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THE SITUATION ROOM

Is Homosexuality Biological?; U.S. Attorneys Firings; Donald Trump Interview; U.S. Forces Fire on British Troops Criminal; Trouble in Pakistan; Japan's Prime Minister Denies World War II Sex Slave Claim; Democratic Presidential Candidates on Gays in Military; Civil War Era Documents on eBay

Aired March 16, 2007 - 17:00   ET

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


WOLF BLITZER, HOST: To our viewers, you're in THE SITUATION ROOM.
Happening now, the White House meets its deadline. We're just getting word in from the White House correspondent's office. We're going to bring you the latest on what's going on.

What's behind the firings of those federal prosecutors? Were they onto something that someone in the Bush administration didn't necessarily want them to find out? Why does the White House suddenly say that memories are getting hazy?

We're watching this story.

Also, is there a biological basis to homosexuality that could be reversed in the womb?

A Christian conservative leader raising a new controversy.

And why would Donald Trump have nicer things to say about Saddam Hussein than President Bush?

He's fired up on the Iraq War and he wants U.S. troops out.

(BEGIN VIDEO CLIP)

DONALD TRUMP: You know how they get out?

They get out. That's how they get out. Declare victory and leave.

(END VIDEO CLIP)

BLITZER: I'm Wolf Blitzer and you're in THE SITUATION ROOM.

Who's idea was it to fire federal attorneys?

Today, the White House is backtracking even as Congress investigates a possible political payback.

CNN's Brian Todd is standing by.

Let's go over to the White House. Suzanne Malveaux, though, has got the latest from there.

This is just coming in -- Suzanne, to our viewers what has happened.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, I just spoke to Dana Perino. She's a White House spokeswoman who is giving us the very latest about negotiations between the White House counsel and lawmakers about whether or not White House officials are going to testify in that investigation of the firing of the U.S. attorneys.

I'll read it to you verbatim here. She says that White House Counsel Fred Fielding spoke to the House Judiciary Committee staff today around 2:30. He had told them on Wednesday, March 14th, he'd get back to them by the close of business today with either an answer on the committee's request or to tell them he was not ready to give an answer.

"Given the importance of the issues under consideration and the presidential principles involved, we need more time to resolve them. Mr. Fielding suggested to the committee that he get back together with them on Tuesday."

Wolf, what this means is that essentially they've been negotiating, negotiating for days. They could come up with a number of options. Whether or not they bring these White House officials forward, whether or not they answer a list of questions, but all that still being worked out -- Wolf.

BLITZER: Suzanne, stay -- stand by for a moment.

I want to go to Dana Bash up on Hill.

How is this likely to play on the Hill -- Dana?

DANA BASH, CNN CORRESPONDENT: Well, we already know how it's playing. The Democrats are not happy. I got a call from a spokeswoman from the Democratic chairman of the House Judiciary Committee, John Conyers, with this news that they had just gotten word from the White House that they are not going to get a decision on whether these witnesses, including Karl Rove, will be here.

And we already have a statement, essentially saying that the committee will not be stonewalled or slow walked on this matter. And the chairman is saying that he does intend to schedule a hearing next week in order to vote to issue subpoenas for Karl Rove and others inside the White House if they don't decide to come forward voluntarily.

That's on the House side.

We are waiting for a statement from the Senate Democratic Judiciary Committee chairman Patrick Leahy. But as you well know, Wolf, he already said that -- and already has plans on the docket next Thursday in the Senate Judiciary Committee to vote in order to get authorization to subpoena Karl Rove and others if that's needed. BLITZER: All right, Democrats clearly not happy.

Dana, stand by.

Suzanne, this comes as we've seen a change coming out of the White House, perhaps suggesting that the original explanation, who came up with the idea to begin with, to fire those prosecutors, may not necessarily have been accurate.

MALVEAUX: Well, Wolf, as you know, really, the center of the controversy, whether or not this administration got rid of those U.S. attorneys for political reasons.

But another big part of this controversy, as well, Wolf, as you know, is who do you believe and who do you trust?

(BEGIN VIDEO TAPE)

MALVEAUX (voice-over): Credibility is at the heart of this controversy.

On Tuesday, the White House said it was the president's former counsel, Harriet Miers, who introduced the idea to Karl Rove to fire all the U.S. attorneys -- a prospect he quickly dismissed.

UNIDENTIFIED MALE: His recollection was that that was not a good idea.

MALVEAUX: By Friday, the White House line was this.

QUESTION: Tony, do you now know whether it was Harriet Miers who first brought up the idea of removing all 93 U.S. attorneys?

TONY SNOW, WHITE HOUSE PRESS SECRETARY: Again -- no, I don't.

MALVEAUX: Republican lawmakers say it's that kind of factual fuzziness that has twisted a perfectly legitimate process of removing some U.S. attorneys into a near scandal.

Democrats say these constantly changing explanations for the administration's actions are exactly why they need Rove to tell his story to them, under oath and in public.

SEN. CHARLES SCHUMER (D), NEW YORK: Karl Rove was in the middle of this mess from the beginning.

KARL ROVE, DEPUTY WHITE HOUSE CHIEF OF STAFF: This, to my mind, is a lot of politics. And I understand that's what Congress has the right to play around with and they're going to do it.

MALVEAUX: E-mails that have emerged from the weeks after the 2004 election show Rove and Gonzales involved in discussions about the fate of the U.S. attorneys from the beginning -- even before Gonzales was officially confirmed as attorney general.

There's no wrongdoing in that. But some lawmakers are accusing White House and Justice Department officials of downplaying the roles Rove and Gonzales played since the firings have become so controversial.

ALBERTO GONZALES, ATTORNEY GENERAL OF THE UNITED STATES: Some two years ago, I was made aware that there was a request from the White House as to the possibility of -- of replacing all the United States attorneys. That was immediately rejected by me. I felt that that was a bad idea and it was disruptive.

(END VIDEO TAPE)

MALVEAUX: And, Wolf, why has this turned into such an important case?

It is because it's really considered a test case here. On the Democratic side, lawmakers now have subpoena power. They want to exercise that muscle. And then on the White House side, they want to make sure that they ensure executive privilege and executive power.

So that is why this is turning into something that is so heated and so controversial -- Wolf.

BLITZER: All right, this controversy clearly continuing. The White House failing to deliver a final word on whether or not they'll let some of these officials go up and testify, as requested by Democrats and some Republicans on the Hill.

We're staying on top of this latest development.

Could some of those federal prosecutors have been fired because they were digging into things that someone didn't necessarily want them to uncover?

Let's turn to our Brian Todd.

He's watching that part of the story -- Brian.

BRIAN TODD, CNN CORRESPONDENT: Wolf, we're told that that question could soon become a very important part of this investigation.

(BEGIN VIDEO TAPE)

TODD (voice-over): Congressional sources tell CNN it could become the focus in the investigation of the firings of U.S. attorneys, if there was any political pressure brought to bear on them because they were pursuing sensitive probes of Republican officials.

One of the fired attorneys, Carol Lam, from San Diego, had just overseen a corruption case that led to a guilty plea and prison sentence for Republican Congressman Randy Duke Cunningham. Senators asked Lam last week if her firing had anything to do with the probe.

CAROL LAM, FORMER U.S. ATTORNEY: I did not receive any pressure from the Department of Justice or any intimation that I was being removed because of the Cunningham investigation. TODD: But according to published reports, another investigation spun off from the Cunningham case, targeting Republican Congressman Jerry Lewis of California. Lamb wouldn't comment when we asked her about that. It's unclear whether any investigation is ongoing at this point.

A spokesman for Lewis said only that he's followed the highest standards of conduct and he never contacted the Justice Department or the White House about any of these cases.

The attorney general has said this about the firings of Lamb and her colleagues.

GONZALES: These decisions were not based for political reasons.

TODD: But last fall, the office of another fired U.S. attorney, Paul Charlton, started a preliminary inquiry into another Republican, then Congressman Jim Kolbe of Arizona, related to the Congressional page scandal. And Charlton was asked last week at a House hearing if he'd been investigating Republican Congressman Rick Renzi.

PAUL CHARLTON, FORMER U.S. ATTORNEY: It's our policy to neither confirm or deny whether there's an ongoing investigation of any individual.

TODD: Contacted by CNN, a White House spokesman said the attorneys' dismissals had nothing to do with any particular cases they were pursuing.

(END VIDEO TAPE)

TODD: And on these two attorneys in particular, Justice Department officials and the White House have said that Carol Lam was let go because she did not pursue immigration or gun cases vigorously enough. And in Charlton's case, they say he was asked to pursue some key death penalty cases and he refused -- Wolf.

BLITZER: All right, thanks, Brian, for that.

The former operative outed in the CIA leak case says the Bush administration carelessly and recklessly revealed her identity. Valerie Plame Wilson today told a Congress panel that the news came as a shock.

Listen to this.

(BEGIN VIDEO CLIP)

VALERIE PLAME WILSON, FORMER CIA OPERATIVE: I found out very early in the morning when my husband came in and dropped the newspaper on the bed and said, "He did it." And I quickly turned and read the article and I felt like I had been hit in the gut. I -- it was over in an instant and I immediately thought of my family's safety, the agents and networks that I had worked with and everything goes through your mind in an -- in an instant.

(END VIDEO CLIP)

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

Let's talk a little bit, John, about the political fallout.

She made this dramatic appearance today up on Hill.

JOHN ROBERTS, SENIOR NATIONAL CORRESPONDENT: It was definitely a dramatic appearance. And she was probably the most compelling person to testify before Congress since Fawn Hall did, in 1989 in Iran- Contra.

But you know, Wolf, I can't see that there's a lot of political fallout here. What I think we saw today really was some very high profile testimony under oath that sets the stage for the civil suit that she and her husband, Joe Wilson, have against Dick Cheney, Lewis Libby, Karl Rove and Richard Armitage, who admitted that he was the one who actually let her name go.

I mean just take a look at the way that this unfolded today. She said that she didn't send her husband to Niger. She wasn't the one who put him on that trip, despite what was said by administration officials, despite what was in the Robert Novak column.

So, why did they bring up her name in the first place?

You know, there's a -- there's a possibility here that she could claim that she was unfairly targeted.

She also said that the administration destroyed her cover. So she could claim malicious intent.

She also said she lost her job, she couldn't do work for which she was highly trained. Perhaps there's some compensation issues in there. She could claim injury.

She also suggested laws might be broken because she was covert.

Patrick Fitzgerald, who is the prosecutor, said that her status was classified. So if they were willing to break laws, perhaps they were willing to violate her constitutional rights.

I think it really sort of portrays the administration in a very bad light in terms of where this could go with the civil case, also suggesting that perhaps they jeopardized national security because foreign agents in the future may not want to work with the CIA if they think that their -- their identities could be outed.

BLITZER: But she went one step further. She thought lives may be in danger now, those who had worked with her in a clandestine way, maybe even her own life, if she's been getting death threats. And that's a very serious charge.

ROBERTS: All part of this idea that the administration acted recklessly as it pertains to her. Really, again, I see this not so much political fallout as much as this could potentially influence the civil case. And we'll wait and we'll see how much of this is entered into that civil case.

BLITZER: As we await to see what happens to "Scooter" Libby, too, as far as jail and stuff like that, pardons. Still a lot to go on in this case -- John.

ROBERTS: It's the case that keeps on giving, Wolf.

BLITZER: Thanks...

ROBERTS: That's what's so great about it.

BLITZER: You're right.

John, thank you.

Are terrorists trying to turn school buses into weapons?

A chilling new warning from the FBI today.

Let's get some details from our justice correspondent, Kelli Arena -- Kelli.

KELLI ARENA, CNN JUSTICE CORRESPONDENT: Wolf, the bulletin says that some school districts have reported an unusual increase in the number of foreign nationals seeking school bus driver positions. FBI investigations have revealed that at number of those applicants had connections to or sympathized with known terrorist groups.

Now, it's not saying that they're terrorists, and that's an important distinction.

The bulletin goes on to say that most troublesome were individuals who the FBI reported had expressed an interest in terrorist applications of explosives. And that's important, Wolf, because historically terrorists prefer to use large vehicles to conduct their attacks.

Now, at this point, it's just a concern. The bulletin says that there is no information indicating that these individuals are actually involved in terrorist plots. An FBI spokesman, Richard Kolko, insists that parents and children have nothing to worry about.

He says the bulletin was sent to educate law enforcement about trends that federal authorities are seeing -- Wolf.

BLITZER: What a story.

Thank you, Kelli, for that.

And stay with CNN for the most reliable news about your security.

Jack Cafferty is off today.

Up ahead, Donald Trump gets testy over Iraq.

Listen to this.

(BEGIN VIDEO CLIP)

TRUMP: Saddam Hussein, whether they like him or didn't like him, he hated terrorists. He'd shoot and kill terrorists. When terrorists came into his country -- which he did control and he did dominate -- he would kill terrorists.

Now, it's a breeding ground for terrorists.

(END VIDEO CLIP)

BLITZER: So does he really think Iraq was better off with Saddam Hussein?

My interview with Donald Trump.

That's coming up, more of it.

And the war in Iraq about to enter its fifth year.

Why is the U.S. still sending in reinforcements?

We're at a staging point in Kuwait.

And are babies born gay?

A conservative Christian leader sets off a new controversy suggesting that homosexuality could be reversed in the womb.

Stick around. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Monday marks the start of the fifth year of the U.S.- led invasion of Iraq. Now, a new deployment is underway as U.S. troops get reinforcements.

Our chief national correspondent, John King, is in Kuwait -- John.

KING: Wolf, as Washington wages its daily debate about whether to set a deadline for withdrawing U.S. troops from Iraq and whether what even many Republicans call the president's last chance in Iraq will work, more and more of the reinforcements are arriving here in Kuwait and heading north.

(BEGIN VIDEO TAPE)

KING (voice-over): This desert base is the staging point for the Iraq troop surge. Refurbished Bradley fighting vehicles ready for soldiers heading to Iraq just as the unpopular war reaches the four year mark. Adding troop levels in 2007 is far from what the Bush White House envisioned when it launched the war in March, 2003, and far from what the American people support.

BILL MCINTURFF, REPUBLICAN POLLSTER: They're tired. They want a resolution and they want American troops home. This is a country that has largely come to judgment and the judgment is we've been in Iraq long enough.

GEORGE BUSH, PRESIDENT OF THE UNITED STATES: Major combat operations in Iraq have ended.

KING: When the president made his now infamous "mission accomplished" visit to the USS Abraham Lincoln on May 1, 2003, the U.S. death toll in Iraq stood at 139.

It is more than 3,200 now and a president who already lost Democratic and Independent support for the war is facing increasing opposition within his own party.

MCINTURFF: Today, for the first time, by double digits, Republicans say that they are less confident of success in Iraq. That's a change. That's a shift. And it just tells you that, again, the very difficult job facing the president.

KING: The troops tend to steer clear of the politics. Their immediate concern here is their equipment and those back a second or third time quickly notice the improved armor on these Humvees.

STAFF SGT. CLARENCE CALHOUN, U.S. ARMY: They can see the changes being made and it's also letting us know that the voices are being heard and things are being corrected, you know, from the soldier's standpoint.

KING: But even this progress is not without some controversy.

(END VIDEO TAPE)

KING: The newly arriving troops are getting tanks, Humvees and other equipment from what the Army calls pre-position stocks, designed to be kept in reserve for rapid deployments. Critics in Congress say depleting those stocks for urgent needs in Iraq leaves the Army unprepared should a crisis spring up elsewhere in the world -- Wolf.

BLITZER: All right, John.

John reporting from Kuwait today.

They go behind enemy lines to rescue pilots and crews under fire. Now, an exclusive inside look at how these secretive elite warriors do their job.

CNN's Alex Quade convinced them to share their stories and pictures for the first time.

Here's her look at combat search and rescue. (BEGIN VIDEO TAPE)

ALEX QUADE, CNN CORRESPONDENT (voice-over): When this happens...

UNIDENTIFIED FEMALE: A U.S. helicopter is down.

UNIDENTIFIED MALE: A military helicopter has crashed in the country's southeast side.

QUADE: These U.S. troops are the first to go in.

BARBARA STARR, PENTAGON CORRESPONDENT: There is recovery operation going on.

QUADE: They face the same hostile threat which brought the aircrafts down. They are combat search and rescue men.

UNIDENTIFIED MALE: All of this is geared toward getting back one person.

QUADE: Under fire -- ready for any situation. Like these -- urban rescue.

WHIZZO: I'm right in the middle of an urban area where there is obviously enemy.

QUADE: Whizzo (ph), a back seater in an F15, will soon deploy. Tonight, he plays survivor -- shot down onto a building.

(on camera): Does it bring it any closer to home that, hey, you're going over there?

WHIZZO: It makes me think long and hard about it.

QUADE (voice-over): Jolly (ph) arrives. That's the helicopter team and the P.J.s, or para-rescumen, like Mark.

MARK: If it were easy, everybody would be doing it. When you're looking at a 22,000 pound aircraft hovering within six inches of its position.

QUADE: They could be blown off the roof or, P.J. Kyle says, get shot at.

KYLE: It's very vulnerable. Everyone and their mom is going to come out and they're going to want to, you know, take pot shots at you. And you've got to be fast, you've got to be quick and you've got to be, you know, know what you're doing.

QUADE: The same for water rescue.

UNIDENTIFIED MALE: Who would have thought when we left for the war that we'd be doing water rescues in the desert?

But the P.J.s train for that stuff.

UNIDENTIFIED MALE: Thirty seconds.

QUADE: In a C130, the P.J.s tell me they train constantly based on these war realities.

UNIDENTIFIED MALE: (UNINTELLIGIBLE). So we're good.

NATE: You've got to make sure that no matter what the winds are, you're going to be able to get to the target or to the survivor that you're going after.

QUADE: P.J. Nate explains.

NATE: Five seconds. Green light on.

Errors as low as five to 10 to 15 degrees means that we don't make it. Especially in the water, if we don't make it to the survivor, you know, we can be 100, 200, 300 meters apart and in the middle of a raging storm, you're never going to get to him. You know, that will be the last time you saw him was when you got out of the airplane.

QUADE: So the next time you see this...

BETTY NGUYEN, CNN ANCHOR: We are just getting word into CNN...

NIC ROBERTSON, CNN CORRESPONDENT: Another Marine helicopter, a CH-46, made an emergency landing.

QUADE: ... you'll know why they train for everything.

UNIDENTIFIED MALE: If someone's having their worst day, we need to be having our best day.

QUADE: Combat search and rescue men -- so that others may live.

UNIDENTIFIED MALE: The bottom line is they're coming home.

QUADE: Alex Quade, CNN, Moody Air Force Base, Georgia.

(END VIDEO TAPE)

BLITZER: And beginning Monday, Alex is going to take us inside the world of combat search and rescue all week. You'll be able to see her exclusive series right here in THE SITUATION ROOM.

Coming up, Donald Trump on the war in Iraq.

Listen to this.

(BEGIN VIDEO TAPE)

BLITZER: Who do you blame?

TRUMP: Well, there's only one person you can blame, and that's our current president.

(END VIDEO TAPE)

BLITZER: And he says the president deserves a place in history.

For what?

You're going to have to wait and watch the rest of this interview.

And later, if you're saying winter, what winter?

There's apparently good reason. Learn what scientists really are concerned about this season.

Stick around. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Let's check back with Carol.

She's got a closer look at some other important stories -- hi, Carol.

CAROL COSTELLO, CNN CORRESPONDENT: Hi, Wolf.

Hello to all of you.

Checking the bottom line, another down day on Wall Street. The Dow dropped 49 points, as a drop in oil prices dragged down energy shares. Also, strong consumer price inflation data dented hopes for an interest rate cut any time soon, and that had investors worried.

All three major stocks -- stock indexes ended down for the week.

And another story affecting the bottom line, hundreds of flights to and from the Northeast canceled because of a big winter storm. Many of the cancellations involve airports in New York City. JetBlue canceled more than 200 flights, hoping to avoid a repeat of storm- related problems last month that left thousands of passengers stranded at airports and inside planes for hours and hours.

Back to you -- Wolf.

BLITZER: Carol, thank you.

Federal forecasters are tracking the world's temperatures and they say the numbers tell the story. The National Oceanic and Atmospheric Administration, or NOAA, as it's called, says this is the world's warmest winter on record, despite some powerful seasonal snowstorms, including one in the Northeast today.

The six warmest winters have occurred in the past 20 years. NOAA points to a continuing worldwide warming trend coupled with a moderate El Nino in the Pacific. NOAA says over the past century, global surface temperatures have increased by about a tenth of a degree each decade.

Despite the overall warmth, several parts of the country were blasted by severe snowstorms this winter.

So what's in store for the spring?

Our Internet reporter, Abbi Tatton has more with the government's outlook.

What are they saying -- Abbi.

ABBI TATTON, CNN CORRESPONDENT: Wolf, for December and January, snowfall in the Ohio Valley -- these pictures here from Palmer, Ohio -- that means that right now there's more moisture in the soil and that means there's a greater potential for flooding come the spring.

That's what's out in the recently released spring outlook from NOAA, warning of near-term flooding in portions of the Midwest and the Ohio Valley.

Now, this report looks at April through June. And another thing they're warning of is the drought in the Southwest, a drought that could persist or intensify and spread into parts of Utah and Colorado.

What about the temperature for the spring outlook?

Well, that's much like the winter we've just had and the outlook here, saying warmer than normal across much of the United States -- Wolf.

BLITZER: Abbi, thank you.

Coming up, Donald Trump in his own words, including a few about Washington and President Bush.

(BEGIN VIDEO CLIP)

TRUMP: Everything in Washington has been a lie. He reads 60 books a year. He reads a book a week. That's -- do you think that's -- do you think the president reads a book a week? I don't think so.

He doesn't watch television.

Does anybody really believe that?

(END VIDEO CLIP)

BLITZER: More of my very candid conversation with "The Donald." That's coming up.

Also, prenatal politics -- the next culture battle, this time over gay babies?

Stick around. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: To our viewers, you're in THE SITUATION ROOM and it's happening now. Word that three police officers will be indicted in the shooting of a bridegroom on the morning of his wedding day. New York police fired at least 50 shots at the car the man was riding in.

Also, a motorcade mishap today. President Bush was on his way to Camp David in Maryland when icy roads and one unlucky driver made some scary news.

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

He doesn't want to be president, but if he did, Donald Trump would know what to do about Iraq.

Listen to his advice and his criticism.

(BEGIN VIDEO CLIP)

BLITZER: The war is hovering over politics right now, as it should -- this is the dominant issue, at least right now, of our time. Give us your assessment. Is there a way out?

TRUMP: The war is a total disaster. It's a catastrophe, nothing less. It is such a shame that this took place. In fact, I gained a lot of respect for our current president's father by the fact that he had the sense not to go into Iraq. He won the war and then said, Let's not go the rest of the way. And he turned out to be right.

And Saddam Hussein, whether they liked him or didn't like him, he hated terrorists. He'd shoot and kill terrorists. When terrorists came into his country, which he did control and he did dominate, he would kill terrorists. Now it's a breeding ground for terrorists.

So, look, the war is a total catastrophe.

BLITZER: Who do you blame?

TRUMP: And they have a civil war going over there.

BLITZER: Who do you blame?

TRUMP: Well, there's only one person you can blame, and that's our current president. I mean, obviously Rumsfeld was a disaster, and other people that are giving him advice have been a disaster. And Condoleezza Rice, who's a lovely woman, but she never makes a deal -- she doesn't make deals, she waves. She gets off the plane, she waves, she sits down with some dictator -- 45 degree angle, they do the camera shot. She waves again, she gets back on the plane, she waves -- no deal ever happens.

So, I mean...

BLITZER: You got to close the deal at some point.

TRUMP: Got to make deals. The world is dying to make deals. And we don't have the right people doing it.

BLITZER: The vice president, Dick Cheney.

TRUMP: Well, he's obviously a very hawkish guy on the war. He said the war was going fantastically, just a few months ago. And you know, it's just very sad. I don't know if they're bad people, I don't know what's going on, I just know that they got us into a mess, the likes of which this country has probably never seen. It's one of the great catastrophes of all time.

And perhaps even worse, the rest of the world hates us. You go throughout Europe -- I travel, I do deals all over the world -- the Europeans hate us. You go to Germany; you go to England, you go to places that, you know, we didn't have problems with, they all hate the Americans because of what's happened. We had a chance, after September 11, to be the most popular -- for the first time ever -- to be the most popular nation on earth, and we blew it.

Everybody -- for the first time, people felt sympathy. I'm not saying it's a great thing, to have sympathy, in terms of yourself, but for the first time they felt a sympathy and a love for this country because of what happened. And we blew it.

BLITZER: How does the United States get out of this situation? Is there a way out?

TRUMP: You know how they get out? They get out. That's how they get out. Declare victory and leave. Because I'll tell you, this country is just going to get further bogged down. They're in a civil war over there, Wolf. There's nothing that we're going to be able to do with a civil war.

They are in a major civil war, and it's going to go to Iran, and it's going to go to other countries. They are in the midst of a major civil war, and there's nothing -- and by the way, we're keeping the lid on, a little bit. But the day we leave anyway, it's all going to blow up.

And Saddam Hussein will be a nice person, compared to the man -- and it will be a man, it will not be a woman, that we understand. People say, oh, gee, you didn't give the women a chance -- it will be a man. Compared to the person that takes over for Saddam Hussein, he will be considered a nice person. This guy will be the meanest, the worst guy, and he'll have one thing -- one thing -- he will hate America, and he'll use that to flame.

So, I mean, this is a total catastrophe, and you might as well get out now because you're just wasting time, and lives. You know, nobody talks about the soldiers that are coming back with no arms and no legs. And I saw at Maralago (ph) -- on Mondays, I make Maralago (ph), my club that you know about...

BLITZER: In Palm Beach.

TRUMP: I make that, twice now, on a Monday, I let returning Iraq injured soldiers come to the premises. The most beautiful people I've ever seen, but they're missing arms and legs. They're with their wives, sometimes they're with their girlfriends, and the tears are coming down the faces of these people. I mean, the thousands and maybe hundreds of thousands, and the Iraqis that have been just maimed and killed -- this war is a horrible thing.

Now, President Bush says he's religious, and yet 400,000 people, the way I count it, have died, and probably millions have been badly maimed and injured. What's going on? What's going on? And the day we pull out, it's going to explode. We're keeping the lid on a little bit; it's still a catastrophe. But the day we pull out, because they're in a civil war -- whether we want to admit it or not, they are in a civil war.

BLITZER: What do you think of some of these scandals that are unfolding in Washington right now? As we speak, the attorney general is under fire, Alberto Gonzales -- what do you make of this, as an executive, trying to watch an administration?

TRUMP: Look, everything in Washington has been a lie: weapons of mass destruction -- was a total lie. It was a way of attacking Iraq, which he thought was going to be easy and it turned out to be the exact opposite of easy.

He reads 60 books a year, he reads a book a week -- that's -- do you think that's -- do you think the president reads a book a week? I don't think so.

He doesn't watch television. Now, one thing I know is that, when I'm on television, I watch, or I try. Because you do -- your own ego says, you know, Let's watch, let's see, whether it's good or bad, you want to watch, right? He doesn't watch television. So he's on television, being interviewed by you or somebody else, he doesn't watch. Does anybody really believe that?

Now they're doing this whole scandal with the U.S. attorneys. Now they're finding e-mails, and it's proven to be a lie. Everything's a lie. It's all a big lie.

BLITZER: So what's going to happen?

TRUMP: Well, it depends. If the Democrats get their act together, they're going to have a big victory in a couple of years, and it's going to be interesting to see what happens with this whole thing with the attorney general. It's a very sad situation.

BLITZER: What was your reading of the whole Scooter Libby situation?

TRUMP: Well, I think he probably took a bullet for the administration, but so far the administration hasn't been so loyal to him.

BLITZER: Well, do you think the president will pardon him?

TRUMP: I think he probably will, because otherwise he's going to see some horrible books written by Scooter Libby.

BLITZER: Scooter Libby could wind up in jail, too. I want to get your sense on the economy right now -- the real estate market, specifically. This is a subject you really know well. There are a lot of nervous investors out there, homeowners worried about their mortgages, the stock markets going up and down. What is your assessment of the U.S. economy right now?

TRUMP: Well, the U.S. economy is okay, but very, very fragile. Interest rates have to start being lowered. I think that Alan Greenspan, who is a friend of mine and a great guy, came out last week and he made the statement. But, I believe interest rates are getting too high, and if they're not lowered, your housing markets will really start crashing pretty big. And I think they will be lowered.

Now, as far as the housing market, I think it's OK. It's not terrible, it's not great -- it's OK.. It was great two years ago; now it's fine, it's solid. It's not like in 1990, which was a disaster. I mean, if somebody came in and even looked at a house, it was like considered a major -- forget about buying, it was considered a major victory.

But, I think that the interest rates have to be lowered fairly quickly, and I hope our chairman does that.

(END VIDEOTAPE)

BLITZER: And Donald Trump is taking on yet another new venture, this one, professional wrestling. The outcome could mean, actually, shaving off his famous shock of hair. Listen to this.

(BEGIN VIDEO CLIP)

TRUMP: I never comment about that, but I will tell you this: I don't want to have my hair shaved. I don't want to have my head shaved.

BLITZER: So you're not going to lose -- your wrestler is not going to lose.

TRUMP: I hope I don't lose. I don't know; maybe I'll lose.

BLITZER: (INAUDIBLE).

(END VIDEO CLIP)

BLITZER: In just a few minutes, what lured Donald Trump into the wrestling wring? You're going to want to see this part of the interview. But up ahead, an arch foe of the United States is about to come to New York City. Can the U.S. do anything to prevent it? Zain Verjee is standing by with the answer.

Also, if you knew your unborn baby was gay and there was a prenatal treatment to change that, would you? Mary Snow brings us an explosive issue being raised by a southern Baptist leader. Stick around. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK) BLITZER: A charter member of the so-called axis of evil coming to America? Let's turn to our state department correspondent Zain Verjee -- Zain.

ZAIN VERJEE, CNN STATE DEPT CORRESPONDENT: Wolf, guess who wants to come to America, again? U.S. enemy Iran's President Mahmoud Ahmadinejad.

(BEGIN VIDEOTAPE)

(VOICE-OVER): He's making a grab for the megaphone. Mahmoud Ahmadinejad wants to go back to the United Nations in New York and tell the world why Iran should have a nuclear program. Iran's president has asked for almost 40 visas. The U.S. has to hold its nose and help.

SEAN MCCORMACK, STATE DEPT SPOKESMAN: We are going to make every effort to expedite the processing of the visa applications.

VERJEE: The U.S. is in a tough spot. It's a free speech champion and the host country of the U. N. so it has to accept America haters and stomach their insults.

Nikita Khrushchev pounded the table in dramatic Cold War theater. Fidel Castro condemned what he called U.S. imperialism. Venezuelan leader Hugo Chavez mocked President Bush at the U. N. last year.

PRES HUGO CHAVEZ, VENEZUELA (through translator): Yesterday the devil came here.

VERJEE: And now President Ahmadinejad wants to come. He's within his rights to argue Iran's case at the U. N. since it faces new sanctions by the Security Council. The world wants Iran to stop enriching uranium which could be used for a nuclear bomb. Iran says its programs only to generate electricity. But Iran's flaunting its nuclear policy printing an atomic symbol on its money. The U.S. says reverse course.

MCCORMACK: Wouldn't it be the right moment for President Ahmadinejad to seize the opportunity to say we are going to reach out and take the hand that has been extended to us with the offer of negotiation, because that offer is still open.

(END VIDEOTAPE)

VERJEE: Ahmadinejad has called the sanctions "torn pieces of paper." The State Department says rhetoric like that just doesn't help -- Wolf.

BLITZER: Zain, thank you for that.

Zain Verjee reporting.

They left Iran hoping to find freedom in Canada. But get this, they were stranded for 10 months in a Moscow airport terminal, sleeping on the floor and depending on handouts to eat. Now an Iranian woman and her children have actually made it to Vancouver as the government sponsored -- as government sponsored immigrants, reunited with relatives and ready to start a new life. Good for them.

Up ahead, the ethics of changing the sexual orientation of a fetus. Mary Snow tackles the explosive and controversial issue. That's coming up here in THE SITUATION ROOM.

And later, will this man, this man, you know who he is, actually shave his head? Up next, the Donald on his all important hair. What's going on? More of my interview, that's coming up.

(COMMERCIAL BREAK)

BLITZER: It has become the great debate over homosexuality. Is it a choice are or gay people born that way? A new hypothetical is stirring up the argument, once again. Let's turn to Mary Snow, she's in New York with this story -- Mary.

MARY SNOW, CNN NEWS CORRESPONDENT: Well Wolf, the furor stems from an article written by a southern Baptist leader. In it he raised a provocative questioning involving gays, genetics and god.

(BEGIN VIDEOTAPE)

(voice-over): If you knew your unborn baby was gay and there was a prenatal treatment to change that, would you? Southern Baptist leader Reverend Albert Mohler suggests there could be a biological basis and if there was, he says the Bible would sanction a change in biology, reasoning homosexuality is a sin.

ALBERT MOHLER, SOUTHERN BAPTIST LEADER: I think if you went to Christian parents and said, look, here is a way you can help your child not just to deal with homosexuality in terms of resisting homosexual acts, but actually to have -- to have that entire process reversed, I think most Christian parents would go for it in a heart beat.

SNOW: Gay rights supporters are outraged.

HARRY KNOX, HUMAN RIGHTS CAMPAIGN: Being gay is an immutable, unchangeable gift from god. And to act as if we can throw that gift back by using hormone treatments on fetuses in the womb is just reprehensible.

SNOW: Some eadvantage gel calls are unhappy, too. They say being gay is a choice and a sin that could be overcome by prayer and counseling. Mohler provoked the debate by commenting on research he read about, but admits there is no proof it is credible and experts agree.

ARTHUR CAPLAN, UNIV OF PENN CENTR FOR BIOETHICS: As of today there's no simple mark, no simple test, nothing you could do to say that person is going to become gay.

SNOW: Bioethics expert Arthur Caplan says he wouldn't be surprised if tests in a decade or so could determine the likelihood of someone's sexual orientation. He sees it as dangerous territory and one where firm rules need to be established.

CAPLAN: Are we going to allow doctors, encourage those who do genetic testing to do this kind of thing just because it fits somebody's preference? Somebody's bias? Somebody's bigotry.

(END VIDEOTAPE)

SNOW: The bioethics expert we spoke with adds that the job of medicine is to treat disease and disorder and advocates laws to prevent genetic testing for being used for anything else, such as sexual differences -- Wolf.

BLITZER: All right, thank you for that. Very provocative story. Mary Snow reporting.

Up next, will Donald Trump shave his head? That's right, you heard it correctly. The answer in just a moment. Stick around. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Here say look at some of the shots coming in from our friends at the "Associated Press," pictures likely to be in your hometown newspapers tomorrow.

In Pakistan, journalists seal their lips with tape to protest a police raid of a private television channel. The talk show host Oprah Winfrey dances at the opening of a primary school in south Africa funded by her charity.

In Great Britain, Prince Charles smells flowers at the National Botanical Gardens of Wales during a visit for British tourism week.

And in Japan, check it out, the sumo grand champion throws his opponent to the ground. Some of this hour's hot shots, pictures often worth a thousand words.

He blasted the White House. He weighed in on the presidential candidate -- the candidates, the war in Iraq and the U.S. economy. But the true question on some minds, will Donald Trump be forced to shave his head? Listen to this exchange.

(BEGIN VIDEOTAPE)

I want to button up two issues: the whole Donald Trump and wrestling situation -- what is that all about?

TRUMP: Well, Vince McMahon, who is a tremendous guy, owns the World Wrestling Entertainment, and about six months ago he called me and said, would you get into a fight with me, and would you this and that, and I'm going to shave your head if you lose, et cetera, et cetera. But -- and it's really -- I mean, it's been amazing, the way it's caught on. It's gotten tremendous ratings, tremendous everything -- everything's talking about it. I mean, here you are, talking about it. And if my wrestler loses -- I have a great wrestler, he has a great wrestler, my guy's big and strong, his guy's big and strong. They wrestle on the first of April...

BLITZER: But isn't all that stuff fixed -- professional...

TRUMP: Well, I never comment about that, but I will tell you this: I don't want to have my hair shaved. I don't want to have my head shaved.

BLITZER: So you're not going to lose -- your wrestler is not going to lose.

TRUMP: I hope I don't lose. I don't know; maybe I'll lose.

BLITZER: If your wrestler loses...

TRUMP: But here's the thing, the bottom line, because somebody said, Why did you do it -- although everyone loves it, they said, Why did you do it? Because millions of dollars are going to charity, and when I heard that, what am I going to do, say No, I'm not going to chose a wrestler and stand there for a little while and have millions of dollars not go to charity? So millions of dollars are going to be paid to charity because of what I've done. So, you know, I'm really very happy about it, and it's been fun. For me, it's been fun.

BLITZER: What next for Donald Trump?

TRUMP: Well, I just want to keep doing what I'm doing. I'm having a great time. I'm building all over the world, I'm having a really great time and it's been a lot of fun, and it's always fun to be interviewed by you.

BLITZER: Thanks for doing it.

TRUMP: Thank you. Thank you, Wolf.

(END VIDEOTAPE)

BLITZER: Now let's go to Carol Costello. I don't know if you ever met Donald Trump, but he's a fascinating guy and he doesn't mince any words.

CAROL COSTELLO, CNN NEWS CORRESPONDENT: Well, actually, and Donald if you're listening and I know you are from this interview, please, shave your head.

BLITZER: No, he's not going to do it. You don't like that hairdo?

COSTELLO: No. But I would be interested to see what he looks like with no hair, let's just put it that way. On to serious news now, Wolf.

In the headlines tonight, a coroner's inquest in Britain concludes that a friendly fire attack in Iraq by U.S. forces was unlawful and criminal.

In 2003 a U.S. Tank Buster jet opened fire on what turned out to be a British convoy. A British soldier was killed. The assistant deputy coroner says the incident was avoidable. He criticizes U.S. officials for not giving him all the evidence he requested. A U.S. Defense Department spokesman calls the incident a tragic accident and says the U.S. cooperated with British authorities.

There is trouble in the streets of Pakistan. Police in Islamabad fired rubber bullets and tear gas at a crowd protesting the suspension of the chief justice of Pakistan's Supreme Court. The government also tried to suppress media coverage of a court hearing for him today. He's accused of misusing his power in cases involving terrorism suspects.

Japan's prime minister is sticking to his claim that women were never kidnapped to be sex slaves for Japanese solars in World War II. Despite an irate reaction from the South Korean prime minister, Shinzo Abe, it says a 14-year-old government study found no direct evidence it ever happened. The U.S. envoy to Japan says he believes the women who testified they were forced into prostitution.

And two at the front running Democratic presidential candidates have come out with fresh statements on the issue of gays in the military in reaction to a story that was covered earlier this week. It moved front and center when joint chiefs of staff chair, General Peter Pace, said homosexual acts were immoral.

Senator Hillary Rodham Clinton issued a statement saying, "I have heard from many of my friends in the gay community that my response to a question about homosexuality being immoral sounded evasive. My intention was to focus the conversation on the failed don't ask, don't tell policy. I should have echoed my colleague, Senator John Warner's statement forcefully, stating that homosexuality is not immoral because that is what I believe."

Likewise, Senator Barack Obama of Illinois had this to say. As the "New York Times" reported today, "I do not agree with General Pace that homosexuality is immoral. Attempts to divide people like this have consumed too much of our politics over the past six year years." And there you have it -- Wolf.

BLITZER: I think it's fair to say that report of yours and other reports that generated some excitement among the Democratic presidential frontrunners.

COSTELLO: I don't think they realized how upset the gay community was at their initial comments so they were forced to issue new ones and there you have it.

BLITZER: John Edwards, immediately, when I asked him, if he agrees with General Pace that homosexuality is moral, he said "No, I don't agree with him. I disagree with him." He didn't mince any words, at least on this issue.

Thanks very much, Carol, for that. Why did Civil War era documents from the National Archives show up on eBay? Federal prosecutors say that a National Archives intern actually stole the rare documents and sold them online. Let's check in with our Abbi Tatton once again for this story -- Abbi.

ABBI TATTON, CNN NEWS CORRESPONDENT: Wolf, 165 Civil War era documents, I'm showing you some of them right here, including the War Department's announcement of the death of Abraham Lincoln. Federal prosecutors say that unpaid intern Denning McTague stole some of these documents while working at the National Archives and put them for sale on eBay.

McTague He is listed in court documents as an avid and educated collector. This is his website here, showing him as a purveyor of rare and unusual books, manuscripts and Americana. He was certainly popular on eBay, 100 percent positive rating, although right now, he's listed as no longer a registered user. His attorney tells CNN that he plans to plead guilty to the charge of theft of government property and that he has been cooperating fully with the National Archives in their largely successful efforts to retrieve these materials.

At this stage, all but four of those 165 documents has been returned to the National Archives -- Wolf.

BLITZER: Abbi, thank you. Sunday on CNN's LATE EDITION, we have two important guests coming up: Steven Hadley, the president's National Security advisor will be joining us on this, the fourth anniversary of the war. And anti-war critic Congressman John Murtha. Sunday on LATE EDITION, 11:00 a.m. Easter, the last word in Sunday talk.

That's it for us, this hour. Let's go to LOU DOBBS TONIGHT. Tonight, Kitty Pilgrim is sitting in for Lou tonight -- Kitty.

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