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Pakistan Funding Controversy; FBI Summer Interns for Arabic Speakers; Foreclosure Suicide in Massachusetts; IOC Bans Iraqi Olympic Teams From Beijing Games; Hispanic Voters Favor Obama; Richard Simmons Goes to Capitol Hill

Aired July 24, 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: To our viewers you're in THE SITUATION ROOM.
Happening now, a huge crowd turns out for Barack Obama's highly anticipated speech in Berlin. What he said, how they reacted. CNN's Christiane Amanpour is in the German capital for us right now.

Also, an oil spill so large, it's actually shut down the Mississippi River. Another blow to New Orleans. How sad is this? We'll go there live.

Plus, an exclusive look inside one of the world's most notorious detention sites. Guantanamo Bay's Camp Delta where terror suspects dubbed the worst of the worst are held. We'll go inside.

I'm Wolf Blitzer, you're in THE SITUATION ROOM.

The reviews are still being written, but to judge by the size of the crowd, Barack Obama was a big hit in Berlin. Some 200,000 people turned out to hear his speech in a giant park in the city's center. Obama told them he was speaking not as a presidential candidate, but quote "As a proud citizen of the United States, and a fellow citizen of the world."

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA, (D) PRESIDENTIAL CANDIDATE: America has no better partner than Europe. Now is the time to build new bridges across the globe as strong as the one that binds us across the Atlantic. Now is the time to join together through constant cooperation and strong institutions and shared sacrifice and a global commitment to progress to meet the challenges of the 21st century. It was this spirit that led airlift planes to appear in the sky above our heads and people to assemble where we stand today. And this is the moment when our nations and all nations must summon that spirit anew.

(END VIDEO CLIP)

BLITZER: Multilateralism is one of Obama's theme along with freedom.

(BEGIN VIDEO CLIP)

OBAMA: Our allegiance has never been to any particular tribe or kingdom. Indeed, every language is spoken in our country. Every culture has left its imprint on ours. Every point of view is expressed in our public squares. What has always united us, what has always driven our people, what drew my father to America's shores is a set of ideals that speak to aspirations shared by all people. So we can live free from fear and free from want, and we can speak our minds and assemble with whomever we choose and worship as we please.

(END VIDEO CLIP)

BLITZER: Let's go to Berlin right now. Our chief international correspondent Christiane Amanpour has been watching all of this unfold all day today. Christiane, why do they apparently like him so much? Not only in Germany, but throughout Western Europe?

CHRISTIANE AMANPOUR, CNN CHIEF INTERNATIONAL CORRESPONDENT: Well, they like him to the tune of some 200,000 people who came out here, according to police estimates now, which is a massive crowd. They like him, some people say, because he is something new. He's a new generation. He's promising change. And people here are desperate for change.

They like him because he is not President Bush and they're slightly traumatized still from the last seven years of this go it alone policy which has seen so much war and has created so much division. So for all those reasons, they find him wildly attractive, but they also want to know about his policies -- Wolf?

BLITZER: Did you get a sense, Christiane, that he actually delivered with his presentation, with his speech, his appearance in Berlin. Did people walk away seemingly satisfied or disappointed?

AMANPOUR: Well, I don't think they were disappointed, and I'm not sure that they were thoroughly satisfied. I did ask some people as they were leaving what they thought. Everybody said good, good. But I was surprised that there wasn't this sort of euphoria afterwards, given how many people had come to listen and how much it had been anticipated. To be sure, there were spikes during the speech which drew large cheers and applause, at least from the crowds immediately around him.

When he talked about removing the walls between various religions and ethnicities and other groups, when he talked about working together, renewed cooperation. By the way, you can hear now the sounds of people dismantling everything that was put up for this event. But when he talked about a common destiny, when he talked about a partnership, when he talked for instance about a battle of ideas, referring to how the United States and its allies won the battle of ideas over communism, and saw the end of communism, surely that we can win the battle of ideas and support, as he said, the vast majority of Muslims who are committed to peace and isolate them from the extremists. Things like that drew big cheers.

BLITZER: It's clear they like Obama in Europe. What about John McCain? What do they think about the Republican candidate?

AMANPOUR: Well, you know, if you look at the polls, they speak very loudly. Not that the people here are voting in the presidential election in the United States. But the poll numbers for Barack Obama are vastly higher than those for John McCain. I think it's because to them, he represents something totally new. And they want something totally new. What one political analyst here said to me is, people want a political redeemer.

I mean, that's very specific language. And he said it's not really based on facts for what they think about Obama, because they don't really know. It's based on expectations.

BLITZER: Christiane Amanpour in Berlin for us. Christiane, thanks.

Obama touched on themes from two famous speeches that also had Berlin as a backdrop for our President John F. Kennedy spoke of freedom back in 1963, when Berlin was a divided city.

(BEGIN VIDEO CLIP)

JOHN F. KENNEDY, FORMER PRESIDENT OF THE UNITED STATES: In the world of freedom, the proudest post is --

(END VIDEO CLIP)

BLITZER: And Berlin was still divided when President Ronald Reagan made this challenge to the then leader of the Soviet Union.

(BEGIN VIDEO CLIP)

RONALD REAGAN: Tear down this wall.

(END VIDEO CLIP)

BLITZER: Seven years later the wall was down, and President Bill Clinton speaking in the former communist part of the city declared Berlin is free. Remember, tomorrow our Candy Crowley is going to be sitting down with Senator Barack Obama in Europe. That interview will debut, will air right here in THE SITUATION ROOM tomorrow, 4:00 p.m. eastern. Candy Crowley's interview with Senator Obama.

The lower part of the Mississippi River is now closed with a huge shipping traffic jam forming, as crews try to clean up a massive oil spill. 400,000 gallons are fouling the water with a slick stretching from the New Orleans Jackson Square all the wail to the Gulf of Mexico. That's 100 miles away. CNN's Brian Todd is in New Orleans. He's watching this story. How sad is this, Brian, a city already so devastated, that whole area, and now this. How bad is it?

BRIAN TODD, CNN CORRESPONDENT: Wolf, just as the city starts to recover a little bit from Katrina three years ago, this horrendous accident very costly in many ways. We're going to give you a sense of the scope of that in just a moment. But first we want to show you a close-up look at this barge that has cracked open and essentially capsized, at least half of it. Our cameraman Bill Casanova is going to zoom in to that red and black structure there, between the other barge and the bridge above it. That is the barge that was hit. It split in half. That barge is leaking oil as we speak.

The other half of that barge is on this side of that bridge abutment. It is completely submerged also leaking oil as we speak. Now Bill's going to walk with me a few feet over here, he's going to essentially lean over this railing, almost into the river. He's going to show us these cleanup booms. Those orange and yellow floatations, those rope-like floatations are what they're using to clean up this massive spill. They sweep those things out into the river then bring them back towards shore, that's where they use these huge suction devices to get the oil out. Also using what really look like large, large paper towels to sop up some of it. It's really something to see. Now, this has just been going on in the last 26 hours. So for all intents and purposes, this cleanup has just begun.

(BEGIN VIDEOTAPE)

TODD (voice-over): This sheen on the water, yards away from the banks of New Orleans, shows just how poisoned the Mississippi River now is. Look downriver and you can see the overwhelming proportions of this. More than 400,000 gallons of industrial fuel, heavier than diesel but lighter than crude, is now snaking down one of the most densely populated stretches of the river. More than 80 miles from New Orleans down toward the gulf.

To get the full scope, we flew over the river in a Coast Guard chopper. This is all the result of one of the worst commercial accidents this river has ever seen. The collision between a 61-foot barge carrying this oil and a tanker that didn't leak a drop. Crews are working frantically to scoop up this sludge and prevent it from poisoning the drinking water of nearby towns and parishes. By midday Thursday --

PAUL BOOK, AMERICAN COMMERCIAL LINES: The estimate we have of recovered oil located close to the site itself is about 140 barrels of oil has been collected and contained.

TODD: Some local jurisdictions have shut their intakes to the river and are getting drinking water from backup sources while the river gets tested. Another huge problem, nearly 100 commercial ships are stuck in place. No traffic allowed during the cleanup. When can they move?

CAPT. LINCOLN STROH, U.S. COAST GUARD: At this point in the operation, I cannot tell you the exact time of the opening. As previously mentioned, think in terms of days for the opening, and think in terms of weeks for the cleanup.

(END VIDEOTAPE)

TODD: Now, you're looking at one of the cleanup barges that has been deployed on the river today and yesterday. That may be going out again in a few minutes. Those are the only boats that are allowed to traverse the river at this point. In the meantime, there's an investigation to run. The owner of the barge is assuming responsibility for the cleanup, but is strongly denying responsibility for the actual accident. The Coast Guard tells us, look, we'll talk about blame later. The Coast Guard officials have already told us that the crew of the tugboat that was pulling this barge was not properly licensed to operate on this river. The tugboat pilot only had an apprentice mate's license, Wolf. So you better believe that's what they're going to be looking at, at least initially.

BLITZER: Whoever was responsible, Brian, our hearts go out to all the residents, all the people of New Orleans and the surrounding areas. This is the last thing they needed right now. As you said, they were just beginning to come back from Katrina. Brian's going to stand by and we're going to continue to watch this heart breaking story.

Some of the other stories we're working on this hour. The FBI desperate to recruit Arabic speakers, tries a new tactic.

Also, an exclusive look inside the Guantanamo Bay cells that hold some of the world's most notorious terror suspects.

And a story just coming into THE SITUATION ROOM right now, U.S. Air Force personnel asleep at the controls of nuclear missiles.

Plus, a candy company under fire for alleged homophobia. Do we have the ad that's causing the controversy.

Stay with us, you're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Just coming into THE SITUATION ROOM right now, we're getting word of a disturbing incident involving U.S. nuclear missiles. The U.S. Air Force says three of its people fell asleep while at the controls. It's the latest in a series of military nuclear related blunders. Let's get the specific details from our Pentagon correspondent, Barbara Starr. What are you picking up, Barbara?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Wolf, what can you say except this does bring a new meaning to the phrase asleep at the switch. The Air Force now acknowledging that a nuclear missile launch crew fell asleep on July 12th while in control of electronic parts that contained old nuclear missile launch codes. It happened at a facility near Minot, North Dakota Air Force base, a site for the minuteman three nuclear missiles. This crew can control up to 10 missiles under normal procedures. Here's what the Air Force says happened.

The crew was behind locked doors, guarded by armed military personnel. The equipment was in a locked container. The codes were out of date and not usable. But three of the four crew members fell asleep and that's not a good thing to say the least. This is the fourth incident in recent months. You'll recall that nuclear warheads were flown across the country from Minot, North Dakota to Barksdale, Louisiana. Nobody knew those warheads were onboard. Fuses accidentally sent to Taiwan. A unit failed its unclear security inspection in the Air Force. This latest matter now under investigation by the super secret national security agency which actually creates those nuclear launch codes and Air Force commanders are deciding on discipline for the crew -- Wolf?

BLITZER: Discipline for the crew, but what about the higher ups? Is there going to be any look at maybe some of their bosses?

STARR: Well, one can only imagine. Again, it's the fourth incident. Defense Secretary Robert Gates already fired the previous Air Force secretary and the chief of staff of the Air Force. And has had -- there have been many reviews now of the Air Force's nuclear security program. And this is now the fourth incident. They keep saying that the material is always under their control. There's never been a risk to national security. But to say the least, things are loose in terms of some of the procedures and regulations for the world's most secure, or supposedly secure weapons arsenal -- Wolf?

BLITZER: I can only imagine the defense secretary, Robert Gates, how he's reacting to this. And I'm sure you can imagine as well. Barbara, thanks very much. What a story.

We also have another CNN exclusive for you right now. A rare look inside Guantanamo Bay's Camp Delta, that's where detainees dubbed the worst of the worst are being held. Our senior pentagon correspondent Jamie McIntyre is at Guantanamo. He's covering the military trial of Osama bin Laden's former driver. But he did receive some exclusive access to a high security cell. Jamie?

JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT: Wolf, even though the pentagon wants to close the prison facility here at Guantanamo Bay, it also wants to show it in its best light. Because of that, I got to go someplace few people do. Except for the people who really don't want to be there.

(BEGIN VIDEOTAPE)

MCINTYRE (voice-over): Down a cool, dim hallway, behind a remote-controlled steel door is a prison cell that holds what the pentagon likes to label the worst of the worst.

(on camera): I'm actually inside a high security cell in camp five. This is the kind of cell detainees are kept in. This one set up for display purposes. It's 12 feet by 8 feet. You see it has a sink and a toilet. And behind me you can see a window that you can see light through, but it's not the kind of window you can actually see outside. It's been made opaque. And behind me, these are the items you get if you're in compliance. Prayer rug, a couple of sets of shoes, a light brown uniform, extra blanket. These are the items you get if you're not in compliance. Prayer rug, some religious items, pair of flip-flops. And the famous orange jumpsuit.

(voice-over): This is the recreation yard where even the hard core cases get up to three hours of outside activity. With an exercise mat, a soccer ball, and Gitmo's version of a treadmill. There's even an arrow pointing to Mecca. But you won't see any prisoners in this video. The military restrictions on photography are draconian, all images must be digital so military censures can delete the ones they don't approve of. That includes any faces of detainees and any security measures including locks and towers. Any glimpse into the shadowy world of Gitmo is just that, only a glimpse.

(END VIDEOTAPE)

MCINTYRE: Wolf, the only reason I had to talk so softly in that piece is that there were other inmates in the area. And the U.S. military doesn't want them to have any idea of what's going on outside, or any contact with the outside world. It really underscores the isolation that these detainees feel here at Guantanamo -- Wolf?

BLITZER: Jamie McIntyre is at Guantanamo at Camp Justice. Thanks for that report.

It's money earmarked to fight terror in search for new terror suspects. But now Pakistan wants to use some U.S. funds for something else. Congress isn't necessarily convinced. We'll update you on that.

Plus, their house on fire. How one family was saved by a rabbit. Stay with us.

(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: Wolf, 236,000 people in south Texas are without power. And 3,000 more are in temporary shelters, thanks to hurricane Dolly. It's now been downgraded to a tropical depression, but the storm is still expected to leave behind anywhere from 8 to 20 more inches of rain. Dolly left behind a mess, including lots of flooding and structural damage.

A new government report says the arctic has enough oil to supply the United States for 12 years. The U.S. Geological Survey says the area contains 90 billion barrels of oil and nearly a third of the world's undiscovered natural gas. The oil and gas are considered recoverable. But obstacles still remain, including which country can lay claim to the area.

And 2 million Americans get a raise today. The federal minimum wage rises 70 cents an hour, it jumped from $5.85 to $6.55. It is the second of three annual increases. Many Americans say that money will go to pay for higher gas and food prices.

Wolf, take a look at this. A couple's pet rabbit simply named Rabbit is quite the hero today. The couple's house in Australia was on fire when Rabbit scratched at their bedroom door. The scratching from Rabbit woke up the couple who then discovered the fire. Everyone escaped unharmed. A firefighter says this is the very first time he's ever heard of a rabbit bringing a fire to someone's attention. I must say, it's a first for me, too.

BLITZER: Very lucky rabbit to have as well. That's pretty amazing, a nice rabbit like that. Good work, rabbit.

COSTELLO: Very good work, Rabbit.

BLITZER: Carol, thank you.

Desperate times compel one woman to take the most desperate action as she's losing her home. We'll have details of a foreclosure tragedy.

Also, outrage out there as Iraq's Olympic team is scratched from the upcoming games in Beijing. White Housey it's being barred. We'll tell you.

Plus, Richard Simmons as we've seldom seen him. The cause that's bringing him to congress. And saying he might run. What's going on? We'll tell you right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

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

Happening now, big bucks for the war on terror. But not everybody is happy with how Pakistan is spending all that money. We're taking a closer look into this story.

A crucial voting block. Some surprising results from a new survey. Barack Obama building support in the Latino community.

A woman kills herself as she faces foreclosure. A family in grief. A nation in a housing crisis. We're telling you the stories behind the numbers.

I'm Wolf Blitzer, you're in THE SITUATION ROOM.

There's a battle brewing over the money the U.S. government gives Pakistan to fight terror. That country now has controversial plans for some of the U.S. funds. Let's go to our state department correspondent Zain Verjee. She's working the story for us. All right, Zain, what's going on?

ZAIN VERJEE, CNN STATE DEPARTMENT CORRESPONDENT: Wolf, Pakistan wants U.S. aid to beef up its fighter jets. But congress is asking, what about the war on terror?

(BEGIN VIDEOTAPE)

VERJEE (voice-over): The top U.S. priority in the war on terror, kill or capture Osama bin Laden and fight terrorists believed to be hiding along Pakistan's border with Afghanistan. Pakistan's new government says to do that, it needs to upgrade its aging F-16 fighter jets. The U.S. is going along.

GONZALO GALLEGOS, STATE DEPT. SPOKESMAN: The bottom line here is that we've shifted money to help the Democratically elected government of Pakistan to fight a common foe. VERJEE: By law, the $300 million in aid Pakistan gets from the U.S. each year must be used to fight al Qaeda and the Taliban. Pakistan wants almost $230 million of that to upgrade its F-16 jets.

MAKHDOOM SHAH MEHMOOD QUIRESHI, PAKISTANI FOREIGN MINISTER: The challenge of terrorism is such that no single country, however strong, can deal with it alone.

VERJEE: Skeptical lawmakers worry the upgrades are more about Pakistan competing with its rival, India, and argue shifting the money for the F-16s takes needed funds from beefing up Pakistani police and military and winning the hearts and minds in tribal areas hostile to America by building roads and schools.

One key lawmaker, Nita Lowey, whose committee controls the purse strings, says this request raises serious concerns. Lowey wants the State Department and Pakistan to demonstrate clearly how these F-16s would be used to fight al Qaeda and the Taliban in order to get congressional support.

Pakistani and U.S. officials say the F-16s are used to fly counterterror missions and need the latest communications and targeting technology. The upgrades will bring the old jets in line with the new F-16s Pakistan is buying from the U.S.

GALLEGOS: These mid-life (ph) update enhancements will allow Pakistan's F-16s to operate safely in all weather and to perform day and night missions.

(END VIDEOTAPE)

VERJEE: The timing of all of this, Wolf, is pretty interesting. The new Pakistani prime minister is going to be here in Washington, D.C., to meet with President Bush next week. The State Department, though, Wolf, is saying it's just a coincidence -- Wolf.

BLITZER: Thanks, Zain, for that, Zain working the story at the State Department.

It's important when dealing with foreign countries to actually know how to speak the language, but seven years after 9/11, there are still far too few Arabic speakers in the U.S. intelligence and law enforcement community. Our justice correspondent, Kelli Arena, shows us how the FBI is trying to tackle a very serious problem -- Kelli.

KELLI ARENA, CNN CORRESPONDENT: Wolf, government agencies are competing against each other and the private sector for Arabic speakers. Now, obviously, corporations can pay a heck of a lot more, so the FBI is getting creative.

(BEGIN VIDEOTAPE)

(voice-over): The day before 9/11, two messages were intercepted by the National Security Agency. One said, "The match begins tomorrow," the other, "Tomorrow is zero hour." The two cryptic intercepts were not translated until 24 hours after the attacks on New York City and the Pentagon. Why? Because there just weren't enough Arabic speakers on the government payroll to translate them in time.

JAMES BAMFORD, INTELLIGENCE AUTHOR: You never know until a crisis breaks out what you're going to need.

ARENA: Fast-forward seven years. The ranks are still thin. There are only 52 agents who speak Arabic at the FBI out of nearly 13,000.

ROBERT MUELLER, FBI DIRECTOR: We've had problems, continue to have problems in having a number -- as many Middle Eastern language speakers that we would like in the bureau, and we've got a focused recruiting program.

ARENA: The latest strategy, get them while they're young.

UNIDENTIFIED MALE: Now, how many of you speak a foreign language?

ARENA: The FBI spent a quarter of a million dollars on a new program to employ college interns who speak Arabic. This summer, 10 are working at the FBI after thorough vetting.

JAMES RAUCCI, FBI ASST. DIRECTOR: It makes it much more easier to be a future employer. The decision-making is cut in half. They already know what they're getting into.

ARENA: Their days are busy -- Arabic classes, field trips, various projects. They don't get paid, but they do get free room and board.

SARAH, FBI INTERN: I'm working more to make a difference and just to make a difference in our government and our society.

ARENA: Sarah was born in Iraq. She doesn't want her last name used in case she ever works undercover. She's already sold on the FBI and hopes to some day be an analyst. But not every intern is convinced.

FADI, FBI INTERN: I haven't clearly made up my mind yet until -- I'm waiting until the internship is over with.

ARENA: Still, even if they never become employees, the cultural exchange is invaluable.

RAUCCI: We learn as much about them as they learn about us.

(END VIDEOTAPE)

ARENA: The FBI says it's hoping to employ as many as 35 Arabic- speaking interns next year. And even though it's hungry for applicants, it's still pretty tough to get accepted. Students must score high enough on an Arabic test, undergo a background check, a drug test and Polygraph -- Wolf.

BLITZER: Kelli Arena working the story for us, a critically important issue. He got the phone call no parent ever wants to get, his daughter gone, her killer drunk. So what happened next? It surprised everyone involved.

Plus, very different story, very different. Richard Simmons running for Congress? He's running a lot, we know that. He says he's fit for office. But not necessarily his primary mission. Why was he on Capitol Hill today? Stick around.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: New numbers out today on home sales, and this probably won't shock you, they're down. The National Association of Realtors says sales of previously owned homes were down 2.6 percent last month. That's double the decline experts had expected.

And the housing crisis isn't just in the numbers, it's in the stories we're hearing of desperation and devastating consequences. Deborah Feyerick is working this story for us. She has one of those really heart-breaking stories -- Deb.

DEBORAH FEYERICK, CNN CORRESPONDENT: Absolutely, a terrible story. A husband is at a funeral home today, making arrangements to bury his wife. She killed herself. He tearfully told CNN by phone, I want my wife remembered, she tried to save this house, but it was too late.

(BEGIN VIDEOTAPE)

(voice-over): Hours away from losing her home, Carlene Balderrama sent her mortgage company a final, desperate fax Tuesday afternoon.

CHIEF RAYMOND O'BERG, TAUNTON, MASSACHUSETTS, POLICE: The fax said by the time they foreclosed on the house today, she would be dead.

FEYERICK: Police Chief Raymond O'Burg says the mortgage company notified Taunton police, who sent officers to the Massachusetts home. It was too late.

O'BERG: They found her dead of a single gunshot wound. She had shot herself with her husband's rifle.

FEYERICK: The home was to be auctioned off later that afternoon. And the husband believes prospective buyers had started showing up at the property.

O'BERG: There was a suicide note left. And part of the note said, Take the insurance money and pay off the mortgage.

FEYERICK: Public records show Balderrama's husband, John, had filed for bankruptcy three times between 2004 and 2006, soon after buying the house. Home owner advocates say people like Mrs. Balderrama blame themselves, even though lenders may have given loans people can't possibly repay.

BRUCE MARKS, NEIGHBORHOOD ASSISTANCE CORP.: People are taking their 401(K)s and applying it to their mortgage payment. They're borrowing from their friends and family. But you know, those mortgages are structured to fail.

FEYERICK: Reached by phone, Mr. Balderrama read the fax his wife sent their lender. Quote, "I will be deceased and John will walk into all this. I hope you are more compassionate with him and our son. John will have my insurance. You wouldn't do anything for me, let's hope you will help him."

The company, PHH Mortgage, said it was devastated and offered condolences and that, quote, "Out of respect for the family and in consideration of their privacy, it would be inappropriate for us to comment further about this matter."

Police say Mrs. Balderrama, who had power of attorney for her husband, had not packed any boxes to suggest the family was moving and says because she handled the family's finances, her husband, a plumber, had no idea the house was about to be sold.

(END VIDEOTAPE)

(on camera): Now, Mr. Balderrama says he plans to stay in the house and that the mortgage company reached out to him, in his words, to straighten things out. He says he never wants this to happen to anyone else -- Wolf.

BLITZER: Now, people who file, Deb, Chapter 13 bankruptcy, as it's called, I take it they can usually stay in their homes, as long as they pay off their debts as arranged by the court.

FEYERICK: Correct. And that's what makes this interesting. In this case, the court dismissed those bankruptcy petitions because the family was not paying its debts based on the terms of the bankruptcy plan. The husband says he never knew that they were in such bad shape, that it was clear that couldn't even pay even at the very beginning of the loan -- Wolf.

BLITZER: What a sad, sad story, a story, as we say, behind -- behind -- the numbers.

Turning the anguish of loss into the healing power of forgiveness, we have one man's story that will inspire you and it will break your heart at the same time. Carol Costello is here with this story. It's an amazing story, Carol.

COSTELLO: It is an amazing story. And you know, I don't know whether I could do it. If you lost your child because of a drunk driver, could you forgive that drunk driver? Jeff Vetter not only forgave, but bonded with the drunk driver, convincing a judge to allow them to travel the country together to tell their story.

(BEGIN VIDEOTAPE) (voice-over): Snapshots of daddy's little girl. Jessica Vetter grew up a tomboy, so much like her father, they dreamed of racing cars and opening up a body shop. But last year on this Maryland roadway, their dreams died with Jessica. Just 20 years old, she was killed by a drunk driver.

JEFF VETTER, DAUGHTER KILLED BY DRUNK DRIVER: It was the phone call you never want to get. That was the worst thing I ever had to deal with in my life.

COSTELLO: Every year, more than 17,000 people are killed by drunk drivers, more than 17,000 stories where sorrow turns to rage, as it did for Jeff Vetter.

VETTER: I was full of anger, hate, revenge. I was full of venom, ready to strike at any time. I was so tied down into that world of mad and anger that I had to try to do something to get out of it because if I didn't, I wasn't going to survive.

COSTELLO: But that changed when he decided to do what few can imagine, forgive. He reached out to the Jacoby family, and to their son, Michael, the man who killed his daughter. The power to do that came to him in court, when he saw not a monster but a fragile almost 24-year-old man pleading guilty to manslaughter, ready to be punished and filled with remorse.

VETTER: I saw your normal everyday boy, kid, family, such as mine. And I saw that they were going through, you know, the things that I was going through, total hell.

COSTELLO: And the Jacobys were going through hell, placing flowers at the accident site, praying not for their son but only for forgiveness.

TINA JACOBY, MOTHER OF DRUNK DRIVER: We wanted to reach out to them, but we didn't know how, other than to go to the site and to pray for Jessie.

COSTELLO: When forgiveness came, they fully expected Michael to remain in jail for the 18-month sentence, but Vetter convinced the judge to release Michael from jail so both could educate young people about the dangers of drunk driving. Michael is willing but still too emotionally fragile to appear on camera.

(on camera): Do you think he'll ever heal?

JACOBY: I don't know. I don't know. He's very remorseful to what happened.

COSTELLO (voice-over): As for what daddy's little girl would think of her father's astonishing gift of forgiveness?

VETTER: I was hoping you wouldn't ask that. She was a very forgiving person. I can feel her kicking me in back right now. She would say, Go on, Dad, give it to him.

COSTELLO (on camera): She would probably be proud.

VETTER: Very.

(END VIDEOTAPE)

COSTELLO: In case you're wondering, before his accident, Michael Jacoby had a clean record. This was his first accident. And he's not completely free but on home detention, and it is a requirement he perform hundreds of hours of community service, including traveling with Mr. Vetter to educate people about the costs of drunk driving.

BLITZER: You can see everybody must have been crying at that scene. It was so, so sad. It's hard to believe that this man could, you know, forgive that kind of tragedy.

COSTELLO: Yes, he said he went to the jail and he visited Michael, and he said as soon as he offered his forgiveness -- and it was accepted, of course -- he felt that life was more brilliant. He felt that a million pounds had been lifted from his shoulders and he could go on and honor the memory of his daughter in a positive way.

BLITZER: Well, it's an amazing story and amazing man indeed. Thanks, Carol, for sharing it with us.

COSTELLO: Sure.

BLITZER: Let's get some more details now on alcohol-related deaths in the United States. According to Mothers Against Drunk Driving, back in 2006, an estimated 17,602 people died in alcohol- related crashes. That's an average of one every 30 minutes. Those deaths made up 41 percent of traffic fatalities.

Here's another example. Take a look at this video from a police dashboard camera. You can see an officer there with a car he just pulled over. He's in the highlighted part of the image. Then an SUV slams into the car, missing the officer by inches. Police in Burnsville, Minnesota, say the SUV driver was drunk.

Up next, some new numbers on Hispanics and how they might vote. Ted Rowlands watching this story for us -- Ted.

TED ROWLANDS, CNN CORRESPONDENT: Yes, Wolf, some surprising numbers concerning Latino voting trends. Remember back in the primaries, some theories about black and brown? Well, they were all squashed. We'll share that with you coming up in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: A lifetime of training, all leading up to one big moment, the Olympic games. But for some athletes, those dreams died today. Morgan Neill is joining us now live from Baghdad with this really sad story, as well. Explain, Morgan, what happened.

MORGAN NEILL, CNN CORRESPONDENT: Well, Wolf, this is devastating news, as you put it, today. It was just today that the International Olympic Committee notified Iraq that Iraqi athletes would not be able to compete in the Beijing games, just weeks away. And whatever the reasons for this decision, it is those athletes and so many people in this country that were looking forward to seeing them compete that will suffer the most.

(BEGIN VIDEOTAPE)

(voice-over): The last time we visited Iraqi sprinter Dana Hussein, it seemed nothing could stop her, but today she's devastated. She's just learned the International Olympic Committee has banned Iraqi athletes from competing in Beijing.

After all the effort I've made, she says, the cayman (ph) said, You can't participate in the Olympics.

The IOC suspended Iraq in June for political interference after the government disbanded the Iraqi Olympic Committee, saying the committee held meetings without quorums and had officials serving in one-year posts for more than five years. One member accused the government of acting out of jealousy over the non-governmental committee's achievements.

On Thursday, the IOC suspension was confirmed. The letter to Iraqi officials read, quote, "We deeply regret this outcome, which severely harms the Iraqi Olympic and sports movement and the Iraqi athletes but which is unfortunately imposed by the circumstances."

But why ban Iraq now, when teams led by the infamous Uday Hussein, accused of torturing athletes who didn't perform well, were allowed to compete? The IOC didn't suspend Uday's committee until after the U.S.-led invasion in 2003.

In Baghdad, reaction was a mixture of sadness and anger.

I blame the Iraqi government, said this young teacher. They should not interfere in sports.

This government worker still held out hope. We asked them to review their decision and to allow the athletes to participate in Beijing, he said.

Dana's coach tries to comfort her, saying she'll compete in 2012.

In this horrible situation, she says, who can say I'll be even be alive in 2012?

(END VIDEOTAPE)

And that's why the decision is so heart-wrenching not only for these athletes, who have surmounted so many obstacles to get to this point, just weeks from the games, but also for the country, where sport has been one of the few arenas where people really pulled together to get a real sense of unity like in -- that you rarely see here, Wolf.

BLITZER: It would have been so nice because the Iraqis, as you know, they've been going through so much -- so much devastation over these years, and a little relief would have been so welcome. My heart goes out to them on this. Morgan Neill in Baghdad, working the story.

Both Senators McCain and Barack Obama are aggressively courting Hispanic voters, and results from a new survey show it's paying off for one of them, at least right now. Let's go out to CNN's Ted Rowlands. He's working this story for us. New poll numbers about Hispanics, where they stand in this contest right now, a new snapshot -- what are we seeing, Ted?

ROWLANDS: Well, Wolf, the Push Hispanic Center released a comprehensive study today, and as you say, we're getting a real look at Latino voters right now. With three months left to go before the election, Barack Obama pretty much has a 3-to-1 lead over Senator McCain.

(BEGIN VIDEOTAPE)

(voice-over): The survey from the Pugh Hispanic Center shows 66 percent of Latino voters are leaning towards Barack Obama and 23 percent towards John McCain, a dramatic lead for Obama considering just a few months ago, people were saying things like this --

ADELFA CALLEJO, LATINO ACTIVIST: Obama simply has a problem that he happens to be black.

ROWLANDS: -- about Latinos supporting a black candidate. When asked about ethnicity, 32 percent of those surveyed said being black helps Obama, only 11 percent said it hurt him, 53 percent said it had no effect.

Max Parrilla, a playwright in San Antonio, Texas, thinks race is not a factor for most Latino voters.

MAX PARRILLA, LATINO VOTER: African-American population and our Latino population have generally, as a whole, gotten along very well. Most of us were, you know, oppressed and suppressed in this society.

ROWLANDS: According to the poll, 77 percent of Latinos who voted for Hillary Clinton in the primaries now support Obama. In fact, the poll shows he's now slightly more popular than Clinton, with a favorability rate of 76 percent. McCain's favorability is at 44 percent. President Bush is at 27.

The Pugh survey also reveals that Hispanics are less concerned about immigration than they are about education, the economy, crime and health care. Las Vegas restaurant owner Rigoberto Gonzalez says health care is his biggest concern, saying he can't afford to insure his employees or his wife and three children.

RIGOBERTO GONZALEZ, LATINO VOTER: You always wonder when you're on the road, you know, if you ever get in a car accident, if your kids have to go to the hospital -- you know, it just is very scary.

ROWLANDS: Both candidates, through Spanish language ads and campaign appearances, are courting Latinos. According to the 2,000 Hispanics who took part in this survey, John McCain has some significant ground to make up. (END VIDEOTAPE)

(on camera): And Wolf, we should keep in mind that this is a national survey, so the swing states with large Hispanic populations will be where the candidates will be concentrating most of their efforts to this group for the next three months, places like Florida, Colorado and New Mexico and Nevada. And in those states, it is -- most of these races are much tighter than they are nationally. But boy, an eye opener here from the Pugh Center in terms of Barack Obama's lead and support among Latinos, especially after all the black-brown rhetoric we heard just a few months ago during the primaries.

BLITZER: Good point. Ted Rowlands in LA for us. Thank you.

Coming up: Why is Richard Simmons angry? He's talking on Capitol Hill?

Plus, John McCain joining forces with Lance Armstrong for a cause that's impacted both of them. Our own Dr. Sanjay Gupta -- he's there, as well. He's standing by to join us live.

(COMMERCIAL BREAK)

BLITZER: If you haven't seen him in a while, you're about to see him right now. And this time, he's actually wearing a suit and tie, not gym shorts. The fitness expert Richard Simmons was actually a bit angry on Capitol Hill here today. Carol Costello was there listening in, and she's joining us with the story. What happened, Carol?

COSTELLO: Well, Wolf, I met Richard Simmons today. He's in town and he testified before Congress on a subject he is very passionate about. And he also hinted that he would run for Congress. He paid a visit to CNN.

(BEGIN VIDEOTAPE)

RICHARD SIMMONS, FITNESS EXPERT AND ADVOCATE: How are you?

COSTELLO: I'm fine.

(voice-over): There is no doubt Richard Simmons has become a cultural icon. He walked into CNN, and boy, did he feel the love.

SIMMONS: Oh, look, we're having a little lunch! Oh, look (INAUDIBLE)

COSTELLO: But earlier, he was all business.

SIMMONS: Good morning, ladies and gentlemen. My name is Richard Simmons, and I never took a PE class in my life.

COSTELLO: Dressed in a suit, testifying before Congress on a topic he feels passionately about, childhood obesity. He wants physical education classes and recess back in schools and says Congress needs to provide the funding for this. SIMMONS: And I'm hoping that the committee today will know there is no other way to do this or our children will get more sick. And there's a statistic that says our children today will not live as long as their parents. What have we done? What have we done to the kids of the United States of America? This is wrong. And I will dedicate the rest of my life -- and Chairperson George Miller, I just may run for office to help this really get through.

COSTELLO: Wait a minute. Richard Simmons running for office?

SIMMONS: Whatever the president or whatever this country wants me to do, I am there to do.

COSTELLO: Simmons is working with members of Congress to introduce the Fit Kids Act, which would force schools to provide some kind of physical activity for kids during the day. And while his schtick may not get him a congressional seat, his enthusiasm and celebrity just might make your child healthier.

(END VIDEOTAPE)

You never know. If you want to help, go to Richardsimmons.com and you'll find a way to lobby your congressman for more exercise in schools -- Wolf.

BLITZER: It's a good cause. Thanks very much, Carol, for that.