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CNN Wolf Blitzer Reports
U.S. Troops Under Fire in Kandahar; Will Enron Collapse Become President Bush's Whitewater?
Aired January 10, 2002 - 17:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
WOLF BLITZER, CNN ANCHOR: Now on WOLF BLITZER REPORTS, U.S. troops at the Kandahar airport under fire, as al Qaeda detainees shaved, shackled and perhaps drugged, are taken from Afghanistan to Guantanamo Bay, where they won't find an island paradise.
After the Enron collapse, a top-level review.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: To make sure that people are not exposed to losing their life savings as a result of the bankruptcy.
(END VIDEO CLIP)
BLITZER: But with its ties to the energy industry, will this be President Bush's Whitewater?
And, which side is he on?
(BEGIN VIDEO CLIP)
COLIN POWELL, SECRETARY OF STATE: The information we are receiving and developing on our own makes it clear that there are linkages to the Palestinian Authority.
(END VIDEO CLIP)
BLITZER: Hello, I'm Wolf Blitzer in Washington.
Today, new evidence that the U.S. Marines are still fighting off hostile forces in Afghanistan. We begin with exclusive video from a CNN camera capturing the reaction to enemy fire.
That gunfire broke out as the first plane carrying detainees from Afghanistan to Cuba took off. U.S. Marines at the Kandahar airport returned fire. There are no reports of injuries at the base. The al Qaeda and Taliban prisoners will be held at the U.S. Navy base at Guantanamo Bay in Cuba. We'll have much more on this coming up shortly. But first, a quick check of the other late developments in the U.S. war.
Defense Secretary Donald Rumsfeld says there is no indication a Marine Corps plane that crashed in Pakistan yesterday was hit by enemy fire. Officials do not know what caused the KC-130 refueling plane to crash. All seven Marines on board were killed. Efforts to recover the bodies are underway.
President Bush is expanding the war against terrorism, sending American special forces troops to the Philippines. The Green Berets will help train Philippine troops to hunt down Muslim rebels tied to the al Qaeda terror network. Sources tell CNN there will be no direct combat role for the expected 500 U.S. troops taking part in the mission.
The president is also demanding that the Palestinian leader, Yasser Arafat, renounce terrorism. The president's strong words come the day after U.S. officials said there is credible evidence Arafat's Palestinian Authority was involved in an armed shipment intercepted by Israel. Mr. Bush says Arafat must find out who was involved and take action against them.
More now on the first group of detainees to be transferred by the U.S. to the U.S. Navy base in Cuba, from Afghanistan. Amid incredibly tight security the mission at the Kandahar airport was proceeding like clockwork. And then, without any sign of trouble, the base came under fire.
(BEGIN VIDEOTAPE)
(voice-over): Just after the prison plane took off, a gun battle apparently broke out around Kandahar airport. CNN's Bill Hemmer spoke to a Marine lieutenant a short while ago.
BILL HEMMER, CNN CORRESPONDENT: Lieutenant, tell us what you believe and understand right now, about this threat. We heard the possibility of snipers, special forces going out. What do we know? What can you say?
UNIDENTIFIED MALE: I can say that we were engaged by enemy positions, a couple of different positions. As a result of that we engaged them, both with both small arms fire as well as a heavy machine guns. And we have since sent out both U.S. and opposition group for anti-Taliban force patrols, to investigate those sites. And as a result, we don't believe the threat exists there anymore.
BLITZER: The prisoners, hooded, possibly clean-shaven. Twenty Taliban and al Qaeda prisoners are now on their way to Cuba. Destination: Guantanamo Bay. It's an 8,000-mile, 20-hour trip, and they're chained to their seats and have no bathroom privileges.
Will they be sedated? The defense secretary wouldn't say.
DONALD RUMSFELD, SECRETARY OF DEFENSE: They have been authorized and instructed to use appropriate restraint.
BLITZER: At Guantanamo, each detainee will be kept in an outdoor cell with a wooden ceiling and chain-link walls until a detention facility is built. In Cuba today, it's 75 degrees and partly cloudy. The Marines are in charge of security. (END VIDEOTAPE)
Joining us now to talk more about how the U.S. forces responded to that hostile fire at the Kandahar airport, our military analyst, retired Army Brigadier General David Grange. In his long career, General Grange served both as an Army ranger and a Green Berets. He saw duty in such hotspots as Vietnam, Bosnia and Kosovo.
General Grange, how concerned should the Marines be about this latest incident?
BRIG. GEN. DAVID GRANGE (RET), U.S. ARMY: Wolf, I don't believe they should be that concerned. It is a very hostile environment. I think all of the military on this location, they know that. Securing an airfield takes a large part of any force there, whether it be the U.S. Marine Corps or the 101st airborne division that's going to replace them.
You don't only secure the airfield itself, but you have to secure the approaches and departure routes from an airfield, so the aircraft are not put under fire. So, it's just a dangerous and ongoing situation that I think they're quite aware of and can handle.
BLITZER: As you're speaking, we're showing exclusive CNN video, General Grange, of the troops responding to that incident. Also preparing to the move those detainees, to get them on board planes to fly them to Guantanamo Bay in Cuba.
The procedures that they've undertaken, the security procedures, seem to be extraordinary. Have you ever seen anything like this before?
GRANGE: I have not. But, you know, considering the type of people that they're going to fly to Guantanamo Bay, I would think they take excessive measures so there is not an incident of anyone breaking free, especially on an airplane. And it's -- Guantanamo Bay, who knows if they even know they're going there? When they get there, the psychological effect on these al Qaeda or hard core Taliban prisoners will be quite effective.
BLITZER: The Marines will be in charge of security at Guantanamo Bay for the detainees. Are they trained for that kind of mission?
GRANGE: Well, all of the services are trained to detain any kind of captives for periods of time. You have battlefield conditions, where you have detainees under guard, and you have locations that you keep people under guard for longer periods of time. But security, obviously, is a big part of it.
But then you have the operations of the camp, the facility, that takes a lot of personnel to run as well. And I think starting out right now, from what we've heard who's on alert, you have Marines there right now, you have Army going down, you have some Air Force. So you're going to have a mixture of the different services supporting this operation. BLITZER: Are the U.S. military forces treating these prisoners as if they're prisoners of war? I know they're formally called detainees.
GRANGE: They are considered detainees, but we give them the rights of prisoners, which actually is quite nice. In fact, if you want to be a prisoner of any military in the world, most people would rather be a prisoner of the United States of America, because we do give humane treatment to prisoners. I've never seen a situation where we have not.
But they're tough characters, and some of these things seem extraordinary, but it's just to secure, not only our people transporting them, but them themselves.
BLITZER: General Grange, thanks so much for joining us.
GRANGE: My pleasure.
BLITZER: Thank you. And later this hour, we'll much more on the war, including a live report from the Pentagon on the next front for U.S. special forces in what's called the war on terrorism. And we'll also remember the most recent to die on the Afghan front.
Now let's turn to the other major story we're covering this hour, the investigation of the Enron corporation. Just last month, the energy giant filed for bankruptcy. Now it's at the center of a federal criminal investigation, one that could have a huge impact, potentially, at least, on the Bush administration. CNN's senior White House correspondent John King is covering all of today's many developments -- John.
JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: Several dramatic developments today, Wolf, and they underscore not only the scope of these investigations, criminal and otherwise, but also the scope of the potential political ramifications, and certainly of the political reach of Enron and its top executives.
Dramatic development No. 1, the attorney general of the United States and his chief of staff announcing today they will recuse themselves from any decisions in this relatively new federal criminal investigation into Enron. The reason is this: John Ashcroft was a senator last year running for reelection in Missouri. He received $60,000 from top Enron officials for his reelection campaign and political committees that supported his campaign. So the attorney general recusing himself.
Another reflection of the political ramifications: it was the president himself today who called his economic team into the Oval Office to make an announcement that the government was launching two more investigations, these ones, to look at what happened in the case of Enron, to see if the government itself needs stronger disclosure rules and other regulations to protect investors and those who put their money, their company money, into their 401(k) and other investment pension plans.
(BEGIN VIDEOTAPE)
BUSH: I have grave concern for the stories -- for those I read about and the stories who put their life savings aside. And for what whatever reason, based upon some rule or regulation, got trapped in this awful bankruptcy and have lost their life savings.
KING (voice-over): Energy giant Enron first gave a public hint of its financial troubles last October, then filed for bankruptcy in early December. A major economic story in any event, and a major political story too, because Enron and its CEO, Ken Lay, have deep connections to the Bush family and in both political parties in Congress.
BUSH: I have never discussed with Mr. Lay the financial problems of the company.
KING: But Lay did alert top Bush deputies that Enron was in trouble, and asked for help well before the December bankruptcy filing. He called Treasury Secretary Paul O'Neill and Commerce Secretary Don Evans in late October, and O'Neill a second time in early November. Sources say Lay wanted help shoring up the company's bond ratings. Aides say Secretaries O'Neill and Evans decided there was nothing the government could or should do. The White House says they did not pass the news on to the president or any other senior administration officials.
ARI FLEISCHER, WHITE HOUSE PRESS SECRETARY: The president is pleased with the actions that his cabinet secretaries took. He thinks they acted wisely and properly.
KING: Lay is an old Bush family friend. He and his company, a major donor to both political parties. In the 2000 campaign cycle alone, Enron and its executives contributed more than $2.2 million to federal candidates and political committees. $74,000 went to the Bush campaign, $1.5 million to other Republican campaigns and committees. $640,000 to the Democrats.
(END VIDEOTAPE)
Now, four Congressional committees are also looking into the circumstances of Enron's bankruptcy. Many Democrats on those committees want more details about the administration's contacts with company. Top Bush administration officials saying today perhaps they should have disclosed sooner the contacts between the two cabinet secretaries and the company, but they insist in the end the record will show this, that the administration first said no when a major Bush supporter asked for help. And now the president is showing no hesitancy at all into launching several investigations of a man who has supported him and his family throughout the years -- Wolf.
BLITZER: And, John, today Arthur Andersen, the huge accounting firm that's been working with Enron, says they've discovered a significant number of documents have been destroyed. That sounds, obviously, very suspicious.
KING: It's suspicious, and the auditing company making that disclosure to the Securities and Exchange Commission. There is a separate investigation there as well, to see if senior Enron executives sold their stock once they received inside information that the company's finances were going south -- sold their stock without telling employees, without telling other shareholders. That will be investigated by the SEC.
And we are also told one of the Congressional committees investigating this plans to issue some 50 subpoenas tomorrow for more documents and information from the company. This will go on. Investigations, the criminal investigation, regulatory investigations, Congressional investigation -- this will go on, looking into the circumstances of the company itself, and certainly all of its political relationships here at the White House. But not just here at the White House, Wolf, across Washington in both political parties.
BLITZER: John King, thank you very much. In this footnote, Dr. Andersen has asked the former Missouri Senator John Danforth to investigate, to open up an independent investigation by himself of these missing or destroyed documents.
Enron's stunning collapse, how did it happen? How could it happen? Our timeline brings a myriad of events into focus.
(BEGIN VIDEOTAPE)
(voice-over): August 2000, the company that transformed the way energy is bought and sold in America appears to have the Midas touch. Enron hits $90 a share on the New York Stock Exchange. Spring 2001, California is in the midst of a severe energy crisis. Governor Gray Davis lays the blame with the big energy firms, including Enron. As more power plants are built to meet the demand, Enron stock slips on fears that an energy glut will cut profits.
August 2001, Enron's CEO Jeffrey Skilling quits, after just six months on the job for -- quote -- "purely personal reasons." Analysts are stunned. It's about to get a lot worse.
October 2001, Enron discloses previously undisclosed losses. The company later said it overstated profits by a staggering $600 million. The result, a total loss in confidence on Wall Street. Enron stock plummets, from $40 in mid-October to 26 cents by the end of November.
With the stock in free fall, company employees say Enron froze the stock in their retirement plans, barring them from selling. Retiree Charles Prestwood told a House panel he lost everything.
CHARLES PRESTWOOD, ENRON EMPLOYEE: And I had all my savings, everything, in Enron stock. I lost $1.3 million.
BLITZER: Average investors got burned too. Seventy-year-old Mary Bane Pearson bought stock after studying the company's managers and books, which masked questionable accounting. When the fall came, her accountant advised her not to sell.
MARY BANE PEARSON, ENRON INVESTOR: But sometimes at night, I do feel real bitter over what I've lost, because it was a big part of my future, and I don't know how I'm going to handle the future now. All I can do is hope and pray I don't get sick.
(END VIDEOTAPE)
BLITZER: And today Enron stock closed at 67 cents a share, that's down 15 percent. Needless to say, some shareholders are upset about what happened. Some are of course already filing lawsuits. Our Brooks Jackson is following all of that, and Brooks joins us now live.
Brooks, basically, what are the allegations?
BROOKS JACKSON, CNN CORRESPONDENT: Well, Wolf, the major allegations against Enron and its executives is that they hid Enron's debts and losses from the public by using off-the-books partnerships. But what makes the Enron story so intriguing are the related allegations about stock dumping by top executives, and political connections in Washington.
First, the broad accusations about stock dumping. A shareholder lawsuit now in federal court in Houston accuses 29 key Enron executives of selling 17 million shares of their own Enron stock, for a total of $1.1 billion during the past 3 1/2 years. They include Enron Chairman Kenneth Lay, said to have sold 1.8 million shares of his stock for $101 million, and former CEO, Jeffrey Skilling, said to have sold 1.1 million shares for $67 million during the period.
Basically the shareholders are saying these executives made huge personal profits while they were misrepresenting Enron's finances to other investors, who, in turn, lost money when they bought the overvalued stock. Lawyers for Enron executives dispute some of these figures, and they also point out, correctly, that Ken Lay and others still own large amounts of Enron stock, on which they have taken huge paper losses themselves. We'll be hearing lots more about these points as the various investigations unfold -- Wolf.
BLITZER: And, Brooks, we heard John King say that Enron and top executives were incredibly active politically with large-scale political contributions. What do you know about that?
JACKSON: All right, let's take a look at that. A new tally by the Center for Public Integrity comes up with this: Since 1999, same period covered by the shareholder's suit, 24 of the executives named in it gave nearly $800,000 in campaign donations. That includes $220,700 to George W. Bush's presidential effort.
And there's no question Enron has been one of the top sources of campaign money in Washington over the years. An earlier tally by the Center for Responsive Politics showed this: Since 1989, a period of a dozen years, Enron, all its executives, not just those named in the suit, and its political action committee, gave $5.8 million. Seventy- three percent of that went to Republicans. Chairman Lay and his wife, for example, gave $793,000 to Republicans, and $86,000 to Democrats.
Did those donations contribute to the debacle? So far, the main allegation against Enron is that it cooked its own books, so there's not much room for political donations there. Will these donations buy any favorable consideration, now that investigations are under way? Well, they sure haven't stopped the committees of the Republican House and the Democratic Senate from announcing investigations. Now, the Bush appointees at the SEC, the Justice Department, and even the Labor Department, are also on the case.
BLITZER: OK, Brooks Jackson, thank you very much for that good reporting.
And all of these campaign contributions begs the questions, how much political influence was Enron able to achieve? Joining us now is Charles Lewis. He's the founder and executive director of the Center for Public Integrity. Charles, thanks for joining us. Is there anything illegal with wealthy executives making these kinds of campaign contributions?
CHARLES LEWIS, CENTER FOR PUBLIC INTEGRITY: No, there's nothing illegal. But when it's the president's No. 1 career patron that gave $550,000 at the beginning of the presidential campaign, just in the mid '90s in Texas -- that's how much they gave him. When they're the closest patron to the president, and you do have books that are cooked, and you've got thousands of documents mysteriously disappearing and you've got access to the highest levels of government from cabinet secretaries to the vice president, and you have policy interaction on things like energy, then it gets complicated.
There is nothing illegal right this minute, except obviously, as Brooks was saying, the cooking of the books is clearly illegal. You don't just lose $600 million in your profit statements, and that's sort of what happened between '97 and 2000. That does appears to be the most significant potential illegality.
But there is a political issue of potential scandal here. What did Enron get in the last year of the first year of the Bush administration? What favors did they get, in terms of energy, in terms of other policy considerations? And to be honest with you, that's still sorting itself out.
BLITZER: So basically, there is no evidence, at least right now, that, they did received any favors, any special treatment, as a result of all of these campaign contributions?
LEWIS: Well, clearly, the president's energy policy was very close to the agenda of Enron. Clearly, on the subject of utility deregulation, it was completely in sync with the administration. Some of the statements of Ken Lay and the statements of the president are with the same words. There was clearly a confluence of views about things like energy. But that's not illegal. That happens frequently.
It does make you scratch your head, especially when you have a crisis involving utility deregulatory in California. A lot of Californians are still hopping mad about Enron. So, all of this -- this is an unfolding drama, and it's going to clearly be one of the major stories of 2002, no question.
BLITZER: As you know, some Democrats are already suggesting this issue could turn out to be for President Bush what the Whitewater scandal was for President Clinton. Is that so far-fetched? LEWIS: To be precise, the president and Dick Cheney, for that matter, the vice president, did not own any stock in Enron. They did not try to make money from Enron directly, to be real literal about it. But could this be the biggest scandal in the Bush administration? The answer to that is yes. It certainly at the moment is the biggest scandal.
BLITZER: But as you point out, there's still no evidence that, in this particular case, any of the top individuals, including the president or the vice president, actually gained financially from anything that Enron had to do?
LEWIS: That's right. Right this minute, no one can say that. It's not there.
BLITZER: And in contrast to Whitewater, Bill Clinton was an active partner, along with his wife, of course, in the whole Whitewater venture, which turned out to be very unprofitable in more ways than one. Charles Lewis, thanks for joining us. We'll get back to you as the story continues to unfold.
Will the Enron affair turn out to be President Bush's Whitewater? The Republican Congressman Bob Barr and the former Clinton pollster Mark Penn will face off on this issue, right at the half-hour.
But next, what did he know and when did he know it? The United States makes its determination about Yasser Arafat.
And, where are special forces heading next in America's war on terrorism? Stay with us to find out.
(COMMERCIAL BREAK)
BLITZER: Welcome back. President Bush has issued his most intense demands yet of the Palestinian leader, Yasser Arafat. This, after learning Arafat may have played a role in the shipment of illegal arms intercepted last week by Israel. CNN's State Department correspondent, Andrea Koppel, brings us up to date.
(BEGIN VIDEOTAPE)
ANDREA KOPPEL, CNN CORRESPONDENT (voice-over): The Bush administration now says it has seen compelling evidence that this weapons-laden ship intercepted by Israel last week was in fact headed for the Palestinian territories, and that the Palestinian leadership, including Yasser Arafat himself, knew about it. Secretary of State Powell chose his words carefully.
COLIN POWELL, SECRETARY OF STATE: The information we are receiving and developing on our own makes it clear that there are linkages to the Palestinian Authority. I have not seen any information that yet links it directly to Chairman Arafat.
KOPPEL: But privately, a senior State Department official tells CNN the operation was of such a magnitude, the U.S. -- quote -- "has to conclude that Arafat would have known." For its part, the Palestinian Authority has denied the charges, insisting it had nothing to do with the shipment.
YASSER ABED HABBO, PALESTINIAN CABINET: We will investigate all the details. We will turn over every stone. We have nothing to hide.
KOPPEL: Reluctant to give up on Arafat, President Bush demanded the Palestinian leader take action.
BUSH: Mr. Arafat must renounce terror, must reject those who would disrupt the peace process through terror, and must work hard to get to the peace table.
KOPPEL: And despite fresh questions about Arafat's credibility, Israel says, if he brings about an end to the violence, it is still prepared to talk peace.
DAVID IVRY, ISRAELI AMBASSADOR: It is going to take this kind of decision, I think we can move back to the process of Tenet Plan and Mitchell Report.
(END VIDEOTAPE)
KOPPEL (on camera): Another concern for the U.S., Iran's apparent strategic shift in deciding to supply the Palestinians with weapons. Until now Iran has limited its support to the Hezbollah guerrillas in Lebanon. Nevertheless, for the time being, Wolf, the Bush administration continues to place its priority on securing a cease-fire between the Israelis and the Palestinians. Said one senior administration official, look, we know that Yasser Arafat was behind the shipment. But if we say that we know, then we have to stop talking to him -- Wolf.
BLITZER: Andrea Koppel at the State Department, thanks so much.
And just last month, Yasser Arafat called on his people to stop their attacks on Israel. But in the case of the illegal arms shipment, evidence seems to indicate Arafat is doing quite the opposite. Is he playing both side?
Joining us now, Martin Indyk. He is a former U.S. ambassador to Israel. He is also now with the Brookings Institution here in Washington, former U.S. assistant secretary of state for Near Eastern affairs. Martin, thanks for joining us.
You know all of the issues. What's your bottom line? Was Arafat responsible for this arms shipment?
MARTIN INDYK, FORMER U.S. AMB TO ISRAEL: I personally have no doubt that he knew about it. This was done by senior people in the Palestinian Authority, including the mastermind behind it was the man who is with him in his entourage, as the man in charge of military finances, Mr. Shibaki (ph). So I don't think there can be any doubt that Arafat, as Andrea Koppel suggested the State Department is saying, off the record, that he knew about it and this was part of the double games they say he's playing.
BLITZER: And the shipment was supposed to go to Gaza, as opposed to southern Lebanon, for example?
INDYK: Yeah, there is also -- I mean, there's enough evidence that the Israelis have put before the State Department, the State Department now calls compelling, that this shipment was going to go through the service canal, dock in Alexandria, under the nose of the Egyptians, who can't be happy with this, and then offloaded to smaller boats in Alexandria and dropped off the coast of Gaza, where fishermen would have picked it up or would have floated into the Gaza shore.
BLITZER: Is this an isolated incident, or do you think that there have been other shipments like this that managed to get through in the past?
INDYK: It's not -- as least as far as I know, nothing else of this caliber got through. There was an earlier shipment around April of last year, from Lebanon, also organized by the Hezbollah with Iran behind it, on the ship called the Santarini. But it was smaller and the weapons were not as effective, not as long-range as these are, which can hit Israeli cities.
BLITZER: So the bottom line, though, you heard the Israeli ambassador in Washington, Mr. Ivry, say that if Arafat is willing to go forward and fight terrorism, despite this shipment, they're still willing to deal with him.
INDYK: Well, they're willing to deal with him, to the extent that he is going to stop the violence. But there is a deeper problem here, which is that this issue of the shipment has driven another nail into Arafat's coffin, in terms of his credibility. And there are already a large number of nails in it. And so, if is he going to be a partner to Israel in the peace process, there is a real question about whether they can rely on his word. And it's not just a question that the Israelis have to ask. But we have to ask it, too.
BLITZER: Well, you heard Andrea Koppel say at the State Department, they don't necessarily want to acknowledge what they privately do believe, because of the consequences of what that may mean for U.S. policy.
INDYK: Right. Look, we are supposed to be the honest broker. How can we be an honest broker between two sides, when one side is seen to be fundamentally dishonest? And that's got to be cleared up. Now, the president has laid out these three criteria, because if Arafat did all these things, then maybe he could rebuild his credibility. But I have to say, there is so much water under the bridge that I think it is going to be very hard for that to happen.
BLITZER: OK, Martin Indyk, the former U.S. ambassador to Israel and assistant secretary of state, thanks for joining us.
INDYK: Thank you.
BLITZER: And let's check some of the other stores on today's "Newswire": Jurors in Cambridge, Massachusetts have finished day one deliberating the fate of Thomas Junta. He is accused of manslaughter in the killing of a fellow hockey dad. Jurors got the case several hours ago after closing arguments wrapped up. Junta could face 20 years in prison if convicted. The jury resumes deliberations in the morning.
A Florida newspaper says the parents of Charles Bishop made a pact when they were teenagers to kill themselves. Bishop is the teen who died when he flew a plane into a Tampa skyscraper over the weekend. "The St. Petersburg Times" reports the boy's mother and father failed in a suicide pact they had planned after they were denied a marriage license almost two decades ago.
The pilot of a New Jersey Air National Guard's jet ejected safely before the plane went down this morning in Southern New Jersey. He is being treated for minor injuries. The F-16 craft crashed after taking off from Atlantic City on a routine training mission. An investigation is now under way.
Next, the Enron debate: Will it become another Whitewater? And nuclear weapons on a hair-trigger: keeping watch on the Indian- Pakistani border.
Stay with us.
(COMMERCIAL BREAK)
BLITZER: Let's get back now to the criminal investigation of the energy giant Enron. How much could it distract the president from his No. 1 priority: the war against terrorism? And could it become another Whitewater?
To debate those points, the Republican congressman, Bob Barr, joins me. He is a member of the House Judiciary Committee. He is in our headquarters in Atlanta. And here in Washington, Mark Penn. He is a pollster for the former president, Bill Clinton.
And I will start with you, Mark Penn. Do you believe this is another Whitewater?
MARK PENN, DEMOCRATIC POLLSTER: Oh, I think it's much bigger than Whitewater. You have got huge campaign contributions, questions that are relevant to the last election and the current administration, phone calls to current administration members.
And you've got substantial, real victims who have lost, as we just saw earlier, billions of dollars, their retirement savings wiped out. This is far, far worse. There's no comparison.
BLITZER: Congressman, what do you say about that?
REP. BOB BARR (R), GEORGIA: I agree with the last statement. There is no comparison.
This has nothing to do, at least as so far as we know now or any indication, of corruption. This appears to be a very, very problematic scenario, a very serious problem. But there has been no evidence whatsoever, no credible allegations, other than just partisan sniping by some folks, that indicate that anything wrong was done. You have a major corporation that has supported both parties and people on both sides of the aisle that now very serious questions have been raised about it. The Bush administration, unlike the prior administration, when faced with these sorts of problems, immediately called for a criminal investigation, authorized a criminal investigation. The attorney general has recused himself simply because he headed up a pact that received some funds from this organization.
The president has said, look, we are going to follow this wherever it leads. Frankly, I don't understand why the folks would find any fault with that.
BLITZER: All right. Let's let Mark Penn respond.
Go ahead, Mark.
PENN: Well, I think the basic question: Can this administration investigate its single largest contributor? We have seen the attorney general recuse himself today after initiating this investigation. So it more or less reinforces the question that I think are on people's minds.
It's not that they know what has been done. It's they that don't know what has been done.
(CROSSTALK)
BARR: That's why the investigation has been initiated.
PENN: But can they trust the administration to get the right answers? And would they trust an administration-sponsored investigation? I don't think so.
BLITZER: Well, what about that, Congressman? Is this case for another independent counsel?
BARR: Well, there certainly isn't any indication so far the mechanism whereby -- and as a former United States attorney, I'm very familiar with this -- the mechanism whereby normal criminal investigations, regardless of their size, are handled, are reviewed thoroughly for conflicts of interests and other problems by the Department of Justice.
And here again, as your other guest said, there is no comparison to Whitewater. There is no allegation of corruption here, other than very possibly some criminal wrongdoing on the part of the corporation. And if that's there, we certainly want to find that out. And the administration has said we will do so.
PENN: Well, I think the no comparison is that this is real. It's substantial. It's huge. It's immediate. I think all of those things make this so much bigger, so much more timely and so much more important that it really justifies making sure that the investigation is in fact independent. And that's what we're hearing. BARR: Well, that's precisely what we are doing. And that's why the attorney general recused himself. I'm flabbergasted that you would find fault with an attorney general recognizing that there might a conflict and recusing himself. Would you rather him not recuse himself?
PENN: Well, I think that's a good first step, but I don't think that we know that that is enough considering that we don't know the real independence of those who are investigating it since this is going to be under Justice Department jurisdiction. And new questions are really coming out every day, if you saw Ari Fleischer's briefing today, the number of questions he received and was in effect unable to answer.
BLITZER: But, on that point, though, Mark Penn, at a time when the United States is engaged in this war, and given the history of the Clinton administration with independent counsels, Whitewater, all the independent investigations that were going on, do you want the country to be going down that road right now?
BARR: Well, I don't think an investigation of this needs to be a major part of the public show at this point. I think an investigation of this, though, needs to be serious. It needs to be independent. It needs to answer those questions. And I think the public -- certainly, this is one of largest issues before the country, considering what has happened to the economy, considering what is happening with rising unemployment, and considering the real impact this has had.
I think even the president today recognized that this is a major issue before the American public. It needs to be treated fairly and fully.
BLITZER: And, finally, to you, Congressman, if this had happened during the Clinton administration, if a big corporation went belly up and billions were lost, a lot of the investors lost their pensions, and they had given huge contributions to the Democrats, wouldn't you be calling for investigations?
BARR: Absolutely. And I think an investigation is very, very appropriate in this case. I would find great fault with President Bush if he did not authorize an investigation. But the fact of the matter is, he has. The attorney general has. And then he promptly recused himself in an overabundance of ethical caution.
If in fact there are facts that come out during the course of this investigation that indicate -- such as we had with the prior administration, with the head of the FBI recommending the appointment of an outside counsel -- then certainly we should consider that at that time. But at least right now, the administration is doing everything that prudence and ethics require. And that is launching an investigation without any sort of limitations and making sure that the investigation is in the hands of an individual of impeccable integrity.
And that is Deputy Attorney General Larry Thompson. BLITZER: All right, Bob Barr, the congressman from Georgia, Mark Penn, the political pollster for the Democrats, thanks so much to both of you for joining us.
BARR: Thank you.
BLITZER: I have a feeling this debate is only just beginning.
And there will be a new battleground for U.S. troops, more on their destination when we return. Also, the first female Marine killed in the war on terror -- her father remembers what started her journey.
(BEGIN VIDEO CLIP)
MATTHEW WINTERS, FATHER OF JEANNETTE WINTERS: She told me -- she said, "Dad, I want to do something different." And next thing I know, she signed up for the Marine Corps.
(END VIDEO CLIP)
(COMMERCIAL BREAK)
BLITZER: Welcome back.
We have been hearing about this for some time now. It's official. The war against terrorism is expanding to the Philippines. U.S. officials tell CNN Army special forces troops are being sent to the Philippines to help that country in its fight against Muslim rebels linked to al Qaeda.
Our military affairs correspondent, Jamie McIntyre, is covering the story. He is live at the Pentagon. And he has more -- Jamie.
JAMIE MCINTYRE, CNN MILITARY AFFAIRS CORRESPONDENT: Well, Wolf, the Pentagon insists that these special forces are trainers, that they are going to not be involved in direct combat, but be assisting the Philippine military, the Philippine government as they go after Abu Sayyaf, the group that has links to Osama bin Laden.
But CNN has learned that the military guidance that has gone out with the dispatch of these troops, which could eventually number 500, includes authorization for them to accompany -- have armed observers accompany Philippine forces to the front lines. That could put potential U.S. troops in a combat situation. Asked about this today at the Pentagon, the defense secretary, Donald Rumsfeld, simply said he wasn't going to talk about future operations.
The Muslim rebels have held an American missionary couple since May. Kidnappings have been one of their main sources of income. And that income apparently could be a source of income for al Qaeda, which originally funded them. Now, sources say the advanced team of troops will be followed by more than 100 special forces next month, along with at least 10 helicopters and some C-130 cargo planes. Logistical support troops that would have to go along with them could eventually bring the number of U.S. forces in the Philippines to 500 -- Wolf. BLITZER: Jamie McIntyre at the Pentagon, thank you very much.
And, in Western Pakistan, rescue teams say the rocky terrain is hampering efforts to recover the bodies of seven United States Marines. They were killed yesterday when their military tanker plane crashed into a mountain. Today, relatives and friends are remembering the crew members who were part of the Marine squadron known as the Raiders.
(BEGIN VIDEO CLIP)
WINTERS: She told me -- she said, "Dad, I want to do something different." And next thing I know, she signed up for the Marine Corps. But then she told me she liked her job once passed the basic thing. And I don't bother the children whenever they say they got a job they liked. But I'm real proud because she was proud. She was proud of her job.
TOM JOHNSON, PRINCIPAL OF NATHAN HAYS: Nathan was an all- American kid, Eagle Scout. He was proud to be a Marine. He is the kid that graduated and the coach still talks about him, how he played the game, on his effort and the kind of kid he was.
NATOSHA MONROE, FRIEND: I really just want people to appreciate people like Bryan, who -- I mean, he could be sitting around surfing or playing his guitar. He liked what he did. He liked being over there. He believed in what he was doing.
(END VIDEO CLIP)
BLITZER: And more on the Marine deaths and war casualties with the former Marine Captain and special operations officer J. Kelly McCann. He'll join me here in the CNN "War Room" tonight, 7:00 Eastern, 4:00 Pacific. You can participate. Just go to my Web page, CNN.com/Wolf. Click on "Send Questions." I will get as many of those to my panel as possible. And that is also, by the way, where you can read my daily online column.
And get a unique glimpse of the U.S. commander of forces in Afghanistan, General Tommy Franks, and see a picture of the general never seen before, at least never in general public. That's tonight on "NEWSNIGHT WITH AARON BROWN." That's at 10:00 p.m. Eastern, 7:00 Pacific.
And next week, the movie "Black Hawk Down" opens nationwide. It's about U.S. special forces in Somalia and the mission that failed. How does this film reflect and depart from what actually happened? And why do you need to be informed about this part of the world? Tomorrow, on this program, the makers of that movie, the producer, Jerry Bruckheimer, the director, Ridley Scott, and the author of "Black Hawk Down," Mark Bowden.
They say they want peace, but do their actions betray them? Coming up: two nuclear neighbors and the worst-case scenario. Later, a will to survive: Would you have what it takes to survive this plane crash? Wait until you hear what happened after the accident. (COMMERCIAL BREAK)
BLITZER: Welcome back.
The Bush White House is taking an increasingly public role in efforts to defuse the tensions between India and Pakistan. Secretary of State Colin Powell, working the phones for weeks, heads for South Asia sometime next week for face-to-face diplomacy. Today, the president met with India's visiting home minister, promising to press Pakistan to take tougher action against militants.
For the past four weeks, the nuclear-armed neighbors have been repositioning their forces along their common border, while at, the same time, saying they want to resolve the situation peacefully. Are tensions easing or are they at a hair-trigger?
Joining me now is Gary Milhollin. He is director of the Wisconsin Project on Nuclear Arms Control.
And, Gary, thanks for joining us.
I want you to listen to what Porter Goss, the chairman of the House Intelligence Committee said to me last night. Listen to this.
(BEGIN VIDEO CLIP)
REP. PORTER GOSS (R), FLORIDA: I would say that of all things on the plate in the national security facing the United States of America, that is probably the most dangerous, the Pakistan-India situation because of the potential for a nuclear flare-up on that. The ambassador here, I'm sure, can show more wisdom on it than I.
(END VIDEO CLIP)
BLITZER: What do you say about that? Is that the most critical issue facing the United States right now?
GARY MILHOLLIN, WISCONSIN PROJECT ON NUCLEAR ARMS CONTROL: It certainly could be if it flares up. And I think he is probably right.
It seems to me that right now in South Asia, we have the greatest risk of nuclear war that we have seen for some time: two armies deployed against each other; no specific doctrine on either side about what to do if a conflict begins; the likelihood that India, being stronger, will begin to move into Pakistan; and the likelihood, at that point, that Pakistan will either have to use its nuclear arsenal or lose it.
I think if war begins, it's a step into the unknown. We have never seen this situation before.
BLITZER: And it could affect the whole world. The ambassador that Congressman Goss was referring other is Robert Oakley, the former U.S. ambassador to Pakistan. And I asked him a question a lot of people want to know: Do India and Pakistan already have the delivery system to deliver nuclear weapons? Listen to what Ambassador Oakley said last night.
(BEGIN VIDEO CLIP)
ROBERT OAKLEY, FORMER U.S. AMBASSADOR TO PAKISTAN: I'm sure on the Pakistani side, they have nuclear warheads sitting on ballistic missiles that are ready to go. And on the Indian side, they have airplanes that can carry nuclear weapons that are ready to go. But the last thing in the world any -- any government wants to do -- including those two -- is to use nuclear weapons.
(END VIDEO CLIP)
BLITZER: It sounds like they do have the capabilities right now.
MILHOLLIN: They have had them for some time. Both sides, for some years, have been able to deliver nuclear warheads with high- performance aircraft. And, in recent years, Pakistan has reached the point where it probably can deliver warheads with nuclear missiles. And India might be able to do the same. So we have the worst possible situation.
BLITZER: And I want to put up a map on our screen and show our viewers the area that we are basically talking about. You can see it right there -- of course India the largest democracy in the world, one billion people -- New Delhi right there, Islamabad not very far away.
And the issue that they're mostly concerned about up here in the north, of course Kashmir, the disputed territory. It looks like these troops, eyeball to eyeball, at a hair-trigger potential capability, the prospects are enormous. The stakes are enormous.
MILHOLLIN: They are. I think it would be a disaster for both countries, and in particular India. India is trying to work its way into the modern world, to be seen as a place where you can invest money, have high-tech products come out. If a nuclear war happens, that's over. We are talking about losing a generation. And both countries are poor. They can hardly take care of their populations now. Imagine one million casualties on each side.
BLITZER: India says it won't strike first, but Pakistan refuses to make such a declaration.
MILHOLLIN: Well, it's because India has an overwhelming conventional superiority. It's easy for India to make that statement. It's much harder for Pakistan.
BLITZER: OK, Gary Milhollin, alarming information, thank you very much.
MILHOLLIN: Thank you.
BLITZER: And the president of Pakistan, Pervez Musharraf, is expected this Sunday to deliver a major speech on the subject. And everybody will be watching very closely. Nevada is a step closer to being selected as the site of a major nuclear dump. The energy secretary, Spencer Abraham, has picked Nevada's Yucca Mountain to be the nation's burial ground for thousands of tons of nuclear waste. The site is about 90 miles northwest of Las Vegas. Under the proposal, used nuclear reactor fuel from across the United States would be buried at Yucca Mountain. President Bush, of course, has the final say.
One day, you may not need the space shuttle to get to space anymore. When we return: an aircraft that may help one company take people closer to the edge of the Earth.
Stay with us.
(COMMERCIAL BREAK)
BLITZER: Let's go to New York now and get a preview of "LOU DOBBS MONEYLINE." That begins at the top of the hour -- Lou.
LOU DOBBS, "LOU DOBBS MONEYLINE": Wolf, thank you.
We are going to have the very latest for our viewers on the Enron debacle. Attorney General John Ashcroft has recused himself from the investigation. So has one of his aides. We will have details for you from the White House -- the president today discussing the Enron situation.
And we will also be talking with Treasury Secretary Paul O'Neill about Enron as well. We will be going live to Afghanistan for the latest developments in the war against terror. General David Grange will be here to analyze the developments there.
And we will be talking about what is a devastating period of time in the telecom industry. I will joined tonight by Sprint's chief executive officer, William Esrey. We'll be talking about Sprint's latest product introduction and its prospects for this year -- all of that, a lot more at the top of the hour.
Please join us -- now back to you, Wolf, in Washington.
BLITZER: Thank you very much, Lou.
And let's do a quick check of some stories on today's "Newswire."
You might call it double-jeopardy for a New Mexico pilot. After his plane with two passengers on board went down in Colorado, the pilot hiked six hours to try to get some help. He was picked up by a helicopter and briefly helped with the search efforts until the chopper crashed. The passengers on board the plane suffered some broken bones. There were no injuries reported in the helicopter crash. That's good.
It's just one small step for a California company that hopes to provide civilians with cheap and easy access to space. The company, XCOR, has completed the latest test of its aircraft known as the EZ- Rocket. The prototype vehicle runs on rubbing alcohol and liquid oxygen. XCOR hopes to use it as a first step toward a supersonic vehicle that would be able to reach the edge of space.
I will be back in one hour with more coverage here in the CNN "War Room." Until then, thanks very much for watching. I'm Wolf Blitzer in Washington. CNN's coverage of America's new war continues with "LOU DOBBS MONEYLINE." And that begins right now.
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