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Outrage Back in Full Force; IED Attacks Soar 1,000%; Where's Jackson's Body?; What Killed Michael Jackson?

Aired July 9, 2009 - 17:00   ET

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


WOLF BLITZER, HOST: Happening now, defiant new showdowns in Iraq. As many as 3,000 people risking arrest, beating, possibly even death to shout for their demands for a new government. Video of their clashes with government forces is now coming into "The Situation Room." Also, a report that Michael Jackson's family was so concerned about his alleged drug abuse, they tried to stage an intervention. We're going to talk to the last journalist to interview the singer before his death.

And desecration on a massive scale -- hundreds of bodies ripped from their graves at an historic cemetery, dismembered and dumped -- then the plots resold to unsuspecting grieving families.

What is going on?

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

The outrage is back in full force in the streets of the Iranian capital, where protesters are right now risking their lives to demonstrate against a government they deem to be illegitimate. As many as 3,000 people facing off with security forces determined to silence them. A flood of new images now coming out of Iran.

Reza Sayah is monitoring all of this from CNN's Iran Desk.

Let's turn to Reza -- Reza, tell our viewers what's going on right now.

REZA SAYAH, CNN CORRESPONDENT: Wolf, it's a little after 1:30 a.m. in the morning local time in Iran. Things are quiet at this hour. But things really heated up earlier in the day. At times, things got flat out ugly.

These were the first protests we've seen in about 11 days. Let's show you some video that's been coming into the Iran Desk over the past few hours.

Really difficult to put a number of on the demonstrators that came out today. But based on eyewitness we've spoken with, they put the number about 3,000 protesters. They started gathering at Revolution Square in downtown Tehran between 4:00 and 5:00 p.m. local time. They were met there with a few thousand security forces -- obviously a recipe for violence and that's what we saw. According to CNN sources on the ground, there were numerous occasions where there were clashes. These forces managed to get the protesters out of Revolution Square. But according to eyewitnesses, the protesters spread out to surrounding streets and neighborhoods. One eyewitness describes a man with a bloody face. Several eyewitness say security forces attacked protesters. Also, accounts of tear gas and shots being fired into the air.

On some of these videos that you're watching right now, some very aggressive chants against the government. We heard "Death to the Dictator!," "Death to Ayatollah Khamenei!," which is the supreme leader. And here's a chant that we hadn't heard before, "Death to Motjaba Khamenei!" Motjaba is the supreme leader's son. And during the past few days, there's been a lot of reports that Motjaba Khamenei has taken over the pro-government Basij militia -- the security forces -- the controversial security forces who we've seen really brutally beat up some of these protesters.

So today, Wolf, you heard "Death to Motjaba Khamenei!"

So not as many protesters out as we've seen before, but certainly a good 3,000 of them coming out on Revolution Square and surrounding neighborhoods -- Wolf.

BLITZER: We'll see what happens tomorrow, Friday, which is a holy day in the Muslim world.

Thanks very much.

Reza Sayah monitoring what's going on over at the Iran Desk.

IED attacks -- right now, they're soaring in Afghanistan.

What is going on on this front?

Lots of U.S. troops obviously in harm's way.

Let's go to our Pentagon correspondent, Chris Lawrence.

We've seen a huge spike in these IED attacks.

What's going on -- Chris?

CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: Wolf, that puts it mildly. In all the years that American troops have been fighting in Afghanistan, they have never seen this many IED attacks.

(BEGIN VIDEOTAPE)

LAWRENCE (voice-over): These are just some of the 25 people who died when a massive bomb exploded in Kabul Thursday. The blast sent shrapnel flying a mile away. Explosives in Afghanistan now have more sheer power and often target American troops.

ADM. MIKE MULLEN, CHAIRMAN, JOINT CHIEFS OF STAFF: The biggest threat is really from IEDs -- the improvised explosive devices, which have become more and more sophisticated over time.

LAWRENCE: And more common. Just look at the month of June in Afghanistan. In 2005, there were 51 IED incidents. Two years later, that jumped to 234. And then last month, it skyrocketed to 736. That's an increase of more than 1,000 percent.

Admiral Mike Mullen saw firsthand the damage inflicted by IEDs as he watched the remains of American soldiers return home. Four of these men died Monday, when a roadside bomb ripped their vehicle apart in Northern Afghanistan.

Humvees are lightweight and have a flat bottom that absorbs blasts. That's why there's an intense push to get troops more mine- resistant ambush protective gear.

MULLEN: From an equipment standpoint, there's no higher priority than to get these vehicles in theater as rapidly as we can.

LAWRENCE: There are less than 3,000 MRAPs in all of Afghanistan and they don't work as well over mountainous terrain. A new version is being built now, but the first ones won't arrive until October at the earliest.

(END VIDEO TAPE)

LAWRENCE: Wolf, the Pentagon is committed to buying more than 5,000 of these new MRAPs. And they are not cheap. A Humvee costs less than $200,000. These are well over a $1 million.

But how much are they needed?

Of all the Marines that are getting killed right now in Afghanistan, IEDs are killing 80 percent of them. Eighty percent -- Wolf.

BLITZER: Well, whatever it costs, they've got to do it to save these lives. Obviously, that -- that's a no-brainer. Let's just do it and do it quickly.

Thanks very much for that.

Let's check in with Jack Cafferty right now.

He's got The Cafferty File -- priority number one, you send troops into harm's way, you've got to do whatever is necessary, Jack, to make sure they come back safe and sound.

CAFFERTY: Well, and we -- we've been dealing with the threat from IEDs for how many years in Iraq?

I mean, it seems to me that somebody with a little foresight, if we were going to move extra troops into Afghanistan and step up operations there, might have made some arrangements to provide additional vehicles for these personnel to travel around in. Let's hope they get them there yesterday. At some point -- and probably in the not too distant future -- this will become President Obama and the Democrats' recession, not George W. Bush's.

If the economy doesn't start to show some signs of life, Democrats could feel the voters' anger in next year's mid-term elections.

President Obama is traveling a path not unlike the one traveled by President Ronald Reagan. In a fine piece written by my colleague and friend, Christine Romans, for CNN.com, she points out the Democrats could learn something from President Reagan's experience. Both Reagan and Obama wildly popular early on; but in both cases, unemployment rising. In the 1982 elections, Reagan's Republican Party lost 26 seats and experts say the scale tipped when unemployment hit 10 percent.

Well, guess what?

President Obama currently has 9.5 percent unemployment. He now says that 10 percent is likely before the year is over. Renowned investor Warren Buffet on "Good Morning America" this very morning said that unemployment in this country could hit 11 percent.

It seems everyone knows someone who's lost a job. While the Obama administration is busy pointing the finger at Bush, those unemployed Americans who cannot find work will likely be tempted to take it out on whoever's in power when they go to the polls next fall.

What remains to be seen is if voters are ready to start putting Republicans back in power so soon after the eight years of the Bush administration.

So here's the question -- will the voters blame the Democrats for our economic problems in next year's mid-term election?

Go to CNN.com/caffertyfile and post a comment on my blog.

It could get very interesting -- Wolf.

BLITZER: Yes, if there's 10 percent or more unemployment, you know a lot of those voters will.

CAFFERTY: Yes.

BLITZER: OK, Jack, thanks very much. Michael Jackson's body is still unburied two weeks after his death.

Where is it being held?

Where will it be interred?

CNN contributor Bryan Monroe was the last journalist to interview Michael Jackson. He's standing by to share what he knows with us. That's coming up. Also, a lawyer for the embattled senator, John Ensign of Nevada, now says his mistress got tens of thousands of dollars from Ensign's parents. Paul Begala and Alex Castellanos -- they're standing by with their takes.

Plus, summer camp students barred from the pool and a private club.

Is it because they're black and Latino?

There are shocking allegations of discrimination and an explanation that's even more stunning.

(COMMERCIAL BREAK)

BLITZER: Two weeks since the death of Michael Jackson and his body remains unburied. In fact, no one knows for sure where it is right now, at least outside of the immediate family and their closest friends.

The journalist and CNN contributor, Bryan Monroe, is joining us now to talk a little bit about that and what -- some other issues that are still out there. Lots of unanswered questions -- have you heard anything specific, Bryan, about the body -- where it is right now, where it might be buried?

BRYAN MONROE, CNN CORRESPONDENT: Well, it's a little bit unclear. From what I'm hearing, it could be in a mausoleum near or around Forest Lawn. There was even questions on how it made it back from Staples Center after the ceremony.

But they've got a little bit of time. I think they're trying to work out where both -- there was an application for a temporary internment at Forest Lawn and that's on file with the state. And they may be holding it there for a while, until they can get, perhaps, the legal situation at Neverland together with both the state and the owners of the property -- the co-owners of the property, trying to clear it with the community near Neverland.

So that's still an option.

BLITZER: His brother, Jermaine Jackson, told our Larry King that would be his first choice, to see the body buried at Neverland, at that ranch. But there's a lot of legal paperwork you've got to go through to get permission for that to happen and that could take some time.

Let's move on and talk about the investigation right now. There are some doctors who the authorities want to question, specifically. Give us some context -- some perspective of what they want to ask these doctors.

MONROE: Well, it's looking at what kind of medications were they prescribing him and for what -- what causes. And, also, I think the toxicology reports that will come out after the autopsy in a few weeks may confirm what, if anything, he had in his system. We know that Michael has had issues with prescription drugs. And, in fact, the report that came out that his sister, Janet, as well as Rebbie, the other sister, and Jackie and Randy, tried, even, an intervention with him back in the end of 2006, the beginning of 2007. And he shut them out in that process.

So there was concern about using prescription drugs to sort of, as he says, bring himself down after a long day. There was never any sense that he was a recreational drug user at all, but -- but there was questions about was there an overuse of certain painkillers and even, you know, the latest report about the Diprivan or the Propofol, which was that short-term sedative that was very, very dangerous that could have been used to help him go to sleep at night.

BLITZER: Yes. Our investigative reporter, Drew Griffin, reported on this intervention at the end of 2006, 2007 -- that Janet Jackson, when she saw her brother, apparently was so concerned, she wanted the immediate family members to get involved. And as you say, he rebuffed them.

What kind of a relationship did Michael Jackson have with Janet Jackson?

MONROE: Well, they were -- they were close. And all -- all the brothers and sisters were close on different levels. You know, Michael saw, at the core, his family first. And while there were many friends and advisers and legal counsel and health counsel in and out of his life, his family was there forever.

And so the flip side of that is when he would get tired of them or they would get too close to -- to something, he would turn them off and not return phone calls for a while. But he knew they would always come back into their lives. They weren't going anywhere.

BLITZER: The -- the family, obviously, we saw Janet Jackson at that memorial earlier in the week. And she was really comforting those little -- little kids, especially the daughter, Paris.

I assume -- and you know this a lot better than I do -- she had a pretty good relationship with those kids?

MONROE: Yes. She was -- she was a great auntie and still -- and you saw -- saw the image yesterday when -- when Paris leaned against her arm and Janet reached out to comfort her. And then, as Paris was beginning the speech, they were -- all the sisters, Janet, Rebbie and Latoya, were right there to support her, as well as all six of the brothers.

And -- and even the other -- the other two children, Prince and Blanket, tucked in there, right in the center of that love and of that family.

And I think as they work through the custody issues, they -- I think they should stay and remain inside that core Jackson family, with the grandmother, with the brothers and sisters, their uncles and aunts. And their cousins -- they have a whole host of cousins that really love them.

BLITZER: And they have an incredible nanny who's been involved in their lives -- almost all of their lives, as well, by all accounts.

MONROE: Right. Yes, they call her Grace.

BLITZER: Right, from Rwanda, I think, originally.

All right. Listen to this exchange, Bryan, that Larry King had light night on "LARRY KING LIVE" with Dr. Arnie Klein, Michael Jackson's long time dermatologist.

Listen to this.

(BEGIN VIDEO CLIP FROM "LARRY KING LIVE")

LARRY KING, HOST: About the children -- and this is hypothetical.

DR. ARNIE KLEIN, MICHAEL JACKSON'S DERMATOLOGIST: All right.

KING: If you were the parent -- this is hypothetical.

KLEIN: Yes?

KING: Would you go and talk to them?

Would you do something about it?

Would you let it ride?

KLEIN: I'd spend every -- if I was the parent, I would spend every moment of the day with the children. I'd spend 24 hours a day.

KING: You'd become their father?

KLEIN: Absolutely.

(END VIDEO CLIP)

BLITZER: It's a very strange story, because he's not completely ruling out that he's the biological father of the two older kids, as you know, Bryan. He's saying to the best of his knowledge, he's not. But, you know, he's leaving some wiggle room there.

What did you make of this?

MONROE: Well, that was a fascinating interview he did with Larry King last night. I'd urge the viewers to go on CNN.com and check that out again.

But he really -- he left a little wiggle room there. He did admit that he had donated sperm at one -- at one point, but was very ambiguous about it.

But one thing he was clear about was how much he saw the love that Michael had for his children and how supportive he wanted to be in that process, no matter what he needed to do. But he explained the relationship and the relationship he had, both medically and personally, with -- with Michael. I thought it was a fascinating conversation.

BLITZER: Yes, I agree. It was an amazing interview, indeed. And I watched it. Larry did an excellent job. It was just good, good television.

All right. Thanks very much, Bryan.

We'll see you back here tomorrow.

MONROE: Thanks, Wolf.

BLITZER: A looming health crisis prompts President Obama to order a flu summit. The H1N1 flu, also known as swine flu, expected to come back with a vengeance in the United States in the fall.

So what's the country doing to prepare?

Plus, just released -- a dash cam video of Steve McNair's girlfriend being arrested for DUI only before the murder/suicide that took both their lives.

(COMMERCIAL BREAK)

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

DEBORAH FEYERICK, CNN CORRESPONDENT: Well, Wolf, the sister of an American journalist killed in North Korea says her sibling acknowledges breaking the law. Lisa Ling says she spoke to her sister, Laura, from North Korea on Tuesday.

(BEGIN VIDEO CLIP, COURTESY KXTV)

LISA LING, SISTER OF JAILED JOURNALIST: I don't know exactly what happened that day, on March 17th. I mean, the details are still unknown to us. And the only people outside North Korea who really do know are Laura and Euna. But she was very, very deliberate and specific when she said, "We broke the law in North Korea."

(END VIDEO CLIP)

FEYERICK: Laura Ling and fellow journalist Euna Lee were detained in North Korea while working for a San Francisco television station. They were sentenced last month to 12 years hard labor for illegal entry and hostile acts.

Fans are lining up in Nashville to view the casket of Steve McNair ahead of tonight's memorial service. The former NFL star was shot to death by his girlfriend, who then killed herself. Police have now released this dash cam video of her DUI arrest just two days before the murder/suicide. McNair was in the car, but was allowed to take a taxi home. And we've just learned shortly before his death, McNair recorded a public service announcement for suicide.

Investigators have just released their findings on the plane crash that killed business tycoon and adventurer Steve Fossett. The National Transportation Safety Board says powerful downdrafts are the likely cause. Fossett disappeared in September, 2007. A hiker found his personal effects in California's Sierra Nevadas more than a year later -- Wolf.

BLITZER: Deb Feyerick, thanks very much.

Nearly a month after Senator John Ensign admitted to an affair with a campaign aide, new allegations of a cover-up. Wait until you hear how much his former mistress was allegedly paid and by whom.

Also, the director of the CIA admits that under the Bush administration, members of the agency weren't always honest with Congress.

Should they have been?

What's going on?

And CNN has exclusive access to an historic cemetery near Chicago where authorities now say more than 300 graves have been unearthed. We're going to show you the scene.

(COMMERCIAL BREAK)

BLITZER: You're in THE SITUATION ROOM.

Happening now, the United States releases five Iranians arrested in Iraq more than two years ago.

But is a secret war being waged between the United States and Iran in Iraq?

Guess what -- I'll be joined by CNN's Michael Ware from Baghdad. He's got new information.

Also, researchers say they've cracked the code that could make identity theft even more common. It's the key to your Social Security number.

And Michael Jackson's final resting place -- where will it be?

We've got some new information about whether a burial at Neverland is possible.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

But first, we're getting some new details of payments made to Senator John Ensign's former mistress.

Let's bring in Brian Todd. He's working this story for us.

The story has taken a new turn.

BRIAN TODD, CNN CORRESPONDENT: It keeps getting a little more salacious each time. Wolf, the Republican senator apologized publicly last month to the woman he had an affair with and to her husband, who was a close friend of John Ensign's.

Now, the husband is speaking out and accusing the senator of paying off his mistress.

(BEGIN VIDEOTAPE)

TODD (voice-over): Three weeks after Senator John Ensign admitted to an affair with a campaign aide whose husband worked in his office, new information and allegations of a cover-up.

Speaking publicly for the first time, Doug Hampton, Ensign's former administrative assistant, whose wife Cindy was treasurer of the senator's re-election campaign, says on the Nevada political program, "Face To Face with Jon Ralston," that his wife received a hefty severance payment when she stopped working for the senator.

(BEGIN VIDEO CLIP FROM "FACE TO FACE WITH JON RALSTON," COURTESY LAS VEGAS 1)

JOHN RALSTON, HOST: He paid severance to your wife out of his own pocket?

DOUG HAMPTON: To my knowledge, that's correct.

RALSTON: How much?

HAMPTON: That, I don't know.

RALSTON: You don't know?

She's your wife.

Was it -- was it more than $25,000?

HAMPTON: Absolutely.

RALSTON: A lot more?

HAMPTON: Yes.

RALSTON: It was a lot more than $25,000?

He's -- he's got some serious issues, because that was never disclosed, do you understand that?

HAMPTON: (INAUDIBLE).

(END VIDEO CLIP) TODD: But Ensign's attorney tells CNN that payments to Doug and Cynthia Hampton were made last year, but by Senator Ensign's parents, who were concerned about the Hamptons' well being. In a statement on the senator's behalf, his attorney says: "In April 2008, Senator Ensign's parents each made gifts to Doug Hampton, Cindy Hampton and two of their children in the form of a check totaling $96,000. Each gift was limited to $12,000. The payments were made as gifts, accepted as gifts and complied with tax rules governing gifts. None of the gifts came from campaign or official funds, nor were they related to any campaign or official duties. Senator Ensign has complied with all applicable laws and Senate ethics rules."

It's not clear at the moment whether campaign finance law has been violated by these payments. But analysts say the reemergence by Hampton and discussion of money being exchanged do little to put Senator Ensign's political problems to rest.

UNIDENTIFIED MALE: You have allegations -- did he pay hush money, how much did he pay, why did it pay it?

These are all questions that could -- could -- could develop and could further engulf him as a political figure.

(END VIDEO TAPE)

TODD: Doug Hampton also says in the interview that Republican Senator Tom Coburn of Oklahoma, who earlier confronted Ensign about the affair to try to stop it, believed the Hamptons deserved restitution.

Coburn told us today that he categorically denies suggesting that any payments be made to Doug and Cynthia Hampton -- Wolf.

BLITZER: All right. What else does Doug Hampton, the husband of the mistress, allege in this interview?

TODD: He says that one day after Senator Ensign wrote a letter to Cynthia Hampton saying how remorseful he was about this relationship, Senator Ensign met up with Cynthia Hampton just one day later. The senator's office will not comment on that.

BLITZER: Amazing.

All right, thanks very much for that, Brian Todd.

Let's talk about this and more with CNN political contributors, Democratic strategist, James Carville, and Republican strategist, Alex Castellanos -- Alex, I'll start with you.

How much damage is this new revelation going to cause for Senator Ensign?

ALEX CASTELLANOS, REPUBLICAN CONSULTANT, CNN POLITICAL CONTRIBUTOR: Well, you'd certainly rather be talking about something else. But, you know, this is a state that appreciates John Ensign and thinks he's done a good job. His popularity ratings, even up to today, have been better than Harry Reid's and Nancy Pelosi's ratings.

So evidently, the voters in that state think being promiscuous with our tax money and spending too much is a more serious offense in this economy than whatever Senator Ensign is doing.

BLITZER: You're laughing, James.

JAMES CARVILLE, CNN CONTRIBUTOR, CLINTON SUPPORTER: Well, I just -- I'm always amused at Republicans who worry about spending after their eight years.

But, look, what's happened here, maybe hell hath no fury like a man scorned. It seems like the husband of this woman is -- is going out there pretty good.

And I love the language of the lawyer that they're gifts to these people, referring to them as gifts. I thought that was pretty amusing, too.

But I -- I agree that this is not going to have a lasting political effect. And I've said this before. It's not likely, it's almost a certainty Democrats are going to get caught up in this kind of thing. We don't need to take morality lessons from politicians. That's the real lesson we're learning in all this. This will be the end of politicians preaching to us about family values. Everyone is human and we understand that.

BLITZER: How much damage for the Republican Party, Alex, does the John Ensign affair and the Governor Sanford of South Carolina, have?

CASTELLANOS: I think the failings of one individual, I think, don't necessarily reflect on the -- on the group. In this situation, Wolf, these are -- these are failings of a man and not of a -- of a philosophy. With James, I know he'd rather have a Democratic party or both parties that are silent about right and wrong and a valueless society. But, frankly, precisely because we all fail, because we all make mistakes, it's good to have standards and leaders who will stand up and try to establish them. Certainly the Democratic Party has no problem trying to enforce its values. For example, on education. It says our kids should go to a government-run school and parents shouldn't have the right to choose. The Democrats don't seem to have any kind of problem legislating their values.

BLITZER: Go ahead, Jimmy.

CARVILLE: Of course, I don't think that people need to take their values from politicians. I think they can take it from their family, I think they can take it from their churches, I think they can take it from their ethics. What happens is we see when you have people like this, you know, that sit and say one thing and do another, it leads to sort of a deterioration of respect. I think the best thing that political people can do is to lead the country in a sort of political direction, if you will. Again, I think both parties are comprised of human beings. You have political parties that are comprised of human beings, things like this are going to happen. It seems to be happening to Republicans a little more frequently than Democrats. I suspect over a period of time that will balance out.

BLITZER: You know, James, there's no shortage of Democrats that have their own sexual escapades?

CARVILLE: Absolutely not. There'll be no shortage of Democrats in the future. That's why -- I think come time to vote, I think this stuff will kind of recede. But, you know, again, when something like this happens, we continue to find out in every case that there's always more to it than first meets the eye. I think it's a sort of tragic thing for Senator Ensign's family. Obviously the husband of this woman is still not very pleased about what happened. I suspect that we've gotten over things like this before. I suspect we'll get over this one, too.

BLITZER: Let's talk about the CIA right now and congress, Alex. I'll start with you. I'll play a little clip from the speaker, Nancy Pelosi. She was asked today about these reports that the new CIA director has basically told congress, Leon Panetta, former Clinton chief of staff, that the CIA during the Bush administration effectively misled or even lied to congress about sensitive, classified issues. Listen to Nancy Pelosi.

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D), HOUSE SPEAKER: I've seen the letters from the members. And obviously they have concern. The intelligence committee has the oversight responsibility for intelligence in the house and the equivalent committee in the senate. I'm sure they will be pursuing this in their regular committee process and -- and that's the way it will go.

(END VIDEO CLIP)

BLITZER: I know you remember, a few weeks ago Nancy Pelosi said the CIA routinely lied to her and to congress. She was really severely criticized for that comment by a lot of Republicans. Here's the question. Does Leon Panetta's letter to the house intelligence committee vindicate the speaker?

CASTELLANOS: I don't think so, Wolf. The charge here really, if you read clearly what is written, is that the CIA concealed actions from congress. And, therefore, misled and deceived. It's the CIA's job to conceal what they're doing. Congress, we don't have 435 mini presidents. It's the president's job, not congress, to know details of everything that's going on. So, again, I think politically it's a huge mistake for Pelosi. She was a fairly unknown house speaker until she got tangled in this mess a few month ago then became one of the most unpopular Democrats in the country by saying the people who defend our country on the front lines, the intelligence community, why those people routinely deceive the people of the United States. Bad political mistake. Now, of course the pressure is on President Obama. Does he think the CIA routinely misleads?

BLITZER: James?

CARVILLE: Again, you have what the CIA director said. You can't -- I think the best thing to do in some of these instances is to try to sit down and go forward. I think there was a lot of deception from the years 2001 through 2008. And not going to be very hard to find it. I think what we can do now is try to figure a way that we don't have to go back and visit that rather dark time in our nation's history. And that would be sort of a good idea. I think you'd probably flush this out with people in congress and the CIA director. It's not unusual that these things happen. Best thing to do is to try to figure out a way to reconcile this and sort of move on in a different direction.

BLITZER: We're going to move on now. I want to point out, Alex, you know the most sensitive information the CIA shares with only a tiny number of members of the congressional leadership of the house and senate intelligence committees and the leadership in the house and the senate. They don't share it with all 435 members of the house or all 100 senators.

CASTELLANOS: Even President Obama acknowledges that there are some things that remain as executive functions and not congressional.

BLITZER: They shouldn't even share, you're saying, with the chair and vice chair of the intelligence committees? Is that what you're saying?

CASTELLANOS: I'm saying as the executive who's an executive branch function, the CIA actually works for the president of the United States.

CARVILLE: But they're funded by the congress. I know a fiscal conservative like Alex would want people who hold the purse strings to also know what's going on. We wouldn't want to overspend now, would we?

CASTELLANOS: Not on every detail. Not when it comes to the defense of the United States. The intelligence committee.

BLITZER: Thank you very much. We'll leave it right there.

This family vacation is nothing like your family vacation. The first family in Russia, now in Italy. What are Michelle Obama and her daughters doing while the president works. Stand by. A full report.

The race to come up with a swine flu vaccine. Will it be ready in time for the coming flu season? Possibly millions of new cases this fall.

(COMMERCIAL BREAK)

BLITZER: The Obama administration is putting states across the country on notice about a potential resurgence of swine flu. The president called in from Italy today to a summit meeting on the disease being held near Washington, D.C., putting an exclamation point on the warning.

PRES. BARACK OBAMA (D), UNITED STATES: We were fortunate not to see a more furious situation in the spring when we first got news of this outbreak. That the potential for a significant outbreak in the fall is looming.

BLITZER: Let's bring in our senior medical correspondent, Elizabeth Cohen. He's working this story for us. Lots of concern that when the -- when the flu season starts in the fall, we could have a big problem with the swine flu.

ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: Wolf, that's exactly right. We all know the swine flu really is no longer in the headlines. But it's easy to forget that the number of cases really could go up as cold weather approaches.

(BEGIN VIDEOTAPE)

COHEN: Right now, in labs across the country, scientists are preparing a vaccine against the H1N1 virus, also known as swine flu. At a summit today, health and human services secretary Kathleen Sebelius said the vaccine should be ready when flu season returns this autumn.

KATHLEEN SEBELIUS, HEALTH AND HUMAN SERVICES SECRETARY: This is a serious virus capable of causing serious disease and even death. It's time to be vigilant. We have to avoid complacency and we must be prepared for whatever the fall brings.

COHEN: Sebelius said to expect the vaccine in mid-October. At Thursday's summit, many gathered to discuss plans for handling swine flu. President Barack Obama spoke over a video link from the G-8 summit in Italy.

OBAMA: I think that if we are all working together in a thoughtful systematic way based on the best science possible, that even if this turns out to be a serious situation, we can mitigate the damage and protect our -- our neighbors and our friends and coworkers.

COHEN: There have been 33,000 confirmed and probable cases of swine flu in the U.S. but the CDC estimates there may have actually been about 1 million cases in the U.S. so far. There have been 170 deaths. To help predict what will happen in the upcoming flu season, held officials are looking to the southern hemisphere where flu season is currently under way. In Australia from July 3rd to July 6th there were 730 newly confirmed swine flu cases. But just one death, which says something about the H1N1 virus. While it spreads easily, most cases around the world so far have been mild to moderate.

(END VIDEOTAPE)

COHEN: So far the U.S. government has spent about $1 billion developing a vaccine against H1N1. Wolf?

BLITZER: Let's hope it works. All right, Elizabeth. Thanks very much.

It's not your typical family vacation when it comes to the first family. They're in Italy right now where President Obama is attending the G-8 summit. What are the first lady and the first daughters up to? Here's CNN's Paula Newton. Paula?

PAULA NEWTON, CNN CORRESPONDENT: Wolf, it's a tough act to pull off. You bring your whole family on vacation and you still have a lot of work to do. And you have to look impeccable throughout. Michelle Obama certainly doing her best.

(BEGIN VIDEOTAPE)

NEWTON: It's not the easiest family trip to pull off. Michelle Obama, kids and husband landed in Moscow to start their three-country tour, the first lady a focus of attention. For the most part, though, she's trying to keep the spotlight off her girls. Mrs. Obama looked flawless through a grueling Russian schedule and arguably held up better than her husband.

OBAMA: I don't know if anybody else will meet their future wife or husband in class like I did.

NEWTON: President Obama was apparently so jet lagged during the speech, he said he met his wife at school. He met her at work. Oh, well. Never mind. It's on to Rome. Michelle Obama is the first lady. But in Rome, she's not the only lady. There is a delicate balance to strike here with other spouses. Warm and gracious, but don't take too much attention.

Here in the media filing room we're keeping track of what some of the other wives are doing. Sarah brown, the British prime minister's wife is blogging, she's tweeting. She's posting her pictures on the blog. That's her with the pope. That is her with Michelle Obama when they were touring the earthquake ruins.

You'd run your own PR campaign, too, if you had to overcome the British tabloid term for the better half. They call them wags, which stands for wives and girlfriends, but sounds more insulting. The supermodel turned first lady Carla Bruni from France has so far been a no-show. For Michelle Obama, that's not an option. This has hardly been a typical family road trip. Though many mothers can relate to the first lady on this one. She's had to be charming to her hosts without imposing. Had to keep the kids busy so they never say, I'm bored. And she will try to keep her better half relaxed and stress free. OK, with President Obama's intense schedule, that might have to wait until next time.

(END VIDEOTAPE)

NEWTON: Tomorrow the first family meets with the pope. They have an audience with the pope. No doubt, again a lot of media attention. Certainly something I'm sure the first family is looking forward to. Wolf?

BLITZER: A historic trip for the first family indeed wraps up Saturday in Ghana which I'm sure the first family will thoroughly enjoy as well.

Workers at an historic African-American cemetery accused of digging up graves, throwing out the very remains. We'll tell you why. An exclusive report from the scene.

Minority kids from an inner city Philadelphia day care center are barred, yes, barred from a suburban swim club after paying for access. Is it because of their race? We're going to take a closer look.

Stick around. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Shocking news from a historic cemetery south of Chicago today where authorities from a historic cemetery where hundreds of graves have been dug up as part of a scheme to resell the plot. CNN is the only network with access to the grounds of the cemetery. An exclusive look at some of the remains close-up. Let's go to Cheryl Jackson. She's on the scene for us.

This is truly, Cheryl, a shocking story. Give us the background and tell us what we know.

CHERYL JACKSON, CNN CORRESPONDENT: Well Wolf, we have been to the back of the cemetery where there are piles and piles that police say contain human remains. Even the too many stones of small children have been tossed around. There are still hundreds of people here trying to figure out whether or not their family members are involved. Many are asking, how could this go on for years and nobody do anything about it?

(BEGIN VIDEOTAPE)

JACKSON: What has happened in this historic African-American cemetery is causing sadness and outrage. Famous African-Americans like Emma Till whose lynching sparked the civil rights movement and jazz singer Diana Washington are buried here. Their graves are undisturbed but others are heartbroken by what they've found.

BRENDA RAY, SISTER OF BURIED MAN: My brother, this is where he's supposed to be. I want to know, what do you do when you can't find your family member?

JACKSON: What do you do? Many like Brenda Ray are asking the same question. Police say at least 300 bodies were ripped from their graves, many crushed into piles with the cement vaults they were buried in all so their graves could be resold.

RAY: He is supposed to be at 10-2, row 9, grave 21. There is nothing over there, not even any too many stones, not even no flowers. It is like they just recut grass.

JACKSON: Four employees of the Burr Oak Cemetery have been charged with felony dismemberment of a human body.

UNIDENTIFIED FEMALE: We presented formal charges against four individuals.

JACKSON: Facing those charges are office manager Caroline Towns and grave digger Maurice Daily, Keith Nicks and Terrence Nicks. Even police are shocked by the careless treatment of the people who are supposed to be resting here in peace on sacred ground.

SHERIFF TOM DART, COOK COUNTY, IL: As I was walking around, I came across bones that it was clear they were parts of skulls and legs and arms. They are all laying in different places around here. There are piles that have been dumped here.

UNIDENTIFIED FEMALE: They are not human to me.

JACKSON: Dora Montgomery has more than a dozen family members buried here.

UNIDENTIFIED FEMALE: My brother, my mother, my father, my sister. To me, they don't have no heart.

(END VIDEOTAPE)

JACKSON: We do know that here at the cemetery tonight, they will be maybe here until 10:00, 11:00 tonight. The sheriff told us earlier that the FBI from around the world would be involved in this investigation. Later, he said, the FBI from around the country would be involved and that forensic people from around the world would be involved in this investigation. The suspects are all in cook county jail tonight. None of them made bail. We don't know whether or not they have attorneys. Two of them are cooperating with police. Wolf?

BLITZER: Let's go to Jack Cafferty. He's got the Cafferty File. Jack?

JACK CAFFERTY, CNN CORRESPONDENT: Unbelievable. The question is will the voters blame the Democrats for our economic problems by next year's mid-term election?

Bob in Kansas writes, "Yes, I'm a Democrat and I will surely blame my party and my president if they don't utilize the political opportunity that was given them by the populous turnout in the last year. Many voters believe there is really no difference between Democrats and Republicans. The current Democrats are proving the truth of that generalization."

Willow writes from Iowa, "If things don't start to change, we can be calling my town Hooverville. Of course he'll be baled if things don't improve. That's why we elected him. Unemployment is slowly dropping in Iowa I read in the paper yesterday. June was much lower than January. So there is hope."

S. in Florida writes, "Depends on what happens the month, the week, the day before the vote. I am patiently waiting for the Democrats to pass health care reform of some sort. If they don't succeed, I see trouble for them in 2010."

Jose in McAllen, Texas, "Let's not forget that in 2010, the Democrats will be in power in congress. It is time they start taking responsibility for their actions and bad decisions. How long can they keep blaming President Bush for all their bone-headed ideas and drunken spending. There aren't enough Republicans in congress to block any piece of bad legislation." Mark in Arkansas writes, "By 2010, the era of George will be forgotten. Even if the recession starts a recovery, the negative effects will be here for a long time. Yes, a lot of the mud will fall on the Democrats, because the ones in power are always to blame. It's always been that way."

Finally, Andy says, "Unless the president and vice president go Republican and have affairs with women, the Democratic party is in good shape. They are much smarter than the party leadership would ever believe. The only reason the Republican exists at all is nobody wants a one-party system. We had that during the last administration."

If you didn't see your e-mail, go to my blog at CNN.com/CaffertyFile and check for yours there. Wolf?

BLITZER: See you in a few minutes Jack. Thank you.

A new sign that Michael Jackson's family may still be considering burying him at the Neverland ranch.

Plus, echoes of segregation. Children of color barred from a private club swimming pool.

(COMMERCIAL BREAK)

BLITZER: Words of racism from a swim club in suburban Philadelphia. CNN's national correspondent Susan Candiotti reports.

(BEGIN VIDEOTAPE)

SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT: Swimming once a week at the spacious Huntington Valley Club in Philadelphia. It sounded ideal for 65 kids described as black and Hispanic at Creative Steps Daycare Summer Camp.

ALTHEA WRIGHT, DAY CARE DIRECTOR: I was excited. The parents and children were excited.

CANDIOTTI: When the youngsters showed up at the pool June 29th after the day camp signed and paid a $1,900 contract, this happened.

WRIGHT: The children came running down the hill saying, Miss Wright, Miss Wright, those people are saying, what are those black kids getting in the pool?

CANDIOTTI: Twelve year old Marcus Allen is her son says he was sitting outside the pool and heard white adults say this.

MARCUS ALLEN, VISITOR: Why are these black kids here? He didn't say, I'm afraid he might do something to my children. I don't know if they might try to steal my stuff or harm my children. I was amazed they were saying something like this because we're just like you. We're just like your kids.

CANDIOTTI: Mrs. Wright says the swim club's director told her he was embarrassed, held an emergency board meeting and called the next day to say they could not come back.

WRIGHT: He said, the membership said, let the chips fall where they may.

CANDIOTTI: You know, Marcus, I see tears coming down your face. Why does this make you cry?

ALLEN: Because it is kind of like sad that people are still thinking like this. I felt like these days was over.

WRIGHT: This is 2009. Children should not be subjected to that.

CANDIOTTI: The swim club's director is quoted by local media as saying the day camp children change the atmosphere and complexion of the club. A club member reacted.

JIM FLYNN, CLUB MEMBER: I will be asking for the club president's resignation today. I think the comment that he made, although taken out of context, was probably one of the stupidest comments I ever heard.

CANDIOTTI: He claims the club was simply overcrowded, not racist. He said two other unidentified camps, both non-minority, also got the boot.

(END VIDEOTAPE)

CANDIOTTI: Now late today Pennsylvania Senator Arlen Specter sent a letter to the club and said that he asked the club to invite the daycare center back. Also, the Pennsylvania human rights commission has opened up its own investigation into allegations of racism and finally, we can tell you the kids are swimming because they already previously contracted some time at the Jewish community center. So they are there twice a week and another school has stepped forward to also offer them time there. So they might have some fun this summer. The investigation goes on, Wolf. Back to you.

BLITZER: Susan, thank you.

Happening now, five alleged lies and politics. Democrats claim new evidence that the CIA misled them for years.