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THE SITUATION ROOM

Israel Ready for Ground War; Treasury Says No Flip-Flop on Bailout; Arnold's Drastic Plan

Aired January 1, 2009 - 17:00   ET

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


SUZANNE MALVEAUX, CNN CORRESPONDENT: Well, you're in THE SITUATION ROOM.
Happening now, breaking news -- Israel's air force hits dozens more targets and kills a top Hamas leader. But it hasn't stopped the rocket fire. Now the army is ready for a possible ground assault on Gaza.

And this is what could have happened in Aspen, Colorado as police blow up the suspicious package that forced the evacuation of much of the town. Why an elderly man threatened mass death in the popular resort.

And new details of Charles Barkley's DUI arrest -- what police found in his car, who he was with and what he said.

Wolf Blitzer is off today.

I'm Suzanne Malveaux.

And you're in THE SITUATION ROOM.

Breaking news -- after killing a militant commander, Israel may

be ready to step up its all-out war with Hamas on the ground.

These are the latest developments.

One of the founders of Hamas was killed today in a targeted hit by an Israeli warplane. Known as a mentor to suicide bombers, Nizar Rayyan died when a ton of explosives was dropped on his home. The Israeli military says more than 40 rockets fell in Israel today. One hit an apartment building 23 miles from Gaza.

And the Israeli military says it has completed populations for a possible ground assault.

CNN's Paula Hancocks has the details -- Paula.

PAULA HANCOCKS, CNN CORRESPONDENT: Suzanne, the weather has improved and more troops have arrived on the border with Gaza. Military experts say that if an Israeli operation is going to happen, it should happen within 48 hours.

(BEGIN VIDEOTAPE)

HANCOCKS (voice-over): Air strikes on Gaza -- Israel's stage one.

TZIPI LIVNI, ISRAELI FOREIGN MINISTER: We want to weaken Hamas in Gaza strip. At the end of the day, Hamas is a problem not only to Israel but to entire Palestinian people.

HANCOCKS: A cease-fire now has been sharply ruled out.

So what is stage two?

Is this the next logical move -- boots on the ground in Gaza?

Defense Minister Ehud Barack has threatened it. And judging by the scene along the border over the past few days, the military is ready for it. Israel's cabinet has already approved the call-up of 9,000 reservists.

Israel claims several times a day, it is destroying more rocket warehouses, more rocket launchers.

This video, released by the military, seems to show secondary explosions consistent with weapons being hit.

But then, Hamas replies with longer range missiles, reaching Israeli cities and civilians who thought they were safe.

The ground option is not an easy one for Israel, even if the military deems it necessary to root out the rockets not seen or accessible by air.

The action Israel has taken so far has strong domestic support. According to one poll Thursday, that would fall to just 19 percent with a ground operation.

PROF. GERALD STEINBERG, BAR ILAN UNIVERSITY: We know that ground forces going in are going to mean casualties. Some of those tanks are going to be blown up. There are going to be Israelis that are going to be killed in the ground operations. So there's a preference not to do it. But there's also a realization there's probably no other choice.

HANCOCKS: And Hamas has already laid down its own welcome mat for any ground troops -- one day before being killed by an Israeli air strike on Thursday, senior Hamas leader, Nizar Rayyan, said

"We are the ones who know Gaza's every corner and know how, with the permission of God, we will kill and imprison their men and rub their noses in the sand."

(END VIDEO TAPE)

HANCOCKS: It's not just a case of troops going in, but how do they get back out again?

Very few Israelis want to reoccupy Gaza and any Israeli tank withdrawal after an operation is likely to be billed by Hamas as a victory for them -- Suzanne.

MALVEAUX: Thank you, Paula.

While Israel weighs a ground offensive, its latest blow came from the sky. Nizar Rayyan, a top leader of Hamas, was killed in an air strike on his home. Known for wearing combat fatigues, Rayyan joined in clashes with Israeli troops. The Israeli military says he was behind a 2004 suicide car bombing which killed 10 Israelis and sent his own son on a suicide mission, which killed two Israelis in 2001.

Rayyan had called for renewed suicide attacks and just yesterday declared Hamas rockets would strike deeper into Israel. He refused to hide and called on Gazans not to leave their homes during air strikes -- even when warned to evacuate. Members of Rayyan's family were killed with him.

General Motors last night got the first $4 billion installment of its bailout loan from the government. The money comes from the bank rescue plan that was approved by Congress in September.

Well, the U.S. treasury has been taking heat from Congress for its handling of that financial bailout. And now it is answering back.

CNN's Christine Romans has the details.

CHRISTINE ROMANS, CO-HOST, "YOUR $$$$$": Suzanne, the way the Treasury Department sees it, the government prevented a widespread failure of financial institutions. The Treasury Department released a 13-page response to criticism that its $700 billion Troubled Asset Relief Program lacks focus and oversight: "The system is fundamentally more stable than it was when Congress passed the legislation."

But they admit the credit crisis will not improve until the economy does: "As long as confidence remains low, banks will remain cautious about extending credit and consumers and business will remain cautious about taking on new loans."

A Congressional panel sharply criticized the Treasury's actions, citing a lack of oversight and an inability to even know whether the bailout is working. This Treasury response echoes what Treasury Secretary Henry Paulson and his deputy for the crisis, Neel Kashkari, have said publicly -- that the Treasury decision to inject money into the banks, instead of using $700 billion to buy toxic assets from the banks, was not a flip-flop, but a change of course after deciding recapitalizing the banks would work more quickly.

Treasury basically telling its critics it prevented something worse, it may take time to see the results and it may be hard to easily gauge how well it's working -- Suzanne.

MALVEAUX: Christine, thank you.

California Governor Arnold Schwarzenegger is proposing some drastic measures to fix his state's budget deficit crisis.

CNN's Dan Simon is in San Francisco with those details -- Dan, what are you learning? DAN SIMON, CNN CORRESPONDENT: Suzanne, it's not often when you see a Republican politician propose across the board tax increases. But here in California, that is exactly what Governor Schwarzenegger has done in his latest plan to fix the state budget.

(BEGIN VIDEOTAPE)

SIMON (voice-over): Governor Schwarzenegger says he doesn't have another choice but to raise taxes in California -- by more than $14 billion over the next 18 months. His plan calls for a 1.5 cent increase to the state sales tax. Plus, a sales tax would now be added to things like car repairs and veterinary bills. Alcoholic drinks would also cost a little more, too -- an additional nickel a drink.

Schwarzenegger's fellow Republicans in the legislature say his plan feels like a bad hangover. But Democrats say additional revenue is needed to fix the state's soaring $40 billion plus deficits.

KAREN BASS (D), CALIFORNIA ASSEMBLY SPEAKER: Raising taxes during a recession is a very difficult thing to do. But the fact of the matter is, our deficit is so large in the State of California, that it is impossible to cut $40 billion out of the state revenue.

SIMON: Still, the governor's proposal outlines deep spending cuts -- $17 billion over the next year-and-a-half. Nearly a third of the cuts would target education. His plan calls for a $5 billion reduction to public schools and would also trim the school year by a week.

If that is approved, it would be the first time in state history that California abbreviated its school year. California would also get a little more cash by borrowing billions against future lottery proceeds.

Schwarzenegger's finance director put it this way.

MIKE GENEST, GOVERNOR'S FINANCE DIRECTOR: The worst budget situation the state has ever faced. We're going to have to cut programs, raise taxes and borrow to the tune of $41.6 billion.

SIMON: California's fiscal situation is among the worst in the nation -- driven mainly by declining tax revenues from the mortgage meltdown and high foreclosures.

(END VIDEO TAPE)

SIMON: Democrats hold majorities in both houses, but Schwarzenegger's plan would need some Republican support. And right now, he's lacking that. The lawmakers would have to act in some fashion in about a month, because that's when the state controller says California will run out of money and need to start issuing IOUs -- Suzanne, back to you.

MALVEAUX: Thank you, Dan.

Despite its current crisis, California remains an economic powerhouse. If you add up the values of all the goods and services produced there, which is known as the gross state product, the number tops $1.8 trillion -- trillion dollars. That makes California the eighth largest economy in the world. That's bigger than Canada, bigger than Russia, even bigger than Mexico and Australia combined.

Real bombs disguised as Christmas presents warning of a horrible price to be paid in blood -- details of a self-proclaimed suicide mission in the resort city of Aspen, Colorado.

Also, we shine a spotlight on presidential pardons -- are some people with special access to the White House getting an insider's advantage?

Plus, new details of Charles Barkley's DUI arrest, including the surprising set of statements that he gave police.

(COMMERCIAL BREAK)

MALVEAUX: This could have happened in the middle of Aspen, Colorado's New Year's Eve festivities.

(VIDEO CLIP)

MALVEAUX: An elderly man's threats of mass death led police to clear the downtown area before finding out that a threatening, suspicious package contained a very real bomb.

Let's go live to CNN's Thelma Gutierrez.

And what are you learning today -- Thelma?

THELMA GUTIERREZ, CNN CORRESPONDENT: Suzanne, police say the devices were made of bladders filled with gasoline that had cell phone components attached to them. Now, investigators say the suspect demanded $60,000 in used $100 bills, but he never collected a dime of it.

(BEGIN VIDEOTAPE)

GUTIERREZ (voice-over): This is 72-year-old James Blanning -- captured on a bank surveillance camera just as he's about to deliver a plastic tub with two packages wrapped in Christmas paper to a Wells Fargo bank.

ASST. CHIEF BILL LINN, ASPEN POLICE: Those packages contained notes threatening detonation of devices contained in those tubs and "mass death" if his demands were not met.

GUTIERREZ: And this chilling warning: "You had better be a very cool individual and not start a panic or many in Aspen will pay a horrible price in blood."

The bank employee immediately called Aspen police. Then 12 minutes later, they received a second call -- this time from the Vector Bank, which also received identical notes.

LINN: He claimed the devices each contained what he called a big firecracker made of unique chemicals and electronics. The notes, which are exactly the same at both banks, seem to indicate that four banks in Aspen were targeted. The notes also indicated the author had a problem with the Bush administration and wars in the Middle East. And he declared this to be "a suicide mission."

GUTIERREZ: By late afternoon, just as New Year's Eve preparations were getting underway, downtown Aspen is evacuated. The bomb squad and federal officials move in.

(VIDEO CLIP)

GUTIERREZ: In the evening, the bomb squad detonates a device at Vector Bank. It explodes in a fireball. On the steps of the "Aspen Times," this handwritten note is found by an employee indicating Blanning is planning on taking his own life.

Then, in the predawn hours New Year's Day, James Blanning is finally found inside his car -- dead from what police say was a self- inflicted gunshot wound.

(END VIDEO TAPE)

GUTIERREZ: Aspen police say they did get a lucky break. When the surveillance photograph was developed, the sheriff immediately recognized Blanning from an incident way back in the '90s, when he threatened to hang himself at the courthouse over issues that he had with the way in which Aspen was growing. Now, police also say that Blanning had spent time in prison in the '90s for fraudulent land sales -- Suzanne.

MALVEAUX: OK. Thank you, Thelma.

We are learning new details about the DUI arrest of former basketball star Charles Barkley, including what police found in his car and where he was going and who he was with.

Our CNN's Brooke Baldwin is working that story for us -- and, Brooke, what are you finding out?

BROOKE BALDWIN, CNN CORRESPONDENT: Oh, boy, Suzanne. Yes, we are definitely getting some new details today. According to this latest police report, an officer found a handgun and a woman in Barkley's SUV, as -- for the reason why Barkley blew through the stop sign. Let's just say he provided police with one very explicit answer.

(BEGIN VIDEOTAPE)

LT. ERIC SHUHANDLER, GILBERT POLICE: It was a very routine, typical DUI arrest.

BALDWIN (voice-over): Police may call this arrest routine, but new details indicate a more colorful conversation between NBA Hall of Famer Charles Barkley and his arresting officer. TMZ cameras captured these photos of the arrest.

According to the latest Gilbert Police report, Barkley, who is married, had just picked up a woman in his SUV when he ran a stop sign. Police pulled him over and eventually arrested him for suspicion of DUI. The officer then asked where the former Phoenix Suns star was going.

According to police, Barkley responded that he was in a hurry. "You want the truth?," he's quoted as saying, "I was going to drive around the corner" -- and to paraphrase Barkley, have a sexual liaison.

Sir Charles went further, saying the same woman had performed a similar sexual act one week ago and that it was the best he'd ever had in his life.

The report also describes how Barkley joked with the officer, telling him that if he could get him out of the DUI, that: "I'll tattoo your name on my" -- well, we don't need to get anymore specific.

SHUHANDLER: The Gilbert Police Department did not treat him any differently than we would treat anybody else.

BALDWIN: This is the Dirty Pretty -- the Scottsdale nightclub where Barkley was reportedly partying earlier that night. Chad Landau was there and said Barkley didn't appear to be stumbling around.

CHAD LANDAU, CLUB EMPLOYEE: It was a bad decision and hopefully it won't happen again so. It's an unfortunate example that has to be made.

BALDWIN: Barkley, a commentator for TNT, which, like CNN, is owned by Time Warner, release this statement through Turner Sports: "I am disappointed that I put myself in that situation. The Scottsdale police were fantastic. I will not comment any further, as it is a legal matter."

(END VIDEO TAPE)

BALDWIN: And there you have it. Now, the gun which may or may not belong to Barkley, and the SUV have both been impounded. Barkley did take a routine test to determine his blood alcohol content -- contents, rather. And, Suzanne, those results should be back, they say, in just a couple of days.

MALVEAUX: OK. Thank you, Brooke.

BALDWIN: Sure.

MALVEAUX: An American president with Muslim ancestors -- could that give Barack Obama an edge, possibly helping him to succeed where other presidents have failed?

Plus, searchers expecting to find a body get the surprise of their life -- details of a life or death drama in "suicide gully."

(COMMERCIAL BREAK)

MALVEAUX: Jim Acosta is monitoring the stories that are coming into THE SITUATION ROOM right now -- Jim, what are you working on?

ACOSTA: Suzanne, a ceremony marks a turning point in Iraq. The U.S. military today handed over authority of Baghdad's Green Zone to Iraqi troops. The Green Zone houses government offices and the U.S. embassy, among other things. This is the first day of a U.S./Iraqi pact allowing American forces to stay in the country until 2011 with tighter restrictions. As a military spokesman put it, Iraqi troops will take the lead now.

And the man who police say dressed up as Santa then carried out a Christmas Eve massacre had been plotting for months. Investigators say last summer, Bruce Pardo bought guns and ammunition. They say Pardo ordered an oversized Santa suit in the fall. Pardo had settled a bitter divorce just days before family and friends watched him open fire at his in-laws' house then set a raging fire. Nine people died.

January 1st brings a prayer for peace from the pope and a message for world leaders -- change the way you do business. Pope Benedict addressed the world's financial crisis in his New Year's Day blessing, saying short-term fixes are not enough. He says the current financial meltdown shows a need for profound revision and change at the root of the world economy.

And Barack Obama wants to thank and honor America's military on Inauguration Night. The president-elect announced today he'll have a commander-in-chief's ball. The event will pay tribute to active duty military and Guard members, their spouses and those wounded fighting in Iraq and Afghanistan. President George W. Bush was the first to hold a ball honoring the uniformed services.

And finally, a New Year's Eve freeze -- not the weather -- for partiers hoping to rock in 2009 using their Zune music players. Thousands of the players simultaneously stopped working yesterday. Microsoft says a bug in the Zune's internal clock and the way it handles a leap year cause the malfunction. The glitch only affected older models and there is a way to fix the Zune by checking out the Web site.

And, Suzanne, I don't have one of those Zunes...

MALVEAUX: I don't have a Zune, either.

ACOSTA: I'm just wondering, does it's have something to do with the leap second?

We talked about that yesterday. Perhaps that was it. I don't know.

MALVEAUX: I'm just not technologically savvy enough to know.

ACOSTA: Neither am I.

MALVEAUX: Thanks, Jim.

ACOSTA: OK. MALVEAUX: Well, exactly 50 years since the Castro revolution and now the possibility that Barack Obama may be ready to make major changes in the U.S. relationship with Cuba.

Also, he was alone and poorly equipped, stranded in a frozen wilderness for three days -- how one snow boarder survived against all the odds.

And celebrities chipping in for the Obama inauguration -- details of which stars are giving and how much.

(COMMERCIAL BREAK)

MALVEAUX: You're in THE SITUATION ROOM.

Happening now, presidential pardons -- when your future is on the line, does who you know at the White House make a difference?

We'll show you the connections and you decide.

Plus, a plane landed in Boston with one more passenger than it had when it took off -- the New Year's delivery no one was expecting.

And the Obama family moves to Washington this weekend -- but not to the traditional place for presidents-elect. We'll take you inside those temporary digs.

Wolf Blitzer is off today.

I'm Suzanne Malveaux.

And you're in THE SITUATION ROOM.

When President Bush handed out a number of end of term pardons, did some of those recipients benefit from special access to the White House?

CNN's Brian Todd has been looking into that -- and, Brian, what have we learned?

BRIAN TODD, CNN CORRESPONDENT: Suzanne, the president's pardons are not subject to anyone's approval. But his choices are often subjected to scrutiny, including on this question -- are your chances of getting a pardon better if your attorney knows someone in the White House?

(BEGIN VIDEOTAPE)

TODD (voice-over): Out of the 19 pardons and one commutation the president issued last week, at least four of the recipients had well connected representatives on their behalf who communicated with White House aides about the cases.

Convicted swindler Isaac Toussie is the best known, since his pardon was approved but then withdrawn. His attorney, a former White House lawyer, visited the White House to personally bring over his application -- although the White House would not say if that included a meeting.

Drug convict Reed Prior's attorney got a White House meeting at the recommendation of Iowa's governor, whose wife he knew, according to "The New York Times".

And Alan Maiss's attorney spoke with a current White House attorney about the petition.

PAUL ROTHSTEIN, GEORGETOWN LAW: There's no question that personal contacts -- who you are, who you know, is the way that you get a pardon by going to the White House.

TODD: But the White House replies that pardons are based only on the merits of clemency petitions and other petitioners were rejected in spite of having high-powered advocates or securing White House meetings.

Another pardon recipient, the late weapons trafficker Charles Winters, also had an attorney who was a former White House counsel. But he said when he got a call from the White House, it was just to verify some details -- key due diligence.

COFFEY: The pardons that are going to be considered by presidents get a lot of personal attention.

(END VIDEO TAPE)

TODD: One reason for contacting the White House directly -- the chances for getting a pardon through the Department of Justice are slim and it takes several years. But the Department defends its work, saying the process is methodical and open to anyone. A spokesperson tells us: "Speed is not preferred over accuracy and due diligence in processing clemency requests" -- Suzanne.

MALVEAUX: So, Brian, how does the pardons of President Bush compare to his predecessors?

TODD: Well, if you don't include that one pardon reversed last week, Mr. Bush has granted a total of 189 pardons and nine commutations, according to the Associated Press. That is fewer than half as many as Bill Clinton and Ronald Reagan issued during their two-term administrations.

MALVEAUX: Thank you, Brian.

Well, joining us to talk about the Bush pardons and much, much more, Democratic strategist Chris Kofinis and one of our political contributors, Republican strategist Leslie Sanchez.

Happy new year to both of you.

CHRIS KOFINIS, DEMOCRATIC STRATEGIST: Happy New Year.

LESLIE SANCHEZ, CNN CONTRIBUTOR: Thank you.

MALVEAUX: Let's start off by saying we listened to Brian's piece. Does it look like there was any kind of inappropriate action by the White House -- those with connections got a better deal?

Leslie?

LESLIE SANCHEZ, REPUBLICAN STRATEGIST, CNN POLITICAL CONTRIBUTOR: I think a lot of people try to allude to that. But there really is a process. It goes to the office of the pardon attorney, the recommendations, just like the package talked about, are made to the president and the White House counsel.

And I think there's always this case of -- Republican or Democrat -- that people think you have access or special ties and those people get certain privileges. I mean you saw a lot in the Clinton administration, there were 140 pardons on his last day -- some of them, they said, had connections to people in his family.

I think ultimately, it's the president's decision, you know, what he ultimately would like to do.

MALVEAUX: Should there be special meetings with certain people who represent some of these folks?

CHRIS KOFINIS, DEMOCRATIC STRATEGIST: I don't necessarily think there should be special meetings. But I think it's the reality of the process that if you have political connections, you're going to your pardon at least reviewed maybe a little bit easier than if you didn't have those political connections. That not necessarily is right, but I think it's just the reality of the process.

And I think there -- you know, there, arguably, should be a better way, where you kind of take the politics out of it.

But, you know, in this case, I think, you know, it doesn't seem to, you know, to be anything inappropriate. You know, the one case with the Prior it seemed that it helped a case that was, you know, justified get reviewed.

You know, I think in one of the other cases, where there was contributions involved to the RNC, that one, I think, becomes a little bit problematic. It depends on, I think, the process.

MALVEAUX: We're looking at, obviously, Israel and Gaza and the firestorm there just for the last five days or so.

Barack Obama is not a Muslim, but his father -- his father was a Muslim. And people are looking at that. There's a lot of optimism in the Muslim world that perhaps there's an opening here, where Barack Obama can make some headway in Middle East peace where others have not.

Do you think that there is a possibility that he can push a little bit further than what we've seen from either Bush or Clinton?

SANCHEZ: Well, I think you outlined it well. There is a tremendous amount of optimism. I think some people believe -- to the extent that it generates good will, I think that's a positive. He's also indicated he wants to give a major address in a Muslim capital. I think there is a lot of issues with respect to dialogue. If it opens a dialogue that didn't exist before, then, you know, it could be a positive.

MALVEAUX: Chris?

KOFINIS: I mean, look, I think if -- you know, I've traveled a little bit in the -- in the Middle East. And, you know, the people I spoke to, they definitely have some optimism that, you know, President-Elect Obama, when he is sworn in, is going to take the country in a different direction.

I think it actually has to do more with the reality that the Bush administration has basically destroyed any kind of international political capital it had with the Iraq War. It didn't -- it can't really coalesce any of its allies to push for any type of Middle East peace or anything like that.

So I think what you're going to see from the Obama administration is an understanding that he's going to bring a fresh perspective and a strong team, especially when you have someone like a Secretary of State Clinton.

SANCHEZ: You know, I think that underscores the main point. It really doesn't matter about ancestry. I think, if anything, Barack Obama has proved that -- that he transcends all of those discussions, especially being here in America that this is going to be more what he wants do in terms of his leadership and his desire to have that dialogue.

MALVEAUX: We have a very important anniversary, obviously -- the 50th anniversary of the Cuban revolution -- that is happening today. And there have been some indications that Barack Obama wants to ease the embargo.

Is that a good idea, Leslie?

SANCHEZ: I think that a lot of people would like the idea of talking -- putting all things on the table with -- especially with respect to that. But it's not unilateral.

What are the concessions that Cuba will make on our -- you know, on the -- with respect to human rights, personal freedoms, freedom of the press, free and open democratic elections?

I think that's probably the starting point here.

KOFINIS: You know, Obama has talked about easing travel, easing money transfers. And I think that's a good thing.

You know, what's interesting is if f you look at one of the recent polls by Florida international University, majority of Cuban- Americans now support lifting the embargo -- the first time since the poll has ever been taken that it's shown that. I think that's a very strong measure that we need to kind of go in a new direction. How far that direction is, I think, is, you know -- is going to be defined by the Obama administration.

But it's pretty clear that the policy of the last 50 years hasn't accomplished what it was supposed to.

SANCHEZ: Well, I mean, you know, but they also have free trade with democratic countries. A lot of people say, look, Cuba is very poor. They don't have credit. In terms of our gain, it doesn't necessarily have it.

There are -- I think a lot of Cubans are interested in the gain that the people have in terms of human rights and political freedoms.

MALVEAUX: OK. Well, Happy New Year to both of you.

KOFINIS: The same to you.

MALVEAUX: Thank you so much for joining us.

KOFINIS: Happy New Year.

MALVEAUX: Earlier this week, it was looking grim for a missing snow boarder.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Hopefully, he's been staying on the move and keeping warm.

(END VIDEO CLIP)

MALVEAUX: Rescuers were expecting the worst -- how they may have gotten the best surprise of their lives.

And a flight no one on board will ever forget -- how a passenger gave birth high above the Atlantic.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

MALVEAUX: Well, we know Barack Obama's inauguration will be star- studded, but it turns out it's also going to be star funded. Some very famous names are donating big bucks to help pay for that celebration.

CNN's Jim Acosta joins us again -- and, Jim, well, I guess we're dying to know who they are.

Who are these folks?

ACOSTA: They're all in my rolodex, Suzanne.

No. You don't need to be a celebrity gossip columnist with sources all over town to know who's giving money to Barack Obama's inaugural. You can just do what we did and go online. (BEGIN VIDEOTAPE)

ACOSTA (voice-over): It could be the title of Steven Spielberg's next Indiana Jones movie

"Barack Obama and The Quest for Inaugural Gold."

Take a scroll through the inauguration's official Web site, pick 2009.org, and you'll find Spielberg is just one of the rich and famous contributors to the incoming president's swearing in. Many of the celebrity donations right at the $50,000 limit set by inaugural planners. Spielberg, along with Halle Berry, Jamie Foxx and Sharon Stone each gave $50,000 to the fund. Magic Johnson chipped in $25,000. All that California cash further proof...

(BEGIN VIDEO CLIP FROM MCCAIN CAMPAIGN ADVERTISEMENT)

UNIDENTIFIED FEMALE: He's the biggest celebrity in the world.

(END VIDEO CLIP)

ACOSTA: This is a president with star power.

KEN VOGEL, SENIOR REPORTER, POLITICO: We have a celebrity president. There is a lot of electricity in the air in Washington around this inauguration. And these folks who give a lot of money are going to get greater access to all of these fun things.

ACOSTA: One thing all that big money won't buy is privacy. Inauguration spokeswoman Linda Douglass says there are no exceptions. Everybody who has given more than $200 is online -- and they know that -- a continuation, she insists, of the campaign's commitment to transparency.

VOGEL: And even if they supported Barack Obama and his presidential campaign, they can only give up to $4,600 each. Here, the limit is $50,000 and we're seeing a lot more wealthy folks giving that.

ACOSTA: Wealthy people like billionaire investor and activist George Soros. He and four members of his family have given $50,000 each -- a quarter million dollars all from one family. The site also allows users to see which states are giving most. As of our last check of the donor list, there was just one contribution from Hawaii -- Mr. Obama's home state. Joe Biden's Delaware fared only slightly better with three donors.

OPRAH WINFREY: South Carolina, I do believe he's the one.

ACOSTA: You can also find out who's not on the list -- Oprah, Noprah (ph).

(END VIDEO TAPE)

ACOSTA: No Oprah. But the Inaugural Committee is trying to offset all of this big money access with something that can only be described as a sweepstakes -- donate just five bucks -- and I think I have it right here on me, Suzanne. And you've got a shot at a ticket to the swearing in -- Suzanne.

(LAUGHTER)

MALVEAUX: We can afford the five bucks.

ACOSTA: Right.

MALVEAUX: So, Jim, tell me about some of the other people in your rolodex, these celebrities who are also contributing.

ACOSTA: Yes. Tom Hanks is in there. That's one we didn't mention in the piece, although we -- I think you saw a picture of him in there. And then one thing about Steven Spielberg that I thought was interesting was, if we remember back to the Democratic National Convention, he actually put together a documentary of sorts about some of the veterans out there -- one of Barack Obama and Michelle Obama's pet projects.

And so we're going to see a big star-studded lineup coming up during this inauguration, the likes of which we probably have not seen in a very long time. And you can just peruse the Web site, pick2009.org, and they've got it broken down not just by name and the amount, but zip codes and states.

MALVEAUX: Wow!

ACOSTA: And you can just scroll down the list and see all of these donors from California. It's really extraordinary.

MALVEAUX: You'll be star gazing, I know, Jim. It's not beyond you, huh, to like do a little star gazing?

ACOSTA: That's right. Yes.

(LAUGHTER)

ACOSTA: We'll have to -- we'll have to get started as soon as possible with our scorecards as to who's showing up and...

(LAUGHTER)

MALVEAUX: We'll see who wins.

OK.

ACOSTA: Yes.

MALVEAUX: Thanks, Jim.

ACOSTA: You bet.

MALVEAUX: Well, some hotel guests in Washington are about to get a very famous neighbor. And that is because when the president-elect comes to the nation's capital, his preferred home is not going to be ready.

CNN's Samantha Hayes is following that story -- and, Sam, what have we learned where he's staying?

SAMANTHA HAYES, CNN CORRESPONDENT: Well, Suzanne, President-Elect Obama and his family are expected to come to Washington this weekend -- but the White House isn't available yet.

(BEGIN VIDEOTAPE)

HAYES (voice-over): He won the most exclusive address in the country. But first, President-Elect Barack Obama will be staying across the street in a hotel that will claims to be the most prestigious.

PERRY BACON, "WASHINGTON POST": Hay-Adams' motto is actually the only thing overlooked here is the White House.

HAYES: And it's where other presidents have looked for topnotch accommodations. President Bill Clinton stayed at the Hay-Adams, which also happened to be conveniently located near one of his favorite restaurant.

The hotel also has a storied past. It was named for John Hay, assistant to President Lincoln and later secretary of State -- and Henry Adams, an acclaimed author and descendent of Presidents John Adams and John Quincy Adams. The hotel is thought to be haunted by Henry Adams' wife, Clover.

BACON: And it's said that Henry Adams's wife Clover, who committed suicide in 1885, still haunts the hotel grounds today, especially in -- I don't know why this is -- in the month of December.

HAYES: The Obamas' first choice was the official White House guest quarters, called the Blair House. But President Bush says it's booked until the 15th.

BACON: There certainly was a lot of whispers when that came out, that it was a little bit rude to tell the president-elect that he couldn't move into Blair House early. But on the other hand, there are legitimate needs for that space for the outgoing administration.

HAYES: So for now, the new president will enjoy the spectacular views of the White House from the Hay-Adams as he prepares to see things from a different angle on the inside.

(END VIDEO TAPE)

HAYES: Well, if the Obamas stay in one of the suites at the Hay- Adams, the price could range from $2,900 to $5,000 -- Suzanne.

MALVEAUX: Now that's actually -- do we know who's paying for the rooms or not or has any of that been worked out or...

HAYES: Right.

Are the Obamas going to pay for this out of pocket?

I think that that's probably unlikely. You know, the transition team has millions of dollars. And plus, you know, the Secret Service, they have contingencies and expectations, too. And it might be unfair to, you know, ask a president-elect to foot the bill for that. But -- so that's probably unlikely.

MALVEAUX: And there was a little bit of controversy over the Blair House, whether that's available or not or not available.

So who is actually staying at the Blair House?

HAYES: Yes, who's in there...

MALVEAUX: Do we know?

HAYES: ...keeping the president-elect out?

Well, nobody is really saying right now. But, you know, that's also a facility that is used for parties and receptions -- things that are planned, you know, months in advance and the schedule can't be moved. And, of course, those are the final days of the Bush administration. So probably some receptions and things going on there during that time.

MALVEAUX: It will be interesting to see whether or not there's access at the Hay-Adams -- you know, whether or not you and I and other reporters are going to be kind of like having brunch and that kind of thing. They've got a great brunch there so...

HAYES: That's right. Well, you know, there's another CNN office nearby there. And you can often see, you know, the beautiful receptions and things that they have on the roof of that building.

MALVEAUX: OK.

HAYES: So it's -- it's a topnotch place.

MALVEAUX: OK. Thank you, Sam.

Well, a baby born in mid-air -- it is something none of the passengers on that transatlantic flight may ever forget.

And Hillary Clinton is planning on giving up her Senate seat for greener pastures in the State Department. You won't believe the latest speculation about who might replace her.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

MALVEAUX: We're learning more about a nightclub fire in Bangkok, Thailand. Two U.S. citizens were injured in that fire.

For more, let's go to Tim Ewart of ITV.

(BEGIN VIDEOTAPE)

TIM EWART, ITV CORRESPONDENT (voice-over): It took just seconds for the flames to engulf this packed nightclub and spread panic as people tried to get out through what exits they could find. Some of those who died were crushed in the stampede to escape. It's thought the blaze could have been caused by the club's own pyrotechnic display during the countdown to the new year.

(VIDEO CLIP)

HEWITT: There were a number of tourists inside and the foreign office say they included at least four from Britain. So far, there's no detailed list of the casualties and the police say that many bodies are burned beyond recognition.

UNIDENTIFIED MALE: The reaction of most people when they first saw the flames, they thought it may be part of the performance on the stage. But the actual look of the people who were on the stage were the -- like I said, if it was sparks or embers coming down, you could see the look of terror on their faces.

EWART: An investigation into what happened is underway amid questions about what are being described as substandard safety measures at the nightclub. Many of the windows were barred and there simply weren't enough exits.

Tim Ewart, ITV News.

(END VIDEO TAPE)

MALVEAUX: And rescuers were expecting the worst, but they got possibly the best surprise of their lives when they found a missing snow boarder alive after three days in a frozen wilderness.

Our CNN's Chris Lawrence is joining us live -- and, Chris, tell us what happened.

CHRIS LAWRENCE, CNN CORRESPONDENT: Well, Suzanne, they think that he ran into some trouble up there, maybe he hit a tree or something like that. But the one thing they are sure of -- they don't think he could have lasted one more day.

(BEGIN VIDEOTAPE)

LAWRENCE (voice-over): When Canadian police saw an abandoned truck near Mount Seymour, they found Jamie Martin's cell phone and wallet inside. That was Tuesday and the snowboarder had already been stranded for days.

UNIDENTIFIED MALE: Hopefully, he's been staying on the move and keeping warm, you know.

LAWRENCE: Martin's friends helped search for him. But it was bone-chilling cold on the mountain. He had no extreme weather gear. And by Wednesday morning, rescue teams thought there was little chance to find him alive. But Martin had built something to sleep on, using his outdoor skills to hang on. Finally, late Wednesday, rescuers spotted his tracks.

UNIDENTIFIED MALE: His limbs had -- the lower limps had frozen on him. He couldn't get out to -- to flag the helicopter. So he was done for.

LAWRENCE: Not quite. They airlifted Martin off the mountain and told his mother: "He's got frostbite and hypothermia, but he's alive.

UNIDENTIFIED FEMALE: Oh, my God. It is such a miracle and it's just -- it's the best news that can ever happen.

LAWRENCE: Rescuers found him in an area called "suicide gully." But Martin himself never gave up hope.

JAMES MARTIN: I thought I was going to get out every single night that I was in there.

LAWRENCE: Martin is still recovering in a Vancouver hospital and still a bit stunned by his rescue.

MARTIN: It's wonderful to live another day, live another year. And it is just wonderful to -- to make it alive.

(END VIDEO TAPE)

LAWRENCE: Boy, I'd love to hear his New Year's resolution.

You know, the thing is, the ski staff noticed his truck Sunday and again on Monday. Nobody called it in until Tuesday. They probably didn't think anything was wrong. But the police say there needs to be more specific rules about when these ski lodges report these vehicles and things like this to police -- you know, notification rules when things like this happen -- Suzanne.

MALVEAUX: Sure, Chris.

It's an amazing story.

Do they have any sense of how it was that he survived?

It really is quite rare. If he kept moving about or if there was anything that he might have done differently?

LAWRENCE: Well, they say one key thing that he did is always -- for the time that he was able to move -- he kept moving down the mountain. So, you know, it was easier for them to find him by the way that he just kept moving closer and closer to the base.

MALVEAUX: OK. Thank you so much, Chris.

A great story.

So far, there have been 19 avalanche deaths in the U.S. and Canada since the current season began last month. That is four more than the same period last year. Avalanche experts say that we have seen near perfect conditions for avalanches this season, with an early snowfall that lays a weak, powdery base, followed by a dry spell.

When heavy snow comes, the base can't support it and the old layer gives way. Ski areas try to prevent those injuries and deaths by detonating small explosives to set off controlled avalanches before the slopes open.

Well, it is a flight that no one on board will ever forget. The plane left Amsterdam with 124 passengers but landed in Boston with 125. That following a birth high above the Atlantic.

And our CNN's Dan Lothian has those details.

DAN LOTHIAN, CNN CORRESPONDENT: Well, Suzanne, the mother of the baby girl was eight-and-a-half months pregnant when she boarded the flight yesterday morning. Of course, the ideal situation is to deliver your baby in a hospital room, on the ground, surrounded by doctors -- not passengers. But in this case, the baby couldn't wait.

(BEGIN VIDEOTAPE)

LOTHIAN (voice-over): This newborn landed in Boston on time, but arrived into the world way too early.

(on camera): How is the baby doing?

UNIDENTIFIED FEMALE: She's doing perfect. She's doing great.

LOTHIAN (voice-over): Her mother, Susan, believed to be a Ugandan national, went into labor about six hours into the flight. They were somewhere over the Atlantic Ocean on Northwest Airlines Flight Number 59 from Amsterdam to Boston.

DR. NATARAJAN RAMAN, ONCOLOGIST: Even though we didn't have a labor room delivery setup, things were just perfect.

LOTHIAN: He's just one of two doctors who, fortunately, were on board and answered the pilot's call for help.

DR. PARESH THAKKAR, FAMILY PHYSICIAN: And when I examined her, the baby was coming out. So I pulled the head.

LOTHIAN: A Boston area physician says he's delivered countless babies -- but always on the ground.

THAKKAR: The baby was immediately crying. So it was wonderful. And then we cleaned the baby.

LOTHIAN: Some of the 124 passengers began to pitch in.

RAMAN: The spirit of America is alive. And there was everybody was there to help. People offered baby food, people brought in things.

LOTHIAN: An unforgettable ride for passengers who burst into applause once the captain announced that mother and baby appeared to be doing well.

UNIDENTIFIED FEMALE: It was really nice. It was really nice.

LOTHIAN (on camera): Exciting?

UNIDENTIFIED FEMALE: Yes. Yes.

UNIDENTIFIED MALE: It was a wonderful Happy New Year for everybody in the family.

(END VIDEO TAPE)

LOTHIAN: After landing, the mother and baby were taken by ambulance to a Boston hospital. Now, commercial airlines recommend that pregnant women not fly during their third trimester. The policy at Northwest airlines requires a doctor's letter for anyone traveling with a due date within 30 days -- essentially, a permission slip. But when it comes to enforcement, it's essentially an honor policy -- Suzanne.

MALVEAUX: An amazing story.

Thank you, Dan.

It's a sound that brings terror -- wailing sirens warning of incoming Hamas rockets.

CNN's Nic Robertson scrambles to take shelter, along with frightened Israelis.

Plus, never before seen -- my one-on-one interview with the next first lady. Michelle Obama tells me why she laughs a little bit when her husband is listed among the best dressed men.

(COMMERCIAL BREAK)

MALVEAUX: When his Texas ranch became his other official home, President Bush put a tiny town on the world map. But Crawford, Texas will soon be out of the spotlight.

CNN's Elaine Quijano and some local residents are taking a look back -- hey, Elaine.

"suicide gully" QUIJANO, CNN CORRESPONDENT: Suzanne, the next time George W. Bush returns here to Crawford, it will be as a former president.

(BEGIN VIDEOTAPE)

QUIJANO (voice-over): After eight years, the sun is setting on the western White House -- Crawford, Texas, population just over 700, with its most famous resident, President George W. Bush leaving office.

UNIDENTIFIED FEMALE: All in all, I think it's been a good thing. QUIJANO: Longtime resident Marilyn Judy (ph) remembers how President Bush visited Crawford's Coffee Station Restaurant and its schools -- sometimes with world leaders in tow.

In 2001 ...

UNIDENTIFIED FEMALE: The Putin conference. You know, those kids were a part of history. And you can -- no other kids in America were going to be a part of history like that.

QUIJANO (on camera): Students also learned another lesson that year -- about the pressure of being home to the president of the United States.

UNIDENTIFIED FEMALE: Of course, then as things rolled along and we had 9/11, we were probably the only school in America that evacuated, too, because we thought that a plane was coming here to the ranch.

QUIJANO (voice-over): In 2005, Cindy Sheehan arrived -- protesting her son Casey's death in Iraq and demanding unsuccessfully to see President Bush at his ranch.

CINDY SHEEHAN, PROTESTER: He never has had the courage to meet with me.

QUIJANO: Bill Johnson watched the crowds from his souvenir shop, the Yellow Rose.

BILL JOHNSON, STORE OWNER: There's been 10 and 15, 20 cameras out here buzzing some afternoons.

QUIJANO: A self-cowboy ...

JOHNSON: We realize we're not in the mainstream (LAUGHTER) and don't want to be.

QUIJANO: Johnson says the national media has mostly given Crawford a fair shake -- mostly.

JOHNSON: I think, overall, Crawford has been, in many ways, given a good shot and in some ways it hasn't, because those that come looking for a booger (ph) can find one.

QUIJANO: And while President Bush is keeping his ranch, residents know the spotlight is fading fast on their one traffic light town. But they say Crawford is better, its residents closer, for having the western White House.

UNIDENTIFIED FEMALE: We've banded together and tried to put up -- put on a good show or a good face for the media. And I think that's made us all better.

QUIJANO: On January 20th, Mr. And Mrs. Bush will return here to Texas and a new home in Dallas. But aides say they'll continue spending time at their Crawford ranch -- Suzanne. MALVEAUX: Thanks, Elaine.

I spent a lot of holidays at the Crawford ranch.

A president can never really get away from it all, but a federal law allows the president to designate a residence outside of the White House as a temporary office, using federal money for upgrades. Dwight Eisenhower was the first to do that at his farm in Gettysburg, Pennsylvania.

Lyndon Johnson had the LBJ Ranch in Stonewall, Texas.

Richard Nixon had his estate in San Clemente, California.

And Gerald Ford went skiing from his base in Vail, Colorado.

Ronald Reagan retreated to his beloved ranch in Santa Barbara, California.