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McCain's Comments on Troop Withdrawal in Iraq Draw Fire; House Fails to Pass Jobless Bill; Jim Johnson no Longer Vetting for Obama's VP

Aired June 11, 2008 - 17:00   ET


Happening now, a new salvo over Iraq in this presidential campaign. As Democrats jump on John McCain's latest comments, some Iraqi officials seem to be echoing Barack Obama. We'll tell you what's going on.

Also, a stunning window into the workings of al Qaeda in Iraq -- things you've never seen before. Our own Michael Ware is in Baghdad. He's going to be showing us the terror group's secret file seized and turned over to CNN by Iraqi militia.

And don't cross the Clintons. Some loyalists say they'll never forget other Clinton supporters crossed over to the Obama camp. I'll be speaking live this hour with James Carville and Bill Bennett. They're here. We'll talk about who's likely to get the cold shoulder, among other subjects. You're going to want to see this.

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

But we begin with a new controversy raging today over America's future role in Iraq.

John McCain touched off a powder keg today when he suggested that avoiding casualties carrying more weight than bringing U.S. troops home.

Listen to this from NBC's "Today Show."


UNIDENTIFIED MALE: Do you now have a better estimate of when America forces can come home from Iraq?

SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: No, but that's not too important. What's important is the casualties in Iraq. Americans are in South Korea. Americans are in Japan. American troops in Germany. That's all fine. American casualties and the ability to withdraw.


BLITZER: Democrats were quick to pounce, calling McCain -- and I'm quoting now -- "out of touch." The Senate majority leader, Harry Reid, said McCain "just doesn't get" what he called the grave national security consequences of simply staying the course in Iraq. McCain supporter Senator Joe Lieberman answered that, "Democrats are trying to distort McCain's words."

The U.S. and Iraq seem increasingly at odds, though, over just how many American troops should stay in Iraq and for how long and what they should be doing there.

Let's go live to our senior Pentagon correspondent, Jamie McIntyre. He's watching this story for us.

What we're hearing from some Iraqi politicians seems to echo what some politicians are saying here -- Jamie.


In Iraq, it's a question of how much sovereignty it should give up for security from the United States. And right now, many Iraqi leaders think it's time for the Americans to bow out. That sounds just like a page right out of Barack Obama's campaign manual.


MCINTYRE (voice-over): Republican John McCain has tied his campaign strategy on Iraq to a simple premise -- that America should stay as long as needed to ensure victory, even if it spells his defeat.

MCCAIN: I would much rather lose a political campaign than lose a war.

MCINTYRE: But on this issue, Iraqis have a vote. And in the heated negotiations between Washington and Baghdad over a Status of Forces Agreement, some Iraqi politicians are saying if there's no deal, U.S. troops should just go.

That sounds more like Barack Obama, who wants to bring most U.S. troops home in 16 months.

In Germany, President Bush insisted Iraqi Prime Minister Nuri Al- Maliki appreciates the American presence.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: You can find any voice you want in the Iraqi political scene and quote them, which is interesting, isn't it, because in the past, you could only find one voice. And now you can find a myriad of voices.

MCINTYRE: Talks are stalled over the extent U.S. forces can act without Iraqi permission. For example, Iraq wants U.S. troops to stay in their bases unless their help is requested. The State Department, which is hammering out the agreement, insists it won't tie the hands of the next president. But in an interview with CNN, Defense Secretary Robert Gates conceded the scope of the accord could go beyond the kind of routine military agreements the U.S. has with more than 80 other countries and require Congressional approval. ROBERT GATES, SECRETARY OF DEFENSE: If it emerges in a way that does make binding commitments that fit the treaty making powers or the treaty ramification powers of the Senate, then it will have to go that direction.


MCINTYRE: After five years of occupation, Iraqis are chafing at their loss of sovereignty the same way Americans are increasingly weary of the war. But, Wolf, it could well be that the next president is faced with bringing troops home on a timetable not entirely of his making -- Wolf.

BLITZER: Interesting. Important developments.

Thank you.

And now to a stunning and exclusive look inside al Qaeda in Iraq.

Our own Michael Ware and his Baghdad bureau colleagues have been very busy looking over the contents of computer hard drives filled with material seized from al Qaeda by U.S. allied Iraqi militias. Those militias provided copies of the al Qaeda hard drives to the U.S. military, as well as to CNN. Among the thousands of documents and hours of sometimes very graphic video, some fascinating insights about how al Qaeda does business.

We should warn you that some of the video is hard to watch.

CNN's Michael Ware has the story -- Michael?

MICHAEL WARE, CNN CORRESPONDENT: Wolf, what we're about to share is a window inside al Qaeda in Iraq like we've never seen before. In fact, only members of al Qaeda itself or a few within the U.S. intelligence community have ever had such a snapshot. This comes from a trove of documents -- the largest collection of al Qaeda materials in Iraq to fall into civilian hands, which were taken from a headquarters overrun by U.S.-backed militia and given to CNN.


WARE (voice-over): Al Qaeda gunmen brought this man here to die. Staged for maximum impact, he's to be executed on this busy market street. We don't know why. The al Qaeda members who recorded this tape offer no explanation. But the anticipation is agonizing, leading to a moment we cannot show you -- a punishment for betraying al Qaeda or for breaking their strict version of Islamic law.

By the way, it was public executions like this that would help lead to the unraveling of al Qaeda in Iraq. And al Qaeda knew it. Its leaders recognized their greatest threat was not the U.S. military, but the men in the crowds who witnessed the slaughters and who would eventually turn against them.

In fact, in a secret memo three years ago, a senior al Qaeda leader warned against a backlash for the public executions. They were being carried out, he wrote, in the wrong way, in a semipublic way, so a lot of families are threatening revenge and this is now a dangerous intelligence situation.

But it took U.S. intelligence more than a year to understand al Qaeda's weakness. Most of these men were once insurgents or al Qaeda themselves. Now they're on the U.S. government payroll, assassinating al Qaeda and patrolling the streets. And it was one of these U.S.- backed militias, as unforgiving as this one, who overran an al Qaeda headquarters. They discovered computer hard drives with thousands of documents and hours upon hours of videotape and passed them all onto the U.S. military and to CNN.


WARE: And, Wolf, what we've also seen from within the pages of these documents is that al Qaeda in Iraq had penetrated not just the Iraqi government with its spies, but even U.S. bases. Included on the hard drives were schematics for the construction of a bunker on a U.S. base that had been given to al Qaeda by one of its infiltrators -- Wolf.

BLITZER: Michael, what does all this tell us?

And it's really remarkable material you've gotten your hands on.

What does it tell us about al Qaeda in Iraq right now?

WARE: Well, Wolf, in our discussions with U.S. military intelligence and other intelligence agencies with whom we've shared this material and talked about it, they say that this gives us an insight into the inner workings of al Qaeda in Iraq. It reveals organization far more sophisticated, far more bureaucratic -- indeed, in one headquarters alone, there were 80 execution videos that were never put on air or used for propaganda. They were merely used to just -- to verify the killings to their superiors.

So we get an insight of the like we've never seen into an organization more menacing than many had feared -- Wolf.

BLITZER: Michael Ware reporting for us from Baghdad.

Michael, good work, as usual. Thanks very much.

WARE: Thank you.

BLITZER: And Michael is going to have a lot more on these exclusive al Qaeda tapes, including the information he mentioned on terrorists infiltrating U.S. military compounds. That's coming up later tonight on "A.C. 360," 10:00 p.m. Eastern.

There's been a vote up on the Hill on the extending -- extending unemployment benefits.

Let's go back to Kate Bolduan. She's working this story.

What happened -- Kate? KATE BOLDUAN, CNN CORRESPONDENT: Well, Wolf, just coming in, we just did -- the vote just finished up in the House. And this is regarding extending unemployment benefits. And the vote just failed. The bill did not pass. It failed -- 279 were in favor of it, but 144 were not. But every -- but because of the rules surrounding this vote, people supporting this bill, they needed a two-thirds majority, not just a simple majority. And they fell three votes short of getting that two-thirds majority to get this bill passed.

It is noteworthy, as we had mentioned earlier, that many Republicans were crossing over to vote in favor of this measure. Roughly four dozen Republicans did so in this vote. But again, it did not pass -- Wolf.

BLITZER: And they would have extended the unemployment benefits for an extra 13 weeks for those unemployed. Three votes shy, even though an overwhelming majority, 279 to 144, in favor. But as you point out, they need that two-thirds majority and they came up short.

Thanks very much, Kate, for that.

BOLDUAN: Of course, Wolf.

BLITZER: Let's go right back to Jack Cafferty. He's got "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: President Bush told a British newspaper, "The Times," that he regrets using phrases like "bring 'me on" and "wanted dead or alive" after 9/11. Bush says it made him seem anxious for war in the eyes of the world. The president says that, in retrospect, he could have used a different tone from the cowboy rhetoric that sent the message he was not a man of peace.

Now he figures that out.

Mr. Bush talked about how painful it is for him to put youngsters in harm's way. But he said he doesn't regret invading Iraq. He insisted at a news conference today that removing Saddam Hussein was the right decision and made the world a better place -- a safer place.

President Bush also said Republican John McCain is going to have to distance himself from the White House and Bush. He called McCain an independent person who will make his own decisions.

There does, however, seem to be one unavoidable similarity between the two men -- they do both manage to put their feet in their mouths with some regularity.

This morning on NBC's "Today Show," John McCain was asked, since the surge appears to be working, if he had a better estimate of when our troops might come home from Iraq.

His answer: "No, but that's not too important".

He went on to say casualties are more important, that there are Americans stationed all over the world who are not in harm's way. My guess would be that it's very important to the families of the 150,000 plus troops that we currently have stationed in Iraq.

Here's the question: Do you think President Bush was misunderstood when it comes to the war in Iraq?

You can go to and post a comment on my blog.

Interesting timing, Wolf, that these comments and reflections are suddenly coming from President Bush with six or seven months left on his second term.

BLITZER: Very interesting.

Jack, thanks very much.

Coming up, American allied troops killed by U.S. war planes -- there's an accident that's sparking outrage. You're going to find out why it could have major consequences in the war on terror and the hunt for Osama bin Laden. This is a significant development today.

Also, the suspense is mounting, even as there are major changes in Barack Obama's vice presidential search team. We're going to show you who's on the short list for the vice presidency and who's not.

Plus, former friends cross the Clintons and are now on the outs with the country's most powerful Democratic couple. We'll talk about that and more with our political contributors, Bill Bennett and James Carville. They're standing by right here in THE SITUATION ROOM.


BLITZER: He was supposed to vet vice presidential candidates for Barack Obama. But Jim Johnson didn't stand up to the vetting of critics, who said he received a sweetheart deal on a mortgage. Johnson today stepped aside, a decision which Obama says he accepts.

Let's go to CNN's Brian Todd. He's looking at this story and more, as far as the search for a Democratic vice presidential candidate is concern.

What are you picking up -- Brian.

BRIAN TODD, CNN CORRESPONDENT: Well, Wolf, this seemingly leaves the campaign -- at least the search team -- in a bit of limbo, at least for the moment.

But on the positive side, the team had already gotten a running start over the past few days.


TODD (voice-over): It's now a search team in transition with the departure of key player, Jim Johnson. Barack Obama's campaign isn't talking about a possible replacement yet, but the team looking for his running mate has already done a lot of leg work. When they made the rounds on Capitol Hill, one of the first people they spoke to was North Dakota Senator Kent Conrad. Conrad is a close friend of Obama's, but tells us he's not on the list. Neither he nor Obama's campaign will say who is. But Conrad says the search team discussed as many as 20 names with him and zeroed in on some key areas.

SEN. KENT CONRAD (D), NORTH DAKOTA: They're very focused on the quality and character of the various people that were being discussed -- what did I know about them, how did their colleagues view them, were they respected in terms of the work that they do.

TODD: A few names float to the top. Obama's just vanquished primary opponent is the most obvious.

SEN. BARACK OBAMA (D), PRESUMPTIVE NOMINEE: Senator Clinton would be on anybody's short list. She is an extraordinary talent and a major leader in her party, as she showed during the campaign.


TODD: But if the rancor of the primaries and the persistent questions of how to handle Bill Clinton become too much to bear, Senators Joe Biden and Chris Dodd and New Mexico Governor Bill Richardson are often mentioned. Analysts say they can counter the rap on Obama's lack of experience.


DAVID GERGEN, CNN SENIOR POLITICAL ANALYST, FORMER PRESIDENTIAL ADVISER: I think the first and most important thing is that he choose someone who is seen as a serious person of gravitas, someone who could become president.

TODD: Virginia Senator Jim Webb and Kansas Governor Kathleen Sebelius are thought to be in play, since they can help in key electoral regions. One thing to keep in mind -- any relative newcomer to the national scene will come with a warning label.

PETER FENN, DEMOCRATIC STRATEGIST: You don't choose someone who people have never heard of and who hasn't been vetted and suddenly you get them out there and you think uh-oh, you know, I've got trouble. You don't go with an initial reaction to someone in a meeting.


TODD: There's also speculation that Obama may select a former military commander to shore up his national security credentials. But, again, that brings a warning from Democratic strategists -- be careful of someone who's never run for office. The political traps are just too hazardous -- Wolf.

BLITZER: There are some fairly big names among those military leaders, aren't there -- Brian? TODD: Yes. Two names that have come out, two former top NATO commanders, General James Jones and General Wesley Clark, who's also a former presidential candidate. Clark had supported Hillary Clinton, but like other party leaders, he's been singing the tune of unity lately, so he could be in the mix.

BLITZER: Thanks very much, Brian Todd, for that.

One after another, they jumped ship, leaving the Clinton camp to Barack Obama. They also left behind some hard feelings.

Let's go to Mary Snow. She's watching this story for us.

Some Clinton royalists are holing grudges we're being told -- Mary, what do we know?

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, the chapter in Hillary Clinton's campaign may be closed, but there are still open wounds over those who crossed the Clintons.


CLINTON: So today I am standing with Senator Obama to say, yes, we can.

SNOW (voice-over): Yes, Senator Hillary Clinton can support Barack Obama. But as for the former Clinton supporters who switched sides to support Obama, forgiving and forgetting might not come that easily. "The New York Times" reports that some Clinton loyalists have been keeping tabs on those who crossed the Clintons. One former Clinton adviser says there's no doubt some have forever burned bridges with the power couple.

GERGEN: I think it would be wrong to say that the Clintons will have an enemies list in the Nixonian sense. You know, they do have long memories, but I don't think they have long knives after the people who have -- who broke with them.

SNOW: Former Clinton aide Lanny Davis is one such loyal Clinton supporter with a long memory.

LANNY DAVIS, FORMER CLINTON SPECIAL COUNSEL: I certainly know that I would never forget. I always can forgive, but I won't forget, as President Kennedy once said.

SNOW: Davis says he's not upset that some former Clinton supporters endorsed Obama. He says he's upset because he says they violated what he calls a fundamental rule of life.

DAVIS: You don't trash, publicly, somebody who's been good to you, period. And that's why Bill Richardson is the number one person whose name evokes the most anger in me.

SNOW: Former Clinton administration official Bill Richardson says he knows the Clintons have been unhappy with him since he endorsed Barack Obama. And he's not the only one thought to be on the outs. "The New York Times" says several Kennedys won't be in good graces, along with some members of the media, like NBC's Chris Matthews and Keith Olbermann, and "Vanity Fair's" Todd Purdum, who drew ire from Bill Clinton for his recent profile of the former president.


SNOW: So what will it mean to be on the outs with the Clintons?

Some former Clinton aides say expect a cold shoulder and no favors. But the former Clinton aides I did speak with say Bill Clinton can hold a grudge, but that it might take Hillary Clinton longer to forgive and forget, since she tends to take things more personally at times -- Wolf.

BLITZER: All right, Mary.

Thanks very much.

Mary Snow reporting.

It's helped make him a success, but it's also a thorn in Barack Obama's side. You're going to find out why the Internet may be both the best and worst thing that's ever happened to his campaign.

Plus, long time Clinton friend and supporter James Carville, he's here in THE SITUATION ROOM. He has a vice presidential idea for Barack Obama. It might surprise you. We're going to talk to James Carville and Bill Bennett right here in THE SITUATION ROOM. We'll also ask James about a Clinton "enemies list."

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


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, some new information on that deadly plane fire in Sudan's capital. Initial reports said it was a crash landing. But officials now say the Airbus A310 caught fire after touching down at the Khartoum airport. At least 30 people were killed. Six are unaccounted for. And 178 people survived.

A new surge in the price of crude oil, spiking more than $5 today, settling at $136 a barrel. Now, the Energy Department is warning there is no relief on the horizon. It says oil will likely remain above the $100 a barrel mark and gas above the $4 a gallon mark through 2009.

Cold comfort for Pluto -- stripped of its status as a planet two years ago by the International Astronomical Union. Now the same group has decided that similar objects circling the sun but too small to qualify as planets will be called plutoids. There's only one other known plutoid -- the larger, more distant Aris, whose discovery led to Pluto's demotion.

Back to you -- Wolf.

BLITZER: Carol, thanks very much.

U.S. war planes make a deadly mistake and wind up killing almost a dozen soldiers of an important ally in the war on terror. You're going to find out why Pakistan is calling this a "cowardly act." The ramifications significant.

Also, we're going to show you why the Internet may be the best thing that ever happened to Barack Obama's campaign, but also could be among the worst.

And James Carville has a unique idea about who might be the next best vice president.

He joins us with Bill Bennett right here in THE SITUATION ROOM.


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

Happening now, almost a dozen Pakistani troops killed by friendly U.S. fire. Now outrage over incident is putting new strains on an already troubled relationships and raising questions about the future of key U.S. ally in the war on terror. We're working the story.

Also, deadly payback for a crackdown on cartels. Thousands of people killed in spiraling violence. We're going to take you to the front lines of a drug war raging on America's doorstep.

And high marks on the campaign trail for Chelsea Clinton.

So what will she do now that her mother's campaign is over?

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

But first this -- the search for a running mate intensifying right now for both John McCain and Barack Obama.

Joining us now to talk about this and more, our political contributor, Bill Bennett. He's the host of the conservative -- national radio talk show host "Morning In America" and our own CNN political contributor, James Carville, a Democratic strategist. They're both part of the best political team on television.

Guys, thanks very much for coming in.



BLITZER: You have a unique idea, James, for an excellent running mate for Barack Obama, someone with some experience.

CARVILLE: Yes. I think if I was Senator Obama I would say the biggest economic problem we face is the biggest national security problem and the biggest environmental problem. And if I were him I would ask Al Gore to serve as his vice president and energy czar in his administration to reduce our consumption and reliance on foreign energy sources. That would send a signal to the world, to the American people, to the Congress, to everybody that America's getting serious about this horrendous problem that we face.

BLITZER: Here's what Al Gore said last December about another vice presidential bid. Listen to this.


AL GORE, FORMER VICE PRESIDENT OF THE UNITED STATES: I haven't ruled out the idea of getting back into the political process at some point in the future. Don't expect to. But if I did get back it would be as a candidate for president, not any other position. I don't expect to ever get back into the political...


BLITZER: He said I don't expect to ever get back into political process. What do you think?

CARVILLE: I'm not suggesting he's just any vice president. I'm suggesting that Senator Obama is president would give him line authority to deal with our consumption of oil. I think it would send a signal to the world and send a signal to the Congress and American people that he's going to be really serious and we're going to cut it and coordinate all of that as the vice president.

This is my opinion. It's the single biggest problem this country faces. I think Vice President Gore has enormous credibility on this issue. He knows it and that would be a very strong signal to the country.

BLITZER: All right. Bill Bennett what do you think?

BENNETT: I don't know. Obviously when it comes to Democrats you have to take James Carville's views very seriously. It's been said the vice presidency isn't worth a bucket of -- you know the rest of the line. To do it twice, I don't know that someone would want to do it twice. He's been there, done that.

Second -- you know, he is a Nobel Prize winner. He's kind of the master of the warming universe. I'm not sure he wants to put himself in a subordinate role.

Two other things about it. One, I'm not sure this is what Barack Obama needs. I see the point of the priority of the issue and I agree with James. It's a very important issue. But Barack Obama seems to need somebody more national security, foreign policy to ensure that side of things. And, you know, I just -- I just wouldn't see Gore taking it. BLITZER: Some of our viewers, James, might be surprised you're recommending Al Gore as opposed to Hillary Clinton.

CARVILLE: Well I mean obviously what I'm trying to do is to provoke a discussion on the importance of -- I think the biggest national security problem we have is energy security and our dependence on that. And I think that my idea is that this is the way that Senator Obama could say, we're dead serious about this.

Obviously I would be delighted if he picked Senator Clinton. I'm trying to be provocative in one sense but I think it's a very good idea and something they ought to consider.

BENNETT: You know the idea of independence if I could, is right. We are too dependent on foreign oil. The thing to do a lot of people believe, and I wish John McCain believed it, is to start drilling you know in Anwar and offshore. I don't think Al Gore is going to recommend that. I don't know what his proposals are. I haven't seen them.

BLITZER: All right.

James, let me get back to the story that was in "The New York Times" this morning which Mary Snow just followed up on this so-called Clinton enemies list that they have. They're holding a grudge and people like Bill Richardson among others are on a list because they were traitors, in effect. We all remember what you said about Bill Richardson and Judas.

CARVILLE: Right, the only Obama supporter I've ever criticized. I know Mark Leibowitz (ph). He's a very good reporter. The reporter is a very silly piece --

BLITZER: He's the reporter from "The New York Times."

CARVILLE: -- "New York Times" that wrote this story.

He's a serious guy. This is a very silly piece. I suspect that he was put up to this by an editor. He said there was a list but there really wasn't a list. And it's just laughable. I talk to a lot of people in Clinton land today. I'm not sure what even the point of the story was. It's being kind of mocked around Washington. I'm surprised Mark let himself be talked into writing a story this silly. Of course they know who's opposed to them. And they, you know, of course they know that. There's no list, anything like that.

BLITZER: From the beginning of the article, Mark, Bill, was that Doug Band who is a top aide to Bill Clinton, walks around, has got a list of, quote, the enemies, those who have betrayed the Clintons.

What do you make of the story?

BENNETT: Well, you know more disparagement on "The New York Times," this time from James. It's getting to be a very popular position in Washington. I don't know what a Clinton enemies list would be. What would they do? Put a horse in your bed? What does that mean? What kind of power do they have? If there is one I hope I'm on it.

CARVILLE: Actually I talk to Doug Band all the time. He's a friend of mine. The idea that he -- where does he keep the list? In his pop pocket? In his back pocket? Whatever. And the story it said well it might not be a list but the Clintons are aware who didn't support them. Of course they're aware who didn't support them. What politician isn't?

BLITZER: Bill, how big of a deal is what McCain said to Matt Lauer this morning on the "Today Show" about it's not that important how long, I'm paraphrasing, how long U.S. troops remain in Iraq, what's important are the casualties and stuff like that? You know he's being hammered right now by a lot of Democrats, including the Obama campaign, for suggesting it's not that important how long U.S. troops remain in Iraq.

BENNETT: Yes. He said it's not the most important thing, when they come home. I mean what he was doing, and I think he ought to elaborate in his speech is explain to people what the purpose of the U.S. military is. These are not a bunch of campers with water rising like it is in the Midwest now threatening a bunch of young kids. These are members of the U.S. military whose job it is to fight and win that war. And they will. And then they will be home. The suggestion that the purpose of an army is to come home is to miss what it is the military is for.

Nobody can instruct John McCain about what families are going through with those who are in service and suffering while in service. Goodness, gracious, five and a half years. You know, bring this issue on. Let John McCain and Barack Obama discuss who knows more about this. That's fine.

BLITZER: All right.

We've got to leave it there, guys. Thanks very much.

Bill Bennett and James Carville, a good discussion as usual.

And any Clinton calculation of whose loyal and who's not pales in comparison to the mother of all Washington enemies list. We were just referring to that. That would be the Nixon administration's decision to keep a list of opponents and political enemies, real and imagined, many of them imagined that surfaced during the Watergate hearings back in the 1970s. It included many members of Congress including Michigan's John Conyards, he's still there, and Minnesota's then Senator Walter Mondale. Even some celebrities like the pro football quarter back of the New York Jets Joe Namath and the actor comedian Bill Cosby.

From an original list of 20 names targeted for reprisals, the file grew to become several inches thick covering the fields of politics, business, the media and a lot more. Now, that was a real enemies list back in the '70s. Some of us remember those days. They're America's allies in the war on terror but tonight Pakistani officials are slamming what they call a cowardly attack. You're going to hear about the friendly fire incident that's causing such an up roar.

Plus, the Internet; it helped Barack Obama raise record amounts of money. But it also could lead to some damage for his campaign. The smear campaigns against the candidates. That's coming up right here in THE SITUATION ROOM.


BLITZER: It's a tangled web for Barack Obama. He certainly relies on it for raising money and spreading the word about his candidacy. Some of his opponents rely on it to spread rumors, sometimes very ugly rumors. Carol Costello is back with us. She's watching this story.

The Internet, is it more of an asset or headache for Barack Obama right now?

COSTELLO: Well, I guess Wolf you could call the Internet a politicians frenemy. Sometimes it's your best buddy and sometimes his evil twin.


COSTELLO: The internet has been Barack Obama's best friend. The Obama girl was just the first in a long line of well wishers. You could say Obama has been fortunate.

ABBI TATTON, CNN INTERNET REPORTER: Look at his online fundraising. One month alone during the primary season, $45 million online.

COSTELLO: But the Internet can turn on you too. In some ways it's become Barack Obama's worst enemy, too. Negative posts abound about his faith, patriotism and about his wife.

MICHELLE OBAMA, BARACK OBAMA'S WIFE: For the first time in my adult lifetime --

COSTELLO: And there's no stopping the rumors.

TATTON: It happens so fast. There's an anonymous smear and it gets forwarded and then it gets cut and pasted. It might get cross posted on to a blog post. These are rumors that start traveling virally.

COSTELLO: While the McCain camp relies on volunteers and the media to discern what's rumor and what's fact, the Obama campaign is going to beef up its camp's Internet operations to aggressively fight back these rumors. There are reports Obama will hire a sort of smear czar to oversee the effort. Campaign workers will directly respond to Internet attacks by sending supporters e-mail messages refuting online rumors. And the campaign has a fact check site on its website. Analysts say the reason for such strategy is clear. Internet rumors about Obama, especially his religion, have left cyber space and entered the non-virtual world. There are voters who now think he's Muslim.

UNIDENTIFIED FEMALE: Do you know whether or not Obama ever attended an Islamic fundamentalist school?

UNIDENTIFIED MALE: I've heard he did. I don't know any of the facts about it but I've heard he did.

COSTELLO: Obama is not Muslim and did not attend an Islamic fundamentalist school. Still the rumors and new rumors persist. Obama blames the media in part for fanning the flames.

OBAMA: There is dirt and lies that are circulated in e-mail and they pump them out long enough until finally you, a mainstream reporter, asks me about them.

COSTELLO: Still most analysts say the positive about Obama outweighs the negative online and they say his campaign has been effective in confronting the lies.


COSTELLO: There's some irony here. From day one he wanted to harness the web to create a grass roots effort online. He certainly did that successfully but now fully realizes he must make the same effort to fight what's become his frenemy.

BLITZER: Carol Costello with our political ticker, thank you very much.

Remember, for the latest political news me time check out That's where you can download our new political screensaver, where you can check out my latest blog post.

An air strike goes astray along Pakistan's rugged border with Afghanistan. That's causing a new increase in tensions between the U.S. and a key ally in the war on terror.

When it comes to lobbyists and their money, Barack Obama doesn't see completely eye to eye with a key supporter. I'm going to speak to Obama backer, Senator Dick Durbin of Illinois. He disagrees on one important front that involves lobbyists, money and Democratic senators.

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


BLITZER: An air strike goes horribly wrong along Pakistan's rugged border with Afghanistan. That's raising serious tensions right now between Pakistan and the United States.

Let's go live to our Pentagon correspondent, Barbara Starr.

Barbara, what's going on?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Wolf, there are a lot of questions about what exactly happened in Pakistan.


STARR: Pakistan says this is where three U.S. war planes dropped more than a dozen bombs, killing 11 Pakistani troops. The U.S. says it was going after militants who had attacked on the Afghanistan side of the border. As the burials began for the soldiers, the Pakistan military called it an unprovoked and cowardly attack. It's all set off new tensions between Washington and Islamabad.

UNIDENTIFIED MALE: There is anger on the Pakistani side.

STARR: Relations are already delicate. The U.S. military, which is giving Pakistan millions in aid, is pressuring it to crack down on the Taliban and al Qaeda but the fragile government is moving slowly. Many believe there won't be a real crack down until President Pervez Musharraf, widely seen in Pakistan in as too close to the U.S., is gone from power. Week long nationwide protests are expected to grow.

BRUCE RIEDEL, BROOKINGS INSTITUTE: It is a dramatic demonstration of the Democratic forces in Pakistan demanding that Musharraf be removed from power.

STARR: Not helping Musharraf, the U.S. had a confused reaction to the bombing. The State Department expressed remorse but the Pentagon wasn't ready to join in.

GEOFF MORRELL, PENTAGON SPOKESMAN: Every indication we have at this point is that this was indeed a legitimate strike in defense of our forces.


STARR: A lot of questions now about whether the U.S. and Pakistan is getting ready for a Pakistan without Pervez Musharraf -- Wolf.

BLITZER: And those ramifications, we'll be watching for those as well.

Thanks very much, Barbara.

Barbara is at the Pentagon.

Let's go back to Jack. He's got "The Cafferty File."

Lots of news today, Jack.

CAFFERTY: It's busy, isn't it?

The question this hour, Wolf: Do you think President Bush was misunderstood when it comes to the Iraq war? He said in an interview with the British paper, looking back perhaps he was.

Allen disagrees. He said: "No, he was very clear. He said he had no regrets. He doesn't regret taking the country to war on bad intelligence, he doesn't regret killing hundreds of thousands of people, he doesn't regret the death and dismemberment of our troops, and he doesn't regret destroying a country that never attacked us. This man sleeps well at night because these things are not important to him."

Donna writes: "No, he and Vice President Cheney have committed war crimes and crimes against our country. There are 35 articles of impeachment introduced in the House and there's been no coverage. If he had been unfaithful to his wife, you'd be covering it around the clock."

We actually talked about those articles of impeachment yesterday. Today they were referred to a committee. What that means is, for all intents and purposes, it's dead.

Brandon writes: "I do think that he was misunderstood. You can tell by looking at his face while he's speaking that he does feel remorseful. He did what he thought was right. I fully respect his decision for doing so despite what he said the decisions were correct."

Toby in Sedona, Arizona: "Misunderstood? Are you kidding? I'm not sure he could have made himself clearer. He even said that once it was obvious to the world WMDs were not going to be found in Iraq that had he known that in advance he would have made the decision to invade anyway. It was obvious to anyone with a brain the reason for war kept changing from terrorist threat to nuclear threat to biological threat to chemical threat to freeing the oppressed to starting a beacon of Democracy in the middle east to whatever it is today. What is it today? But there was one thing that wasn't changing. We were going to go to war. Period."

Finally, Gary writes: "The only misunderstanding was he thought he knew what he was doing."

If you didn't see your e-mail here go to my blog and look for yours there among hundreds of others.

Hundreds, Wolf.

BLITZER: Sometimes thousands.

CAFFERTY: Thousands.

BLITZER: Thanks, Jack.

Lou's coming up in a moment.

A war on drugs leaves thousands of civilians dead. Now the violence in Mexico is threatening to spill over into the United States. We're going to show you what has U.S. law enforcement very worried right now. We'll get Lou Dobbs' immediate reaction.

Plus, she spent months campaigning full time for her mom. So what will Chelsea Clinton do now?

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


BLITZER: The blood is flowing in Mexico right now. The body count is rising as narco traffickers fight among themselves and battle security forces. There are new fears the violence in Mexico could spread to this country.

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

ZAIN VERJEE, CNN STATE DEPARTMENT CORRESPONDENT: Wolf, Mexico's war on drugs can't be won without the U.S. But will more U.S. aid make a difference?


VERJEE: Mexico's drug war, 4,000 killed, more than 400 military and police officers. The country's acting police chief assassinated. It's payback for the government's crackdown on drug cartels. Fears in Washington the battles could spill across the border and threaten U.S. security.

ROBERTA JACKSON, DEPUTY SECRETARY OF STATE: Certainly, I think the cartels and the violence that they use can be considered terrorism.

VERJEE: Take a look at this map. The worst areas are along the U.S. border. In just this one town, in one day, nine people were killed.

Why is it so unstable?

Because of demand. Cocaine and marijuana just flow up through Mexico through this area into the United States. U.S. authorities say that Mexican drug traffickers have a presence in 82 cities right across this country. The situation is getting so dangerous that some Mexican policemen scared for their lives are turning up at the border asking for asylum in the U.S.

President Bush wants to help Mexico. Helicopters, surveillance equipment, parts of a 2007 initiative to root out corruption and boost border security.

UNIDENTIFIED MALE: Building a really good justice system that's effective, building strong police forces that people can trust and those are the things that are going to give us a solution in the long term.

VERJEE: The president wants Congress to fund a $1.5 billion aid package to Mexico over three years. JACKSON: I think the U.S. Congress understands Mexico cannot do this alone and it affects the United States. It affects our security.

VERJEE: Congress has already trimmed the cash for the first year and is attaching conditions to the aid to make sure the crackdown doesn't violate human rights and the money isn't lost to corruption. Mexico's furious at those conditions and wants Congress to soften them. U.S. officials worry Mexico may not cooperate as running gun battles rage at the border.


VERJEE: Another big problem, weapons comes from the United States. The Mexican embassy in Washington tells CNN that police forces there are out gunned by heavily armed drug organizations. They add too that Mexico wants to work with Washington to ensure the security of both Mexico and the U.S. -- Wolf.

BLITZER: All right, Zain. Thanks very much.

Let's discuss this with Lou Dobbs. He's got a show in one hour. I know you've been spending a lot of time on this very same story. What do you think? What's going on?

LOU DOBBS, HOST, "LOU DOBBS TONIGHT": We've been reporting for years what's going on with the drug cartels. Mexico remains a principal source of methamphetamines, marijuana, cocaine into this country. The idea that this is something, a new issue, is mind boggling because that open border which I've been calling for us to secure that border for literally years. Now people are starting to pay attention because 4,000 people have been killed in a year and a half in northern Mexico.

BLITZER: What about the billion dollar aid package that the administration would like to provide to Mexico?

DOBBS: It's absolutely -- it's absolutely essential. I have been calling despite the Democratic leadership's objections early on, I've been calling for that aid package to Mexico. It's absolutely essential. But we've got to begin to understand the United States can't tolerate a war that we're losing and have been losing for 30 years. No longer is it acceptable to consider young Americans, millions of them, simply collateral damage because somebody wants open borders. It's absurd.

BLITZER: What about the restriction some members of Congress want to impose on the Mexican government?

DOBBS: Well to their credit, they dropped those conditions in the House and those conditions are stupid. I mean this is about a war and it's time to go win it.

BLITZER: Lou is going to have more on this story tonight and in the nights that follow, I'm sure.

DOBBS: Absolutely. BLITZER: Lou, thanks very much for coming in.

DOBBS: Thank you, Wolf.

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