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The Situation Room

Sarah Palin to Quit as Alaska Governor

Aired July 03, 2009 - 16:00   ET

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

SUZANNE MALVEAUX, CNN ANCHOR: Happening now, brand new evidence in the investigation of Michael Jackson's death. We're getting more detailed allegations of the pop icon's prescription drug use and possible abuse. Sources contend that Jackson once traveled with a mini clinic to keep him medicated.

Plus, how you can get in to Jackson's memorial service. The online giveaway of thousands of tickets is under way right now. This hour, who's footing the bill for the big farewell?

And Sarah Palin's shocking news. The Republican star and political lightning rod is quitting her job as Alaska governor.

Wolf Blitzer's off today. I'm Suzanne Malveaux.

And you're in THE SITUATION ROOM.

(BEGIN VIDEO CLIP)

GOV. SARAH PALIN (R), ALASKA: And so, as I thought about this announcement that I wouldn't run for re-election, and what that means for Alaska, I thought about, well, how much fun governors have as lame ducks. They maybe travel around their state, travel to other states, maybe take their overseas international trade missions. So many politicians do that.

And then I thought that's what's wrong. Many just accept that lame duck status, and they hit the road, they draw a paycheck and they kind of milk it. And I'm not going to put Alaskans through that.

(END VIDEO CLIP)

MALVEAUX: We'll have all the breaking news on Michael Jackson in a moment.

But first, Alaska Governor Sarah Palin's bombshell.

Just a short while ago the Republican announced that she will step down from her post at the end of the month and she'd hand over power to the lieutenant governor. Palin did not take any questions during the news conference at her home in Alaska. We have gotten wind that she decided not to run for a second term, but this is a big surprise from the 2008 Republican vice presidential nominee.

I want to bring in CNN Senior Political Correspondent Candy Crowley, who is here.

You have been following this story.

First of all, did it come as a surprise to you?

CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT: Yes, it did. Again, we thought, well, she'll probably step down. She can run, she can keep her options open, she can go to the end of her term, which is the end of next year, probably won't run again. She can run for president then, if that's what she wants to do.

But to sort of drop it in the middle and say, well, I don't want to spend millions of Alaskans money, and I want to spend time with Trig, ,and people are going to -- trying to knock me off while I pass the ball, still begs the question, what is this about?

Now, she says this is what it's about, but there were no questions allowed to be asked. But certainly there are questions left. So I think it's stunning. And you know as a reporter, you're going, what's going on here?

MALVEAUX: Really. And for the viewers who didn't get a chance to see the press conference, to see the full statement that she made, what were the reasons that she gave? Why is she doing this, stepping down now? What did she say?

CROWLEY: She said she felt that she could be more effective if she worked outside the government. She said she thought that she had done what she set out to do and didn't want to waste taxpayers' money. She said that she wanted to spend some time with Trig and that Trig had taught her things along the line. And she said that she thought she could better serve Alaska and the country working outside the governor's office, outside politics.

So there were sort of four reasons in there. She said everyone is going to say that these aren't the reasons, but these really are the reasons.

Now, look, we know a couple of things. First, she can make some money out there. She is very popular among Republicans. She's got a book deal already talking about her story. And as you know...

MALVEAUX: So she has a book tour that's coming up?

CROWLEY: Well, she has a book deal. Now, I don't know whether she has written it or not, but you know that that is like a prerequisite to running for office. I don't know that she is, but there are ways out there she can make money. There are ways out there that she can be visible. And certainly a book and putting her side out there, which she has always felt all along that her side never got out in public, has always been important to her.

MALVEAUX: What does this mean for 2012? When we take a look at this announcement, are we to take away that perhaps this makes this more likely that she's going to seek the Republican nomination to run for president?

CROWLEY: I'd take away that she is keeping her options open. I think it's awfully early at this point.

I mean, again, clearly, she is popular inside the Republican Party. I think she clearly is thinking about it and has been since the last election was over, otherwise she would have gone back to Alaska and stayed there. But we have seen her do speeches, we have seen her react to things on a national basis. So I think the options are open, but I don't think any politician makes a decision this far out.

MALVEAUX: Is she arguably the front-runner for the Republican ticket?

CROWLEY: She is arguably the one with the most name recognition, but no. We have seen polls recently among Republicans where she pretty much splits with Mitt Romney, with Mike Huckabee. So she is not the front-runner.

And honestly, polls at this point are about name recognition. They are about, oh, yes, I know that guy. I would like him.

So, yes, she is up there. She's a possibility. But she's no more a possibility than some of the other names you've heard.

MALVEAUX: Candy, I want you to hang on for a minute.

I want to bring in our own John King, as well, the host of "STATE OF THE UNION," who has some additional information about this bombshell of Sarah Palin.

John, what do you know?

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Suzanne, I talked to someone who is very close to her political team who calls this a "calculation." That is the word that he used.

And he said because of the "friction" -- again, the word he used -- that Governor Palin has received over her book deal, over these ethics controversies that she says are created by her political opponents, that she made the calculation that it was best to not only say she was not going to run for re-election, but to take the more dramatic step of saying she was going to leave in the middle of her term. And this source said that he has not heard these words from Governor Palin directly, but that close to her politically say that she is working to put herself on a path to run in 2012.

Now, there will be a great number of questions about, why would she leave in the middle of her term? That's a very unusual step for a governor to take. It is her national platform, if you will, but as Candy was just discussing, she has incredibly high name recognition. She is well liked among Republicans, particularly the Republican base.

Although, I will say, in Washington -- and Candy knows this as well as anyone -- the political professionals sort of play down her chances. They say that her performance in the last campaign was not so great. But she has star appeal with the base of the party, and the question now is we'll have to watch her in the coming days and weeks as to what she does with that base. MALVEAUX: John, do you know who is actually advising Sarah Palin now? I know that she had a whole group of people while she was in the race before, and there was a falling out among some members.

Is it a different group of people that are now telling her we think this is the direction you should go? Do you know who those people are?

KING: It's a mix of people. I mean, she keeps in close touch with Bill Kristol, who is a Republican commentator on another cable network. He also was Dan Quayle's chief of staff and has worked in Republican politics quite some time. She keeps in close touch with him.

Some of the McCain aides who were most loyal to her like Randy Scheunemann are in touch with her. There is sometimes tension between her Alaska circle of advisers and influence and what they call up in Alaska "the Washington people," or the political people. But there is no question that there is a small group loyal to her.

We have seen even more reports recently. And you remember them all at the end of the campaign and just after the campaign about splits in the McCain campaign and so much dissatisfaction with her among top McCain advisers. But there is still a small group very loyal to her, and some of them are in the Washington, D.C., area, in national Republican politics, still involved.

And again, the (INAUDIBLE) that went back to Alaska with her. And you do detect tensions from time to time between them. But among those who are the true believers, Suzanne, they believe that she has a very good base from which to enter the 2012 Republican presidential race, should she so choose. And I will leave that big question mark, because we can't answer it today.

MALVEAUX: How do you explain that real difference between the groundswell of support that she has when she goes out and she travels, and people gather -- she's a real rock star among the conservative base -- and then those who are in Washington? Why that split? Why that difference? Why is she received so differently?

KING: Well, some of it is based on personality conflicts. Remember, some close McCain advisers -- one of them particularly used to me the term "rogue diva" during the campaign, saying that she did not follow the playbook that they had settled on in campaign staff meetings. That they said this is what we had to do on today, tomorrow and the next day, and she would do other things that they believed...

MALVEAUX: John, sorry to interrupt for a moment. I just want to bring -- this is the very beginning of the press conference, Sarah Palin making that dramatic announcement.

I want to bring our viewers up to speed.

(BEGIN VIDEO CLIP)

PALIN: OK, good.

Appreciate you all being here. And I just want to say hi to Alaska. And I appreciate speaking directly to the people that I serve as governor.

And I thank you all for coming here today on the shores of Lake Lucille. This is a source of inspiration for my family and for me.

And I'm thankful that Todd flew last night from commercial fishing grounds in Bristol Bay to stand by my side, as always.

It's the eve of our celebration of independence as a nation. It's a time to remember our nation's dear souls who sacrificed so selflessly so that we all may live in freedom.

From the shores of Maine, to Texas and California, to the tip of Barrow, we live in peace because centuries ago, so many fought for something far greater than themselves, and so many continue to fight for us today.

So I say God bless our military on this eve of Independence Day.

Well, people who know me know that besides faith and family, nothing is more important to me than our beloved Alaska. Serving her people is the greatest honor that I could imagine.

I want Alaskans to really be able to grasp what can be in store for our state.

We were purchased as a territory because a member of President Abraham Lincoln's cabinet, William Seward, he providentially saw in this great land vast riches and beauty and strategic placement on the globe and opportunity. He boldly looked north to the future, but he endured such ridicule and mocking for his vision for Alaska.

Remember the adversaries, they scoffed and they called this "Seward folly." Steward withstood such disdain as he chose the uncomfortable, unconventional but right path to secure Alaska so that Alaska could help secure the United States. Alaska's mission, to contribute to America.

We're strategic in the world as the air crossroads of the world, as a gatekeeper of the continent. And bold visionaries, they knew this and they knew that Alaska would be part of America's great destiny, our destiny to be reached by responsibly developing our natural resources.

This land, blessed with clean air and water and wildlife and minerals and oil and gas, it's energy. God gave us energy.

So, to serve this state, it is such a humbling responsibility, because I know in my soul that Alaska is of such import for America's security in such a volatile world today. And I know that you know me by now. I promised four years ago I would be showing my independence and there would be no more conventional politics as usual.

We're doing so well, my administration. My administration's accomplishments, they speak for themselves. We work tirelessly for Alaskans. We aggressively and responsibly develop our resources because they were created to be used to better our world, to help people, and we protect the environment and Alaskans, the resource owners, foremost with our policies.

Here are some of the things that we have done.

We created a Petroleum Integrity Office to oversee safe development. We held the line for Alaskans on Point Thompson. And finally, for the first time in decades, you are seeing drilling up there for oil and gas.

We have AGIA, the gas line project, a massive bipartisan victory. The vote was 58-1.

Also, succeeding as intended, protecting Alaskans, as our clean natural gas will flow to energize Alaska and America. It is very different than what happened before. This time it's through a very competitive pro/private sector project.

This is the largest private sector energy project ever. This is energy independence.

And ACES, another bipartisan effort. It's working as intended, and industry is publicly acknowledging its success.

Our new oil and gas clear and equitable formula, it's so Alaskans will no longer ever be taken advantage. ACES incentivizes new exploration and development and jobs that were previously not going to happen, not with a monopolized North Slope oil basin.

We cleaned up previously accepted unethical actions, and we ushered in bipartisan ethics reform. We also slowed the rate of government growth. We worked with the legislature to save billions of dollars for our future, and I made no lobbyist friends with my hundreds of millions of dollars in budget vetoes, but living beyond our means today is irresponsible for tomorrow.

We took government out of the dairy business. We put it back into the private sector's hands, where it should be.

We provided unprecedented support for education initiatives. And with the right leadership, we finally filled long, vacant public safety positions.

We built a subcabinet for climate change and we took heat from outside special interests for our biologically sound wildlife management for abundance practices, predator control.

We broke new ground on the state's new prison.

And we made commonsense conservative choices to eliminate personal luxuries, things like the jet and the chef and the junkets and the entourage.

And the lieutenant governor and I, we said no to our pay raises. Really, there is so much success in this first term. And this success, I am proud to take credit for hiring the right people.

Our goal was to achieve a gas line project and more fair oil and gas valuation, and ethics reform in four years. We did it in two, and it's because of the people, the good people, good public servants surrounding the governor's office with servants' hearts and astounding work ethics. They are Alaska's success.

And we are doing well. And I really wish you would hear more from the media, more from the media of your state's good progress and how we tackle outside interests, special interests, daily, we're tackling, those interests that would stymie our state, even those debt-ridden stimulus dollars that would force the heavy hand of federal government into our communities with an all-knowing attitude.

I have taken the slings and arrows with that unpopular move, because to veto that, it was the right thing to do, because I know being right is better than being popular. And it wasn't a popular stand to take. But some of those dollars would harm Alaska, and they harm America.

I resisted those dollars because of the obscene national debt that we are forcing our children to pay because of today's big government spending. It is immoral and it doesn't even make economic sense.

Another accomplishment, our law department protected states' rights. Two huge U.S. Supreme Court reversals came down against that liberal 9th Circuit, deciding in our state's favor, just over the last two weeks. We're protectors of our Constitution, and federalists protect states' rights, as mandated in the 10th Amendment.

You don't hear much about the good stuff in the press anymore, though, do you? Some say things changed for me on August 29th, last year, the day that John McCain tapped me to be his running mate. And it was an honor to stand beside a true American hero.

I say others changed. And let me speak to that for a minute.

Political operatives descended on Alaska last August digging for dirt. The ethics law that I championed became their weapon of choice.

Over the past nine months, I have been accused of all sorts of frivolous ethics violations such as holding a fish in a photograph, or wearing a jacket with a logo on it, and answering reporters questions. Every one of these, though, all 15 of the ethics complaints, have been dismissed.

We have won, but it hasn't been cheap. The state has wasted thousands of hours of your time and shelled out some $2 million of your dollars to respond to opposition research. And that is money that's not going to fund teachers or troopers or safer roads.

And this political absurdity, the politics of personal destruction, Todd and I, we're looking at $500,000 in legal bills just in order to set the record straight. And what about the people who offer up these silly accusations? It doesn't cost them a dime. So they are not going to stop draining the public resources, spending other people's money in this game. It won't stop. It's pretty insane.

My staff and I spend most of our day -- we're dealing with this stuff instead of progressing our state now. And I know that I promised no more politics as usual, but this isn't what anyone had in mind for Alaska.

If I've learned one thing, it's that life is about choices, and one chooses how to react to circumstances. You can choose to engage in things that tear down or that build up, and I choose to work very hard on a path for fruitfulness and for productivity.

I choose not to tear down and waste precious time, but to build up this state and our great country, and her industrious and generous and patriotic and free people. Life is too short to compromise time and resources.

And though it may be tempting and more comfortable to just kind of keep your head down and plot along, and appease those who are demanding, hey, just sit down and shut up, but that's a worthless, easy path out. That's the quitter's way out.

And I think a problem in our country today is apathy. It would be apathetic to just kind of hunker down and go with the flow.

We're fishermen. We know that only dead fish go with the flow.

No. Productive, fulfilled people determine where to put their efforts, choosing to wisely utilize precious time to build up, and there is such a need to build up and fight for our state and our country. And I choose to fight for it.

And I'll work very hard for others who still believe in free enterprise and smaller government and strong national security for our country, and support for our troops, and energy independence, and for those who will protect freedom and equality and life. I will work hard for and campaign for those who are proud to be American and who inspired by our ideals and they won't deride them.

I will support others who seek to serve in or out of office. And I don't care what party they're in, or no party at all, inside Alaska or outside of Alaska. But I won't do it from the governor's desk.

I've never believed that I, nor anyone else, needs a title to do this to make a difference, to help people. So I choose for my state and for my family, more freedom to progress all the way around so that Alaska may progress.

I will not seek re-election as governor. And so, as I thought about this announcement, that I wouldn't run for re-election, and what that means for Alaska, I thought about, well, how much fun some governors have as lame ducks. They maybe travel around their state, travel the other states, maybe take their overseas international trade missions. So many politicians do that. And then I thought, that's what's wrong.

Many just accept that lame duck status and they hit the road, they draw a paycheck, and they kind of milk it. And I'm not going to put Alaskans through that.

I promised efficiencies and effectiveness. That's not how I'm wired. I'm not wired to operate under the same old politics as usual.

I promised that four years ago and I meant it. That's not what is best for Alaska at this time. I'm determined to take the right path for Alaska, even though it is unconventional and it's not so comfortable.

With this announcement that I'm not seeking re-election, I've determined it's best to transfer authority of governor to Lieutenant Governor Parnell. And I am willing to do this so that this administration, with its positive agenda and its accomplishments and its successful road to an incredible future...

(END VIDEO CLIP)

MALVEAUX: Well, we just lost Sarah Palin.

We have Candy Crowley here with us to kind of make some sense out of this, if we can.

Obviously, for people who aren't used to hearing Sarah Palin speak off the cuff here, she brought up so many different things. And I'm just not sure what the main point of this was.

At one point she said, "Only dead fish go with the flow," as a reason for her stepping out of her position.

Is she offering a platform when she talks about all the things that she's done and reasons why she's leaving? What do you make of what was the bottom line, what was important about this?

CROWLEY: I think there were several bottom lines, I think, watching this. And part of the problem in listening to her speak, and those who have seen her and heard her speak is, that she does talk off notes, does not -- I mean, she did talk off teleprompters some in the campaign when they kind of wanted to dial back what was going on.

But the last time I saw her was in Evansville, Indiana, well after -- it was earlier this year. And it was the same kind of thing, where it sort of went from one thing to the other, in front of a huge crowd that loved her. It was a pro-life, anti-abortion crowd.

And so it's her speaking style. And it seemed a little ratcheted up to me than usual, but pretty much, she does that when she is not reading off the teleprompter.

The reason is it sounds like it is multi-determined here, but it's clear that she is still smarting from the national reputation that she's gotten by some. It's clear that she still blames the media and other politicians. She says, well, I've accomplished what I wanted to accomplish, and I could be a lame duck and go out and spend a lot of money, but I'm going to pass it over to my lieutenant governor and work outside the government.

I thought it was interesting that she said, I will campaign for anybody who watts to improve America. Well, that's what people who are going run for office do. If we're going to read teal leaves, there is another tea leaf that, as you know, you gather up chits. And that's a way to do it.

MALVEAUX: Sure.

I want to bring in our own host of "STATE OF THE UNION," John King, who joins us on the phone.

And John, you've been listening to this, following this as well. You followed it very closely.

What did you take away from her statement?

KING: Well, Suzanne and Candy, she said she was unorthodox. And I think after that statement, there's no arguing with that.

It's a bold risk for her. Whether there are internal Alaska reasons, as she noted, the ethics investigation, for her to do this, that will be thwarted out within her state.

When you look at her as a potential national candidate down the road, the question will be is she helping herself or hurting herself here? Yes, she frees herself up from the day-to-day responsibilities of being governor if she wants to now build a national base and run a national campaign, but remember the criticism of her in the campaign in where she hurt McCain in the end, within the suburbs, particularly among more affluent suburban women who questioned her experience and her readiness to be vice president and if, God forbid, something happened, president of the United States.

Well, now she is stepping down without completing her one term as governor. So, if she decides to run for president now, she will be a candidate criticized in the last campaign for not being ready, who will be a less than one term governor seeking the presidency of the United States, at that moment against an incumbent president. And so if you are looking at this from a national political perspective, and what is her future, this is a very, very risky and, to use her word again, very unorthodox decision.

MALVEAUX: And John, this maybe be a bit of a stretch, but is there a possibility that she is thinking of running for the Alaska Senate seat in 2010, when that seat potentially becomes open? Is there -- that race takes place.

KING: That's a great question. And the Senate, of course -- and Barack Obama is the notable recent exception -- the Senate is not known as a place that launches people to the presidency. But that is a potential route for her now.

If she is the governor and she says that she's stepping down as governor because of all the questions about her -- people keep challenging her within the state of Alaska, would she then do an Alaska Senate race, another statewide race? It's a fascinating question.

All indications from people around her have been that she's not interested, that she has no interest having been a chief executive, both as mayor and now as governor, to come into the field of 100 in the United States Senate. But that is a question before us. And she has announced a major change today, and when politicians make big changes, they often recalculate everything before them. So that is a fascinating question that we'll all need to answer in the weeks ahead, without a doubt.

MALVEAUX: Thank you so much.

John King, the host of "STATE OF THE UNION."

I want to bring in Ed Rollins, a Republican strategist, to weigh in on this.

Obviously, she's a very popular figure when it comes to the grassroots, the base of the Republican Party. There's some folks in Washington, however, who she is not in favor with.

What do you think overall is going to be the response from the party for her stepping down at this time?

ED ROLLINS, REPUBLICAN STRATEGIST: Well, first of all, I think everyone is shocked by this, and I think to a certain extent, everyone is going to assume there is another story. You don't just quit with a year and a half to go as governor. You certainly don't do this as a stepping stone to run for president.

You finish the job that you're in. And obviously she is not doing that.

I think people are going to be very suspicious because of the timing. You don't quit on a Friday, on a three-day holiday. If you're going to do this, you think it through. You give a good speech. You basically have an audience.

And I think to a certain extent, this has just made her look terribly inept. I think that's been one of the questions that people have about her, is she substantive enough to be a more serious candidate for president than anything else?

So, my sense is she is a young woman, so it's never the end. And I've been around politics too long to ever think anybody's finished, but at this point in time, there's going to be a lot of people looking hard at this. There's a lot of Republicans that are going to be shaking their head after the last week or 10 days we've had with Senator Ensign and Governor Sanford. This is just one more blow to the body of the Republican Party. So I think there's not going to be any happiness anywhere by this decision, except maybe the lieutenant governor of Alaska, who now gets to finish her job.

MALVEAUX: Ed, you brought up the fact that she mentions -- she does this in such a way, that it really is -- it's the beginning of the July 4th weekend, a lot of people taking time off, or in traffic, they're going to picnics, that type of thing.

Do you think that she was trying to bury this news, or why do you think that she actually did it this way?

ROLLINS: If she did it by thinking she was going to bury the news, I mean, obviously this is a tactic that you use when you want to bury something, but this is not a story you want to bury. And you can't bury it.

I mean, she was the running mate and is viewed as a serious candidate in the future. So, my sense is the idea that this story is not going to go away.

You may be stuck today finding people to come on and talk, just as you were with me, but by Sunday, Monday, Tuesday next week, this is a story that's got long legs and everyone is going to go look hard again.

She's going to have another total review of what's going on in Alaska, almost the scrutiny she had when she was first announced. This just doesn't make sense. It goes against anybody's common sense, and it certainly doesn't enhance her in any way, shape or form.

MALVEAUX: And Ed, I know it's hard to predict as these events unfold, but at one point you did think rather highly of her. You called her a brilliant but risky choice for vice president.

Are you reassessing what you think about her now?

ROLLINS: Well, you listen, it was a brilliant, bold move at the time. I think she had two great weeks at the beginning of that campaign. I think she energized the base.

I still think she is very popular among the base. But everybody around the country who's for her -- and many people might be shaking their heads saying, ,why quit now? I mean, you've got two more years, a year and a half to go. If you want to finish out your term and use your family, whatever, as the excuse, fine. But you don't quit in the middle of a term.

We're not a party of quitters. And basically, to walk away right now without scandal or what have you, because the job is tough or somebody else can do it better, and the idiotic story about "I don't want to be a lame duck," I mean, everybody's a lame duck. There was a period in this country where half the governors only had four-year terms.

So I think the reality is that -- all that she has done today has raised very serious questions. MALVEAUX: Ed Rollins, I want to thank you.

I want to go back to Candy Crowley quickly.

Because I know that you have Democratic responses as well that you seem to be getting on your BlackBerry fast and furious here.

CROWLEY: It's certainly an indication that she still has a high profile.

This from the Democratic National Committee: "Either Sarah Palin is leaving the people of Alaska high and dry to pursue her long shot national political ambitions, or she simply can't handle the job now that her popularity has dimmed and oil revenues are down. Either way, her decision to abandon her post and the people of Alaska who elected her continues a pattern of bizarre behavior that more than anything else, may explain the decision she made today."

MALVEAUX: There you go. We were discussing as well, she has a lot of support within the Republican base. What is her appeal among moderates? Does she have a chance in expanding her appeal?

CROWLEY: Among Independents in the last CNN poll in May she had a 48 percent approval rating, which astonished me. She is divisive. When you add in the Independents who don't approve of her and Democrats, her disapproval rate is higher.

She is an interesting figure. I totally agree with Ed. All this does is say what's really going on.

SUZANNE MALVEAUX, CNN ANCHOR: I want to bring in somebody else. Paul Begala, Democratic strategist as well as CNN contributor. What do you make of this, Paul? What do you think is going on?

PAUL BEGALA, DEMOCRATIC STRATEGIST, CNN CONTRIBUTOR: First off, obviously, we don't know all the facts. It cannot simply be that she is just kind of tired of being governor.

You begin with the personal. Is she OK? Clearly, yes. She is in "Runner's World" this month, looking great, totally fit, very healthy. She seemed the picture of health on the campaign trail. So you tend from the outside to discount any problem like that.

And then you are left with the political and the professional, which does look a little flaky. We don't know what is really going on, but let's presume that there is no legitimate health issue she has to deal with, because she seems so completely healthy, it's just very flaky. It is odd.

And here is a woman who was asking the voters to make her a heartbeat away from the presidency, and now she is not going to finish her term as governor.

I can't imagine. I'm flabbergasted. This is not the path, if I were trying to advise her, this is not the path to running for president in 2012. She is a governor in an important state. Everyone was telling her, go home, do a good job, study up on issues, and you will be in a position to come back.

As Candy pointed out, she's very popular with the grassroots conservatives in her party. But I don't that even they are going to think it is good idea to walk away from you post.

MALVEAUX: OK, Paul, thank you so much. I want to thank everybody who weighed in the new story, Paul Begala, John King, Candy. Obviously, all of you guys will be staying with us. We will be updating our viewers as the story unfolds.

And then I want to return the corner. We are continuing to follow developments on Governor Sarah Palin. But there is a disturbing new discovery in the investigation of Michael Jackson's death. In a report that a powerful sedative found in his home, and growing concerns that drugs may have contributed to his death.

And Vice President Biden in Iraq on a Fourth of July mission to ease political fireworks.

(COMMERCIAL BREAK)

MALVEAUX: Now to the most sought after Michael Jackson tickets ever. And they are free. Thousands of people are registering online right now to get into Tuesday's memorial service in Los Angeles.

Tomorrow night, 8,750 names will be randomly chosen to get two tickets each. The Jackson family will hold a private ceremony Tuesday before the public service at the Staples Center.

In the investigation of Jackson's death the Associated Press reports a powerful sedative diprivan was found in Jackson's home. It's an anesthetic that is widely used in operating rooms to induce unconsciousness.

Let's bring in Drew Griffin of CNN's special investigations unit. Drew, this is not the first time we have seen diprivan in connection with Michael Jackson. Is that right?

DREW GRIFFIN, CNN CORRESPONDENT: That's right, Suzanne. We want to be very careful with what we are telling our viewers here. It is the Associated Press using what we believe is a single source who is saying diprivan or propofol was found inside the home of Michael Jackson.

This is that strong sedative that would be used basically to put people out under ICU conditions or people going into surgery. We talked to Sanjay Gupta about this. This is really a drug that needs to be constantly monitored, administered to the body in a drip.

A.P. is reporting that this was the drug that was found inside Michael Jackson's home.

Now, in early spring, the nurse practitioner who was at Michael Jackson's home helping with his nutritional needs and trying to help with sleep problems, told us that at one point Michael Jackson asked her to find this drug for her or find somebody who would find it. Here is a part of that interview I did with her earlier this week.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: I said who is the doctor? And if he gave it to you, where is he? I mean, why are you asking me? He said "I don't know where he is. It was a long time ago, but I know this worked for me."

And he actually sat there and said "I'm telling you, when I have that IV in my hand, when I have it in my hand, when it drips in my body the first drop, I'm asleep. And all I want to do is sleep."

(END VIDEO CLIP)

GRIFFIN: That was the description that Michael Jackson was giving this woman about his experience reportedly with diprivan previously. She couldn't say when that took place, only that Michael Jackson was asking for that. That would be sometime around April.

Again, the LAPD is not confirming this. The L.A. coroner's office has been silent on its autopsy findings. We have this from a single source, and whether or not this drug was indeed found in Michael Jackson's body, we have no idea at this time -- Suzanne?

MALVEAUX: Drew, thank you very much. Drew Griffin.

Tuesday's memorial for Jackson surely will be a tribute that is fit for a king, but it may cost a king's ransom. And who is going to pay for this?

Let's bring in Jan Perry, Los Angeles city Councilwoman and the cities acting mayor. Mayor Perry, thank you for joining us here in "The Situation Room."

Give us a sense, obviously California now is writing IOUs for expenses. How is the city of Los Angeles going to pay for this memorial service?

JAN PERRY, ACTING MAYOR, LOS ANGELES: Well, we have a budgeting process that we go through every year. And as part of the budgeting process for the Los Angeles police department, we always budget for extraordinary events.

So there is an account that has been designated to be there for extraordinary events. This is a large city, a major world class city, and so we are accustomed to having extraordinary events here, like the Democratic National Convention. We have had several major officer funerals. Farrah Fawcett's funeral was held here the other day. And the list goes on and on.

So we have budgeting set aside for this.

What we would appreciate, and I want to say this publicly, is any individual, corporation, anyone who has great love for Michael Jackson, we do have incremental expenses, the sanitation, the clean up afterwards, the information technology support that we will have to have.

Anyone wishing to donate or reimburse the city for those expenses, like members of the public did for the Lakers parade, would really be greatly appreciated.

MALVEAUX: So you are saying you are considering private donations to help out and expenses of the memorial service, that the city would accept private donations?

PERRY: That would be fantastic, absolutely, to reimburse us.

MALVEAUX: Why not have the whole service itself, why not have this be privately funded as opposed to having the city pick up the tab?

PERRY: The city is not picking up the tab for the service. This service is a private service which is being hosted by AEG. But as a city, we are obligated to protect the public on the outside. They have a perimeter set up.

The perimeter will go from from Olympic to Pico to Flower to Blaine Street. And anyone who does not have a ticket cannot enter the perimeter.

But it is our obligation as city to make sure that we maintain public safety. So whatever one chooses to do on private property, which is what is going on here in the Staples in L.A. live private property, the spillover effect is what the city is responsible for handling.

MALVEAUX: Sure. Do you have any idea, any estimate at this point what it might cost for security and the type of thing you are talking about?

PERRY: At this point we'll have to wait until the event has concluded. I have put out a call to all department heads that may be participating in the planning of this. They are having a logistical support meeting right now at 1:00 in our emergency operations center so we can map all that out and perhaps get some decent numbers by Monday.

MALVEAUX: Obviously, you are expecting thousands and thousands of people to show up there. How are you going to deal with crowd control and the safety of those people who show up over the weekend in the days ahead?

PERRY: That is the obligation of the police department to make sure that all those who are here in the public right away, the common areas, are safe and that public safety is maintained.

But remember this, Mr. Eli Whitney announced the limited number of tickets that would be released. And he encourages, and I also support him in that, that anyone who does not have a ticket should not probably come down here, because they will not be able to enter the perimeter, and therefore they will not be able to see anything.

MALVEAUX: Thank you very much. Mayor Perry, appreciate your time.

PERRY: Thank you, take care.

MALVEAUX: It is a risky move if Sarah Palin wants to run for president someday. And our strategy session, the wisdom or folly of her decision to step down as Alaska governor.

And another Republican governor's drama -- is Mark Sanford anywhere close to putting the fallout from his extramarital affair behind him?

And Vice president Joe Biden on a peace mission of sorts in Iraq.

(COMMERCIAL BREAK)

MALVEAUX: More now on the story that is shocking the political world. The highly visible governor of Alaska, just months after being thrust into the national stage, will resign as governor this month and will not run for governor again.

Let's bring our CNN deputy political director Paul Steinhauser. Paul, I understand that you have some polls that pretty much lay out what people think of Sarah Palin and her chances.

PAUL STEINHAUSER, DEPUTY POLITICAL DIRECTOR, CNN: Yes, exactly. It is only 2009, Suzanne, and the next presidential race is a long way away.

But CNN and other polling organizations, we are taking a look every now and again at the possible race for the White House on the Republican side.

Take a look at this. CNN and the Opinion Research Corporation, we did this national poll back in May. And you can see here, we suggested five people who may want to run for the Republican nomination. Then you can just tell, it is wide open at this early rate.

Right now, Mike Huckabee, the former Arkansas governor who ran last time, Mitt Romney, the former Massachusetts governor who ran last time, and Sarah Palin, basically a three way dead heat right now. But it is so early. But it is a snapshot of what Republicans nationwide are thinking -- Suzanne?

MALVEAUX: And Paul, what about favorabilities? What are the polls showing there?

STEINHAUSER: A very different story. Take a look at her overall favorability among all Americans, and you can see slightly more have an favorable opinion of her than unfavorable.

But when you break it down by party, this is where it is very interesting. And of course would be the Republicans that matter the most.

And you can see, Republicans, 80 percent of those we polled had a favorable opinion of Sarah Palin. That is very high. Independents, 47 percent favorable, and, obviously, among Democrats they don't think very highly of Sarah Palin -- Suzanne?

MALVEAUX: OK, Paul, thank you so much for breaking it down for us, appreciate that.

Here for today's strategy session, Democratic strategist Karen Finney, a former communications director for the DNC, and Republican strategists Tony Blankly, a former spokesman for Newt Gingrich.

Thanks for joining us on this breaking news on a Friday, really quite surprising. Let's start out with the Sarah Palin bombshell, if you will. What do you make of this? Why do you think that she is leaving now? Is there any benefit here for her stepping away from her position? Let's start with you, Karen.

KAREN FINNEY, DEMOCRATIC STRATEGIST: Sure. It is pretty surprising, although it sounds like perhaps she is trying to keep her options open for 2012. Although we've seen the governor has had some pretty bizarre behavior in the last few months, so it does make you wonder who she's listing two and two is is advising her now is the time to do something like this given that being governor gives you a policy platform you would think she would want to continue to utilize that sort of looking forward to a run.

And also interesting to do it in on Friday. When I was in the White House press, we always said that is like throwing out the trash. Friday is when you push stuff out into the weekend.

So it's interesting timing and a very surprising announcement.

MALVEAUX: Tony, what do you make of this? I mean, a fellow Republican, what does this mean for the party, for her future in the party and where she goes from here?

TONY BLANKLY, REPUBLICAN STRATEGIST: Noticing that in the first hour since she made this announcement, Washington politicians from both parties have gone nuts, suggests me that she has probably done something pretty smart.

And while normally Friday of a three-day weekend is a place to bury the news, we are all here talking about it. She is the only one deciding to make news this Friday. So she will have three days of news that nobody else to cover. So she actually launched very well.

I think it is an interesting move. I have been given time to think about it. Everybody had one hour. But my first thought is this is going to be a pretty tough time for incumbents these next couple of years in America with everything going to hell, and not being in office may be an advantage.

MALVEAUX: Does it help or hurt her? She is writing a book, perhaps give a book tour, and really kind of lay out the picture to Americans who she is, what she is on her own terms.

FINNEY: Certainly, it is bizarre timing. That being said, if you look at the pluses, it does give her the opportunity to do the thing that she really ought to be doing, and that is she is very popular with the Republican base.

And now she can continue to court that base. That is one of her greatest assets at this point. So she is freer to travel without some of the restrictions you might have as governor in terms of speaking engagements.

I find it a little bit odd just the irony that this is the governor that everybody wants to have step down is not stepping down, and here is the one you wouldn't expect to step down is stepping down.

BLANKLY: Just at a technical level it makes sense for Alaska. In other words, a typical governor or senator who wants to run for president, they are based in Philadelphia or Chicago, and it's an hour and a half flight to everywhere they wanted to go. She's got like a seven hour flight to get to here.

To just commuting back and forth, it's very hard to be governor and a player down in the lower 48.

Also, she doesn't have to struggle, so many candidates do, with the official staff of the current office and the political staff of the future office. This way she will have a united staff. She can be versed in these to be. I think it makes a lot of sense.

MALVEAUX: Do both of you agree that you think this is a clear sign that she is going to make a run for it in 2012?

BLANKLY: I wouldn't want to predict anything, but she --

MALVEAUX: Come on. Why not? It is Friday.

(LAUGHTER)

BLANKLY: I think he's moving down the path towards it.

FINNEY: I think it is pretty clear she is trying to keep all her options open. That's what I would read there.

FINNEY: And obviously the segue, you gave me a perfect one when you talk about Governor Sanford of South Carolina. A lot of peopling taking a look at what he is doing this weekend. Obviously, we have been told he is going to spend some family time this weekend.

FINNEY: It is about time.

MALVEAUX: Jenny Sanford says that she is willing to give him another shot. Is he taking a break now and buying time, or has this thing basically been put to bed?

FINNEY: I don't think he can buy himself some time. I think it is pretty clear that he has lost the confidence of the people of South Carolina. And I don't think a weekend with your family gets you around that, saying things like you are going to try to fall back in love with your wife.

Clearly, he has some pretty serious personal matters to attend to. And he should do those things. It's totally appropriate for him to be with his family. But maybe that means he shouldn't do that and try to be governor.

MALVEAUX: Got to leave it there. Thank you so much for joining us today.

"Give me your huddled mass." If you yearn to walk up to the statue of liberty's crown, you will again get your chance. That is tomorrow. And we'll show you that today.

And will Michael Jackson get his dying wish? He wanted his mother to have custody of his children. But will former wife Debbie Rowe complicate that? We'll look at who she is and what they were like as husband and wife.

(COMMERCIAL BREAK)

MALVEAUX: Afghanistan may need what Iraq has, that is, more U.S. troops. Despite troops pulling out of Iraq city and towns, the war torn country has major issues to resolve. And that is why Vice President Biden is in Iraq.

Let's turn to CNN White House Correspondent Dan Lothian. And Dan, tell us about the trip.

DAN LOTHIAN, WHITE HOUSE CORRESPONDENT, CNN: Vice president Biden, as you mentioned, is meeting with top government officials in Iraq, including Prime Minister Malaki, telling them the future is now their responsibility even as the US starts focusing on another hotspot.

(BEGIN VIDEOTAPE)

LOTHIAN: On this Fourth of July weekend, Vice President Joe Biden is saluting American troops in Iraq. But his real mission in Baghdad is to tamp down the fireworks between sectarian groups in the wake of a major pullback of U.S. combat troops.

JOE BIDEN, (D) U.S. VICE PRESIDENT: Iraqis must use the political process to resolve the remaining differences and advance the national interest. And we stand ready, if asked, and if helpful, to help in that process.

LOTHIAN: Helping to drive the U.S. strategy in Iraq, General Ray Odierno and Ambassador Christopher Hill.

BARACK OBAMA, (D) PRESIDENT OF THE UNITED STATES OF AMERICA: There's still a lot of work to be done there. And right now, I think because the national election is coming up, we're not seeing as much cooperation and compromise as we'd like to.

LOTHIAN: A lingering problem for the U.S. as it tries to refocus on Afghanistan. And the most significant military operation there since the 2001 operation, U.S. marines are going after entrenched militants in southern Afghanistan.

Americans seem to be split on this latest offensive. In a CNN Opinion Research Corporation poll 50 percent said they favor the war in Afghanistan, 48 percent oppose it.

When asked if the administration planned to prepare the public for the loss of more young men and women on the battle feed, this is what White House spokesman Robert Gibbs had to say.

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: I think the American people understand the sacrifice and commitment that the men and women and of the military have made, and the men and women that worked to stabilize the economic and governance issues that also face Afghanistan.

(END VIDEOTAPE)

LOTHIAN: Ahead of the president's trip to Moscow next week, Russia announced that they have agreed to allow U.S. troops and weapons to fly over their territories on the way to Afghanistan. This is a crucial new route, especially as the U.S. ramps up operations there -- Suzanne?

MALVEAUX: OK, thank you so much, Dan. A very significant development.

We are getting reaction from all the angles to breaking news that Alaska Governor Sarah Palin is stepping down. The best political team on television working their sources right now.

And we will take a closer look at the powerful sedative reportedly found at Michael Jackson's home. What is diprivan, and could it have contributed to Michael Jackson's death?

(COMMERCIAL BREAK)

MALVEAUX: On our political ticker, President Obama's robotic appearance at Disneyworld. It is the newest edition to the Hall of Presidents, featuring automated versions of the commanders in chief. The attraction has been around for over 30 years.

And President Obama has two big reasons to celebrate this weekend while he is at Camp David where he will celebrate the nation's birthday and his daughter's birthday.

Malia Obama turns 11 on July 4th. About 20 of her friends will join the first family's celebration.

You're in the "Situation Room." Happening now, breaking news, Sarah Palin drops a political bombshell, announcing that she is resigning as governor of Alaska.

Also, a disturbing new report of a powerful drug found in Michael Jackson's home. Could it hold the key to unlocking the mystery of his death?

And she is the woman who could change everything in Jackson's will. The mother of his children, Debbie Rowe, now weighing in on a possible custody battle.