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Soaring Oil Prices; Copperfield Raid; Bhutto Assassination Attempt

Aired October 19, 2007 - 17:00   ET

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


CAFFERTY: Connor in Pennsylvania: "Yes, we should make the Darfur crisis a priority. But as we have seen with how our government reacted to the Armenian genocide that happened in World War I, we'll have to wait almost a hundred years until after the Darfur crisis is over until our government actually does something."
Tony in Florida writes: "We have no business in Darfur. Let the rest of the U.N. Deal with that. If the international community wants our help, they can help us in Iraq."

And Joe writes from Alabama: "Are we nuts? Americans want to get involved in yet another civil war? Vietnam and Iraq ought to be enough to last us for a century or two." -- Wolf.

BLITZER: Thanks, King Middle School.

We'll see you in a few moments.

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

Happening now, the severed head of a suicide bomber -- Pakistani investigators hoping it will show who's behind the deadly blast apparently targeting the former prime minister, Benazir Bhutto.

Is al Qaeda behind an attempt on her life?

Also, the magician, David Copperfield, now the subject of an FBI raid. Wait until you hear what officials found in a storage space in Vegas.

And for the first time ever, oil prices now climbing above $90 a barrel. That news helped send stocks plunging on Wall Street.

Is the worst still to come?

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

The State Department now says there's "a strong connection al Qaeda in the apparent assassination attempt on the former Pakistani prime minister, Benazir Bhutto. The death toll from the suicide car bombing that marred her return from exile now stands at 136 people dead. And investigators are examining just the head of the suspected bomber, hoping to identify him.

Let's go straight to our State Department correspondent, Zain Verjee.

She is watching this for us -- so I take it officials there, Zain, are pointing their fingers at Al Qaeda.

ZAIN VERJEE, CNN STATE DEPARTMENT CORRESPONDENT: Yes, Wolf, they are, but not with all certainty because there's no smoking gun.

(BEGIN VIDEO TAPE)

VERJEE (voice-over): She's still standing -- defiant after extremists tried to kill her.

BENAZIR BHUTTO, FORMER PAKISTANI PRIME MINISTER: This was a dastardly and cowardly attack.

VERJEE: Her tough talk against terrorism made former Prime Minister Benazir Bhutto a target even before she touched down in Pakistan. State Department officials say it's still too early to know for sure, but the attacks appear to bear the hallmarks of Al Qaeda -- a prime suspect. The simultaneous attacks, officials say, are chilling because they show extremists are still free to operate in Pakistan. One of the U.S.' biggest fears is that the terrorists could wrestle control over the country's nuclear weapons and the latest attacks may threaten stability and U.S. hopes for a free and fair election.

TOM CASEY, STATE DEPARTMENT SPOKESMAN: We do not wish to see any actions take place that would undermine the democratic process in Pakistan.

VERJEE: Terrorists failed and tried to kill Musharraf, too. Now that Bhutto is in the same line of fire, the U.S. hopes the foes will join forces to fight a common enemy.

(END VIDEO TAPE)

VERJEE: Pakistan's ambassador to the United States says that this attack has really had the opposite effect that the terrorists wanted.

What it's done, he says, is that it's galvanized both sides to work together -- Wolf.

BLITZER: How hard it is going to be for Benazir Bhutto now to move around Pakistan -- Zain?

VERJEE: Well, a lot of people have been asking that. She's saying that this isn't going to change anything. She is going to continue campaigning as planned. But a lot of analysts are saying that that's going to be a lot harder now and it could undermine the idea of having that free and fair election that the U.S. has been pushing for so hard in Pakistan -- Wolf.

BLITZER: All right, Zain.

Zain will stay on top of this story for us.

Thanks very much. Closer to home, House Speaker Nancy Pelosi wrapping up what many people say was a very, very bad week for her after setbacks on key legislation.

Our Congressional correspondent, Jessica Yellin, is standing by.

She's watching this story for us.

How serious of a setback was this week for the speaker -- Jessica?

JESSICA YELLIN, CNN CORRESPONDENT: Well, Wolf, it was serious, but not fatal. Nancy Pelosi has demonstrated that running Congress is not easy.

(BEGIN VIDEO TAPE)

YELLIN (voice-over): Nancy Pelosi suffered so many setbacks this week, gleeful Republicans are joking someone should give the Democrats an Alka Seltzer. The first punch was the Armenian genocide resolution.

REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE: There is reason to bring this to the floor.

YELLIN: But she's backing off that promise after Democratic support fell away.

REP. JOHN MURTHA (D), PENNSYLVANIA: If it were to run today, it wouldn't pass.

YELLIN: Blow number two -- Democratic leaders yanked the wiretap bill after Republicans pulled a procedural maneuver that made it seem like the bill would protect Osama bin Laden.

UNIDENTIFIED MALE: We're going to bring it back. We think it's an excellent bill.

YELLIN: Then there's the children's health insurance program.

PELOSI: In the next two weeks we intend to send the president another bill.

YELLIN: Though Pelosi insists yesterday's failure to overcome the president's veto will eventually turn into a win, she did not deliver it this week.

NORMAN ORNSTEIN, AMERICAN ENTERPRISE INSTITUTE: There are some lessons to learn from this about when you schedule things, about how much you look ahead to a train wreck that might happen, about how you frame an agenda.

YELLIN: The speaker insists these are not unusually hard knocks.

PELOSI: No, this is the legislative process.

YELLIN: And her aides maintain Democrats will eventually win on the wiretap and children's health insurance bills.

Her opponents are pouncing.

REP. JOHN BOEHNER (R-OH), MINORITY LEADER: Running the House is a difficult job. But trying to run it yourself is an impossible job.

YELLIN: But Congressional watchers say no one won this week.

ORNSTEIN: It hasn't exactly been a banner week for Congressional Republicans or for the president. The president was forced pretty much into a press conference to say I'm still relevant here -- not a position any president particularly wants to be in.

(END VIDEO TAPE)

YELLIN: And with Congressional approval even lower than the president's, there is clearly pressure to produce some accomplishments here. Bottom line -- this is not where Democrats would like to be a year after they took control of Congress -- Wolf.

BLITZER: Thanks very much.

Jessica Yellin watching all of this on the Hill.

Jack Cafferty is watching all of this in New York for The Cafferty File.

You're watching a lot of stuff -- Jack.

CAFFERTY: Yes, well I've been -- none of them are very relevant based on their performance here lately.

Thanks, Wolf.

Some very troubling statistics about our troops. There has been a sharp increase in the number of Iraq and Afghanistan war veterans who seek treatment now for Post-Traumatic Stress Disorder. "USA Today" -- a great front page piece they did today. The total number of health cases among war veterans grew from almost 64,000 in June of 2006 to more than 100,000 one year later. And when it comes to Post-Traumatic Stress Disorder cases, that number grew from about 29,000 to more than 48,000 in one year -- an increase of almost 70 percent.

In fact, mental health is now the number two injury returning Iraq War veterans are seeking treatment for. It follows orthopedic problems, but is increasing at a much faster rate.

Mental health issues include PTSD, as well as drug and alcohol dependency and depression. Some experts say that troops tend to ignore, hide or fail to recognize these wounds until after their military service is over.

The Department says it has gradually increased the number of mental health specialists by 4,000, to almost 11,000, as it sees the need for such treatment growing.

So the question is this -- what does it say about the conflict in Iraq when the number two injury among U.S. troops is mental illness?

E-mail your thoughts on that to caffertyfile@CNN.com or go to CNN.com/caffertyfile.

Very troubling stuff -- Wolf.

BLITZER: It's an enormous strain on these men and women who serve over there -- 160,000 -- maybe more right now. Every single day they have an enormous amount of pressure on them. They're worried about their lives.

CAFFERTY: And the tours...

BLITZER: So they don't want -- CAFFERTY: And the tours keep expanding, too. Now there's sort of -- the combat tours are 15 months, which is, I think, probably unreasonable to expect someone to be able to hold up for that length of time.

BLITZER: And some of these troops are now back for their not only second, but third tour of duty there.

CAFFERTY: Yes. Yes.

BLITZER: So it's really a tough, a tough challenge for all of us.

Thanks very much.

CAFFERTY: Indeed.

BLITZER: Especially for the troops, obviously.

Up ahead, a suspected child molester nabbed after a three year worldwide manhunt. We're going to show you the concern investigators may have given other predators now a new advantage in the process. We'll tell you what happened.

Also, a mystery surrounding the magician David Copperfield.

What are the allegations that prompted an FBI raid on his warehouse in Las Vegas?

And Mitt Romney's Evangelical challenge -- can the Mormon candidate convince conservative Christians that he's one of them?

Stay with us.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: A suspected pedophile nabbed in Thailand after a three year international manhunt. A Canadian schoolteacher named Christopher Paul Neil is suspected of using young boys in Asia and posting pictures of all of that on the Internet.

But did investigators in this very high profile case tip their hand, possibly giving other child molesters a new advantage?

Let's go right to our justice correspondent, Kelli Arena.

She's watching this story for us -- explain this deep concern you're learning about, Kelli.

What's going on?

KELLI ARENA, CNN JUSTICE CORRESPONDENT: Well, Wolf, there was a lot of attention paid to how investigators were able to unmask this alleged pedophile. And it's definitely a story worth telling -- if only we could keep other pedophiles from hearing it.

(BEGIN VIDEO TAPE)

ARENA (voice-over): The man who had been unmasked by technology tried to hide his face again today under a shirt as he arrived at Thai police headquarters.

For years, they allege, Christopher Paul Neil's pictures were seen on the Internet, sexually abusing children -- his identity protected by an electronic swirl. But specialists in Germany working with Interpol were able to untwist the images and his picture was made public.

UNIDENTIFIED FEMALE: We have tried every line of investigation to track this man down. So this was the last straw, to put it that way, to put his image out to the public.

ARENA: By any definition, a success -- an alleged pedophile is off the street. But there's a cost. Interpol has never detailed exactly how the photos were reconstructed, but law enforcement experts say that just knowing the police could do it could compromise future investigations. They say Interpol could have just released the photo without explaining how they got it.

Mike Rolince is a former senior FBI official.

MIKE ROLINCE, BOOZ ALLEN HAMILTON: By planting a seed that you have reversed engineered, if you will, someone else's technological advancement, it just tells them, OK, they're onto me, what can I now do to stay one step ahead of them the next time?

And that's where you don't want to go.

ARENA: It's a technological race that law enforcement officers short on resources, technology and time too often loose. So when police do get a half step ahead, it's important to keep the advantage -- especially as victims are getting younger and abusers more violent.

MICHELLE COLLINS, NATIONAL CENTER FOR MISSING & EXPLOITED CHILDREN: We actually have seen live broadcasts of children being molested. These offenders actually are using this technology to push each other into doing things that they may or may not have done before.

ARENA: In this case, Interpol says the suspect is seen in about 200 photographs sexually abusing 12 different young males.

(END VIDEO TAPE)

ARENA: Now that pedophiles know that the cops can decode the swirl, they'll be looking for a new technological mask that the cops can't crack -- Wolf.

BLITZER: Kelli, thanks very much.

Kelli Arena.

A fascinating story.

David Copperfield is in the business of illusions. But Las Vegas police and the FBI are apparently on the hunt for some very real evidence.

The question is this -- what were they looking for when they raided a Las Vegas warehouse?

Let's go right to CNN's Brian Todd.

He's following this mystery for us.

What's going on -- Brian?

BRIAN TODD, CNN CORRESPONDENT: Well, Wolf, local and federal officials are, at the moment, being very protective of the information they have. But a curious FBI raid and what appears to be a serious allegation are giving David Copperfield some attention he doesn't want.

(BEGIN VIDEO TAPE)

DAVID COPPERFIELD, ILLUSIONIST: I used to vanish this way every night -- twice a night.

TODD (voice-over): A superstar illusionist under scrutiny from local and federal law enforcement. Seattle police tell CNN a woman filed a police report over the summer, making an accusation against David Copperfield. Police would not say what the accusation was, but they termed the incident serious and referred to the woman as an alleged victim.

Seattle police say the reported incident took place in the Bahamas. A top Bahamian police official told us there's no official record there of any incident involving Copperfield.

FBI officials tell CNN federal agents from Seattle and Las Vegas raided a Las Vegas warehouse owned by Copperfield this week.

CNN affiliate KLAS, citing a source close to the investigation, reports the agents took a computer hard drive and a memory chip from a digital camera system, along with $2 million in cash that was inside a safe. KENT ALEXANDER, FORMER U.S. ATTORNEY: Federal authorities have to be really careful, and it looks like they are being careful. If there is no charge against David Copperfield and to, you know, sully his name or image with rumors and innuendo would be absolutely unfair.

TODD: Copperfield's attorney says his side is in touch with investigators and adds: "Unfortunately, false allegations are all too often made against famous individuals. But we are confident the investigation will conclude favorably."

(END VIDEO TAPE)

TODD: Another note on the investigation -- KLAS, the CNN affiliate in Las Vegas, reports the FBI told the station that agents also went to the MGM Grand Hotel in that city, where Copperfield performs. But KLAS quotes the FBI as saying the hotel was not the target of that visit.

The MGM Grand has not returned our phone calls -- Wolf.

BLITZER: He potentially has an enormous amount of stuff to lose here in this whole investigation -- Brian.

TODD: He could. According to "Forbes" magazine, he made $57 million in 2005. The same amount the year before. He has a few big endorsement deals, as well. One editor of a national entertainment magazine told us a huge part of his success is a large fan base made up of families. So even if he is cleared by law enforcement, these allegations could hurt his career.

BLITZER: Thanks very much.

Brian Todd reporting for us.

Up ahead, a Nobel Prize winning scientist is caught in a scandal after he apparently made some racist remarks. Why people on both sides of the Atlantic are demanding an apology.

And the Air Force now explaining how exactly live nuclear bombs were accidentally flown across the United States.

Stay with us.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: His British book tour canceled. His research position suspended. And scientists on both sides of the Atlantic up in arms right now over comments quoted from the biologist and Nobel laureate, James Watson, suggesting that black people are less intelligent than whites.

Let's go right to CNN's Mary Snow.

She's watching this story for us. What is the latest on this very, very controversial story?

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, Dr. Watson has left the U.K. He's returned here to the U.S. to deal with the controversy. And the lab where he works here in New York, Cold Spring Harbor Laboratory, has suspended him.

(BEGIN VIDEO TAPE)

SNOW (voice-over): Dr. James Watson has been called the godfather of DNA. But the Nobel Prize winning scientist is now at the center of a racial controversy for suggesting black people are not as intelligent as whites.

Watson says he's sorry and that his comments were misconstrued.

But it hasn't quelled the outrage among fellow scientists.

HENRY KELLY, PRESIDENT, FEDERATION OF AMERICAN SCIENTISTS: This is really one of the icons of American science and it's extremely painful to have to have a conversation like this about it.

SNOW: Watson sparked a furor when the U.K.'s "The Sunday Times" quoted him saying: "I'm inherently gloomy about the prospect of Africa," adding: "All our social policies are based on the fact that their intelligence is the same as ours, whereas all the testing says not really."

And that wasn't all. Watson was quoted as saying he hopes everyone is equal, but "people who have to deal with black employees find that's not true."

Watson says he was misquoted.

But "The Sunday Times" tells CNN its taped interview with Watson supports the quotes used.

The London Science Museum canceled an event with Watson and at least one U.K. organization demanded he retract his words.

KOKU ADOMDZA, DIRECTOR, 1990 TRUST: We call on him to actually give an unqualified and unresolved apology to Africa and all descendants of African heritage.

SNOW: Watson apologized, saying: "To all those who have drawn the inference from my words that Africa as a continent is somehow genetically inferior, I can only apologize unreservedly. That is not what I meant. More importantly, from my point of view, there is no scientific basis for such a belief."

But some scientists say the apology doesn't go far enough.

KELLY: He really hasn't rebutted the notion that people of color have lower intelligence -- whatever that statement meant.

(END VIDEO TAPE) SNOW: Now, Watson is no stranger to controversy. In 2000, he suggested there might be a link between skin color and sexual prowess and he defended his idea that women should be able to abort babies if tests show the babies are gay.

And, Wolf, we did call Dr. Watson's home, but he declined comment.

BLITZER: So what -- what happens next in this -- this whole uproar?

SNOW: Well, the board at Cold Springs Laboratory has more than 30 members and they say they are immersed in the situation and they are right now deliberating, doing their due diligence, they say, and they'll decide his fate and whether he'll be gone permanently.

BLITZER: Thank you very much,

Mary Snow, for that story.

By the way, James Watson isn't the first Nobel Prize winner to make racially charged comments.

William Shockley won the 1956 prize for physics for inventing the transistor -- a device controlling the flow of an electrical current. He's better remembered for his theories on genetics. Shockley often faced protesters for saying that African-Americans were of lower intelligence than Caucasians. He also suggested that people with low I.Q.s should be voluntarily sterilized. Shockley is the only laureate to reveal publicly that he had donated to the so-called Nobel sperm bank.

Up next, Republican presidential candidates make a full court press, trying to impress Christian conservatives.

But do so-called values voters like what they're seeing?

And the verdict is in for Saddam Hussein's former jailer. A U.S. military commander accused of aiding the enemy. You're going to find out how his court-martial ended.

That and a lot more coming up right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

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

Happening now, President Bush sets out to punish the rulers of Myanmar, also known as Burma, for their violent crackdown on pro- democracy protesters. For the second time in two months, the president today announcing new economic penalties. He says the U.S. is freezing more financial assets and tightening controls on exports.

The commander of Saddam Hussein's last prison in Baghdad is acquitted of charges he aided the enemy. U.S. Army Lieutenant Colonel William Steele had been accused of giving an unmonitored cell phone to one of his inmates. If convicted, he could have gotten a life sentence. He was found guilty of three lesser charges.

And a Food and Drug Administration panel said over-the-counter cold and cough medicines should not be given to children under the age of six. The advisory committee's recommendation was released today.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

The U.S. Air Force is offering an explanation of how live nuclear missiles were accidentally flown across the United States, citing what it calls -- and I'm quoting now -- "an unprecedented string of procedural error."

Let's go to our senior Pentagon correspondent, Jamie McIntyre.

He's watching this story for us -- so, Jamie, what was the string of errors?

JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT: Wolf, you know from your days as a Pentagon correspondent that if you asked about an incident involving nuclear weapons, you got a standard response -- the U.S. can either confirm nor deny the existence of nuclear weapons in that incident.

And there was a remarkable news conference today at the Pentagon where the Air Force secretary, Mike Wynne, said he was giving a one time exception to that rule to discuss how this unacceptable mistake, he called it, happened that allowed the weapons to fly aboard a B-52 bomber from Minot, North Dakota to Barksdale, Louisiana.

They cited five separate cases where the airmen at the bases did not follow standard Air Force procedure -- everything from not preparing and inspecting the weapons before they were loaded onto the plane, to not inspecting them when they were on the plane.

The Air Force says it's taken a number of steps to make sure that this can't happen again, including they have decommissioned the 5th Bomb Wing from its wartime role. They have relieved the commanders and other officers of command. They are instituting new procedures.

But, again, even with all of that, Mike Wynne, the Air Force secretary said that will make -- reduce the chances to a minimum that this could happen again. They couldn't guarantee it would never happen again because it was never supposed to happen this time -- Wolf.

BLITZER: Jamie, thanks very much.

Jamie McIntyre at the Pentagon.

The stage could be set for Turkish troops to actually invade Iraq, with Turkey's parliament now having approved cross borders targeting Kurdish separatists -- a move that could drastically complicate the war in Iraq. Enormous ramifications for the United States at play right now.

Joining us to talk about it, the visiting Iraqi deputy prime minister,

Barham Salah.

Minister, thanks very much for coming in.

Among other things, you, yourself are an Iraqi Kurd. So you know what's going on up north.

How worried are you that Turkish troops -- and thousands of them are massed along the border with Iraq -- might start to cross in looking for these PKK terrorists, as they're called?

BARHAM SALAH, IRAQI DEPUTY PRIME MINISTER: We're monitoring the situation and we are very concerned about these events across the border. We have reminded our Turkish neighbors that unilateral military action will cause irreparable damage to our bilateral relations. There are security problems along the border. We need to deal with those through established protocols of security between Iraq and Turkey. Unilateral action by Turkey will set the precedents for other neighbors to intervene, and we'll destabilize Iraq. It will not be good for Iraq, nor for Turkey.

BLITZER: Here's what the Turkish prime minister said on Tuesday. I'll read it to you: "Turkey has reached the end of its patience with those who encourage, support and protect the rebels. Turkey has reached the point of self-defense in the struggle against terrorism." You don't deny that these PKK elements are crossing the border, going into Turkey, killing Turkish troops?

SALAH: There are PKK elements within the borders of Turkey, and the PKK issue is one that has been going back for almost two decades. And if there were a military solution, the Turkish military would have dealt with it within its borders.

We do not deny that there is a problem along the border. We, as a government of Iraq, including the Kurdistan Regional Government, are committed to preventing any hostile acts emanating from Iraqi territory against our neighbor, Turkey. Turkey is our neighbor. We both share a lot of interests. We need to work this program together. Again, unilateral action will only make matters worse.

BLITZER: Because there are no significant numbers of U.S. troops in the Kurdish areas along the border with Turkey. What they're saying, the Turkish government and others, is that you, the Iraqis, especially the Iraqi Kurds, you have to get tough with these guys and arrest them or stop them from infiltrating and potentially causing a real war between Turkey and Iraq.

SALAH: Well, we have, over the past year or so, the government of Iraq, with the help of the Kurdistan Regional Government, have been working to close down offices of the PKK. We clamped down on the certain activities that were going on in a refugee camp, and a whole host of other measures that we've done.

And I want also to reaffirm that the government of Iraq and Turkey signed a joint security protocol only about a month ago. This is the place where this issue could be dealt with. And we also have a tripartite commission between Iraq, Turkey and the United States, where we can settle this matter and deal with it effectively. Unilateral action, military action, violation of Iraqi sovereignty will be detrimental to Iraqi stability, but it will also be detrimental to Turkish interests. And we must work this issue as two good neighbors committed to peace and common interests.

BLITZER: Are you going to be going to Turkey for this meeting, this regional meeting. The secretary of state, Condoleezza Rice, will be there. The neighbors of Iraq, presumably, are going to be there. Will Iraq be there, given the tensions with Turkey right now?

SALAH: Iraq will be there. Iraq will be represented at the very senior level. Our foreign minister will be there. And he told me an interesting irony. This conference is going to convene on the premise of the neighbors respecting Iraqi sovereignty. It will be quite an irony if Turkey were to invade Iraq at a time when it is planning to host neighbors to tell them not to interfere in the domestic affairs of Iraq.

Again, Turkey is an important neighbor of Iraq. We understand the legitimate concerns of Turkey about the security of the borders. This is our problem, too, as well. We can work it out together, not through unilateral military actions that will violate Iraqi sovereignty.

BLITZER: Some have suggested that the debate in the U.S. House of Representatives over a resolution that would condemn the Ottoman Turks for what they call, quote, "genocide" of the Armenians, that that may have exacerbated the tensions between Turkey and Kurdistan right now, the Kurdish area in the north, that the Turkish were, in part, reacting to what's happening here on Capitol Hill. Are you among those who accept that interpretation?

SALAH: I don't want to engage in speculations and analysis beyond what I see on the ground. What I see on the ground is cause for concern. We are seeing troops being massed across our borders, and we are seeing threats emanating from Ankara, foreign invasion, violating our sovereignty. We tell our neighbor Turks that this will not be good for them and not good for Iraq.

BLITZER: Yesterday, there was a front page story in the "New York Times" noting that your government, the Iraqi government, was about to conclude a $1.1 billion deal with Iran and with China to build electrical power stations in Iraq. And there was -- we got a ton of e-mail from our viewers, Minister, saying this is the United States, we've helped Iraq liberate Iraq, hundreds of billions of dollars spent, thousands of Americans lost their lives. Why are you giving this contract to Iran and China, as opposed to seeking U.S. firms that could help Iraq?

SALAH: I left Baghdad about a week ago. At the time, there was no such talk coming. I know that there are many companies, Chinese and other companies, that are interested in investment in the energy sector in Iraq. We want to encourage investment, but we would be looking at investment based on competitive deals. And obviously our liberators, principally the United States, have a lot to offer Iraq, and Iraq has a lot to offer by way of economic operation between the two countries.

BLITZER: All right, let me get this other point. Mowaffak al- Rubaie, the national security adviser in Baghdad, he told our Jim Clancy just yesterday when he was asked about permanent U.S. military bases in Iraq. And I want you to listen to what Mowaffak al-Rubaie said.

(BEGIN VIDEO CLIP)

MOWAFFAK AL-RUBAIE, IRAQI NATIONAL SECURITY ADVISER: The people of Iraq, the parliament, the council of representatives, and the government of Iraq, they all say, "No, big, fat no, n-o for the bases in Iraq." No military bases for Iraq, because we believe that is direct encroachment to our sovereignty.

(END VIDEO CLIP)

BLITZER: Is he right, Mowaffak al-Rubaie, that there should be no permanent U.S. military bases in Iraq?

SALAH: The five most senior leaders of Iraq have recently announced they seek, they will seek to negotiate a long-term arrangement with the United States, security arrangement. We believe that we will need the support of the United States and the international community for some time in order to defeat the threat of terrorism, and as well as to protect Iraq from regional predators.

We are engaged, as we speak, in working out and developing plans for this long-term security relationship. Exactly how this will come out will depend on both the Iraqi side, as well as the United States, but this is too premature to talk about.

BLITZER: So what I hear you saying is you don't necessarily agree with Mowaffak al-Rubaie?

SALAH: I think this issue is still before us. And Iraq will need -- and this is not Barham Salah speaking, this is the five most senior leaders of Iraq in their public statement about two months ago, announcing their commitment to negotiating a long-term security arrangement with the United States. Iraq needs that in order to defeat the threat of terrorism, as well as to protecting sovereignty against the regional predators.

BLITZER: It's interesting you say that, because when I interviewed President Jalal Talabani the other day when he was here in Washington, he also suggested maybe in the long run the Iraqis will need a U.S. military presence in the north, one in the center part of the country, and one in the south, but he was just raising that possibility.

SALAH: Iraq is an interesting place. It's no longer rule by one man, and this will be an important subject that will be debated. And Iraqi political leaders in our parliament and Iraqis will come to the right decision, based on our own national interests and collaboration with our allies in the United States and in Europe.

BLITZER: Barham Salah is the deputy prime minister of Iraq. Mr. Minister, thanks for coming in.

SALAH: Thank you, sir.

BLITZER: Good luck to you.

A question of faith or a question of values. With Mitt Romney in the presidential race, for the first time there's the prospect of a Mormon in the Oval Office. Actually, his father was once seeking that run, as well, but we're going to take a closer look at how Mitt Romney's faith might influence his work in the White House.

And just in time for winter, crude oil prices gushing into unchartered territory. What caused it? And how is it going to hit your wallet? The price went up to $90 a barrel today; that's a record. When will it hit $100? Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: By the way, you may have noticed something a little different at the bottom of your screen. The CNN logo in the lower left corner has actually turned green. That coincides with the premiere of "Planet in Peril," a special report from Anderson Cooper, with Dr. Sanjay Gupta and Animal Planet's Jeff Corwin. That airs Tuesday and Wednesday, 9:00 p.m. Eastern. That's why the little CNN logo is green.

Thousands of conservative Christian activists are now here in Washington for what they're calling a Values Voters Conference. And they're being courted by Republican presidential candidates, including John McCain, Fred Thompson, and Mitt Romney. We're going to have more on the conference in a moment.

But, first, Romney's appearance is, once again, raising the question that's dogging him in his campaign: Is America now ready for a Mormon president? Our national correspondent Gary Tuchman has more.

(BEGIN VIDEOTAPE)

GARY TUCHMAN, CNN CORRESPONDENT (voice-over): For Mitt Romney, it's a divine question that won't go away. What would it mean to have a devout Mormon in the White House?

MITT ROMNEY (R), FORMER GOVERNOR OF MASSACHUSETTS: We're thankful on the occasion on the birth of our son.

TUCHMAN: The question won't go away, largely because many voters don't understand what it means to be Mormon. Some voters believe the Mormon Church still allows a man to have multiple wives. This was Romney on "60 Minutes."

ROMNEY: I can't imagine anything more awful than polygamy.

TUCHMAN: And some view Mormons with suspicion, wondering if powerful church leaders could somehow control a Mormon president.

I caught up with Mitt Romney in Michigan.

ROMNEY: I think Americans want a person of faith to lead the country. I don't think that they care about the particular brand of faith, so much as whether we share values.

TUCHMAN: Here in Salt Lake City, at the Church of Jesus Christ of Latter-Day Saints, Romney's candidacy has put church leaders under a microscope.

ELDER RUSSELL BALLARD, MORMON APOSTLE: Now is the time for all of us to reach out and tell others who we are.

TUCHMAN: In a rare interview, Apostle Russell Ballard, a top Mormon leader, is crystal clear: There is no relationship between the campaign and the church.

(on screen): Does the church endorse candidates for presidency of the United States?

BALLARD: No, we don't.

TUCHMAN: Do you think it's proper for a politician to spread the word about their religion the same way they did when they were on their missions?

BALLARD: No, I think that would be terribly understood.

TUCHMAN (voice-over): The suspicion that, as president, Romney might take orders from the church derives from Mormon history. Church presidents are considered prophets. In 1843, a prophet's divine revelation led to polygamy, and it was then abolished in 1890.

So what if today's church president had a major revelation? Could that influence a Romney White House?

(on screen): Is it up to all faithful Mormons to follow the tenants of the revelation?

BALLARD: If it is a declaration for the entire church, the answer to that is yes.

TUCHMAN: And is that infrequent though in the modern times?

BALLARD: It's infrequent today, because the foundation of the church is solidly in place.

TUCHMAN (voice-over): There is certainly prejudice against Mormons.

ROMNEY: Hello, sir, how are you?

UNIDENTIFIED MALE: I'm one person who will not vote for a Mormon.

ROMNEY: Oh, is that right? Can I shake your hand anyway?

UNIDENTIFIED MALE: No!

ROMNEY: OK.

TUCHMAN (on screen): So are you considering communicating more about your religion to the American public?

ROMNEY: You know, I'm happy to talk about my faith to people in our country. I believe in God. I believe that all the children on Earth are children of God. So will there be a speech about this at some point? Perhaps. I haven't given that a final decision at this point.

TUCHMAN (voice-over): A looming political question for a man of faith who's not overly eager to publicly talk about his Mormon faith.

Gary Tuchman, CNN, Dearborn, Michigan.

(END VIDEOTAPE)

BLITZER: And Gary is going it have a lot more on Mitt Romney and his faith later tonight on "ANDERSON COOPER 360" at 10:00 p.m. Eastern.

Let's get some more now on this so-called Voters Values Conference that's drawing thousands of Christian conservatives right here to the nation's capital. We're bring in our senior political analyst, Gloria Borger. She's been watching all of this unfold.

So how is Romney doing with this group? Is it working the case that he's trying to make?

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Well, you know, Wolf, as a Mormon and as someone who was once pro-abortion rights, it's kind of a tough sell for Mitt Romney. But he's really been going about it very methodically, and he's had some success.

He's gotten some key endorsements this week from some evangelicals. He's going to be speaking to this conference tonight, and he's going to try and tell these evangelicals that they share common ground, that they share family values. He believes in strengthening the family, but, most of all, Wolf, he is going to promise them that he is going to fight for justices that respect the sanctity of life.

So he says, "I'm with you on the issue of abortion." Now, again, that is an issue for these evangelicals, the question of his authenticity, because just a few years ago, of course, he supported abortion rights. Now he opposes abortion. And they have to look at him and they have to say, "Do we believe you?"

BLITZER: And the same goes with gay rights, as well.

BORGER: Absolutely. So they say, "This is a fellow who is telling us one thing now; he told us something else a while ago. And we have to believe in his conversion or not."

BLITZER: What about Giuliani? How is this evangelical community dealing with him?

BORGER: Well, they're split. They're totally split about him. There's a group in the evangelical community, a lot of leaders in the community, who believe that, if he is nominated by the Republican Party, that's the end of their movement. It's over. And so they say they would have to split, perhaps even support a third-party candidate.

But I've also talked to other leaders in the movement, one of them Gary Bauer, who once ran for the presidency himself. And he said, look, I believe we are one vote away from overturning Roe v. Wade and that it would be tragic for us if we handed this election to the Democrats. And he believes that's what would happen.

BLITZER: Gloria, thanks very much. Gloria Borger is our senior political analyst.

This important programming note for our viewers: On November 15th, I'll be in Las Vegas, Nevada, to moderate a debate in that key Western state among the Democratic presidential candidates. We'll be there, November 15th in Las Vegas.

Up ahead, it wasn't so long ago we marveled at oil prices over $60 a barrel. Take a deep breath: They broke the $90 mark today.

And the Dalai Lama laughs. CNN's Jeanne Moos listen to the spiritual leader's giggle. Is it as infectious as his message? Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Lou Dobbs is getting ready for his show that begins right at the top of the hour. He's going to give us a little preview right now -- Lou?

LOU DOBBS, CNN ANCHOR: Well, Wolf, of course, tonight at 6:00 p.m. Eastern on CNN, I'll have all of the day's news. Also, we will be bringing you some incredible developments. America continuing to sell its secrets. A communist Chinese company planning to buy a stake in an American technology firm providing computer security to the Pentagon. And guess what? This government hasn't got a clue what to do about it. We'll have that story.

And New York's Governor Spitzer, speaking of people without a clue, continues to move ahead to give away those drivers' licenses to illegal aliens, and his plan is raising nationwide security concerns about just who would be using drivers' licenses for identification and a little concern about voter fraud. We'll have that story for you, as well.

And another American city taking action on its own, trying to deal with our illegal immigration crisis. We'll be telling you about its efforts being met with protests from pro-amnesty, pro-open borders advocates.

And we'll have a report tonight on some controversial fundraising by Democratic frontrunner, Senator Hillary Clinton. We'll be joined by three of the country's most distinguished political analysts as we discuss what's happening with the conservatives, the liberals, the Democrats, and the Republicans, all my favorite people.

Please, join us for that and a great deal more at the top of the hour.

Wolf, back to you.

BLITZER: See you in a few moments, Lou. Thanks very much.

You might as well brace yourself for higher prices at the pump. CNN's Ali Velshi is in New York where he's been watching crude prices hit the roof -- Ali?

ALI VELSHI, CNN ANCHOR: Wolf, oil is up about 50 percent this year alone, and it has some people worried about a recession.

(BEGIN VIDEOTAPE)

VELSHI (voice-over): This most recent spike in oil is being driven by speculation that critical oil supplies in the Middle East could be cut off. That's if tensions between Turkey and Iraq escalate and draw other countries in.

But even without Mideast turmoil, oil prices are up because of good, old-fashioned demand. The U.S. economy might be slowing down, but many of the world's economies are growing and using more oil faster than producers can pump it.

The obvious effect is already being felt: Gasoline prices are up an average of five cents just this week.

PETER BEUTEL, OIL ANALYST: If you've seen a nickel already, say in the last week, then you've got 15 cents coming.

VELSHI: And if you heat your home with oil, expect your heating bills to be about a third higher than last year.

BEUTEL: I honestly expect that some people may have trouble picking this winter between heating their home and keeping their home or paying the mortgage on it.

VELSHI: Beyond gasoline and heating oil, higher oil means inflation. Everything that needs to be shipped to a U.S. port or trucked to a store is going to cost more. And factories that need energy to heat their plants or power their equipment will likely pass those costs onto consumers.

(END VIDEOTAPE)

VELSHI: Now, Wolf, over the last 50 years, oil price spikes have triggered recessions nine out of ten times. A small but growing band of people are now predicting that possibility. And what might be more important is that a CNN Opinion Research Corporation poll shows that almost half of Americans feel that we're already in a recession.

And, as you know well, Wolf, perception can be reality for many.

BLITZER: It certainly can, Ali. Thanks very much.

This note: The Dow Jones Industrial Average dropped more than 360 points today, some analysts suggesting that record-high $90-per- barrel price for oil could be playing a role in that.

Up ahead, our question of the hour: What does it say about the conflict in Iraq when the number-two injury among U.S. troops is mental illness? Jack with your e-mail, when we come back.

(COMMERCIAL BREAK)

BLITZER: Here's a look at some of the "Hot Shots" coming in from our friends over at the Associated Press, pictures likely to be in your hometown newspapers tomorrow.

In China, the Great Wall fills in as a catwalk for a Beijing fashion show. In Malaysia, men walk barefoot over burning coals in the final day of a festival. Women aren't allowed to take part in the painful ritual. In Paris, a young fan carries a banner asking an English rugby player to marry her, when she's old enough. England plays South Africa in the Rugby World Cup Finals Saturday. And at the Virginia Zoo -- look at this -- a 2-month-old female lion cub takes a peek at her surroundings. Cute little thing.

Some of this hour's "Hot Shots," pictures often worth 1,000 words.

Let's go right to Jack for "The Cafferty File" -- Jack?

JACK CAFFERTY, CNN ANCHOR: I would like to have one of those lion cubs. They're adorable.

BLITZER: What would you do with it?

CAFFERTY: Well, just until it got a little bigger, and then you'd have to figure something out. But I mean, at two months? I mean, it would be fine. Just put it right on the couch and let it watch TV.

BLITZER: There it is.

CAFFERTY: Yes, look at that. Look at how big their feet are.

All right, we've got to move along. The question is: What does it say about the conflict in Iraq when the number-two injury among U.S. troops is mental illness?

Dan writes from North Carolina, "As a two-time Iraq war veteran returning for my third tour in a week, I can testify the hardships and tragedies that are experienced in Iraq on a daily basis can lead anyone to lose their mental sanity. With repeat tours getting longer and longer, it's almost impossible to prevent one's mental health from deteriorating. The answer, in a nutshell, Jack, is this: We don't have enough mental health specialists. And it's still taboo for a soldier to seek out help for mental health-related issues, regardless of what the military doctors tell us when they say it's OK to ask for help."

Peter writes, "What it means, sir, is that we ignored all those hundreds of thousands of Vietnam vets who suffered the same trauma. War is still hell, but, hey, as long as they aren't your kids dying, well, we can all go shopping."

Dennis in Colorado, "What did you expect? They have TV in Iraq, too. Soldiers lay their lives on the line, then get back to the barracks, turn on the news, and realize that Barney Fife and Porky Pig are running the show. It would drive anyone into therapy."

John in New York, "When General Sanchez told us last week it's a nightmare in Iraq, too many of us here in the United States weren't listening. It is a nightmare in Iraq, because this senseless war is creating an epidemic of mental illness among our soldiers."

And, finally, a touching letter from John in North Carolina. "As a Vietnam veteran, I'll tell you for sure that almost everyone I know came back with mental health problems. We just weren't smart enough or brave enough to face up to it. I'm back 40 years now. I still haven't worked up the courage to talk about Vietnam or visit the memorial. Maybe this year I'll make it to Washington. Wish me luck."

If you didn't see your e-mail here, you can go to CNN.com/caffertyfile. We post more of them online, along with video clips of "The Cafferty File."

BLITZER: That's a poignant letter...

CAFFERTY: Some of that stuff's pretty sad, isn't it?

BLITZER: There are a lot of guys like that. Very sad. Very sad, indeed. And I fear a lot of guys are going to come back from Iraq with that same sense. Hopefully, we can deal better with them than we dealt with the guys coming home from Vietnam.

CAFFERTY: Let's hope.

BLITZER: Thanks, Jack, very much.

Mark your calendars. Don't forget: November 5th, one year from Election day, we'll be three hours straight, 4:00 to 7:00 p.m. Eastern. Lou will start at 7:00.

Let's go to Lou, in fact, right now -- Lou?

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