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THE SITUATION ROOM

Russian Spy Confesses.; President Obama Speaks on Immigration Reform; Hurricane Alex Complicates Gulf Oil Cleanup.

Aired July 1, 2010 - 17:00   ET

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


SUZANNE MALVEAUX, CNN ANCHOR: Thank you. Happening now, there is breaking news. One of the alleged Russian spies is now confessing. After years of hiding in plain sight, they appear in court, and their secrets are now being revealed.

Also this hour, President Obama is urging Congress to solve the problem of illegal immigration once and for all, but Arizona's governor says he should stop talking and start doing his job.

And what if the disaster in the Gulf could be solved by bugs? Well, it turns out there's a kind of bacteria that eats oil. Wolf Blitzer is off. I'm Suzanne Malveaux, and you're in THE SITUATION ROOM.

For at least one of the suspects in the Russian spy ring drama, the secrecy, the lying, the intrigue apparently are over. The breaking news this hour. Federal prosecutors say that they've got a confession. I want to go straight to our Brian Todd, who has the details on this. Brian, what do we know?

BRIAN TODD, CNN CORRESPONDENT: Suzanne, a very dramatic development in this case that we just found out about this afternoon. One of the key suspects in this case, his name is Juan Lazaro, that's the name he went by. He now says that's not his real name, but let's get to the gist of it.

He has confessed. He has made a lengthy post-arrest confession to authorities. This is according to a bail letter that was released by the US Attorney's Office in New York. The confession occurred on Sunday right after he was picked up. He waived his Miranda rights, according to officials and started talking.

He said he had worked for the Russian intelligence service. Here's a quote from the bail letter that the US Attorney's Office released. "Juan Lazaro admitted that Palaez, that is Vicky Palaez, identified his wife, and another suspect in this case, that Palaez had delivered letters on his behalf, that the Yonkers house had been paid for by the service and that although he, Lazaro, loved his son, he would not violate his loyalty to the service even for his son."

A lengthy post-confession by Juan Lazaro, that he worked for the Russian intelligence services. He said his name was not Juan Lazaro, he was not born in Uruguay as had been previously believed, and that he would not give his real name. But he did admit working for the Russian intelligence services. We got that information after a bizarre occurrence here in Alexandria, Virginia, where three of the suspects were paraded before a US district judge, and two of them, a married couple named Patricia Mills and Michael Zottoli first came in.

They sat down, the hearing was set to get started, a pretrial detention hearing. One of their attorneys said, "Your honor, I have late information from the government to confer with my clients." He whispered into his clients' ear, then asks the judge to delay the hearing until tomorrow. The judge grants his request, so we're going to be back here tomorrow to hear what's going on in that.

We are told by a source close to this case that the confession on Sunday was not the reason that this attorney asked for this delay. But there is, nonetheless, some kind of pressing reason for a delay until tomorrow, so those two suspects and a third, named Mikhail Semenko, their pretrial detention hearing will be delayed.

We're told a hearing in Boston for two suspects there has been delayed. One in New York is going on at this hour, we understand, so a lot of fluid developments in this case, and we're going to be probably hearing a lot more about the detention status tomorrow, at least here in Alexandria.

MALVEAUX: Brian, thank you so much. Intriguing developments. Thank you very much.

President Obama says that the only way that Congress can pass comprehensive immigration reform is by putting politics aside. But his new pitch today only seems to be generating more partisan potshots. Some Democrats concede that this issue may be too hot to handle until after the November election.

I want to go to our white house correspondent Dan Lothian. And Dan, we know that the president has been meeting behind closed doors with a lot of advocates pushing for comprehensive immigration reform. Do we get a sense that this white house is ready for a deadline here, some sort of goal to get this on the agenda and get this passed?

DAN LOTHIAN, CNN CORRESPONDENT: Well, the White House not talking about deadlines today, but I can tell you this. One person saw the president's speech today as a framework for getting a just immigration strategy. Not everyone, of course, will see it that way, but with immigration reform in the headlines once again, President Obama wanted to get out there in front of the American people, but more importantly put pressure on Congress.

(BEGIN VIDEOTAPE)

LOTHIAN: Admitting that immigration reform is an emotional and thorny issue, President Obama tapped into public frustration.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The system is broken, and everybody knows it.

LOTHIAN: As Congress grapples with a plan to secure the US/Mexico border and demand accountability from 11 million illegal immigrants and the employers who hire them, the president blamed delays on republican roadblocks.

OBAMA: I'm ready to move forward. The majority of Democrats are ready to move forward. But the fact is without bipartisan support, as we had just a few years ago, we cannot solve this problem. That is the political and mathematical reality.

LOTHIAN: Will enough Republicans come on board?

UNIDENTIFIED SPEAKER: I think where there's a will there's a way.

LOTHIAN: The president has been reaching out to conservatives.

JUAN HERNANDEZ, CONSERVATIVE COMMENTATOR: Three weeks ago we said, President, how do you expect us conservatives, us Republicans to support you when you don't stick your head out? Today he stuck his head out.

LOTHIAN: But there are plenty of fingers pointed at the president.

JAN BREWER, GOVERNOR OF ARIZONA: What is our country coming to?

LOTHIAN: Arizona's governor Jan Brewer is featured on this web video on her campaign site calling out the president.

BREWER: Do your job. Secure our borders.

LOTHIAN: Her state has become the flashpoint in the immigration debate after a new law that gives police powers powers to check immigration status. President Obama called the law ill-conceived and divisive.

OBAMA: We face the prospects that different rules for immigration will apply in different parts of the country.

LOTHIAN: Trying to avoid what the administration describes as a patchwork of local rules, this new push is aim at pressuring Congress to act. But at the conservative Heritage Foundation, Rory Cooper is calling for baby steps, not another, quote, "bloated bill."

RORY COOPPER, THE HERITAGE FOUNDATION: We need leadership from the White House, and that starts with securing our borders and then providing a clear, incremental approach to our immigration plan. And right now, we're not getting that from the president.

(END VIDEOTAPE)

LOTHIAN: Now Suzanne, for months you and I have been hearing from immigration advocates who were concerned and fruits traded that President Obama was not moving quickly enough and pushing for comprehensive reform, immigration reform. I talked to one of those folks today, and I said, "Are you still frustrated?" And he suggested that they are shifting their focus to a different target. He described it as, quote, "a new kind of politics at play, politics that challenges Republicans to be part of the solution." Suzanne?

MALVEAUX: All right. Thank you, Dan.

There has actually been a decrease in illegal immigration in recent years. The Department of Homeland Security estimates that 10.8 million illegal immigrants were in the US as of January 2009. Now, that's down by almost 1 million people from the previous year.

More than a third of all illegal immigrants live in California and Texas. Now, this map shows the ten states with the most illegal immigrants. Arizona comes in seventh.

Gulf Coast officials are looking into a surprising way to get rid of some of the oil that is tainting the region. It's bacteria that feeds on crude under the microscope.

Also, some Democrats are taking aim at war funding for Afghanistan, and their own president's policy.

And a holy shrine targeted by suicide bombers in Pakistan.

(COMMERCIAL BREAK)

MALVEAUX: Jack Cafferty is here with "The Cafferty File." Hey, Jack, what are you working on?

JACK CAFFERTY, CNN ANCHOR: Hello, Suzanne. On July 4th, 1776, our nation's founders approved the Declaration of Independence in Philadelphia, and the greatest nation in the history of mankind was born.

Flash ahead, and that nation is struggling as she gets ready to celebrate her 234th birthday. Two wars, a deep and protracted recession, and the loss of confidence in our government to function in our best interest has dampened our spirits.

Most of us don't approve of the job the government is doing, and a lot of us don't even like the people who represent us. Almost 10% of us can't find a job. Many more of us work just part-time or have given up looking for work all together.

We're overrun with millions of illegal aliens that our government refuses to seal the borders, or for that matter, to even address the issue. They talk about it, but that's about all, and they threaten to sue a state like Arizona, which is struggling to cope with the presence of 460,000 illegal aliens and was finally forced to pass its own law to try to cope.

The country's $13 trillion in debt. States are broke. Cities and towns are slashing programs right and left. It's a telling sign that this Fourth of July, more and more places are canceling the fireworks celebrations that have marked our independence forever. Places like Glendale, Arizona; Jersey City; Springfield, Missouri. They don't have the money to throw a birthday party for our country this year. I don't know about you, but as our nation's birthday approaches, I don't feel a lot like celebrating this time. I worry about our kids and our grandchildren, about our senior citizens who can no longer afford to retire, and about what awaits hundreds of thousands of our service men and women who come home bearing the scars of wars in faraway places that seem increasingly irrelevant to our daily lives.

So here's the question. Do you feel as patriotic as you used to? Go to cnn.com/caffertyfile and post a comment on my blog -- Suzanne?

MALVEAUX: All right. Thank you, Jack.

We now want to go to the oil disaster zone. Officials are saying that the remnants of hurricane Alex are holding up cleanup operations hostage, essentially. That oil skimmers may have to stay out of the water through the weekend until the weather improves.

Now, Alex has been downgraded to a tropical storm after slamming into Mexico last night, dumping rain on southern Texas. And it is still unleashing strong winds, big waves across a big swath of the Gulf, disrupting cleanup as well as the containment.

Even when the cleanup effort is going well, there's always more oil on the way to the beaches. So when do we expect that the gushing well is going to be shut down, killed, put out of action? Joining me now is the man in charge of the federal response of the disaster, just retired Coast Guard Admiral Thad Allen.

Thank you so much for being with us. Congratulations on your retirement, but clearly you still have a very big job ahead of you. I want to start off by getting the status of the relief well. How close is it to the source of the oil spill, the pipe itself?

ADM. THAD ALLEN, NATIONAL INCIDENT COMMANDER: Well, Suzanne, the drilling has become very close to the well bore. I would say between 15 and 20 feet at this point. And the way they actually close in to kill this well is to go vertically now down the pipe, getting closer and closer but being very careful not to nick it or run into it. Several hundred feet at a time, and then they the measure the electro- magnetic field around the well bore and they come in a little closer.

The original date for the relief well to be done was the middle of August. They're slightly ahead of schedule, but I think we need to under-promise and over-deliver in terms of schedule here so I'll stick with the middle of August, but we could be sooner than that.

MALVEAUX: So you think you will meet your goal?

ALLEN: Right now they look on track for the middle of August. Yes, they do.

MALVEAUX: Is there a backup plan if this relief well does not work?

ALLEN: There are several, Suzanne. First of all, there's a second relief well-being drilled. It's down around 6,000 feet below the seabed floor right now.

Also, there are various containment options that do exist for us to completely seal the well head above and actually produce all that oil, but that's not a permanent fix.

We're also looking at the ability to lay pipeline from the well site over to other production facilities that may be in the area several miles away and then actually pipe that oil back down into the reservoir. A number of things, but we really want to kill this thing in August.

MALVEAUX: I want to ask you about something that former president Bill Clinton had suggested, the possibility of using conventional weapons to blow it up. I want you to take a listen to what he told our Wolf Blitzer.

(BEGIN VIDEO CLIP)

BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: Unless we send the navy down deep to blow up the well and cover the leak with piles and piles and piles of rock and debris, which may become necessary. We don't have to use a nuclear weapon, by the way. I've seen all that stuff, just blow it up. Unless we're going to do that, we are dependent upon the technical expertise of the people from BP.

(END VIDEO CLIP)

MALVEAUX: Now in light of that fact, is this a real possibility? Is this something that you would consider?

ALLEN: Not right now, Suzanne. I think we need to understand the implications of the rock strata around there, the seismic implications of that kind of force or trauma being applied to the seabed. It's not on the list of options at this time.

And I think we also need to understand, we need to know what happened with that blowout preventer. I think we need to recover it and bring it to the surface, because that's as close as we have to a black box in this investigation as anything.

MALVEAUX: So if you blew it up, you wouldn't actually have the kind of information that you're looking for? Is that what you're saying?

ALLEN: I don't think that's the predominant reason to do it. I think the proximity of other production facilities, we don't know what the impact of that type of a kinetic action would be on the strata and the formation around it.

And we also know that there potentially could be some problems with the well bore and the casing itself below the surface, where oil could ultimately get out of formation and make it to the seabed anyway.

MALVEAUX: Clearly the Gulf Coast got lucky with Hurricane Alex, it veered over toward Mexico. But, obviously, our forecasters are saying that there's going to be a number of hurricanes headed, at least before August, before that relief well is complete. What is the plan in place? Are you prepared?

ALLEN: We are, Suzanne, but the public needs to understand that this won't be perfect if we have to leave that site. We know that we need about 120 hours in advance of forecasting gale force winds at the well site to be able to remove the equipment that's there now. And this has to be do with disconnecting the riser system associated with the Discover Enterprise, the production vessel that's out there right now.

We are looking at potentially changing to a new containment cap in the middle of July, which would allow us greater flexibility, because it will be hooked up to the riser pipe through flexible hoses, and it will be floating below the surface. But everybody needs to understand that if we have to evacuate that site right now, there could be a period of time where the flow would be unabated from the well.

MALVEAUX: I want to bring up this report here, this Republican congressman Darrel Issa. He's released this report from the Republicans of the House Committee on Oversight and Government Reform. We have it here with us. And this is one of the conclusions they come up with.

He says that BP and the Coast Guard provided Mr. Nungesser, that's the parish president from that region, with a map of the Gulf allegedly pinpointing the exact locations of 140 skimmers cleaning up oil. Sensing that the chart may have been somewhat inaccurate, Mr. Nungesser requested a fly over the area for verification.

After three canceled trips, officials admitted to him that only 31 of the 140 skimmers were ever deployed. The rest were sitting at the docks. Do you know anything about this report, or the validity of this report? Would you agree with his conclusions?

ALLEN: Well, Suzanne, I've heard about the report several times today. I haven't had a chance to read it myself. A couple of things regarding skimmers and deployment of the vessels out there.

First of all, from the start, at least on all my conversations and communications publicly, we try to be very transparent. Skimmers operate out there in a variety of conditions and become marginally operational in certain sea states and so forth, and they don't stay in one place very long. I'd probably need to know the exact details of the assertions that are being made.

But in general, we've put liaison officers with all the parish presidents of Louisiana to shorten the decision cycle, get them more in charge with what's going on, and create a unity of effort. And Mr. Nungesser has one of those Coast Guard officers assigned to him. And we recommend that if there are any issues regarding to the coordination and the response, they should be directed there because we've been able to significantly enhance the response by putting those folks with them. MALVEAUX: Can you reassure the public? Are there skimmers out there on the docks that aren't being used? Does this sound like this is grossly inaccurate, or is it something you're looking into?

ALLEN: We have a certain number of skimmers out there any particular day, Suzanne. And some of the skimmers are self-contained. They are actually vessels that have the equipment built into them. Some of the skimmers are towed behind commercial vessels or fishing vessels.

There's no one particular type of skimming technology being used out there, so without knowing the exact types of vessels that were supposed to be sitting at the dock, I'm not sure I could comment. We also are using barges with vacuum trucks on them in Plaquemines Parish to vacuum the oil up out of the marshes, too. So I would need more details to comment on it.

MALVEAUX: Okay. We would look forward to whatever details you can get in response to this report. Thank you very much, Thad Allen.

ALLEN: Thanks, Suzanne.

MALVEAUX: Thank you.

Dozens of delegates take a guided tour of Israel's border crossing with Gaza. More than a month after its deadly attack on a Gaza aid ship wanting to bust the blockade, why Israel now says there's no need for anymore flotillas.

And a republican senator predicts the Tea Party's days are numbered. Do Donna Brazile and Bill Bennett agree? Stand by for our strategy session.

(COMMERCIAL BREAK)

MALVEAUX: A big vote is looming in Congress tonight on money for the war in Afghanistan and there are signs that democrats may be increasingly at odds with their president's strategy. I want to bring in our Congressional correspondent, Brianna Keilar, what are we hearing about the funding measure here and the level of opposition to this?

BRIANNA KEILAR, CNN CORRESPONDENT: Well, Suzanne, we're hearing about growing discord between democrats here on Capitol Hill and President Obama over his policy for the war in Afghanistan. What we're going to be seeing tonight is a vote to add $33 billion more to pay for the war in Afghanistan, and keeping in mind, sources are telling us that they expect that this is going to pass, albeit narrowly.

But what we're really watching is some other votes that we'll be seeing. Anti-war democrats who are going to be given at least a couple of chances to add timetables maybe or conditions to this money, so that's what we're keeping an eye on here, and one of the democrats who is pushing an amendment here would be Massachusetts Congressman Jim McGovern. What he wants to do is force President Obama to report to Congress a plan on how to draw down troops in Afghanistan starting next summer, and then if the president decides that he wants to deviate from that plan, he'd have to come back to Congress and basically ask for the money to do that, and Congress would have much more discretion. Here's what McGovern told me.

(BEGIN VIDEO CLIP)

REP. JIM MCGOVERN (D), MASSACHUSETTS: Let us not waste, you know, more resources, more lives, on a policy that quite frankly is going to lead us nowhere. We need to let Karzai know that we're not a cheap date. We're not a blank check. We're not going to be here forever and ever. We expect him to clean up his government. This is not a guy that we should be sacrificing our young men and women in the field of battle for.

KEILAR: President Obama and General Petraeus have left the door open to if conditions change, they may change that July 2011 plan. This amendment puts you directly at odds with that.

MCGOVERN: Well, and Congress, if we wanted to, could make a necessary adjustment if it was the right thing to do. Look, we've been there for almost ten years. You know, where are we going with this?

KEILAR: What kind of support do you have?

MCGOVERN: I think more than half the democratic caucus will support this. I think people are anxious about what's happening.

KEILAR: What's the point of this vote if it's not going to pass?

MCGOVERN: The point is to show the White House and to show others in Congress that there is growing concern. I mean, that there are people who care and that we need some answers.

(END VIDEO CLIP)

KEILAR: Now, there's another more liberal amendment that will be up for a vote that would completely strike all money for the war in Afghanistan. That is not expected to pass. It's still expected to get a significant amount of votes, not as much as the McGovern Amendment, but the point here, Suzanne, is that this is a message that these anti-war democrats are sending to the White House, and this is really their first chance since the surge in Afghanistan to send that message to President Obama about how they want to see a timetable for the war in Afghanistan.

MALVEAUX: But Brianna, Defense Secretary Robert Gates and General Petraeus, they've both said that they need Congress to approve these funds before the July 4th recess. Obviously that's right around the corner. Is that going to happen?

KEILAR: No, it's not expected to happen because -- here's why. The Senate, although it has okayed its bill that would put this funding for the war in Afghanistan through, the House has added some domestic funding to the measure, and so it would have to go back to the Senate.

That's not going to happen. So at this point, Suzanne, according to, of course, Secretary Gates, he says that's going to put the Pentagon in a bit of a bind, but I spoke with one House democratic source who said they understand it's just shifting around money, and they don't think it will cause such a problem.

MALVEAUX: Okay. Thank you, Brianna. A sheriff on the front lines of the border wars. He's not impressed by the president's new pitch for immigration reform. I will talk with the outspoken sheriff, Paul Babeu. And more on the breaking news. A confession in the Russian spy ring case. Some of the suspects appearing today in court.

(COMMERCIAL BREAK)

MALVEAUX: Reaction to the president's new push for immigration reform. Republicans are complaining he needs to stop giving speeches and do more to protect the border. Democratic allies are firing back saying the GOP leaders are polarizing and grandstanding. Let's get some perspective from ground zero in the battle of course, Arizona. We're joined by the Pinal County Sheriff Paul Babeu, he is a vocal critic of the president on immigration. Sheriff, thanks for joining us in "THE SITUATION ROOM."

PAUL BABEU, PINAL COUNTY SHERIFF, ARIZONA: Thanks, Suzanne, a pleasure to be here.

MALVEAUX: Thank you. You've been listening to the president. He pushed for today on comprehensive immigration reform. The federal government's going to take on your state over the new immigration law. The president today put it today in terms that I believe you'll be able to understand, and that is an issue of law enforcement. I want you to listen what he said.

BABEU: Yes.

(BEGIN VIDEO CLIP)

OBAMA: States like Arizona have decided to take matters into their own hands. Now given the levels of frustration across the country, this is understandable. Dozens of delegates take a guided tour of Israel's border crossing with Gaza. More than a month after its deadly attack on a Gaza aid ship wanting to bust the blockade, why Israel now says there's no need for anymore flotillas.

And a republican senator predicts the Tea Party's days are numbered. Do Donna Brazile and Bill Bennett agree? Stand by for our strategy session.

(COMMERCIAL BREAK)

MALVEAUX: A big vote is looming in Congress tonight on money for the war in Afghanistan and there are signs that democrats may be increasingly at odds with their president's strategy. I want to bring in our Congressional correspondent, Brianna Keilar, what are we hearing about the funding measure here and the level of opposition to this?

KEILAR: Well, Suzanne, we're hearing about growing discord between democrats here on Capitol Hill and President Obama over his policy for the war in Afghanistan. What we're going to be seeing tonight is a vote to add $33 billion more to pay for the war in Afghanistan, and keeping in mind, sources are telling us that they expect that this is going to pass, albeit narrowly.

But what we're really watching is some other votes that we'll be seeing. Anti-war democrats who are going to be given at least a couple of chances to add timetables maybe or conditions to this money, so that's what we're keeping an eye on here, and one of the democrats who is pushing an amendment here would be Massachusetts Congressman Jim McGovern.

What he wants to do is force President Obama to report to Congress a plan on how to draw down troops in Afghanistan starting next summer, and then if the president decides that he wants to deviate from that plan, he'd have to come back to Congress and basically ask for the money to do that, and Congress would have much more discretion. Here's what McGovern told me.

(BEGIN VIDEO CLIP)

REP. JIM MCGOVERN (D), MASSACHUSETTS: Let us not waste, you know, more resources, more lives, on a policy that quite frankly is going to lead us nowhere. We need to let Karzai know that we're not a cheap date. We're not a blank check. We're not going to be here forever and ever. We expect him to clean up his government. This is not a guy that we should be sacrificing our young men and women in the field of battle for.

KEILAR: President Obama and General Petraeus have left the door open to if conditions change, they may change that July 2011 plan. This amendment puts you directly at odds with that.

MCGOVERN: Well, and Congress, if we wanted to, could make a necessary adjustment if it was the right thing to do. Look, we've been there for almost ten years. You know, where are we going with this?

KEILAR: What kind of support do you have?

MCGOVERN: I think more than half the democratic caucus will support this. I think people are anxious about what's happening.

KEILAR: What's the point of this vote if it's not going to pass?

MCGOVERN: The point is to show the White House and to show others in Congress that there is growing concern. I mean, that there are people who care and that we need some answers.

(END VIDEO CLIP) KEILAR: Now, there's another more liberal amendment that will be up for a vote that would completely strike all money for the war in Afghanistan. That is not expected to pass. It's still expected to get a significant amount of votes, not as much as the McGovern Amendment, but the point here, Suzanne, is that this is a message that these anti-war democrats are sending to the White House, and this is really their first chance since the surge in Afghanistan to send that message to President Obama about how they want to see a timetable for the war in Afghanistan.

MALVEAUX: But Brianna, Defense Secretary Robert Gates and General Petraeus, they've both said that they need Congress to approve these funds before the July 4th recess. Obviously that's right around the corner. Is that going to happen?

KEILAR: No, it's not expected to happen because -- here's why. The Senate, although it has okayed its bill that would put this funding for the war in Afghanistan through, the House has added some domestic funding to the measure, and so it would have to go back to the Senate.

That's not going to happen. So at this point, Suzanne, according to, of course, Secretary Gates, he says that's going to put the Pentagon in a bit of a bind, but I spoke with one House democratic source who said they understand it's just shifting around money, and they don't think it will cause such a problem.

MALVEAUX: Okay. Thank you, Brianna. A sheriff on the front lines of the border wars. He's not impressed by the president's new pitch for immigration reform. I will talk with the outspoken sheriff, Paul Babeu. And more on the breaking news. A confession in the Russian spy ring case. Some of the suspects appearing today in court.

(COMMERCIAL BREAK)

MALVEAUX: Reaction to the president's new push for immigration reform. Republicans are complaining he needs to stop giving speeches and do more to protect the border. Democratic allies are firing back saying the GOP leaders are polarizing and grandstanding. Let's get some perspective from ground zero in the battle of course, Arizona. We're joined by the Pinal County Sheriff Paul Babeu, he is a vocal critic of the president on immigration. Sheriff, thanks for joining us in "THE SITUATION ROOM."

PAUL BABEU, PINAL COUNTY SHERIFF, ARIZONA: Thanks, Suzanne, a pleasure to be here.

MALVEAUX: Thank you. You've been listening to the president. He pushed for today on comprehensive immigration reform. The federal government's going to take on your state over the new immigration law. The president today put it today in terms that I believe you'll be able to understand, and that is an issue of law enforcement. I want you to listen what he said.

BABEU: Yes.

(BEGIN VIDEO CLIP)

OBAMA: States like Arizona have decided to take matters into their own hands. Given the levels of frustration across the country this is understandable, but it is also ill-conceived, and it's not just that the law Arizona passed is divisive, although it has fanned the flames of an already contentious debate. Laws like Arizona's put huge pressures on local law enforcement to enforce rules that ultimately are unenforceable. It puts pressure on already hard- strapped state and local budgets.

(END VIDEO CLIP)

MALVEAUX: So sheriff, can you enforce those laws if the Arizona law goes into place, and you're still fighting crime but you're chasing down illegal immigrants?

SHERIFF PAUL BABEU, PINAL COUNTY, ARIZONA: Yes. Not only we can enforce it, we'll do so following not only our constitution but the fourth amendment safeguarding everyone's constitutional freedoms and rights protecting them from unlawful search and seizure.

MALVEAUX: How will you do that? The president believes they are going to file that lawsuit saying, look, this is actually not -- this is not going to work.

BABEU: Well, here he understands that it's a critical issue here in Arizona, yet sending us the soldiers, the armed soldiers that we're asking for to secure the border. He's sending lawyers to Arizona to fight us in court, so we'd rather real support to build the fence, the double-barrier fence that's proven to work, and the soldiers that are deployed there and then to stop the catch and release. There's very real things that the president can do, that he can be our hero in Arizona rather than to look at this purely as a political issue in an election year and everybody is getting into this, you know, who is right, and who is wrong and nobody wants to be caught holding the hot potato.

MALVEAUX: Sheriff, is that really a fair criticism to say that they are just sending lawyers, because the federal government has offered to send guard over to Arizona, at least 524, to help you on the border there, so clearly they are moving in the direction in which you've asked.

BABEU: It's begrudgingly so. Only a few months ago there was the Secretary Napolitano and the president said that border is secured, and there is no problem, and it's more secure now than it was before, and that's false, and now they begrudgingly come up with this 1,200 number split among four southwest border states, and I served along the border as the commanding officer for a task force. I know what it takes.

MALVEAUX: What does it take? Tell us what it takes. What do you want?

BABEU: It takes us 3,000 armed soldiers here in Arizona alone. Of all the illegals that come into America, more than half enter Arizona, and just to give you an idea, that's 241,000 just last year alone that the border patrol apprehended, and that's a reflection of one out of every 2.6 so the border patrol's estimate is there's over half a million that come in there. We can't handle this in law enforcement so myself as a sheriff. I had ten of my police chiefs stand up and Senator McCain and Kyl's plan demands these 3,000 soldiers here. The reason why we want the soldiers on the boarder, and it worked in Yuma where I commanded those soldiers in support our hero the border patrol agents, and while they were deployed in high- profile positions stationary, not with law enforcement authority and ask as a deterrent and anyone south of the board their wants to come in, they don't want to be detected. They don't want to fight anybody so it's the path of least resistance. While we were there the double barrier fence was built and completed and it worked. There's not one soldier there today, and there were 134,000 illegals that crossed in 2006. Today it's only 7,000 so 95 percent reduction. It works.

MALVEAUX: One of the things that the president believes will work as well as New York City Mayor Mr. Bloomberg, he says he and a coalition of CEOs want to get together and say, look, if you help people towards the path of citizenship, you don't have to worry about some of the things that you're talking about when it comes to crime, when it comes to crossing the border. Here is how he put it. This was his thinking.

(BEGIN VIDEO CLIP)

OBAMA: This country was created by immigrants. Half of the people that win Nobel prizes in physics here were born overseas. Intel was started by immigrants. Google was started by immigrants. Yahoo! was started by immigrants. The next drugs that we're going to need to save our lives are being created by immigrants, and if we don't keep those immigrants here in this country, it's other countries that are going to eat our lunch.

(END VIDEO CLIP)

MALVEAUX: So does he have a point here? Can you do both at the same time, secure the border and at the same time provide those productive citizens with a path to becoming Americans legally?

BABEU: Absolutely, and the basis of all of this argument is somehow they are forgetting the difference between immigrants who came here legally and those who came here illegally, and that's what we're talking about here. We're talking possibly 1 million a year that enter Arizona. We can't sustain that, and what concerns me as a sheriff is 17 percent of these illegals have a criminal record already established in Arizona prior to their re-entry, so when you add 30,000, 40,000, 50,000 felony and misdemeanor felonies to our population, we shouldn't be scratching our head trying to wonder how our crime rates are so high compared to other parts of America.

MALVEAUX: All right.

BABEU: That's why.

MALVEAUX: We'll have to leave it there. Sheriff Babeu, thank you so much.

Ten suspects, one on the lamb. Now word one may have spilled the beans. More on the alleged Russian spy ring in the next half hour. Also, a little help from above. A blimp is helping the oil cleanup.

(COMMERCIAL BREAK)

MALVEAUX: Lisa Sylvester is monitoring some of the other top stories that are coming into THE SITUATION ROOM right now. Hey Lisa. What are you working on?

LISA SYLVESTER, CNN CORRESPONDENT: Hi there, Suzanne. In the past couple of hours house members have approved a bill extending long-term jobless benefits through the end of November. The measure also includes some retroactive assistance. It provides payments to people whose unemployment insurance lapsed at the end of May. A similar measure though is stalled in the Senate. It's unclear if the Senate intends to pass it after next week's July 4th break.

The new head of the transportation security administration is finally in place. Former FBI director John Pistole took his oath as chief today. The swearing in ceremony at New York Penn Station ended a lengthy search. Two previous nominees withdrew from consideration under allegations of impropriety. Pistole has served as the FBI's number two man since October 2004.

Weeks after Israel's deadly assault on a flotilla of aid ships to Gaza, dozens of diplomats get a tour of a key border crossing between Israel and Gaza. They with respect courted there today by Israel's deputy foreign minister who told them there is, quote, no need for any flotillas. Prime Minister Benjamin Netanyahu announced an easing of the blockade. To date, the naval blockade remains in place. Suzanne?

MALVEAUX: Thank you, Lisa.

Well, it puts candidates on the map and force others to stick up for conservative principles, but is the tea party movement self- sustaining? One powerful senator doesn't think so.

And later, the blimp and the whale. Some unorthodox assistance for the effort to scour the Gulf of Mexico clean.

(COMMERCIAL BREAK)

MALVEAUX: The sound you hear is the gauntlet hitting the floor. House minority leader threw it down in the latest war of words with the white house. President Obama has blasted Boehner for being out of touch with the American people. Well, today he fired back.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER (R), MINORITY LEADER: This week President Obama traveled to Racine, Wisconsin, a city with 14 percent unemployment and he used his time there to attack me. But I'd ask the president several questions. Why aren't you focused on stopping the oil spill in the gulf and getting the gulf cleaned up? Why aren't you focused on reforming Fannie Mae and Freddie Mac? Why aren't you focused on cutting spending now? Why isn't the president focused on creating jobs that the American people are asking for? And, Mr. President, what about the country? For someone who asked to be held to a higher standard, President Obama spends an awful lot of time making excuses and whining about others.

(END VIDEO CLIP)

MALVEAUX: Joining me for the strategy session are two CNN political contributors, Democratic strategist Donna Brazile and national radio talk show host Bill Bennett. Is it wise? Is it important for -- for him to come out and say that the president is whining? Does that help?

BILL BENNETT, NATIONAL RADIO TALK SHOW HOST: Well, it's inevitable. It's Washington. It's politics. He's minority leader of the opposition party. We are in July of an election year. There are serious disagreements. You've got to realize that the Republican Party and Barack Obama disagree on about 80 percent of the things that he has done as president, so as long as the issues are joined on things that matter, I think it's fine and perfectly appropriate.

DONNA BRAZILE, DEMOCRATIC STRATEGIST: Well, it appears that Mr. Boehner has the last jaw. Speaker Pelosi is knocked around every day and she can take it like a professional. The truth is that Mr. Baron is on tape saying that the financial regulatory reform bill was like a nuke was the problem was as small as an ant. The problem with that analogy is 8 million Americans have lost their jobs, $17 trillion in savings during the worst economic crisis, and so he's on tape talking about this, and he's also on tape saying that he would raise the retirement age to 70, so if you're going to walk the walk, get ready.

BENNETT: It's not a small problem. The point was it was misdirected and the kind of artillery that was loaded was loaded in the wrong direction, and he did make the point where are Freddie Mac and Fannie Mae in this? They are a large part of the cause of this problem.

BRAZILE: Too big to fail. The Republicans willing to go ahead and bail out more banks and to go back to the old paradigm that caused owl of the problems. I think, look, again, we have policy disagreements, but the point is the president inherited a mess. He proposed solutions to Republicans who have not come up with any ideas. They have been complaining and whining every day since President Obama took office.

MALVEAUX: Who is winning this message because obviously when I speak with white house officials, they say they believe it's a real win for the president to go after Boehner or to go after Barton or whoever is making comments, that they will hit them every single time, that they will take those remarks and use them to their advantage. Is it -- is it wise for Boehner to come back and just have this continue?

BENNETT: Again, yes, I think if it's on principle and on policy and if you can articulate the policy differences, and I think the policy differences have been articulated. Is it wise for them politically? We'll find that out in November. There is a great sense of frustration, as you know, among American people. I'll be honest enough to tell you it's with both parties. The American people are not happy with the performance of this president and that's for sure.

BRAZILE: They are not happy with the performance of Wall Street and not happy with the performance of any governmental institution.

BENNETT: Happy with the military.

BRAZILE: And thank god they are happy with the military. I'm happy with the president. I'm happy we Congress, but you know what? I hope that they get something done, including extending the unemployment benefits for over 1.2 million Americans, many of those who voice opposition to extending those benefits come from states with double-digit unemployment. Shame on them to go back home and not provide relief to those Americans.

BENNETT: John Boehner understands coming from Ohio understands the situation of joblessness. We don't believe what the president is proposed is going to solve the problem.

BRAZILE: Extending a lifeline.

BENNETT: Not the way the Democrats want to do this. You cannot do this indefinitely, cannot do this over and over.

BRAZILE: We need jobs, I agree.

BENNETT: Not the way to stimulate jobs by more government spending.

BRAZILE: We need to give these people a lifeline. One in eight Americans are on food stamps. They are not on food stamps because they want food stamps, because they can't find work, Bill.

BENNETT: It's a terrible situation when we lose 5 million jobs in the private sector, and the way the president is going we're going to lose more.

MALVEAUX: One party, the tea party obviously has been looking -- they are quite pleased. They are quite happy with the way things have been going. They have managed successfully to put some candidates on the map, stressing conservative principles, those like Rand Paul, Sharron Angle. One Republican, Senator Lindsey Graham, and we know he's pretty outspoken against the conservatives in his own state, does not believe that the tea party can sustain itself and tells the "New York Times" magazine this that the problem with the apartment, I think it's just unsustainable because they can never come up with a coherent vision for governing the country. It will die out. What do you think of that? What do you make of that prediction?

BENNETT: I'm one of these strange people that actually likes both Lindsey Graham and the tea party people. My sympathies with more with the tea party people. I will predict that the tea parties will outlast in political viability Lindsey Graham, but I hope they both survive a long time. They are not there to govern. That's not what the tea parties are there for. They are not about putting together a platform or a series of proposals. Tea parties are a way for people to voice their dissent and digs agreement, to address grievances, as Thomas Jefferson said. What they are saying is and they are conservatives, they are Republicans, many independents. They are saying we don't like the way things are going. That's what the tea party is about.

MALVEAUX: Do they need a head, need somebody to lead this.

BENNETT: They don't.

BRAZILE: I'm not a fan of the tea party movement, not because they are Republicans or because they are conservative. I'm not a fan because I just disagree fundamentally with some of the rhetoric, the angry rhetoric that they have used to rally Americans. That said, look, if the Republicans want to go back to a 19th century model of small government, less taxes, fine. We, meaning the government, inherited a mess that the Republicans created.

BENNETT: Stop that. You've got to take responsibility now. It's time to take --

BRAZILE: We will take --

BENNETT: Enough. It is time you guys stop this.

BRAZILE: Bill, Bill. Bill.

BENNETT: He's been president a long time now.

BRAZILE: Go tell that to the Republicans in Congress.

BENNETT: Oh, my goodness.

BRAZILE: To start acting like lawmakers and then we can govern as a political party.

BENNETT: It's time to stop blaming George Bush. You said we inherited this. Who did you inherit it from, Lyndon Johnson?

BRAZILE: $10.3 trillion.

BENNETT: We're not going to agree on this point.

BRAZILE: And you've tripled it.

BENNETT: We haven't tripled this.

BRAZILE: Fuzzy math.

MALVEAUX: We will bring you back. Bring you both back.

BRAZILE: Got to ice tea and not green tea.

BENNETT: That is true enough. MALVEAUX: Donna Brazile, and Bill Bennett, we have to leave it there. Independence Day is coming up Sunday, so do you feel as patriotic as you used to? Jack Cafferty is reading your e-mails.

And later, mega ships and miles of booms and heavy equipment out there to clean up the gulf, but an army of tiny hungry creatures could soon help in a very big way.

(COMMERCIAL BREAK)

MALVEAUX: Jack joins us again with the Cafferty file. Hey, Jack.

JACK CAFFERTY, CNN CORRESPONDENT: The question this hour, Suzanne, is do you feel as patriotic as you used to? A lot of the towns and cities canceling the July 4th celebrations, no money.

Zach writes, "Yes, I do, but I realize it is easy to focus on all of the negatives. We have our issues for sure, however the standard of living is higher than any nation in history. We like to focus on the negatives, because it sells more commercials and it is more dramatic, but if you take a step back, you might realize that we have it pretty good here despite the oil spills, the debt, the crooked politicians, and the 24/7 media blitz on our country. We can agree to disagree on the issues, but I don't see a run for the border happening any time soon."

Bonnie writes from New Jersey, "I'm trying hard to hold on it to, but as a struggling member of the middle-class, it is very difficult. It seems as though my country doesn't give a damn about me and my fellow middle-class citizens. I feel like I'm in a one-sided relationship."

Red in Columbus, Ohio, says, "I'm more patriotic than ever, angry and determined to do what I can to get America back on the right track. It may seem insurmountable, but you have to start somewhere with something small like the next election."

Gary in Scottsdale, Arizona, "I was born in the middle of the depression and grew up in World War II and served ten years in the military and 33 years in corporate life, and America was like a best friend, strong, reliable, and compassionate and focused. Today, that dear friend is living near poverty and many of the qualities I so admired seem to have been lost. My friend has clearly changed, but on July 4th, my friend is having a birthday party, and I plan to attend albeit with a heavy heart."

Cindy writes, "Jack, I was beginning to waiver on the patriotism until the Russian spy story broke. If the Russians still consider us worthy of spying on, then we must be doing something right."

And Meg says, "This is not a good year for fireworks, because we have lost our way, and I'm not sure that the leaders give a damn."

If you want to read more on the subject you will find it on my blog CNN.com/Caffertyfile. Suzanne? MALVEAUX: All right. Thank you, Jack.

Stand by for more on the breaking news in this hour, a confession in the Russian spy ring case.

(COMMERCIAL BREAK)

MALVEAUX: The casket of Senator Robert Byrd leaving the U.S. capitol where he served longer than anyone else in history. The body of the West Virginia Democrat now returning to his home state after a very rare tribute here at the capitol dome for Byrd who died Monday at age 92. We are joined by our senior Congressional correspondent Dana Bash, and tell us and give us a sense of what took place at the capitol.

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Well, it is very rare what happened today. It has not happened since 1959 and ironically, the first year that Senator Byrd who served for 51 years was in the Senate. He made the request to lie in repose on the Senate floor, the place that he loved and lived for and really wrote the history of, and literally wrote the history of. He did take pride, Suzanne, so much on the fact that he is a vestige of a time and era gone by and the man who held up the traditions and the importance of the Senate and the legislative branch. He liked the way that the constitution said that the legislative branch comes before the executive branch and don't you forget it.

MALVEAUX: Typically what we see when a figure of this stature there's cameras that are lying in the state of repose. Why no cameras this time?

BASH: That's right. There were no cameras at all, no video cameras. This is on the floor of the Senate. You know we watch the Senate everyday and we know there are cameras there, but this time the C-SPAN cameras were prohibited from being there. Senate officials said that it was Senator Byrd's family who said they did not want it to happen. Ironically this is illustrative of Senator Byrd and who he was, and again, of an era gone by. He when cameras were first allowed on the floor in 1976 he fought it tooth and nail. He said it would sully the institution and it would denigrate the institution and he eventually came around, but that is in keeping with what he did. There was a single still photographer that was allowed in there and we can show you a photograph of it. Here it is. This is what the Senate floor looked like today that nobody got to see. What happened was over to the right of the casket, his family was there. His daughters were there and they were greeting senators, former senators and dignitaries and so forth.

MALVEAUX: And the vice president and the secretary of state and many of his former colleagues were there as well.

BASH: They were there and it is interesting because of the strict restrictions in the Senate, and around the chamber today, there was a -- just to give you a behind the scenes moment there was an odd moment in that before the casket came in, the Senate chamber was closed off and so we were standing outside and there was a huge group of people waiting to get into the chamber including the Senate majority leader and the house speaker and the secretary of state Hillary Clinton and they could not get in because of the restrictions while the casket was moving. It was an interesting moment to see all of these people gathered in one place. We actually got a treat at the very end when the casket was on the floor, they asked the press to come in and they allowed us to go onto the floor and pay respects.

MALVEAUX: Thank you for your obviously your insights and a first-hand look. Thank you, Dana.

BASH: Thanks, Suzanne.