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THE SITUATION ROOM

U.S. Fears for Pakistan's Future; General Warns of Afghan War Risk; Bill Clinton Convention No Show?; More Trouble for Detroit's Mayor; Dark Portrait of Ivins; Ivins' Alleged Sorority Obsession; Rice: No Documents Forged; Protestors Confront McCain; Searching for Jail Under Capitol Hill;

Aired August 7, 2008 - 17:00   ET

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


WOLF BLITZER, CNN ANCHOR: And to our viewers, you're in THE SITUATION ROOM.
Happening now, a worsening war in Afghanistan -- now in an exclusive interview with CNN, the top U.S. general there implicates Pakistan, where the country's president now faces impeachment.

Also, a convention controversy brewing among Democrats -- will the former president, Bill Clinton, be invited to speak?

And the mayor of one of the country's largest cities jailed. Details of the trip that put him behind bars.

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

A key U.S. ally in the war on terror, a nuclear power, and now serious concerns about Pakistan destabilizing, potentially even falling into civil war as the country's ruling coalition moves to impeach President Pervez Musharraf. The implications -- the ramifications for the United States right now and the war on terror enormous.

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

She's working this story for us -- potentially, Zain, a critical development today.

ZAIN VERJEE, CNN STATE DEPARTMENT CORRESPONDENT: Right. Exactly, Wolf.

Any political turmoil in Pakistan is really bad for the U.S. And this could be a dangerous development.

(BEGIN VIDEOTAPE)

VERJEE (voice-over): Pervez Musharraf's political enemies want him out. Their latest plan -- impeach him. The call, coming from Benazir Bhutto's widower, head of the ruling party.

ASIF ALI ZARDARI, PAKISTAN PEOPLE'S PARTY: The coalition believes -- the leadership believes that he has become -- it has become imperative to move for impeachment against General Musharraf. VERJEE: To impeach the president, the government needs a two- thirds majority in both houses of parliament. A Pakistani government spokeswoman says parliament has enough votes to get rid of Musharraf, but hopes he will resign instead.

State Department officials worry political infighting and chaos in a nuclear armed nation distracts from the number one U.S. priority in the region -- fighting the war on terror, Al Qaeda and the Taliban.

PARAG KHANNA, NEW AMERICA FOUNDATION: And some of the militant elements in the tribal areas have also become quite strong in the interim.

VERJEE: Publicly, the U.S. says the impeachment is an internal Pakistani matter but sent a veiled warning to its close ally, Musharraf, not to take action that could be destabilizing to Pakistan.

GONZALO GALLEGOS, DEPUTY STATE DEPARTMENT SPOKESMAN: Our expectation is that any action will be consistent with the rule of law and the Pakistani constitution.

VERJEE: Musharraf could use his powers as president to dissolve parliament, fire the prime minister and call new elections. Musharraf has promised in the past not to repeat his actions of last November, when he imposed a state of emergency. It's unclear whether he would go quietly. So far, Musharraf has resisted pressure to resign, even as his unpopularity grows.

The critical question -- whether the Pakistani military will allow the government to humiliate and oust Musharraf, their former chief.

KHANNA: They might actually intervene in order to prevent the crisis from getting worse and simply force the civilian government to contend or to be comfortable or simply allow Musharraf to stay in power in exchange for the parliament not being dissolved.

(END VIDEOTAPE)

VERJEE: U.S. officials say that the U.S., Wolf, doesn't really have a dog in this fight. They say that the U.S. doesn't really have a lot of influence. So their position is let's wait, let the situation play out however the Pakistanis want it -- Wolf.

BLITZER: All right, Zain.

As I said, the ramifications enormous. U.S. officials watching all of this very, very carefully.

Despite billions of dollars in U.S. aid, many believe Pakistan is making the situation in neighboring Afghanistan worse. In a CNN exclusive, our Pentagon correspondent, Barbara Starr, spoke about this and a lot more with a senior U.S. general -- Barbara, tell us what he told you about the situation in Afghanistan, and Pakistan, for that matter. BARBARA STARR, PENTAGON CORRESPONDENT: Well, Wolf, as you say, the ramifications of what's going on in Pakistan are huge. General David McKiernan telling CNN that Pakistan bears a lot of responsibility for what's going on in the region.

(BEGIN VIDEOTAPE)

STARR (voice-over): In an exclusive interview with CNN, the top NATO commander in Afghanistan warns Pakistan's continued harboring of al Qaeda and the Taliban could put the war in Afghanistan at risk.

GEN. DAVID MCKIERNAN, NATO COMMANDER, AFGHANISTAN: I don't believe we can get to the right outcome in Afghanistan as long as these militant sanctuaries exist across the border.

STARR: U.S. Army Four Star General David McKiernan is blunt about one of America's closest allies and the role of its intelligence service, the ISI.

MCKIERNAN: Do I believe that the Pakistani government must do more? I absolutely do.

Do I believe that there has been some complicity on the part of organizations such as the ISI, over time, in Pakistan? I believe there has been.

STARR: Pakistan's failure to crack down on the militants may be reaching a crisis level. McKiernan says there's clear evidence Al Qaeda is still pulling the strings.

MCKIERNAN: Al Qaeda provides financing. They help recruit fighters. They help with command and control and logistics, intelligence, for the Taliban. I believe that they are part of this nexus of insurgency.

STARR: The U.S. is still trying to find more troops to send to Afghanistan. But for the 64,000 NATO and U.S. forces already in the fight, a new worry.

MCKIERNAN: We've seen increased numbers of foreign fighters in Eastern and Southern Afghanistan this year. And there is an expectation that the leadership in Pakistan will do something about these militant sanctuaries in their country.

(END VIDEOTAPE)

STARR: And, Wolf, General McKiernan, like other top commanders, also warning that Pakistan must take some action because these sanctuaries and these militants are also responsible for much of the violence inside their own country.

But the bottom line question for the U.S. military, if they cannot make Pakistan do something about this situation, will sending more U.S. troops to Afghanistan really do any good -- Wolf.

BLITZER: Good question. Don't know the answer.

All right, thanks, Barbara for that.

Let's get some more on these very troubling developments in Pakistan and Afghanistan. For that, we're joined by the former defense secretary, former U.S. Senator William Cohen.

He runs a The Cohen Group, a consulting group here in Washington.

Given the tensions there and what's going on, impeaching Musharraf right now, potentially, for the United States, when the U.S. sees this, this has got to be a huge, huge potential nightmare.

WILLIAM COHEN, FORMER DEFENSE SECRETARY, THE COHEN GROUP: It is one because we've had a relationship with President Musharraf during the past several years. And...

BLITZER: Since 9/11 really.

COHEN: Since 9/11. And when he took over. He actually took over in a bloodless coup, as such. And since that time, there's been an election, which has called into question by some. But the whole issue of impeachment -- number one, do they have the constitutional authority to do that? There are three rules for that. Number one, is he disabled by virtue of an inability to carry out the function of government?

Number two, has he violated the constitution? Number three, has he engaged in gross misconduct? So those are the three tests they have to look at impeachment.

BLITZER: But does he still have the clout within the military, the intelligence service, to do anything or is he simply a figurehead right now?

COHEN: Well, we don't know. If the military were to intervene and to support him and try to and negotiate some sort of stay for him, then we'd find that out. But if the military then takes action, that's going to energize those who are seeking to establish or reestablish democratic rule. It is really quite a mess there right now.

BLITZER: Because what a lot of people are worried about, you have this democratically-elected new coalition government, a lot of supporters of the late Benazir Bhutto. They hate Musharraf, as you well know.

What are the realistic chances of a civil war really breaking out inside a nuclear armed Pakistan?

COHEN: Right. What they have to be concerned about is to be careful of what they wish for.

Let's assume that President Musharraf is either removed or he's impeached. What happens to the so-called coalition at that point? The parties then start to fight for power amongst themselves. And so you have this whole issue of instability continuing on into the future. In the meantime, you see the Taliban and the Al Qaeda groups getting stronger, which causes great problems for Pakistan, but also for Afghanistan and for the U.S.

Whether U.S. aid would continue to Pakistan under those conditions remains a question for the Congress, to be sure. So this is an issue that has to be resolved fairly soon one way or the other. But to see this go on with this kind of instability, I think, is going to cause concern not only for us, but neighboring India. Other countries in the region can't be looking too favorably upon what's going on.

BLITZER: Pretty serious stuff right now.

All right, thanks very much, Mr. Secretary, for coming in.

COHEN: It's my pleasure.

BLITZER: Let's go back to Jack.

He's got "The Cafferty File." It's a huge, huge potential nightmare -- Jack.

JACK CAFFERTY, CNN ANCHOR: Yes, I just -- I wonder, at the end of the day, what the real story with all the billions of dollars we gave to Pervez Musharraf is, where all that money went...

BLITZER: Ten billion.

CAFFERTY: Yes. I mean it's all a bit murky, as they say.

Four dollar a gallon gasoline on the minds of voters. Barack Obama and John McCain virtually tripping over each other to address our energy issues. It's something that touches us all. Higher gas prices inflate the cost of food, transportation, you name it. Our dependence on foreign oil is a national security concern.

So what is the next president going to do about it?

Both candidates have been laying out their plans, criticizing the other's proposals while they're at it. The air is thick now with lofty goals and promises.

McCain -- reduce carbon emissions 60 percent below 1990 levels by 2050; spend $2 billion a year for 15 years for clean coal technology. McCain opposes a windfall profits tax on the oil companies and in a change of position, now favors offshore drilling. He wants to build new nuclear reactors and has proposed a $300 million prize for a battery to advance hybrid and electric car technology.

Obama -- get us off Middle East and Venezuelan oil within 10 years. Invest $150 billion over 10 years, with billions more from the private sector, to build a new energy economy that he says will create five million jobs. Obama is calling on Americans to cut back on their use of electricity. Obama, too, now says he supports offshore drilling, as part of a larger energy strategy, and would require 10 percent of our energy to come from renewable sources by the end of his first term.

Here's the question: How much faith do you have in Barack Obama or John McCain to solve our energy problems?

Washington has been talking about this for 30 years and doing virtually nothing -- Wolf.

BLITZER: Jack, thanks.

See you in a few moments.

Here's the question: Are Hillary Clinton supporters planning a dramatic last stand at the Democratic National Convention in Denver?

Barack Obama answers allegations of a looming Democratic rift.

Also, details of a deeply troubled scientist raising serious questions about security.

Why was the man the government calls a killer given access to anthrax?

And Secretary of State Condoleezza Rice pushing back after allegations of a White House forgery plot. You're going to hear what she's saying.

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

(COMMERCIAL BREAK)

BLITZER: We're getting word of a brewing controversy. It's not exactly clear whether Bill Clinton, the former president of the United States, will speak at the Democratic convention, which begins in only a couple of weeks or so.

Our senior political analyst, Gloria Borger, and CNN's Jessica Yellin are working this story for us -- Gloria, what are you hearing?

GLORIA BORGER, SENIOR POLITICAL ANALYST: Well, we're hearing everything about it. It sounds like the Clintons and the Obamas need some couples therapy here, because you're hearing from people who are close to the former president that, in fact, his role at the convention has not yet been determined. And friends of the former president say, look, he's not angling for a role at this convention, but they -- he thinks it's kind of odd that he hasn't been asked to speak.

But on the other hand -- and Jessica can talk about the other side of this -- there are people who say yes he has been invited, right?

BLITZER: What are you hearing?

JESSICA YELLIN, CNN CORRESPONDENT: I'm hearing from the other side that Bill Clinton...

BLITZER: From the Obama side?

YELLIN: From the Obama, from people who are involved with convention planning in general, that this is all still in the discussion stages. The reason that's significant is because you'd think that by now, by this point, the popular former president, Democratic president, would have a major role at the event.

And instead of feelings getting resolved as we move closer toward the convention, feelings between the two camps seem to be getting a little more tense. There's a lot more friction now than we heard in the days after Clinton bowing out.

BLITZER: And one of the points of friction is Hillary Clinton's campaign debt. She still has millions and millions of dollars in debt. And the Obama campaign was supposed to help them pay back some of that debt.

BORGER: Oops. It's not going so well, Wolf. They sort of cut a deal, that Hillary Clinton would raise $500,000 for Barack Obama, that Barack Obama would raise $500,000 and a lot more for her debt. And that hasn't happened.

He's raised about the $500,000. But even people in the Obama campaign say, you know, we really should be doing better. They're hitting up senior staff. They're contributing. But there's a lot of sense in that campaign, you know, we don't want to pay the bills of the people -- like Mark Penn -- who tried to defeat us.

And so they're working on it. But there is a lot of friction.

BLITZER: The Hillary campaign owes Mark Penn and his consulting firm a lot of money.

Is that the point?

YELLIN: Yes. And some of the top Obama donors really resent him in particular. They think that Mark Penn, this pollster and guru for Clinton's campaign, was the one who really attacked Obama. So they don't want to be paying him down.

It's such sort of inside ball. But the problem is it's contributing to this divisiveness in the Democratic primary, which could really hurt the party's chances in the end.

BLITZER: And...

BORGER: And then there's the question of the roll call.

BLITZER: Right. It comes at a time when Hillary Clinton is suggesting, you know what, my name might be placed in nomination and there could be a formal roll call. That could create some division.

BORGER: Right. And I was told by a Clinton supporter today that it looks 60/40, that her name will be placed in the roll call, that it should be, that she had a historic race and she had 18 million voters and that -- that they ought to do it.

YELLIN: And I'll tell you, a month ago, I talked to a top, top Clinton source who said no, we're not going to go into roll call. We don't need to do that. We want to move forward.

Now we're hearing something, as Gloria is saying...

BLITZER: So what changed?

What happened?

YELLIN: I think they're very upset about the money. They're upset about the money. They want more fundraising.

Gloria is hearing different.

BORGER: Well, I'm hearing it's not about the money, but it's about the women supporters of Hillary Clinton, who really are pushing her to do this. The Clinton campaign people say we're not worried about raising this money. We're going to retire her dealt. Don't worry about it. We can do that. But she needs to have her moment in the sun at the convention.

BLITZER: Because she says this could be catharsis and he says today, you know what, they don't need catharsis, they need party unity. Go ahead.

YELLIN: They're under enormous pressure, Senator Clinton is, from some of these supporters -- these feminist supporters who see this as history. And this really is true. She's under enormous pressure from these people to really do something and have her name in roll call. And they won't take anything less.

BLITZER: All right. We'll watch all of this together.

BORGER: Couples therapy. It's the only way to solve it.

BLITZER: Maybe a little therapy is not so bad.

(LAUGHTER)

BLITZER: So will Hillary Clinton's supporters make a last stand at the Democratic convention?

The presumptive nominee, Barack Obama, spoke about that and more with reporters aboard his campaign plane, heading from Minneapolis/St. Paul to Chicago.

Here in his own words, raw and unfiltered.

(BEGIN VIDEO CLIP)

QUESTION: Senator, there's been some talk that Hillary Clinton's supporters may call for a floor vote at the convention.

Do you think this indicates that there's some work to be done still on the healing process and how do you go about that?

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: Well, you know, I spoke to Senator Clinton this week. She's campaigning for me in Nevada and Florida. She is very enthusiastic about the need for a unified party. I think we're going to have a terrific convention.

As is true in all conventions, we're still working out the mechanics of the four days. And our staffs are in communication with Senator Clinton's staffs. But I don't anticipate any problems.

QUESTION: Senator (INAUDIBLE) yesterday that said 48 percent of the public is suffering from Obama fatigue.

(LAUGHTER)

QUESTION: Do you think that it's possible to be overexposed when you're running for president?

Is that even a concern?

OBAMA: Well, you know, we are going to correct that this week, hopefully with your help. So...

QUESTION: But is it wise to cede an entire week of press coverage to John McCain at this point?

And are you going to go surfing at Sandy's (ph)?

OBAMA: Well, you know, I -- look, I'm going to see my grand mom, who I haven't seen in almost 18, 19 months and, you know, who is getting to the age where I want to make sure that I'm spending time with her on a consistent basis. And so that she can see her great grandchildren. And I want to spend some time with those children, as well.

So it's -- you know, we had a long -- and this goes to, actually, Maria's question, as well. We had a very long primary. We had the longest primary in history. And so I can imagine that folks need a break from politics. And they didn't really get one like they normally do.

John McCain got one. But I think that, you know, the majority of people have been fed a constant, you know, stream of political chatter. And I'm sure that having a couple weeks off and enjoying the Olympics is probably what the doctor ordered for everybody.

(END VIDEO CLIP)

BLITZER: Coming up, we're going to hear what Senator McCain is saying today, as well.

So how does one of -- one group of thieves make off with 41 million credit card numbers?

A car, a laptop and a lot of illegal hacking. We're driving with a computer expert to show you how the scammers do it and how to protect yourself.

Plus, it came up in a Congressional hearing -- a jail right inside Capitol Hill. Is it real? We're going underground to find out.

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

(COMMERCIAL BREAK)

BLITZER: Carol Costello is off today.

Fredricka Whitfield is monitoring other important stories incoming into THE SITUATION ROOM right now -- Fred, what's going on?

FREDRICKA WHITFIELD, CNN CORRESPONDENT: Hello again, Wolf.

Well, we've got an update on a story we told you about not long ago. We've just heard from our crew traveling to Beijing with President Bush for the Olympics. Last hour they phoned in telling us that passengers on the press plane were being held on the tarmac at the Beijing airport and had been sitting there almost two hours with no explanation. Well, we just heard back and they're now being allowed to deplane. Situation resolved. But the only thing they are being told right now is that it was a logistical delay.

And this update on a story we told you about in THE SITUATION ROOM. An Israeli commander and a soldier charged today with unworthy conduct after a shooting incident last month. A handcuffed and blindfolded Palestinian protester shot at close range with a rubber bullet. He suffered a minor injury. The soldier and the commander will be tried in military court.

And going green while sailing the seas -- check Al Gore's new boat out. It's energy-efficient, of course. No big surprise. The boat is called Bio-Solar One. And the former vice president will reportedly have to fill her up only once a year. And it's being tricked out a little bit more with some solar panels. A pretty hip ride on the waters there.

And the Paris Hilton plan -- that's what Republican Congress Michael Burgess wants to talk about. Really, he just wants to make the Democrats look bad. He's talking about the parody commercial starring the celebrity heiress, who shares her energy plan. GOP lawmakers are trying to make the case that Democrats aren't taking action on energy. And they're pushing for a House vote on offshore oil drilling, even though Congress is on its August recess -- Wolf.

BLITZER: Thanks very much.

I suppose we're never going to hear the end of these parody ads.

WHITFIELD: I don't think so.

BLITZER: Thank you.

The government says he's the anthrax killer. So how could a scientist get around government security to work with some of the world's deadliest toxins?

Also, the secretary of State, Condoleezza Rice, answering allegations that the White House ordered a forgery to justify the invasion of Iraq.

Plus, Detroit's mayor arrested and jailed. We've just received -- there it is -- his mug shot.

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

(COMMERCIAL BREAK)

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

Happening now, deadly pathogens and the people your government trusts to work with them. The anthrax case has everybody talking about this.

Is security at these labs as tight as it should be?

Allegations of forging documents to make the case for war -- Condoleezza Rice is asked about it and she pushes back very hard.

And it's called war driving -- computer hackers using wireless connections to capture your confidential information. They just point, click and crack the system.

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

He was already in trouble, now he's in jail. We're talking about the mayor of Detroit, Kwame Kilpatrick, and a judge who laid down the law today.

Let's go to Mary Snow.

She's working this story for us -- pretty shocking stuff, Mary. What's going on?

MARY SNOW, CNN CORRESPONDENT: Yes, it really is, Wolf. You know, it is just the latest chapter in the legal saga for Detroit's mayor. He already faces eight felony counts and has been free on $75,000 bond. That's until a judge stepped in today and ordered him to go to jail.

(BEGIN VIDEOTAPE)

MAYOR KWAME KILPATRICK (D), DETROIT: All I'm asking for, you know, your forgiveness. It will never happen again.

SNOW (voice-over): Detroit's mayor appealing to a judge to prevent being sent to jail. Kwame Kilpatrick, who is at the center of a sex and perjury scandal, admitted to a judge that he traveled to Windsor, Ontario without first getting court permission. The terms of his bond require him to do so.

KILPATRICK: ...court and my respect for you has presented (INAUDIBLE) that I don't. I don't know where that comes from, Your Honor. But I don't believe that there's a person who can sit in this type of scrutiny, this type of pressure and these type of issues where I have to deal with personally with my wife and children.

SNOW: Kilpatrick said the trip wasn't a willy-nilly go frolick in Canada trip; rather he was trying to save a business deal for Detroit. But the judge ruled that Kilpatrick violated his bond and sent him to jail.

UNIDENTIFIED MALE: If it was not Kwame Kilpatrick sitting in that seat, if it was John six-pack sitting in that seat, what would I do? And that answer is simple.

SNOW: Kwame Kilpatrick and his former chief of staff, Christine Beatty, face felonies of perjury, obstruction of justice, and in misconduct of office. They stand accused of lying about having an affair during a whistle blower trial. They both deny the charges.

Kilpatrick became embroiled in the scandal back in January after the Detroit Free Press published text messages indicating the married mayor and Beatty were romantically involved.

(END VIDEOTAPE)

SNOW: Wolf, tonight a growing number of leaders in Detroit are calling on Kilpatrick to resign. The mayor's chief of staff is now running the city while Kilpatrick is in jail and there's no talk of the mayor stepping aside. Lawyers for Kilpatrick are appealing. They'll be back in court tomorrow -- Wolf?

BLITZER: Thanks, Mary, for that.

Another important story we're following includes some homicidal, psychotic and depressed and addicted government records. That's what they show. People who knew him paint a very disturbing portrait of the man blamed for the anthrax attacks. So why was this troubled scientist given access to some of the world's most lethal agents?

Our homeland security correspondent Jeanne Meserve has been looking into this troubling story as well.

Jeanne, what are you finding out?

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Well, Wolf, first, according to a search warrant request just days before Bruce Ivins' death, FBI agents saw him use library computers to visit an anthrax website and review e-mails. Today, they asked to look at the contents of those computers even though they consider the case solved.

Whether you buy the government's contention that Ivins was responsible for the anthrax attacks, it brings up serious questions about the security of labs and people working with deadly pathogens.

(BEGIN VIDEOTAPE)

MESERVE: As far back as 2000, Bruce Ivins wrote "it's like I'm not only sitting at my desk doing work, I'm also a few feet away watching me do it." According to documents in the case, he wrote about depression, paranoia, delusional thoughts.

MAUREEN STEVENS, WIDOW OF ROBERT STEVENS: I mean, he was not just a little bit weird, like they said, I mean, he was certifiable.

MESERVE: The widow of an anthrax victim who is pursuing a $50 million negligence suit against the federal government wants to know how in the world Ivins was allowed to work at a U.S. army biodefense lab.

RICHARD SCHULER, STEVENS' ATTORNEY: They had better security at a Seven-11 than they did at the laboratory where they had the most dangerous substances known to mankind.

MESERVE: Since the anthrax attacks, billions have been pumped into biodefense research. Estimates are that more than 400 labs and 14,000 scientists handled the most dangerous diseases, like Ebola, plague and anthrax. That has a down side.

DR. JULIE FISCHER, STIMSON CENTER: More opportunity for accidents, accidental exposures or deliberate theft or misuse.

MESERVE: The safety and security of labs handling the most dangerous pathogens has to be certified by the federal government. But according to the Government Accountability Office, the oversight of these labs is fragmented and relies on self-policing.

Scientists working in the labs undergo background checks, which include a look at mental health. But the system did not catch Bruce Ivins mental issues for years. He continued working with anthrax until last November.

AMY SMITHSON, MONTEREY INSTITUTE: It's a failure of the security clearance system when his clearance was re-upped, to catch that he was having mental difficulties.

MESERVE: Some say Ivins' case show that rules need to be toughened but others warn that even the current security regime has driven some researchers away from biodefense.

GIGI GRONVALL, CENTER FOR BIOSECURITY: There are lots of things that we need these scientists to do. We need them to do their job.

(END VIDEOTAPE)

MESERVE: Without their research, Gronvall warns we might not have the medicines to cope with another attack or accident with a biological agent -- Wolf?

BLITZER: Thanks, Jeanne, for that report.

Documents released by authorities describe Dr. Ivins' obsession with a woman's sorority. An obsession he also took to the website Wikipedia.

Abbi Tatton is working this part of the story for us.

What are you finding out, Abbi?

ABBI TATTON, CNN INTERNET REPORTER: Wolf, this is the Wikipedia page for the sorority Kappa Kappa Gamma. Anyone can edit this, offer their suggestions. It seems Ivins did so not just once or twice, but more than 100 times. According to documents in the case, he was using an alias jimmyflathead, that investigators have traced this to an e- mail account.

The posts and edits start in late 2005. First of all, just focusing on notable members of the sorority. Then he would profess to have inside information about the group. I'm familiar with their secrets and rituals, he posted in 2006. Then it seemed to get more intense. He said to someone, if my additions to this page continue to be removed, then I will start posting derogatory information about the organization. That prompted someone else on the site to say to him, I can't understand the obsession. Where do you feel the need to add all this? Why Kappa?

FBI investigators say the New Jersey mailbox from which the mail was sent is near the sorority. But they acknowledge there was no evidence placing Ivins there -- Wolf?

BLITZER: Do we have any idea why he was apparently obsessed with the sorority?

TATTON: The documents go into it for the last few years, detailing this, that it's been going on for several years. But you can tell from this that he was doing this a lot, going onto this and giving a lot of information, taking down other people's information as well.

BLITZER: Interesting. Abbi, thank you.

Explosive new charges against the White House. Now the Bush administration is fighting back.

CONDOLEEZZA RICE, U.S. SECRETARY OF STATE: The United States, the White House was not going to ask somebody to forge a letter on something of this importance.

BLITZER: The rest of Secretary Rice's reaction to a very serious allegation that the White House actually forged documents. We're watching this story.

Plus reluctant witness testifying on Capitol Hill, thrown in a capitol jail? Is this real? Could it happen?

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Secretary of State Condoleezza Rice is refusing explosive charges in a controversial new book alleging the White House took extreme and illegal measures to justify the invasion of Iraq. Let's go to CNN's Fredricka Whitfield once again.

Fred, what is the secretary saying?

WHITFIELD: Well Wolf, Condoleezza Rice flatly denies the most disturbing charge in the new book by Pulitzer Prize winner Ron Suskind called "The Way of the World.: In it, he claims the White House ordered the CIA to forge a letter showing ties between al Qaeda and Saddam Hussein, a charge he stood by in an interview yesterday with you, Wolf, in THE SITUATION ROOM. Rice talked about the charge to Yahoo News in partnership with Politico defending the decision to go to war.

(BEGIN VIDEO CLIP)

MIKE ALLEN, YAHOO NEWS: Secretary Rice, you know there's a new book by Ron Suskind, which says the White House ordered the CIA to falsify intelligence about Iraq's ties to al Qaeda. Is it possible the U.S. government forged a letter from Iraq's intelligence chief to Saddam Hussein?

RICE: The United States government didn't forge a letter. The White House in which I was working. And I think that --

ALLEN: Indirectly?

RICE: I think the people who he, as I understand it, the people who he quotes as being sources for that have denied it.

ALLEN: So you think it's impossible --

RICE: The United States, the White House was not going to ask somebody to forge a letter on something of this importance.

ALLEN: And you are saying that did not occur?

RICE: Did not occur. The intelligence might have been wrong, that's now clear. Not because people weren't working very hard. But when you have an opaque regime like Saddam Hussein's regime that had used weapons of mass destruction before, that had them before, one can understand how the judgment may have been wrong.

But the decision to go to war was based on the strategic threat of Saddam Hussein, the fact we've been to war against him before, the fact that he still threatened his neighbors and the fact that we were told that he was reconstituting his weapons of mass destruction.

(END VIDEO CLIP)

WHITFIELD: Author Ron Suskind also said that right here in THE SITUATION ROOM, that he has taped interviews backing up his allegations against the White House. But he says that he would be hesitant to actually release them -- Wolf?

BLITZER: All right. Thanks very much, Fred, for that update. John McCain, meanwhile, facing protesters at a DHL shipping plant in Wilmington, Ohio. The Associated Press reporting it could soon be shedding as many as 8,000 jobs because of a merger that McCain campaign manager, Rick Davis, worked on as a lobbyist back in 2003.

Here's what McCain said about it today, raw and unfiltered.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: I'm deeply troubled by the job loss confronting the town of Wilmington and this spire area, nine areas. My concerns are being reinforced in my meeting today with those facing the most personal consequences of what may happen here if the agreement pending between DHL and ups is finalized. Should this happen, DHL will see significant elements of control over cost and service quality to one of its chief competitors.

This raises serious concerns that consumers all over America would suffer in terms of costs and quality in the services provided. And I'm a strong supporter of our antitrust laws and I think they should be vigorously enforced. I support an antitrust review of the case. But I do not prejudge its disposition.

In the meantime, planning must proceed to ensure that in the event the transaction does go through, the rapid response assistance mechanisms, local, state and federal are in place. Job re tension must remain our overriding concern, and we should explore all options for proceeding with a viable commercial development plan, if DHL ceases operations in Wilmington.

National emergency grant funding should be released to assure any potential response efforts, have the resources necessary to meet the challenges ahead, and we must have an effective displaced worker assistance and training program in place.

Now, I believe that Congressional oversight is necessary. I believe that the justice department should conduct a thorough and complete investigation as rapidly as possible. I believe that it would be important for the chief decision-makers at deutsche post would come here, come here to Wilmington, come here to Ohio, and explain the reasons and rationale for their decision and meet with the people and their representatives because of the impact of this decision made a long ways away from the state of Ohio.

(END VIDEO CLIP)

BLITZER: Important to note, by the way, Ohio is a swing state, the swing state that actually decided the 2004 election. The job and economy huge issue there.

It could be a major break-through in the war in Iraq. U.S. and Iraqi officials may be close to making a deal on when to pull troops out of the war zone.

Plus, deep underground at the U.S. capitol in search of a jail cell. Does it really exist? You're going to find out. And how a group of thieves actually stole 41 million credit cards.

UNIDENTIFIED FEMALE: Wolf, it is easier than you think. You need a car, you need a computer and a criminal mind. Coming up, we're going to go war driving. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: A reluctant witness and a Congress that wants answers. We're talking about Karl Rove and questions about the firing of those federal prosecutors. Some say he should go to the capitol jail if he doesn't talk. Is there really such a thing?

Our Jim Acosta has been looking into this -- Jim?

JIM ACOSTA, CNN CORRESPONDENT: Wolf, with the president refusing to allow certain members of his administration to testify on Capitol Hill, some in Congress have threatened to turn back the clock and bring back the legislative branch's arrest powers. Some say Karl Rove, and the capitol slammer.

(BEGIN VIDEOTAPE)

ACOSTA: When Karl Rove refused to testify before a house committee last month, Democrats in Congress started thinking creatively.

UNIDENTIFIED FEMALE: The claim of executive privilege is really not a valid one.

UNIDENTIFIED MALE: Congressman, I just want to clarify, there is a jail in the U.S. capitol. You want Karl Rove in that jail?

ACOSTA: A jail in the U.S. Capitol? Has the Congress ever done that?

JONATHAN TURLY, CONSTITUTIONAL LAW PROFESSOR: It would actually arrest people, try them, and even jail them in the Capitol.

ACOSTA: Constitutional law professor Jonathan Turly (ph) says the house has the little-known authority to put administration officials on trial when they fail to testify. The charge? Contempt of Congress.

TURLY: The defendant is brought forth by the sergeant of arms. In the case of Mr. Rove, it shouldn't be difficult. He's a consultant of Fox News a block away from the house floor.

ACOSTA: As for that jail --

DON RITCHIE, HISTORIAN: The great of majority people who tour the Capitol building never see this area.

ACOSTA: We went deep into the bowels of the Capitol with Senate historian Don Ritchie. The closest thing to a jail, Washington's tomb. An area once considered and then rejected as a final resting spot for the first president.

RITCHIE: A lot of people who have seen it assumed this must be the Capitol jail.

ACOSTA: But it's not the capitol jail?

RITCHIE: No, it's never been used as the capitol jail.

ACOSTA: The last time Congress detained an administration official, 1934 when a member of the Hoover administration was temporarily held in the Willard Hotel.

RITCHIE: When he refused to cooperate, he was then turned over to the district courts. He was convicted of contempt of Congress and sentenced to ten days in a real prison.

ACOSTA: He was convicted?

RITCHIE: Yes.

ACOSTA: Technically, Congress has a holding cell over at the capitol police department. Jonathan Turly wonders if it will ever get that far.

TURLY: What you have a game of constitutional chicken.

(END VIDEOTAPE)

ACOSTA: With Congress off on its August recess, there's still time for both sides end to their showdown, but if that doesn't happen, don't be surprised if some Democrats don't start calling for high noon, capitol hill style -- Wolf?

BLITZER: All right, Jim. Thank you. Interesting stuff.

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

I learned something in that piece. I assume you did as well?

CAFFERTY: I did. The thing I learned is that they only have one cell allocated for these people. It should be much, much bigger. They should undertake an expansion immediately.

The question is: How much faith do you have in Barack Obama or John McCain to solve our energy problems?

Bob in Idaho writes: "Neither one of them can solve America's energy problems. And it is not their job. It is ours. Sure, the politicians can implement programs, create incentives, control legislation here and there but the real solution is in the hands of each and every person in the U.S. If we don't change our attitudes toward energy consumption, no amount of legislation will help. We will always find a way to consume more and we always have."

Dan writes from Virginia: "Like most of the major issues facing America, this election has turned into a battle of who will screw it up the least. McCain's energy plan doesn't make much sense and in some way is overtly harmful. Obama's energy plan lacks details of how exactly he plans to do what he claims he'll do. So I guess Obama's plan is better by default. And anyone with a working brain should realize neither of these guys is going to fix our energy problem, especially not in four years."

Jean writes: "McCain gets my vote to solve the energy problem. His plan hits on multiple fronts, and more importantly, he keeps all options on the table. As McCain has noted, the biggest issue to resolving energy is the partisanship in Congress."

Judy writes: "I have a lot more faith in Barack Obama to solve our energy crisis than I do John McCain. McCain has been in Washington for 26 years and hasn't seen fit to rise this issue. What we need is someone who has a vision and can move this country away from imported oil."

Kim in Dodge City, Kansas: "Neither one of these guys can change our dependency on foreign oil or any oil for that matter. Congress runs on oil, just like everything else, and they are not about to let that gravy train come to a halt anytime soon. They will tell you whatever you want to hear, but rest assured, as long as there's money in it, oil will be our economic heroin until the end of time."

And finally, Jenny in Georgia says: "I honestly don't know, Jack. But take heart. Apparently Paris Hilton is available for consultations regarding her energy plan. So there is hope."

If you didn't see her e-mail, go to my blog at CNN.com/Caffertyfile and you might find yours there. There are hundreds of others posted -- Wolf?

BLITZER: Thanks, Jack. See you in a few moments.

Arnold Schwarzenegger, the governor of California, he's now in a standoff with the California legislature. Their battle over the budget is getting very ugly out there.

Plus, the massive high-tech scam nabbing millions of credit card numbers from a car. We have the story right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: It's the biggest -- yes, the biggest identity theft case ever prosecuted in the United States. Hackers getting their hands on 41 million credit card numbers. 41 million. How does this happen? How could it? Guess what, it's easier than you might think for them to do this kind of dirty work.

Let's go to Brooke Baldwin. She's watching this story for us. Brooke, you've come up with some amazing information. Tell our viewers what's going on.

BROOKE BALDWIN, CNN CORRESPONDENT: Wolf, it's pretty fascinating. There's this entire computer sub culture where hacking is apparently hip. You need a car, you need a laptop with a wireless internet connection and a total disregard for the law.

(BEGIN VIDEOTAPE)

BALDWIN (voice-over): It's called war driving. The goal, find an unsecure wireless connection, crack the computer's code and capture confidential information. One expert says it's easier than you think.

JONATHON GIFFIN, PROFESSOR, GEORGIA TECH: Too often systems and data are not protected in the way they should be.

BALDWIN: Jonathan Giffin teaches computer science at Georgia Tech. Today he's our war driver.

GIFFIN: We're looking to see if there are open wireless access points that would allow us to gain entry into someone else's network.

BALDWIN: Along with givens' assistant, armed with a laptop, we hit the road to see just how secure cyber-security really is.

GIFFIN: We've been out and out war driving for four or five minutes and we've already picked up several hundred open access points.

BALDWIN: Several minutes later, we found more than 1,000 different access points. Some were highly encrypted where no hacker could attack, others were not secured by passwords where we could peak into someone's computer and find private information. We didn't do that, but that doesn't stop hackers. All they need is a laptop, wireless connection, and some simple software called a sniffer program.

And boom, you could capture credit card information.

GIFFIN: If the credit card information is being transmitted unencrypted across a wireless connection, yes, you could.

BALDWIN: The feds say that's how a group of hackers made off with 41 million credit card numbers in the biggest identity theft case ever prosecuted in American history. They hit major retail chains, including Sports Authority, DSW, and T.J. Max, whose parent company lost $197 million.

Our war driver parked in front of several stores and in a matter of minutes Giffin could point, click, and crack into a system. We're not sure which store, but that doesn't matter to hackers.

GIFFIN: With we're seeing is somewhat concerning. It's using an insecure form of encryption that a hacker could break within a couple of minutes.

BALDWIN: And steal your credit card number. It's frightening.

GIFFIN: It's cause for concern, particularly because there are better ways of running wireless networks. There are stronger forms of encryption that would prevent an attacker from breaking it.

(END VIDEOTAPE)

BALDWIN: Now, the question really now, Wolf, is how can you protect yourself walking into a store with your Visa card, let's say. According to the Consumer Federation of America, you really can't. It's up to the stores to stop the hackers. A couple simple suggestions they offered to me.

Make sure you're monitoring your credit card statements online fairly frequently and use cash instead of a credit card. Also, if you have a wireless internet connection at home, make sure that connection is password protected, Wolf.

BLITZER: All right. Brooke, thanks for that useful information. Appreciate it very much.

And to our viewers, you're in THE SITUATION ROOM.