are on top of this situation.

(END VIDEOTAPE)

BOUDREAU: At today's hearing, U.S. Senator Bob Casey said that during the last three weeks, he's gotten calls from active duty soldiers in Iraq who say they continue to receive electrical shocks while they carry out their daily tasks, and that includes taking showers -- Wolf.

BLITZER: This should not be going on.

I know you're going to stay on top of this story for us.

BOUDREAU: Absolutely.

BLITZER: Thanks very much. Abbie Boudreau reporting.

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

JACK CAFFERTY, CNN ANCHOR: I'll tell you, it's a wonder Waxman keeps showing up for work. I mean this -- this room full of worms.

Nobody takes responsibility for electrocutions of our service people?

BLITZER: It's sick, isn't it?

I mean I...

CAFFERTY: I mean what the hell kind of government do we have down there?

BLITZER: Yes.

CAFFERTY: It's right there in your city.

BLITZER: I will personally make it go away. (LAUGHTER)

CAFFERTY: Senator Ted Stevens -- remember him, the only guy behind Alaska's bridge to nowhere?

Well, he might soon be able to use that bridge to cross from the U.S. Senate to a federal prison. And based on that story we just saw, he could take a bunch of those clowns with him.

The Alaska Republican, Stevens, indicated on charges of lying about accepting gifts from an oil company, somewhere in the neighborhood of $250,000 worth -- stuff that included work on his home, like a new first floor, a garage, a wraparound deck, plumbing, electrical wiring, a gas grill, furniture, tools, and, of course, a sweetheart deal on the Land Rover.

Stevens says he's innocent. His office says he will move full steam ahead toward re-election. Lovely.

A six-term Republican -- six-term Republican -- we need term limits. He'll face his toughest general election challenge so far, running against the mayor of Anchorage, who was already leading in the polls.

What is it about politicians who think they can simply continue in office as though nothing happened after they run afoul of the law?

Remember that worm, Larry Craig, from Idaho? He's still in the Senate after his little episode in the bathroom up there in Minneapolis.

The news probably couldn't come at a worse time for the Republican Party either. This kind of stuff could help the Democrats reach that 60-seat majority in the Senate that would let them break Republican filibusters.

But they're not -- I mean they're not any better than the Republicans. It's just, you know, it's a different brand of fertilizer.

Stevens' legal problems could even affect the presidential race. Alaska is a state that hasn't voted Democratic since Lyndon Johnson won there in 1964. But Barack Obama, who said he wants to run a 50- state campaign, has sent staffers there and he is likely ready to compete in Alaska.

Some of Stevens' Republican colleagues are already saying Stevens who? They're donating campaign contributions from him to charity, they're refusing to comment on whether they support his decision to remain in the Senate. Six six-year terms.

Here's the question: How will Ted Stevens' indictment affect an already wounded GOP?

Go to CNN.com/caffertyfile and you can post a comment on my blog.

Unbelievable stuff -- Wolf.

BLITZER: You can't make this kind of stuff up, Jack...

CAFFERTY: Nope. You sure can't.

BLITZER: ...as you and I know.

All right. Coming up, as Iran's supreme leader warns his country will continue its nuclear efforts, are the odds growing that Israel will launch an attack?

My interview with the Israeli defense minister, Ehud Barak. Stand by for that.

Also, he was praised for his star power. Now Barack Obama is accused of acting too presidential. Is that a bad thing?

And that 5.4 quake gave California a pretty good shake yesterday. You're going to see what happened when it hit.

But what happens when the big one hits -- why one scientist is now warning of a catastrophe.

Stick around. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: He's been showered with attention from the beginning because of his so-called star power, but now Senator Barack Obama is being accused of acting too presidential.

Let's go back to Carol. She's working this story for us.

Is the criticism fair?

CAROL COSTELLO, CNN CORRESPONDENT: Well, that's the million dollar question.

I will say the criticism is getting louder.

The irony here, Wolf, is critics once said Barack Obama did not look presidential enough. He was too young, he was too green. Now they're accusing him of looking too much like the real thing.

(BEGIN VIDEOTAPE)

COSTELLO (voice-over): Critics say Barack Obama is already president -- in his own mind. That little election thing in November -- whatever.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: People of the world, this is our moment. This is our time.

COSTELLO: That speech Obama delivered to a massive audience in Germany rankled John McCain's camp because it looked so -- so narcissistic, said one adviser. And McCain used the speech to come up with an attack ad.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: He's the biggest celebrity in the world.

(END VIDEO CLIP)

OBAMA: I don't pay attention to John McCain's ads.

Although I do notice that he doesn't seem to have anything very positive to say about himself, does he?

He doesn't -- he seems to only be talking about me. You need to ask John McCain what he's for and not just what he's against.

COSTELLO: But even mainstream newspapers like the "New York Times" and the "Washington Post" wonder at Obama's presidential aura. "Washington Post" columnist Dana Milbank writing: "Obama's biggest challenger may not be McCain, but rather his own hubris."

It is hard to miss that alleged hubris. Obama staffers nicknamed his campaign plane 0 Force One. They fashioned a faux presidential seal for Obama's lectern in Chicago. And take look at Obama's schedule on Tuesday. 10:45 -- meets with women leaders. 11:30 -- meets with Pakistan's prime minister. Noon -- talks with Treasury Secretary Paulson. 2:00 -- meeting with Fed Chair Ben Bernanke. Then at 5:30...

REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE: Thank you, Senator Obama. Yes, we can!

COSTELLO: Obama meets with Democrats in Congress.

That kind of schedule, combined with Obama's overseas trip, has some critics suggesting Obama is acting like he's already president -- a sentiment Obama supporters call laughable.

ROBERT ZIMMERMAN, OBAMA SUPPORTER: John McCain has toured as a presidential candidate, as well. The fact that his trips to Mexico and Colombia and Canada didn't get the response that -- or the attention he was looking for -- is an issue his campaign is going to have to address.

(END VIDEOTAPE)

COSTELLO: Senator Claire McCaskill also alluded to this today as she introduced Senator Obama. She said: "They say that he's arrogant, that he's unpatriotic, blah, blah, blah, blah. I know this man," she says. "He is humble, he is devoutly Christian and he is as red, white and blue as you could possibly get." -- Wolf.

BLITZER: All right, Carol. Thank you for that.

Carol Costello working the story.

For years, Pentagon critics have praised retired U.S. Army General Eric Shinseki as the guy who got it right. As the Army chief of staff, he testified before Congress in 2003 that several hundred thousand U.S. troops would be needed for the invasion of Iraq.

Now there's a little new development. Let's go to our senior Pentagon correspondent, Jamie McIntyre.

What are we learning today -- Jamie?

JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT: Well, you know, General Shinseki has been silent over the years about that famous testimony. But now, "The Washington Post" has obtained his farewell letter to his boss, Donald Rumsfeld, in which he says that he purposely inflated that estimate to give commanders more flexibility.

Let's go back and listen to what he said back in February of 2003, just a month before the war, when asked how many troops it would take to secure Iraq.

(BEGIN VIDEO CLIP)

GEN. ERIC SHINSEKI, U.S. ARMY CHIEF OF STAFF: Something on the order of several hundred thousand soldiers are probably, you know, a figure that would be required.

(END VIDEO CLIP)

MCINTYRE: You may recall that Deputy Defense Secretary Paul Wolfowitz criticized that as wildly off the mark. But as the years went by, many people tended to believe that more troops should have been sent and that Shinseki had it right.

But as you said, even though he's been the poster child for Pentagon critics assailing Rumsfeld, the former defense secretary, for not heeding the advice of his generals, in that letter, Shinseki says -- and I quote -- "I gave an open-ended answer, suggesting a non- specific, larger rather than smaller number, to permit you and General Franks maximum flexibility in arriving at a final number. I felt an artificially low number would impose a premature force cap, would increase risk and jeopardize the mission's success unnecessarily."

And essentially he said he didn't think there was a right answer.

And, you know, Wolf, as the Army chief of staff, Shinseki wasn't directly involved in drawing up the war plans. And according to sources, when the chairman of the Joint Chiefs asked each one of the chiefs individually if they were OK with the plan, General Shinseki voiced no objections. That was back in 2003 -- Wolf.

BLITZER: You see, I remember back then -- and I'm sure you do, as well, Jamie. I could never understand why Colin Powell, when he was chairman of the Joint Chiefs of Staff during the first Gulf War, deployed more than half a million troops to liberate a small country like Kuwait, but in this war, Rumsfeld -- they wanted to do it sort of on the cheap. They thought they had new technologies, could get away with 150,000 or 180,000 troops.

General Shinseki, among others, they were veterans of that first Gulf War. They knew what it took then and I think they wanted to have that flexibility of General Colin Powell, that overwhelming force, in a situation like this.

MCINTYRE: Well, there's no doubt that many people believe that Shinseki did get it right. But what the letter seems to indicate is that he didn't have a firm conviction at the time. Like everyone else, he was struggling to figure out what the right number was. And the myth that's grown up around it is that he was a forceful advocate for more troops for Iraq and his advice was ignored. In fact, he kind of sat back on the sidelines and kept some of his reservations to himself.

BLITZER: Yes. But what he did say publicly turned out to be very, very truthful and very, very important. And that is that.

All right, Jamie. Thanks for that update on an important little historic footnote.

Journalists, athletes and thousands of visitors might be sharing their personal information with the Chinese government without knowing it. One U.S. senator says there could be some spying at the Olympic Games. We'll tell you what we know.

And why one school district hopes a simple blue jumpsuit will force teens to behave.

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

(COMMERCIAL BREAK)

BLITZER: Let's check back with Carol. She's monitoring some other important stories incoming into THE SITUATION ROOM right now.

What's the latest -- Carol?

COSTELLO: Well, Wolf, General Motors is reportedly planning major job cuts. A G.M. official tells the Associated Press the automaker plans to cut 15 percent of its U.S. and Canadian salaried workforce. That's around 5,100 jobs by November 1st. G.M., which would not confirm or deny the reports, said earlier this month it would cut white collar costs in the United States and Canada by more than 20 percent.

The Iraqi flag will fly at the Beijing Olympics after all. IOC officials today lifted their ban on Iraq competing in the Summer Games. At least four Iraqi athletes will now take part. Iraq's government says it agreed with the IOC to hold elections for its Olympic committee later this year. The IOC had accused Iraq of political interference in Olympic matters.

A controversial new way to enforce the dress code at a Texas high school. Students who don't follow the rules will be forced to wear that prison-like jump suit. Some parents say the jump suit will make students feel like, well, you know, prisoners. But Gonzales High School officials say it's a way of covering up dress code violations without having to suspend students or have parents bring in a change of clothes. Some students say intend to break the code so they can actually wear the jump suit. They always find a way to rebel -- Wolf.

BLITZER: No doubt about it.

All right, Carol. Thanks very much.

Iran's nuclear program -- is it nearing the point of no return? Is the clock counting down for an Israeli military strike? We'll ask those questions to the visiting Israeli defense minister, Ehud Barak. Stand by for that.

The cameras were rolling when the California quake hit and we've got it all -- shaking buildings, people scrambling, even Judge Judy. Stay with us for that.

And the price of gas -- does it have you down?

Maybe a jet pack will pick you up. Our own Miles O'Brien tries one out.

(COMMERCIAL BREAK)

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

Happening now, planning on going to the Beijing Olympic Games?

You may want to think twice. A U.S. senator charges that China has installed Internet spying equipment on all the major hotel chains. We'll have more on the story.

The cameras rolled in Hollywood as yesterday's frightening earthquake hit the Los Angeles area. No major damage, but many are saying it was a drill for the "big one."

And Senator Ted Stevens under indictment. His legal problems just the latest in a series of setbacks for the GOP.

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

Political shock waves today from Jerusalem. Caught up in a corruption probe, the Israeli prime minister, Ehud Olmert, says he will resign once his party picks a new leader in September. And that could mean a wide open race for the next prime minister of Israel. But a former prime minister, the current defense minister, Ehud Barak, tells me he expects to be in charge once again.

(BEGIN VIDEOTAPE)

EHUD BARAK, ISRAELI DEFENSE MINISTER: We is the party that led the establishment of the state of Israel and the country on many decades and we are determined to come back to power. The public has to choose or to make its choice, but you should realize that as of now it's not yet clear whether there will be an election in three or four months from now or in a year and a half or so because probably a new government could emerge from the present connection without going into election. BLITZER: But the answer that you're giving us, once there are new elections and there is an opening for a new prime minister, Ehud Barak, you will seek that office?

BARAK: Of course.

BLITZER: Let's get to the key issue right now that you face. That would be Iran. How much time does Israel have before it has to decide whether or not it will use military action?

BARAK: I think the alliance might say of course the point of no return between you know 15 months or 36 months. I don't think that it really matters. It depends how you count it the point of no return. For the time being, we are dealing only with sanctions. I think there should be made more urgent and more much tougher. Later on, we'll see what follows. We believe that neither Israel nor other place should leave any option out of the table.

BLITZER: So basically what you're saying is that you think that between 15 months and maybe a bit longer, that's the time for diplomacy right now, but after 15 months or 30 months or whatever, that's when you have to make a decision about military action?

BARAK: No. I don't exactly say this. I think that the sanctions should be accelerated and carried out under chapter seven of the charter of the U.N. in order to have peace and I think that they should include anything from bringing importing of light oil into Iran to closing financial transactions. It is urgent because we might end up with a situation where under the cover of continued negotiation about the nature of sanctions, whether to apply them or not, Iranians will cross the point of no return. We cannot know for sure when and how exactly they would cross it.

BLITZER: But you're saying you have at least 15 months before they cross that so called point of no return?

BARAK: I say that our assessment is that it could be close within 15 months but probably will behind the waves of there is an urgent need to act now, not to delay anything for the next year.

BLITZER: The Ayatollah of Iran, the supreme leader, issued a statement today saying that Iran will continue its nuclear program despite the standoff with countries demanding an end to its nuclear enrichment, its uranium enrichment. It's one thing for Mahmoud Ahmadinejad, the president, to make statements like that but when the Ayatollah Ali Khamenei says that, that makes it all the more powerful, doesn't it?

BARAK: It is but we'll know for sure that under the veil of working for a nuclear for peace purposes, they are moving determiningly (ph) while defying the whole world deceiting (ph) and cheating on the whole world, they continue with their military nuclear program and it is these military nuclear programs which worries us. We cannot fully know every detail, but we should make sure that they're not reach this point. BLITZER: You met with high ranking U.S. officials in Washington. Just came out of these meetings this week. The last U.S. government's national intelligence estimate that was released included these words, "We judge with high confidence that in fall 2003, Tehran halted its nuclear weapons program." I know your government, your intelligence service, totally disagrees with that. Did you raise that issue with the Americans?

BARAK: We raised the issue. We are trying to convince friends all around the world and provide evidence to push the realization that the Iranians are continuing determiningly (ph) into the capacity of building a nuclear weapons. They are not even the most good ones, kind of project.

BLITZER: Are you on the same page with the U.S. intelligence community when it comes to your assessment?

BARAK: I think and hope we are on the same page and we are working to make sure that we will be on the same page. I think that we gradually are capable of convincing any honest observer who knows something about nuclear physics and weaponry, nuclear weaponry, that they are heading decisively toward nuclear weapons, probably even second generation, not a very good simple ones.

BLITZER: We know Israel destroyed a few months ago a suspected nuclear facility in Syria. A lot of us remember back in 1981 when Israel destroyed the Iraqi nuclear reactor. I'm sure you've thought through if you were to do something similar in Iran, what the consequences would be, not only in terms of Iranian retaliation with missiles against targets in Israel but closing the straits and the oil shipping, the impact it would have on the world's economy, the price per barrel. You've walked through those scenarios.

BARAK: I cannot confirm and we never responded to the allegations that we are responsible for the destruction of the Syrian nuclear facility last summer but I can tell you that of course, any kind of operation against Iran is quite complicated and many aspects of it and many implications and potential consequences should be taken into account.

It's not a simple challenge. It's a challenge for the whole world, but we should think very seriously and we in Israel are thinking very seriously about the possibility that if we could somehow paralyzed form a, considering these options, we might end up with an Iranian Ayatollahs having nuclear weapons in their hands. That will be the end of any conceivable stable world order. That would be the end of any nonproliferation regime. And it will or could escalate into a switch to Israel and we are taking our future very seriously.

BLITZER: Ehud Barak is the defense minister of Israel and the former prime minister. Minister, thanks very much for joining us.

BARAK: Thank you.

(END VIDEOTAPE) BLITZER: That moderate quake yesterday in California caused a stir out there, as you know. Imagine what would happen if the big one were to strike. A top scientist has an ominous forecast for California. The biggest worry, that's coming up.

And it looks like something from a sci-fi movie, but it's a real jet pack. Yes a jet pack and our own Miles O'Brien is going to be flying it, sort of. You'll see it right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Yesterday's earthquake was a nerve-racking reminder of the power of quakes. The 5.4 magnitude quake caused no major damage but it certainly was felt from Los Angeles to San Diego, even in Las Vegas.

CNN's Kara Finnstrom has more from Los Angeles.

(BEGIN VIDEOTAPE)

KARA FINNSTROM, CNN CORRESPONDENT: The cameras were rolling in Hollywood when web casts and courtroom reality shows captured scenes nobody could have staged.

The 5.4 quake burst water pipes, shook bricks off buildings and left light fixtures dancing. And as it rumbled, many scrambled to capture the frightening sway wondering could this possibly be the big one.

An i-Reporter shot what so many saw in their southern California yards, pools swishing, splashing on the deck.

UNIDENTIFIED FEMALE: It felt like a large jolt.

FINNSTROM: Another i-Reporter assessed the damage with video camera in hand.

UNIDENTIFIED FEMALE: It just knocked the TV out of our armoire. It felt like someone just pushed the house.

FINNSTROM: This may be earthquake country, but we now know the quake itself did more damage to southern California's nervous than anything else. It caused only minor damage but image after image conveyed the panic, the uncertainty in those 10 to 15 seconds.

(END VIDEOTAPE)

FINNSTROM: Some pretty powerful images that were captured all across southern California. Seismologists here at Cal Tech are hoping that yesterday's experience will prompt more southern Californians to take the precautions necessary now to prepare for the next big quake -- Wolf.

BLITZER: Kara Finnstrom watching this story. Thank you.

By the way, another major quake that was caught on film. This one happened more than 70 years ago. You're about to see a quake hit the set of a WC Fields movie back in 1933. Watch this.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Probably saved my life. What can I do for you?

UNIDENTIFIED MALE: Take us to Shanghai.

UNIDENTIFIED MALE: Shanghai?

UNIDENTIFIED MALE: Yes.

UNIDENTIFIED MALE: What's the matter?

UNIDENTIFIED MALE: Earthquake.

UNIDENTIFIED MALE: Earthquake.

(END VIDEO CLIP)

BLITZER: That was the 1933 Long Beach earthquake. It wound up killing 115 people.

With renewed talk about the big one, when might that actually be? Brian Todd has been looking into this.

He's got some seismologists who are investigating as well and what are you discovering?

BRIAN TODD, CNN CORRESPONDENT: Well Wolf, for the first time, we have some clear, hard numbers about the so called big one. These come from very credible experts and that's what makes this projection so chilling.

(BEGIN VIDEOTAPE)

TODD: A catastrophic new outlook for California, a top scientist forecasting a massive earthquake along the San Andreas Fault that would be devastating to people and property near Los Angeles.

LUCY JONES, SEISMOLOGIST, U.S. GEOLOGICAL SURVEY: We are reasonably certain that we are going to have substantial damage to our buildings. It's got to be in the range of hundreds of billions of dollars. Then, there will be a significant loss of life, probably in the thousands.

TODD: Specifically about 1800 dead and roughly $213 billion in damage. That's according to a new report by a team from the U.S. Geological Survey, which includes seismologist Lucy Jones. She warns the region is 150 years overdue for the so called big one.

A likely scenario she says, the epicenter in the Coachella Valley. The quake moves northwest towards L.A. with a possible magnitude of about 7.8. Compare to the 1989 earthquake in San Francisco, collapsing part of the Bay Bridge and killing 63 or the North Ridge quake near Los Angeles in 1994, when 57 people were killed. Both measured about 7.0 or lower. Jones says it's not just the size that will be more devastating but the amount of time the earth actually shakes.

JONES: North Ridge 6.7 had a duration of seven seconds and this earthquake is going to be two to three minutes.

TODD: The largest single source of damage? Fires triggered by the quake. Jones and her team predict 1,600 fires throughout southern California. Roads, railways and pipelines, she says, will be gone. The massive damage, experts say, is partially due to urban sprawl creeping east of Los Angeles right along the danger zone. Within the next 20 to 50 years when this quake is forecast ...

JONES: The communities that are within ten miles of the San Andreas Fault are going to be doubling in the same time period.

(END VIDEOTAPE)

TODD: What about the buildings? Those buildings that were constructed after about 1990 can withstand earthquakes, but experts are concerned about several older structures with concrete frames in L.A. They cannot take the pounding. Some of them were not required to be retrofitted. Jones and her team predict that when the big one hits, five high rise buildings are going to collapse, Wolf.

BLITZER: That's scary, very scary stuff. Brian, thank you very much.

Just in time for the Beijing Olympics, a U.S. senator makes a very serious charge against China.

And the world's first political jet pack and our Miles O'Brien standing by to give it a try.

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

(COMMERCIAL BREAK)

BLITZER: This morning, a New Zealand inventor unveiled what he calls the world's first practical jet pack.

CNN's Miles O'Brien takes us for a little test flight -- Miles?

MILES O'BRIEN, CNN CORRESPONDENT: Wolf, this is the last great unrealized, cool dream of the 20th century, now the 21st century and it's come to pass. We're here at the Experimental Aircraft Association, the biggest fly in the world. Aviators from all over have come here to marvel at the Martin jet pack and I was one of the lucky few who got an opportunity to fly it. Take a look.

Go a little higher, can't you? Not bad. Probably need to slow down now. Want me top land? How do I do? All right.

It's kind of hard to describe the feeling. It's not quite like flying. You've got a sense of floating. Like scuba diving, a sense of weightlessness. It's a euphoric kind of thing, a really wonderful experience. A lot of people are signing up to buy them right now, Wolf. They've had a stack of orders already. At $100,000 apiece, they say they'll be delivering these jet packs in about a year.

You don't have to have a license to fly this. It's considered an ultra-light aircraft. You don't have to have an FAA license for it. You won't be seeing it in downtown Washington or Manhattan because ultra-lights are not allowed to fly there. So these will be in places wherever you see ultra-light airplanes and maybe before too long, you'll have an opportunity, Wolf, to strap on a jet pack and become a jet pack pilot like me -- Wolf?

BLITZER: You're a courageous guy. You're not going to see me in one of those ever.

Let's go to Jack Cafferty.

Jack, we're not going to see you in one of those ever, are we?

CAFFERTY: No, you're not. I wonder what happened if those two guys holding on to the side let go. We might have lost Miles. Where did he go?

The question this hour: How will Ted Stevens' indictment affect the already wounded GOP?

Jonathan in Connecticut: "GOP doesn't hurt. They feel nothing but the pleasures of revenge and vindictive vetting. They have survived DeLay, Rumsfeld, Gonzales, Bush, Rove, Libby, Cheney, Vitter, Craig and Goodling. Stevens is nothing. Get it over with before Christmas. Give him a pardon. The American people have short memories and shorter attention spans."

Gideon writes: "What a surprise. The guy is living like a Republican. This is the kind of stuff they teach in the Republican boot camp. He's just expressing his loyalty to his party's values."

Joe in Virginia writes: "The Stevens' bribery case looks similar to Congressman Duke Cunningham's case in 2006. Even though Duke went to jail, there wasn't much fall-out. Bribery is OK. Stevens would have to be hanging with Senator Larry Craig in the capital men's room in order to affect Republicans."

Eugene in California: "Stevens, just another corrupt politician. Doesn't matter which party they belong to. They're all corrupt."

Judy writes: "Stevens' indictment adds more fuel to the Republican disgrace. The thing that bugs me is he'll be found guilty, go to prison and still get a very generous retirement."

Sheryl writes: "Jack, no more than your boy Jefferson who had the 90k in cash in with the frozen hot dogs. Two four year terms and then get out of Washington."

Robert writes: "I doubt it will affect anything. Unfortunately, the voters in this country seem to have no memory at election time, which is why the same idiots wind up serving six terms." And Galen in Vancouver: "Will Senator Stevens scandal affect the Republicans? Do you mean before or after Diebold counts the votes?"

If you didn't see your email here, you can go to my blog, CNN.com/Caffertyfile. We post a bunch of them there. Check them out.

BLITZER: We will. We'll see you in a few moments, Jack. Thank you.

A U.S. senator makes a very strong point about the Chinese. Why he's worried about athletes, visitors and even journalists, that's coming up.

And it's not an image we've ever seen in a political ad. It's a serious effort by the McCain campaign. We'll tell you what's going on right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: There's been a stunning new charge made today. China getting ready to spy on visitors at the Olympic Games.

CNN's Jill Dougherty has the story.

(BEGIN VIDEOTAPE)

JILL DOUGHERTY, CNN CORRESPONDENT: In preparation for the Beijing Olympics, China is ordering foreign-owned hotels in the country to install internet software and hardware that will allow authorities to spy on the internet traffic of their guests. That's the allegation by Senator Sam Brownback, former presidential candidate and vocal critic of Beijing's government.

SEN. SAM BROWNBACK (R), KANSAS: This means journalists, athletes, families, human rights advocates, and other visitors will be subjected to invasive intelligence getting by the Chinese public security bureau.

DOUGHERTY: Brownback says several international hotel chains have confirmed the order but he won't name them. They want anonymity he says because they fear retaliation from the Chinese government.

The senator did release what his staff say is a translation of the order. "Refusing the installment or stopping operation of the system after installment will be subjected to punishment provided in article 21," it says. "In case of serious violation, access to internet will be suspended or business license will be canceled."

The document contains no official stance and cannot be independently verified. The Chinese embassy in Washington did not answer phone calls from CNN.

One hotel manager reached by CNN in China says, authorities did meet with hotel personnel on the issue of internet security but provided nothing in writing. He added the Chinese government is capable of monitoring internet traffic without involving hotels or even telling them they're doing it. That source would speak only on background.

One international trade expert says business travelers going to the Olympics should leave their laptops at home.

STANLEY MARCUSS, FORMER DEP. ASST. COMMERCE SECY.: They are required by the U.S. government not to permit unauthorized access to information stored in their computers. If the Chinese say, we're going to get access to what's in your computers if you use your computers in China, that's a real problem.

DOUGHERTY: Meanwhile, Senator Brownback says foreign hotels in China are warning guests their website activity is not private.

Jill Dougherty, CNN, Washington.

(END VIDEOTAPE)

BLITZER: We know Lou Dobbs has been keeping an eye on this story is and he's joining us with his assessment. What do you make of it, Lou?

LOU DOBBS, CNN ANCHOR: Well, I'm amazed that anyone would be surprised that communist China is spying on guests in Beijing during the Olympics or Hong Kong or anywhere else.

I mean, I don't know where Sam Brownback and other senators have been. We know there are 3,500 front countries spying for communist China in the United States alone for crying out loud. Somebody is supposed to be surprised, shocked and outraged that this is happening in Beijing during the Olympics? Of course it is.

They don't require, by the way, something to be affixed to the computer, as Senator Ted Stevens famously put it, find out what's going on in those tubes on the internet. My gosh, this is crazy. They are spying. They're a communist crazy. They do what they say is in their interest, unlike the United States. Why isn't Senator Brownback outraged there is spying in this country? It's their country for crying out loud. We would be fools to assume they would do anything else.

BLITZER: The number, what, 3,500 front companies?

DOBBS: In this country, yes. It's been reported here for years on "LOU DOBBS TONIGHT," Wolf.

BLITZER: It's a good show.

DOBBS: It's a great show, Wolf.

BLITZER: I expect a lot more on this story coming up.

DOBBS: You better believe it.

BLITZER: Lou Dobbs, coming up in one hour.

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