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The Situation Room

Vilsack Apologizes to Sherrod; British Prime Minister Flies Commercial; Taunting North Korea?

Aired July 21, 2010 - 17:00   ET

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

TOM VILSACK, AGRICULTURE SECRETARY: Each of us represents this department. Each of us represents the administration and the president. And we've got to be very careful about our actions and our words, and we have to make sure that -- that we think before we act.

I did not think before I acted. And for that reason this poor woman has gone through a very difficult time.

UNIDENTIFIED REPORTER: Will there be a vetting process put in place before you make a decision like this in the future?

VILSACK: Well --

UNIDENTIFIED REPORTER: Or (INAUDIBLE) how you might examine information before you make a decision?

VILSACK: Sure. We went through a process today of reviewing precisely as best we could what took place, and there will be changes. One thing is there needs to be a more deliberative process, obviously, and I need to do a better job of reaching out to get input before a decision of this magnitude is made.

That is a very serious lesson I learned. I was very sensitive and remain sensitive to the civil rights issues involving this department. Again, when you're dealing with tens of thousands of claims -- tens of thousands of claims -- it is something that needs to be resolved that hasn't been resolved and must be resolved, and so we have done two things.

We've made a concerted effort to try to resolve these cases and we've also begun a process of looking at our entire operation from an outside consultant to take a look and see whether or not there are any other things that we're doing or shouldn't be doing that would potentially lead to claims in the future because we want to put a stop to this.

This is a great agency. A lot of hard working people who care deeply. Shirley is one of them. And they're proud of this agency. And this is part of our history. We need to close the chapter on. And that was foremost in my mind when I made a very hasty decision which I deeply regret.

ED O'KEEFE, WASHINGTON POST: Mr. Secretary, Ed O'Keefe from "The Washington Post." VILSACK: Ed, go ahead.

O'KEEFE: Well, yes, and that was my question. Can you elaborate a little more? And had you met Miss Sherrod previous to today's conversation? And if she's so qualified -- so uniquely qualified -- why was she not given a more senior position previously when you were, you know, hiring new officials with the new administration?

VILSACK: Ed, first of all, I may very well have visited with her or met her in the context of the larger group meeting of rural development directors. I --

UNIDENTIFIED REPORTER: You don't recall a specific --

O'KEEFE: Time -- meeting her previously?

VILSACK: No. No, no. And I don't know for certain whether or not the rural development job was one that she specifically sought. I know that she was recommended for that job.

But given her life experiences, as we begin the process of more aggressively doing advocacy and outreach, this is a person who, because of these experiences, having been discriminated against and being a claimant, having gone through that process, having gone through the process that she described in great detail in her speech.

Having gone through the last couple of days, she is uniquely positioned to be able to identify with a number of different people who might intersect with this agency in an effort to try to make sure that we don't continue to make the same mistakes we've made in the past.

O'KEEFE: Would she be a senior adviser or an undersecretary?

VILSACK: I don't really want to go into detail. I'm happy to do this after she has had an opportunity to think about this. I want to honor my commitment to her in our conversation today to give her a chance to think about this.

I just simply want everyone to know that I value that experience and I think there is a way in which, despite the difficulties that I have put her through, there is an opportunity here for us -- for me personally -- to learn obviously but for the department to be strengthened.

And at the end of the day I think that's what the people of this country would want. They want to do right by this woman but they also want to make sure that this doesn't happen again, which is the learning process, and if there is a way of strengthening the department, then that's my responsibility to explore.

And I'm hopeful that she sees it that way.

KATE BOLDUAN, CNN CORRESPONDENT: Secretary Vilsack, Kate Bolduan with CNN one more time. Have you spoken to President Obama about this? VILSACK: No. Allen?

UNIDENTIFIED REPORTER: Secretary Vilsack, you mentioned that you would be discussing about with her -- Allen (INAUDIBLE) from Bloomberg News. Is this a position that had been looked at previous to this incident or this would be a new position created in part as a result of the incident?

VILSACK: It's a position that needs to be filled.

UNIDENTIFIED REPORTER: Secretary --

VILSACK: Wait a minute. Phil, did you want to ask a question? I'm just --

UNIDENTIFIED REPORTER: Just to be clear. When you saw the transcript -- I assume the staff provided you with a transcript of the initial video clip. Were you aware that it was a partial transcript? Did they make you aware of it? Did you ask to see more of it?

VILSACK: I had not been aware of it and I talked with Shirley about the fact that she had e-mailed the office Thursday prior to this -- to this video becoming an issue. I did not receive the e-mail because it was not addressed properly to me.

In other words the e-mail address was -- there was a problem with the e-mail address so it never came to my attention. She --

UNIDENTIFIED REPORTER: Did she read that (INAUDIBLE)?

VILSACK: She had received some indication of this clip being available and she, in an effort to try to respond, sent an e-mail to me which I did not get. It was not addressed properly.

It was also sent to the deputy secretary's attention. We did not discover it until after the fact. After this all came up. And that's one of the -- that's one of the issues that we're going to address in terms of this review.

UNIDENTIFIED REPORTER: Mr. Secretary, you're taking very deeply personal responsibility.

VILSACK: Yes.

UNIDENTIFIED REPORTER: For this today.

VILSACK: Yes.

UNIDENTIFIED REPORTER: Does that absolve -- I mean, Barack Obama, President Obama is your boss. Are you absolving the White House of any responsibility here in this situation?

VILSACK: You know it's not -- it's not my place to absolve anybody from anything other than to accept responsibility for what I did. And I am accepting that responsibility with deep regret. This is a good woman. She's been put through hell. And I could have done and should have done a better job. I want to learn from that experience. I want the agency and department to learn from that experience.

And I want us to be stronger for it. I want to renew the commitment of this department to a new era in civil rights. I want to close the chapter on a very difficult period in civil rights. So I accept responsibility. And I don't think the -- the buck stops with me, as it should.

UNIDENTIFIED REPORTER: You decided to fire Miss Sherrod and then you notified the liaison at the White House or someone did? And can you describe what their reaction then to that?

VILSACK: I requested her resignation about the same time -- sort of things crossed in time. I'm not certain in what period of time the White House was contacted but as these calls were being made, the White House through the liaison's office was aware.

But the decision to do what was done was done by me. It was my decision and it was communicated and one of the lessons learned here is that this type of decision first and foremost should have been communicated by me.

It should have been done in a much more personal way. It should have been done with far more thought and it should have been done in far less haste. And all of those are my responsibility. And I accept that responsibility.

And I asked for Shirley's forgiveness and she was gracious enough to extend it to me and for that I am thankful.

WOLF BLITZER, CNN ANCHOR: All right. So there he is. The secretary of agriculture, Tom Vilsack, apologizing publicly and very enthusiastically to Shirley Sherrod for what has been done to this woman.

This former official who was forced to resign from the Department of Agriculture, but now she's been offered a brand new job at the Department of Agriculture. And you heard Tom Vilsack say she's thinking about whether to accept this new position.

And we want to welcome our viewers here in the United States and around the world. I'm Wolf Blitzer. We're in THE SITUATION ROOM.

We're going to digest what we've now heard from the secretary of Agriculture because it's been a dramatic several hours.

First, the White House went ahead and apologized to this former agriculture official and now the secretary of agriculture, upon talking to her on the phone just a little while ago, formally apologized as well.

Let's bring in our senior White House correspondent Ed Henry. Ed, this is dramatic stuff. You don't see it every day. But he's basically saying and he regretted the circumstances, I accept responsibility for the pain and discomfort that has been done to this woman and he's exonerating, in effect, the White House where you are.

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: He is trying to, Wolf. You're right. He was very blunt in saying that this woman, Shirley Sherrod, has been put through hell. The agriculture secretary also is saying that the buck stops with him.

But it doesn't completely absolve the White House. Very interesting that this comes -- this statement a short time after Robert Gibbs was at the podium in the White House briefing room really being very vague about the details, about exactly what the White House knew, and when they knew it.

When we pressed him on a whole series of issues in terms of when all of this started playing out on Monday afternoon and evening, which White House officials spoke to the Agriculture Department? He wouldn't name any names.

We finally did learn that on Tuesday morning -- yesterday morning -- is when the president was finally briefed on this and initially agreed with Secretary Vilsack's decision to get this resignation, but later Tuesday after they got more information a fuller copy of this speech by Shirley Sherrod, the president was briefed again late Tuesday.

In a rather extraordinary development overnight Tuesday into this morning the White House pushed Secretary Vilsack to put out another statement saying look, we're going to review this. Hold on. We're going to take another look.

Robert Gibbs would not reveal even which White House officials were talking to Secretary Vilsack about that.

The other thing I'll note is that this is coming now, we are now just one year and a day -- it was a year ago tomorrow that the president at a news conference here in the White House slipped up a bit when he talked about another issue involving race, the arrest of Henry Louis Gates, the Harvard University professor.

You'll remember the president came out after that because he had slammed the Cambridge Police Department in Massachusetts. He called it a teachable moment, apologized. They had the beer summit here.

Here we are one year later. That news conference last year, the president ended up over shadowing a push for health care reform. This whole debate now is over shadowing the president's signing of dramatic financial regulatory reform.

He did that today. The White House was hoping to get a lot of credit for it. Instead, this story is dominating. Very interesting development -- Wolf.

BLITZER: Ed, stand by. I want to bring in Gloria Borger, our senior political analyst, and John King, the host of "JOHN KING, USA." Both of whom have been doing some reporting on what is going on as well.

First to you, John. A huge embarrassment for the Obama administration.

JOHN KING, ANCHOR, JOHN KING, USA: It certainly is. Number one, what you see from Secretary Vilsack there and we will try to get more details as we report, but you call that manning up whether it's in politics, in life, or anything else. Just saying, me, my responsibility, my decision. Blame me.

But as Ed said, there are some questions. Remember, this was an administration that if you listen to Robert Gibbs today, they were being asked for answers. Asked for reaction. Asked for a response. And so they hastily responded and hastily made some decisions.

This is the administration that said they weren't going to play that game. That their Washington was going to be different. They wouldn't play by the old rules and they didn't care about what they liked to call cable chatter.

They also promised to try to be different when it comes to how we get into conversations about what is always a risky and sometimes an ugly issue when race combines with politics.

And yet Secretary Vilsack made very clear his hypersensitivity. He has been so involved these recent months in dealing with the civil rights issues. He was clearly hypersensitive to the race issue.

And if you talk to people inside the White House, Wolf, they clearly -- when the first warning came over from the Agriculture Department there is some video out there, we think it could be a problem, it involves racism, they concede they were hypersensitive as well.

BLITZER: And there was a history, unfortunately a bad history, at the Department of Agriculture involving race.

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Sure, there was. And I think what we saw with Secretary Vilsack today was his decency and his anguish at what had occurred and the mistake that he made.

And he did take blame for it, and you can see what was going on in his head, essentially, was we have this history at the Department of Agriculture. We cannot have this happen. And therefore Shirley Sherrod has to go.

Now everybody realizes -- and this is to John's point -- that we live in this 24/7 news cycle that everybody overreacted very, very quickly. Tom Vilsack among them. And he said that he did. We still -- he denied, though, having any communication with --

BLITZER: Personally.

BORGER: Personal or his staff? That's the question. KING: Ed makes a very good point. And, Wolf, you know this from covering the White House. When the sensitive personnel issues come up, or policy issues, they're often reluctant to give us the chain of communication and who is involved.

In part it's to protect the president and in part it's because they say hey, that's executive business. It's our business. But when the first warning came over, what we don't know for Secretary Vilsack, is what was the correspondence back? Was it OK, great, do what you have to do? Or was there some message in that, some urgency sent back?

Maybe they didn't say fire this person but deal with it quickly. It sounds like a problem. That's what we don't know and it would be nice to know to sort of connect the dots of where the political urgency was noted.

BORGER: And we --

BLITZER: Does the president of the United States need to call Shirley Sherrod right now?

BORGER: Well, there are some people I've spoken with who believe that in fact he does. And there are some who say that he probably will. But they're not inside the White House. And there are some folks who say, you know, the president himself is the person who could deliver an apology to her.

I think the first case that was made was by Tom Vilsack who clearly needed to apologize. But to John's point about this --

BLITZER: But earlier in the day the White House press secretary Robert Gibbs --

BORGER: Also apologized.

BLITZER: On behalf of the administration --

BORGER: Exactly.

BLITZER: -- apologized on live television as well.

BORGER: Also apologized. But I think the question in terms of the chain of command and how these things happen at the White House, people -- the woman who called Shirley Sherrod invoked the White House and said the White House wants you to resign. You've got to pull over to the side of the road because she was in her car. And resign.

Sometimes people invoke the White House.

KING: Oh, yes.

(LAUGHTER)

BORGER: When they haven't really spoken to the White House, or sometimes people invoke the White House when it is indeed the case. And we don't -- we sort of need to know the answer to that question.

BLITZER: Yes.

KING: They gave her the apology. Secretary Vilsack did. Robert Gibbs did.

BORGER: Right.

KING: Perhaps the president will. I think they also owe her a thank you for how graciously she has handled it. As Secretary Vilsack said she was willing to graciously accept his apology. She could be saying no. You have speared me. You have, you know, been part of an effort that in some way could undermine my reputation.

Instead she has said, all right, we all make mistakes.

BLITZER: She is an incredibly gracious woman. I spent some time interviewing her today and the interview, we're going to air it here in THE SITUATION ROOM, but whoever watches this interview will see what a gracious and charming woman she is with a rich history including a rich history on civil rights.

BORGER: Right. And, Wolf, you know, sometimes we think about faceless bureaucrats in Washington. She puts a face on somebody who is in the bureaucracy in Washington who cared about the people she was serving and cared about doing her job.

BLITZER: Brianna Keilar is up on Capitol Hill right now. The secretary of Agriculture, Tom Vilsack, is getting ready, Brianna, to meet with the Congressional Black Caucus. Set the stage.

BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: Yes. Any minute, Wolf, we're expecting for him to show up at the building where I am standing. This is the Canon House Office building part of the Capitol complex. And he is going to be meeting here.

The meeting was scheduled for about 5:15 but obviously it depends on when he can show up. And he will be talking with the Congressional Black Caucus. Forty-two black members -- black members of Congress here on Capitol Hill who have been putting a lot of pressure on Vilsack.

Even before the full context of Sherrod's statements were known you had members of the CBC on the phone with him. And that included Maxine Waters of California who was pressing him, wanting to know why he was calling for her ouster, why he ousted her before conducting a full investigation. And this was before, again, the full context of her statements were known.

Just a sample of some of what Secretary Vilsack is going to be hearing. This is what Congresswoman Waters told us earlier.

(BEGIN VIDEO CLIP)

REP. MAXINE WATERS (D), CONGRESSIONAL BLACK CAUCUS: I want them to step up to the plate and say -- Vilsack to say I made a mistake and her job is here for her and yes, we should have investigated. We should have done more.

(END OF VIDEO CLIP)

KEILAR: And having spoken with some members of the Congressional Black Caucus since the apology to Shirley Sherrod, I can tell you, Wolf, they are happy about the apology but I also spoke with the Democratic source who's really familiar with their thinking here, and that source told me that the apology is all good and well, but at the same time there's a lot of concern about the process.

How did they get to this point? That it's clear to them -- a lot of these CBC members -- that there was a knee-jerk reaction in the Obama administration. And certainly they are looking for some answers and they want to make sure it's not going to happen again.

BLITZER: If you don't learn the lessons you're bound to repeat those lessons.

All right, Brianna, stand by. We'll get back to you. We're going to be speaking with a member of the Congressional Black Caucus here in THE SITUATION ROOM later, Kendrick Meek of Florida. That's coming up.

A lot more on this story coming up. I want to check in, though, with Jack Cafferty right now. He's got the "Cafferty File."

A very dramatic day, Jack.

JACK CAFFERTY, CNN ANCHOR: Indeed. The British prime minister broke protocol big time during his trip to the United States. He flew here commercial. As one British reporter put it, David Cameron was, quote, "slumming it in business class," on the flight from London to Washington.

How utterly refreshing. Cameron didn't take his own private jet. He didn't even fly first class. Turns out that Cameron's actually walking the walk when it comes to fiscal austerity.

Britain, like much of Europe, is in the midst of making drastic cuts to many government programs to try to keep their economy afloat. Under normal circumstances, prime ministers travel on their own planes. They either charter a Boeing 747, 767, or they use military jets.

But Downing Street officials say that Cameron's commercial flight saved $300,000. In the grand scheme of things that amount isn't that much but the gesture is huge.

As one British official tells the newspaper "The Sun," quoting here, "When we were asking the country to tighten their belts as much as we are, it's very hard to justify hiring big jets to swan around the world. It may make his travel a little harder but the prime minister believes it's up to him to set an example," unquote.

Are you listening, Nancy Pelosi? Of course, having top government officials fly commercial can cause nightmares for security types and it's certainly not as convenient. According to "The Sun" Cameron's meetings in Washington had to be scheduled around British Airways' flight schedule.

Never mind all that. It is just great. Imagine the money U.S. taxpayers could save if more of our lawmakers slummed it with the rest of us on commercial airplanes and in other ways?

Here's the question. Is there a lesson for our politicians in the British prime minister flying commercial to America?

You bet there is. Go to CNN.com/caffertyfile and give us your thoughts.

BLITZER: I was invited last night, Jack, to a small dinner party at the British embassy in honor of the new prime minister. He's only 43 years old. He was extremely impressive. We spoke -- I spoke with his staff about that.

He could have flown first class on that commercial flight. He flew business class because he was -- wanted to make a statement. Didn't fly in coach but business class. Not first class on that British Airways flight. Because he wanted to make a statement about austerity during these difficult times right now.

CAFFERTY: Indeed.

BLITZER: Jack, thanks very much.

Once again the weather is threatening to get in the way of emergency operations along the Gulf Coast. We're going to have the latest on the oil disaster, an important new procedure that may be only a few hours away.

And did Hillary Clinton get a little too close for comfort to the communist regime in North Korea today? Ahead. The message being sent by the secretary of state and the secretary of defense.

(COMMERCIAL BREAK)

BLITZER: My interview with the former Agriculture -- Department of Agriculture official Shirley Sherrod, that's coming up. Stand by for that. But there's other important news we're following right now.

Secretary of State Hillary Clinton announced today some tough sanctions -- new sanctions -- against North Korea to try to stop the communist nation from buying and selling arms.

The secretary and the Defense Secretary Robert Gates are both visiting South Korea right now at a time of heightened tensions with the North. They toured the heavily armed demilitarized zone that has divided the two countries since the Korean War stopped in 1953.

Let's bring in our senior political analyst, David Gergen. He's been to the DMZ as have I.

It's a tense area. The statement that these two secretaries are making to Pyongyang, to North Korea, right now is what?

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: It's a statement of resolve that the United States intends to stand by South Korea. We're not going to allow them to -- you know to sink another ship. I'm not quite sure how we're going to stop them but we're going to put the screws on more.

And going to this DMZ, as you know, Wolf, because it's a sort of a four-kilometer wide, two and a half mile wide border between North and South, is very symbolic. Presidents go there. I went there with President Reagan. I had a chance -- the privilege to go there again with President Clinton.

And when the president of the United States or the secretary of defense, secretary of state go there together to view that it sends a strong message to the other side. We're here to stay. Don't mess with us. Don't try to hit South Korea because we're going to be right there at their side.

BLITZER: And, you know, it's hard to predict what North Korea does and doesn't do.

GERGEN: Absolutely.

BLITZER: What is a greater threat right now from your perspective? Because I know you spend a lot of time with the White House talking to national security officials. The tension with North Korea or the tension with Iran?

GERGEN: Iran. Iran is the toughest problem the administration faces but they are very sensitive to the fact that North Korea could do something very irrational and they don't quite know what that is.

You know, they -- this is a -- this is a like a cornered snake. And it's wounded and you never know what it's going to do next, where it's going to bite, how it may leap. So Iran is a much tougher problem, front and center, but North Korea is irrational.

BLITZER: Let me switch gears as I get back to our top story and pick your brain. You worked for four presidents. Not every day the secretary of agriculture comes out and you heard a very robust apology to Shirley Sherrod, the fired Agriculture Department employee.

Where do we go from here?

GERGEN: Well, Wolf, I do think the secretary deserves a lot of credit for the way he handled that. The remorse he showed was genuine. As Gloria Borger said he did live up to his reputation for fundamental decency.

I do not think this ends the story. The president clearly should call Miss Sherrod. I don't think this ought to be a matter of political calculation in the White House. It's a matter of what's in his heart. And his heart should go out to this woman.

We'll see what happens. Secondly, I do think the secretary was evasive as the White House has been on what actually happened, the conversations that have been going on over the last few days between the two.

Both sides owe it, a tic-toc in effect, you know what that is. Sort of a white paper saying here's what happened. You know we need to know more facts than we got today.

Finally, Wolf, I think it's very important for Miss Sherrod. I know I think she lives in Georgia. I think -- what if the woman wants to stay home and keep her old job? I didn't understand why that wasn't on the table today.

She may not want to move to Washington. And the job was -- I thought he was evasive about the job. So I think we need a little -- a fuller explanation and a more complete set of options for Miss Sherrod to stay where she was, keep her -- get her old job back, or to move to Washington and what sounds like a bigger job but would also require her to leave home.

BLITZER: Yes.

GERGEN: And I'm not sure she may not want to do that.

BLITZER: She may not. I suspect if she wants to stay in Georgia she could have her old job back. But this may be a promotion.

GERGEN: She should.

BLITZER: And it sounds like it's right up her field involving civil rights at the Department of Agriculture. An area that she knows something about.

GERGEN: Well, I think it's nice that they offer her a promotion but I also think it'd be nice if they said, you know, we really think you were terrific at your old job. If you'd like to keep that we'd love to have you.

You know they've left it sort of dangling that they somehow don't think she's right for the old job. I don't understand that.

BLITZER: Well, we'll get much more, I'm sure, in the coming hours, David. Thanks very much.

GERGEN: Thank you.

BLITZER: Shirley Sherrod, who's a lovely, lovely woman, I got to speak to her a little bit earlier today. She says she's thinking about any new job offer.

Listen to this part of the interview.

(BEGIN VIDEOTAPE)

BLITZER: And joining us now the woman at the center of this controversy, Shirley Sherrod. She is the former director of Rural Development in Georgia for the U.S. Department of Agriculture.

Shirley, may I call you Shirley?

SHIRLEY SHERROD, FORMER AGRICULTURE DEPT. EMPLOYEE: Yes. Please.

BLITZER: Thank you so much for coming in. These have been an amazing 48 hours for you. Indeed, I should say for the entire country. First of all, how are you doing?

SHERROD: I'm hanging in here. This has been a whirlwind, you know, so much has happened since Monday.

BLITZER: You've seen the statements that they've released saying they're taking a second -- perhaps even a third or fourth look at the entire case. You've seen those statements.

SHERROD: Yes, I have.

BLITZER: And what do you think? What do you want them to do?

SHERROD: You know I want them -- I think they should know by now that they were so quick to judge me and they judged me on something that was not correct.

I would love to hear them say to me we were wrong in this situation. I would love to hear them say to me that this taught us a lesson and whether it's me or anyone else they won't be so quick to judge without looking more deeply into what's going on.

BLITZER: If you had a chance to speak to the president of the United States and you might have a chance. Who knows, he might invite you into the oval office one of these days.

When you look at President Obama in the eyes what would you say to him?

SHERROD: You know, I would like, first of all, for him to know I'm a great supporter of him. I want him to know that. I don't like what happened in this situation, but that doesn't lessen how I feel about him. You know, it doesn't take away from the support I would offer him, would want to continue to give him wherever I am. You know, I don't need to be at USDA to support this president. I believe in what he stands for.

BLITZER: And if they offer you your job back, will you take it?

SHERROD: I just don't know at this point. I can't say whether I would or not. I know that there are people out there who have contacted me here in the state of Georgia who are saying, Shirley, please reconsider that. But I'm just not so sure at this point.

BLITZER: There are some out there, your supporters, who are outraged by this injustice that has occurred that says others should lose their jobs for the way they treated you, they rushed to judgment without getting all of the facts. Do you think some others in the government should lose their job?

SHERROD: No. I would not push for that. There are some good people in USDA. There are some people who want to see some of the same things I want to see happen within the agency, and I would not be in favor of seeing some of them kicked out over this situation. I think they need to stay where they are and continue to do some of the good things we were trying to accomplish.

BLITZER: When you spoke to CNN this week, you told us that your manager, the deputy undersecretary at the Department of Agriculture, was under pressure from the White House to get you to resign. Did they -- did they -- did she say who at the White House wanted you to resign?

SHERROD: No, she just said the White House.

BLITZER: Just in general terms, the White House. So you don't know if there were phone calls back and forth? Because Vilsack, the agriculture secretary, says no one from the White House called him personally.

SHERROD: You know, I don't know how they did it. I know from the first time I was told to stand by for a call, I waited at least a couple of hours before that call finally came through. So I can imagine there was some high-level talk going on before she made the call to me to say I was being placed on administrative leave.

That was the initial call that I received because that's when I -- I was there at West Point, Georgia, with my leadership staff, meeting with them, and I explained to them what was going on and said, you know, This is unbelievable, but I've been placed on administrative leave and I have to leave. So I had to actually leave the meeting I was in with them.

BLITZER: Did you say to your manager, to your supervisor, Look, this is -- you're not getting the whole story. Give me a chance to make my case before you rush to judgment?

SHERROD: I said, Cheryl, this is -- I tried to tell her this is not what I was saying. If you listen to the whole tape, you'll see the message. I said, It's the message I have told, I have put out there over and over again. This is not the only group where I said that. I tried to plead my case in that way. Even when I was receiving the calls on the road, I was trying to say, This is not the way it was. You know, if you look at the whole tape, you'll see. And then when, you know, that final call saying they need you to pull over -- I'm, like, Where is this coming from? Why? What is happening, you know?

BLITZER: And what did she say?

SHERROD: She said, Well, when Glenn Beck announced that you would be on his show tonight, that did it. And didn't mean that I would literally be on his show, but I would be the subject of part of the conversation on his show that night. BLITZER: All right. We're only getting started. We're going to have much more of my interview with Shirley Sherrod later here in THE SITUATION ROOM. She talks specifically about what it was like to be condemned by the NAACP, an organization she loves, initially in this flap. Stand by for more of this interview with this woman.

We'll also talk about the White House and its wariness to address racial issues. That's coming up in our "Strategy Session." Donna Brazile is here to talk about that. Tony Blankley, as well.

Plus, President Obama signs Wall Street reform into law. Could this apparent victory, though, come back to haunt him politically? We're assessing that.

And is the metal in your cell phone helping to fund the deadliest conflict since World War II? It's being called a dirty little secret addressed in the financial reform law.

(COMMERCIAL BREAK)

BLITZER: Lisa Sylvester is monitoring some of the other top stories right now.

(NEWS BREAK)

BLITZER: The most sweeping overhaul of the financial system since the Great Depression now is the law of the land. President Obama signed the Wall Street reform bill today, a political victory for Democrats over a year in the making. Regulators immediately will get new powers to liquidate big firms that threaten the entire financial system if they collapse. But some big provisions are closer to a year away, including new limits on hidden fees for mortgages and credit cards. It will be several years before we see new rules on the kind of risky investments big banks can make.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: If a large financial institution should ever fail, this reform gives us the ability to wind it down without endangering the broader economy. And there will be new rules to make clear that no firm is somehow protected because it is too big to fail so we don't have another AIG.

(END VIDEO CLIP)

BLITZER: The president is touting Wall Street reform right now, but could it actually hurt him politically down the road, especially in the run-up to the mid-term elections?

Let's bring back our senior political analyst, Gloria Borger. You wrote this column at CNN.com today. "The problem for Obama and company," you write "is that while anti-Wall Street sentiment is still alive, it's playing second fiddle to a much stronger fervor, anti- government."

GLORIA BORGER, CNN SR. POLITICAL ANALYST: You know, that's right, Wolf. He's going to get less credit for this measure than he would have gotten in 2008, when everybody was railing against Wall Street after the economic crisis. 2010 is a different thing, and now people are railing against big government.

And in many ways, you could say that Barack Obama is a victim of his own legislative successes. If you take a look, he's passed an economic stimulus plan, health care package, and now Wall Street reform. And some folks are saying, you know, he's asking people to tolerate more government than they're actually comfortable with. The White House will say they're taking the long view, that in the long run, health care reform is going to help with the deficit. But in the short term, this is a political problem for them because people are not comfortable with this much government.

BLITZER: It is pretty dramatic, three major pieces of legislation...

BORGER: It is!

BLITZER: ... with a far-reaching...

BORGER: Huge.

BLITZER: ... impact for many years to come. Listen, though, to the top Republican in the Senate, Mitch McConnell.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: Jobs-stifling taxes, regulations, government intrusion -- these appear to be the three pillars of every Democratic legislative effort.

(END VIDEO CLIP)

BLITZER: Is there any strategy -- risky strategy here for the Republicans?

BORGER: Yes.

BLITZER: Because we keep hearing...

BORGER: Well, first of all, in the short term, they're doing fine with this. They're doing fine with pointing to regulations as evidence of more big government. Everybody expects them to win seats in the House and pick up some seats in the Senate.

But the danger is in the long term. They're kind of the opposite of the administration. Their danger is they take the short-term view. In the long term, they're going to elect a bunch of Republicans who are anti-government. And if they win the House, they're going to have to vote for spending bills. A lot of them are against the war in Iraq and Afghanistan. They're going to have to decide whether they want to vote to fund the war. So the Republican Party is going to have some questions to answer as it heads into the next presidential election about its own leadership.

BLITZER: We'll be watching.

BORGER: Yes, we will. You bet.

BLITZER: Thank you very much. We're going to have much more coming up with the breaking news this hour, the government's apology, a new job offer to Shirley Sherrod, and a popular columnist now calling President Obama and the NAACP -- and I'm quoting now -- "villains" in the racially charged controversy over Shirley Sherrod. Here's the question. Is he right? We'll assess. And President Obama signs that historic financial regulatory reform into law. Why is there a provision on metals from Congo that's included in this new law? Mary Snow is investigating.

(COMMERCIAL BREAK)

BLITZER: Let's get back to breaking news right now. Brianna Keilar is up on Capitol Hill, where she's following Tom Vilsack, the agriculture secretary, right now very apologetic, Tom Vilsack, apologizing to the nation for what was done to Shirley Sherrod, the Agriculture Department official. He's now meeting, Brianna, with members of the Congressional Black Caucus. What's going on?

BRIANNA KEILAR, CNN CORRESPONDENT (via telephone): That's right, Wolf, and I'm right outside of the room where the meeting is continuing right now. And James Clyburn, who is the top-ranking African-American lawmaker in the House of Representatives, just gave some very impassioned remarks as he went into the meeting. He said he actually realized he had a personal connection to Shirley Sherrod because he had met her husband, Charles Sherrod, back in the '60s when they were both working with the Student Non-violent Coordinating Committee, which of course, did voter drives for black Americans in the South.

And he -- basically, you know, Wolf, you know while, certainly, there is some criticism of the Obama administration for what some Democratic sources have called a knee-jerk reaction here, he held a lot of his criticism for Andrew Breitbart, who initially put these comments on his Web site, Wolf. He called him "mean, idiotic and sick." And we will bring you comments, hopefully, from the secretary when he leaves this meeting, Wolf.

BLITZER: All right, we'll check back with you, Brianna Keilar up on Capitol Hill.

Let's bring in our "Strategy Session." Joining us are Democratic strategist Donna Brazile and Tony Blankley. He's the Republican strategist, former spokesman for Newt Gingrich when he was Speaker of the House. Guys, thanks very much for coming in.

Long before the NAACP apologized to Shirley Sherrod, long before the White House apologized, long before Tom Vilsack, you came on this show, said, You know what? I listened to the whole speech. She has been vilified. She has been wronged. And you said they must step up to the plate. I assume you're happy the way things are now unfolding.

DONNA BRAZILE, DEMOCRATIC STRATEGIST, CNN POLITICAL CONTRIBUTOR: Absolutely. First of all, I would like to say to Ms. Sherrod that some of us do read. Some of us do listen to speeches before we react, although we're all part of the 24/7 news cycle.

But Wolf, once again, I thought she handled herself very well again today. She must be very stressful. Forty-eight hours ago, she was just a wonderful government employee doing the right thing, trying to help people, and today look at her. She's out there. She's defended her character, defended her name. I'm grateful that the White House has apologized, Secretary Vilsack, and now she should be offered her job back, to stay in Georgia. If she wants to come to Washington, D.C., let her know I cook very well. If she want to stay home in Georgia, let her stay there and continue her great work.

BLITZER: I told her if she comes to Washington, I'll take her and you out to dinner. You don't have to cook.

BRAZILE: Well, I like to cook, too.

BLITZER: But you go out to dinner (INAUDIBLE)

BRAZILE: I would go out with you.

(CROSSTALK)

BRAZILE: Absolutely.

BLITZER: Tony, listen to what David Frum -- he was -- he's a conservative, was a speech writer for President Bush, the second President Bush. He writes this today. "Conservative pundits justify fraudulent journalism on the grounds that all is fair in war. You'll never guess who emerged as the villains of the story in the second-day conservative react. Not Andrew Breitbart, the distributor of the falsified tape. No, the villains were President Obama and the NAACP for believing Breitbart's falsehood."

How much of a problem has this incident created for some of the conservative bloggers, shall we say, like Andrew Breitbart?

TONY BLANKLEY, REPUBLICAN STRATEGIST, CNN POLITICAL CONTRIBUTOR: I don't think it's created any problem. I think David, who's a friend -- I think he misses the thread on this. The reason why Breitbart put that up was in retaliation for the NAACP accusing tea party people of being bigoted. He put it up to show not the woman speaking, who we know is a heroine in all of this, but rather, the way the audience reacted before her speech had been finished, before she said that, I learned the lesson that it's not a matter of race. But when she sounded in the sound bite -- when she was saying, I treated a white farmer worse than a black one because (INAUDIBLE) and the audience was chuckling approval, that was the point Breitbart was making, and that's a valid point. And the reason he did it was that the NAACP had slandered the audiences of the tea party.

BLITZER: And you know, you're going to hear in part of two of my interview with Shirley Sherrod -- that's coming up right at the top of the next hour -- she says as painful it was for her to be condemned by the Department of Agriculture and the White House, it was so much more painful for her to be condemned by the NAACP, an organization she grew up in and worked for. She dedicated her whole life for Civil Rights after her father was murdered. And to see that quick reaction, Donna, from the NAACP -- they've now apologized to her. They've called her -- Ben Jealous, the head of the NAACP. But the fact that they reacted as quickly as they did, what does that say to you?

BRAZILE: Well, let me first of all correct the record. The NAACP did not call all tea party members racists, nor did they call all the conservatives or anyone else. What they said is that as responsible citizens of this democracy, we must repudiate any elements of racism. The NAACP has been known publicly to repudiate racism on the left. And so this is what they called upon the tea party, and quite frankly, Tony, just 24 hours later, tea party -- it took one member and said, Go -- go wherever.

It is important, Wolf, that in this ongoing dialogue on race, if we're going to ever have a conversation, that we just stop calling each other names...

(CROSSTALK)

BRAZILE: ... stop this recrimination.

BLANKLEY: I agree with that, but...

BRAZILE: Tony, just because you're a conservative doesn't mean that I think that there's something bad about you. I think that you have good taste, by the way.

BLANKLEY: I appreciate that.

BRAZILE: But the NAACP has a responsibility. Their mission is to make this a more perfect union.

BLANKLEY: Of course it is, but note they backed off their initial broader charge against the tea party and said, No, we didn't mean all of them. But the initial press conference that they held was -- obviously, they weren't prepared to stand by the words that they themselves had uttered, and within, I think, 24 hours, had backed off it somewhat, said maybe just people on the periphery. So -- but you know, this is all part of a very...

BRAZILE: They amended the resolution to ensure that it was meant to target those who, you know, in some way are racist or having racist literature or statements. That's what the NAACP was doing, but they were right to apologize.

BLITZER: We got a lot more to digest and assess, and I want both of you back. But stand by right now because I want to bring in Jack Cafferty. He's got "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN: The question this hour, is there a lesson for our politicians in the British prime minister flying commercial to the United States? Red (ph) writes, "Jack, perhaps if the politicians flew like us, got to work like us, they might understand us a little better. Unfortunately, both sides of the aisle have a huge disconnect between them and us, and they don't know what it feels like to be a regular person anymore."

Jeff (ph) in Minnesota writes, "It all depends. What about the security of people that ended up on that plane with him? Personally, I don't want to be traveling with a government official who has giant target painted on his back, like the prime minister of the U.K. What would the press be saying if that plane had been attacked? It makes for great press, but it really was a stupid gesture, in my book."

Wendell (ph) in Ohio writes, "I'd love to sit next to the politician on a flight. I could ask him if I could borrow a few dollars for a drink without every worrying about paying him back. He'd understand."

Dennis (ph) writes, "I'd give a month's salary to say, No breaking in line, Ms. Pelosi. You're in zone six."

Slumming It In Coach writes, "I'm nowhere being a fan of Nancy Pelosi, but she did sit across the aisle from me in coach on a flight from Reagan National Airport to Minneapolis a couple of weeks ago."

John (ph) writes, "We ought to applaud Mr. Cameron. Not only -- now only if our pious elected officials would follow suit. If the present security for commercial air travel is good for the common folk, then it ought to be good for any elected official or government employee. As they say, everyone is replaceable."

Chris (ph) writes, "Absolutely. And since when is business class slumming it? Last row of coach, maybe."

Steve (ph) says, "Could we ask Great Britain to take us back and save us from Obama, Reid and Pelosi."

If you want read more on this, you'll find it on my blog at CNN.com/caffertyfile.

Jack, thank you. Jack will be back in the next hour.

Will the Shirley Sherrod controversy now spark a new conversation about race in America? Our own Lisa Sylvester is investigating. Plus, we'll have much more of my conversation today with Shirley Sherrod. That's coming up. What was it like to be criticized by the NAACP in this flap?

(COMMERCIAL BREAK)

BLITZER: Almost five years since being devastated by Hurricane Katrina, Waveland, Mississippi, is struggling to recover, but with the help of its young people, it's managing to build up America. Here's CNN's Tom Foreman.

(BEGIN VIDEOTAPE)

TOM FOREMAN, CNN CORRESPONDENT (voice-over): The children are riding the waves again around the battered shores of Waveland. No community was hit harder by Katrina and none has been more mindful of the fact that children suffered just as much as adults. Caroline Collins can attest to that. She remembers her father staying through the storm and returning to find him amid the wreckage.

CAROLINE COLLINS, YOUTH LEADER: Coming home, and like, seeing him when I walked in the door -- I remember him kissing all of us on the head.

FOREMAN: So from the start, this town has focused on the recovery of children as much as the return of adults because as Mayor Tommy Longo puts it, more than business, more than government...

MAYOR TOMMY LONGO, WAVELAND, MISSISSIPPI: The families are the heart and soul of the community.

FOREMAN: As a result, some of the earliest recovery projects here were family-oriented -- baseball fields and parks, a community center, a new library, new schools, and safe places for children and their parents to retreat from the devastation and debris. It is an ongoing process. At St. Claire's (ph) church, still in a temporary building, a new youth group has just been started. Beth Gruzinskas is an organizer, and she's never had any doubts about staying.

BETH GRUZINSKAS, PARENT LEADER: I've lived here my whole life. You know, this is where I belong and this is where my children belong and my family. And there was no question that we were going to rebuild.

FOREMAN: And plenty of young people are fully committed to helping.

COLLINS: We want the best for the community because we love it just as much as all the adults do.

FOREMAN (on camera): Still, it's an ongoing process. Convincing adults to deal with terrible things like a great storm or a catastrophic oil spill is one thing. Persuading them to expose their children to it is something else.

(voice-over): But this town made that a priority, and it still is.

(on camera): As a parent, what do you want other parents to know about your town?

LONGO: That it's safe. It is a safe environment. I want them to know that they need to come home.

FOREMAN (voice-over): And he should know. He has seven children, all still growing up right here in their hometown. Tom Foreman, CNN, Waveland, Mississippi.

(END VIDEOTAPE)

BLITZER: You're in THE SITUATION ROOM. Happening now, breaking news. An apology and a job offer to the woman forced out of her government job over a snippet of tape that led to wild allegations of discrimination. This hour, my interview with Shirley Sherrod.