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THE SITUATION ROOM

Senator Levin Alleges Private Contractors Linked to Murders in Afghanistan; "Myth" of NRA Favoring Republicans; White Turning Against President, Democrats; Joe Sestak Makes His Case for Election; Attitudes About U.S.-Led War in Afghanistan Going Down

Aired October 7, 2010 - 17:00   ET

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


BROOKE BALDWIN, CNN ANCHOR: And now, THE SITUATION ROOM with Wolf Blitzer.

WOLF BLITZER, CNN ANCHOR: Brooke, thank you.

Happening now, a senator's stunning allegations linking private security contractors in Afghanistan to terrorists and murders. Just in this hour, a story that's breaking, how the Pentagon is spending your tax dollars and how that money may be used against American troops.

Also, another CNN exclusive, an interview with the controversial U.S. Senate candidate in Delaware, Republican Christine O'Donnell. You are going to want to hear what she has to tell us on the heels of her surprising declaration the other day in a commercial that she is not a witch.

And the New York mayor wants to ban the use of food stamps to buy soda. Is he helping people with low incomes or infringing to on their freedom?

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

But just in this hour, a bombshell report being released right now on the Pentagon's private security contractors in Afghanistan. It alleges that your tax dollars are being funneled to Afghan warlords and strongmen linked to murder, kidnapping and bribery.

Let's go right to our Pentagon correspondent Chris Lawrence, he's over it he Pentagon. Some startling allegations in this new report, Chris. Tell our viewers what is going on.

CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: Yes, Wolf.

You know, this report was just released literally just about one minute ago, and do you want an example of what a lack of oversight can cost? One example in the report, back in February, some security guards start firing on American troops, the troops start screaming, "We're Marines. We're Marines" but they keep firing.

The guards shot and killed a U.S. Marine. And when the Marine Corps detained those guard, not only did they find that the guards were high on opium, they hadn't even been trained how to fire their rifles.

(BEGIN VIDEOTAPE)

(voice-over): Security contracting in Afghanistan comes off as some sort of gangster movie in this scathing Senate report. One example, Armor Group hired a series of warlords to guard an air base and gave them code names to hide their identity.

SEN. CARL LEVIN (D-MI), CHAIRMAN, ARMED SERVICES COMMITTEE: This is the company's naming of these warlords -- Mr. Pink, Mr. White, Mr. White II.

LAWRENCE: Sound familiar? Senator Carl Levin says they took it right off Quentin Tarantino's "Reservoir Dogs."

(BEGIN VIDEO CLIP, "RESERVOIR DOGS")

LAWRENCE TIERNEY, ACTOR (portraying Joe Cabot): Here are your names -- Mr. Brown, Mr. White, Mr. Blond, Mr. Blue, Mr. Orange, Mr. Pink.

STEVE BUSCEMI, ACTOR (portraying Mr. Pink): Why am I Mr. Pink?

(END VIDEO CLIP)

LEVIN: Those warlords were variously, variously implicated in murder and bribery. As a matter of fact, Mr. Pink killed Mr. White I.

LAWRENCE: The Pentagon contracts with security companies which then pay Afghans to guard base or supply convoys. What did this group buy with American taxpayer dollars?

LEVIN: They were found to possess landmines and large amounts of ammunition and were determined by the U.S. military to be in league with the Taliban.

LAWRENCE: In fact, the report says Mr. White number two was holding a Taliban meeting in his home when U.S. and Afghan troops raided it.

The Armed Services Committee investigated 125 contracts like this and found the Pentagon didn't have the manpower to oversee its own contracts. The Pentagon says it has now hired 300 percent more personnel to audit contracts in the field, and General David Petraeus has made U.S. commands in Afghanistan responsible for overseeing contracts in their battlefield.

Defense Secretary Robert Gates wrote to Senator Levin, "Through the new programs we have implemented, I believe DOD has taken significant steps to benefit our forces on the ground, while not providing aid to our enemies."

Analyst Carl Forsberg was invited to Afghanistan when General Petraeus took over. He has testified on Capitol Hill about contracting issues and says reform is no quick fix. CARL FORSBERG, INSTITUTE FOR THE STUDY OF WAR: A lot of these (INAUDIBLE) militia commanders will try to retaliate if we cut off contracts and we have to be willing to accepts that there is going to be some short-term difficulty, but the long-term gain will be tremendous if we can actually do this.

(END VIDEOTAPE)

LAWRENCE: OK, we mentioned Armor Group, also gave them a call, they haven't got back us to yet, but they are just one of the security firms that's mentioned in this report and they are not one of the eight security firms that President Hamid Karzai banned outright from Afghanistan, although he has issued a decree to get all 44 private security firms out of the country by the beginning of the year.

Despite all the problems we just told you about and that this report details, that would be a huge blow to operations there because almost anybody here in the Pentagon will tell you, they are intrinsic. They are very, very valuable to the operations going on there.

BLITZER: Part of the trend over at the Department of Defense in recent years, to use private contractors for all sorts of jobs that used to be done by the United States' military.

Chris, thank you.

LAWRENCE: Exactly.

BLITZER: Thanks very much for that report. We will stay on top of this.

Now let's get to one of the most talked about candidates in the midterm election campaign, she is now speaking to CNN directly. We are talking about Republican Senate nominee in Delaware, Christine O'Donnell. She has been surrounded by controversy, including the recent dust-up over her past remark she dabbled in witchcraft when she was young.

O'Donnell had said she was swear swearing off national TV interviews, but just a little while ago she he spoke with CNN's Jim Acosta in Delaware. Here is a little taste of this new and exclusive interview.

(BEGIN VIDEO CLIP)

JIM ACOSTA, CNN CORRESPONDENT: Let me ask you one more thing about these video clips that have surfaced. Have you been embarrassed by those clips?

CHRISTINE O'DONNELL (R), DELAWARE SENATE CANDIDATE: No, I haven't been embarrassed, and I'm not saying that I'm proud. It's, you know, obviously what they are trying to do is paint a picture of who I was 20 years ago. I have matured in my faith, I have matured in my policies.

Today, you have a 40-something woman running for office, not a 20-year-old. So that's a big difference and I think most people --

ACOSTA: Were you just having fun back then? Is that basically your message?

O'DONNELL: Well I think back then, as I said on Hannity's show, a lot of what I said, I had a new found faith and I saw this an opportunity to talk about the faith on national TV, more as a ministry opportunity. But voters need to rest assured that when I go to Washington, D.C., it is the Constitution by which I will make all of my decisions and I will defend their right to disagree with me.

(END VIDEO CLIP)

BLITZER: Standby for the full interview. She spoke at length with the Jim Acosta in Delaware. We are going to air the interview for you later right here in THE SITUATION ROOM. She speaks out on a whole bunch of issues.

And don't forget, I will be asking Christine O'Donnell some questions as well. Next Wednesday, I'm one of the moderators over at the Delaware Senate debate. She'll be debating Chris Coons, the democratic candidate. You can see it live here on CNN, that's next Wednesday here on CNN.

Right now, the nation's most powerful gun rights group may be influencing the outcome of the battle for Congress and not in the way you might think. Brian Todd is here, he's working the story for us.

We tend to associate the National Rifle Association basically with Republicans, but not necessarily all the time.

BRIAN TODD, CNN CORRESPONDENT: Right, Wolf, not this year at least. Several House seats, House Democrats who are running for those seats are being backed by the NRA this year. Some believe this is a high watermark for the NRA in that regard. It flies in the face of everything we have come to associate with the gun rights group.

(BEGIN VIDEOTAPE)

CHARLTON HESTON, FORMER PRESIDENT OF THE NRA: From my cold, dead hands.

TODD: The iconic image of the NRA, Hollywood maverick, the late Charlton Heston, brandishes a musket, a legendary portrait of the gun lobby's tight relationship with conservatives. But huh? Harry Reid?

SEN. HARRY REID (D-NV), MAJORITY LEADER: Pull.

TODD: The democratic Senate majority leader, shown here in a campaign video, has been endorsed by the NRA in the past. Not this year. He backed the Supreme Court nominations of Justices Sotomayor and Kagan, who the NRA believes don't support gun rights.

But the group is backing 64 House Democrats this election cycle, most of them incumbents, including several who are running for seats viewed as crucial for winning the majority in the midterms. TOM DAVIS (R), FORMER U.S. CONGRESSMAN: They are an interest group like any other interest group and they want to advance their interests.

TODD: Former GOP Congressman Tom Davis was once chairman of the National Republican Congressional Committee, the party's arm that pushes House campaigns.

(on camera): Why is it in the NRA's interest to push incumbent Democrats this year?

DAVIS: Well incumbent Democrats have stood with the NRA on a lot of very votes and you have to reward people that are voting for you or they are not going to vote for you in the future.

TODD (voice-over): It was a group of House Democrats who got the Obama administration to back away from reinstituting a ban on assault weapons.

(on camera): Despite their traditional link badge with the Republican Party, officials here at the NRA insist to us they are not a partisan organization. One official said, if you're a candidate and you're sincere about fighting for the Second Amendment, the right to bear arms, you will get the NRA's support. But he also said flat out, if you don't, we will go after you.

(voice-over): And if two opponents have earned the same rating, the NRA favors the incumbent, even if is a Democrat.

(on camera): If you are a Democrat, does the NRA's backing inoculate you from some criticism?

MARK PRESTON, CNN SENIOR POLITICAL EDITOR: Look, Republicans are going to go out and try to label all of these Democrats "Nancy Pelosi's Democrats." If you have the NRA's backing, you can say, I'm not a Nancy Pelosi Democrat, I'm a Democrat that represents you.

(END VIDEOTAPE)

TODD: The NRA brings considerable financial backing when it endorses. An NRA official told me they will spend 15 to $20 million this election cycle.

But Tom Davis stays is not the money the NRA brings that is so crucial, it is the fact that they have people in virtually every district in the country who can pound the beat in favor or against any candidate, Wolf, it is there with where they make the difference.

BLITZER: But the NRA supports a lot more Republicans that than tough Democrats.

TODD: Right. You've got to keep it in perspective, they're supporting a lot more Republicans for House seats than Democrats, a lot more Republicans for seats than Democrats.

But of course, this year, every race in the House is crucial. Those 64 Democrats they are supporting could make a huge difference.

The real irony is the NRA supports them, if they win, they could help Nancy Pelosi retain her job. The NRA could have had a hand in helping Nancy Pelosi retain her job as House speaker. Nancy Pelosi and the NRA, sworn enemies politically. I mean, it's real irony there.

BLITZER: One of the weird things about this political season.

Thank you very much, Brian Todd.

He toppled a Senate veteran in Pennsylvania and he bucked the Democratic Party establishment. I will ask Congressman and Senate candidate Joe Sestak why the president and his formal rival are embracing him and whether he thinks that is a plus.

And too many Medevac helicopters that are supposed to save lives have been costing lives. We are going to tell you what is being done to try to make them safer.

(COMMERCIAL BREAK)

BLITZER: Twenty-six days until the midterm elections and President Obama's approval rating is on Jack Cafferty's mind. Jack is here, he has "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: President Obama continues to have problems when it comes to the subject of race. White Independent voters helped to make Mr. Obama the first African-American president in our history, but now, a lot of them apparently don't like him so much anymore.

A CNN poll taken shortly after President Obama was inaugurated, April of 2009, showed a 61 percent approval rating among whites. That same poll now shows the president with a measly 34 percent rating among whites. Meanwhile, more than 90 percent of blacks approve of the job the president's doing.

There are more since of trouble when it comes to support from white voters, not just for the president but for Democrats in general. Another new poll shows working-class whites are flocking to the Republican Party, which will make it even tougher for the Democrats to keep control of the Congress. The "Associated Press"/GFK poll shows whites without college degrees prefer the Republican candidates by 22 points, that's double the margin of the last two elections. Compare that to whites with college degrees, they are evenly split about between the two parties, and minorities who heavily backed the Democrats.

But working class white are a key voting bloc, they make up about four in ten voters nationally and the Democrats cannot afford to lose any more of them. A lot of these voters were never too fond of Barack Obama to begin. Remember Mr. Obama's comments about bitter, small town voters who cling to their guns and religion?

The silver lining for Democrats in all of this is that almost 30 percent of working-class whites in this poll say they may still switch candidates. But if they don't, the Democrats could see a tsunami.

Here is the question -- Why have so many whites turned against President Obama and the Democrats? Go to CNN.com/CaffertyFile, post a comment on my blog.

BLITZER: Jack, thanks very much.

Standing by right now, a Democrat who helped prove that incumbents are on very shaky ground this election year. We're talking about the U.S. Senate candidate in Pennsylvania, Congressman Joe Sestak.

Here are some things you should know about our guest. He is a former -- retired, I should say, three-star vice admiral in the Navy and the highest ranking former military officer serving in Congress right now.

Sestak broke ranks with party leaders to challenge and defeat a veteran incumbent in the primary, the republican-turned-democratic Senator Arlen Specter. Sestak claimed publicly that the Obama White House had offered him a job to drop his challenge to Specter. The White House eventually acknowledged offering him an unpaid advisory position through Bill Clinton.

Right now, Sestak is trailing his Republican opponent, Pat Toomey, in the polls. Recent surveys put him anywhere from three to nine points behind Toomey. So the president and the establishment Democrats are right now circling the wagons around Sestak.

Let's go to Congressman Joe Sestak, he's joining us from Philadelphia. Congressman, thanks very much for coming in.

REP. JOE SESTAK (D), PENNSYLVANIA SENATE CANDIDATE: It's good to be back, Wolf.

BLITZER: Why are you behind in a state which is normally, should be pretty democratic at this point?

SESTAK: You know, Wolf, I have never been this close this far out. I was 20 points behind Senator Specter at this point and I was 23 points behind Congressman Weldon.

Now, we are in a dead heat, we know that, and this race is going to be different. Pennsylvanians are pretty cautious people, because we have all right wolf at our door. And you can see they are beginning to discriminate right now, as next door in Delaware, we have got Ms. O'Donnell all of a sudden there.

Now, Wolf, this race is going to come down to who do want on your side? Someone who actually believe we should take Social Security, as Congressman Toomey does, and plunk it into Wall Street where he came from to gamble? Or someone who stood up and bucked his own party and said I will always be on your side, even at the risk of my job?

I will fight for them, and that is the choice we have. So I feel very, very comfortable. BLITZER: Even though our little bit behind in these polls, the margin of error may show, you that still have -- what? -- three and a half weeks to go.

Arlen Specter, who was your opponent, he is the incumbent senator, he's going to be at an event with you, at a fundraising event, I take it the coming days. Do you feel that he is really trying to help you or is this just for show?

SESTAK: It is a very nice gesture and he has been gracious.

Look, when he called me the night of the primary, I mean, here I am a wet-behind-the-ear guy in politics, and he called me and said, look, Joe, congratulations, I'm going to support you. And frankly, he is coming to this event to do so.

Look, I want to work with everyone. I grew up in the military and we don't breed liberals or conservatives but problem solvers. And heaven forbid a Congress down there that Washington, D.C. just doesn't tend to work together. So I think that, as well as Senator Hagel, who is a Republican, as well as Mayor Bloomberg, who is an Independent coming in, kind of says, hey, let's have someone who is going to resolve our problems.

That is why you are going to see this election go the way, you know, god willing, that I am the senator for Pennsylvania.

BLITZER: Do you want President Obama to come in and campaign for you?

SESTAK: He is actually coming in this Sunday. And look, yes, I stood up and I will always remember what John F. Kennedy said once, sometimes the party asks too much. I'm not a yes man, but I do want to work with everyone and yes, I like it when people come in.

But at the end of the day, Wolf, in Pennsylvania, I mean, we are -- we're all sons and daughters of coal miners and steelworkers. We've all had the wolf at our door. For me, it was when my daughter's -- when she had, as you know, brain cancer and I was fortunate.

We are going to make a cautious decision here that will be the right decision in the end, and they will make it on me versus Congressman Toomey, someone who sides with, as he wants to, eliminate all corporation taxes or someone who is fighting for them.

So no, it's not going to be about outsiders coming in, it is going to be about a choice Pennsylvanians make.

BLITZER: Here is an ad, a little clip from an ad that former Congressman Toomey is putting -- is using in Pennsylvania right now saying you are basically 100 percent behind everything that President Obama and the Democratic leadership in Washington stand for.

I will play this little clip.

(BEGIN VIDEO CLIP) ADVERTISEMENT ANNOUNCER: It's sad what's happened to Joe Sestak.

He served our country well, then he went to Washington where he's voted in lockstep with the extreme agenda of bailouts, debt, government health care and job-killing energy taxes. He took an ethics pledge, then broke it.

Say it ain't so, Joe.

(END VIDEO CLIP)

BLITZER: All right. Where do you disagree with President Obama?

SESTAK: Well, I disagreed with President Obama on a number of areas.

For example, I really do believe that what we should have done is had small business tax cuts and guaranteed community bank loans in the recovery bill. I argued vociferously for that now, and I would have had that within there because it is the private market, since small businesses lost the majority of all the unemployed, that would regain you and get you going again. It's --

BLITZER: He is supporting small business tax cuts now.

SESTAK: Yes, now. But remember, I also, as I put out in my first -- his first year, is I would have had a cap on discretionary spending of all the discretionary spending. I would not have the had any -- have any caveats, as we did for the pay-as-you-go requirement or mandatory spending.

Look, the issue is here, not just the policies but how you shape those policies. And that -- so therefore, in my first two years in Congress, I actually was -- passed more pieces of legislation than any other freshman member by working across the aisle on elder abuse, on the first funding for autism in 12 years.

The issue is my vote is in the middle of the Democratic Party.

BLITZER: OK, let me just be precise though, on these points in this Toomey ad, did you vote for the bailouts, the government health care, the Obama-proposed health care around the job-killing, as they call it, energy taxes, the cap and trade? Did you vote for those three pieces of legislation?

SESTAK: Oh, yes. And you know as well as I do, Wolf -- well, actually you don't -- but I, when I went to Congress, arrived the year of the recession. It reminded me my first job of warship on the Vietnam War era. I was damage control officer, I had to go and help control the damage. And we've been torpedoed by policies, by policies that Congressman Toomey and President Bush had actually implemented where they threw out window of pay as you go, to where Congressman Toomey shaped legislation that let Wall Streeters actually gamble their savings.

So, those were tough decisions, Wolf. I took them because they had to be done. But I have now voted to reput into place pay as you go. I think it should have been more stringent, as I said.

So I always take a vote as an Independent who happens to be a Democrat. But boy, you know as well as I do, we are losing 700,000 jobs a month when that first month of January happened, Mr. Obama came in. The previous six months, our GDP had gone minus 6 percent with 3 million jobs lost. I would take those votes because --

(CROSSTALK)

BLITZER: So you're proud of (INAUDIBLE) --

SESTAK: -- they were necessary.

Look, they -- it's what a public servant does. Regardless of their job, he does what's necessary. And as you know, Mark Zandi and other economists, John McCain's economic adviser said, we would have had 8 million more unemployed. But Congressman Toomey says we would have had a harder down if we had done nothing. What is a harder done than what we had?

And so, yes, leadership means actually doing what's necessary for the middle class, not Wall Street.

BLITZER: Congressman, thanks very much for coming in.

SESTAK: Wolf, it has been a pleasure again.

BLITZER: Joe Sestak is the democratic nominee for the United States Senate from Pennsylvania.

We have invited Congressman Sestak's opponent, Republican Pat Toomey to join us. We hope to see him here in THE SITUATION ROOM. He has an invitation. So far, he said, but we hope he will join us.

We are monitoring other top stories, including a police search now underway for the man behind a major security scare at a Philadelphia airport.

Plus, imagine this, a woman applies for a marriage license, then learns she was apparently kidnapped more than 25 years ago. What is going on? We will have the story.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP, OCTOBER 7, 2001)

GEORGE W. BUSH, FORMER PRESIDENT OF THE UNITED STATES: On my orders, the United States military has begun strikes against al Qaeda terrorist training camps and military installations of the Taliban regime in Afghanistan.

(END VIDEO CLIP)

BLITZER: That was exactly nine years ago today, President Bush announcing the start of the U.S.-led war in Afghanistan. Demonstrations were held today to mark the day, including a protest against redeploying wounded U.S. troops to the warzones.

As the Afghan conflict begins its tenth year, now under President Obama's command, can U.S. allies in the region be trusted? What's going on with the war? Let's assess with our senior political analyst, David Gergen, he is here.

Public opinion, attitudes toward the U.S.-led war in Afghanistan going down. Back in March, we asked how ire things going for the U.S. in Afghanistan, 55 percent said well. Now, only 44 percent say they are going well. I suspect that number is continuing to go down as more of these reports come in about Hamid Karzai.

What is going on, David?

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: Well, Wolf, you know, we are heading into the tenth year, 1,300 Americans have lost their lives, soldiers, but this has been the deadliest year of all, we have already lost 400. And, Wolf, even though we have got the best commander, the best general in the United States military there on the ground in General David Petraeus, it does look increasingly likely that this is going to have a messy end.

It is not -- you know, General Petraeus finding, I think, it is harder than it looks. He is -- he's made progress, the U.S. military made a lot of progress, made a lot of contributions. He's now going into Kandahar, but the Taliban is just simply not fading away. It remains an important part of what's going on in Afghanistan. There are not only the public opinion here but a lot of top-flight former secretary of states in the U.S. are saying maybe we are on the wrong track.

And now, we've got these talks under way in Kabul between the Karzai government and some elements of the Taliban. They are peace talks, but there are indications that if we want -- if Karzai is going to cut a deal, it may be that we would have to give up some things that we in the United States, NATO have demanded, like having a chance to stay in there.

So this war could have a messy end that could be -- the end of it could be as unpopular as the war itself.

BLITZER: And now we're hearing that some elements, some elements in the Pakistani intelligence service, what is called the ISI, may, may actually be supporting the Taliban, maybe encouraging the Taliban to go after U.S. and NATO forces, even though we are hearing from U.S. officials the top leadership in Pakistan, the government there, the military and the intelligence leadership per se, not necessarily part of that group.

GERGEN: Well, this is another complication in the story and why it makes it less likely we will have any kind of clear-cut result that we will be happy with.

We have -- Pakistan, as you know, is central, it's critical to stability in this region. We have poured billions of dollars into Pakistan and yet it is quite clear that there are elements in Pakistan that are not friendly to us and do not share our goals in Afghanistan and perhaps even in Pakistan. It may not be that the top leadership of the spy agency, ISI, may not be supporting the Taliban and you recalling them to five. As "The Wall Street Journal" reported on in the lead story today, a sobering piece there are people within the spy agency in Pakistan who are telling the Taliban, this is -- this is -- we have given these people in Pakistan billions of dollars, their -- many of the people in their spy agency are telling the Taliban keep fighting the United States in Afghanistan, pour it on. And just in our relationship from Pakistan are now becoming quite strained, we have this incident, very unfortunate incident, which we have apologized when our helicopters hit some of their army people, but over 100 different trucks with fuel for American troops have been blown up in Pakistan in recent days.

BLITZER: David, it's a very worrisome situation, as I say.

GERGEN: Very worrisome. Start year ten now of this operation much the stakes are certainly enormous for so many Americans much appreciate it very much.

BLITZER: Thank you.

Mary Snow is monitoring other top stories THE SITUATION ROOM lie rite now including a major security incident over at the Philadelphia International Airport. Mary what is going on?

MARY SNOW, CNN CORRESPONDENT: Police are searching for the man behind the grounding of a Bermuda-bound U.S. Airways flight. He was seen loading the plane but when approached by two of the baggage handlers, failed to identify himself. Bags on the plane were rescreened by bomb-sniffing dogs but tested negatives for explosives. Authorities say they don't believe the incident is terror related.

A sizable number of supeonas have been issued in the investigation of former Democratic presidential candidate John Edwards. A federal grand jury is examining payments the former senator's 2008 presidential campaign allegedly made to his mistress, Rielle Hunter, who worked as videographer for his campaign. Edwards' attorney says his client is innocent. Ed and his wife, Elizabeth are now legally separated.

And a woman suspected of abducting her own daughter over 25 years ago is in custody in Nevada. Authorities were tipped off when Nancy Fielder's adult daughter, Eva, applied for a marriage license. An old missing child report turned up in a background check. Now, police say that Nancy Fielder fled New Jersey with her then 6-year-old daughter during a 1984 custody battle. Eva Fielder apparently had no idea about that until the police went to arrest her mom. Wolf?

BLITZER: What a story that is. All right, thanks, Mary, thanks very much.

The House speaker, Nancy Pelosi, thought he be a great running mate for Barack Obama. Now, Chet Edwards is running away from Nancy Pelosi. We are going to tell you why.

(COMMERCIAL BREAK)

BLITZER: The federal government is cracking down on helicopter safety in the aftermath of a number of recent fatal accidents. Let's go to our homeland security correspondent, Jeanne Meserve. She has the details. Jeanne?

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Wolf, too many life-saving medevac helicopters have been costing lives because of crashes. Today, proposals intended to make them safer.

(BEGIN VIDEOTAPE)

MESERVE: The irony is never lost, helicopters designed to save lives instead crashing and taking lives. Four died in this 2008 crash of a medevac helicopter just outside Washington, one of 139 air ambulance crashes in the past ten years that have killed 130 people.

UNIDENTIFIED MALE: These people are out there doing a humanitarian service and they end up losing their lives in the process.

MESERVE: To improve safety, the Federal Aviation Administration is now proposing new rules for medevac chopper, requiring ground warning systems, stricter flight time and crew rest rules, dispatch centers to monitor weather and track flights and programs to analyze flight risk.

GARY C. ROBB, AUTHOR, "HELICOPTER CRASH LITIGATION": No question about it, there will be fewer helicopter accidents as a result of what the FAA did this morning.

MESERVE: Many of the choppers have crashed at night and Gary Robb says there is one additional safety measure the FAA should require, night vision goggles.

ROBB: That is the most significant omission and is that the number one thing that would have had the most dramatic effect in decreasing helicopter crashes in this country.

(END VIDEOTAPE)

MESERVE: The organization representing medevac helicopter operators issued a statement saying it had not had time to carefully review the FAA proposal and would withhold comment. The FAA estimates the new rules would cost the industry $136 million over ten years but there is no telling how many lives could be saved. Wolf?

BLITZER: All right Jeanne. Thanks very much, Jeanne Meserve with that.

A Congressman in Texas is trying to save himself by turning against the House speaker, Nancy Pelosi. He's a Democrat. And we will have CNN's exclusive interview with the Republican Senate candidate, Christine O'Donnell. Our reporter in Delaware, Jim Acosta, asked her about Sarah Palin.

(BEGIN VIDEO CLIP)

JIM ACOSTA, CNN CORRESPONDENT: Is Sarah Palin qualified to be president?

CHRISTINE O'DONNELL: Is she running for president?

ACOSTA: I don't know, you tell me.

O'DONNELL: Well, again, hypotheticals.

ACOSTA: I have heard you talk on the phone with her much does she advise your campaign?

O'DONNELL: She does not advise our campaign.

ACOSTA: Does she give you advice?

O'DONNELL: She gives me you go girl, advice, don't listen to them.

ACOSTA: Tell to you speak through Fox News?

O'DONNELL: I heard that -- she didn't tell me personally.

(COMMERCIAL BREAK)

BLITZER: In Texas, House speaker Nancy Pelosi's choice for to be President Obama's 2008 running mate is now fighting for his political life and doesn't seem to be turning to either of them for help. CNN's Ed Lavandera has the details.

ED LAVANDERA, CNN CORRESPONDENT: Wolf, you remember this town well, Crawford, Texas, home to the western White House. George W. Bush keeps his ranch just down the road. This area is deeply conservative, deeply Republican but it has been represented by a Democrat for the last 20 years in Congress, but this year, that spells trouble.

(BEGIN VIDEOTAPE)

LAVANDERA: In nearby Clifton the smoked brisket attracts people from all over central Texas to the Bunkhouse Barbecue joint. Many here feel their long time Congressman Chet Edwards is just too cozy with Washington Democrats. Burl Hammonds support Edwards in the past but not this time.

BURL HAMMONS, FORMER EDWARDS SUPPORTER: He's done his good stuff, he is moving into the area.

UNIDENTIFIED MALE: How are you doing, Robert? It is good to see you. Thank you.

LAVANDERA: Chet Edwards has defied the political odds, a Democrat re-elected since 1990 in one of the most Republican districts in the country, with heavy support from military veterans but in this year's campaign commercials, Edwards sounds more like a Republican. UNIDENTIFIED MALE: When President Obama and Nancy Pelosi pressured Chet Edwards, Chet stood up to them.

LAVANDERA: Two years ago, Edward was on the short list to be Obama's vice presidential nominee. Now had his Republican opponent, Bill Flores, a former oil executive, never shies away from linking Edwards to Obama and Nancy Pelosi.

UNIDENTIFIED MALE: I think Chet Edwards and President Obama are wrong.

LAVANDERA: If I'm one of those disgruntled voters out there, how do you win me over?

REP. CHET EDWARDS (D), TEXAS: Well, I think my message is what it's always been that I have always put our district first and whether it is fighting for our jobs, quality education, fighting for our veterans, championing the cause of our veterans and our military troops, those shall use shouldn't be partisan.

UNIDENTIFIED FEMALE: You there go.

LAVANDERA: That argument isn't enough to win over most of the lunchtime crowd at the Bunkhouse, even if they don't know much about Chet Edwards' opponent.

A lot of people don't know much about Flores.

KIM WATKINS, FORMER EDWARDS SUPPORTER: I don't. And I'm one of them.

LAVANDERA: You are fine with that?

WATKINS: Chet has been around for so long. Maybe it is a good time for change. I don't know.

UNIDENTIFIED FEMALE: Chet Edwards for Congress.

UNIDENTIFIED MALE: Chet Edwards for Congress.

LAVANDERA: If you win this year, would this be your most impressive yet?

EDWARDS: They have written my obituary so many elections over the years that I'm not sure which would be the favorite.

We are still the underdog.

LAVANDERA: The question is whether this Democrat can defy the political odds one more time.

(END VIDEOTAPE)

BLITZER: And Ed, what are the campaigns themselves actually saying about how close this race is? LAVANDERA: Well, just gotten some poll numbers that the Chet Edwards campaign released to us, they had done a similar poll back in September, and it showed he was 10 points down and according to their own polling that he has cult that lead to 4 points. However, the Bill Flores' campaign, the Republican in this race, put out a poll toward the end of September that had him up by almost 20 points what ever you believe there is up in the air. Regardless this is a very difficult fight and everyone, even Chet Edwards' campaign realizes that he has a tough road ahead this next month.

BLITZER: It's a sign of the times for this political season. Ed Lavandera in Dallas for us, thank you.

It's the job that propelled him to the presidency but can President Obama keep his former Senate seat in Democratic hands?

Plus, the White House defends itself against allegation it is tried to down play just how bad that BP to oil spill really was. We will have the latest.

(COMMERCIAL BREAK)

BLITZER: All right. This just coming into THE SITUATION ROOM, the House Ethics Committee has just set a date for the ethics trials for the two powerful members of the House. We are talking about New York Democrat Charlie Rangel. He will tried on ethics charges November 15th. California Democrat, Maxine Waters, she will be tried -- her trial held on November 29th. The panel clearly rejecting calls by some Republicans to hold those trials before the November 2nd elections. The two trials happening later in November.

It says a lot about this midterm election campaign that President Obama is heading become to his home state to try to save his old Senate seat. Stand by for our strategy session.

Also coming up, our exclusive CNN interview with Senate candidate in Delaware, Christine O'Donnell. The Delaware Republican trying to explain her controversial "I am not a witch" ad.

(COMMERCIAL BREAK)

BLITZER: All right. Let's get right to the strategy session and joining us are our CNN political contributor, Democratic strategist Donna Brazile, and the former House Republican speaker, Dennis Hastert. He's now a senior adviser at the law firm here in Washington Dickstein and Shapiro. Guys thanks very much for coming in. Mr. Speaker, welcome back to THE SITUATION ROOM.

J. DENNIS HASTERT, FORMER SPEAKER OF THE U.S. HOUSE OF REPRESENTATIVES: Good to be here.

BLITZER: For 6 years, when President Bush, first six years of his administration he had Republican majorities in the House and the Senate. You were the speaker of the House. You tried to cut spending but the national debt doubled during the eight years of the Bush administration. Why should Americans right now believe the Republicans when they say they will cut spending and balance the budget?

HASTERT: Well for the first couple of years, when I was speaker, we paid down $550 billion of the public debt, never happened before and it has not happened since.

BLITZER: That's was during the Clinton administration.

HASTERT: Well and the Bush administration. Then 9/11 happened and we promised the America people we would never let that type of attack happen in this country again and we didn't. So basically our spending was national security spending and greater homeland security spending, and we had a war on two fronts and veterans to take care of and everything else was flat line and we stayed within the president's budget every year that I was speaker. I think that is the discipline that the Republicans are talking about now. We can start to cut spending and the toughest legislation I ever had was to cut into nontraditional spending. And so, but, you can do it, and it is a tough thing to do.

BLITZER: Well, it is certainly not easy, but you accept the explanation of what was happening when the Republicans controlled both branches of government, the executive and the legislative?

DONNA BRAZILE, DEMOCRATIC STRATEGIST: Well, one thing I've always enjoyed about the speaker is that he has the ability to tell the truth and he is absolutely right. Under Clinton and Gore, we had the healthiest economy ever, and under Bush/Cheney administration, we saw the national debt double and one item that the speaker forgot was the Medicare prescription program in 2003 that was not paid for that also contributed to the debt.

BLITZER: And the Democratic support, too.

BRAZILE: But he was the speaker and he held the gavel. There you go, and the earmarks double and of course there were many other items, but we are on a course now where the country is finally beginning to grow some jobs. The economy is coming back. It is feeble, but it is still coming back, and I think that the American people have a choice of election, to go back with the Republican policies or go forward the Democratic plans.

BLITZER: And we will see with the numbers tomorrow with the jobless number tomorrow.

BRAZILE: I hope it is good.

BLITZER: And what does it say to you as somebody from Illinois that the president has to go back to help the Democratic candidate get elected in his home state of Illinois?

HASTERT: Well, first of all the president and Giannoulias are very good friends and they've been very close and I don't see that that's wrong or atypical.

BLITZER: Well, there's nothing wrong with it but he could be helping others. HASTERT: Well, it is a close race and one of the problems in Illinois is that 1 of 5 families are unemployed or underemployed and basically the state of Illinois under Democratic control is basically bankrupt. I think that the American people and the people of Illinois don't want to see the same people bankrupting the country at the same time. So, that is a tough race. I think that is up for heads.

BLITZER: If Giannoulias loses to Kirk, that would create a different world for the Democrats?

BRAZILE: Well, the latest Tribune poll has Alexi up a few percentage points, but it is a tight race and the president can make a difference of encouraging the enthusiasm gap, and bringing out the independents. And also, remember voters in the state of Illinois that Mr. Kirk in 2008 voted against unemployment extension so it's a problem with unemployment. President Obama is there to rally the base.

BLITZER: And speaking of Illinois, Chicago, your kind of town, I think you like it. Is Rahm Emanuel the next mayor of Chicago?

HASTERT: I think he has a very good chance. I think that he has to prove whether he is actually a resident of Chicago or not, and that is a hurdle, but there are some good candidates out there, and Tom Dart is a candidate, and Houlihan is a candidate, and we will have to see how it plays.

BLITZER: It is not a slam dunk for Rahm Emanuel, is it?

BRAZILE: No it's not and Reverend James Meek is a candidate and there are so many others, so this is an interesting race to watch. I want to let you know, Wolf, the speaker looks really good.

BLITZER: He looks great. He looks fabulous. How many pounds did you lose?

HASTERT: About 90.

BLITZER: Wow. Just by diet and exercise?

HASTERT: Yes.

BLITZER: You're going to come back and we're going to talk about your diet and weight.

BRAZILE: He is a wrestler.

BLITZER: Believe me, I know that. Thanks for coming in.

HASTERT: My pleasure. Good to be here.

BLITZER: Jack Cafferty is next.

Then, tea party icon GOP Senate candidate Christine O'Donnell is speaking exclusively with CNN and why she is telling voters, "I am you." (COMMERCIAL BREAK)

BLITZER: Jack Cafferty is back with "The Cafferty File" -- Jack?

CAFFERTY: As the midterm elections inch ever closer, the question this hour is: Why have so many whites turned against President Obama and the Democrats?

Jack writes from Florida: "A better question is why haven't blacks turned against him? Why do more than 90 percent of them still support a president who has been a miserable failure in every sense of the world? There is racism at work here but it is not coming from just white people."

Mark writes: "Jack, I am surprised at you. If this is not a racist question, then I've never seen one. I know a lot of people of color who are just as disgusted with Obama and his policies as whites."

Gary in Arizona writes: "Obama creates too many questions without straight forward answers. His smooth talk about change during the campaign has not materialized and in fact, he is now perceived as talking down to American's white working class; small town folks sticking to their guns and religion being a case in point. His big government, big spending and incredible national debt have caused second thoughts among the white middle class who work hard and pay their bills. There's a genuine disconnect here."

Tom in Florida says: "I won't support Obama again and I don't regret my vote for him. I think we need a box for "none of the above." When "none of the above" receives the most votes all of the candidates are rejected and cannot run again and a new primary is held to vet new candidates."

John from Vermont says: "It is the economy and the unremarkable health care bill which will penalize most people."

Ron in Georgia says: "I have been a Democrat for almost 40 years and I voted for Obama but I hesitate to vote for him again. It's not about color. I would care if he was as Irish as the Blarney Stone. It's about two things: competence and courage."

And Rafael writes: I've been saying for months that the opposition to Obama is racial. The Ku Klux Klan never went away. It just went inside and waited for the Tea Party."

If you want to read more, you'll find it on my blog.

BLITZER: Jack, thanks very much

You're in THE SITUATION ROOM.