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ANDERSON COOPER 360 DEGREES

U.S. Government Tracks North Korean Ship Suspected of Carrying Contraband Equipment; Foley Fallout Escalates

Aired October 19, 2006 - 22:00   ET

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


ANDERSON COOPER, CNN ANCHOR: Good evening, everyone.
Breaking news tonight -- U.S. intelligence is watching North Korean -- a North Korean ship that could be carrying military or even nuclear materials headed who knows where.

Also, the page scandal now goes to the very top -- secret testimony against the speaker of a House, who is turning more radioactive by the minute.

(BEGIN VIDEOTAPE)

ANNOUNCER: What did the top Republican in Congress know about the Foley page affair, and when did he know it? Tonight, damning testimony under oath from his second in command.

He's a congressman from Eastern Pennsylvania, but he sure spends a lot of time in Eastern Europe. And his daughter's company is sure getting a lot of money from Russia. Interested? So are the feds. We're "Keeping Them Honest."

And failing grades -- a top commander in Iraq says the plan to hold Iraq together, starting in Baghdad, just isn't working.

(END VIDEOTAPE)

ANNOUNCER: Across the country and around the world, this is ANDERSON COOPER 360.

Reporting tonight from the CNN studios in New York, here's Anderson Cooper.

COOPER: Hey, thanks for joining us.

We begin with breaking news: a ship out there, somewhere, that could spark a global crisis. For years now, the nightmare scenario has been North Korea spreading technology to other bad actors around the globe. Last week's nuclear test, small though it was, only crystallized that fear.

Well, tonight, we have perhaps the makings of a showdown, either at sea or in some unfriendly port of call. The story broke just a short time ago.

CNN's Jamie McIntyre is monitoring developments at the Pentagon tonight. Jamie, what is the latest?

JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT: Well, Anderson, put this one down to another case of the U.S. government not knowing for sure what North Korea is up to.

Two U.S. officials confirm to CNN that the U.S. government is tracking a North Korean merchant ship that left from a port southwest of the capital of Pyongyang some time ago, and put out to sea. It's a ship that a U.S. military official tells CNN, in the past, has carried military equipment. But, at this point, the U.S. government does not know what's on the ship.

It's unlikely they will stop and try to board the ship at sea or inspect it, because, as officials concede, they have no evidence of what the cargo is. But we're told that the U.S. government is likely to pressure whatever country the ship eventually puts into to conduct a full inspection once that ship arrives. As you know, the U.N. sanctions prohibit North Korea from exporting anything that could be used in a weapons of mass destruction program.

But, again, the big problem is, the U.S. doesn't have what would be called in law enforcement probable cause to stop the ship at sea, so, they will probably just follow it and see where it goes -- Anderson.

COOPER: If they wanted to stop it, I mean, they could, just in terms of logistics of it. It's -- it's more a question of international law?

MCINTYRE: Well, it is.

The question is, can and should the U.S. take the provocative act of stopping a ship at sea, boarding it, and inspecting it, without any evidence whatsoever of what's on -- on the ship? So, at this point, while that would be an option, it seems unlikely.

Also, several officials have said: Look, it's not like we're going to be able to get overly excited about every single ship that leaves North Korea. But, again, this particular ship has been known to carry military equipment in the past, so, there's a high degree of interest of -- of what it's carrying.

COOPER: Well, Jamie McIntyre, appreciate it, continuing to follow the breaking story.

On now to South Korea for the early reaction there.

For that, we turn to CNN's Dan Rivers, who is in Seoul this -- this evening.

Dan, what's the reaction?

DAN RIVERS, CNN CORRESPONDENT: They're being very tight-lipped here. We have spoken to U.S. military sources here and diplomatic sources here. No one is saying anything about this ship. I think there are concerns that they don't want to ratchet up the situation unnecessarily.

What we do know is that the U.S. does have a large number of naval assets in the area. They have the USS Kitty Hawk, an aircraft carrier, along with seven other ships, in the area. They have left from Yokosuka, a port in Japan, and are in the region -- about 7,400 sailors aboard those eight ships.

So, they have plenty of resources here, if they did want to go in and intercept this ship. There's no suggestion they're going to do that at the moment. I think that would cause more problems than it would probably solve. But, as Jamie said, they're monitoring the ship, from what we understand, and seeing where it's supposed to be headed.

There is a problem here, that, under international law, they're -- they're not allowed, under international law, to -- to stop and search a ship, you know, with no evidence at all. Under the Proliferation Security Initiative, which is one thing that about 15 countries have signed up to, they can search ships when -- when they enter their territorial waters.

But, crucially, China and South Korea have not signed up to the PSI initiative -- Anderson.

COOPER: Interesting.

Dan following the situation in Seoul -- thanks very much, Dan Rivers.

In addition to U.N. sanctions, North Korea is already very much on notice.

Listen.

(BEGIN VIDEO CLIP, "ABC WORLD NEWS TONIGHT")

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: If we get intelligence that they're about to transfer a nuclear weapon, we would stop the transfer. And we would deal with the ships that were taking the -- or the airplane that was dealing with taking the material to somebody.

GEORGE STEPHANOPOULOS, ABC NEWS: And, if it happened, you would retaliate?

BUSH: You know, I'm -- just, it's a grave consequence.

(END VIDEO CLIP)

COOPER: President Bush on ABC News last night. Grave consequences, by the way, is diplospeak rarely heard since the Cold War. It means nothing is off the table. Joining us now for some perspective is Anne-Marie Slaughter, dean of Princeton University's Wilson School of Public and International Affairs.

Dean Slaughter, thanks very much for being with us.

Impossible at this point to stop a -- a ship like this leaving North Korea, yes?

ANNE-MARIE SLAUGHTER, DEAN, WOODROW WILSON SCHOOL OF PUBLIC AND INTERNATIONAL AFFAIRS AT PRINCETON UNIVERSITY: Yes, not -- not stopping them on the high seas, without provoking a crisis ourselves.

This is a situation where we have to -- to take it seriously, and let the North Koreans know that we are taking it seriously. But we have to play it cool. We -- we don't want to provoke a crisis. And we don't have any evidence that -- that there's anything that violates the U.N. sanctions.

So, we -- we want to play it as cool as we can, and keep our credibility as high as we can with the international community.

COOPER: China and South Korea, which are probably the most important actors in the region, in terms of being able to rein in North Korea, are -- are very reticent to actually take that step, to -- to get aggressive. Why is that?

SLAUGHTER: They don't want to provoke a crisis either.

They want to put North Korea -- North Korea on notice. And I think the Chinese, at this point, are not sure how much they really can control Kim Jong Il. But they -- they -- they want to be cautious, in terms of their domestic pressures, and because I -- I'm not sure they think there's much that we really can do.

So, at this point, if -- if the North Koreans, for instance, were to enter a Chinese port, it -- it would be delicate for the U.S. to even convince the Chinese to inspect. And if -- if there's a -- a division between the U.S. and China, that's exactly what North Korea wants. What's most important for us is to maintain the unity of the international community.

But, for that, we have to proceed more slowly than we would like to.

COOPER: Do we know, publicly, how active North Korea has been in exporting arms, in exporting technology to other bad actors, to other states, or to other groups?

SLAUGHTER: We know that North Korea has exported missile technology.

And the U.N. resolution says that -- that North Korea cannot export anything to do with missiles. It doesn't just talk about nuclear material. It talks about missiles generally. That's because we do have evidence of North Korea exporting its missile technology, which, of course, could be used to deliver a nuclear weapon or anything else, to a number of bad actors.

COOPER: Where do you see not just the ship story, but, in the next days, weeks, this story going? I mean, do you think it likely that North Korea will launch another series of -- of nuclear tests?

SLAUGHTER: I think North Korea is determined to -- to prove that it is not going to be deterred.

And I think it will -- it will, in fact, again, hope to drive a wedge between us and the other powers in the six-party talks, between us and China, between us and Russia, possibly us and South Korea. So, that is where, as we have done to date, we need to really work the diplomacy, and keep what is a somewhat fragile coalition together, to make it clear to North Korea they're -- they're not going to be able to divide and conquer, and that the pressure is going to get ratcheted up.

COOPER: Dean Slaughter, appreciate you joining us -- Dean Anne- Marie Slaughter from Princeton University.

Another hot zone tonight, Iraq, Baghdad under siege -- an American general on the ground says the strategy to stop the bloodshed is failing. What should be done? We are going to look at the options.

And, in Washington today, the House Ethics panel heard from two key witnesses in the Mark Foley scandal -- coming up, why their testimony could be damning for House Speaker Dennis Hastert. It's all about who knew what and when.

Around the world, you're watching 360.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: ... will tell you, this Internet guide that is available. And we encourage everyone to take this home.

UNIDENTIFIED MALE: ... Missing and Exploited Children's Caucus here in the...

(END VIDEO CLIP)

COOPER: Well, our other "Top Story" tonight is the Mark Foley page scandal that's dogging Republicans as they head into the midterm elections, less than three weeks away.

Two key witnesses testified today before the House Ethics Committee. Now, the questioning took place behind closed doors, but there's good reason tonight to think what they said may be damaging to Republican leaders.

Here's CNN's Dana Bash.

(BEGIN VIDEOTAPE) DANA BASH, CNN WHITE HOUSE CORRESPONDENT (voice-over): The number-two Republican in the House gave sworn testimony to the Ethics Committee that appears to contradict House Speaker Dennis Hastert.

REP. JOHN BOEHNER (R-OH), HOUSE MAJORITY LEADER: I made myself clear on the record for the last three weeks. And I told the Ethics Committee today the same thing that I have told many of you.

BASH: Here's what Speaker Hastert has said repeatedly since a troubling e-mail from Mark Foley to a House page was revealed three weeks ago.

REP. DENNIS HASTERT (R-IL), SPEAKER OF THE HOUSE: I, first of all, learned of this last Friday, when we were about to leave Congress for you know, the break to -- to go out and campaign.

BASH: In other words he did not know. But Boehner has said he told the speaker last spring about the e-mail.

BOEHNER: I believe I talked to the speaker, and he told me it had been taken care of.

BASH: That kind of inconsistency inside the GOP, a fresh reminder of Republican disarray over Mark Foley, less than three weeks before Election Day, the last thing Republicans need, given this poll conducted for CNN by Opinion Research Corporation, which shows nearly six in 10 Americans think GOP leaders deliberately tried to cover up Foley's behavior.

If anyone can answer the who knew what, when of the Mark Foley scandal, it's this man, former House Clerk Jeff Trandahl, who had day- to-day responsibility over House pages. He went behind closed doors with the House Ethics Committee, under oath, for more than four hours.

Just before he left his job last year, Trandahl confronted Foley about the e-mail with a former male page. Trandahl isn't talking publicly, but sources say he repeatedly raised red flags about Foley years earlier, long before GOP leaders say they knew about Foley's inappropriate conduct with pages.

Two sources close to Trandahl tell CNN that he had observed and was told about Mark Foley's troubling behavior in the House cloak room and elsewhere, and was actively monitoring Foley's interaction with pages.

Among the many questions for Trandahl, what did he do about the early warnings? Several former colleagues describe Trandahl as a by- the-book guy, who took his job overseeing 16-year-old pages very seriously -- one source saying he watched the teenagers closely and had -- quote -- "zero tolerance for problems," expelling pages for drinking and smoking pot, no matter how senior a lawmaker the page's sponsor was.

Craig Shniderman is a longtime friend of Jeff Trandahl.

CRAIG SHNIDERMAN, FRIEND OF JEFF TRANDAHL: Jeff is a guy who always does the right thing. If he was aware of something that was improper, I'm confident he would report it.

BASH (on camera): Jeff Trandahl is not saying anything publicly. But CNN is told by sources close to Trandahl that it is impossible to imagine he did not go to the House speaker's office with concerns about Mark Foley. And we know those concerns started years ago.

Dana Bash, CNN, Capitol Hill.

(END VIDEOTAPE)

COOPER: Well, today's testimony is a potential bombshell for Republicans, of course, but it's not the only new twist in the Foley story today. Days after the Florida congressman resigned last month, his lawyer, you will remember, said that his client was in recovery for alcoholism, and oh, by the way, he has also been sexually abused by a priest when he was a teenager.

Well, until today, the priest's identity was unknown. But then came a stunning admission.

CNN's Susan Candiotti has that.

(BEGIN VIDEOTAPE)

SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT (voice-over): Father Anthony Mercieca admits he had intimate contacts with a teenaged Mark Foley, but says whether it was abuse depends on how you look at it.

FATHER ANTHONY MERCIECA, FORMER PRIEST OF MARK FOLEY: See abuse, it's a bad word, you know, because abuse -- you abuse someone against his will. But it involved just spontaneousness, you know. But, anyway, whatever it was, you know, molestation, I guess. And that's what happened.

CANDIOTTI: Father Mercieca, now 69 and retired, lives on the Maltese island of Gozo, near Italy. He talked by phone with CNN and CNN affiliate WPTV.

Sources familiar with the investigation say he's the Catholic priest Mark Foley claims molested him as a teen nearly 40 years ago. Father Mercieca told CNN his memory is now a bit fuzzy about one incident. The priest admits he might have gone too far when he was mixing tranquilizers and alcohol to treat depression.

MERCIECA: Once, maybe I touched him, or so,but didn't -- it wasn't -- because it's not something you call, I mean, rape or penetration or anything like that, you know. We were just fondling.

CANDIOTTI: A source familiar with the investigation tells CNN, Mercieca was assigned to Sacred Heart Church in Lake Worth in the mid- '60s.

Foley was an altar boy there. Mercieca says they took trips to New York and Washington.

MERCIECA: We became, more and more, friends, almost like brothers.

CANDIOTTI: Father Mercieca tells CNN, he and Foley went skinny- dipping and took saunas wearing only towels. Sometimes, he says, he massaged the teen's bare shoulders.

MERCIECA: I would say that, if I offended him, I am sorry, but to remember the good time we had together, you know, and how, really, we enjoyed each other's -- each other's company, and to let bygones be bygones.

CANDIOTTI: One longtime parishioner says she's appalled that Foley waited so long to come forward, and is angry at Father Mercieca.

GISELLE BASANTE, LONGTIME PARISHIONER: He never been a priest. He never been blessed by God. He was a rotten apple in a tree.

CANDIOTTI: Foley's attorneys have no comment on what the priest said.

The Catholic Church says it will investigate whether Mercieca allegedly abused Foley and anyone else.

MARY ROSS AGOSTA, SPOKESPERSON, ARCHDIOCESE OF MIAMI: We offer counseling to both the victim -- the alleged victim and the alleged abuser. We will do an independent review board investigation.

CANDIOTTI: Counseling, Father Mercieca says that's just what his former so-called brother needs.

MERCIECA: But, anyway, he will overcome it with a psychiatrist, you know. Mark is a very intelligent man, you know?

CANDIOTTI (on camera): His attorney says Foley won't press criminal charges. And unless another alleged victim asks the Palm Beach state attorney to investigate, a spokesman says that office won't open a criminal case.

Susan Candiotti, CNN, Lake Worth, Florida.

(END VIDEOTAPE)

COOPER: A remarkable telephone conversation -- the priest's admission is shocking, but consider this "Raw Data."

A survey commissioned by the U.S. Catholic Church found more than 10,000 allegations of sexual abuse involving more than 4,300 priests and deacons. Eighty-one percent of the alleged victims were male; 19 percent were female. The study covered the years between 1950 and 2002.

And, tonight, there's another high-profile church sex scandal. A bishop knew one of his own was molesting children, but he waited to tell authorities. And the delay could lead to an indictment. That story is next.

And a grim warning from a top general in Iraq -- he says: We need a new plan -- when 360 continues, live from New York.

(COMMERCIAL BREAK)

COOPER: More now on the Mark Foley page scandal.

Polls -- polls show that it may hurt Republicans in the midterm elections next month, but it's also not the only radioactive issue out there.

Earlier, I spoke with A.B. Stoddard -- she's the associate editor of "The Hill," a newspaper that covers Congress -- also, CNN's Candy Crowley and Joe Johns, part of the best political team on television.

(BEGIN VIDEOTAPE)

COOPER: Candy, how much damage is -- is done to Hastert if Boehner's testimony directly contradicts what he has been saying?

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Well, this is something that Boehner has been saying in public. So, the testimony makes it official.

I think, until, Anderson, you get this Ethics Committee report, things are frozen in place, politically.

COOPER: Joe, how did Boehner come out -- come out in the eyes of his own party on this?

JOE JOHNS, CNN CONGRESSIONAL CORRESPONDENT: Well, the first thing you got to do is say the truth, tell the truth, because you don't want to get caught in contradicting stories.

You don't want to get caught in a situation where you have said one thing in one place, and something else before the Ethics Committee. There's that. There's also the issue of the dirt that's out there, and trying not to get any of it on you. Boehner is the number two in the House of Representatives. And the number one is in real trouble right now.

What he wants to do, Anderson, is sort of portray himself as part of the solution, rather than part of the problem.

COOPER: You know, A.B., Republicans would like nothing more than this story to just go away. Boehner himself says: Look, we need to put this behind us.

You can't do that with -- with kind of drips and drabs of testimony coming out like this.

A.B. STODDARD, ASSOCIATE EDITOR, "THE HILL": No.

I think, actually, today was a bad-news day, and I think it looks like it's going to get worse. There are rumors swirling around. And Jeff Trandahl reportedly told the committee that he informed a top aide in Hastert's office, you know, years ago that there was a troublesome group of members, not just Mark Foley, who were too close to the pages.

And the problem for Boehner is that Hastert is leaving. We -- we -- that's the expectation, is that Hastert will leave, no matter what happens in -- after -- after the election. And, so, for -- for Boehner, depending on how many seats they lose, he could be in serious peril as well, in terms of his future leadership.

COOPER: Well, Candy, what -- if you're a Democrat, what do you do? Do you continue to try to use this in -- in the campaigns, or you just kind of stand back and let the Republicans beat each -- you know, beat each other?

CROWLEY: Well, I mean, you know, there's a little bit of both going on out there. We have seen commercials where it comes up. We have seen some of these campaigns where it comes up on the stump.

Where it helps, in some of those races where there are perhaps conservative voters that Democrats would like to keep home -- obviously, it makes a difference in Foley's race. It makes a difference in Reynolds' race up in New York. So, there are specific races that this hurts.

Outside those specific places, this is a groundwater issue. It feeds into that: What the heck was the leadership doing? Can we trust them? So, it becomes part of a whole.

COOPER: But, Joe, can the numbers go any lower? I mean, the "Wall Street Journal"/NBC poll, 16 percent of people have a -- have a, you know, favorable impression of Congress. That -- that's incredibly low.

JOHNS: And it's sort of a question of critical mass.

I mean, when you look at this thing, though, the -- the question is, why? And the answer, probably, is that it's a story that's very simple for people to understand. The average person out there doesn't pay that much attention to the news. They don't read into scandals about campaign finance reform, or what have you. But this is a story about young kids working at the Capitol, and a member of Congress hitting on them.

That's very easy for people to understand, and, for parents, perhaps disturbing, Anderson.

COOPER: And, A.B., for -- for the president, what does he do? I mean, he has come out in support of Hastert in the past. If -- if this thing continues to take a turn for the worse for Hastert, does he continue to stand by him? I assume it would wind up hurting the president politically.

STODDARD: I think, at this point, that -- that they have -- they have all made the decision that Hastert has to stay through the election, that having him go is not going to help anything, having a new sort of leadership scramble or shuffle right now is not going to help, because it's more finger-pointing, and it's more drama. I think they're trying to stop the bleeding. And I think the president and Karl Rove and others have made the decision that Hastert's going to stay, and they're going to try to get through the election.

COOPER: The -- the new election theme song should be Mary J. Blige's "No More Drama," I think.

(LAUGHTER)

COOPER: That's my idea.

(LAUGHTER)

COOPER: A.B. Stoddard, Joe Johns, Candy Crowley, thanks.

STODDARD: Thanks.

(END VIDEOTAPE)

COOPER: Well, earlier, we told you how a priest said he fondled Mark Foley when he was an altar boy. It's doubtful the priest is going to face any criminal charges.

But, tonight, another member of the clergy is already a wanted man. He's suspected of preying on the young. And, this time, a bishop may also be held accountable.

CNN's Jason Carroll reports.

(BEGIN VIDEOTAPE)

JASON CARROLL, CNN CORRESPONDENT (voice-over): Daniel Walsh was appointed bishop of California's Santa Rosa Diocese six years ago. In large part, his job was to restore trust in a church community rocked by sexual abuse. Church leaders and parishioners put their faith in Walsh, because he had been outspoken about the church's zero-tolerance policy.

DEIRDRE FRONTCZAK, SPOKESPERSON, SANTA ROSA DIOCESE: He's taken that very seriously. And he wants to be responsible.

CARROLL: But now Walsh is the subject of an investigation that could lead to the first indictment of a U.S. Catholic bishop for failing to report an abusive priest.

Walsh says that, after the priest admitted molesting three boys, he did not notify authorities immediately.

MICHAEL MEADOWS, ATTORNEY: He didn't follow his own internal guidelines, much less the laws, which is why he finds himself the subject of a criminal investigation.

CARROLL: Mike Meadows is an attorney representing seven men in a civil suit filed last week against the diocese and the offending priest, Father Francisco Ochoa. The plaintiffs say Ochoa sexually abused them when they were children.

One of his alleged victims, who requested anonymity, says Ochoa started molesting him when he was a 9-year-old altar boy.

UNIDENTIFIED MALE: And, then, one day, he started kind of touching me. He told me: That's normal. You know, just don't tell anybody.

CARROLL: In a letter to parishioners, Walsh said that Ochoa admitted to him last April that he had recently sexually abused a 12- year-old boy and two other boys a decade ago.

(on camera): Walsh immediately put Ochoa on administrative leave, and barred him from serving as a priest. What Walsh says he didn't do immediately is call the authorities, which is required by California state law.

(voice-over): The diocese's own charter says a report should be made immediately.

Bishop Walsh waited three days to call authorities. The Sonoma County Sheriff's Office believes Father Ochoa fled during that time, and is now in Mexico.

MEADOWS: What reason could there have been for not reporting this immediately? It's not like he has to conduct an investigation. Ochoa came to him and said: I have been abusing these boys.

What more did he need to know?

CARROLL: Bishop Walsh declined an interview. But, in that letter to parishioners, he apologized and explained -- quote -- "I did not wait in order to allow Reverend Ochoa time to escape. I waited from an excess of caution."

FRONTCZAK: In this case, the bishop made a mistake. It was a mistake that has had some serious consequences, unfortunately.

CARROLL: One early call Walsh did make the day after Ochoa confessed was to a church attorney.

FRONTCZAK: I think his first concern was: Gosh, what's the lawyer tell me I should do?

In retrospect, that was not a wise move.

CARROLL: The sheriff's office says its investigation found, this case is worthy of district attorney review. The DA's office declined to say whether it has reached a decision to indict.

One church legal affairs expert says, they should.

MARCI HAMILTON, CARDOZO LAW SCHOOL: If he's not indicted on these clear facts and this predator got away, it's just going to perpetuate the system that created the massive child abuse that we have. CARROLL: Walsh says he's prepared to face the consequences if he's criminally charged.

UNIDENTIFIED MALE: Many people think that yes, he, of course should be punished, and other people say the man made a mistake. There was not a malicious intent. Perhaps prosecution is a bit harsh.

CARROLL: Not harsh for Ochoa's alleged victims, who believe Walsh let Ochoa get away.

UNIDENTIFIED MALE: I really do believe he should be indicted and investigated further.

CARROLL: One man of the cloth has escaped justice for now. Another waits to see if he'll be judged in a place governed by facts, not faith.

Jason Carroll, CNN, Santa Rosa, California.

(END VIDEOTAPE)

COOPER: Well, up next a sobering assessment of Iraq. That's not a surprise. The surprise is who's talking.

(BEGIN VIDEO CLIP)

MAJ. GEN. WILLIAM CALDWELL, U.S. ARMY: The violence is indeed disheartening.

(END VIDEO CLIP)

COOPER: A top general in Iraq sounds the warning. We need a new plan. We'll explore the options. One calls for splitting Iraq in three. How would it make things better? How might it make things worse? We'll take a look at the options. You're watching 360.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: For the sake of the security of the United States of America, we must defeat the enemy in Iraq.

(END VIDEO CLIP)

COOPER: That's President Bush on the campaign trail. He's been quoted by Bob Woodward as saying that he won't pull out of Iraq even if the only ones still with him are his wife and Barney the White House dog.

Well, today new word of how bad things have gotten, that the current plan for holding the country together isn't working. Comes not from a critic or a pundit, or a retired commander. I should say it comes from a top American general currently in Iraq.

Again, here's CNN's Jamie McIntyre.

(BEGIN VIDEOTAPE)

JAMIE MCINTYRE, CNN CORRESPONDENT (voice-over): On a day when President Bush was sounding determined.

BUSH: We will fight, we will stay, and we will win in Iraq.

MCINTYRE: His chief military spokesman in Baghdad was sounding discouraged.

CALDWELL: The violence is indeed disheartening.

BUSH: What's disheartening, Major General William Caldwell noted, is that attacks are up 22 percent in the past three weeks, that Operation Together Forward, the joint U.S./Iraqi effort to secure Baghdad, has in his words, not met overall expectations. And that now the U.S. and Iraqi government must figure out, quote, "how to refocus the effort."

CALDWELL: We're taking a lot of time to go back and look at the whole Baghdad security plan. We're asking ourselves if the conditions under which it was first devised and planned still exist today or have the conditions changed and therefore modification to that plan needs to be made.

TONY SNOW, WHITE HOUSE PRESS SECRETARY: The White House listens to the generals, but I would caution you against saying it's not working because that's not their view.

CALDWELL: The White House was quick to downplay the sober assessment of the military, insisting it amounted to routine adjustments.

SNOW: Tactics change all the time. Generals talk about changing tactics all the time. It happens regularly. It is nothing new in a time of war.

MCINTYRE: Baghdad is not the only problem city. In Ramadi Wednesday, some 60 gunmen believed to be members of al Qaeda in Iraq, were seen carrying banners to announce the city was joining an Islamic state.

In Balad, North of Baghdad, at least 95 Sunnis and Shia were killed in five days of revenge attacks that began Friday. And in the usually calmer north, Mosul and Kirkuk have also seen a significant increase in violence in recent days.

The U.S. military expected casualties to go up with the Baghdad offensive in the holy month of Ramadan. At this pace October will surpass the high of 137 deaths the U.S. suffered back in November of 2004.

Still the White House dismissed as a lot of hooey the idea that the recommendations from an independent Iraq Study Group would result in a major course change, such as dividing up Iraq. SNOW: Non-starter.

MCINTYRE: What about a phased withdrawal?

SNOW: No, you withdraw when you win. Phased withdrawal is a way of saying, regardless of what the conditions are on the ground we're going to get out of dodge.

MCINTYRE (on camera): The one thing the White House did not rule out is an infusion of additional troops in the future. Again repeating that U.S. commanders will get what they need.

Jamie McIntyre, CNN, the Pentagon.

(END VIDEOTAPE)

COOPER: Well, the president may be ruling out options now, but he may have no choice but to reconsider them later.

With that in mind, CNN's Tom Foreman looks at the debate over splitting Iraq up.

(BEGIN VIDEOTAPE)

TOM FOREMAN, CNN CORRESPONDENT (voice-over): With the fighting grinding on and on, some leaders inside and outside of Iraq believe dividing the country into autonomous states could be a reasonable idea.

Right now the Shia primarily occupy the east and south, the Sunnis are in the west, and the Kurds the north. And old ethnic differences between these groups have produced some support for official state borders between these regions.

But some foreign affairs analysts warn splitting up Iraq will almost certainly lead to more trouble. Why?

(on camera) One reason lies beneath the ground. Look at where the oil is. These deposits, which could make Iraq a very wealthy nation if peace ever comes, are located primarily under Shia and Kurdish land. So unless there's a strong plan to assure nationwide sharing of oil revenue, the Sunnis could be cut out of the windfall.

(voice-over) Even some supporters of a partitioning plan, who say a little independence for each region could quiet bitter rivalries, say the Sunnis must be guaranteed a fair share of the oil money.

UNIDENTIFIED MALE: And you've got to tell, we've got to tell, the Shiites and the Kurds, "Look, you're not going to get anything out of the oil you have if there's civil war in that country."

FOREMAN: But the White House vigorously opposes partitioning.

SNOW: Nonstarter.

FOREMAN: Among the apparent, fears, if the Sunnis become effectively their own country they could join forces with Syria, a Sunni neighbor and no friend of the United States.

And the same holds for the Shia. They could cozy up to neighboring Iran, expanding that country's already substantial and growing influence in the region.

Tom Foreman, CNN, Washington.

(END VIDEOTAPE)

COOPER: Troubling options. From warnings by U.S. generals on the ground to surging body counts, there's growing evidence that another strategy is needed. The question is what should the strategy be? It is not an easy question to answer.

Coming up CNN's Iraq correspondent Michael Ware and terrorism analyst Peter Bergen weigh in.

Also a top Republican with big problems heading into the election. We're not talking about Dennis Hastert. We're talking about Curt Weldon at the center of an FBI investigation.

We're keeping them honest tonight when 360 continues.

(COMMERCIAL BREAK)

COOPER: Those are insurgents in Ramadi, practically owning the streets. And all over the country, violence is spiking. People in Baghdad now averaging about two and a half hours of electricity a day. In other words, they spend most of their time without power and often living in terror.

The question tonight: What to do now that the plan for securing Baghdad and the rest of the country doesn't seem to be working?

We talked about that earlier with CNN's Michael Ware and CNN terrorism analyst Peter Bergen.

(BEGIN VIDEOTAPE)

COOPER: So Michael, General Caldwell says that the increased violence is disheartening, and essentially saying that this U.S. strategy of focusing on some neighborhoods in Baghdad has been a failure, or hasn't worked as they'd like. Was the policy itself -- did the strategy just not work, or are things just so out of control that no strategy would be working right now?

MICHAEL WARE, CNN CORRESPONDENT: Well, Anderson, it's a little bit of both, I would guess. I mean, let's look at the so-called battle of Baghdad plan: To move through the city chunk by chunk, targeting areas of volatility, surging, as the military calls it, flooding these areas with American forces and Iraqi forces.

The fundamental flaw in the plan is that after the Americans would leave, they would hand over responsibility to the Iraqi security forces. This means the police, the national police, and the army -- the very people who are linked to much of the violence, be it the death squad violence or the insurgents.

COOPER: Peter Bergen, how much is al Qaeda in control of matters on the ground in Iraq? What sort of level of coordination is there, to our knowledge, between al Qaeda and the Sunni-based insurgents and the other people fighting in Iraq?

PETER BERGEN, CNN TERRORISM ANALYST: I think it's a little hard to tell. I mean, at the time that Abu Musab al-Zarqawi was in charge of al Qaeda in Iraq, we heard a lot more from al Qaeda in Iraq. We heard much more about their strategy. He was a much more public figure than his -- his -- the person who succeeded him, Abu Muhajir. But that, Muhajir, is somebody who's interesting, because he's an Egyptian who joined the jihad group in Egypt in 1982. I think that he will try and adhere much more closely to al Qaeda's central back in Afghanistan/Pakistan border region. He indicated -- he's indicated on a couple of occasions that he's looking for cues from al Qaeda central. But I think right now, it's very hard to sort of sort out.

COOPER: Peter, does al Qaeda actually have a strategy for ruling Iraq, you know, if they ever were able to take over, which is, I mean, virtually impossible, but I mean, do they actually have a plan beyond creating chaos?

BERGEN: Well, I think they do have a strategy. They have a narrative about the United States, and they have a strategy. The narrative is based on Vietnam, Beirut in the '80s, and Mogadishu in the '90s. Which is essentially, the United States is a paper tiger. If you send enough body bags back to the United States, they'll pull out. That's their narrative.

Their strategy is that they want to get a state or part of a state, preferably in the Middle East, to basically create a new Afghanistan. That is a strategy laid out by Ayman al-Zawahiri, al Qaeda's number two, in his autobiography, which came out shortly after 9/11. So they've been quite explicit, and you know, their aim is to create a mini-state in central western Iraq, in which they can regroup and make it a mini-Afghanistan. That's the strategy.

COOPER: Michael, how dangerous is it in Baghdad right now? I mean, General Caldwell said there are at least 23 militias operating in and around Baghdad. You have these death squads, often in police uniforms. I mean, when you get stopped at a roadblock by Iraqi police, how scared are you?

WARE: Well, this is the thing. You drive around a street corner here in the capital, and lo and behold suddenly there's a checkpoint in front of you. Sometimes these guys aren't even in uniform, and when they are there's absolutely no assurance whatsoever that it's legitimate. I mean, every time you encounter a checkpoint, in one way or other, whether your life is in your hands or not, certainly your security and your liberty is. You honestly don't know who these guys are.

COOPER: Frightening days. Michael Ware, appreciate it. Peter Bergen, thanks.

(END VIDEOTAPE)

COOPER: We made a tough call last night when we chose to air a report from Michael Ware showing sniper teams shooting at American troops. We did it knowing that it might disturb you. We know, because it certainly disturbed us as well.

How can anyone look at the images of Americans literally being hunted on the street in Iraq and not feel terror and sorrow and outrage? Not to show, however, we think does a disservice -- not just to the truth, but to the sacrifice of nearly 3,000 men and women.

This is how the story came to us. We sent a list of questions to a group of insurgents. They sent back answers and this tape -- to establish, I suppose, their credentials.

We did not sit down or spend any time whatsoever with these killers, and the fact that the insurgency sent us the tape does not change the picture it shows.

Besides, even if there weren't a single camera around to record it, insurgents would go on shooting Americans. They are the enemy, and that's what they do.

Certainly not everyone sees it that way, however. A debate is forming and a healthy one, we think.

Our viewers and emailers to the blog are weighing in as well.

Debbie in Denham Springs, Louisiana writes to us: "Honestly, I found it absolutely disturbing and terrifying, but I needed to see it. CNN handled this story in the best way possible and without watering down the brutality of this war."

Joseph in Norwood, Massachusetts begs to differ: "Sensational, shocking, in your face news. That's what it's all about with CNN. It doesn't matter that this video tears out the heart of a soldier's mother, father, family and loved ones. I'm shocked, but more sad that CNN would go this far."

There is also this from Rodney in Plano, Texas: "I served in Iraq last year. I often said that, quote, "to CNN, if it's not blowing up, it's not news." Now I'm disgusted by CNN's decision to air this video. No amount of spin can justify the damage you've done."

Tom in Chicago, also served in Iraq. He writes: "As a soldier in the Army, I can appreciate the professionalism that you have presented the real story of so many Americans overseas. I believe that many here in the States fail to realize the full impact of the war on our service members fighting that fight. Thank you for bringing to light, at least in a small way, their sacrifices."

A very healthy debate, and we thank you all for taking part of it, and no doubt it will continue.

The poll will say Iraq will be a big issue in the elections ahead, but some candidates have extra worries on their plate right now. Coming up, a top Republican under investigation by the FBI. He says the Democrats are behind it. The Republican-led Justice Department says politics have nothing to do with it. So where does Russia figure into all of this? We're keeping them honest tonight.

And in the next hour he is angry, and he's not going to take it anymore. Jack Cafferty takes on, in his words, weasels in Washington in his special, "Broken Government".

(COMMERCIAL BREAK)

COOPER: Well, in the top ten list of things for politicians to avoid in an election season, sex scandal is pretty much right up there. So are FBI raids and allegations that you've used your influence to steer lucrative contracts to your daughter's company.

We've already updated you on the Foley scandal. Now the latest on Curt Weldon, a ten-term congressman under investigation by the Justice Department and facing a razor sharp race for reelection.

CNN's Joe Johns tonight is keeping them honest.

(BEGIN VIDEOTAPE)

JOE JOHNS, CNN CORRESPONDENT (voice-over): Moscow in January 2002, so what's a congressman from Pennsylvania doing in a place like this? Curt Weldon, one of the top Republicans on the House Armed Services Committee, is also one of the Congress's biggest promoters of U.S./Russian relations. He's been to the country countless times.

In May of 2002 he was back in Russia leading this congressional delegation. Now, years later he's facing tough questions on the campaign trail and a Justice Department investigation issuing search warrants for evidence about whether he used his work on Russia to steer contracts to his daughter's company.

This is the story of how his daughter's company, Solutions North America, or SNA for short, got its first ever contract, a giant Russian energy form known as Itera, that very same year, 2002.

During that congressional trip to Moscow in May, Weldon meets with Itera management. Then in September of 2002, Karen Weldon, the congressman's daughter, and SNA tell the U.S. government they're registering to represent Itera in the U.S.

The plan was for SNA to do consulting, helping the Russian energy company find business, get contacts, basically what consultants normally do. Only in this case one of the consultants was the daughter of a U.S. congressman, and the congressman would later go to bat for his daughter's future client.

For example, that very same month, on September 24, Karen Weldon's company gets to work coordinating a dinner at the Library of Congress, a dinner hosted by her father, Congressman Weldon, and attended by Itera's CEO, along with about 30 House members and some Russian legislators. Then just two days after that on September 26, Congressman Weldon goes to the House floor gushing about the dinner, delivering a speech praising Itera and its CEO, calling it one of the rising companies in Russia.

Government records show the half million dollar contract with Itera was signed by Itera's CEO on September 30, just four days after Congressman Weldon's speech.

Itera declined comment, except to say it's cooperating with the investigation.

Weldon and his daughter deny wrongdoing. He says he never tried to steer Russian money to his daughter.

REP. CURT WELDON (R), PENNSYLVANIA: I would absolutely never use my position to help anyone in an unusual way, and my daughter -- my kids don't need my help. They're successful. They're talented. They do a good job, and that's -- I mean, that's what any father would say, and that's what I would say. You know, my daughter doesn't need my help now, and she never has.

JOHNS: Weldon has also accused the Democrats of playing a political dirty trick on him by leaking the investigation to the media, but the Republican-led Justice Department said there's no politics. Weldon's Democratic opponent in the reelection campaign also denies any involvement.

JOE SESTAK (D), PENNSYLVANIA CONGRESSIONAL CANDIDATE: Look, the Republican Attorney General Alberto Gonzalez, he doesn't invite me or my staff into his meetings. This is absurd.

JOHNS: Legal experts say cases like this are notoriously hard to prove, and Justice Department officials say this could take a long time to unravel. Translation: don't expect a resolution by election day, which leaves the matter in a legal limbo with potentially serious political consequences.

Joe Johns, CNN, New York.

(END VIDEOTAPE)

COOPER: Well, straight ahead a very simple way of putting an end to each and every story of alleged corruption, scandal, and shame. Listen.

(BEGIN VIDEO CLIP)

JACK CAFFERTY, CNN ANCHOR: It's my fervent hope that every single incumbent on the ballot will lose. It's time to start over.

(END VIDEO CLIP)

COOPER: Jack Cafferty, he's mad as hell, and he'll spend the next hour telling you why you don't need to take it anymore. We'll have more from us in a moment. (COMMERCIAL BREAK)

COOPER: Erica Hill from Headline News joins us now with a 360 bulletin -- Erica.

ERICA HILL, HEADLINE NEWS ANCHOR: Anderson, Secretary of State Condoleezza Rice is paying a visit to Beijing for talks on implementing U.N. sanctions against North Korea.

It is the third leg of her four-nation trip, aimed at reassuring allies the U.S. supports stability in the region. Rice and officials from five other nations are urging North Korea to return to talks on its nuclear ambitions.

In Ohio one of the FBI's most wanted fugitives has been caught barely two miles from the jail he escaped from back in July. John Parsons is accused of killing a police officer. A tip led police to a storage shack where Parsons apparently had been living for sometime. He was sleeping when police found him and didn't put up a fight.

On Wall Street a record day, the Dow closing above 12,000 for the first time. Blue chips gained more than 19 to hit 12,011. The NASDAQ added three, the S&P up just slightly.

And go ahead. Do the tailgating. Eat your wings, have your beer, cheer on your team at the stadium without fear. The FBI says that bomb threat against several NFL stadiums this weekend was a hoax.

The word comes after agents questioned a 20-year-old Milwaukee man about threats posted online. No word on whether he will face any charges, Anderson.

COOPER: Erica, thanks.

Thanks for watching, everyone. Tonight, "Broken Government", hosted by Jack Cafferty, is coming up next.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com

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