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THE SITUATION ROOM

Police Crack Down on Opposition Protests in Kenya; Interview With Mitt Romney

Aired January 16, 2008 - 17:00   ET

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


WOLF BLITZER, HOST: Thank you very much, Jack.
And to our viewers, you're in THE SITUATION ROOM.

Happening now, teargas and bullets -- police cracking down on opposition protesters in Kenya. Our Zain Verjee is caught right in the middle of one very frightening confrontation. We're going to show you what happened.

In the end, he made it look easy. Now, fresh from his badly needed victory in Michigan, Republican Mitt Romney is looking ahead to his next challenge. My one-on-one interview with the Michigan winner. That's coming up.

And it was a long, bloody war which went terribly wrong for the U.S. military. Now, chilling new information shows how enemy intelligence actually tricked U.S. forces into firing on other American troops.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

A day after the Michigan primary and Mitt Romney's big win, candidates from both parties are looking ahead to their next contest. Following three races with three different winners, Republicans are focusing in on South Carolina right now, where Saturday's primary is up for grabs.

John McCain and Mike Huckabee are vowing to bounce back. But Fred Thompson says it's his turn now -- and Romney does have momentum. Democrats, in a race that's also up for grabs, are focusing their attention right now on Nevada, where unions and the Hispanic vote will factor heavily in Saturday's caucuses. Hillary Clinton and Barack Obama are still seen as the leaders there, with John Edwards, though, close behind. A lot more on these political stories coming up, including my interview with Mitt Romney.

Other news, though, that we're following right now.

A former United States Congressman and delegate to the United Nations was indicted today -- indicted today -- accused of being connected to a terrorist fundraising ring.

Let's go straight to our justice correspondent, Kelli Arena. She's standing by with details.

It's really a shocking story -- Kelli.

Update viewers with what we know.

KELLI ARENA, CNN JUSTICE CORRESPONDENT: Well, Wolf, according to the government's indictment, the Islamic American Relief Agency paid former Congressman Mark Siljander $50,000 in stolen federal money to lobby the Senate Finance Committee. Now, the group allegedly wanted to be removed from the government's list of charities that support terrorists.

The government says that Siljander knowingly took the stolen money, laundered it and then lied about it twice to federal prosecutors and agents. Now, he allegedly claimed that the money was for a book that he was writing on bridging the gap between Christianity and Islam.

Now Siljander is currently chairman of Global Strategies Incorporated. That's a lobbying firm, Wolf. And he served as a congressman, as you know, back in the '80s.

I did call his lawyer for a response. He says he's working on one. We haven't gotten it yet. As for the charity itself, its U.S. branch was shut down in 2004. It's charged with sending $130,000 to an Al Qaeda and Taliban supporter. It's an Afghani terrorist named Gulbuddin Hekmatyar. He has allegedly targeted U.S. troops, declared holy war against the United States.

Wolf, earlier on this broadcast, we may have inferred that the former Congressman sent the money to that man in Afghanistan. That is not the case here. What he did was he accepted money from that charity, according to this indictment, laundered that money and lied to prosecutors about it, Wolf.

So let's -- we just want to make sure that everybody is on the same page here.

BLITZER: All right. We're trying to get in touch with him and get his reaction. Hopefully, we'll get that.

Thanks very much, Kelli, for that.

ARENA: You're welcome.

BLITZER: But it's a shocking story.

American troops are stepping up their assault on insurgent forces in Northern Iraq, but the insurgents are striking back. The U.S. military today said three soldiers were killed, two were wounded by small arms fire in the Salaheddin Province.

Also in Iraq, a woman wearing a bomb blew herself up today in a town north of Baghdad, killing a number of Iraqi civilians. It's but the latest in a series of attacks carried out by women. CNN's Arwa Damon is in the Iraqi capital -- Arwa.

ARWA DAMON, CNN INTERNATIONAL CORRESPONDENT: Wolf, it was a female suicide bomber. And according to Iraq's Ministry of Interior, her explosive belt was concealed underneath her black Islamic dress. The attack took place in a town called Khan Bani Saad. That's about 20 miles northeast of Baghdad in Diyala Province.

The attack, that was targeting Shia pilgrims that were collecting in preparation for an upcoming major religious festival, left at least eight civilians dead and at least another seven wounded.

Now, it's not common that we see female suicide bombers in Iraq. However, in the last three months, there have been four, including today's just in Diyala Province. That religious festival I was just meaning, that is a the festival of Ashura, where Shias commemorate the death of Imam Hussein that took place in the seventh century. They gather in very large numbers, carrying out acts of self-flagellation and other displays of grief.

This has not been a time that has passed without violence. If you remember back in 2004, at least 180 people were killed in the southern holy cities of Karbala and Najaf.

The Iraqi government is trying to put security measures into place -- already announcing that there will be a nationwide curfew that begins at 8:00 p.m. on Thursday, to continue through 6:00 p.m. on Saturday. There are extreme fears that another severe attack against Iraq's Shia population would just re-spark -- renew the sectarian violence here that has already claimed so many lives -- Wolf.

BLITZER: Arwa Damon reporting from Baghdad.

What a story.

Thanks very much.

A mass protest, meanwhile, and a violent reaction by police sparking fears of new chaos in Kenya. Security forces used tear gas and bullets to break up opposition rallies. At least two people were reported killed in one showdown with rock throwers in one of those cities.

CNN's Zain Verjee was caught up right in the middle of one confrontation in the capital, Nairobi.

I want you to watch and listen to this.

(BEGIN VIDEO CLIP)

(BEGIN VIDEOTAPE)

ZAIN VERJEE, CNN STATE DEPARTMENT CORRESPONDENT: Opposition supporters and security forces appear braced for another confrontation. On this side, supporters of Raila Odinga saying that he is really the president. They want to march into Uhuru Park. In Uhuru Park, if you take a look there, what you see is hundreds of police and paramilitary forces. They've just added another truck now in for reinforcements. They've been firing tear gas canisters at both supporters of the opposition, opposition leaders themselves and journalists, as well.

They are beginning to make their move, and it's very likely that, from the other side, they will start firing back.

Ow! Ow! They hit my arm.

UNIDENTIFIED MALE: Are you OK?

VERJEE: Yes. They shot me here in my back. Yes.

UNIDENTIFIED MALE: They almost hit your head.

VERJEE: Yes.

UNIDENTIFIED FEMALE: Are you OK?

VERJEE: Yes, it's OK. I'm standing.

(END VIDEOTAPE)

BLITZER: And joining us now in Nairobi is our own Zain Verjee.

First of all -- Zain, how you doing?

How do you feel?

VERJEE: I'm OK. I have a little bit of a bruise, but I'm feeling OK. And when that happened, we just continued. You know, the adrenaline just kept things going. We continued with the story. The cameraman was amazing. He managed to hold the shot and capture what you saw -- Wolf.

BLITZER: And this was a tear gas canister that was a small one that was shot at you. You're very lucky it didn't hit your face or it could have caused serious injury -- a bruise is one thing. But it looked like this was totally unprovoked.

Give us a little background of what happened.

VERJEE: Well, we were just standing around and opposition supporters were coming in and we were doing some interviews. All the journalists were standing around in that particular area -- of course, a park they were trying to get to called Uhuru Park.

And all of a sudden, just out of nowhere, they fired that tear gas canister that hit me. Then, as everybody dispersed, they continued to fire another one and then a third one. And it stung our eyes terribly and everybody just fled.

But what this really underscores, Wolf, is not just that we were treated this way and it was unprovoked, but this is happening all over the country. There is excessive police brutality. I mean they even fired tear gas on old ladies selling tomatoes. So that's a real issue. And this is what the demonstrators have been feeling the brunt of today -- Wolf.

BLITZER: Zain, you grew up in Nairobi. You're from Kenya. Your family is there.

What's it like going back there after years here in the United States and seeing this situation unravel before our very eyes?

VERJEE: It's really tragic. It's difficult. It's shocking to see, because Kenya has always been a beacon of stability in the region. And all of us have really prided ourselves on the fact Kenya is not like our neighbors. We haven't degenerated in that way and have really kept things together.

The other thing, too, that was striking is that Uhuru Park is a place where my family and I have been to growing up. A lot of Kenyans will go there and relax have lunch. It's really sort of the Central Park of Nairobi. It's in the central business district, right in the heart of the city.

So to see paramilitary forces and police -- hundreds of them barricading the roads and surrounding Uhuru Park, which means freedom, incidentally, was really difficult to see -- Wolf.

BLITZER: Well, thank God you're OK, Zain.

And be careful over there.

Give our best to your family and your friends.

And let's hope this situation eases up.

Zain Verjee doing some amazing reporting for us all week in Nairobi.

Zain, thanks.

Let's go right to Jack Cafferty.

He's got The Cafferty File.

You know, she's really lucky, because if that canister had hit her head, God forbid, it could have been a disaster.

CAFFERTY: No. She -- the nice folks here at CNN ought to give her a big raise when she gets back. I mean you go and do duty in a zone like that, where police are shooting things around and stuff, I mean that's dangerous duty. And she's doing a hell of a job. And I just hope she gets back safely.

Three major primaries, three different winners -- the Republican Party not a single step closer to a clear frontrunner than they were when all this started. Nevada and South Carolina up next, now. And the candidates obviously scrambling for votes. Mitt Romney, off that victory in Michigan last night, is pushing his business experience. He's hoping to hit home with a growing number of voters who are concerned about the economy.

And that, by the way, along with the war, is the real issue. This country is coming undone from the inside out. It seemed to work well for Romney in Michigan. We'll see what happens elsewhere.

John McCain is trying to regain his momentum after a setback in Michigan. He's already predicted he'll win in South Carolina -- but so is Mike Huckabee predicting a win in South Carolina. Huckabee hoping that Christian conservatives might give him a boost there.

But Fred Thompson, who comes from nearby Tennessee, might get some of the Evangelical Christian vote, as well. And that might keep Huckabee from winning.

It's a demolition derby.

And then there's Rudy Giuliani, who's got nothing. He's waiting for Florida on January 29th. It might be too late for Rudy already.

The question then is this -- with a different candidate winning each week, how will the Republican primary finally sort its itself out, do you think?

Go to CNN.com/caffertyfile. You can post a comment on my blog -- Wolf.

BLITZER: All right, Jack.

Thanks very much.

A much needed win, as Jack just said, in Michigan -- so how does Republican candidate Mitt Romney plan to carry the momentum into this weekend's vote?

I'll ask him. He'll be joining us live right here in THE SITUATION ROOM.

Also, a stunning secret from the Vietnam War revealed -- how U.S. forces were tricked into firing on their own.

And Hollywood on the campaign trail -- celebrities pick South Carolina. Find out who's backing whom.

But do they really matter to voters?

Stick around.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: United States forces tricked into firing on their fellow American soldiers -- it's a stunning revelation contained in once secret documents on the war in Vietnam.

Let's turn to CNN's Brian Todd.

He's been going through all of these documents.

Give us the details -- Brian.

BRIAN TODD, CNN CORRESPONDENT: Well, Wolf, the man who disseminated this document says he's never seen anything like it before. It shows the North Vietnamese, although heavily outgunned, tapped into U.S. communications to potentially deadly effect.

(BEGIN VIDEOTAPE)

TODD (voice-over): Chilling new information that one of America's most notorious enemies tricked U.S. forces into firing on their own troops. It comes from a newly declassified report from the National Security Agency.

Mid-1960s -- North Vietnamese intelligence units infiltrate American radio communications dozens of times. On eight occasions, the report says, the communists were able, by communicating on allied radio nets, to call in allied artillery or air strikes on American units.

STEVEN AFTERGOOD, FEDERATION OF AMERICAN SCIENTISTS: I can't think of a single documented case where an opposing force was able to use allied communications against U.S. forces. I just -- I'm not sure it's ever happened before. And it shows tremendous sophistication on the part of the North Vietnamese.

TODD: Experts are not sure if the North Vietnamese spoke English when they called in the air strikes or spoke Vietnamese to South Vietnamese forces who were American allies. It's also not known how many Americans were killed or wounded in those air strikes. But it's believed friendly fire accounted for roughly 15 percent of all U.S. deaths in Vietnam.

The report was made public by a branch of the Federation of American Scientists that works to get government documents declassified. This report also backstops an extraordinary finding by the NSA two years ago about the key second North Vietnamese strike on U.S. warships in the Gulf of Tonkin in 1964, which brought the U.S. into the Vietnam War.

AFTERGOOD: There was no second attack. And so, in a sense, the Gulf of Tonkin Resolution was built on an error -- a misunderstanding with tremendous consequences, as we all know.

(END VIDEO TAPE)

TODD: So how did that mistake happen in the Gulf of Tonkin incident?

Stephen Aftergood cites part of this new document, saying it was basic miscommunication, that U.S. signals intelligence picked up something from the North Vietnamese, indicated something had happened. But ambiguous language on the part of translators led to a critical misinterpretation of that -- Wolf.

BLITZER: Brian Todd.

What a story.

Thanks very much for sharing it with our viewers.

President Bush now wrapping up his eight day trip to the Middle East with a stopover in Egypt, where he's making another push for peace before he leaves office.

Our White House correspondent, Ed Henry, is traveling with the president and has this report.

(BEGIN VIDEOTAPE)

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT (voice-over): President Bush used the stunning backdrop of Sharm El Sheikh -- which Egypt bills as the City of Peace -- to cap his first Mideast trip in office. Flanked by Egyptian President Hosni Mubarak, Mr. Bush declared he was returning home full of hope -- even though little, if any, progress was made on the actual stumbling blocks dividing Israelis and Palestinians.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: When I say I'm coming back to stay engaged, I mean it. When I say I'm optimistic we can get a deal done, I mean what I'm saying.

HENRY: The most significant development was that after seven years of a somewhat hands-off role in the peace process, the president is showing a sense of urgency. The most revealing moment of the trip spoken almost accidentally.

BUSH: I'm not a timetable person. Actually, I am on a timetable -- I've got 12 months.

HENRY: With the president bluntly stating his motivation of wanting a deal before leaving office, the deadline could help by prodding Israeli Prime Minister Ehud Olmert and Palestinian President Mahmoud Abbas to make tough compromises.

EHUD OLMERT, ISRAELI PRIME MINISTER: The courage that you have, the determination that you...

MAHMOUD ABBAS, PALESTINIAN AUTHORITY PRESIDENT (THROUGH TRANSLATOR): We start with you a new year, hoping that this will be the year for the creation of peace.

HENRY: The president's engagement was visible in other ways. Normally on these trips, he's all business -- rarely seeing the sights. This time, he lingered eight days, hamming it up with a sword in Bahrain, kissing leaders and holding their hands and waving another sword in Saudi Arabia. Solemn moments, too, at the Holocaust Memorial in Israel and walking in the footsteps of Jesus along the Sea of Galilee.

There are many obstacles, because old habits die hard in this region, from the constant violence, to the fact that one day after the president delivered his speech urging the spread of freedom, we landed in Saudi Arabia, a closed society nowhere close to democracy.

(on camera): But at every stop, President Bush was privately peppered with questions about the wide-open U.S. presidential election. Administration officials read that to mean Mideast leaders are very nervous about the uncertainty and are going to push to get a peace deal done while Mr. Bush is still in office.

Ed Henry, CNN, Sharm El Sheikh, Egypt.

(END VIDEOTAPE)

BLITZER: Amending the Constitution to meet God's standards -- that's what Republican presidential candidate Mike Huckabee says he wants to do. We're going to tell you what he has in mind.

Plus, my one-on-one interview with Mitt Romney. You're going to find out how he plans to repeat his Michigan win in just three days. He's standing by live. We'll speak with him.

Stay with us.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Carol Costello is monitoring some other important stories incoming into THE SITUATION ROOM right now -- Carol, what's going on?

CAROL COSTELLO, CNN CORRESPONDENT: Well, Wolf, O.J. Simpson in a Las Vegas courtroom today where an angry judge scolded him and doubled his bail to $250,000. That's because Simpson violated terms of his previous bail by trying to contact a co-defendant. The judge also ordered Simpson to pay 15 percent of his bail before being released after learning that he never paid anything toward his first bail. So far, Simpson hasn't come up with the money and he is still behind bars.

The Marine wanted in the death of a pregnant colleague may have fled the country. The FBI saying it strongly suspects Corporal Cesar Laurean has fled to his native Mexico. Laurean is charged with murdering Lance Corporal Maria Lauterbach, who had accused him of rape. Her body and that of her fetus were found in a fire pit in Laurean's backyard.

They say everything is bigger in Texas. But now we're learning that applies to carbon emissions, too. The U.S. Energy Information Administration says Texas is the country's top producer, spewing 670 million metric tons of the greenhouse gas in 2003. That's more than second place California and third place Pennsylvania combined.

Back to you -- Wolf.

BLITZER: Thanks very much, Carol, for that.

Mike Huckabee wants to change the U.S. Constitution. The Republican presidential candidate wants to conform it to what he's calling "God's standards." You're going to hear what Huckabee is saying and what his critics are saying, as well.

Also, Mitt Romney -- he won big in Michigan, in large part because of his focus like a laser beam on the ailing U.S. economy. I'll ask him what he plans to do about it. He'll join us live.

And a rural Texas town in the spotlight after several dozen residents report seeing UFOs. We're even getting an I-Report video of a possible UFO sighting from a nearby town.

What was it?

We'll share it with you.

Stay with us.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

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

Happening now, the pace of inflation slowed a little bit in December, to .3 percent, after jumping .8 percent in November. Overall, prices are up 4.1 percent from a year ago. That's the highest inflation rise in 17 years -- 17 years in this country.

Also, a federal judge is ordering a small Texas town to surrender 233 acres of land for construction of a border fence. The mayor of Eagle Pass calling the move -- and I'm quoting now -- "heavy handed."

And the autopsy report on Ike Turner is now in. It turns out he died of a cocaine overdose. The music pioneer died just over a month ago at the age of 76.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

Republican presidential candidate Mike Huckabee says the U.S. Constitution needs to be amended to conform to what he calls "God's standards." It's a statement some critics say they find very, very troubling.

Carol Costello has been looking into this story for us.

What issue -- what is he specifically talking about?

COSTELLO: Well, he's talking about the incredibly divisive issue of abortion. There is a split among social conservatives in how to ban the procedure. Huckabee has positioned himself far to the right, invoking God and the Constitution.

(BEGIN VIDEOTAPE)

MIKE HUCKABEE (R), PRESIDENTIAL CANDIDATE: Life begins at conception and we'll protect it until its natural conclusion.

COSTELLO: Mike Huckabee, a Baptist minister, says he is so strongly opposed to abortion he advocates a constitutional amendment banning the procedure. It's an unusually strong stance. But what's angering some criticizing is the way he is selling his idea.

HUCKABEE: I believe it's a lot easier to change the constitution than it would be to change the word of the living god and that's what we need to do is to amend the constitution so it's in god's standards rather than try to change god's standards so it lines up with some contemporary view of how we treat each other and how we treat the family.

COSTELLO: Huckabee's idea reflects a split in the Republican Party. For years, social conservatives have opted to chip away at roe v wade through urging states who outlaw abortion as opposed to an outright constitutional amendment. John McCain, Fred Thompson and mitt Romney among them.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: I'm not looking to change the constitution. I do believe from time to time we will have amendments to the constitution, particularly where there has been confusion on its applicability. I believe a marriage should be defined as between a man and woman but I'm not looking to apply a religious text to the constitution of the United States.

COSTELLO: And constitutional experts say that's exactly what Huckabee wants to do.

PROF. JONATHAN TURLEY, GEORGE WASHINGTON LAW SCHOOL: What Governor Huckabee is suggesting is to create more of a sectarian constitution, a constitution that reflects not morality but his specific view of morality.

COSTELLO: But it's Huckabee's comments seem to be appealing to evangelical Christians, an important voting block in the coming South Carolina primary.

TONY PERKINS, PRES. FAMILY RESEARCH COUNCIL: I don't think the governor in any way was injecting god or religion. I think he was stating a very clear fact that many Americans believe as well.

COSTELLO: At least one republican strategist says it's a good strategy to win South Carolina's conservative vote. But it may back- fire if Huckabee makes it to the general election.

(END VIDEOTAPE)

COSTELLO: If you're wondering where Americans stand on the issue of a constitutional amendment to ban abortion, according to a CNN "USA Today" gallop poll taken last November, 37 percent favor one, 61% oppose a constitutional amendment banning abortion.

WOLF BLITZER, CNN ANCHOR: Carol, thanks very much for that report.

The Democratic Party penalized Michigan for moving up its primary. That state will get no delegates at the Democratic National Convention at the end of the summer in Denver. Hillary Clinton ran virtually unopposed there but didn't exactly run away with the contest. Republican strategist Karl Rove gleefully takes note of that. Listen to this.

(BEGIN VIDEO CLIP)

KARL ROVE, FORMER PRESIDENTIAL ADVISER: She is running against nobody and nobody gets 40% of the vote. The other 5% of the vote went for three other people. 27,924 votes went for the guy who believes in UFOs, the guy who dropped out, and the guy who last held public office somewhere around 1855. That's a pretty remarkable testament to the deep concerns that democrats have about Senator Clinton when she can barely beat nobody else.

(END VIDEO CLIP)

BLITZER: Democratic front runners Hillary Clinton and Barack Obama are each engaged in star wars, trying to harness celebrity power to win over young voters. Suzanne Malveaux is joining us in South Carolina right now. Where is Hollywood throwing its weight around in these critical presidential contests?

SUZANNE MALVEAUX, CNN CORRESPONDENT: Well, you know, really what these Hollywood stars do, they bring out the fans in the numbers and that critical information in the campaign, so the e-mails, cell phone numbers of these folks, so they can follow up, make sure they vote on primary day but as you know, it is all about the candidates delivering the closing arguments here to make their case that they are the winner. In order to be the winner, they have to win over the young voters.

(BEGIN VIDEOTAPE)

MALVEAUX: Cue the campaign theme songs, because look out, South Carolina. In days, Hollywood's biggest stars will be descending on you.

HILL HARPER, ACTOR/OBAMA SUPPORTER: Go to churches, we will go to beauty shops, barber shops and that will be great. It's not just me. There are many people from Los Angeles.

MALVEAUX: Actor on "CSI New York" and best selling author and youth activist Hill Harper will be one of many campaigning in South Carolina going after that hot commodity, young folks who could tip the balance of power and determine who gets the democratic nod.

OPRAH WINFREY, TALK SHOW HOST: Thank you, South Carolina.

MALVEAUX: There's fierce competition for their attention. On Barack Obama's side, Oprah Winfrey, Scarlet Johansson, Will Smith, Halle Berry. And Harper who was one of Obama's secret weapons in Iowa where he was a big hit recruiting college students.

HARPER: We want to find out if they're registered. Are they going to vote? Who are they going to vote for? What are the issues they care about? And educate them about the senator if they're not already committed to voting for him. 50 million people watch a week. It creates a platform. We know that young people in particular pay attention to celebrity.

MALVEAUX: Actor Susan Sarandon and Tim Robbins have been frequent travel companions for the trailing John Edwards. Hillary Clinton's big name backers tend to be older, reflecting voters with deep pockets and President Clinton's close ties to Hollywood like Barbara Streisand, Ted Danson, Quincy Jones and Magic Johnson. While Hollywood stars can raise a lot of money, the question is who will be more successful in the fight over fresh voters. Clinton's supporter Anthony Singleton is not that impressed with the star power.

ANTHONY SINGLETON: I think it's a gimmick.

MALVEAUX: Obama supporter Samuel Robinson downplayed the celebrity influence.

SAMUEL ROBINSON, COUNCIL MEMBER: I am a free thinker.

MALVEAUX: Predictably, older voters are more dismissive. Sheryl Mack is a grandmother and Clinton supporter.

SHERYL MACK, CLINTON SUPPORTER: I think the bottom line is people will make decisions based upon what they think Hillary brings to the table.

MALVEAUX: But getting young voters to the table in South Carolina is key, many who are still on the fence.

UNIDENTIFIED FEMALE: I guess Hillary or Obama.

UNIDENTIFIED MALE: It is important because I haven't been following it that closely yet.

UNIDENTIFIED MALE: At this point, I have not chosen a candidate. I'm waiting to hear some more debates.

(END VIDEOTAPE)

MALVEAUX: What is really unique about South Carolina is the fact that nearly 50% of the democratic voters likely to vote are African- American so it really means winning over the young voters in that group, a group that largely people have not been involved, is really going to be critical for the winning candidate.

BLITZER: We will see what kind of influence these stars have. Thanks very much, Suzanne, for that.

While the stars are coming out, the candidates themselves will also be in the spotlight. CNN and the Congressional Black Caucus Institute are sponsoring a democratic presidential debate in Myrtle Beach on Monday, January 21st. That's Martin Luther King Junior Day. Please join me and Suzanne Malveaux and Joe Johns for this southern showdown just five days before the democratic primary in South Carolina. It all begins next Monday night, 8:00 p.m. eastern right here on CNN.

He says he's been inspired by Ronald Reagan and the first President Bush. But Mitt Romney didn't mention the current president in his victory speech last night. I'll ask him why. Mitt Romney standing by to join us live. That's coming up.

Also, a small town abuzz after a mysterious sighting. What did dozens of people actually see in the sky? What was it?

Stick around. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: United States Navy right now battling environmentalists over the use of sonar and its possible effect on whales off the California coast. A federal judge ordered the U.S. Navy to curtail sonar use there but the Navy says that could harm national security. Now President Bush has stepped in on the side of the U.S. Navy.

Let's turn to our senior Pentagon correspondent, Jamie McIntyre, who's watching this story for us. Where do things stand right now, Jamie?

JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT: Well Wolf, it looked like the Navy had lost its battle with environmentalists until President Bush stepped in and gave them more legal ammo.

(BEGIN VIDEOTAPE)

MCINTYRE: The case fits the Navy's responsibility to protect the environment, in this case whales and other sea mammals against its mission to protect the U.S. against a new generation of quiet diesel submarines used by Iran, North Korea and China. At the heart of the controversy, underwater radar and its effects on underwater mammals such as these beached whales found in the Bahamas eight years ago. The Navy admits the whales were probably trying to get sound waves from an unusual exercise and were likely driven ashore in desperation.

Two weeks ago, a federal court ordered the Navy to curb its sonar use during its training this year off the coast of California. So environmental groups are furious that President Bush has intervened, granting the Navy an exception and therefore a new legal basis to challenge the ruling.

UNIDENTIFIED MALE: The Navy can train effectively with sonar and abide by this injunction, do so carefully in a way that minimizes risk to marine mammals. It just doesn't want to.

MCINTYRE: The Navy says it uses 29 different measures to protect whales, including a safety zone of 1,000 meters around each ship. Sonar volume is turned down if a whale comes within the zone and is turned off completely within 200 meters.

The judge ordered a doubling of the safety zone and required an immediate sonar shutdown if a whale gets within 2,000 meters. A Navy statement says that requirement creates, "A significant and unreasonable risk that the Navy will not be able to conduct effective sonar training." And it argues the latest research indicates the way it uses sonar poses no threat to whales.

(END VIDEOTAPE)

MCINTYRE: The Navy will now head back into court armed with the new exemptions from President Bush that exempt them from the laws the judge used to impose the new restrictions but the Navy admits it will have to abide by whatever the court says and they say if they're forced to not use their sonar in this year's training, it will result in some ships being not battle-ready as they head out to far parts of the world. Wolf?

BLITZER: Jamie McIntyre, watching this story for us at the Pentagon, thanks.

Let's take a look at some other stories around the world right now. Fidel Castro shown smiling, speaking and having apparently a pretty good time, but if he's well enough to meet with another leader, why won't he appear before the Cuban people? Let's turn to our own Morgan Neill. He's CNN's Havana bureau chief. Morgan?

MORGAN NEILL, CNN HAVANA BUREAU CHIEF: Wolf, Cuban television has broadcast new video and photos of Fidel Castro recorded during a meeting late Tuesday with Brazilian President Luis Inacio Lula da Silva. The video, edited by Cuba television, shows Castro and Lula da Silva taking pictures of each other, clearly enjoying themselves. The Brazilian leader said jokingly that he spoke for half an hour while Castro spoke for two hours. Lula da Silva said he found Castro in very good condition, a man of incredible lucidity he said and impeccable health. Little of the conversation was audible but near the end of the video, Castro bid good-bye to the Brazilian leader. I feel very good, said Castro, apparently referring to their meeting. The long-time Cuban leader hasn't made a public appearance in nearly a year and a half. The latest pictures, he looks thin but alert. In an essay in today's state run newspapers, Castro writes he's too ill to speak to voters ahead of this weekend's Parliamentary elections in Cuba, while Brazil's president says Castro looked ready to retake his political role within Cuba. It's worth pointing out this is something we have heard time and time again over the last year and a half and Castro has yet to emerge. Wolf?

BLITZER: Thanks very much, Morgan Neill for us; our man in Havana.

Mitt Romney made his Michigan win look relatively easy but can he keep up the momentum in the upcoming weekend primary? I'll have my one-on-one interview with Mitt Romney, the winner of the Michigan primary. That's coming up right here in THE SITUATION ROOM.

(COMMERCIAL BREAK) BLITZER: Fresh off his big win in the Michigan primary last night, republican presidential candidate Mitt Romney is stumping today in South Carolina, which holds its primary this Saturday. The former governor of Massachusetts joining us now live. Governor, congratulations on a big win last night.

ROMNEY: Thanks, Wolf. It feels terrific.

BLITZER: Well, you got two goals, now, if you include Wyoming, which is still as far as I can tell a state in the United States. And you got two silvers. Now we move on to Nevada and South Carolina.

Let's talk about the big issue that in the exit polls among democrats and republicans was underlined yesterday, the state of the U.S. economy. If you're president of the united states and there is a recession right now or close to a recession, what's the immediate thing you need to do right now, knowing that inflation is a big problem as well?

ROMNEY: Well, the first thing you do is make sure that the democrats don't have their way and raise taxes. Hillary and Barack Obama and John Edwards are all planning on putting in programs that cost additional taxes being raised and that slows down the economy. It doesn't help it.

Number two, you find ways to provide capital to the economy in a way that allows it to grow. If you just put money out there, why, you are going to send money off to the oil-producing states and they will be happy as a clam. The right thing to do is invest in our future. That's why my tax savings plan is for the middle class, for people earning $200,000 and less. It says save your money, tax free. Puts more money in their pocket and it also creates more capital.

BLITZER: But governor, those are long-term steps. There's an immediate crisis right now. A lot of poor people can't afford the high energy costs. They are having trouble heating their homes right now. They are even having some trouble buying food. What do you do in the short term right away to sort of stimulate the economy and help these folks?

ROMNEY: Well, certainly you are going to care for the very poor to make sure people's homes don't have their pipes freeze, to make sure food is on the table. That doesn't cause economic stimulus, however. That's a program to care for the poor. That's certainly, that's something we have always done. We have a home heating oil program, home heating oil assistance program. These programs are there. If they need to be adjusted, then those are adjusted to care for the poor.

If you want to see the economy get growing, you cut back on the taxes so people can count on making investments and saving for the future. You also do something which I proposed in Michigan, which is you substantially increase our investment in research and technology. Now, that's money going into institutions of higher learning, to research centers, to places where people are earning salaries as well. But we are building technologies which free us of our dependence of foreign oil which allow us also to build the products of the future. You want to be spending money but spend it on things that have lasting value.

BLITZER: A lot of economists say we may not technically be in a recession but it's getting close, it looks very worrisome. The more people hear that word, the more they start behaving as if there is a recession and they stop buying things and stimulating the economy, if you will, that they may have otherwise purchased. What are you going to do about that?

ROMNEY: Well of course, the greatest fear with a recession is that people just get the recession mentality and cause the recession. Of course, it comes bouncing back shortly thereafter. Any time you have a recession, people at the entry level of our economic ladder, they really have the toughest life because they are wondering if they can put food on the table. It's important for us to try to keep that psychology from setting in. That's why the president and the head of the Federal Reserve need to be very careful in communicating what is and what's not going on. Ben Bernanke has taken action to lower the interest rates to bring additional credit to the market. He's going to do that again by all the signals he has been sending out. And the president as well should show the even course he's planning on setting to make sure we don't fall into some kind of economic slowdown. But I believe investing in our future and holding down our taxes for middle income individuals, those are two of the best things we can do to build a brighter tomorrow.

BLITZER: Are you concerned about the Saudis, Kuwaitis, Singapore, a lot of countries that have a lot of cash, China, they are buying up huge chunks of American companies, especially in the financial sectors right now, whether Citigroup or some of the other big companies? Have we lost control of our own economy?

ROMNEY: Well, you know, for the last several years, they have been the source of all of the excessive spending that's been going on in Washington. Washington keeps on spending more and more money than it takes in and where do you think we have been getting the money from? We have been getting it from those countries. They have been taking debt from this country. At some point they want to turn that into something. They don't want banks full of paper. They want to buy things with it. Now they are getting that chance. People should have thought of this over the last several years as Washington has continued to spend us into a financial hole. It's one of the reasons I want to go to Washington. That place is fundamentally broken. They make promises to reign in spending but they don't. They make promises to cut back on our entitlement growth but they don't. You know, it's time to have somebody go to Washington who understands how the private sector works, who knows why jobs go away, who knows how to balance books, and that's one reason I'm in this race.

BLITZER: I take it you are concerned about the foreign countries purchasing big chunks of American companies?

ROMNEY: Oh, of course. You would like to have this only being done by highly successful American companies. But you know, on the other side of the aisle, any time they hear a corporation is making a lot of money they get very concerned. They talk about excess profits and try to cut back on profits. Look, I like profits in corporations. I want them to be successful. It means the future of America's bright because they are investing in growth and technology and innovation. But what's happened these last few years is that we have seen Washington spend so much more money than it takes in, we're having to go begging for dollars and go begging for support around the world. Now those nations around the world are buying things here.

BLITZER: One clarification because we are out of time. You referenced Ronald Reagan last night. George Herbert Walker Bush, as perhaps your role models right now. Why not the current president?

ROMNEY: Oh, I respect the current president as well. He's kept us safe these last six years. He fought for no child left behind, which I think was brave and a good thing. I do respect the president a great deal. In the case of his dad, and Ronald Reagan, you have people that are out of office and whose lives are quite heroic. I think you look to them if you're someone my age, you look to those guys that are out of office and acknowledge the extraordinary role they had in the last century, helping us defeat the great threats of that time, which was the spread of global communism.

BLITZER: Governor, congratulations once again. Thanks for joining us. Good luck this weekend.

ROMNEY: Thanks, Wolf. Good to be with you.

BLITZER: Appreciate it very much. Mitt Romney joining us here in THE SITUATION ROOM.

Coming up, my interview with another republican presidential candidate, Fred Thompson. You're going to find out what he says he would do to help people struggling in the economy right now.

Which candidate is best prepared to tackle the terror threat from day one? We'll have our reality check.

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

(COMMERCIAL BREAK)

BLITZER: Check back with Jack Cafferty. He's got the Cafferty file.

JACK CAFFERTY, CNN CORRESPONDENT: The question this hour is with a different candidate winning every week, how will the republican primary finally sort itself out?

We get this from Steven. "GOP will sort itself out when Giuliani puts the hammer down in Florida on Super Tuesday. Clearly, none of these candidates are blowing the field away. The main event will come with Florida where Giuliani's support is its strongest."

Todd in Bloomington, Indiana, "I'm not sure why the republicans even have caucuses and primaries. For the past several cycles, the religious right has dominated and look where that has gotten us. I'd say let's simplify it. Call a meeting of Pat Robertson and all the other religious zealots, let the big oil companies and the no good military contractors sponsor it and then let Robertson tell us what God has told him he wants this election cycle."

Patrick in Georgia, "I think the republican primary is headed for a brokered convention. Giuliani is dead in the water, and the other three have clear bases of support. The republicans are divided and demoralized and the democrats are going to take advantage of it."

Alex in California, "The GOP primary situation will be sorted out over time by republican voters. We still have 46 states to go and you see chaos because we don't yet have a presumed winner? You media types are too impatient. You want things to be all wrapped up and simple. Take a deep breath."

Marty writes, "Good question, Jack, but I really don't believe it matters which one wins in the end. No one wants more of the same republican mess we have now. Go John Edwards!"

Steven writes, "Does the republican party want any of them? The best thing the Republican Party can hope for is Michael Bloomberg to run as an independent."

And Peter has this suggestion, "Don't worry, Jack. Saudi bankers and Chinese industrialists will find a guy the Mexican government will approve of." Wolf?

BLITZER: Jack Cafferty with the Cafferty file. Jack, thanks very much.

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