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THE SITUATION ROOM

Libby Found Guilty; Hidden Wounds of War

Aired March 6, 2007 - 19:00   ET

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


WOLF BLITZER, CNN ANCHOR: Thanks very much, Lou.
Happening now, from the White House to the big house, former Cheney aide Lewis "Scooter" Libby is found guilty in the CIA leak case and a federal prison sentence looms. What light does the conviction shed on the inner workings of the Bush administration?

The hidden wounds of war, devastating brain injuries that may not show up until months after troops come home from the battlefield. How many are suffering right now?

And steamy e-mail messages sent to the space shuttle while it was still in orbit. Stunning new details in the astronaut love triangle.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

He served in the inner sanctum of the Bush White House and now Lewis "Scooter" Libby could wind up in prison for a maximum of 25 years. The former top aide to Vice President Dick Cheney was found guilty today, guilty of four counts, four of those five counts in the CIA leak investigation, obstruction of justice, making false statements and perjury. But his lawyers say they'll seek a new trial or appeal.

But tonight, the verdict is putting new legal and political pressure on the Bush White House. Let's begin our coverage with our chief national correspondent John King. John.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Wolf, perhaps inevitable with a case with such a high profile and such high legal drama that with the verdicts come not only a debate about legal strategy in the courtroom but political fallout across Washington.

(BEGIN VIDEOTAPE)

KING (voice-over): Guilty on four of five counts is the legal verdict against former top White House aide "Scooter" Libby.

TED WELLS, LIBBY DEFENSE ATTORNEY: We are very disappointed in the verdict of the jurors.

KING: But this case is as much about politics as it is the law and the debate turned immediately to the impact on the president and vice president and the question of whether Libby might be spared jail time through a presidential pardon. DANA PERINO, DEP. WHITE HOUSE PRESS SECRETARY: I don't think that speculating on a wildly hypothetical speculation at this time is appropriate.

KING: Senate Majority Leader Harry Reid, though, was among the senior Democrats moved immediately to pressure the president to publicly rule out a Libby pardon.

SEN. HARRY REID (D-NV), MAJORITY LEADER: For the first time in 135 years, someone working in the White House is indicted and now convicted. I think that says it all.

KING: Another Democratic goal, cast the Libby verdict as a reflection of more than one man's guilt. House Speaker Nancy Pelosi said testimony in the case unmistakably revealed at the highest levels of the Bush administration a callous disregard in handling sensitive national security information and a disposition to smear critics of the war in Iraq.

The nuts and bolts of the case are confusing and Libby is hardly a household name outside official Washington. Still the conviction of Mr. Cheney's long-time confidant on perjury and obstruction of justice counts is the latest political blow to a beleaguered White House.

PATRICK FITZGERALD, SPECIAL PROSECUTOR: It's sad that we had a situation where a high level official, a person who worked in the office of vice president obstructed justice and lied under oath.

KING: The president's approval rating stands at an anemic 33 percent.

(SHOTS)

KING: Six in 10 Americans view the Iraq war as a mistake and now guilty verdicts in a case that stirs up the debate about prewar intelligence.

(END VIDEOTAPE)

KING: If there is any silver lining in this verdict for the White House, Wolf, it is this. The defense decided against calling the vice president to the stand. That would have dramatically escalated the political stakes and the prosecutor Patrick Fitzgerald says his investigation is now dormant. That he expects no more charges unless he says some dramatic new evidence comes to light -- Wolf.

BLITZER: John, thank you. The Libby guilty verdicts are racing red hot questions about Vice President Dick Cheney and his power within the Bush White House. Chief among them, was Libby a fall guy for former his boss and old friend?

Let's bring in our senior national correspondent John Roberts. John.

JOHN ROBERTS, CNN SR. NAT'L CORRESPONDENT: Hey, good evening to you, Wolf. The verdicts in the Libby trial today told us that or at least suggested that "Scooter" Libby was willing to lie to protect himself and perhaps his boss, the vice president. But what does the trial tell us about Dick Cheney?

(BEGIN VIDEOTAPE)

ROBERTS (voice-over): It was Libby who was convicted of lying, but when it comes to the issue orchestrated White House leaks on prewar intelligence, all roads point higher up. The jury had no doubt about that.

UNIDENTIFIED MALE: There was a tremendous amount of sympathy for Mr. Libby.

DENIS COLLINS, JUROR: We're not saying that we didn't think Mr. Libby was guilty of the things we found him guilty of, but that it seemed like he was, to put in Mr. Wells' point of view, he was the fall guy.

ROBERTS: Who was he the fall guy for? According to Libby's own testimony, Dick Cheney. It was the vice president he says who ordered the leak to beat back claims from former Ambassador Joe Wilson that the president had lied about Iraq trying to buy uranium from Niger. Prosecutor Patrick Fitzgerald strongly implied that Cheney may have even told Libby to disclose that Wilson's wife worked for the CIA. Wilson still has a civil suit pending against Cheney and other White House officials.

UNIDENTIFIED MALE: It's very clear that he's a very powerful figure within the White House. It's also very clear that he was intimately involved in this. He was obsessed with this. He was writing talking points on the -- on my article after it appeared. And again, rather than deal with the facts, he was concerned about his own image.

ROBERTS: The trial only reinforced the perception of Cheney as the all-seeing vice president, the director of elaborate kabuki theater to defend the White House against its critics.

JIM VANDEHEI, THE POLITICO: He likes to do things behind the curtain and he obviously is quite a micromanager and likes to pull the strings when he knows that the vice presidency or the presidency could be in trouble.

ROBERTS: No question Cheney is the most powerful vice president in recent memory, perhaps ever, intimately involved in policy development, national security. Democrats have long tried to peel back the veil of secrecy that surrounds his office. Will they take this verdict as an opportunity to go after him?

UNIDENTIFIED MALE: The big question is do Democrats see this as a tip of the iceberg? Could they use power of subpoenas in a power of congressional investigations to dig deeper, to find out what exactly was Cheney's role?

(END VIDEOTAPE) ROBERTS: One Republican strategist I talked to said that this is very bad for Cheney's office and the administration. One more log on the fire of missteps and corruption in the Republican Party, so many demons that Republicans are desperately in need of an exorcism -- Wolf.

BLITZER: John Roberts reporting. Thank you, John. The outed CIA operative Valerie Plame Wilson and her husband Joe Wilson have now filed a civil lawsuit and it's pending against Cheney, Libby and presidential adviser Karl Rove.

Let's talk about that with our senior legal analyst Jeff Toobin. Jeff, if it's not thrown out, potentially there are a lot of minefields out there for the top Bush administration leadership.

JEFFREY TOOBIN, CNN SR. LEGAL ANALYST: There certainly are if they can get to the point where depositions happen. There are a lot of obstacles to a civil suit against high level government officials. There's something called official immunity which is a barrier to most lawsuits against officials for actions in the course of their duties.

The Wilson's lawyers will argue that this was not in the course of their duties. So the lawsuit can proceed. And if it can proceed, that means that there will be depositions of Dick Cheney, Karl Rove and certainly "Scooter" Libby.

BLITZER: And that would be potentially a nightmare. It could be very embarrassing if the Wilson attorneys have a chance to ask for example the vice president or Karl Rove some very, very pointed questions.

TOOBIN: And to demand documents. A lot of documents were produced in the course of this criminal investigation, but certainly there are a lot more out there. And that will probably be the first battlefield in that lawsuit, document production before we even get to the issue of testimony.

BLITZER: All right. There's a history of these civil lawsuits against government officials. We'll see what happens. Jeff, thank you very much.

Democratic Party Chairman Howard Dean says there are dots to connect between Libby's guilty verdict and the vice president. My interview with Howard Dean, that's coming up this hour.

Coming up right now is Jack Cafferty and "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: Wolf, we can all sleep well tonight. President Bush has now come up with his answer to the scandal at the Walter Reed Army Medical Center, a new presidential commission. This one will be chaired by, are you ready, former Senator Bob Dole and former Health and Human Services Secretary Donna Shalala.

Yes, that ought to take care of it -- the goal, to look into the problems of the nation's military and veterans hospitals. They're going to do a review of care for the nation's war wounded. And then after they spend lots of money and lots of time, they'll report back to us that our war wounded aren't getting the treatment they should be. Sound familiar?

Remember the 9/11 Commission report? Still hasn't been implemented. How about the bipartisan Iraq Study Group report recommending withdrawal of American troops from Iraq? It was ignored. It might be worth pointing out too that President Bush is the sole reason there are so many wounded troops getting inadequate care.

He ordered the invasion of Iraq. He sent these young people there to be killed and wounded. And now that we find out they're being ignored, he wants a commission to investigate. He wants Bob Dole and Donna Shalala to tell us what we already know. This is a White House that never ceases to amaze.

Here's the question. Is another government commission the answer to problems at the nation's Veterans Administration hospitals? E-mail your thoughts to CaffertyFile@CNN.com or go to CNN.com/CaffertyFile -- Wolf.

BLITZER: There's a history of these presidential commissions over many, many years I've been covering Washington. Whenever there is a big crisis, they create a commission. They sort of kick the can down the road a little bit and hope the subject goes away. You're familiar with that, Jack.

CAFFERTY: They're worthless -- these commissions, worthless.

BLITZER: Jack Cafferty will be back in a little while. Thank you.

Coming up, hidden and devastating wounds of war -- what more is the U.S. government doing to help troops returning from Iraq with brain trauma injuries -- stick around.

Also, steamy e-mail tells more of the story of an astronaut love triangle that went horribly wrong.

And does Arnold Schwarzenegger hold the keys for certain Republicans to keep control of the White House? A veteran of California and national politics, Jerry Brown, he's here in THE SITUATION ROOM. He opens up about the race to 2008.

We'll be right back.

(COMMERCIAL BREAK)

BLITZER: Now a CNN exclusive, almost four years after the United States led an invasion that toppled Saddam Hussein is Iran, yes Iran, ready to move in and reap enormous benefits? There are signs tonight of a U.S. intelligence setback in Iraq as Tehran tries to take advantage.

Joining us now in Baghdad our correspondent Michael Ware -- Michael, you've been doing some exclusive reporting on this competition between the U.S. and Iranian intelligence services in Iraq. What are you picking up?

MICHAEL WARE, CNN CORRESPONDENT: Well, Wolf, what it's coming down to now is the long-term victory in terms of intelligence here in Iraq. What's at stake, Wolf, is the dominance of the Iraqi intelligence community.

What we're seeing now is the Iraqi government which U.S. military intelligence and Western intelligence claims is heavily dominated by political factions with ties to Iranian intelligence trying to reset the landscape, just as you have in the United States at the CIA, the FBI, the DIA, a myriad of intelligence agencies, so you have here in Iraq, but there's legislation that's about to go before the Iraqi parliament that essentially will gut the CIA's influence here within the Iraqi community.

BLITZER: Who is winning right now, the CIA or the Iranian intelligence community in terms of influencing events in Iraq?

WARE: Right now you would have to argue that it's a tie. Although politically, one would say that Tehran has much more sway here in Baghdad than Washington does. Among the intelligence community, it's still up for grabs.

BLITZER: So you're saying the long-term impact for the U.S. is not good. It is good though for Iran?

WARE: Absolutely, Wolf. What we're seeing is a complete resetting of the landscape and as it stands right now if these laws pass through parliament, a parliament dominated by Iraqi Shia political factions, that Western intelligence claims are linked to Iranian intelligence, then completely Tehran will have the advantage. While America invaded Iraq, removed Saddam, established what it calls a democratic government, and the intelligence apparatus that goes with it, what we are now witnessing, Wolf, is Tehran swooping in and taking over, dominating the entire intelligence landscape under the CIA's watch.

BLITZER: A very disturbing picture you paint. Thanks very much, Michael, for joining us.

WARE: Thank you, Wolf.

BLITZER: Another heavy blow for American troops in Iraq, the United States military announcing today the deaths of at least nine American soldiers in a pair of bombings yesterday north of Baghdad. Four others were wounded. When troops return from the battlefield here in the United States, one of the wounds of war is often hidden.

Let's turn to our Pentagon correspondent, Barbara Starr -- Barbara.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Wolf, the Department of Veterans Affairs says finally it will start screening returning veterans from the war to see if they're suffering from brain injuries.

(BEGIN VIDEOTAPE) STARR (voice-over): Lawmakers at the first congressional hearing on conditions at Walter Reed Army Hospital met Staff Sergeant John Daniel Shannon.

STAFF SERGEANT JOHN SHANNON, WOUNDED IRAQ VETERAN: On November 13, 2004 I suffered a gunshot wound to the head from an AK-47 during a firefight with insurgent forces near Saddam's mosque. The result of that wound was primarily a traumatic brain injury and the loss of my left eye.

STARR: Shannon's loss of vision is apparent, his traumatic brain injury, TBI, is not. TBI is often the invisible wound of this war. Soldiers injured especially in blasts from roadside bombs suffer debilitating brain injuries as blast waves rock delicate brain tissue. Four years into the war for the first time the Department of Veterans Affairs will start screening all returning vets for TBI, asking them if they were ever in an IED attack, if they were ever unconscious. Lawmakers say in order for already stretched military hospitals to treat brain injured troops, there first needs to be a better idea of how many are suffering.

SEN. PATTY MURRAY (D), WASHINGTON: The DOD, Department of Defense, is not recording those injuries. These soldiers may go out, go home and several months later not be able to remember what's happening tomorrow or where they're supposed to be and don't realize it was an impact of one of these IED explosions.

(END VIDEOTAPE)

STARR: The Pentagon says it, too, will start looking more closely at veterans for possible brain injury, that it's already treated about 1,800 troops but Senator Murray and others say the problem is much deeper, that possibly as many as 10 percent of all the troops that have served in the war, about 140,000 in all may be suffering from brain injury problems -- Wolf.

BLITZER: What a horrendous situation, thank you, Barbara for that report.

Still ahead tonight here in THE SITUATION ROOM, those steamy e- mails shedding new light on the case of the NASA astronaut charged with trying to kidnap a romantic rival.

Plus, Democratic Party Chairman Howard Dean weighs in on the "Scooter" Libby case. Does he think the president or the vice president committed a crime? Stick around. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: New developments in that NASA love triangle that has one astronaut charged with attempted kidnapping of a romantic rival. Some of the steamy e-mail messages that may have motivated her are now out.

Let's turn to our national correspondent Susan Candiotti. She's in Miami with details -- Susan.

SUSAN CANDIOTTI, CNN CORRESPONDENT: Wolf, you know that old saying that you never should put anything into a letter you wouldn't want someone else to read? Well these e-mails are now part of the public record.

(BEGIN VIDEOTAPE)

CANDIOTTI (voice-over): It may be freezing outside those shuttle hatches, but inside zero gravity steamy e-mails can keep astronauts warm, will have to control myself when I see you. First urge will be to rip your clothes off, throw you on the ground and love the hell out of you, writes Air Force Captain Colleen Shipman to her lover, astronaut Bill Oefelein.

At the time last December, he was circling earth, piloting the Shuttle Discovery. Oefelein tells Shipman he's quote, "a moron when she's not near". He writes, you must really have me around your finger that I can't even function without you here, and with you here, I am slightly smarter than a slug.

E-mails between Shipman and Oefelein apparently sent romantic rival Lisa Nowak over the edge. Prosecutors say after fellow astronaut Nowak found the love letters on Oefelein's computer, she plotted revenge, a mind-boggling 900-mile cross country drive from NASA headquarters in Houston to Orlando in adult diapers to meet Shipman's plane.

Nowak is charged with trying to kidnap Shipman from an airport parking lot, even though Nowak, a mother of three who is seeking divorce from her husband, downplayed their affair. Oefelein told police he was involved with both women, but told Nowak he wanted to date Shipman exclusively. In this newly released letter from Nowak to Oefelein's mother, Nowak pours out her soul.

Bill is absolutely the best person I've ever known and I live him more than I knew possible.

(END VIDEOTAPE)

CANDIOTTI: Love triangles can be tricky and in this case can put you behind bars. Lisa Nowak has pleaded not guilty, no comment from the two other players who just might be regretting those oh, so personal e-mails sent from outer space and back -- Wolf.

BLITZER: Susan Candiotti reporting for us in Miami. We'll continue to watch this case.

Just ahead, one Democrat says Lewis "Scooter" Libby's conviction is only just the beginning.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Don't forget this is the tip of the iceberg. This is about the president and the vice president trying to discredit people who turned out to be right about the war in Iraq. (END VIDEO CLIP)

BLITZER: Democratic National Committee Chairman Howard Dean says the real casualty in this case is the truth. I'll speak with him.

And they're riding high now, but could presidential campaigns for Hillary Clinton, Barack Obama and among others self-destruct? One prominent California Democrat thinks the answer is yes. The attorney general of California, Jerry Brown, he'll be here in THE SITUATION ROOM. We'll be right back.

(COMMERCIAL BREAK)

BLITZER: To our viewers, you're in THE SITUATION ROOM.

Happening now, in Afghanistan hard core members of the Taliban train, but there's a fierce push against them. It's a NATO-led multinational spring offensive called Operation Achilles and it's designed to root out the Taliban in Afghanistan's southern mountains.

Also happening now, a positive sense of the talks, a sense of optimism -- that's how U.S. Assistant Secretary of State Chris Hill is describing a meeting with his North Korean counterpart. That happened today in New York. It's the first of many planned meetings over North Korea's nuclear program.

And single parenthood and a virus that causes Aids, those topics on the pages of an upcoming book from one of President Bush's twin daughters. Jenna Bush's book will be about a teen mother in Central America living with the Aids virus. It's based on her work as an intern with UNICEF.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

Let's get back to our stop story first -- the guilty verdict for former Cheney aide Lewis "Scooter" Libby in the CIA leak case. It's a scandal that has rocked the Bush administration now for some time, shed new light on the inner-workings of the White House.

Let's go to our White House correspondent Suzanne Malveaux -- Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, you talk to many people inside the White House, they say that "Scooter" Libby is the kind of guy who was well liked. As one person put it, they didn't have the long knives out for Libby. They say today's verdict is demoralizing and they also say it is revealing.

(BEGIN VIDEOTAPE)

MALVEAUX (voice-over): Like the rest of America, President Bush learned of "Scooter" Libby's guilty verdict on TV. The White House's response was predictably not that much.

PERINO: He said that he respected the jury's verdict, that he was saddened for "Scooter" Libby and his family. MALVEAUX: Vice President Cheney issued a statement, saying I am very disappointed with the verdict and said he would not comment further. There's a code of silence here regarding the "Scooter" Libby case, which comes from the very top.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I'm not going to talk about any of it.

UNIDENTIFIED MALE: How about pardon, sir? Many are asking whether you might pardon "Scooter" Libby...

BUSH: Not going to talk about it.

MALVEAUX: Administration officials say their self-imposed gag order comes from the fact there's appeals process and a civil suit that have yet to play out.

But quietly some admit there's the embarrassment factor. When Mr. Bush first ran for president, following Clinton's legal troubles, he pledged under his watch he would bring back good ethics.

BUSH: America wants somebody to restore honor and dignity to the White House. That's what America is looking for.

MALVEAUX: But by September 2003, the Bush White House had become fully embroiled in a criminal CIA leak investigation. In June of 2006, when the highest ranking official, Deputy Chief of Staff Karl Rove, was told he would not face any charges. Many White House insiders felt the administration dodged a bullet. But the investigation did reveal some of the hardball tactics the White House used to discredit it's critics.

Among them, selectively declassifying sensitive information, strategically feeding it to certain reporters. And on at least one occasion lying to then Press Secretary Scott McClellan about the case.

While those tactics were not illegal, they were, at times, heavy- handed and calculating.

(END VIDEO CLIP)

MALVEAUX: Now, Wolf, there is a possibility that President Bush could use his exclusive power to pardon Libby, but White House officials, tonight, saying it's much too early to speculate about that -- Wolf.

BLITZER: All right, Suzanne, thank you.

And the CIA leak figure, former Ambassador Joe Wilson is lashing out at President Bush in the wake of guilty verdicts against Scooter Libby. The husband of outed CIA operative Valerie Plame told reporters, let me quote, specifically, "The president was quoted as saying he was sorry for Mr. Libby and his family. I wish that he would express his sorrow for what has happened to my wife, whose career was destroyed as a consequence of this; and perhaps, also, to the service people of this country who are fighting in a war that now very clearly was justified by lies and disinformation."

The verdict is in, but the saga sure to continue. Already some are warning the president against doing one specific thing.

(BEGIN VIDEOTAPE)

BLITZER: And joining us now from Burlington, Vermont, the former governor of Vermont, the chairman of the Democratic Party, Governor Howard Dean.

Thanks very much for coming in.

HOWARD DEAN, CHAIRMAN, DEMOCRATIC PARTY: Thanks for having me on, Wolf.

BLITZER: You say the president would make a mistake in pardoning Lewis Scooter Libby. Why?

DEAN: Well, that's been done before, as you know, especially around the Iran-Contra times. The problem is that Scooter Libby now has a great incentive to tell what else was going on in the vice president's office. Don't forget this is the tip of the iceberg. This is about the president and the vice president trying to discredit people who turned out to be right about the war in Iraq.

And, they didn't -- Scooter Libby didn't do this all by himself. The best way that the president has to shut Scooter Libby up, before sentencing, is to pardon him. I hope that will not happen. I think we need to find out what really did happen when the CIA gave the president reports that said that -- not to trust some of their sources in Iraq. What really did happen in the vice president's office when the vice president got CIA reports he didn't like? Did he pass them onto the president? Did he withhold them from the president? There's a lot more going on here than just this.

BLITZER: But the special prosecutor, Patrick Fitzgerald says as far as he's concerned the case is closed. He's not pursuing any other leads. He's not pursuing any other investigations. He says he's done for all practical purposes. What makes you think this is the tip of the iceberg?

DEAN: Because we know that the president was not truthful to the American people when he sent us to war. And we know that the politics consumes this administration. Here you have a spectacle of the vice president of the United States circling things in newspaper articles that he didn't like, in order to discredit his foes, while our kids, our young men and women, in Walter Reed hospital are not getting proper medical care.

This administration needs to stop talking about politics and start doing something about the actual problems that are facing the American people, starting with those soldiers in Walter Reed.

BLITZER: But --

DEAN: There's a lot going on in this administration that's about politics and the truth is the casualty in this administration.

BLITZER: It's one thing to talk about politics, but it's another thing to accuse the president -- and/or the vice president -- of actually committing a crime. Are you suggesting either has committed an actual crime?

DEAN: We have no way of knowing what happened. What we do know is, that the president sent us to war, and the facts that he told us, when he was sending us to war, turned out not to be true. We don't know why that happened. I bet Scooter Libby has a pretty good idea how that happened.

BLITZER: But there have been all these presidential commissions, congressional commissions. They've been investigating whether there was any crime, per se. There may have been misjudgments, there may have been mistakes. But it's one thing to say that, it's another thing to say there was a deliberate lie and that the president actually committed a crime?

DEAN: We don't know. As I said before, Wolf, we don't know if the president committed a crime or not. It would be interesting to find that out. What we do know is that the vice president's chief of staff has just been convicted of obstruction of justice and lying. And we do know that happened in conjunction with trying to suppress people who were criticizing the war; people who were in a position to know something about the war.

And we do know that the president of the United States gave false information to the American people in the State of the Union Addresses, and in many other places. And we do know that in fact the 9/11 Commission disputed some of the president's statements. Such as, the idea that Iraq and Saddam Hussein were somehow linked to Al Qaeda.

(CROSS TALK)

BLITZER: So, Governor, Governor, do you want to see a special prosecutor investigate the president and/or the vice president, is that what I'm hearing?

DEAN: No, I didn't say -- you are very good with this, Wolf, but I didn't say any of those things. What I did say is, there is more to come. I think we ought to stay tuned, but I think pardoning Scooter Libby would deprive us of a potential witness at some point.

BLITZER: The president today invoked the name of Osama bin Laden in saying that Democrats, other critics on Capitol Hill, should hold their fire. Let this new strategy in Baghdad and the Al Anbar Province work. Listen to what the president told the American Legion today.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: For the enemy, it's their plan. They're not debating whether the war in Iraq is worth it. Here the words of bin Laden in a message to the American people, just last year. He says of Iraq, "The war is for you, or for us, to win. If we win it, it means you're defeat and disgrace forever."

(END VIDEO CLIP)

BLITZER: All right what do you say about giving the military, giving the president the chance he says they desperately need to win this war.

DEAN: Well, the fact of the matter is the president made a huge mistake in getting us into this war. We didn't have to have this, either you win, or we win. The fact of the matter is the president sent our troops over there without the proper equipment. They are now in Walter Reed hospital without proper care.

BLITZER: But are you concerned the Democrats themselves, and the House and the Senate -- they see it differently. There's no unified Democratic stance on what legislative actions should be taken, if any, to try to curtail the president's hands?

DEAN: Well, we are unified in the fact that we need to get out of Iraq. And we got elected to do that in 2006. The American people disagree with the president. They now see the president's misstatements. And they now see what's going on in Washington. They now see that the president cares more about politics than he does about the soldiers that need to be taken care of when they get home.

We are now going to put a stop to what's going on at Walter Reed hospital. And we are going to put a stop to what's going on in Iraq. We may -- it may be tough for us, because the president is in charge of foreign policy and military policy. We will find a way to get us home from Iraq.

BLITZER: Governor Howard Dean, the chairman of the Democratic Party. Thanks very much for coming in.

DEAN: Thanks, Wolf.

(END VIDEOTAPE)

BLITZER: Still ahead tonight, here in THE SITUATION ROOM, will Republican Governor Arnold Schwarzenegger be able to deliver California to his party in the next presidential election? The former California Governor Jerry Brown thinks that's possible. I'll speak with him.

And the circus at the court. Our Jeanne Moos takes a unique look at today's events in the CIA leak case. You'll want to see this. Stick around, you're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: California usually swings Democratic when it comes to the race for the White House. But with a popular Republican governor in office right now, could a moderate Republican change that trend? I talked about that, and more, with the State's Attorney General Jerry Brown, himself a former governor, and three-time presidential candidate. (BEGIN VIDEOTAPE)

WOLF: Is it possible that Governor Schwarzenegger, who is popular right now in California, as you well know, could help carry that state for a moderate, Republican, let's say Rudy Giuliani, maybe even John McCain in 2008. Is that possible?

JERRY BROWN (D-CA) STATE ATTORNEY GENERAL: Yes, it's possible. How likely? That's not as clear.

But Schwarzenegger is now carving out a path of what he calls post-partisan politics. It's somewhat similar to Governor Earl Warren, who later became the chief justice of the United States. He was beloved by both parties. And Arnold, after some rocky road has figured out a way to go right down the middle.

He has one big ace card and that is the legislature wants to modify term limits. And they only way they can modify term limits is if the majority of people feel good about their performance. So, they're all going to be on their best behavior until the presidential election, when they put on the special term limits. So, I think he's going to be positioned -- now who is going to be -- is Giuliani? Can he present himself?

BLITZER: Do you think Giuliani can get the Republican presidential nomination?

BROWN: I think it's too early to tell. But he certainly would bring that mayoral experience, where you go --

BLITZER: So, he would have a shot in California?

BROWN: I think he would have a shot, yes.

BLITZER: What about John McCain?

BROWN: I think that his position on the war is going to make him very -- I think there will be a lot of people who would be very troubled by that.

BLITZER: And Mitt Romney?

BROWN: Mitt Romney is a completely fresh face. I think some of his more fundamentalist affiliations would make it difficult. But he's certainly -- if you're going to Central Casting, Mitt Romney would be the guy that you would pick.

BLITZER: Let's talk Democratic presidential politics for a moment. Achilles' heel? Do the front runners have an Achilles' heel, for example, Hillary Clinton, right now, what's your sense?

BROWN: I think they do. Having gone through a presidential -- and a gubernatorial and a senatorial campaign, you run out of stuff to say. You get boring. As things get boring, there is a chance -- people start looking for things. The press starts grabbing at you, the extremes in your party pushes you. I think it's a very risky position, the poll position out front.

BLITZER: To be the front-runner right now?

BROWN: To be the front-runner.

BLITZER: So, Hillary is -- Hillary could be in trouble?

BROWN: She is kind of like -- she could be in somewhat of a stall, to try to prevent turbulence. All of these other people are going to creating turbulence.

BLITZER: They're going to be going after her?

BROWN: We've never had a campaign with so many high-profile people so early with 24 hour news, to push it along.

BLITZER: What about Barack Obama? What do you think of this phenomenon?

BROWN: Well, he is exciting. He doesn't have the record. But in many ways that's quite good. Because the more of a record you have, the more they can pick at you. So, that in itself is possible. But then you get the question, "Where's the beef?" -- which they threw at Gary Hart. So each of these candidates have possibilities, have vulnerabilities. And as they go back and forth, a new candidate could emerge.

BLITZER: If you were giving those democrats one piece of advice right now, what would it be, knowing your personal experience seeing the nation's highest office?

BROWN: I would say to Hillary I'd avoid the exposure until later. Barack, he's got to keep coming up. And the other ones, I'd make a mark, start attacking, start making noise, they have to breakthrough. So, each one has a different strategic challenge that they are facing.

BROWN: What about Al Gore?

BROWN: Well, Al Gore is always waiting there. He seems rather reluctant. There is the possibility if Barack and Hillary start weakening themselves in mutual combat. That opens the possibility of these other lower-tier candidates and Al Gore could come in and try to overcome the wreckage, and then present himself as the consensus candidate. That's highly possible, he's well known. He doesn't have to raise a lot of money, he can wait till the very end. Just waiting for some kind of train wreck to precede his entry.

BLITZER: Jerry Brown, the attorney general of California. Thanks, for stopping by THE SITUATION ROOM.

BROWN: Thank you.

BLITZER: We hope you'll come back.

BROWN: I will. (END VIDEOTAPE)

BLITZER: And tonight, fired federal prosecutors making powerful new claims they were let go for political reasons. That issue claims the prosecutors were leaned on by Republicans to rush indictments against Democrats before the November election. Let's get some more from our Congressional Correspondent Dana Bash. She's following the story for us.

Pretty stunning testimony today from one of those prosecutors from New Mexico, Dana.

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: That's right. David Iglesias, Wolf, says that he was fired by the Bush administration for not indicting Democrats in New Mexico. And today he described a phone call he got, at home, 12 days before the November's election, from GOP Senator Pete Domenici; he says it's a call that made him sick.

(BEGIN VIDEOTAPE)

DAVID IGLESIAS, FMR. U.S. ATTORNEY: And he wanted to ask me about corruption matters or the corruption cases that had been widely reported in the local media. I said, all right. And he said are these going to be filed before November? And I said I didn't think so. And to which he replied I'm very sorry to hear that. And then the line went dead.

UNIDENTIFIED MALE: So, in other words, he hung up on you?

IGLESIAS: That's how I took that, yes, sir. I felt leaned on. I felt pressured to get these matters moving.

BASH (voice over): Iglesias described a similar wall from GOP Congresswoman Heather Wilson.

IGLESIAS: She says, what can you tell me about sealed indictments? The second she said, any question about sealed indictments. Red flags went up in my head.

BASH: Both Domenici and Wilson deny pressuring the former New Mexico U.S. attorney. The stunning testimony also included allegations that a top Justice Department official warned one prosecutor, after being quoted in newspaper stories about these emails. He e-mailed fellow fired prosecutors about the call.

JOHN MCKAY, FORMER U.S. ATTORNEY: I felt it was a threat. Felt it was hugely inappropriate coming from a Department of Justice official.

(END VIDEOTAPE)

BASH: The Justice Department is denying anyone tried to pressure, threaten or even silence those fired prosecutors. A spokesman say any suggestion that that call took place is ridiculous and not based on fact. And, Wolf, we tonight got a statement from Senator Domenici responding to those harsh allegations from the former federal prosecutor in his home state of New Mexico. Domenici said he did not mention November's election in their call. He said, quote, I did not pressure him. I asked him a timing question -- Wolf.

BLITZER: Thanks very much, Dana, for that.

Still to come, here, in THE SITUATION ROOM, Libby Mania. CNN's Jeanne Moos has a most unusual take on the trial that's grabbing the headlines. Her report coming up and Jack Cafferty wants to know is another government commission the answer to the problems at the nation's veterans administration hospitals? Jack standing by with the "Cafferty File". And you're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: A disturbing story coming in from Indonesia, the Antara (ph) News Agency now reporting, according to Reuters and AP, that a commercial jet liner from Indonesia state airline, Garuda (ph), crashed and exploded on landing at the Jakarta Airport Wednesday morning.

Antara, the news agency, saying the fuselage was burning, passengers were trapped inside of the plane. We'll stay on top of the story, update you as we get more information as we are in THE SITUATION ROOM

Meantime, let's go to Jack Cafferty in New York -- Jack.

JACK CAFFERTY, CNN ANCHOR, THE SITUATION ROOM: The question is, yet another government commission the answer to problems at the nation's veterans and military hospitals.

A.R. writes in Forth Collins, Colorado: "No. But how about we form a group of concerned citizens composed, say, of veterans families to oversee the VA from the ground up? That means an open review of their finances, their infrastructure, and their operations. With 30 years management experience I'm certain I could affect rapid positive change to an organization that our government apparently disregards."

Mike in California writes: "Donna Shalala can't even lead a two- bit university."

Donna Shalala and Bob Dole are the co-chairs of this commission named by President Bush today.

"Shalala's handling of the UMiami-FIU brawl was appalling. She's obviously more than qualified to be a tool for this administration. The commissioner has already succeeded in one regard, though, it's competing with the Libby verdict for coverage.

Al in Kennedy, California: "Why didn't he announce [Bush] that they're sending clean-up crews and licensed doctors tomorrow to these hospitals? Answer: he doesn't care. Our wounded boys and girls are denied proper care and accommodations while millions of illegal aliens are receiving top-notch care at top-notch at our expense. The damage that Mr. Bush has done to America is unfathomable."

Lauren in Las Vegas -- "No, indeed, the answer is not yet another commission-to-be-ignored, but impeachment of Bush and Cheney."

Robbie in New York: "How about a commission of one? George Bush goes to the facilities himself, uses his eyes and ears, and then orders changes. What's so difficult about that? Can't this president face up to anything by himself?

And Timothy in Minnesota: "Hey, Jack, can you find out when it's my turn to be on a bi-partisan commission? I must be next, and I want to make sure and clear my calendar."

If you didn't see your e-mail here, you can go to cnn.com/cafferty file. Where you can read more of these online -- Wolf.

BLITZER: Thanks, Jack. See you tomorrow.

Let's find out what's coming up at the top of the hour. Paula is standing by.

Hi, Paula.

PAULA ZAHN, CNN ANCHOR, PAULA ZAHN NOW: Hi, Wolf. Thanks.

"Out In The Open" tonight, lots of unanswered questions in the wake of the Scooter Libby verdict. In addition to getting some answers we're going to look at why both Democrats and Republicans are having some big problems with some of their top-tier candidates for president.

Also, a rare look inside of the savage world and why segregating black and Latino prisoners are the only way to save lives in prison. It's all "Out In The Open", coming up at the top of hour. Hope to join us then, Wolf.

BLITZER: Thank you, very disturbing story. Thank you, Paula, for that.

Up ahead, if you like the trial, you may like the movie. CNN's Jeanne Moos takes a closer look at what she calls Libby Mania. Stick around, you're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Let's get some more information on that plane crash in Indonesia. Mary Snow is checking the wires.

What's the latest information, Mary, we're getting?

MARY SNOW, CNN CORRESPONDENT: Wolf, the Associated Press says that airline officials do confirm that a jetliner caught fire on landing in Indonesia. This happened at the Yogyakarta Airport. State news wires saying that it was believed that some people may still be trapped on board. However there's no word on the number of people who are on that plane -- Wolf.

BLITZER: That plane landing at the Yogyakarta Airport in central Indonesia. We'll stay on top of this story. Thank you, Mary.

Let's wrap it up with this, though. Where were you when the Scooter Libby verdict came down? President Bush was in the Oval Office watching it on TV. And for a look at how TV covered the verdict, here's CNN's Jeanne Moos.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT: The defendant, the press, the bulletin, it was just after high noon.

UNIDENTIFIED FEMALE: OK, guilty on count one, guilty on count two.

UNIDENTIFIED MALE: It appears that on all five counts he is, in fact, guilty.

UNIDENTIFIED FEMALE: Not guilty on count three.

UNIDENTIFIED MALE: Just a moment, not guilty on count three.

UNIDENTIFIED MALE: Four out of five counts.

UNIDENTIFIED MALE: Yeah, yeah.

MOOS: So FOX missed a count, who's counting?

UNIDENTIFIED MALE: They're getting ready to bring out that jury!

(SIREN BLAST)

MOOS: But only one juror came out and spoke. He happened to be a former reporter for "The Washington Post". And he gave the impression the jury felt almost guilty about its guilty verdict.

DENIS COLLINS, LIBBY JUROR: There was a tremendous amount of sympathy for Mr. Libby. I mean, he was the fall guy. He was a very sympathetic guy sitting over there. I wish we weren't judging Libby. You know, this sucks.

MOOS: You can bet the defendant agreed with that assessment. Lewis Scooter Libby, scooted by the press, with his wife, without a word.

UNIDENTIFIED FEMALE: I'm sorry, that's very uncomfortable guys.

MOOS: From the jury deliberations room, where they were hold up for 10 days, the jurors had a window view of this hotdog cart.

COLLINS: We lusted after him.

UNIDENTIFIED MALE: How's that dog?

UNIDENTIFIED MALE: Ready man. It's as good as you want it to be.

MOOS: Hey, maybe a little Valerie Flame Hot Sauce would help. And speaking of lunch, this fancy Indian restaurant, the Bombay Club is where Joe Wilson was when his wife Valerie called to tell him the verdict. Wilson is the man the Bush administration allegedly wanted to discredit by leaking his wife's name, at the time a CIA operative.

Warner Brothers pictures is developing a movie based on the couple. Wilson spoke with reporters on a conference call after the verdict.

(On camera): I'm wondering who you would like to play you and your wife, Valerie, in the movie?

(Voice over): In the blogosphere, Sharon Stone is by far most frequently suggested to play Valerie Plame: "a dead ringer" as one e- mail put it.

As for Joe Wilson, suggestions range from George Hamilton to George Clooney. Wilson, himself, would only say who he didn't want.

JOE WILSON, FMR. AMBASSADOR: I would only add that Jack Black, be cast in a role other than that of Joe Wilson.

MOOS: Jeanne Moos, CNN, New York.

(END VIDEOTAPE)

BLITZER: Leave it to Jeanne Moos. Thank you, Jeanne.

Let's go to New York. Paula is standing by with more -- Paula.

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