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Suspect in Times Square Bomb Attack Pleads Guilty; Judge Weighs Lifting Drilling Ban

Aired June 21, 2010 - 17:00   ET


WOLF BLITZER, CNN ANCHOR: Thanks very much, Don. Happening now, the suspect in the botched Times Square bombing case enters a plea in court after a last-minute delay at his arraignment. This hour, we have breaking news on the hearing and a deal apparently with prosecutors. Stand by.

Astounding new figures about the cost of the Gulf oil disaster, the amounts of crude that may be gushing into the water. We're investigating the biggest estimate to be thrown out yet, perhaps 100,000 barrels leaking every single day.

In New Orleans right now, a judge is deciding whether to lift a temporary ban on deep water drilling. Is it a threat to the oil ravaged coast or key to funding its recovery? I'm Wolf Blitzer. You're in "The Situation Room."

But first, the breaking news. The suspect in the failed Times Square bomb attack has pleaded guilty. Faisal Shahzad was due to face a judge in New York a while ago. He has now faced that judge. The hearing had originally been scheduled for earlier in the day, but let's go to CNN's Allan Chernoff, he's got the details for us. He was facing ten counts. Apparently guilty he is saying, he is guilty on all of them, Allan?

ALLAN CHERNOFF, CNN CORRESPONDENT: No surprise over here, Wolf, because the federal authorities have said that Mr. Shahzad indeed confessed to them, said that he received bomb making training in Pakistan, that he drove that Nissan Pathfinder into Times Square, attempted to detonate it, and the evidence was overwhelming here.

Remember, Shahzad had actually cooperated with federal prosecutors, with investigators for two weeks after that May 3rd arrest. And remember it was back on May 1st, that evening, of Saturday night, that he tried to blow up a Nissan SUV in Times Square. So we do have the guilty plea in court and as I said, not a surprise. Now, Wolf, six of the 10 counts do carry a maximum term of life in prison. So let's see what happens over there.

BLITZER: But usually, Allan, if there is a guilty plea and they cooperate, these defendants with law enforcement, they're almost always going to get a reduced sentence. Isn't that right?

CHERNOFF: That's typically what happens. This is not a typical case and attorneys who have followed it say it's hard to see federal prosecutors giving Mr. Shahzad any type of a break over here. He has provided information. He did tell the authorities that he believed he was working with the Pakistani Taliban, but in terms of giving him a break, anything less than life in prison, tough to see that according to a lot of legal scholars who have followed this.

BLITZER: All right. Let's talk about it with Fran Townsend. Allan, stand by. Fran Townsend is our national security contributor here at CNN, former Justice Department official during the Clinton administration, homeland security adviser during the Bush administration. He's almost certainly going to get, usually a judge goes along with prosecutors. Someone pleads guilty. They avoid a trial, avoid all the requirements of a trial, cooperates with the law enforcement. They almost always get some sort of reduced sentence. Isn't that right?

FRAN TOWNSEND, CNN NATIONAL SECURITY CONTRIBUTOR: That's right, Wolf. You know, what benefit he gets, first of all we ought to assume that the reason that the plea, the entry of his plea was delayed was to ensure that the government would have the full benefit of his cooperation before the public plea. Once that happens, the question is what kind of benefit will he get? As you mentioned, oftentimes that's a reduced sentence. But it may be in this case to Allan's point, it may be other things. It may be where his, where he is housed to serve his jail sentence, what the conditions of his confinement are. There may be other things that they are able to do without having to reduce the sentence very much if at all.

BLITZER: So you would not necessarily, given the fact for weeks he has been talking to law enforcement, including early weeks without even an attorney present, you're not surprised that he decided to plead guilty for whatever reason?

TOWNSEND: No, not at all. In fact I was quite certain that they delayed as I said the entry of the public plea until they were finished debriefing him. The question will be how does the government evaluate his cooperation? Do they believe he was truthful in all respects or did he lie at some point? Did he give the benefit of the cooperation that may lead to other co-conspirators? All those things will weigh either in his favor or not, depending on what the government's view is of his cooperation.

BLITZER: I wasn't surprised for the simple reason that a few days ago when they announced all the charges against him, none of the charges carried more than life. None of them carried the death sentence for example, which they could have. The prosecution could have gone for, including a charge that carried the death sentence. Once they didn't do that I said to myself, you know what, he is likely to plead guilty and cooperate.

TOWNSEND: That is exactly right. That may have been part of the negotiated settlement but I will tell you, Wolf, where it was an unsuccessful attempt and no one was actually hurt or killed as a result of that attempt. It wasn't surprising that it was not a death penalty case although as you say, it could have been.

BLITZER: Just to be precise and put a button on this, just because the defense attorneys and the defendant in this case and the prosecution, the law enforcement, the U.S. attorneys agree, that doesn't necessarily mean the judge is going to agree. The judge can do whatever he or she wants.

TOWNSEND: That's exactly right. The sentencing guidelines will restrict depending on what the charges are what is available to the judge but the judge can accept or reject the defense lawyer and the government's arguments in terms of what sentence he ought to get.

BLITZER: There is a related case involved that the Supreme Court came out with today and I want to talk to you about this. The Supreme Court ruling today in the fight against terrorism. This is a case that has a lot of people wondering what exactly it means. The court upheld a key provision of the Patriot Act that makes it a crime to provide material support, what is called material support for a foreign terrorist group.

The 6-3 decision by the Supreme Court, the justices rejecting the arguments that the law threatens the constitutional right of free speech. You read the decision, 6-3, only three of the Democratic appointed justices decided they didn't like this. They were the minority. But the majority was pretty firm in saying that if you go ahead and express what is called material support for a known terrorist group, you could go to jail for that.

TOWNSEND: This is a tremendous win for not only the United States but for the current administration. It's interesting, Wolf, Elena Kagan the current Supreme Court nominee argued in favor of upholding this law. This is an important tool the government uses to convict those, to charge and convict, potentially convict those who provide money, recruits, propaganda, to terrorist organizations, but are not what we call people who actually blow things up or pull the trigger.

BLITZER: So it's a major decision, a 6-3 decision by the Supreme Court. If you're thinking about even voicing support for a terrorist group, don't do it because the government can come down hard on you and the Supreme Court said the government has every right to do so.

TOWNSEND: It is more than just voicing support, Wolf. It is actually the notion of providing material support, significant material support.

BLITZER: But they're saying that if material support, they're defining as expressing support or giving advice or whatever to that organization.

TOWNSEND: That's right. But it could be technical advice, bomb- building advice, fundraising.

BLITZER: Obviously, but if you're just talking, it's one thing but if you're doing something in terms of providing money or technical advice, that's obviously a lot more serious.

TOWNSEND: That's right, exactly.

BLITZER: Thanks very much. Let's get to the Gulf oil disaster right now. A federal judge in New Orleans says he'll decide within the next two days whether to lift the Obama administration's temporary ban on deep water drilling. It could happen as soon as tomorrow afternoon.

Supporters of the six-month moratorium say it's needed while the safety review continues of the April 20th rig disaster. Opponents say the ban is further ruining the economy of a region that's already reeling from the worst oil spill in U.S. history. BP says it collected about 23,000 barrels of oil over the last 24 hours ending at midnight last night. But that could be less than half the amount of crude leaking every single day based on scientists' most recent estimates.

The oil giant says it's already spent $2 billion responding to the spill including efforts to plug the leak and payments of damages, they'll be spending a lot more. Let's bring in CNN's Mary Snow with more on the cost to BP and the payout of these damage claims. Mary?

MARY SNOW, CNN CORRESPONDENT: Wolf, the man in charge with overseeing BP's $20 billion compensation fund says there are two immediate things that need to be done when it comes to figuring out how to compensate people in the Gulf who have lost their livelihoods because of the spill.

Kenneth Feinberg, who was appointed by the Obama administration as an independent administrator says BP must speed up those claims and provide more transparency. Now, to date BP says 65,000 claims have been submitted, 32,000 have been paid out. That amounts to about $105 million.

Now, to accelerate the process, Feinberg says emergency claims need to be paid out. That was actually modeled on what was done with the 9/11 fund which Feinberg oversaw. What was such a big pool of money and the high visibility, how do you prevent fraud? CNN's John Roberts asked Feinberg about that earlier today.


KENNETH FEINBERG, ADMINISTRATOR, INDEPENDENT CLAIMS FACILITY: It's a delicate balance. On the emergency payments that have been going out that you mentioned, and I give BP credit, I give them credit. They've set up this program. They've already accelerated a process and paid out over $100 million in claims. But with the emergency payments, John, you've got to allow those payments to go out with less corroboration than you would if you're giving a lump sum payment that is the total compensation. For the emergency payments, we've got to err on the side of the claimant.


SNOW: Wolf, to those questions about fraud, Feinberg points out that of the 7,300 claims paid out in the 9/11 fund, 35 were found to be fraudulent. Now, of course, the other big task that he is sorting out right now is figuring out a formula to determine which businesses are linked to the spill and those that are too far removed to be eligible for money. Wolf?

BLITZER: It's interesting, when he ran, Ken Feinberg, the 9/11 compensation fund for the victims, if they accepted money from that compensation fund they could no longer go ahead and file lawsuits. In this particular case there is a difference. If they go ahead, Mary, and accept money from the $20 billion fund, they can still at a later point still sue BP, can't they?

SNOW: Right. And that's what he was reiterating today. He says these emergency payments do not come with the conditions that you can't sue. However, Feinberg was very clear that he advises against lawsuits. He says like the 9/11 funds, if there is an award and people are willing to give up the right to sue, he says he's advising claimants to do that basically for two reasons. They don't know if they're going to win and the costs that are involved when you involve lawyers.

BLITZER: There's no doubt about that. All right, Mary, thanks very much.

It's the pride of Louisiana cuisine, but shrimp and other kinds of seafood are now threatened along with the livelihoods of a lot of people who catch them. We're taking you to the docks and we'll show you the despair.

And a top Republican is accusing President Obama of holding immigration reform hostage. Donna Brazile and Ed Rollins, they're both standing by live. They'll get into the middle of that.


BLITZER: Jack Cafferty is here with "The Cafferty File." Jack?

JACK CAFFERTY, CNN CORRESPONDENT: There are growing signs that the federal government wants more control over the Internet. For starters, a bipartisan Senate bill would give the president a so- called Internet kill switch, which would allow the president to control or even shut down the Internet in the event of an emergency.

Senator Joe Lieberman's a cosponsor of this. He says that America's economic security, national security and public safety are all at risk from new kinds of enemies, like cyber terrorists. Lieberman says that's why the government needs more control over the Internet in what he calls times of war. Critics worry about the level of control the bill would give to the president and they claim it could have unintended consequences.

Speaking of terrorism, the Homeland Security department says the United States has got to do more to monitor terrorist groups that use the Internet to recruit and train. DHS Secretary Janet Napolitano says the government needs to find the right balance between protecting individuals' rights to privacy and keeping the country safe. This comes on the heels of several domestic terror attacks in which the Internet played a key role. It's believed the terrorists in both the Fort Hood shooting and the attempted bombing of Times Square were inspired by online postings of Islamic extremists. Finally, the Federal Communication Commission is getting into the act, too, taking steps toward more Internet regulation. Last week, the FCC voted to formally consider tighter control over high speed Internet companies. Until now, these companies have operated with virtually no government oversight. So here's the question. How much power should the government have when it comes to the Internet? Go to Post a comment on my blog.

BLITZER: Jack Cafferty, thank you, good question.

A down day today on Wall Street with the Dow Jones Industrials losing eight points at the closing bell. The Dow had climbed more than 100 points earlier in the morning on the news that China is moving to strengthen its currency but in this volatile market, the rally did not hold at all.

As President Obama prepares to meet with world leaders in Canada this coming week, is the United States now at risk of another economic downturn? And do the Feds have any real ammunition left to fight? Let's talk about that and more with our senior political analyst David Gergen. A lot of folks out there are expressing concern about what's called a double dip recession. David, I know you've been looking into this. How worried should we be?

DAVID GERGEN, CNN SR. POLITICAL ANALYST: Wolf, I've had a chance to talk to economists and people in New York and in the financial community about this. I find very little belief that we're actually going to have a double dip. What I do find is a growing concern that the economy is stalling out. That with these job numbers we've seen, the housing markets being what they are, commercial real estate still highly vulnerable, that we may not continue to experience the kind of growth that we were looking at, that it may level out. That would be very bad news for American workers.

BLITZER: Because some economists are saying the Federal Reserve has limited ammunition now, ready to go in case it's necessary to bail out this economy if you will.

GERGEN: That's right, Wolf. The most important way the Federal Reserve, and it's done an enormous job in preventing us from going into a depression, but their biggest tool as you know is interest rates. And they've had the lowest interest rates in modern history. They've already been maintaining them. So you can't go any lower. You know, they're 0.25 percent.

And indeed, Wolf, there are those on the -- and they're meeting tomorrow -- there are a couple Federal Reserve governors, I talked to one last week in Kansas City, who actually are worried about inflation and they would like to start raising interest rates. There is nowhere else to go down.

But it goes to the point that the Fed, there's not much more the Fed can do in the near term. They are withdrawing some of their support in the housing area. They could go back into the housing area and help shore it up but they can't do much more to stimulate at this point. That's why all the pressure is are we going to spend more money in Congress and the White House of course is setting off a huge fight.

BLITZER: Yes, spending money not what folks want to hear right now with the budget deficit and the national debt where it is right now. David, thanks very much for that.

GERGEN: Thank you.

BLITZER: A wildfire rages out of control. The latest on the evacuations and the desperate attempts to contain it. We have new information coming in.

And it's a common chemical that could be found in your furniture, even in your electronics. Now a new study says it could pose a serious health risk to pregnant women.


BLITZER: Brianna Keilar is monitoring some of the other top stories in "The Situation Room" right now. Brianna, what's going on?

BRIANNA KEILAR, CNN CORRESPONDENT: Wolf, there is a wildfire near Flagstaff, Arizona that's raging out of control this hour. It's actually grown to more than 8,000 acres and it is not contained. Authorities have evacuated almost 750 properties and high winds in the vicinity certainly aren't helping matters. This is the second large fire to break out in the area over the weekend.

And this morning for expectant mothers, a new study shows exposure to certain flame retardant chemicals could reduce the levels of certain thyroid hormones needed for fetal brain development. Among 270 women tested, those with higher levels of the chemical had lower levels of thyroid stimulating hormones. These chemicals are commonly found in a variety of consumer items like cars, electronics, and home furnishings.

President Obama honored fathers today. The president using this day after Father's Day to launch a new fatherhood and mentoring initiative. He also talked about what it was like growing up without a dad.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I say all this as someone who grew up without a father in my own life. He left my family when I was 2-years-old. And while I was lucky to have a wonderful mother and loving grandparents who poured everything they had into me and my sister, I still felt the weight of that absence. It's something that leaves a hole in a child's life that no government can fill.


KEILAR: Mr. Obama says that being a father to his own daughters is the most challenging and most fulfilling job he'll ever have.

And in the process of leaving their Pittsburgh wedding on Saturday, Ashley Marasco drove away not realizing that her husband had left an envelope with more than $3,000 on top of the car. Of course, they went looking for it after they realized the slip because the envelope of course was gone but, Wolf, imagine their surprise after learning today that the money was recovered. The man who found it there on the side of the road, he heard about it on the local news and immediately returned the money. So I guess there is some good in the world.

BLITZER: Reaffirms our faith in the goodness of folks out there. He is a good man. Thanks very much, Brianna, for that.

It's the worst case scenario yet. One lawmaker citing a possible estimate of 100,000 barrels of oil escaping into the Gulf every day. We're taking a closer look at that number and whether BP has been covering it up.

And CNN's Kyra Phillips takes us out on the Gulf with some shrimpers who are seeing their business and their way of life vanish in the earth.


BLITZER: You're in "The Situation Room." Happening now, a fiery debate. Is President Obama's six-month moratorium on deep water drilling only making matters worse for those suffering in the Gulf Coast? Now it's up to a federal judge to decide. The decision could come as soon as tomorrow.

President Obama getting heat for golfing and catching a baseball game in the midst of a growing environmental disaster. Will he pay a political price? I'm Wolf Blitzer. You're in "The Situation Room."

We've seen estimates of the amount of oil rushing into the Gulf rose dramatically over the past two months. For the first time, we are now hearing about an astounding figure, a scenario of 100,000 barrels of crude leaking every day. Is that a valid figure? Has BP been hiding it? Brian Todd has been looking into this for us. Brian, what have you discovered?

BRIAN TODD, CNN CORRESPONDENT: Wolf, more accusations today that BP has not been forthcoming with information about this spill. Congressman Ed Markey from the House Energy and Commerce Committee has released an internal BP document right here showing that the company's worst case scenario for the amount of oil gushing from this well is much worse than BP has told the public. Markey and his aides tell CNN when the committee held a closed door meeting with BP on May 4th, Markey specifically asked what the worst case would be. They say BP officials told them at that time, the worst case was 60,000 barrels of oil a day leaking out. That's what the high end estimates are for the flow right now.

But this document from BP which Markey's side claims to have gotten later in May says, quote, "if the blowout preventer and wellhead are removed and if we have incorrectly modeled the restrictions, the rate could be as high as 100,000 barrels per day." We have contacted BP officials about this. They say the figure of 100,000 barrels a day is irrelevant because the company has no intention of removing the blowout preventer and never did. When I spoke with Congressman Markey this afternoon, he leveled another shot at BP, a motivation he says the company has for low balancing flow rate figures.


REP. ED MARKEY (D), ENERGY AND COMMERCE CMTE: I think that BP right from the beginning was more interested in their liability than in the livability of the Gulf. They are actually going to be fined per barrel of oil per day that spills out into the Gulf. Obviously a fine for 1,000 barrels is much smaller than 60,000, and in turn much smaller than 100,000 barrels per day.

And so I think right from the beginning they decided they would low ball the figure, assure people that they were going to fix it, and that there would be no significant impact on the gulf of Mexico and we now know that all of that was untrue.


TODD: I asked a BP official about that comment and he said the company is not low balling flow rate numbers and he says the numbers have been issued the whole time either by the unified command or more recently by that flow rate technical group and as he points out BP is not a member of that group. Wolf?

BLITZER: Brian Todd with the latest on that. We'll stay on top of it. Thanks.

Let's turn to another critical angle of the spill the growing toll it's taking on Louisiana's shrimping industry. CNN's Kyra Phillips is joining us now from a shrimping dock in Grand Isle, Louisiana. The boats used to be very busy where you are Kyra. I'm looking behind you and I don't see a lot of activity.

KYRA PHILLIPS, CNN CORRESPONDENT: Well, unfortunately this is what we've been seeing every day since we arrived, Wolf. I'm on a bait boat. Normally this bait boat is out in the waters getting live shrimp. The troll usually hooked up right here to these brackets in the water out there working from 5:00 a.m. throughout the entire day. If I take you through this boat, Wolf, up front usually the front of the boat right here filled with the live bait. Thousands of dollars a day. That's what the Vegas family here that owns this marina is losing, thousands of dollars a day. You can see up top here the Bridge Side Marina. They're actually having to reinvent their business now. They've turned their shop basically into a kitchen so instead of selling bait to all the fishermen that come out here or used to come out here every single day, they're making sandwiches for all the workers out here trying to clean up the water, trying to save the shores. Fishing completely shut down.

Something else, too. Let me take you to the back of the trawler once again, Wolf. Jody and Buddy Vegas, they're the one who own this marina, it's been in the family for 38 years, they said normally back here it's filled with college students. He kind of chuckled and said, you know, in years to come you'll see less lawyers and doctors. Why? Because usually he employs college students. They see how hard this work is, and they realize I want to go back to college and make some money and do something else. He's keeping a good sense of humor about what's happening but it really is a sad reality, Wolf, that not only are college kids not able to make money to go back to college but the fishermen and the shrimpers aren't working either which is exactly why we're here tonight, hopefully raising a lot of money for these folks on that telethon that Larry King is going to be having for two hours tonight live.

BLITZER: It's an important event here at CNN. An important event for where you are right now. Let me just update our viewers. At 8:00 p.m. eastern tonight on CNN, Larry will host this two-hour telethon called disaster in the gulf. How you can help. Larry will be joined by a lot of celebrities to raise money for three charities that provide direct support for residents and for the wild life there, the united way gives emergency assistance and recovery help to people affected by this disaster. The national wildlife federation is creating a volunteer network to track, report, and rescue birds and other creatures endangered by the spill. And the nature conservancy is working to restore the gulf coast and make it more resilient. For more on these groups and other ways you can help, go to your world, and check in tonight 8:00 p.m. eastern, a two-hour Larry King special. I think you'll want to see this and you'll want to help out.

We're counting down to another round of voting across the nation including a runoff for governor of South Carolina. A runoff that could be historic. And the president in a he said/he said showdown with the top Republican senator.


BLITZER: In South Carolina a political soap opera will be written tomorrow when Republicans cast votes in a gubernatorial runoff. The star of the drama for better or worse the state representative Nikki Haley. She overcame very long odds and unproven allegations of marital infidelity to get where she is, possibly on the brink of becoming the state's first woman nominee for governor. Let's go to CNN's Jim Acosta. Jim?

JIM ACOSTA, CNN CORRESPONDENT: Hi, Wolf. As you know, politics in South Carolina is a rough and tumble sport. That has been the case for Nikki Haley in her race to become the governor of South Carolina. Just in the Republican primary she has faced accusations of marital infidelity, ethnic slurs, even questions about her religious faith. So we caught up with Representative Haley at a campaign stop earlier today in Florence, South Carolina. At that event she talked about the brutal weeks in the waning days of this campaign. So after that event I talked to her about that and whether or not the attacks on her are actually helping her campaign.

(BEGIN VIDEOTAPE) ACOSTA: There is a political narrative out there that some of these allegations against you actually helped your campaign. What do you think of that?

NIKKI HALEY (R), S. CAROLINA GOV. CANDIDATE: I wouldn't wish that on my worst enemy. You know what I can tell you is that we while they, the negative campaigners tried to distract us it only made me more focused and more confident and more determined to make sure we got our message out to the people of this state. What it showed was that the people rose above it and said we're not going to allow the negative campaigning and turned around and made their decisions based on that.

ACOSTA: Do you think the public deserves answers when it comes to those type of issues when they come up especially in a state like South Carolina considering what the current governor went through?

HALEY: I think public officials have to answer to the voters. What is sad is when public officials have to answer to negative false accusations. That's where this went wrong. There was no proof. There was nothing that validated it yet all of a sudden it became a story.

ACOSTA: You have said those accusations are false.

HALEY: That's right.


ACOSTA: Now Nikki Haley has gone from last to first in this campaign. She once had 7 percent of the vote according to the polls down here, Wolf. She surged to 49.5 percent of the vote in that primary two weeks ago. Nearly enough to avoid a runoff but she is having a runoff with Congressman Gresham Barrett tomorrow. She is heavily favored to win that race. She is a tea party darling down here in South Carolina, a staunch conservative who has earned the support of Sarah Palin. We asked her about an issue that is near and dear to Sarah Palin's heart, offshore oil drilling, and Nikki Haley not hesitating for a second saying she would support offshore oil drilling off the shores of South Carolina if she becomes governor. That will obviously become a very big campaign issue coming up in the fall should she win tomorrow as she is expected to do.

BLITZER: If she wins not only would she be the first woman governor of South Carolina, she would be the second Indian American to be elected governor of a state after Bobby Jindal whose parents were from India. She would be the second Indian American elected governor of a state in the United States. All right.

ACOSTA: That's right. And the first nonwhite female governor of the United States.

BLITZER: So we'll watch it closely. She is heavily favored. She beat him by a lot in the earlier contest but she didn't get 50 percent plus one vote so that's why the runoff is taking place tomorrow. We'll watch it with you. Thanks very much. So why is the white house saying a top Republican is flat out wrong when it comes to comprehensive immigration reform? We'll talk about that and more in our strategy session.

And there isn't much oil there so why aren't more tourists coming to Florida?


BLITZER: Let's get right to our strategy session. Joining us our CNN political contributors, the Democratic strategist Donna Brazile and the Republican strategist Ed Rollins. Not every day you see a he said/he said battle between the president of the United States and the top Republican, the number two Republican in the Senate Jon Kyl. Listen to what Kyl told some of his constituents in Arizona the other day.

SEN. JON KYL (R), ARIZONA: I met with the president in the oval office just the two of us. I kept the rest of the people out. Here's what the president said. The problem is, he said, if we secure the border, then you all won't have any reason to support comprehensive immigration reform. In other words, they're holding it hostage. They want to secure the border unless and until it is combined with comprehensive immigration reform.

BLITZER: All right. White house communications director Dan Pfeiffer says, "The president didn't say that and Senator Kyl knows it. There are more resources dedicated toward border security today than ever before but as the president has made clear, truly securing the border will require a comprehensive solution to our broken immigration system." To which Kyl's office said, "There were two people in that meeting and Dan Pfeiffer was not one of them. Senator Kyl stands by his remarks and the white house spokesman pushed back that you must have comprehensive reform to secure the border only confirms Senator Kyl's account." This is a serious issue especially going forward with the election right now. You have a very serious accusation made by Kyl against the president.

DONNA BRAZILE, DEMOCRATIC STRATEGIST: Well, first of all, Wolf, I think it's important to understand that the president has launched the southwest border initiative which as Mr. Pfeiffer said has doubled the number of border personnel, tripled the number of intelligence, surveillance people who are available 100 percent of the shipments now going to the south are being expected, screened. So I think this president is serious about securing the border and making sure that the proper enforcement tools are under way. We know what has happened in Arizona has distracted us from looking at comprehensive immigration reform. It's time that we really put it on the legislative agenda and perhaps Mr. Kyl could use this experience to find a Republican to work with Senator Schumer and Senator Menendez and others because this is something Senator Reid has said is a big priority for the United States Senate.

BLITZER: Does that sound like something the president would say to Kyl, one-on-one in the white house, and the president says we aren't going to secure the border. We really don't want to secure the border because that will ease or reduce the pressure for comprehensive immigration reform? Does that sound from your perspective like something President Obama would say?

ED ROLLINS, REPUBLICAN STRATEGIST: If he did it was a big mistake. I know Jon Kyl for a long time. I know he is a man of integrity and whatever he thinks he heard, is what he is out there basically talking about. The key issue here is that for four years the Democrats have controlled the Congress. President Bush was more than willing to have a comprehensive plan both security and some sort of a transfer to, from illegal immigration to legal. President Obama has talked about this for two years. The votes aren't there. And the Democrats don't have the votes to get it done. I think at the end of the day it's a lot of rhetoric here and definitely with two or three months to go, four months and 11 days exactly before this election I don't think there's going to be any comprehensive immigration legislation passed and I think mostly Democrats don't want to put it up right now.

BLITZER: Well they couldn't get it passed with president bush supporting it, with Ted Kennedy supporting it, John McCain, Lindsay Graham supporting it. Donna, what makes you think there is any greater appetite to support comprehensive immigration reform now?

BRAZILE: First of all, Senator Reid has charged two high ranking Democratic senators to go out there and find the votes. So this is an issue that the Democrats are willing to put on the table. They are willing to put not just border security and border enforcement but also we have to find a way to get to 10 million to 12 million undocumented residents out of the shadows so we can solve that problem. 40 percent to 45 percent of the people here undocumented didn't cross the border illegally but overstayed their visas. Let me just say something. I think I know President Obama well enough to say that he would not say something as crass and as stupid as oh, we can't do this until -- we're going to hold this bill hostage until we can get everything we want. No, I think this president is quite a pragmatist and he was probably appealing to Senator Kyl to say look, we have to find a comprehensive solution. We can't say it's border security without looking at the other aspects of our immigration problems.

BLITZER: It wouldn't be the first meeting where two people emerge with different recollections of what they said.

ROLLINS: Absolutely not. And the reality is you should never let the president be meeting alone. In the white houses we worked in even if a senator comes in you always want someone there to be the record keeper. I think Donna feels the president is honest. I feel Jon Kyl is honest. Clearly this is not going to make it any better and Jon Kyl is a very key player in the Senate. If he feels the president wasn't honest with him, it's not going to make it any better.

BLITZER: And Arizona as we all know is right in the middle of all of this.

ROLLINS: And overwhelmingly the polls indicate people like what's going on down there. The bottom line on Senator Reid is Senator Reid is trying to survive in his own environment in which he is substantially behind the candidate that he didn't think could give him a real race. He's giving him a race. All I'm saying is there is not going to be any comprehensive and we shouldn't take up a piece of legislation like this in this environment when you got about two months left to go to have real legislative battles.

BLITZER: We have to leave it right there. Donna and Ed, thanks as usual.

Jack Cafferty is back in a moment with your e-mail. Then the fight to protect the popular family friendly beach in Florida, destined getting aggressive to save their shore.


BLITZER: Jack's back with "the Cafferty file." Jack?

JACK CAFFERTY, CNN CORRESPONDENT: Question this hour, how much power should the government have when it comes to the internet?

Kathy writes, "A kill switch is totally dangerous regarding freedom of speech, like totally. The internet gives us all access to the outside world immediately. Open, outside communication keeps nations and governments somewhat honest. Our media is already compromised with biased accounts of stories, our history books being rewritten by conservative short-sighted idiots and now allow a politician the right to control the internet? What crisis should be so bad as to shut down our access to news and communication?"

Steve in Virginia, "The government should have sufficient involvement in the internet to ascertain security threats, address security threats, eliminate security threats to the American people. The internet moves our U.S. borders within the homes of every American citizen who has a computer."

Thomas writes, "So now that China is overtaking us as the manufacturing leader we're going to try to be more like them with greater government restrictions on the internet. I find it funny the government is trying to exert more control over our citizens and yet they shy away from controlling the illegal immigration issue."

Greg in Minneapolis says, "Had this been George W. Bush proposing a government kill switch on the internet the impeachment proceedings would be well under way. We don't need big brother having anything to do with the internet. The only reason there is to put in a kill switch is to deal with dissenting opinions in the only way they can, rather than counter them with their own arguments."

Mark in Houston, "The outcry coming from those who use freedom of speech as an excuse to abuse our rights will be louder than those horns at the world cup. We live in an age of fast changing advancing threats to this country. If shutting down the net serves a justified purpose in any one of those situations then go for it, however I can't think of too many people in elected office that I would trust with that control." And Jack in Florida writes, "The government gets to control the flow of information? Have you ever read "1984," Jack? No president, Democrat or Republican, should ever have that power."

If you want to read more on the subject, you'll find it on my blog at Wolf?

BLITZER: Thanks very much, Jack.

The oil hasn't even reached most of Florida yet but it's already taking a toll.

Could a six-month deepwater drilling moratorium be doing more damage than good?


BLITZER: The Florida Governor Charlie Crist wants to you visit his state's beaches, a lot of folks in Florida do. Despite all the reassurances, businesses are struggling right now to build up America. Here is CNN's Tom Foreman.

TOM FOREMAN, CNN CORRESPONDENT: Wolf, this is absolutely what you should not be seeing this time of year on the Gulf of Mexico, empty beaches, empty parking lots, empty restaurants, and all of that is despite the fact that there is almost no oil to be found anywhere near these beaches. On Pensacola's still beautiful beach, locals are waiting and watching for the oil that largely has not arrived. That's the good news. The bad? They are waiting for visitors who are not here either, chased away in the height of the tourist season by the mere fear of oil.

EILENE BEARD, CO-OWNER, SCUBA SHACK: Typically on the weekend I have a lot of rentals.

FOREMAN: At Eilene Beard's Scuba Shack a day should see all of her wet suits, fins and air tanks in the water.

BEARD: On the weekend it's not unusual for us to have a $5,000 day and yesterday I took in $150. So as you can see, it's dead.

FOREMAN: An analysis by the University of Central Florida says the disaster may cost almost 200,000 jobs and $11 billion in business here, but on this part of the gulf, folks are fighting back, through an aggressive combination of local, state and national efforts to keep local businesses afloat. The lines have been long at this mobile command post set up by the state's small business development center to offer bridge loans to businesses in trouble.

LEW ATTARDO, FLA. SMALL BUS. DEVELOPMENT CENTER: It's to help them make their payments, keep people on the payroll if they possibly can, to do other things, so our initial reaction is look, let's get you some loan money so you can keep the lights on.

FOREMAN: Down at Mike Pinzone fishing pier other help is coming through, too. The local government modified the due dates for the beachfront lease payments. BP has come through with a little money and most importantly, he says, locals are coming out to help ease the 60 percent decline in his business.

MIKE PINZONE, BUSINESS OWNER: Our state doesn't have the money to handle this. There's no way.

FOREMAN: But it seems to me that makes it all the more important that everybody here pull together and help each other as best they can.

PINZONE: Absolutely, and I feel that they have, and I feel that they are.

FOREMAN: Mike has had to cut hours for his workers and abandon plans for an expansion this year, but so far, he says, he has not had to lay anyone off, and he's praying week by week, he can keep that up, until the fear of oil goes away, and his customers come back. Even a moderate impact, a 10 percent loss of jobs along the Florida gulf coast could mean 40,000 people out of work, Wolf, so you can see how desperate they are to get the word out that at least for now, the water and the beaches here are just fine, and they hope folks will come on in. Wolf.

BLITZER: Tom Foreman, thanks very much.

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