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Iowa Caucuses Preview

Aired January 3, 2008 - 17:00   ET

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


WOLF BLITZER, CNN ANCHOR: And happening now, Iowa caucus goers will soon go off into their corners, picking their favorites for the presidency. Until the final moments, the candidates are giving it all they have. I'll speak with one of them -- Republican Fred Thompson. That's coming up.
Oil prices hitting a new record.

Will we just have to get used to $100 a barrel or -- or could it soon get even worse?

Bodies in the streets and a nation burning with rage.

What set off the slaughter in Kenya and can anyone bring it to an end?

I'm Wolf Blitzer at the CNN Election Center in New York.

And you're in THE SITUATION ROOM.

We're now only three hours away from the first major contest of this, the 2008 presidential campaign, the Iowa caucuses. We'll have complete coverage for you this hour and throughout the evening. It could be a long evening.

But we begin with some troubling new developments impacting the campaign right now. That would be the price of crude oil. It topped $100 a barrel today for the second day in a row, sending shock waves all the way to Iowa.

Here's what the White House hopefuls are saying, as Americans brace for soaring fuel prices.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: It's time for America to stop just about energy independence and finally become energy independent, finally develop nuclear power resources that we have, finally have liquid coal, finally have our renewable resources, finally have more efficiency in our homes, our automobiles, our appliances. It's time for America to be serious about becoming energy independent.

FRED THOMPSON (R), PRESIDENTIAL CANDIDATE: We're not going to become energy independent in the near future, but we can be more diversified. And that's the thing we've got to move toward. We've been getting too much oil from too many hot spots in the country. We can do better using the oil reserves we've got, nuclear, clean coal alternatives and renewables and more research into -- into the solutions of the future.

MIKE HUCKABEE (R), PRESIDENTIAL CANDIDATE: Let's quit talking about this 20- 30-year oil-free economy. Let's say that within 10 years, we're going to find domestically produced alternative energy sources that'll make it so that we can tell the Saudis and all these guys in the Middle East who are producing the oil upon which we're enslaved, we don't need it anymore.

JOHN EDWARDS, PRESIDENTIAL CANDIDATE: Well, the starting place is we need to be investigating the oil companies to see whether they're gouging people.

UNIDENTIFIED MALE: Yes, but they've been investigated how many times?

EDWARDS: Yes, but they need to -- and here's the thing. If we investigate them and they're not violating the law but they're right up at the edge of the law, then we may need to actually modify the law. We should use the strategic petroleum reserve and release some petroleum into the market to bring the price down.

UNIDENTIFIED MALE: Has that ever worked?

EDWARDS: It works. Yes, it'll bring the price down. But it's very much a temporary fix. And so the real answer here is to get -- to get America off its addiction to oil.

SEN. HILLARY RODHAM CLINTON (D), PRESIDENTIAL CANDIDATE: Now, just today, oil hit $100 a barrel. Those oil producing countries and the oil companies have us over the barrel, don't they?

I mean gas is over $3. Heating oil is up. People are feeling the pinch.

GOV. BILL RICHARDSON (D), PRESIDENTIAL CANDIDATE: It's going to involve asking the American people to sacrifice a little bit. It's going to mean going 30 percent of our electricity renewable energy, fuel-efficient vehicles, 50 miles per gallon. You know, the Congress did 35. That's pathetic. We should go to 50. We need a new ethic that recognizes that it's in our national security interests to shift from imported oil -- fossil fuels -- to renewable sources.

(END VIDEO CLIP)

BLITZER: So what's behind this spike in the price of crude oil and when are we all about to feel the impact?

Ali Velshi is here in THE SITUATION ROOM watching it.

When are we going to feel it, us consumers?

ALI VELSHI, CNN CORRESPONDENT: Well, we've been feeling it. But oil has been on a rise for a few years. But this past year, a 70 percent increase. That's the biggest increase in decades, actually. We've also seen increases in gasoline prices. But the interesting thing is gasoline prices are up only 30 percent in a year. So there's some break there. Gas, at least, is not moving in lockstep with this increase in oil. But we're going to see this price for a while.

BLITZER: Now, all the candidates are speaking about it. They all have their ideas.

Do any of them really resonate with Wall Street?

You were just out there today.

VELSHI: Yes. There are a few that do. First of all, the generalities about -- about not depending on foreign oil, that's sort of passe. That's (INAUDIBLE)...

BLITZER: (INAUDIBLE) for 30 years?

VELSHI: Exactly. We need specifics. You heard Mitt Romney talk about nuclear. You heard Bill Richardson talk about increased fuel- efficiency standards. You know, Mike Huckabee talking about in 10 years not depending on oil -- that's fantastic. You need to see a plan. And I think John Edwards is way off base with the discussion of oil companies gouging. We keep going down that road. That's interesting. But the fact is the oil companies are not controlling oil at $100 a gallon. We need -- $100 a barrel. We need very specific answers about how to diversify the portfolio of energy that we use in America so that we're not dependent on one type of oil.

It's not where it comes from, it's what type of fuel that we can use. We can use solar, we can use wind, we can use nuclear, we can use oil, we can use different types of fuel. And that's the answer.

BLITZER: And some of the candidates -- Fred Thompson talking about clean coal as an alternative, too.

VELSHI: Right. We should look at it.

BLITZER: We're going to be talking to him shortly.

All right, Ali, thanks very much.

VELSHI: OK.

BLITZER: You're looking now at a live picture of a Democratic caucus room in Persia, Iowa. It's actually the living room of Michael and Michelle Rain (ph). They themselves are first time caucus goers. The living room is empty right now, but in a few hours -- less than three -- voters will be there to help decide who will win their party's nomination. Living rooms, schools, firehouses -- all over the state they're going to be meeting. By the way, if you're going to be caucusing in Iowa this evening yourself, we want to know what it's like. Bring your camera, send us your photos, your videos from inside. We'll air some of the best I-Reports during our special coverage that begins at 8:00 p.m. Eastern. Send us your pictures. Go to CNNPolitics.com. Hundreds of people are already dead and violence still raging in Kenya right now. Today, police used water cannon and tear gas to turn back thousands of protesters at the -- who were protesting the presidential elect results.

Neil Connery is in the capital of Nairobi.

We must warn you, his report contains some very graphic images.

(BEGIN VIDEOTAPE)

NEIL CONNERY, ITV CORRESPONDENT (voice-over): On the outskirts of Kenya's capital, they protested in the only way they were allowed to -- thousands trying to make it to the opposition rally -- blocked by a wall of armed police.

(on camera): It's 10:00 in the morning and these demonstrators are determined to get to the center of Nairobi for this rally. But they're being stopped by police and are now setting these tires alight. There is a real sense of anger on the streets here.

UNIDENTIFIED MALE: We are (INAUDIBLE). We don't want these elections.

CONNERY: Are you worried about what could happen to you?

UNIDENTIFIED MALE: Yes, we're worried about this.

CONNERY: You tried to...

MAN: You know, one, what you have to know is that if you are willing to fight for the democracy and maybe for your right, you have fight -- what you have to (INAUDIBLE) is that.

CONNERY: And you are prepared to die?

UNIDENTIFIED MALE: Yes.

UNIDENTIFIED MALE: Yes.

(CROSSTALK)

UNIDENTIFIED MALE: Yes. Look at them. They are well-armed. And look at me. Nothing I have to fight with.

CONNERY (voice-over): The tribal violence sparked off by this disputed presidential election continues. On the edge of Nairobi, one man is set upon by a machete-wielding gang. He cannot escape. He is hacked to death. In the grounds of a hospital, we found George Onyango (ph). He was also attacked by a gang with machetes for being the wrong tribe -- but managed to flee.

GEORGE ONYANGO: I'm still frightened. But someone coming behind us (INAUDIBLE).

CONNERY: Elsewhere, we came across another family plunged into grief. This man's son was electrocuted by overhead cables dislodged when police fired on demonstrators trying to get to the opposition rally. His body lies where he fell.

This is a tense and testing time. The policing tactics used today prevented thousands of demonstrator from making it to the center of Nairobi for the rally. But the opposition leader says he and his supporters may try again tomorrow. With no sign of compromise, Archbishop Desmond Tutu flew in to try to encourage talks.

ARCHBISHOP DESMOND TUTU, NOBEL LAUREATE: We've come as members of the church, you know, to support our sisters and brothers here in the efforts that they have been making to be mediators.

CONNERY: But Kenya's crisis continues to grow and so, too, the bloodshed. This beacon of stability in Africa is threatening to unravel with unimaginable consequences.

(END VIDEO TAPE)

BLITZER: Neil Connery reporting for us from Nairobi.

We'll stay on top of this story. It's got major ramifications for that part of the world.

Meanwhile, in Washington, there's been a new development this hour in the investigation of those destroyed CIA interrogation tapes. It's new evidence that Democratic Congresswoman Jane Harman urged the CIA back in 2003 not -- repeat -- not to destroy those videotapes. The letter Harman wrote to the CIA when she was then the senior Democrat of the House Intelligence Committee was formally declassified today. She wrote that destroying the tapes of terror suspects being interrogated would, in her words, "reflect badly on the agency."

Harman was one of the few lawmakers briefed about the tapes earlier, back in 2003. The tapes were eventually destroyed in 2005. All of this now coming a day after the Justice Department formally launched a criminal investigation into the entire matter.

Let's bring in Jack Cafferty.

He's got The Cafferty File.

A lot of CIA and White House officials, other administration officials, they're hiring lawyers right now, because they're going to be called to testify before grand juries, before the FBI. And you don't go to those sessions unless you've got a little legal -- legal advice.

CAFFERTY: Well, the expression is it's time to lawyer up.

BLITZER: That's right.

CAFFERTY: Because they're coming for you.

BLITZER: And they're not -- those Washington criminal defense lawyers, they're not cheap. CAFFERTY: No, they're not. And this will be lengthy process. And, if nothing else, maybe it'll exhaust some of the funds of some of these scalawags we have down there inside the beltway.

The Iowa caucuses tonight could be make or break, obviously, for some of the candidates. And even before the choices are made by the good people in Iowa, there are reports that Republican Fred Thompson might drop out of the race within days if he places third or worse. He denies it, but you sort of get the impression that this whole thing is an annoyance for Fred, that it would be a relief if he could just quit because he would rather just be named president than have to go through all of this unpleasantries of actually campaigning and trying to convince people he ought to be elected.

Those were just a couple of ideas I have.

Anyway, if he drops out, he would then endorse John McCain, is the conventional wisdom. That would shake up the race in New Hampshire. Thompson probably would not be the only one to hang it up. A piece in Politico today asks if there really are three tickets out of Iowa.

The candidates like to talk about gold, silver, bronze being enough -- that if you're one, two or three, you can go on. A third place finish in Iowa has almost always meant the end of the road for presidential wannabes. Sometimes even a second place finish in Iowa isn't good enough. For example, John Edwards. Let's assume he finished second. But let's assume Hillary finished third. The news headline the next day -- Obama wins, Hillary third.

Edwards who?

Top tier candidates likely to stay in the race if they don't do well in Iowa. But some of the others likely will vanish. The trick for the candidates is to exceed media expectations. That would be us. Meaning if you can do better than the news media expects, then you're likely to still be a story tomorrow.

So here's the question -- which candidates won't be around after the Iowa caucuses and New Hampshire primary and why?

Go to CNN.com/caffertyfile. Post a comment there on my blog.

BLITZER: Love your -- love your blog.

CAFFERTY: The blog.

BLITZER: The Jack Cafferty blog. It's a wonderful thing.

Is this a great country or what?

CAFFERTY: Hey, who'd have thunk it?

(LAUGHTER)

BLITZER: Jack, stand by. We'll get back to you shortly.

Some say he doesn't have much of a chance. But Fred Thompson is fighting hard in Iowa.

Can he prove the pundits wrong?

I'll go one-on-one with the Republican presidential candidate. That's coming up.

Also, when all is said and done, the winning candidate may be the most likable candidate.

Does experience count for anything these days?

And pro-Huckabee pastors are getting some nasty anonymous letters warning them that the IRS could punish their churches. We're going to take a closer look at possible dirty tricks in caucus country.

Stay with us.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: At this hour, Fred Thompson may realistically be fighting for third place in Iowa based on the polls, but the Republican candidate is still looking ahead to the White House. He's still campaigning and fighting very hard.

Fred Thompson is joining us now from Sioux City in Iowa.

Senator, thanks very much for joining us.

THOMPSON: Thank you, Wolf.

Good to be with you again.

BLITZER: We're only a few hours away from the doors closed and this caucus -- these caucuses underway.

If there's one commitment you want to make to Iowa Republican caucus goers right now one -- commitment you want to leave them with before they go into the meeting rooms, what would it be, that if you're president, you would do what?

THOMPSON: I would try to be the best president that I could possibly be for this country and always communicate with the people and make my case to the people and tell them the truth and understand the challenges that face us and be a strong leader, with nothing else in mind, from a personal aggrandizement standpoint or from my own personal standpoint other than what's best for my country.

BLITZER: But would there be one issue that you would devote yourself on that first or second day in the Oval Office, that you want these caucus goers tonight to be aware of, that's going to be the highest issue on your priority, whether a domestic issue or a foreign policy issue?

THOMPSON: Wolf, the security of this nation. That's where I spent a lot of my years. I served on the Intelligence Committee. I was a Republican floor manager for the Homeland Security Bill. I've traveled the world. I've met with foreign leaders -- friend and foe alike.

After I left the United States Senate, Condoleezza Rice asked me to advise her with regard to matters. I formed an advisory board of distinguished Americans for that purpose. It's the number one thing that Americans have to be concerned about. Without the personal freedom, without the safety of our nation, nothing else is possible. We've got to do a lot of things better and we've got to be united as a people as to that goal.

BLITZER: All right, well, on the issue of national security, foreign policy, is there any area that you would deviate from President Bush, where you would immediately make changes to what has been his strategy now for seven years, going into its eighth?

THOMPSON: Well, Wolf, you're covering an awful lot of territory there in a short time for me to talk about it. I would just say this. I would always try to bring the American people on the front end of problems and not the back end. And not try to gloss over what might be a troublesome situation. I think without the long-term commitment and support of the American people, it makes it very, very difficult to make tough decisions and in terms of the long-term welfare of the country, as well as...

BLITZER: So are you suggesting that, Senator...

THOMPSON: ...it's a building process. It's a trust process.

BLITZER: Are you suggesting that President Bush didn't bring the people on board...

(LAUGHTER)

BLITZER: ...he was sort of misleading them with the dangers, uncertainties involved?

THOMPSON: Oh, Wolf -- Wolf, you can be so predictable sometimes.

(LAUGHTER)

BLITZER: I'm just following up.

THOMPSON: No. What I -- what I'm implying, clearly, is with Iraq, there should have been more communication sooner and the seriousness of the problem and the potential difficulties we were going to have should be laid on the table sooner. I think the American people was able to deal with it. I think they are dealing with it now. I think things are looking very good there. I'm very optimistic about it. But it's shown that we have to be together in these endeavors or it makes it much more difficult.

BLITZER: Did this campaign -- and it's now been several months you've involved -- did it turn out to be the way you thought it would be, the process?

Were there any huge surprises for you?

THOMPSON: Wolf, I don't really think so. I mean I've been around presidential campaigns before. I've supported other people before. Of course, I served -- I was elected twice to the United States Senate. So I've been around presidential politics.

I think everything is exacerbated. I think, in terms of the scrutiny, in terms of the press, in terms of the money, in terms of the earliness that most everybody got into the race and things like that, it's just been moved up and exacerbated and made bigger -- and not necessarily better.

But no real big shocks to me.

BLITZER: One final question before I let you go, Senator Thompson.

Do you have to come in third tonight in Iowa in order to continue on to New Hampshire?

THOMPSON: I'm not going to -- I'm not going to talk about that, Wolf. We -- you know, we'll see what we see. We're not going to have to speculate much longer. I think some folks are going to be surprised and some of our friends are going to be pleasantly surprised. And we'll just see whether or not we're right or the experts are right.

But we look forward to the results tonight. And we'll just have to see what the numbers look like -- not only the rankings, but the percentages and things like that, and what the financing looks like going forward and those kinds of things, that everybody will be looking at, whether they acknowledge it or not.

But I'm optimistic about those -- those results.

BLITZER: Well, you're -- that's fair enough. And it's two hours and 38 minutes or so to go. A fair enough point.

Thanks very much, Senator Thompson.

Good luck to you.

THOMPSON: Thank you, Wolf.

I appreciate you, Wolf.

Thank you very much.

THOMPSON: Thank you.

Senator Fred Thompson waiting with all of us.

We've been talking a lot about it. Pretty soon we're not going to have to talk so much. We'll see the actual results. Experience versus likeability -- we'll take a closer look at what voters really want from the next president of the United States.

Plus, Toyota passes Ford in the hearts and minds of American car buyers. We'll tell you what happened.

Stay with us.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Carol Costello is monitoring some other important stories coming into THE SITUATION ROOM right now.

What's going on -- Carol?

CAROL COSTELLO, CNN CORRESPONDENT: Well, Wolf, a Texas man who spent 26 years in prison for rape is now free after new DNA testing. Charles Chatman was convicted in 1981 and he was sentenced to 99 years in prison. He has always maintained he was innocent. After the DNA test, which lawyers said proved his innocence, a judge recommended that his sentenced be overturned. Chatman was released from custody today.

Jobless claims are down. The number of newly laid off workers filing for unemployment benefits fell sharply during Christmas week. There were 21,000 fewer jobless claims than the previous week -- when they hit the highest level in more than two years. But analysts note that unemployment offices were closed on Christmas and Christmas Eve, allowing less time to file for benefits.

The San Francisco Zoo is open again for the first time since that deadly tiger attack on Christmas Day. The zoo has stepped up security. Lions and tigers are now being kept hidden from view. Police are investigating whether the victims taunted the tiger before he got out of his pen. A teenaged boy was killed, two of his friends injured. The lawyer for the survivor says the idea that they provoked the attack is nonsense.

The U.S. dollar is taking even more of a beating, especially in India. The U.S. dollar is not only at a nine year low against the rupee, but at tourist spots in India, including the Taj Mahal, the dollar is no longer accepted. India's tourism minister says the decision is only partly because of the dollar's plunging value. He says charging only rupees is more practical.

I don't know, Wolf -- back to you.

BLITZER: Carol, thanks very much.

And we're just a little bit more than two-and-a-half hours away from the Iowa caucuses. People will be going into those caucus rooms. The doors will be shut and then we'll be getting results shortly thereafter.

In the meantime, some pastors in Iowa have been getting some very unwelcome news from unwelcome and surprising information in the mail. You're going to want to see what's going on in these letters. We're looking for those -- for who is behind what some are calling a political dirty trick.

And you may eventually have the same choice facing Iowa voters tonight -- should a president be more likable or more experienced?

And we're hearing exclusively from another of Pakistan's deposed leaders. You're going to hear what Nawaz Sharif says about Benazir Bhutto's assassination and his own political future.

Stay with us.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Happening now, a remote controlled car bomb kills at least four people and wounds more than 60 in a Kurdish dominated city in southeastern Turkey. The device exploded as a civilian bus carrying Turkish military personnel was passing.

Also, a new dawn for Toyota and an end of an era for Ford; the Japanese automaker is now the number two car company in the United States, ending Ford's 76-year lock on that position. General Motors remains number one in the United States.

And a spike in bankruptcies in the United States; a tracking group reports a number of Americans seeking bankruptcy protection was actually up 40 percent in 2007 with just over 800,000 filings.

I'm Wolf Blitzer and you are in THE SITUATION ROOM.

They have been running for nearly a year, in some cases a lot long. Hear in their own words what the democratic presidential candidates are saying about their prospects, their opponents, and their voters.

(BEGIN VIDEOTAPE)

JOHN EDWARDS (D), PRESIDENTIAL CANDIDATE: What's different from me and Senator Clinton and Senator Obama is they have spent massively in Iowa and have massive campaign organizations. They've outspent me 5 or 6-1. The fact that we are in a dead heat now I think actually says something about my message of ending corporate greet and strengthening the middle class and fighting for the middle class. People are responding to it.

SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: The American people are just hungry and ready for change. We have been seeing it throughout this campaign. They want republicans, democrats, independents to come together and to solve problems and I believe that they are seeing in how I have conducted myself and what is taking place in our campaign; the possibility of breaking some of the gridlock and actually doing something about healthcare, actually doing something about energy policy and bringing this war in Iraq to a close. We feel good about our prospects tonight. GOV. BILL RICHARDSON (D), PRESIDENTIAL CANDIDATE: You have to say that torture is unacceptable to have forced interrogations. We have to stand for something. We've got to be a country that's for quality, freedom, our constitution. You know our constitution is pretty important. One of the first speeches I'm going to make is if I'm elected president I'm going to follow the constitution of the United States. People rise up in Iowa. They love that. I mean, that's what this election is all about.

(END VIDEOTAPE)

BLITZER: Candidates are giving it their all as the clock counts down to 8:00 p.m. eastern. Joe Johns is watching all of this unfold in Des Moines right now. He's taking a closer look at the democrats' prospects tonight. They are fighting over the independents right now. They are trying to get them onboard, all of these democratic candidates, Joe.

JOE JOHNS, CNN CORRESPONDENT: Yes. Absolutely, Wolf. I mean I don't have all the answers. There's a lot of controversy surrounding it. What you can say is the local newspaper here in Des Moines did a poll and that poll's results seem to suggest that a very large number of people who are thought to be independents before now, are going to caucus with the democrats as opposed to the republicans. That number, the newspaper says, could be as high as 40 percent.

Now, when you put that out there, there's a lot of push back on the democratic side. You have Barack Obama, who is thought to be perhaps the beneficiary of a large number of independents coming over democratic side, saying he's not sure about those numbers. Hillary Clinton is saying she's not sure about the numbers. And who knows because so much of what has gone on here in Iowa has been pretty extraordinary over the last several months, Wolf.

BLITZER: It would almost be unprecedented if a huge number of independents showed up and registered with a democratic caucuses, wouldn't it?

JOHNS: Right. Well, new voters we're talking about here, sort of siding early on with the democrats at least in Iowa and you try to game it out. On the one hand, you have had just sort of unprecedented money spent in this state. You have had very creative and hard-fought campaign tactics here in the state for quite a long time. It has been very unusual. You can sort of see why a lot of people would be energized to come out on caucus night, tonight, and make their voices heard. Still that number is pretty extraordinary; a lot of people very suspicious of it, Wolf.

BLITZER: We will start getting numbers in 2 hours and 25 minutes. Joe, thanks very much. Joe Johns is out in Des Moines.

With only a brief time left to go before the Iowa caucuses, the presidential candidates are trying to shake one more hand. They are trying to make one more distinction or say one more thing to sway Iowa caucus-goers. Let's listen to what some of the GOP presidential candidates are telling the voters, both in New Hampshire, and as well as Iowa.

(BEGIN VIDEOTAPE)

MIKE HUCKABEE (R), PRESIDENTIAL CANDIDATE: I believe it is important also that we take a strong stand not against other people but for the traditional family and for traditional marriage because it is through families and marriage -- through families and marriage that we not only create the next generation but it's through those marriages and families that we train our replacements. So those will take over for us when we drop the baton.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Today have you 47 million people that don't have health insurance. And the democrats have the answer for that. It's the old answer. It's the European answer. Let's socialize medicine. Let's have government take it over. I don't want the guys that ran the Katrina cleanup welcoming me into the emergency room. That's not what on I'm looking for. I believe instead that the free enterprise, free market system works and that if we have a challenge in healthcare, we need to find out how to market dynamic work for us.

RUDY GIULIANI (R), PRESIDENTIAL CANDIDATE: Here are the pillars that create fiscal soundness that leads to your being able to make decisions and having more discretion to make decisions and grow; low taxes, moderate regulation, and restraint on government spending. If can you do those three things, and they are not easy to do, as we can see, right, but if you can do those three then you can grow.

REP. RON PAUL (R), PRESIDENTIAL CANDIDATE: When you look at what we did once we got in power, we didn't do a very good job. We doubled the size of the department of education and we used to be elected to end wars and now we got ourselves into a mess and it's sort of a quagmire now. So people are unhappy with the republicans and I'm trying to, you know, reinvigorate the party and go back to their basic principles which really is defending the constitution and individual liberty.

(END VIDEOTAPE)

BLITZER: The candidates are out there campaigning on the issues but in Iowa and beyond, success could come down as something much more subjective. Who is the most likable?

Let's bring back Carol. She is looking at this part of the story. How is it playing out, based on all your reporting, on the campaign trail, Carol?

CAROL COSTELLO, CNN CORRESPONDENT: Well Wolf, the candidates are not only kissing babies, they're kissing up to voters trying to get voters to like them and that may be the toughest and most important challenge of all.

(BEGIN VIDEOTAPE)

COSTELLO: Despite the Iraq war, the economy and healthcare concerns, winning the first caucus of the 2008 presidential campaign may have little to do with experience and everything to do with likability.

It has to be a confounding problem for democrat Hillary Clinton and republican Mitt Romney. According to CNN polls, voters by far say they have the right experience to deal with the problems the country is facing. Yet, both are fighting to win Iowa.

DAVID GERGEN, SENIOR POLITICAL ANALYST: Each one has an authenticity problem with voter perception, that they are tailoring their remarks or tailoring their stances to favor them, to cater to the voters and you know to massage the erogenous zones of the voters.

COSTELLO: Which translates to phoniness and nobody likes a phony.

So in the weeks before tonight's caucus the candidates, all of them, were trying to show voters personality. Warm, care, real personality. That's why you saw Hillary Clinton with her mom and daughter. And John Edwards expressing love for his family.

EDWARDS: I want to say thank you to the love of my life for over 30 years, Elizabeth. She's going to make a great first lady.

COSTELLO: And Mike Huckabee who has suddenly become Mr. Personality Plus. He plays bass guitar. He jogs. He nixes his own negative campaign ads so he can sleep at night. And he got real on "The Tonight Show."

MIKE HUCKABEE (R), PRESIDENTIAL CANDIDATE: People want a presidential candidate that reminds the more of the guy they work with rather than the guy that laid him off.

COSTELLO: But wait. Why wouldn't voters value experience over likability in a post-9/11 world? Even some politicians are confused about that.

Former Senator Bob Kerrey, the Kerrey who ran for president in 1992, said in a "New York" magazine, "I would much rather have a phony competent person in the White House than an incompetent authentic person. I'm not sure the two aren't correlated. The greater competence you've got, the more you've got to be phony in order to get the job done." In other words, you have to hold your real self back sometimes to get things accomplished. Whether that gem will shine in the voters' minds tonight, we will know in the morning.

(END VIDEOTAPE)

COSTELLO: OK. So what about the candidate who raised high in inexperience and high in likability? They have both. There isn't any candidate like that in the Iowa polls. So the results in Iowa will be very interesting, indeed. Wolf?

BLITZER: We will know soon enough. Thanks very much, Carol, for that.

Pro-Huckabee pastors are now saying they've received some very nasty surprises in the mail; anonymous letters warning them of tax problems. Is someone playing tricks in caucus country?

And the top opposition leader in Pakistan right now accusing President Musharraf of rigging the upcoming election. Our Zain Verjee is on the scene. She has an exclusive for us.

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Dirty tricks or shady tactics? Some pro-Huckabee pastors say they have been receiving warnings in the mail that they could face trouble with the feds. Let's go to Brian Todd. He is looking into the story for us. Brian, what are you learning?

BRIAN TODD, CNN CORRESPONDENT: Well Wolf, these letters raise suspicion because they don't seem to come from the feds. Political observers say the fact that they have no names on them, no return addresses, likely means par for the course as the campaign pressure heats up.

(BEGIN VIDEOTAPE)

TODD: Mike Huckabee, hazardous to your tax returns? That's the message some Iowa pastors say they got in their mailboxes' letters warning them their support of Huckabee or any candidate could endanger their church's tax exempt status. Three pastors in different parts of Iowa who support Huckabee tell CNN they got copies of this one saying the IRS is on the lookout for illegal campaigning and don't get caught doing this. It will land you in the slammer; signed, concerned Christian.

REV. REX DECKARD, CALVARY APOSTOLIC CHURCH: Well first of all, I chuckled because it was just so funny. But then it irritated me.

TODD: Reverend Rex Deckard says he got nine letters like this in recent weeks.

DECKARD: The gist of it is just intimidating churches and pastors to stay out of the political process.

TODD: The pastors say each letter they got was postmarked from Des Moines with no return address. They didn't name names but their theories on the culprits range from opposition campaigns to individual supporters of other campaigns who might be freelancing to people who might want to target Christian leaders.

HUCKABEE: I don't honestly know where they are coming from. I know that there's some real just frankly anger among pastors across this state. They feel like that this is one of the most underhanded things they have ever seen is to try to threaten people and their first amendment rights for speaking out. It is a form of voter suppression that really is beyond the pale.

TODD: Under IRS rules, church leaders wouldn't go to jail but their church could lose their tax exempt status they asked their congregations to vote for a certain candidate or if they stumped for a candidate in the name of their church. Each pastor we spoke to says they have never done any such thing. Political analysts in Iowa aren't exactly shocked at the letter campaign.

KATHIE OBRADOVICH, DES MOINES REGISTER: I think that there have been all kinds of sort of shady tactics this year. Well, I think that there are always last-minute efforts maybe to confuse people where their caucuses are.

(END VIDEOTAPE)

TODD: If this letter campaign was designed to intimidate church leaders, it does not appear to be working. None of the pastors we spoke to said they would not stop personally supporting Mike Huckabee. One said you don't give up your first amendment rights when you get ordained. Wolf?

BLITZER: Brian Todd, thanks very much. What a story.

As the Iowa caucus precincts report their results later tonight, you can keep track yourself in real-time as they come in to CNNpolitics.com. Let's go back to our Internet reporter, Abbi Tatton. Abbi, explain to our viewers how they will be able to follow all of this for themselves.

ABBI TATTON, CNN INTERNET REPORTER: Wolf, it's all happening online at CNNpolitics.com and the Iowa page is about to go live.

What is going to happen is each of these precincts, they are going to report in their results to the state party. We'll be getting it and we'll put it straight up here. You will be able to see the results flowing in county by county as they come in, who's ahead, who's behind.

On top of that, we have cameras all over the state, all over the country and we are going to be showing you live streams on the site so you can watch what's happening and what's going on there. Be there, candidate speeches or the caucuses themselves are a lot of people that don't understand how this whole system works. Our cameras are going to be inside a couple of precincts, democrat and republican. You will be able to watch the whole thing play out.

And on that note, we are making an appeal to Iowans. Send us your I-report, CNN.com/ireport, of what is going on in your precinct. We have been getting a few in already. These are giving us a glimpse of how this process all works. This is Karen Jubeck. She is in Peosta, Iowa. She's caucusing for the first time for Barack Obama she says and as a marketing tool; she says she's making these sugar cookies, which she will be taking along. We will look at these I- reports coming in. Send them along tonight. Wolf?

BLITZER: Abbi, thanks very much.

Following the assassination of Benazir Bhutto, another opposition leader is now accusing President Musharraf of trying to rig the election. He's asking the United States to pull the plug on support. Zain Verjee is standing by. She has an exclusive report in Pakistan on what's going on.

Plus, the countdown to the Iowa caucuses, now just slightly more than two hours away. We are going to have complete coverage throughout the night with the best political team on television.

Stay with us. You're in THE SITUATION ROOM.

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BLITZER: Pakistan's President Pervez Musharraf today conceded there are shortcomings in the investigation of Benazir Bhutto's death but he denies any security lapses in her assassination. Bhutto's death leaves another former prime minister as the principle opposition figure. That would be Nawaz Sharif. He spoke exclusively and very bluntly with our own Zain Verjee.

(BEGIN VIDEOTAPE)

ZAIN VERJEE, CNN CORRESPONDENT: Nawaz Sharif is a major opposition leader in Pakistan. He accuses the country's president, Pervez Musharraf, of rigging next month's elections. Still, Sharif says he will run in the elections anyway.

NAWAZ SHARIF, PAKISTANI OPPOSITION LEADER: We need to be in the process to expose Musharraf's rigging and what he wants to do in the elections.

VERJEE: Musharraf rejects any charge the election will be rigged.

PRES. PERVEZ MUSHARRAF, PAKISTAN: This election is going to be free, fair.

VERJEE: Sharif says Musharraf and his government are desperate.

SHARIF: I think they are feeling very insecure. They are very unnerved with the massive support that we have among the people of Pakistan.

VERJEE: There is another issue Sharif has to deal with, terrorism. He says election campaigning is going to be tough because he's on a terrorist hit list. Sharif says that he's forced to handle his own security like Benazir Bhutto.

SHARIF: The government doesn't give us anything except one or two police jeeps.

VERJEE: Sharif also says the Bush administration should rethink its backing of Musharraf.

SHARIF: America needs to very clearly review its policy of supporting one man against 160 million people of Pakistan.

VERJEE: In the middle of a heated and violent campaign in his own country, Sharif has his eyes on another campaign in America. Sharif led Pakistan while Bill Clinton was president. SHARIF: His wife is certainly capable of winning. I think she is one of the strongest contenders in the presidential elections.

VERJEE: Zain Verjee, CNN, Lahore, Pakistan.

(END VIDEOTAPE)

BLITZER: Let's check back with Jack Cafferty. He's here and he's got the Cafferty File.

JACK CAFFERTY, CNN CORRESPONDENT: All right. After tomorrow, it's likely there won't be as many candidates left in the race. The question is which ones won't be around after the Iowa caucuses and the New Hampshire primary? Which is, of course, is next Tuesday.

Jimmy writes, "The big three democrats will be fine. They'll all live to fight another day, Obama, Clinton, Edwards. The rest will be gone. For the republicans, I think you're going to see Fred Thompson gone soon, McCain won't make it much further and I honestly think Giuliani is going to take a big hit here. I think only Mitt Romney, Mike Huckabee and my man Ron Paul will survive." Boy, he has loyal followers that Ron Paul.

BLITZER: It's amazing.

CAFFERTY: Yes, they are amazing.

Steve in New York writes, "Duncan Hunter, Chris Dodd, Dennis Kucinich, Mike Gravel and surprisingly Fred Thompson. I think Thompson's out of fuel already." I think you are right.

Mike in San Francisco, "Sad to say, the two democratic candidates who are most qualified to be president are Joe Biden and Bill Richardson, and they won't be around much longer."

Tim writes, "I'm hopeful this year, at least more hopeful than in times past. After caucus time though I think we'll be saying goodbye to Hunter, Thompson, and (as much as I like him) Paul on the republican side. For the democrats, (again, as much as I like him) Kucinich, Richardson and Dodd are probably done but anything can happen."

Jacob in Iowa, "On the democratic side, I believe it will come down to Edwards, Clinton and Obama. On the republican side, there will be Huckabee, Romney, Paul and McCain. But McCain is going to miss third place to Paul's swelling support here in Iowa. For some reason, I am seeing very little reporting on the massive amount of campaign." Then you are not watching. We have done stories about the fund-raising and ...

BLITZER: If Ron Paul does well, our viewers in THE SITUATION ROOM will not be surprised if he does well tonight or Tuesday night in New Hampshire.

CAFFERTY: Yes, who is this? I don't know who you are watching there, Jacob, but get a grip. William in Port Washington, New York, "The only candidates who will still be around after the Iowa New Hampshire primaries are the ones that you choose to report on. While I believe that you, Jack, are one of the more honest reporters, the corporate media is unfortunately the final decider. If you choose not to report Edwards in second place the fault lies with you and not with the voters." So there.

BLITZER: See you in a few moments, Jack.

CAFFERTY: OK.

BLITZER: Thank you.

Lou Dobbs is counting down to the Iowa caucuses along with all of us. He's going to be joining us in just a moment.

Also, the democratic presidential candidate Bill Richardson, who will he show his support to if he does not make it? He will join us from Iowa as the countdown to the caucuses continues.

Stay with us. You're in THE SITUATION ROOM.

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BLITZER: Lou Dobbs is here in THE SITUATION ROOM getting ready for his show that starts in an hour. You are going to do some work on the middle class at 7:00 p.m. eastern. Of all these candidates, democrats and republicans, who is best for the middle class?

LOU DOBBS, CNN CORRESPONDENT: It is hard to judge that, Wolf, as we are beginning to see some tests. I think this is a very important and exciting test in Iowa today. A lot of criticism of the caucuses but I think it is a wonderful process.

I think that right now there are two candidates who are beginning to focus possibly three on populous middle class, working men and women in this country for a change. They are Senator John Edwards. And interestingly enough, Ron Paul, Congressman Paul is talking about that on the republican side. And Barack Obama has begun to start talking empirically. He has begun to speak about important issues to the people of this country. At this point, I can't judge the sincerity, authenticity, if you will.

You know George Bernard Shaw said that only the stupid can afford sincerity. In politics, I think we've reached a point where authenticity and sincerity are going to be very prize commodities for the American people. And we are going to see, we hope in this process, although I'm disappointed with the overall level of the candidates, perhaps we will see that come to the fore. Beginning with the process tonight, it will take place in just about two hours.

BLITZER: And Lou will be with us throughout the night. You have a show coming up in one hour at the top of 7:00 p.m. eastern. Lou, thanks very much.

DOBBS: Thanks. Looking forward to being with you.

BLITZER: And happening now, the countdown to the caucuses. Only two hours until Iowans close the doors and cast the first votes for president. Tonight, first time caucus-goers could make a huge difference for democrats. We are watching the story.

Plus, republican front-runners Mike Huckabee and Mitt Romney, they are taking very different paths on this decision day, one preaching populism, the other going corporate. We are on the trail with the candidates.

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