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The Situation Room

Interview With Bill Clinton; Goldman Sachs Accused of Fraud

Aired April 16, 2010 - 18:00   ET


WOLF BLITZER, CNN ANCHOR: Almost every American can recall exactly where they were when they first heard the news -- 15 years ago Monday, a massive, homemade bomb ripped apart the Murrah federal office building in Oklahoma City, killing 168 people.

The shock of the attack was compounded when it became clear that it was an act of domestic terrorism carried out by a young U.S. Army veteran who had grown to hate the federal government.

Bill Clinton was the president of the United States at that time. He sat down with me today to recall that day.


BLITZER: Mr. President, thanks very much for joining us.

It seems only -- at least for me and I assume for you -- like yesterday, April 19, 1995.

When you first heard that there was an incident in Oklahoma City, I assume you remember where you were, what immediately went through your mind.


I was in the White House. And we -- first, I thought that it had to be some sort of attack. And, second, I wanted to make sure we were doing what we were supposed to do. And the third thing I remember thinking was, we can't jump to conclusions here, that the easy thing would be to go out and start talking, and we need to just be quiet, help where we can, and see what the real facts are.

BLITZER: Because the immediate instinct for a lot of -- quote -- "analysts" after the '93 first World Trade Center bombings, these must be Arab terrorists.

CLINTON: A lot of people thought it was Arab terrorists. And, frankly, it wasn't just the World Trade bombing. By then, we had been trying to block attempts to bomb up the U.N. and the Holland and Lincoln tunnels.

I mean, there was a lot of evidence that there was a sustained effort to conduct operations in America. But, you know, we held back. Just instinctively, it seemed sort of funny. I -- I -- it wouldn't have been even irrational for a foreign terrorist to try to pick a target in the heartland. But I'm glad we didn't. And, of course, we know now it was different.

BLITZER: I want you -- we have got some video. I want to show you these pictures. Look at these pictures, because people don't remember what was going on. You were there. I was there. But it wasn't just the federal -- the Murrah federal office building. It was that whole area...


CLINTON: Oh, yes. Well, look at it. We had 300 buildings had some damage or another.

And if you look at the Murrah Building there, what happened was, it just -- the bomb was a concussion. I think a lot of times, ordinary people think that you get hit by a bomb, it's something goes into your body and pierces it.

Most of these people were casualties of this powerful concussive effect that brought that structure down. And this is an exaggerated example which will help everyone understand why traumatic brain injury is such a big problem of veterans of Iraq and Afghanistan now.

If they're around these roadside bombs, their brains can rattle around in their skulls. That's what happened here to all these buildings, and that's what killed most of these people.

BLITZER: It's hard to believe. You see -- you look at these pictures now, it's hard to believe that this was -- until 9/11, this was the worst...


CLINTON: The worst terrorist attack in our history.


CLINTON: Look at it. It's -- and if -- it's -- when you look at this building, you can also see why, for days and days, it was hard to be sure that everyone whose body had not been recovered was dead, because people thought about -- and you can also see, looking at this, how the young man who introduced me here today, who was there, fell from the seventh to the third floor.

BLITZER: And survived.


CLINTON: Survived and was conscious and crawled his way out of the building there. But he fell four floors.

And now, when you look at what happened, just the face ripped off the building, you can see how it happened.

BLITZER: All right. So, you came out there. I remember that memorial service...


BLITZER: ... where you spoke. And I think it was one of the turning points, if not the turning point, in your first term, because it resonated with so many people out there.

I'm going to play a little clip for you...


BLITZER: ... what you said on that day. Listen to this.


CLINTON: This terrible sin took the lives of our American family, innocent children in that building only because their parents were trying to be good parents, as well as good workers, citizens in the building going about their daily business, and many there who served the rest of us.


BLITZER: As you think back on that and you think ahead 15 years, could that kind of domestic terror attack occur again?

CLINTON: Well, I think that, in fairness to the public officials that were the main victims here and their families, I think that we have done a much better job over the last 15 years of preparing for it and guarding against it, and trying to be alert to the most extreme members of groups that advocate violence, for example.

But I think the circumstances have a lot of parallels. For example, there's the same kind of economic and social upheaval now than there was then. I say, in 1993, the economy, for most average people who were likely to be drawn into this was not quite as bad as it is today, but the social upheaval was even greater.

There was more crime. There was more gang violence. There was more of a sense of disintegration after the Cold War. So there were big psychological pressures. Then you had the rise of the extremist voices on talk radio. Here, you have got a zillion Internet sites, people, you know, pumping up a lot of these...

BLITZER: So, what you're saying, it potentially could be worse today because of this echo chamber?

CLINTON: Yes. The echo chamber is bigger today. And there are more voices in it.

But I think that the country is not without memories of this, and I think this 15th anniversary will bring them back. And I believe that, not just at the national level, but the state and local people are better at scoping the potential attacks out.

(CROSSTALK) CLINTON: So, could it happen again? Yes. Will it? I hope not, and I think we have learned something about it.

BLITZER: We're talking about domestic terrorism now.

CLINTON: Yes, of course.

BLITZER: The hatred that Timothy McVeigh, that he had, there are others, there are plenty of people right now.

CLINTON: Lots of them.


BLITZER: Do you feel it's more intense today and it's greater today than it was 15 years ago?

CLINTON: I can't say, but I will -- there were -- Oklahoma City was the last of a series of very high-profile violent encounters, at least the last high-profile one. We have had several since.

And now there are all these groups, you know, saying things like the current political debate is just a prelude to civil war and all of that kind of stuff. But, you know, there was a lot of that tough stuff back then that Gordon Liddy was on the radio telling people, if the ATF agents came, to be sure and take a head shot at them because they had vests on.

BLITZER: But he didn't seem to have much support at that time.


BLITZER: Now there seems to be, at least if you go to these Web sites, you listen to some of this...

CLINTON: Well, that's the thing. See, it's still a minority, but they have -- they can communicate with each other must faster and much better than ever before. The main thing that bothered us at the time of Oklahoma City was, already, there was enough use of the Internet that, if you knew how to find the Web sites -- not everybody even had a computer back then, but, if you knew how to find it, you could learn, for example, how to make a bomb.

Now everybody's got a computer. Web sites are easily accessible. And you can be highly selective and spend all your time with people that are, you know, kind of out there with you.


BLITZER: Bill Clinton is worried that President Obama's a lightning rod for hostility and possibly violence. More of my interview with the former president, that's ahead.

And the government accuses Wall Street's most powerful firm of ripping off investors in securities tied to subprime mortgages.

Plus, why that giant ash cloud is forcing the U.S. military to reroute medevac flights from the war zones.


BLITZER: Much more of my interview of Bill Clinton coming up, but let's go to Jack Cafferty right now for "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: Watching that in the office. That's fascinating stuff.


CAFFERTY: Both sides say that the bond is unshakable, but it's pretty hard to ignore the rising tensions these days between the United States and Israel.

And now President Obama's signaling a shift in American policy in the Middle East by declaring that the Israeli/Palestinian conflict is a -- quote -- "vital national security interest of the United States" -- unquote.

He's drawing a direct link here between what's happening in Israel and the safety of U.S. troops fighting Islamic extremists in the region. "The New York Times" reports the president's shift in tone reflects a debate within the administration over how to -- quote -- "best balance support for Israel against other American interests."

It's no secret the administration has been frustrated with the lack of progress in the peace talks, and they were not happy at all with Israel's recent snub of announcing a massive new Jewish housing project while Vice President Joe Biden was in their country.

That was reportedly followed by a very tense meeting between President Obama and Israeli Prime Minister Benjamin Netanyahu at the White House. Israel's right-wing government is concerned that the United States will try to push through a peace deal on its own, meaning they would have to give up things they don't want to give up, and that the Palestinians might declare statehood unilaterally as early as next year.

To that end, Israel has spent much of the last week highlighting threats that it faces in the region, from a potentially nuclear-armed Iran to charges that Syria's providing weapons to Hezbollah guerrillas in Lebanon. Syria, by the way, says that's not true.

Anyway, here is the question. How should the U.S. change its policy toward Israel? Go to and post a comment on my blog.

You get the sense that something's going to give one way or the other on that deal.

BLITZER: Yes. It's a tense situation, very tense right now. Jack, thank you.

The government is accusing Wall Street's most powerful firm of fraud. The Securities and Exchange Commission says Goldman Sachs ripped off investors in securities tied to subprime mortgages.

Lisa Sylvester's looking in to this story for us.

It involves some complex financial instruments, as they say.


And one way to look at it is, imagine that you're sitting at the poker table and you're feeling pretty lucky, but what you don't know is that the dealer gets to decide what cards you get, and every single time, you're dealt a losing hand and lose money.

Well, that's what the SEC said happened to investors here. Goldman Sachs was selling a portfolio of mortgage-backed securities called Abacus. There was another company, a hedge company called Paulson and Company, and they got to pick and choose what mortgage investments were put into that portfolio.

Now, the SEC says what Goldman did not tell investors, though, was that Paulson and company, that they had every reason in the world to pick the dog investments, you know, those mortgages that they knew were most likely to go into default.

So why would Paulson do that? Well, one reason is because they had taken out insurance betting that the portfolio was going to fail. And, according to the SEC, a Goldman vice president, Fabrice Tourre, was telling investors, hey, go ahead, put your money in here, you're going to win, while at the same time knowing that there was a good chance, based on the Paulson picks, that it would fail.

Now, Goldman Sachs is denying the charges, calling them in a statement completely unfounded in law, in fact, and it plans to vigorously contest these allegations -- Wolf.

BLITZER: Lisa, how much did investors lose, and I guess, more importantly, can they get their money back?

SYLVESTER: Oh, there was a lot of money at stake, Wolf -- $1 billion is what investors lost.

Now, John Paulson, the guy behind Paulson and Company, he made $1 billion as these mortgage securities collapsed. Now, investors, they may file private lawsuits to try to get some of the money back, and if this case ends up going to court and the court rules in the SEC's favor, that will make a strong case for Goldman Sachs to have to repay investors, but we're a long away from that point, Wolf.

BLITZER: So, though, the penalties facing Goldman Sachs potentially and John Paulson?

SYLVESTER: Well, at the very least, from where we're starting off right now, Goldman Sachs has to give up $15 million that it made in commissions in the deal. Now, on top of that, they could also face other financial penalties.

Now, as for John Paulson, though, and his company, they're not actually charged here. It's Goldman Sachs that's charged with fraud for failing to fully disclose to investors. The SEC said Paulson wasn't the one selling the portfolio and had no duty to the buyer.

So, although they are the ones who made the money, an SEC spokesman said what Paulson and company did was basically legal.

BLITZER: Well, so that's going to be the legal fight. But Goldman Sachs, as you know, the first three months of this year, they showed a profit of $3.3 billion.

SYLVESTER: And that's -- yes. And, as you well know, Goldman Sachs is seen -- you know, they got help from the government, federal government. They made all of this money within months.

And now you start seeing that they were -- you know it sounds like they were playing fast and loose with the rules.

BLITZER: What a case.

SYLVESTER: It's allegations, though, at this point. We should emphasize that.

BLITZER: Yes. It's going to be a huge legal case, lots of money involved.

Thanks very much, Lisa. Good report.

Bill Clinton worries about the angry rhetoric aimed at President Obama. I will ask the former president of the United States about a climate of extremism in America.

Stay with us, more of the interview right here in THE SITUATION ROOM.


BLITZER: You have been hearing former President Bill Clinton talk about the horrific homegrown terror attack 15 years ago in Oklahoma City.

We want to give you a little sense of what it was like. I was there right after the bombing of the federal building. Look at these reports. Listen to this.


BLITZER: The Murrah federal office building in Oklahoma City was ripped apart by a truck bomb.

President Clinton was quick to praise U.S. law enforcement authorities and to issue yet another warning to those responsible for the Oklahoma City bombing.

CLINTON: Justice for these killers will be certain, swift, and severe.

BLITZER: We're here in Oklahoma City, where later today the president and first lady will be attending a memorial service.

The president is about to walk in, Bernie. We see some of his Secret Service agents preceding him. And no doubt, when he does arrive here, there will be a very warm response.

CLINTON: We mourn with you. We share your hope against hope that some may still survive. We thank all those who have worked so heroically to save lives and to solve this crime. Justice will prevail.



BLITZER: All right, let's get to more of my interview with the former President Bill Clinton.


BLITZER: I guess the question is, is the rhetoric that we're hearing today -- I don't know if you want to get into the Tea Party, or some of the expressions you're hearing there...


BLITZER: ... or what we're generally hearing from a small, but very, very vocal group -- is that potentially dangerous?


Most of the Tea Party people, though, are explicitly political. You got to give them that. Now, forget about whether we disagree with them or not. It's really important to be able to criticize your government and criticize elected officials. That never bothered me.

Nobody's right all the time, and it's part of the lifeblood of liberty. The freedom of speech means the freedom to criticize in part. And so most of them have been understanding that they are not like the Boston Tea Party, when there was no law, there was no representation.

They just have representation they didn't vote for and don't agree with. But they -- most of them have been well within bounds in their harsh, but limited criticism -- that is, they're not advocating violence or encouraging other people to do it.

But some of the things that the secessionists have said, the Idaho militia says that, if they want to secede in Idaho, they will support them military. Some of the things these Three Percenters have said, some of the things these Oath Keepers have said, that's more like the extremist and the militia groups or what David Koresh did or some of the other people, that -- that -- all of which influenced Timothy McVeigh.

I think it's important not to draw too tight a historical analogy. The Toyota thing I want to say is, I'm not interested in gagging anybody. I actually love this political debate. I would like to be a part of it. I was a tiny part of it when the president asked Hillary and me to make some calls on the health care thing, and then for me to go out and speak to the Senate and others on it.

But I just think that we have to be careful. We have been down this road on more than one occasion before. We don't want to go down it again.

BLITZER: The other difference -- yes, the Internet has exploded over these 15 years. There's a Democratic president now. You were a Democratic president then. But the other big difference is, there's an African-American president.

CLINTON: Yes, and an African-American president whose father was from Kenya, who has been -- whose mother's second husband was a Muslim.

And so he's had all these attacks from the birthers and others. I do think -- and he's had a lot of threats, and also the members of Congress have had a lot of threats against them. We had a lot of threats. I remember when that guy came from Colorado and opened fire on the White House with an assault weapon and sprayed the press room.

Do you remember that? Some of the bullets got in the press room.

BLITZER: Yes, on the North Lawn of the White House.

CLINTON: And he were -- they were so angry at me. And they were madder at me. I was sort of an apostate, and he's an outsider -- that is, the white Southern Protestants, of which I am one, were the heart and soul of the then right-wing movement in America, of the right wing of the conservative property, and also were a lot of the people who were most alienated. So, they figured, you know, what was the matter with me? I was a traitor to my class sort of.

President Obama is different, and symbolizes the increasing diversity of America. And both of them -- and, for him, it's like a symbol of, he symbolizes the loss of control, of predictability, of certainty, of clarity that a lot of people need for their psychic well-being.

And so I worry about it. Look, he's well-protected by the Secret Service. They're terrific. And a president -- I can tell you, I have never met a president -- and, look, George W. Bush had some threats against him by people who strongly disagreed with his policies.

Some -- Eric Cantor got a threat here. The governor of New Jersey has been, at least jokingly, threatened by some of the interest groups in New Jersey, the Republican governor of New Jersey.

But, by and large, in the last 50 years -- or, well, at least since the early '70s, when we still had some left-wing problems, by and large, these have been systematically coming out of the far right.

And, again, I think that all those folks have a place in our political debate. We just have to know where to draw the line. And I -- and we have enough threats against the president, enough threats against the Congress that we should be sensitive to it.

The 15th anniversary of Oklahoma City -- I'm not trying to draw total parallels -- I'm just saying we should be aware of this. This is a vast echo chamber, this Internet. And there's lots of folks listening, and, as I said, some are serious. Some are delirious. Some are connected. Some are unhinged.

And we, all of us who have any responsibility, have to exercise that responsibility, so that we're intellectually honest about our political positions, but we're also intellectually honest about what certain words might do to people who are less stable.


BLITZER: America on edge. The former president has some advice for President Obama on how to heal the divide -- more of the interview coming up.

Plus, it's not a very good birthday present for Pope Benedict. Our latest poll shows a stunning drop in popularity.


BLITZER: As the country grows more divided and the political battle grows sharper, is there a way to bring Americans back together?

Let's get back to my interview with the former President Bill Clinton.


BLITZER: What can a president -- and you had to deal with this. What can any president do to heal this divide?

CLINTON: Well, I think, first, listen, President Obama genuinely has tried. He's reached out to the Republicans on health care. He's reached out to the Republicans on financial reform.

He's -- you know, he included the Christian evangelical minister with whom he had a good relationship, Rick Warren, in his inaugural, took some grief from the liberals for it. He campaigned openly to Republicans in the states where they could participate in the Democratic primary process or the Democratic caucus process.

He wants to be a unifying figure. He had Republican friends in the Congress. The problem is that once you get to be president, as I found out much to my chagrin, it is very much in the interest of the people in the other party, in their short-term interests, for you not to succeed, because that enables them to argue that -- that, you know, they deserve a chance.

If you are going to succeed, it's in their interests for you to succeed with only members of your party, so they can claim they would have done it differently and better. I think -- I guess what I was appealing for today is that on some of these core issues, I don't want us to have another -- have to have another Oklahoma City to sober up, because Oklahoma City really helped us in a way, as a country that is. After it, it made the conflict seem smaller than our common humanity. They were so brave. They were so courageous. They were so magnificent that all of us -- and as I said, I included myself, I had said some things that I never said again after Oklahoma City.

BLITZER: Like going after federal bureaucrats?

CLINTON: Yes, I think, you know, the president -- or when I was a governor, referring to federal bureaucrats, it's like they're all arrogant, they're all power abusers, they're all insensitive or they're all non-competent. That's not good.

BLITZER: Most of the people killed in Oklahoma City were federal bureaucrats.

CLINTON: Yes, they were. And most of them were very good at what they did and were very much liked and respected by the people who they served.

BLITZER: Let me wrap this up with you on Oklahoma City by reading to you from your book "My Life" because these words, I'll read them to you, could be said today by the president of the United States. Anti-government paranoia has been building in America for years, as more and more people took the historical skepticism of Americans toward government to a level of outright hatred. This animus led to the rise of armed militia groups that rejected the legitimacy of federal authority and asserted the right to be a law unto themselves.

The atmosphere of hostility was intensified by right-wing radio talk show hosts whose venomous rhetoric pervaded the airwaves daily and websites encouraging people to rise up against the government and offering practical assistance, including easy to follow instructions on how to make bombs. You wrote that. You're recalling what was the mood in 1995. I think President Obama could say the same thing right now.

CLINTON: He could. And that's why I have -- I said what I did today. I don't want something bad to happen for us to -- to get this thing right again. And as I pointed out today, we -- after Oklahoma City, we kept right on having our political disagreements. You know, the congressman -- the speaker, they closed the government twice in 1995. You remember it very well at the end of the year. We had an election in 1996. Oklahoma was a Republican state. I still didn't carry it. But I love them, because they reoriented me, too, and all of us.

I don't want the country to have to go through that again. I want us to resume this political debate and resume the dialogue and keep it within the limits that the primers intended. Beyond the law, there is no freedom. The reason all these groups have the freedom to advocate whatever they want is because of the rule of law. So, we can't have violence or the advocacy of violence, and we've got to be careful who we get close to that, particularly if we're in positions of influence.


BLITZER: We're going to have more of the interview with the former president.

But joining us now to talk about this is our national security contributor, Fran Townsend. She was the homeland security adviser to President Bush. She also worked in the justice department during the Clinton administration. What should concern us more right now, Fran? Domestic terrorism or foreign terrorism?

FRANCES TOWNSEND, CNN NATIONAL SECURITY CONTRIBUTOR: You know, your conversation, Wolf, understandably because of the anniversary focused on the domestic peace, but I think what I would tell you and I think what others in power now would say is you've got to be able to pay attention to both. As we've seen with the recent shooting at the Holocaust Museum, there's the lone, Wolf. There are the hate groups, the extremist domestic groups, and we have international terrorism. People, I think, when they get into office find they spend more time on domestic terrorism than they really expected to.

You know, I think back to my time in the Clinton justice department, there was ruby ridge. This month is also the anniversary of that tragedy at Waco. There were the abortion clinic violence cases. And so, we had a lot of domestic terrorism-type incidents that we had to deal with, and I think concerns about that continue today when you see something like the Holocaust Museum shooting.

BLITZER: He's very worried that the angry rhetoric out there could excite or inflame some lunatics to go crazy and start using violence. How concerned are you about that?

TOWNSEND: I think the former president is correct when he says that the internet has made the communication easier, the passing of information about how to conduct a violent attack, how to -- how to manufacture a bomb, all that does make it easier. I -- I would disagree, Wolf, with the notion that this is limited to one end of the political spectrum or another. I can remember being in the White House and being briefed on the animal liberation front, the environmental left-wing groups.

I mean, all of these have resorted to violence at some point. Sometimes, it's against property. Sometimes, it's against people, but all of it is really very concerning and requires resources. I know the FBI have groups inside the FBI devoted to following these sorts of threats and trying to thwart them, but it's a real challenge for them.

BLITZER: There's a lunatic fringe on the left and a lunatic fringe on the right, that's what you're saying. Be careful of both of these fringe elements, small numbers, but potentially very dangerous. Which raises the question that I asked the former president, and I'm anxious for you to weigh in on as well, how safe is President Obama? How safe are members of Congress for that matter?

TOWNSEND: Those are really two different groups of people. I will say to you, Wolf, I have tremendous confidence in the protection of the secret service. There had been an attempt against President Bush when we were in office, and we knew that there were threats growing even during the candidacy of then-senator Obama, and I know that that's continued. I mean, it's unfortunate. The secret service takes all of this seriously. Unfortunately, we've seen some missteps by the secret service. But I will tell you, Wolf, I and others who have served, including the current people serving, have tremendous confidence in the ability of the secret service.

Members of Congress and the president are always at risk mostly when they're moving between their office and an event or when they're at event, and they're doing what's called a rope line. You know, when they begin to wade into the public, those are the times when the secret service and those protecting dignitaries worry the most. They do the best that they can, but you know, you can't tell a politician that he can't be among those who are going to vote for or against them, and so, it's part of the risk inherent in holding public office. We try to mitigate that risk. You know, the secret service tries to protect them, but it's a daily challenge.

BLITZER: They spent seven years covering the eight president of the united states and the White House. I applaud the secret service. They do an unbelievably great job and I'm sure you agree with that. Fran, thanks very much.


Three months after a catastrophic earthquake, are things any better from Haiti's homeless? We'll get an update from the former president, Bill Clinton, when our interview continues.

And how a massive cloud of ashes are making things much more difficult for wounded U.S. troops. Stay with us. You're in the SITUATION ROOM.


BLITZER: We'll have more on my interview with former president Bill Clinton coming up. I'll ask him how he's feeling right now. That's in a few moments.

But there's other news we're watching. A massive cloud of ash rising from a volcano in Iceland is snarling world air traffic for a second day. Because the ash cloud could stall jet engines, 16,000 flights have been canceled, and the U.S. military has been forced to reroute evacuation flights for wounded U.S. troops. Let's go live to our Pentagon correspondent, Barbara Starr for more -- Barbara.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Wolf, you know, Europe is a major air hub for the U.S. military, so they're coping like everybody else. Several airfields shut down. Now, as for the wounded, you know, Wolf, routinely what has happened over the years, the wounded are flown by Medevac flights. They come out of Iraq and Afghanistan. And when you look at the map, you see that routinely, they go back to Ramstein Air Force Base in Germany, where they get treatment at nearby Landstuhl Hospital, then flown on here to the United States, generally to Andrews Air Force Base, but Ramstein in Germany is shut down due to this volcanic ash cloud. So, now the military forced to reroute the wounded. They are, of course, still very expeditiously, we are told, being picked up in Iraq and Afghanistan, but they are now flying this southerly route that you see, way south of the ash cloud, and flown directly into Andrews Air Force Base. In fact, the first diverted flight is expected to land at Andrews tomorrow. Families are, of course, being notified where their loved ones, where their wounded are. The military making all efforts to make sure this is not disruptive to their medical care or their families being notified, but they are scrambling to cope with all of this, Wolf.

BLITZER: All right. Barbara, thanks very much. I know this is having a dramatic effect. Hopefully, it will go away soon.

The recalls keep coming in for Toyota. The latest for hundreds of thousands of minivans.

And rating the pope on his birthday, as he turns 83, Americans weigh in on how they feel he handled the church's sex-abuse scandal, and their pulling no punches. Stay with us. You're in the SITUATION ROOM.


BLITZER: Lisa Sylvester is monitoring some of the other top stories in the SITUATION ROOM right now. Lisa, what else is going on?


More trouble for carmaker Toyota, the company is launching a voluntary recall of approximately 600,000 Sienna minivans over potential corrosion in the spare tire carrier cable. The recall affects models in the District of Columbia and 20 states manufactured between 1998 and 2010. Now, the company says it's working on a fix, but until then, customers will get a notice telling them to bring the vehicle in for inspection.

More legal trouble for the company formerly known as Blackwater. Former Blackwater president, Gary Jackson and four other officials of the company which now goes by the name of Xe Services were indicted today on federal felony weapons charges. They are accused of enticing the sheriff's department in Camden County, North Carolina, to pose as purchaser of M4s and AK-47s. The indictment says they then diverted the deliveries to a nearby Blackwater facility. The case dates back to 2005. Blackwater is a security firm with a federal contracts oversees, most notably in Iraq.

Tensions mount as rescuers in remote Western China race against the clock and the rubble left behind by Wednesday's powerful 6.9 earthquake. China's state-run news agency said the death toll has now jumped to almost 1,150. More than 400 people are still missing. China's premier travel to the predominantly Tibet region today to survey the damage. Ethnic Tibetans have accused Chinese soldiers of not doing enough to help immediately after the earthquake. A charge, Beijing denies. U.S. and Russian officials have both given birthday gifts to a now 8-year-old boy who was returned to Russia last week by his American adoptive mother. The boy returned unaccompanied to Moscow. In a note, his adoptive mother wrote that he had psychological problems and was violent. Russia has sent conflicting signals about whether or not it will suspend all adoptions by U.S. families. The state department says U.S. officials still plan to travel to Russia next week for talks on this issue.

Pope Benedict XVI is 83 today. The pontiff marks the milestone though still in the shadow of the sex abuse scandal that could threaten his legacy as the leader of the Catholic Church. A new poll shows that the pope's favorability among Americans and among American Catholics in particular has dipped dramatically since February. Fifty-six percent of American Catholics think he has handled the scandal badly. Fifty-six percent compared to 36 percent who believe he's doing a good job, Wolf.

BLITZER: Yes, that's not good news for the Vatican. Thanks very much, Lisa, for that.

Jack Cafferty is asking how should the U.S. change its policy toward Israel? Stand by for his e-mail.

And more of my interview with former president and U.S. envoy to Haiti, Bill Clinton. You're going to find out why he's so worried about the devastating effects of the rainy season on the earthquake- ravaged country. He'll also tell us how much longer he'll be involved in Haiti.


BLITZER: Time to check back with jack for "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN CORRESPONDENT: Question this hour, Wolf, is how should the United States change its policy toward Israel.

Richard in Kansas writes, it would be nice if we would stop kissing their butts and remind them that America can exist just fine without Israel, but Israel cannot exist without America. Consider that, the next time you think of slapping us in the face when we come to help you make peace with your neighbors.

Nancy in Tennessee writes, the U.S. could change its policy toward Israel best by staying out of their business. The Palestinians have long been encroaching on a land that belongs to this Jewish nation. We could take some lessons from Israel as thousands of Mexicans flood our borders and call U.S. soil their home illegally.

Nick writes, I say it's time to abandon Israel completely. No more free Abrams tanks, no more military budget expenditures on defense technology, and no more American lives spend to defend a people who consistently inspire the hatred of their neighbors. Time's up. Let's move on. Annie in Atlanta writes, we need to back them up. They're surrounded by people who hate them. However, I have one question. With the way Jewish people were treated as a whole in the past, how can they justify the way they treat Palestinians?

Michael writes, other than federal politicians, the average American has no idea why the U.S. caters to an obviously oppressive country. Peace needs to be achieved between Israel and Palestine. And the U.S. needs to adjust its stance on Israel in any way that will make this happen. The U.S. has stood too silent for too long. When you're as close as the U.S. and Israel say they are, the relationship can stand some tough love.

And Chris in Philadelphia writes, Israel's an ally and always will be, but they can't be given carte blanche to do whatever they want. You want to live peacefully with your neighbors, you may have to sacrifice something, like settlements. If you live among alligators would you regularly poke them in their eye and expect everything to go your way?

Do you want to read on this subject, you will find it on my blog at And you will find me in New Jersey in about 20 minutes. I'll see you on Monday.

BLITZER: Have a great weekend, Jack.


BLITZER: Thanks very much, Jack Cafferty with the "The Cafferty File"

Former president Bill Clinton gives us an update on the hundreds of thousands of people living in tents three months after Haiti's earthquake.


BLITZER: Here's a look at some hot shots coming in from our friends over the associated press.

In Iceland, a woman wears a mask to protect herself from volcanic ash.

In Taiwan, guardian statues said to protect fisherman, and sailors are prepared for a religious pilgrimage.

In Sudan, people watch as ballots are carefully counted at a polling station.

And in India, look at this, some boys try to beat a heat wave by taking a swim. Hot shots. Pictures worth a thousand words.

Let's get some more now with my interview with the former president, Bill Clinton. He's a UN special envoy to Haiti. and three months after the earthquake, are things getting any better at all?


BLITZER: Quick question on Haiti, and then I'll let you go. Short-term prospects and long-term prospects, short-term prospects have been $10 billion pledged over the next few years. I don't know if the money will actually get delivered. The long-term prospects, I'm worried, because Haiti's such a poor country, even under the best of circumstances.

CLINTON: The real critical pledge was for $5 billion for the next 2, because that's a billion more than we asked for and we expected originally.

BLITZER: That's one thing to get a pledge. It's another thing to get the cash.

CLINTON: Another thing to get the money. One of the reasons that prime minister -- the president asked me to co-chair this effort with the prime minister and the UN asked me to help is that they think I'll be better at collecting the money. But here's what I think, in the short term, our big problems are not allowing the rainy season to kill anybody. We've got to get people out of the wet places.

BLITZER: Do you know how many people died actually so far?

CLINTON: We don't have a good number.

BLITZER: 200,000?

CLINTON: More. Probably around 230,000, but we don't have the exact number. We may never have an exact number.

BLITZER: A lot more could still die.

CLINTON: Yes, because -- in a couple of ways. First, the rainy season, we are going to be able to get people out of the low-lying areas where they're intense. So, I don't expect anyone to drown. But we still, because hundreds of thousands of people are living in these new settlements in tents, we still don't have what I would call even adequate sanitation. So, the prospect for water that's standing to be polluted and then to make children sick is quite high. That's the second big thing. We still got to keep working on sanitation.

And then we need to try to have some structures that can be built in a hurry about all of the big tent cities, so that if the winds are particularly severe, they can run to those structures. See, the Haitians aren't used to be afraid of the wind because they live in concrete buildings. They got killed in hurricanes by the water, you know, and all of the clogging of the waterways. And that's all pretty well been taken care of. But now, they're in tents. So, a wind that wouldn't, you know, make a scratch on a building could blow a lot of tents down.

Those are the short-term problems. I'm actually more optimistic over the long run for a simple reason. They have -- they're smart people. They have better leaders they've ever had, and they want to build the truly independent state. They're willing to think about going wireless. They're willing to think about maximizing solar. They're thinking about things that they never would have even talked about before. They want to begin anew. So, I think they have an excellent chance. And if they do, it'll be a model for modernization everywhere in the world.

BLITZER: You're committed, not just the short term but long term?

CLINTON: Oh, no, no. I expect to be there three to five years, anyway. Long as I can keep jogging along, I'll be there.

BLITZER: They're counting on you, Mr. President.

CLINTON: I'm counting on them.

BLITZER: You look good. You feel all right?

CLINTON: Great. Really good.

BLITZER: Thanks so much.

CLINTON: Thank you.


BLITZER: I'm Wolf Blitzer in the SITUATION ROOM. "John King USA" starts right now.