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The Situation Room

Showdown Test of Wall Street Reform; The Evidence Against Goldman Sachs; Immigration vs. Climate Change; Noriega Extradited

Aired April 26, 2010 - 17:00   ET

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

WOLF BLITZER, HOST: Rick, thanks.

Happening now, a showdown test of Wall Street reform.

Will Republican opposition crack under the weight of the case against Goldman Sachs?

This hour, the Senate vote -- more revealing e-mails just released by lawmakers, as well.

Also, growing suspicion that it was North Korea that torpedoed a South Korean warship -- we'll tell you what a U.S. military official is saying right now and whether there's new reason to worry about war.

And a wide stretch of U.S. coastland is in danger right now. We're watching the race to plug up and clean up thousands of gallons of oil oozing from that sunken rig off Louisiana.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

We're standing by for a crucial vote in the U.S. Senate right now -- a vote that will help decide whether Wall Street will have to play by new rules. Democrats are hoping public anger about the economy, the financial bailout and the fraud allegations against Goldman Sachs will push the debate forward. But they need some Republican support to do that. They probably won't get it, at least not this hour.

(BEGIN VIDEO CLIP)

SEN. HARRY REID (D-NV), MAJORITY LEADER: In short, Democrats stand for bring more accountability and transparency to Wall Street. As far as I can tell, the only thing Republicans stand for is standing together.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: If we can't look our constituents in the eyes and tell them with absolute certainty that we've addressed their core concerns, then tell me, why are we voting on this bill?

The Democrats want us to trust them on this one. With all respect, Americans aren't in a trusting mood.

(END VIDEO CLIP)

BLITZER: The roll call is now underway.

Let's go up to Capitol Hill.

Our Congressional correspondent, Dana Bash, is watching all of this unfold. This vote right now, it looks like a -- a done deal, that they're not going to have the Democrats need.

Is that true -- Dana?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Well, I talked to a Republican source just before coming on air who says that they do feel confident that all 41 Republicans will vote no, meaning that they -- the Democrats will not get to vote -- to move ahead with this debate.

And that is not unexpected. And, in fact, what we are seeing here is, in many ways, political theater on a very real very resonant issue, which, of course, is Wall Street reform.

And, Wolf, talking to Democrats, they say that they are moving forward with this, even though they know it's going to fail, because, in fact, they believe that that is actually a political up side, to have as headlines tomorrow morning that Republicans are blocking Wall Street reform. They say that that is not a bad thing at all politically.

So you might wonder why Republicans would be walking into what seems like a political trap. Well, Wolf, Republican sources say that they believe they have a good argument, too. And that is they're not voting no in general, but they are just voting no against what they call a partisan Democratic bill and they actually do want bipartisan reform and they're working toward a bipartisan deal.

And, in fact, what you're seeing on the floor is what's going on in public -- as I said, in many ways, theater. But behind-the-scenes, there are bipartisan talks going on. In fact, the chairman of the Banking Committee, Chris Dodd, who was the lead negotiator on this, met earlier today with Republican Richard Shelby on this issue. They are going to continue to meet. I just bumped into Richard Shelby. He said that they're going to have a meeting right after this vote is done and they're going to keep negotiating. There are lots of issues that separate them, but they say they are continuing to make progress.

But that is going on as this vote plays out, that, again, we could be surprised, but everybody believes it will fail, at least to start debate right now.

BLITZER: Because the Democrats were hoping Olympia Snowe or Chuck Grassley or at least one Republican would join them and get the 60 votes they need.

Does it look like all 59 Democrats -- the 57 Democrats, the two Independents who caucus with the Democrats -- will they vote en mass as one?

BASH: I also checked in with senior Democratic sources. And they say they believe that they have all of their votes in line, even Independent Joe Lieberman. I spoke to his office. And they -- he said that he was planning on voting yes for this.

So if everybody shows up, we are probably -- we are going to see a straight party line vote, if all of these forces are correct and -- and their head counting and whip counting is correct going into this vote -- Wolf.

BLITZER: All right. We're going to watch this. We expect several more minutes for them to vote. We'll have the results as soon as it's official.

Dana, don't go too far away.

In midst of this political tug of war over financial reform, top executives of Goldman Sachs face off with senators here in Washington tomorrow. They expect to be grilled about the fraud allegations against Goldman Sachs and about a bunch of internal e-mails just released ahead of this hearing. Some more of those e-mails are being made public this hour.

And Lisa Sylvester has been going over the documents -- Lisa, what are we learning?

SYLVESTER: Oh, this is fascinating stuff, Wolf.

The Senate Subcommittee on Investigations just released new Goldman Sachs internal e-mails and that will be highlighted during tomorrow's hearing.

The Committee's chairman, Senator Karl Levin, says that as the mortgage market was tanking, as people's home were being foreclosed on, Goldman made billions by betting against the housing market or, in other words, shorting the housing market. And at the same time, Levin says, Goldman was still selling to its clients these mortgage products that it didn't even believe in and was betting would fail.

Here's a sample of some of those e-mails Goldman's wrote in an e- mail: "Of course we didn't dodge the mortgage mess. We lost money, then made more than we lost because of shorts."

Another exhibit. This is a performance review of Goldman employee, Michael Swenson. Quote: "It should not be a surprise to anyone that the 2007 year is the one that I'm most proud of to date -- extraordinary profits, nearly $3 billion to date."

Now, Senator Karl Levin said that all of this slicing and dicing and selling toxic mortgages played a role in blowing up the financial markets, costing people their homes and jobs.

(BEGIN VIDEO CLIP)

SEN. CARL LEVIN (D-MI), CHAIRMAN, PERMANENT SUBCOMMITTEE ON INVESTIGATIONS: The evidence shows that Goldman repeatedly put its own interests and profits ahead of the interests of its clients. For large fees, Goldman helped run the conveyor belt that dumped hundreds of billions of dollars of toxic mortgages into the financial system.

(END VIDEO CLIP)

BLITZER: Lisa, what is Goldman Sachs saying about all of this?

SYLVESTER: Well, Goldman clearly is -- they are denying the charges that Levin has put forward. And Goldman is actually saying that they had a net loss of $1.2 billion in residential mortgage products at the time. They say the committee, what it's done is essentially cherry picked the e-mails, adding, quote: "It is concerning that the subcommittee seems to have reached its conclusion even before holding a hearing."

BLITZER: We -- we've heard a lot about one particular Goldman Sachs employee who's actually been charged charge by the SEC with fraud.

Tell us about him.

SYLVESTER: His name is Fabrice Tourre. And Goldman Sachs, they're clearly distancing themselves from him. They released e-mails from 2007. It's between Tourre and his girlfriend. And I got a hold of those e-mails. And I've got to tell you, it doesn't paint a favorable picture. Tourre, at the time -- I'll paint the picture for you -- was a 28-year-old trader. He was selling a portfolio of mortgage investments called Abacus to investors. And he writes in one: "The entire system is about to crumble at any moment. The only potential survivor, the Fabulous Fab." This was one of those e-mails in which he's referring to himself as the Fabulous Fab.

On the U.S. subprime market he wrote, quote: "According to Sparks (ph), that business is totally dead and the poor little subprime borrowers will not last so long."

Another e-mail to his girlfriend: "Just made it to the country of your favorite clients, Belgians. I've managed to see a few Abacus bought -- to sell, rather, a few Abacus funds to widows and orphans that I ran into at the airport."

And, Wolf, we'll expect to see more of these details, more of these e-mails and internal documents tomorrow. So that hearing should be fascinating to watch.

BLITZER: Twenty-eight years old at the time. Fabrice -- and he called himself the...

SYLVESTER: Fab...

BLITZER: The Fabulous Fab.

SYLVESTER: The Fabulous Fab. Exactly. He's now only 31 and he's going to be grilled tomorrow. I mean you can expect...

BLITZER: He'll be there, as well?

SYLVESTER: Yes, he will be testifying.

BLITZER: Including Lloyd Blankfein, the chairman and CEO.

SYLVESTER: Exactly.

BLITZER: All right. We'll be having extensive coverage of that tomorrow.

Lisa, thanks very much.

Anger in Arizona over the state's very new tough immigration law setting off alarm bells here in Washington.

Is federal immigration reform a winning issue for Democrats in this election year or is it already backfiring?

And the U.S. Supreme Court may have a say in the kind of video games your kids are allowed to play.

Finally, did North Korea sink a South Korean warship?

There's new information coming in right now.

If it did, will the Obama administration do anything about it?

(COMMERCIAL BREAK)

BLITZER: All right, we're just getting this in, this important story.

I want to go to Jack Cafferty in a moment.

But Manuel Noriega is now on a plane heading to France, we are told. Secretary of State Hillary Clinton has signed an order extraditing the former Panamanian leader to France, where he faces charges that he laundered drug money. You're looking at pictures -- he was escorted to Miami to an Air France jetliner and he's now on his way to France.

He served 20 years here in the United States. Presumably, he'll serve a few more in France, as well. We'll get more information for you on that, as well, although I can give you the headline. A senior federal law enforcement official saying the former Panamanian president, Manuel Noriega, was placed aboard an France flight in Miami to Paris. He's on his way right now. Noriega's lawyers are shocked by this development. They say the State Department could have had the courtesy to inform them of what was going on.

We'll have more information coming up.

Let's go to Jack Cafferty right now.

He's got The Cafferty File -- Jack. CAFFERTY: So Arizona passes a tough law against illegal immigration and suddenly they've got Washington's attention. One poll finds 70 percent of Arizona voters support this new law. So, hey, maybe we'd better do something, too.

And like the lemmings they are when they smell a chance to score some political points -- and some of them need a lot of help with the mid-terms coming up -- there is now talk of rushing immigration reform through Congress.

President Obama called the Arizona law "misguided."

What's misguided, Mr. President, is the federal government's ongoing refusal to enforce the laws that are already on the books.

Read the Arizona law. Parts of it are word for word the same as the federal statutes, which continue to be all but ignored.

Now we're hear all sorts of blathering from our Washington gerbils about the need for a new federal law. There will be news conferences and interviews and committee hearings and draft legislation and polling -- all the usual carnival acts that accompany any hot button Washington issue. Instead of simply closing the borders and enforcing the existing law, so they could turn their attention to something like the national debt and the fact that the country is bankrupt, instead we're going to get this freak show.

Washington's position on illegal immigration is patently dishonest from the top down -- no enforcement, no border security, just pandering to the Hispanic voters and the corporations that hire the illegals.

And then when one of our states that's being ravaged by the presence of 460,000 illegal aliens inside its borders does something about it, the president says that's misguided.

What a shame.

Here's the question -- will the federal government ever enforce our immigration laws?

Go to CNN.com/The Cafferty File and post a comment on my blog -- Wolf.

BLITZER: Ever being a very, very long time -- Jack. We'll see if...

CAFFERTY: Indeed.

BLITZER: -- if they do.

Good to be back.

Jack, thank you.

CAFFERTY: Yes. You were missed last week. BLITZER: Thank you. But you guys did an excellent job, as you always do.

Let's continue this immigration issue right now.

As the controversy in Arizona plays out, a new push forward on federal immigration reform has left a major climate change bill in limbo right now. This was supposed to be the day that three top U.S. senators introduced the environmental legislation.

But Republican Senator Lindsey Graham dropped out of his talks with Democrat John Kerry and Independent Joe Lieberman this weekend. Graham complained about the Democrats' plans to debate immigration reform before climate change.

Our senior political analyst, Gloria Borger, is here with more on this story -- what happened here, Gloria, because...

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Have you ever heard of something called politics?

BLITZER: There was a lot of -- a lot of anticipation. There would be this...

BORGER: Exactly.

BLITZER: These three senators would show up this morning for this historic announcement, this news conference. And then all of a sudden, it didn't happen.

BORGER: Yes. You know, late last week, we all began getting indications from the Senate majority leader, Harry Reid's office, that it was his preference to move with immigration reform before climate change. And you don't have to be a rocket scientist, you don't have to be a political journalist to understand why this is happening.

Obviously, the Democratic base could be energized by this. Hispanic voters are very important to the Democratic base. And for Harry Reid, who's facing a really uphill battle in Nevada for re- election, those voters are important to him.

And so the Senate majority leader said, you know what, I think we ought to take up immigration first, because even though it may not get anywhere -- it could just be a vote that goes nowhere in the Senate -- it puts the Democrats on record. And he thinks that's good for them and it's also good for him.

BLITZER: Even though the climate legislation has already passed the House and was...

BORGER: Exactly. Immigration hasn't been written.

BLITZER: It hasn't even been considered. It was 2007 it was considered.

BORGER: Right. BLITZER: But it went down.

Here's what -- here's what Senator Graham said in his statement: "Moving forward on immigration in this hurried, panicked manner is nothing more than a cynical political ploy. I know from my own personal experience the tremendous amounts of time, energy and effort that must be devoted to this issue to make even limited progress."

BORGER: Yes, he's -- he's got a point there. And I should point out to you that our own Dana Bash broke this story over the weekend. She got this letter from Lindsey Graham. Look, he's been working with John Kerry. He's been working with Joe Lieberman for six months trying to get this legislation written. He's also a very important part of the immigration reform effort.

So I spoke with some of his people today and they feel like the rug has kind of been pulled out from under him. And don't forget, Lindsey Graham's from South Carolina. He's taking a lot of political heat back home for even working with these people on both of these issues. And so you can imagine his consternation when this occurred. They'd had a meeting mid-week at the White House last week, with top White House advisers, and everything seemed ready to go and on track for climate change.

By the end of the week, not so much.

BLITZER: Harry -- Harry Reid said not so...

BORGER: Right.

BLITZER: -- so fast.

BORGER: Right.

BLITZER: Is this immigration issue a home run for the Democrats?

BORGER: You know, not necessarily. It -- it's -- you know, first look we say, sure, good with Hispanic voters. It brings out your base during the election. It keeps Hispanics and Latino voters happy.

But, on the other hand, there are lots of Democrats I've spoken with who say wait a minute. There's 10 percent unemployment right now in this country. Democrats need to be focusing on jobs, jobs and jobs. They don't need to be focusing on anything else.

Do financial regulation and then make a pivot to jobs. That's what we ought to be talking about. And they think, you know, Republicans will have a more receptive audience, Wolf. With 10 percent unemployment, people in this country may be less hospitable to immigration reform.

BLITZER: We invited Lindsey Graham to join us here today in THE SITUATION ROOM. He couldn't do it. Hopefully he'll join us...

BORGER: I'm sure he will. BLITZER: -- in the next few days. He's got a lot to say and he's not a happy guy...

BORGER: Not happy.

BLITZER: -- right now.

All right. Thanks very much.

Dramatic images of disaster from a tornado that plowed across dozens of miles, leaving at least a dozen people dead in two states.

Plus, Playboy's Hugh Hefner comes out to the rescue of one of the country's most famous landmarks.

(COMMERCIAL BREAK)

BLITZER: We're getting more details now. The U.S. government -- the secretary of State specifically has signed an order saying that Manuel Noriega, the former Panamanian president, has now been extradited from the United States, after serving 20 years, to France.

Brian Todd is working the story for us -- Brian, you're getting more -- some more specifics. It's causing a lot of buzz out there, shall we say.

BRIAN TODD, CNN CORRESPONDENT: A lot of buzz, Wolf, and a lot of anger from Noriega's attorneys. To recap, essentially, what you said, Manuel Noriega, the former Panamanian dictator, is on his way to France at this hour. Secretary of State Hillary Clinton essentially paved the way for that to happen this afternoon by signing his extradition order.

Here is a statement from Charles Luoma-Overstreet, the spokesman for Western Hemisphere Affairs at the State Department. Quote: "I can confirm that Secretary of State Clinton signed his surrender warrant. He lost his appeal, so this was the last step which enables him to go to France."

Now, Noriega is wanted in France for money laundering -- drug money laundering. He has already been convicted in absentia. But we're told that the French government is going to reopen his trial once he hits the ground there.

Noriega's attorneys had been petitioning for the United States to send him back to Panama, even though he was wanted for murder in Panama. His lawyers had stated that Panama is his home.

Now, coincidentally or not, there is a new law in Panama that says if you're 75 years old or over, you can serve your sentence for any crime at your home, essentially under house arrest. Noriega is now under -- excuse me, he is over 75 years old. But his lawyers have not really equated any of that together.

However, they did want him to go to Panama. And his lawyer, Frank Rubina -- Rubino -- has issued a statement saying, quote: "I am angry. I think it's pretty low and disrespectful that they didn't have the common courtesy to tell us that they were going to transfer him."

Noriega's lawyers claiming that they never really got word of this.

As you see, video here of Manuel Noriega walking toward an airplane that will take him to France, Wolf. That's where he's going to face money laundering charges.

The French government, I think, believed that he had essentially used some drug money to buy some apartments, to stash some money in French banks. He'll be tried there, it looks like, as soon as he gets there.

BLITZER: So Noriega now becomes France's problem, not the problem of the United States.

We'll see what happens in France.

Brian, thanks very much.

It's not even May yet, but President Obama may be getting worried about November. We're going to tell you why he's suddenly feeling the need to rally the Democratic troops.

And we know more about George W. Bush's highly anticipated memoir. Coming up in our Strategy Session, will it soften the public's opinion of the former president?

(COMMERCIAL BREAK)

BLITZER: And you're in THE SITUATION ROOM.

Happening now, 42,000 gallons of crude oil spewing into the waters off Louisiana each day from that sunken rig forming a 400 mile slick and threatening an environmental disaster along the Gulf Coast. Stand by for information.

Outrage over Arizona's tough new immigration law sparking vandalism and comparisons to Nazism. The mayor of Phoenix fears the controversy will tear his state apart. He's joining us to explain why the city will now sue.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

Check out President Obama welcoming the New York Yankees to the White House today, in honor of their third World Series victory last year.

The president is putting new energy into coaching the Democratic team. He's giving an online pep talk about the fall election.

Let's go to our White House correspondent, Dan Lothian, who's working the story for us.

I said their third World Series victory. They've won a lot more than just three World Series, Dan. As you know, the New York Yankees -- it was an exciting time for the president, for the New York Yankees. We watched it as it happened.

But he's got another issue on his agenda right now. They over at the White House are deeply, deeply worried about November and the mid- term elections.

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: It certainly does appear that they're worried, although top aides here at the White House, Wolf, are staying away from characterizing it as worried or concerned. Instead, there's this sense of urgency. And that's why you see the president reaching out to his supporters, laying out for them what's at stake and asking them for their help.

(BEGIN VIDEOTAPE)

LOTHIAN (voice-over): The political climate changed since President Obama was ushered into office. A storm of sorts, with angry protesters and promises to oust Congress' Democrats, has raised the stakes in the upcoming mid-term elections.

(on camera): There's deep concern of -- of losing a lot of seats and losing control of Congress?

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: Well, look, we'll have plenty of time to debate what the outcome of or what -- why those elections went whatever way they went. They're many months away. Obviously, more campaigns are gearing up and the president wanted to speak directly to -- to his supporters.

LOTHIAN (voice-over): Directly with a video aimed at rallying the troops, telling them that the special interests and others are looking to undo his administration's accomplishments.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: It will be up to each of you to make sure that the young people -- African-Americans, Latinos and women, who powered our victory in 2008, stand together once again.

LOTHIAN: The president touts progress on the economy, health care reform and how America is now viewed on the global stage, even as he calls on supporters to find fresh faces.

OBAMA: If you help us do that, if you help us make sure that first time voters in 2008 make their voices heard again in November, then together we will deliver on the promise of change.

LOTHIAN: But it's unclear whether his video pep talk will have the desired effect. Since his own election, President Obama has been unable to deliver several key races. He jumped in during the Massachusetts Senate race and two gubernatorial contests in New Jersey and Virginia.

(END VIDEO TAPE)

LOTHIAN: Now, Organizing for America, which is part of the DNC, is also sending around an e-mail, reminding supporters that there are only 190 days until the mid-term elections and also telling them that while Republicans might, quote, "be measuring the drapes for their new offices," they believe that they can avoid a nightmare scenario some of these Republicans already think will happen -- Wolf.

BLITZER: We'll see if the president can rally that coalition, that base that helped him in November 2008. Dan, thanks very much.

Let's get back to one of the big issues in this mid-term election year, anger over Wall Street's role in the economic crisis. Executives of Goldman Sachs will be in the hot seat on Capitol Hill tomorrow as they fight allegations of fraud. Our senior political analyst David Gergen is here. He's joining us now.

David, the court of public opinion versus the legal court. They've got two major agenda issues concerns Goldman Sachs right now.

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: Absolutely. And Goldman Sachs is going to be in effect put on trial in the court of public opinion tomorrow but then they go later on to defend themselves in front of the Securities and Exchange Commission in a formal courtroom proceeding. Their chances of losing the court of public opinion are much, much higher than in a legal court. What we have tomorrow in this hearing, it's supposed to be an investigation. It has all the signs of a hanging.

BLITZER: A hanging?

GERGEN: Yes. You can almost hear the gallows being built right now. What happens when you put these -- you put the CEO of a company up there, you put him in front of a bunch of other people. It all looks like they're guilty of something and then you hit them pretty hard. We're going to have a lot of sound bytes out tomorrow berating them.

BLITZER: Even in advance of the hearing they released all of these e-mails which makes Goldman Sachs look so bad.

GERGEN: Yeah. I think -- there has been bad action on Wall Street. There's no question about that. We need regulatory reform. No question about that, but ordinarily when people are charged with something wrong, first we have a trial. Then we have the hanging. In Washington periodically, these gusts of populism sweep across and then we have the hanging. First we have the hanging, now we have the trial. That's what's happening.

BLITZER: Our friend and colleague, Fareed Zakaria, writing in the "Washington Post," among other things he says this, "Even if some Wall Street practices seem dodgy or unethical, that's not the same illegal. I want financial reform, but I also want our system of governance to be characterized by fair play and equal justice even for people making $10 million bonuses." To which Carl Levin, the chairman of this primitive sub-committee said this, listen to this. CARL LEVIN: They misled the country, I believe, and they were not fair to their customers.

BLITZER: He's already convicted them.

GERGEN: Yes and see he's pre-judging them. To be fair, Carl Levin has seen a lot of evidence, but there is a quality about this. We've seen it so often. There's a quality about this. They're hauling them in in order to make them the poster boys of bad doing. Goldman Sachs has this almost mythic reputation of saying you guys are responsible. Everybody is trying to shift the blame now to Goldman Sachs and some of the other banks saying you guys took us down. Now we're going to put new your place and many are arguing they should be punished. I happen to disagree. I thought Fareed Zakaria had it precisely right.

BLITZER: A lot of people don't believe the notion that the white house had nothing to do with the timing of this fraud charge against Goldman Sachs.

GERGEN: Well Wolf, I imagine the white house didn't have anything to do with. But the people at the SEC they have newspaper subscriptions. They watch THE SITUATION ROOM. They know what's going on.

BLITZER: Yes, right.

GERGEN: Good to have you.

BLITZER: Good to be back. You'll be with us tomorrow as we watch these ...

GERGEN: I look forward to it.

BLITZER: It's going to be a lively session. There's no doubt about that.

The president's national security adviser is now publicly apologizing for a joke that offended some Jewish Americans. It probably didn't help the administration's diplomacy with Israel that much either.

And later, new finger-pointing at North Korea over the attack at a South Korean warship. Will it inflame nuclear tensions?

(COMMERCIAL BREAK)

BLITZER: They're still voting on the floor of the U.S. Senate, a key test vote on Wall Street reform right now. Democrats need 60 votes in order to break a filibuster. It's unlikely at this point they're going to get that. One Republican they need to get to 60, looks like they won't, but we'll see over the next few minutes the roll call will be completed. We'll have that information for you in just a few moments. Stand by.

Meantime, let's go to Lisa Sylvester. She's monitoring some of the other top stories in THE SITUATION ROOM right now. Lisa what else is going on?

LISA SYLVESTER, CNN CORRESPONDENT: Hi there, Wolf. It is good to have you back, by they way.

In the news though, the U.S. Supreme Court will decide whether California can ban the sale or rental of violent video games to minors. California lawmakers passed the measure in part relying on research suggesting violent games can be linked to aggression. A federal appeals court dismissed that data and ruled to throw out the ban which never actually went into affect citing constitutional concerns.

And look at the twister that tore through Yazoo City, Mississippi over the weekend. This tornado and related storms leveled several homes and killed at least 10 people in Mississippi and 2 in Alabama. Choctaw County Mississippi was hardest hit. Two children and a baby are among the dead. Meteorologists measured wind speeds at 120 miles an hour and they say that the tornado carved out a path of destruction at least 50 miles long.

National security adviser James Jones is apologizing for a joke about a Jewish merchant he made at a speech in Washington. In a statement, the retired general called the joke off the cuff and says the U.S. commitment to Israel's security is "Sacrosanct." Jones' apology comes the same day we met with Israeli Defense Minister Ehud Barak and President Obama at the white house.

And today, thanks to "Playboy" magazine founder Hugh Hefner, many in Los Angeles are getting a Hollywood ending they were hoping for. His $900,000 donation has helped preserve 138 acres of land behind the iconic Hollywood sign you see there from development. The year-long effort raced $12.5 million to purchase the land and make it part of a nearby park. Wolf?

BLITZER: Good for Hugh Hefner, a nice thing indeed.

SYLVESTER: Yes it was. Everyone knows that Hollywood sign so it will be staying in place a little while longer Wolf.

BLITZER: $900,000, all right, thanks very much, Lisa for that.

President Obama jumping into the upcoming mid-term election campaign with a video message to his supporters.

Plus, the much-anticipated memoir from former President George W. Bush. We'll talk about all of that. That's coming up next in our "Strategy Session."

(COMMERCIAL BREAK)

BLITZER: They're very worried at the white house about the mid- term Congressional elections. The president trying to pump up, pump up his base. Let's talk about it in our strategy session. Joining us, CNN political contributors, the Democratic strategist Donna Brazile and the Republican strategist Alex Castellanos. Here's a little clip of what the president had to say in this video they've just released over at the white house, Donna.

PRES. BARACK OBAMA (D), UNITED STATES: It will be up to each of you to make sure that the young people, African Americans, Latinos and women who powered our victory in 2008 stand together once again.

BLITZER: Could he do it? Can he get that political base excited, as excited as the base of the Republican Party is right now?

DONNA BRAZILE, DEMOCRATIC STRATEGIST: I think so, Wolf. Look, I've seen quite a bit of a turnaround now in the Democratic Party. Contributions are coming in. People are calling saying they're ready to hit the streets again. This is one of the largest get out the vote programs that I've ever seen in the mid-term at the DNC. They are targeting 50 million young people and others who voted in 2008, those so-called surge voters. They targeting them with a unique campaign to get them excited about this election, and, of course to get them excited about turning out the vote for President Obama's allies and many others who support many of his important programs.

BLITZER: The turn out in a mid-term election, Alex, it's critical, because you don't have a presidential contest right now. Only the most enthusiastic voters actually show up, and that's usually older folks.

ALEX CASTELLANOS, REPUBLICAN STRATEGIST: That's usually older voters and it's folks who are concerned or scared about something. You know, Obama's voters won their election. They got the president they wanted. Now the voters are out there most concerned thinking Washington's spending too much, taxing too much, and not listening to them. Those are not Democrats. Those are independents and Republicans who look pretty much alike. The president who inspired those younger voters, Wolf, those Latinos, women, that was a very inspirational Obama. Yes, we can. Remember the campaign? Since then he's been a very divisive president. You know, Goldman Sachs, insurance companies. It seems like there's always an evil villain. I think he's looking very small and political and not like a big leader, and that's really what got his base out.

BLITZER: And his name is not going to be on the ticket anywhere in 2010, Donna.

BRAZILE: No. You know what, health care is on the ballot. Education is on the ballot. Of course a strong economy is on the ballot and you know what most Democrats and independents are fearful of? Going back to the past, going back to the Bush/Cheney years. That will get people excited about voting this fall.

CASTELLANOS: Wolf, that's not on the ballot. Republicans aren't going to run the country. Barack Obama's running the country. The only question is, is there going to be a brake pedal on the car? I think that strategy from the Democrats, go back to Republicans running everything, it just doesn't make sense. It's not true. This car has no brake pedal. Obama's got the white house. He's got the Congress. He's got the Senate. Do we need a brake pedal on the car?

BRAZILE: But this car is no longer going off the cliff and we know the same actions, the same players that took the car off the cliff, they are ready to status quo, they are ready to get back in the car and we're not going to allow them to drive this economy off the cliff again.

BLITZER: Let me pick your brains. We've got the book jacket now for the new George W. Bush memoir that will be coming out in November, just a few days after the mid-term elections. There it is, "Decision Points" by George W. Bush. Alex, a lot of folks are saying, at least from your perspective, Republican conservatives, he's looking a lot better now than he did when he left office.

CASTELLANOS: You know, he sure is, Wolf, and I think the rehabilitation of George Bush is well underway. It was about six year ago that one president stood up and said, you know, we've got to do something about Fannie Mae and Freddie Mac or else we'll have an economic crisis. That was George Bush. Chris Dodd and others in Congress, the Barney Franks didn't listen. History will treat him well for that. He was right about Iraq. He found a way to get us out, and even President Obama ratified that. So I think this book is going to add to that, and put, I think, his presidency in a larger context, and history's going to treat him well.

BLITZER: Although a lot of Republicans and conservatives, Donna, very concerned. They're still deeply upset he allowed the national debt to double over his eight years in office. Six of which he controlled the Republicans controlled the white house and Congress. Go ahead, Donna. Does he look better when his memoir comes out?

BRAZILE: He has a lot of explaining to do, Wolf. I think out of respect for the former president, most people will be interested in hearing his story about 9/11. They'll be interested in hearing the story about Hurricane Katrina, Afghanistan, Iran. There are many stories hat we would like to hear from George W. Bush, and, look. I hope this book is not in the fiction section. I hope it's a nonfiction. I hope it's good. I hope it's soundbyting something we can learn from, but he left office with the lowest approval rating in large part because the American people were tired of his policies.

BLITZER: I'll be speaking with Laura Bush, the former first lady, in the next few weeks. Her book is coming out in early May. I'm looking forward to sitting down --

BRAZILE: That's a good mother's day gift for you to send your mother.

BLITZER: Of course. A great idea. Laura Bush's book, out in time for mother's day. Thanks very much, guys.

BRAZILE: Thank you.

BLITZER: Jack Cafferty is asking, will the federal government ever enforce our immigration laws? We're standing by for Jack and your email.

And rising tensions right now between the Koreas, a month after a warship was torpedoed, North versus South and the stakes for the United States intense.

And thousands of gallons of oil leaking and leaking and inching towards the U.S. coast. Growing concerns about the environmental threat from that rig disaster in the gulf.

(COMMERCIAL BREAK)

BLITZER: Looking at this live Air France 747 on the tarmac at Miami international airport. Aboard, Manuel Noriega. He served 20 years in a U.S. prison. He's now being extradited to France where he faces money laundering charges. The secretary of state Hillary Clinton signed the extradition order just a little while ago. He is heading to France. Stand by, we'll get more information.

Meantime, let's go to Jack. He's got the Cafferty file. You and I remember Noriega, Jack, from 20 years ago.

JACK CAFFERTY, CNN CORRESPONDENT: Indeed. The question this hour, will the federal government ever enforce our immigration laws?

Peter writes, "I agree with your opinion. The federal government shows total disregard for existing immigration laws. When a state saddled with the costs of illegal immigration tries to do something, it's labeled misguided. So now the federal government would like to change the laws in order to fit the crime and then they'll label it as reform. No wonder people have so little faith in our government."

Allison writes, "I couldn't agree more. Thank you for speaking up for the 70% of Arizonans who support this new law. My parents live in Arizona. They've had their car stolen out of their driveway by illegal immigrants, and their house has been broken into three times in the last two years by illegal immigrants. When we are more afraid of offending someone by asking for their I.D. or legitimate papers, we sanction crime and fail to protect the average American citizen."

Steve in Hawaii writes, "Only after dirty bomb detonation number three or number four."

Ron in Phoenix, "As a resident of Arizona, I know that we have already decided the federal government was never going to enforce the federal law, so we took it upon ourselves to make our own law."

Chuck writes, "No, there's pretty much no way to enforce them without profiling and everybody is too scared to do that for fear of losing votes. Maybe letting states deal with it on their own is a good idea. Let's see how it works in Arizona. Seems like a good place to start."

T. writes, "Obama's talk about Arizona's law being misguided is just a smokescreen for the amnesty he and other liberals want to give illegal aliens. They'll call it something else of course and claim that the illegals have to go back to the end of the line and learn English and a list of other lies, but it will be the 1986 debacle all over again."

And Bob in Houston says nothing will be done to halt illegal immigration while Obama is president. Congratulations to the governor of Arizona. I hope Texas will be next."

If you want to read more on this, got lots of e-mail. Go to my blog, CNN.com/Caffertyfile.

BLITZER: And get ready. A lot more e-mail, I'm sure is going to come in, Jack. Thank you. Jack Cafferty, with the Cafferty file.

A South Korean warship split in half and new claims that North Korea was responsible, a torpedo attack raising serious tensions right now on the Korean peninsula and around the world.

And the mayor of Phoenix sides with opponents of the new immigration law. He'll join us to talk about plans to sue his own state.

(COMMERCIAL BREAK)

BLITZER: Lisa Sylvester is monitoring some of the other top stories in THE SITUATION ROOM right now. Lisa, what do you have?

SYLVESTER: Hi there Wolf. The world's largest car rental company is about to get even bigger. Today Hertz said it will buy Dollar Thrifty for $1.2 billion cash and stock. Hertz says the deal will bring its total number of locations to 9,800 worldwide. Travel industry analysts are mixed on whether it will mean lower prices for customers or not. In 2009, car rental rates reached record highs.

Authorities say an armed man arrested at a North Carolina airport just after Air Force One took off yesterday, can be released if he posts a $100,000 bond. Joseph McVey allegedly arrived at the Asheville airport driving a car equipped with police lights, sirens and rifle scope calculations, even though he does not work in law enforcement. But the Associated Press is reporting that McVey is a volunteer with his local sheriff's office. Wolf?

BLITZER: Lisa, stand by.

A U.S. military official is now saying what many people suspected that a South Korean war ship that sank last month was likely sunk by a North Korean torpedo that literally split the ship in half. Our pentagon correspondent Chris Lawrence is working the story for us. Chris, what are your sources telling you?

CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: Well, Wolf, the state department is being very cautious, you know, saying they're working with the South Koreans to develop what's called an appropriate response. U.S. military officials are saying privately what some South Korean military officials are saying publicly. That they now believe that the most likely cause for this South Korean ship sinking is a North Korean torpedo. Take a look at some of this animation, if you will. It shows you exactly somewhat of what they believe to be the best case scenario right now, and that's that an underwater explosion basically split the South Korean war ship in half, but they do not believe the explosive device actually connected with the war ship. Neither South Korean officials or U.S. officials are coming out publicly to name North Korea. That's a very calculated response. But in the last few days, South Korean officials have been sort of hinting more and more that they're getting closer to determining an exact cause for the explosion.

BLITZER: And that raises this question, it's an obvious one, Chris. If, in fact, it turns out to be true that a North Korean torpedo sunk this South Korean ship, what's to stop the South Koreans from retaliating?

LAWRENCE: Well, the most obvious thing that would stop them are the tens of thousands of pieces of heavy artillery in North Korea pointed exactly at South Korea. They've also got hundreds of missiles, the military response, the risks from that of escalating that conflict would be enormous. But there's also an economic effect as well. You know South Korea felt the same economic downturn the entire world felt. This is happening just as some of the major credit rating agencies are finishing up their report on South Korea. They don't want to damage that credit rating. And you have to think, even the hint of heating up these tensions could send investors fleeing some of the markets, Wolf.

BLITZER: Chris Lawrence, reporting for us. Chris, thank you.

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