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Raids at Ahmed Chalabi's Home; Capitol Visit: Presidential Priorities; 'Hot Topics' With Bernie Ward, Armstrong Williams

Aired May 20, 2004 - 12:00   ET

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

(BEGIN VIDEO CLIP)
AHMED CHALABI, IRAQI GOVERNING COUNCIL: My message to the CPA is let my people go. Let my people be free. We are grateful to President Bush for liberating Iraq, but it is time for the Iraqi people to run their affairs. The government...

(END VIDEO CLIP)

WOLF BLITZER, CNN ANCHOR: In Iraq, things have apparently come to a head between the United States and the Iraqi leader who calls himself America's best friend there. Today, U.S. forces were part of a raid against the headquarters of Ahmed Chalabi, whose leadership role in the new Iraq is largely due to U.S. backing, including millions of U.S. dollars. It's been a controversial friendship for years, that appears to finally have soured.

Let's begin in Baghdad. CNN's Harris Whitbeck standing by with details -- Harris.

HARRIS WHITBECK, CNN CORRESPONDENT: Hello, Wolf. That raid occurred this morning. There were U.S. soldiers involved. It was also -- it was led, however, by members of the Iraqi national police. They raided the headquarters of the Iraqi National Congress, which is Ahmed Chalabi's political organization.

Shortly after that raid in which several documents and computers were taken from the INC headquarters and outraged Chalabi, who, as you said, describes himself as a longtime U.S. ally, said he was severing his relationship with the U.S.-led Coalition Provisional Authority.

(BEGIN VIDEO CLIP)

CHALABI: (through translator): My relationship with the CPA now is nonexistent. And my relationship with the Governing Council is that my colleagues, they are great patriots. I have worked with them for many decades to fight Saddam. We won, we are in Baghdad, and we hope to lead Iraq into a sovereign, independent government, and with complete control over its armed forces and finances.

(END VIDEO CLIP)

WHITBECK: Chalabi says that his increased calls for more Iraqi sovereignty and more Iraqi independence from the CPA here are what prompted that raid on his headquarters. But an Iraqi judge who served the warrant for the raid on Chalabi's compound was presented to the press at CPA headquarters, and he says that the raid was to look for people involved in government fraud and kidnapping. And the CPA says that it was not clear whether people involved in Chalabi's INC were the ones who were targeted during that raid -- Wolf.

BLITZER: Were U.S. officials, military or civilian, Harris, involved in this raid?

WHITBECK: Well, there were U.S. soldiers who were present at the raid, soldiers who established an outer ring around the House. And we did see a lot of U.S. civilians who were carrying -- they were dressed in flap (ph) jackets and were carrying weapons. But again, the insistence from the CPA is that this was an Iraqi-led operation and that the warrant for the raid was issued by an Iraqi judge.

BLITZER: But there is no doubt that unless Ambassador Bremer and the top leadership of the CPA, the Coalition Provisional Authority, approved this, there is no doubt that this was coordinated between the U.S. and the Iraqi representatives. Is that right?

WHITBECK: That's correct, Wolf. In fact, we understand that U.S. Ambassador -- administrator to Iraq, Paul Bremer, was aware of the raid. But again, the official line from the CPA is that this was an Iraqi operation.

BLITZER: All right. An Iraqi operation, clearly, though, with the blessings of the Bush administration. Harris Whitbeck, thanks very much for clarifying that important point for us.

We mentioned the strong friendship that chalabi has courted here in the United States, in Washington, particularly with top officials over at the Pentagon, the vice president's office, and elsewhere, certainly.

Barbara Starr is our Pentagon correspondent. She's joining us now, picking up that part of the story.

He's very close to Deputy Secretary Wolfowitz, to Rumsfeld, to Cheney, to Cheney's people, to Doug Feith. What happened, Barbara?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, you know, Wolf, things have certainly soured a bit. As well, the facts on the ground to have changed.

I'm sorry, I was having technical problems, Wolf. I couldn't hear you. Things on the ground have changed.

You know, now that Iraq is liberated, there is no longer the need for the type of support to the Iraqi opposition that there was. Chalabi's group, the Iraqi National Congress, was getting over $300,000 a month under the Iraq Liberation Act passed by Congress, supported very strongly by the Bush administration.

The last payment came this month, in May, because with transition there was no longer the policy need to support the opposition. But, in addition, there have been a lot of problems. The CIA felt someone misled, if you will. They felt some of the intelligence that Chalabi's group had given them about weapons of mass destruction, that sort of thing had not proved to be true.

In recent weeks, there were also allegations concerned that Chalabi had met with Iranian officials and given them critical information about coalition operations inside Iraq. So certainly, the bloom had come off the rose somewhat, but it's not at all clear any of that in particular is tied to today's raid. As Harris Whitbeck said, the Iraqi judge issued these arrest warrants for 15 people based on the fact that they were looking for people involved in potential fraud corruption and abuse -- Wolf.

BLITZER: He was on "LATE EDITION" a couple weeks ago, and I asked him specifically about these allegations and suggestions that he may be getting too close to the Iranians, that he had been visiting Tehran, and a suspicion, at least raised in Newsweek Magazine, that he may be handing over classified information. He flatly denied that. He said it was not true, although he insisted it was important for Iraq to eventually wind up having a strong relationship with Iran.

Do you sense, Barbara, that now, going into the war, there was always a split between the State Department and the CIA on the one hand, the vice president's office and the Pentagon on the other hand, as far as Chalabi and the Iraqi National Congress are concerned. Do you get a sense now the administration is all on the same page as far as Ahmed Chalabi is concerned?

STARR: Well, certainly from the standpoint that the information about weapons of mass destruction that he had brought to the administration by all accounts has not panned out in at least any significant way. But they are still looking for that type of information. Certainly, some very senior elements of the intelligence community had let it be known around Washington that it was their feeling, at least, that Ahmed Chalabi's information about WMD did not pan, that the defectors that he brought to the attention of the U.S. intelligence community had not panned out in any significant way.

You'll remember, several weeks into the war Ahmed Chalabi and some of his supporters were flown into southern Iraq to help fight the war at that point. That was at the behest of the Pentagon, of the U.S. Central Command. They certainly had been given special treatment all the way along. And now it's very interesting, Wolf, because just days now before that turnover to Iraqi sovereignty on June 30, what senior officials here are making the case about is they say they have to get some names of Iraqi leaders that will be in a position to take over.

They say one of the key problems right now is that there is no senior Iraqi leadership that seems to be forming, that seems to be stepping forward to take over that leadership challenge. And it was interesting, Ahmed Chalabi today in that press conference in Baghdad also launching criticism at the initiative of the U.N. envoy, Lakhdar Brahimi, who is trying to put together that new Iraqi government, because right now no one is indicating that Ahmed Chalabi will have any type of sanctioned role in this new transitional government. BLITZER: Fascinating material we'll be covering throughout the day here on CNN. Let's switch gears, Barbara, and talk about that bombing that occurred not far from the Syrian border that some Iraqis say it was a bombing of a wedding party, perhaps 20, maybe as many as 40 people were killed. The Pentagon denying that. What is the latest information you're getting?

STARR: The latest information, Wolf, as you see this video that was shown yesterday of what is alleged to be the aftermath of the bombing of a wedding party and the burying of children that Iraqis say were killed in that wedding party attack. The coalition said today in Baghdad they will investigate the matter, they will try and get more information about exactly what happened.

But Brigadier General Mark Kimmitt at the podium made it very clear that they believe -- the coalition believes the intelligence was very strong and they were hitting a target that involved foreign fighters coming in from Syria. Here's a bit of what he had to say.

(BEGIN VIDEO CLIP)

BRIG. GEN. MARK KIMMITT, U.S. ARMY: We are satisfied that the intelligence that we had, the multiple correlated evidence that got us there, and the actions of our forces on the ground, what they found and what they brought back, foreign passports, money, weapons, satellite communications, would be inconsistent with the wedding party for sure, and fairly consistent with what we have seen throughout this country time after time after time, which is the flow of foreign fighters to come in to terrorize and kill the Iraqi citizens.

(END VIDEO CLIP)

STARR: So General Kimmitt, Wolf, saying he believes they hit a target, a rat line, if you will, of fighters, a House, vehicles, that sort of thing, foreign fighters coming in from Iraq. But they are going to investigate. They know the world's attention is on this matter, especially after that video was shown.

In many cases in the past, the U.S. has -- this has been a problem. The U.S. hits the target they aim at. They hit the target based on intelligence, but there have been many cases in the past when unexpectedly there have been civilians in the area. So that is what they're going to look into now -- Wolf.

BLITZER: Barbara Starr reporting for us from the Pentagon. Thanks, Barbara, very much.

Iraq also very high on the agenda as President Bush holds high- level meetings on Capitol Hill. His first trip to Capitol Hill in some time, a private session with Republican leaders.

For more on that, let's bring in our congressional correspondent, Ed Henry.

What happened today, Ed?

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Good afternoon, Wolf.

Basically, there's been a lot of hand ringing among Republicans up here on the Hill about the situation in Iraq, about whether or not the message on the economy is being trumped by the prison abuse scandal. But rather than any kind of hand ringing from the president, instead, what Republican senators say is that the president came in very upbeat, very strong, positive message.

The president believes has a very strong record on the economy, very strong record on Medicare, saying that senior citizens are having their drug bills lowered. Also saying that he believes the situation in Iraq is going to get better and that he is going to stay the course.

In fact, when the president noted that the United States would not cut and run, we're told there was a standing ovation, to give you a sense of the reaction from House and Senate Republicans. While they're nervous about the situation in Iraq, when the president very firmly said he's not going to cut and run, there was a standing ovation.

In fact, Senator Lamar Alexander told us that there were several standing ovations throughout this one-hour meeting. And Alexander pointed out, though, that basically the president was preaching to the choir and the choir was very much in tune.

Also interesting to note that the president spoke very little, if anything, about the prison abuse scandal itself. Senator Trent Lott said that the political health of Secretary Rumsfeld never came up, another contentious issue. Lott was saying, though, a lot of this is just beltway nonsense and that real people across the country do not care as much about it as people in Washington do. So the president is trying to focus on his own record, not get lost on some of the political infighting here.

Obviously, there's also been not just fighting between Democrats and Republicans, but we saw a little dust up yesterday between Republican Speaker Hastert, Republican Senator McCain. Lott and other Republican senators said that also did not come up.

The president was in a joking mood. He even made a joke at the expense of Senate Majority Whip Mitch McConnell, saying that he -- the president said he wants to make sure that he reelects House Speaker Dennis Hastert and Senate Majority Bill Frist to their majorities, but he doesn't care about Mitch McConnell. And then obviously said, just joking. But it was kind of a needling remark to show the president is very upbeat and is not going to let all these different situations affect his mood -- Wolf.

BLITZER: It was fascinating yesterday to see that videotape of Dennis Hastert being asked by a reporter questions about John McCain, and Hastert, the speaker of the House of Representatives, with his leadership standing around him all smiling and laughing as he's making these snide remarks about John McCain a fellow Republican. And McCain later went out and issued a statement complaining about the Republican leadership. You would think at this sensitive moment, when there's so much speculation that John Kerry might want to reach out to John McCain and ask him to be his running mate, the Republican leadership would be a little nicer to him.

HENRY: That's right. You wonder whether that gives Senator John McCain a little bit of an opening, to say that maybe he's not welcome in the Republican Party. Instead, what we saw from McCain, though, is that he put out a statement, he tried to take the high road yesterday, saying that he thought the Republican Party -- he remembers the days when the Republican Party stood for fiscal discipline. Because, as you remember, this dust up started up about tax cuts, but McCain also had his defense credentials questioned a little bit on the issue of sacrifice.

Speaker Hastert said that maybe Senator McCain should go to the Walter Reed Army Hospital or Bethesda Naval Hospital to see sacrifice from American veterans. Obviously, McCain not taking kindly to that, a former prisoner of war, highly decorated military veteran.

It also points up just the fighting that's been going on, as well. Senator John Warner, chairman of the Senate Armed Services Committee, his House counterpart took some shots at Warner this week as well, saying that maybe the Senate investigation of the prisoner abuse scandal is going too far. McCain got involved in that as well, saying he believes these hearings are necessary.

A lot of tension between Republicans. President Bush trying to stay above the fray. And what he said at this private meeting was, focus on what we get along with. He didn't address the infighting, but he said we have an upbeat message that we've achieved together on tax cuts, education, Medicare, focus on that -- Wolf.

BLITZER: Ed Henry, our congressional correspondent, reporting from the Hill today. Thanks very much, Ed.

HENRY: Thank you, Wolf.

BLITZER: A lot of hard work has to be done in less than six weeks, and it will take every member of the U.S.-led coalition. That is what Secretary of State Colin Powell is telling U.S. allies as they debate the way forward in Iraq.

(BEGIN VIDEO CLIP)

COLIN POWELL, SECRETARY OF STATE: Construction costs money, and you see what our Congress has been willing to do. But success of any kind always requires investment of this nature. And if we don't do it now, up front in the beginning, we will end up paying for it later on under less favorable circumstances. So this is the time to be generous and to make your pleasures known.

(END VIDEO CLIP)

BLITZER: Powell says he's confident the United Nations Security Council will endorse the interim Iraqi government that's being put together to take over June 30.

Let's go back to Iraq right now and check the status of some of the ongoing fighting south of Baghdad, the southern part of Iraq. CNN's Jane Arraf joining us on the phone from Najaf.

What is the latest, Jane?

JANE ARRAF, CNN BAGHDAD BUREAU CHIEF: Wolf, there have been offensive operations here over the last week or so against the Mehdi Army. Those have leveled off, and military officials, when asked why, essentially say that they are trying to see if a political solution can be found, if the statement by the Grand Ayatollah Ali al-Sistani calling for all forces to leave Najaf, will result in some solution to dissolve the Mehdi militia.

Now, it's a fascinating and a crucial development here as to the evolving attitudes towards Muqtada al-Sadr. And on one hand, they are telling coalition officials and telling the U.S. military that they don't want the militia in the streets. But we went around the troops today, including PSYOPS, psychological operations personnel, who were asking people of what they thought of Muqtada al-Sadr. And they got a bit of a different answer, with people saying that they thought he was a holy man, they thought he was standing up to the Americans, and in their mind that's a good thing, something that doesn't bode well for a quick or easy solution by any means here -- Wolf.

BLITZER: All right. CNN's Jane Arraf on the phone for us from Najaf. Thanks, Jane, very, very much.

Thousands of U.S. soldiers stationed in Iraq.

(BEGIN VIDEO CLIP)

GEN. JOHN ABIZAID, CENTRAL COMMAND: Did I miscalculate the number of troops? Maybe.

(END VIDEO CLIP)

BLITZER: What troop levels should we expect after the June 30 handover? Retired U.S. Army four-star General George Joulwan, the former NATO supreme allied commander will be my guest.

And later, Israeli troops move ahead in Gaza. We'll take you live to the scene.

Stay with us.

(COMMERCIAL BREAK)

BLITZER: Here's a grim statistic. Since the fight for Iraq began a year ago March, 795 U.S. troops have now died. Hundreds, thousands more, in fact, have been injured, and thousands of Iraqis have been killed, as well. U.S. military leaders now predict the violence may even get worse after the transfer of power scheduled for June 30.

Here with some special insight, the former supreme allied commander of NATO, retired U.S. Army general, George Joulwan.

General, thanks very much for joining us.

General Abizaid, who is the central commander in charge of the entire region, knows the region as well as U.S. military commander, speaks Arabic, has studied the region for years. He's now suggesting -- he testified yesterday that the insurgency may not even get -- may get worse between now and June 30, but it may get even worse after that. In other words, he's saying it may go from worse to worse.

GEN. GEORGE JOULWAN, FMR. NATO SUPREME ALLIED COMMANDER: That's right. And I think what has to happen in this reassessment that Abizaid is making is that as you continue to reassess, so must you reassess what we call the troop to task analysis. As his task increased now, with the turnover coming on 30 June, with an election that's going to be held in perhaps January, he has to always readjust what those numbers are, what he needs to do to do the job. And that's a little bit of what we heard yesterday.

BLITZER: We also heard this from General Abizaid. And I want to play this excerpt from his testimony yesterday before the Senate Armed Services Committee.

(BEGIN VIDEO CLIP)

ABIZAID: Did I miscalculate the number of troops? Maybe.

UNIDENTIFIED MALE: I know you read different articles in the paper that affect you. Isn't that correct?

ABIZAID: I'm not aware of that, Senator. But as I understand the context of Ambassador Bremer's and my discussions, and also the context of discussions that I had with many Iraqis, as well, who are also talking to me about the detainee issue, it had to do with moving into the prison system, being lost sight of because we didn't have a good tracking system.

(END VIDEO CLIP)

BLITZER: All right. Well, we got two different sound bites intermingled there for some reason. Apologize to our viewers for that.

But on the significant issue, "Did I miscalculate the number of troops? Maybe." This is a sensitive issue for many because John McCain, for example, the Republican senator, for a year has been saying he doesn't have enough troops in the region, he needs more. And Rumsfeld and company at the Pentagon have been saying, if they need more, why don't they ask for more.

JOULWAN: Well, here you have a commander, the combatant commander, standing up and saying maybe I miscalculated. That means as the task increases as the opposition grows, as your initial assumptions are proven wrong, you have to adjust your plan. That's what Abizaid is saying. Perhaps miscalculation on the original plan. Now what we have to do is get it in balance with the tasks that we have to do now to make this turnover successful. And I think that is what he is setting the stage for.

BLITZER: If the situation might go from worse to worse, if he's saying the insurgency could heat up even after June 30, doesn't that automatically mean he might need more troops?

JOULWAN: Sure. But, also what Abizaid said, which is something you and I have talked about several times, he's talking about getting more alliance forces, more coalition forces. It doesn't have to be just U.S. troops. And he said that in his testimony, as well.

So I think he's anticipating what may be additional tasks, more violence that may come up. And he will adjust to that and is preparing the ground for it.

BLITZER: Because we do hear a lot now from the president, from the defense secretary, even, saying they're anxious for a new U.N. Security Council resolution to be approved. And if it's approved, presumably other allies -- Rumsfeld has said maybe as many as 15 or 20 -- other countries would be willing to send in troops, and it might even set the stage for NATO to do in Iraq what it is now doing in Afghanistan.

JOULWAN: Yes. And that is yet to be seen. But you have to set the conditions for that.

And you're absolutely right. For example, we had a U.N. resolution before we went into Bosnia that tasked NATO to provide the force to go in under their political umbrella. We may see something like that. But the U.N. is needed, in my opinion, for political legitimacy for the new Iraqi government that is going to be stood up and for the elections in June.

How we knit that together is going to be very important. Abizaid's job is to create a secure environment for that to take place. And we've talked about that several times.

BLITZER: Well, let's get to the specific issue of NATO.

JOULWAN: Sure.

BLITZER: If the U.N. Security Council passes a resolution and says NATO should come in and play a role, does NATO have the wherewithal, the capability now that it's involved in Afghanistan, to get involved directly in Iraq?

JOULWAN: The quick answer is yes, but the "but" comes into be getting this NATO response force that is now being established in NATO for a rapid reaction deployment. That can be used. It's upwards of maybe 20,000 to 25,000 troops.

So I think they do have the wherewithal of the troops. But the political groundwork has to be set here. You have to cut them in on the political action. You have to get them a seat at the table. And I'm not sure we're there yet, but that needs to be done.

BLITZER: A lot of work needs to be done. We're going to pick up that line of questioning, but we're going to take a quick break. Much more with General Joulwan right after this.

(COMMERCIAL BREAK)

BLITZER: Welcome back. We're continuing our conversation with retired U.S. Army four-star general, George Joulwan, the former NATO supreme allied commander.

Let's talk about what happens after June 30. Based on what I can tell, there will be a United States embassy in Baghdad. John Negroponte will be the United States ambassador; he's been confirmed. He will be in charge and he will report to the State Department. This will not necessarily going to be a Pentagon-run operation as it has been.

JOULWAN: Exactly. And you'll find that the State Department and the ambassador will be the chief of mission, the president's representative in country. What is still not firm is the relationship between that ambassador and CENTCOM, for example.

BLITZER: Central Command.

JOULWAN: Central Command.

BLITZER: That would be General Abizaid.

JOULWAN: General Abizaid. However, what is clear now is that, in our terminology, in my terminology of the military, Negroponte will be the supported individual. In other words, he will be the lead. And supporting will be DOD. It was just the opposite for the last year. So the State Department is taking a very firm lead here after June 30, and much of what we've seen recently, Chalabi being one of them, I think is setting those conditions for June 30.

BLITZER: I think you're absolutely right in the sense that the rise and fall of Ahmed Chalabi in the eyes of the Bush administration sort of reflects the rise and fall of the Pentagon and, for example, the vice president's office, which was aligned with the Pentagon in terms of building up Chalabi. And now that he's going down, the CIA and the State Department always resented this guy.

JOULWAN: There'll be a lot of conjecture on that. My concerns are for the troops. What they need is clarity now about what will happen on June 30. What is Negroponte -- and John Negroponte is a very good guy. He understands the civil military side, how to have a team effort here after June 30, how to really concentrate on making this a one-team, one mission, so to speak, as we look forward to what happens between June 30 and the elections next year.

BLITZER: We heard some griping yesterday from conservative Republicans, including Duncan Hunter, the chairman of the House Armed Services Committee. This trio of generals being forced to come before the Senate Armed Services Committee, spent hours testifying, they're needed to fight this war over there and not to score political points here in Washington. In your career, have you ever seen this kind of bitterness and political sniping going on?

JOULWAN: We've had that in just about every conflict we've been in. It's a little more pronounced now. But look, we're a democracy, we understand civilian control, and that includes congressional oversight, as well as civilian control of our military.

BLITZER: Does it hurt the war effort, as alleged by Duncan Hunter and others, to bring these guys over to Washington, to take them away from their fighting the war and make them testify before Congress?

JOULWAN: I personally don't think so. I truly believe our subordinate commanders in the field can handle this. There are a lot of senior leaders.

But the idea of accountability is important here. Both Sanchez and Abizaid spoke to that. The troops need to hear that, as well as the American people. So, in many respects, I think it was a clearing of the air. Let's get on with the mission at hand: what's going to happen on 30 June and what's going to happen for the election.

BLITZER: All right. Let's button this whole thing up. In your opinion -- and you're the former NATO supreme allied commander, you know this subject as well as anyone, you know the military, the political aspects, as well -- what must the United States do between now, June 30, and the days that follow to get the job done? I assume you don't want to cut and run.

JOULWAN: No. I think set the conditions for success. That means on 30 June you need to have a successful handover.

We need to see Negroponte coming in, not saying everything that was done in the past was wrong, but creating this relationship with the military. That is absolutely critical for success.

You cannot have -- what happens back in Washington is one thing. What happens in Iraq is yet another. You have to create this civil military team to go forward. That's the number one requirement between now and June 30.

BLITZER: General George Joulwan, always good to have you on the show.

JOULWAN: Thank you, Wolf.

BLITZER: Thanks very much.

U.S. military personnel raid the compound of the Iraqi National Congress, together with Iraqi authorities. Why was the home of Ahmed Chalabi targeted? And what does this mean for the transfer of power on June 30? We'll get to that.

Also, gas prices soaring past the $2 mark. What should be done to stop the crunch? Those are among our "Hot Topics" that we will debate. Bernie Ward, Armstrong Williams standing by to join us.

(COMMERCIAL BREAK)

BLITZER: Welcome back. In Iraq, Ahmed Chalabi once a Pentagon favorite, now on the oust, at least seemingly, at least with the Coalition Provisional Authority in Baghdad. What exactly happened?

Also, there are more disturbing photos now in the prisoner abuse scandal heating up in Iraq.

And what about the price of gasoline?

Here to debate those topics and more, two guests. Radio talk show host Bernie Ward, he's on KGO Radio in San Francisco. And syndicated columnist radio talk show host Armstrong Williams. He's here in Washington.

Armstrong, let me begin with you. Ahmed Chalabi, once the darling of a lot of the so-called neo-conservatives who were pushing for the war, including Paul Wolfowitz and Don Rumsfeld, the vice president, Dick Cheney, now his home was searched today, they took his computer, they went in there and they took all of his personal effects. What happened?

ARMSTRONG WILLIAMS, RADIO TALK SHOW HOST: Well, there was always a riff among the neo-cons and conservatives regarding Chalabi. He had not been in the country for 35 years. He said to the military people that it would be a cake walk if they went into Iraq.

It was not a cake walk. He gave a lot of advice on the strategy on which backfired on Rumsfeld and company. He's proven to be someone who is dishonest, who is only trying to promote himself to become head of the government. That has backfired.

He has little credibility, and he should have been out and removed long ago. They should have never put their faith in him.

BLITZER: What do you think, Bernie?

BERNIE WARD, RADIO TALK SHOW HOST: I just think this is absolutely delightful. I mean, he didn't say it was going to be a cake walk. Vice President Cheney and Wolfowitz and Rumsfeld said it was going to be a cake walk. He was feeding them information.

He was a guy when they said to him, all this stuff you said was lies, and he said, what does it matter? We're in Baghdad now.

We have given this guy $27 million of taxpayers' money, and he is primarily responsible through Doug Feith and the office of special planning for almost all of the misinformation. Colin Powell now is totally embarrassed because of the -- supposedly the biological trucks and trailers. Chalabi's cousin gave them that.

The weapons of mass destruction, Chalabi's scientists gave them that. Chalabi is primarily responsible for the entire scenario of us going into Iraq. And it was all lies. And now all of a sudden, because he has become critical, we've cut him off and we're not going to give him any money anymore.

BLITZER: You want to respond to that, Armstrong?

WILLIAMS: I would add to that, I think the guy is more resented and more despised than Saddam Hussein was. I mean, this is one of the few times where I absolutely agree with much of what Bernie said.

It's a disaster. He should have never been trusted. There was a lot of infighting among conservatives about whether to trust this guy or not. He convinced them, they believed in him, and it has just proved to be nothing but a total disaster.

BLITZER: Well, let me ask you a question, Armstrong. Should someone be held responsible, accountable inside the Bush administration for apparently relying on Ahmed Chalabi, the Iraqi National Congress, if, in fact, this is true, for so much of the intelligence that turned out to be wrong?

WILLIAMS: You know, Wolf, when you go into a situation like this, everyone has an idea of who you can trust and who has the credibility and who can move you forward and with the fewest casualties. Chalabi sold himself as one of those people.

They believed in him. There was a lot of fighting. They trusted him. And instead of us passing on blame and somebody being punished for those past mistakes, we need to move forward and correct the actions of the past.

BLITZER: But let me press you, Armstrong. Should someone be held responsible? Should someone, for example, resign or be forced to resign because they relied on the Iraqi Nation Congress and Ahmed Chalabi?

WILLIAMS: I certainly believe in accountability, and I think the administration has paid a huge price on trusting this guy and it has been totally disastrous for them. It is effecting the president. The president (UNINTELLIGIBLE) right now, and his fate is in his hands. It's a very fragile situation because of this trust and the situation that we're in today.

BLITZER: What about that, Bernie?

WARD: It is Cheney. What do you mean somebody? Chalabi was Cheney's guy.

Cheney was the guy. Powell and the State Department didn't want him. Tenet and the CIA said he was a complete flake. The Defense Intelligence Agency wanted nothing to do with him.

It was Cheney and Scooter Libby. They kept him, they funded him. Every time someone went after him, they protected him.

This whole thing lies in their office, it lies in the office of special planning through Rumsfeld, Wolfowitz. I mean, he was their guy. There was nobody else championing him, and he took $27 million of American taxpayers' money and he lied through his teeth. And I will tell you who else is embarrassed by this blow. It's got to be The New York Times. The New York Times used him as a primary source. Judith Miller, who wrote stories that turned out to be absolutely false -- and The New York Times relied on him and did not confirm a lot of the stuff he gave them. And he did to them what he did to Cheney.

But in the administration, Wolf, it's Cheney. It's Cheney. It's Cheney. And he was the one who loved Chalabi.

WILLIAMS: Well, you know, Bernie, it's not just Cheney. It's also Paul Wolfowitz and Don Rumsfeld and Doug Feith. There were top officials at the Pentagon who admired and worked closely with Ahmed Chalabi, as well.

WARD: Absolutely. And he funneled guys to them who lied. He funneled guys to them who hadn't been in Iraq in years. He had a scientist who talked about chemical weapons who had left in '91.

I mean, it was just amazing. And nobody checked his stuff. Nobody checked his information.

And the only reason he's getting hit now is because he started to criticize the Bush administration in Iraq and he broke -- you know who he reminds me of? He reminds me of Noriega. He reminds me of Noriega, who only got into trouble when he started to go after the Bush administration. But when he was their darling, they loved him.

BLITZER: All right.

Armstrong, you know his nephew, Salem Chalabi, has been put in charge of the war crimes tribunals against Saddam Hussein, against Tariq Azziz, and others who will be tried for crimes in Iraq. Salem Chalabi was on this program within the past month or so. He's a graduate of Northwestern University Law School. But he's going to be the judge presiding over these judicial matters.

Do you think that's a good idea to keep him there?

WILLIAMS: No, of course not. It's almost comical. I mean, it's been printed about in different media periodicals around the world, and it's just finally coming to surface. It's disastrous.

I mean, it shows you the handprint of Chalabi on many of these situations where he was trusted, his family was placed into power, and now it's disastrous. And I just hope the United States government and this administration have the courage to realize that they made a catastrophic mistake and try to change this immediately.

BLITZER: All right. Let's move on and talk about the prisoner abuse scandal. And Bernie, I'll let you start off on this side of the story right now.

The three generals testified before the Senate Armed Services Committee. They're wrapping up their stay in Washington today, getting ready to go back to the region, presumably in the days to come. I assume tomorrow, to get ready to continue fighting this war.

What do you make of the argument that they shouldn't be forced to come back to Washington to appear before these congressional panels, they should be allowed to continue their job fighting the war?

WARD: Well, they don't fight the war. These guys are the CEOs. When I used to work in Washington, we talked about the generals who came up to the Hill with their weenies.

I mea, these guys have all their aides and everything else that run this war. These guys are the CEOs, they're in control of setting the general pattern, and then it's carried out underneath them, which is, of course, why this prison abuse scandal is so amazing.

If you watched that testimony yesterday, these guys didn't have an answer to anything. They couldn't explain it. One guy was going, jeez, we trained them, we had all our values. He couldn't explain it.

I'll tell you, the scandal of this, Wolf, isn't bringing those generals up. The scandal in this is the (UNINTELLIGIBLE) of Alberto Gonzalez's memo saying that we could be accused of war crimes for doing this, so we better abandon the Geneva Convention so that nobody can use it against us. That is an amazing piece of paper.

BLITZER: Wait a minute. Who's Bruno Gonzales?

WARD: Alberto Gonzales, the general counsel....

BLITZER: Oh, Alberto Gonzalez, the White House counsel. Alberto Gonzalez.

WARD: Yes, I apologize for slurring my words. His memo was absolutely devastating in this whole prison abuse scandal. And you've got the Bush administration trying to protect itself from war crimes, which is why they abandoned the Geneva Convention. And it set the stage for everything that's happened.

And one other question we ask, Wolf, is we know a lot about Abu Ghraib. We know nothing what is going on at Guantanamo. And the threat at Abu Ghraib was, if you didn't cooperate there, they'd send you to Guantanamo. How much worse can Guantanamo be if it's used as a threat against the people at Abu Ghraib?

BLITZER: All right. What about that, Armstrong?

WILLIAMS: Well, listen, I think with Senator Warner and McCain and others on that commission, I think they thought long and hard about bringing those generals back to testify. These are some very serious issues that need to be discussed.

I mean, you have the world looking upon us to make sure that we're not hypocrites when it comes to human rights. And America must set the example.

We have a lot of public relations problems around the world. There's still disdain for Americans. So I thought it was very good that these generals come back and testify because of the scandal.

The bottom line is that, look, we're at a crossroads here, and a lot of mistakes were made. The mistakes that were made with this prisoner abuse is not an indictment of the entire military. They're trying to correct this problem and they're trying to get this situation under control.

And what I want to do is trust the commission, because I think, overall, they're doing a very good job because Americans are concerned. And even though we have this June 30 deadline approaching, I mean, the transfer of sovereignty doesn't mean the transfer of peace.

I mean, we have some very long days ahead of us, and what we have to do is come together as Americans, make sure we that we correct the problems of the past. But we need to unify and not play into the hands of these terrorists.

BLITZER: All right. We're going to take a quick break. Two more subjects. We'll continue our discussion after the break. We'll talk about what's happening in Gaza right now. Also, the price of gasoline.

Bernie Ward, Armstrong Williams, they're standing by.

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(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: By defending the freedom and prosperity and security of Israel, we're also serving the cause of America. Our nation is stronger and safer because we have a true and dependable ally in Israel.

(END VIDEO CLIP)

BLITZER: President Bush speaking Tuesday morning before the American Israel Public Affairs Committee, the pro-Israel lobbying organization here in Washington, D.C.

Welcome back. We're continuing our conversation with Armstrong Williams, Bernie Ward, two popular radio talk show hosts in the United States.

Armstrong, if the president delivered that very strong statement of support for Israel Tuesday morning, why do you believe he allowed the United States representative at the United Nations Security Council yesterday to abstain rather than veto a resolution condemning Israel's policies in Gaza?

WILLIAMS: Well, abstaining is just like continuing to support Israel. But...

BLITZER: Wait a minute, Armstrong. There's a huge difference between vetoing and abstaining. Abstaining, you let the resolution pass 14 to nothing, and the Security Council resolution condemns Israel.

If you veto, and the United States almost always vetoes these kind of resolutions that condemn Israel -- not always, but almost always -- then that doesn't allow the U.N. Security Council to go on record with that kind of resolution. This case, the White House, I assume, specifically made the decision to let that resolution be passed.

WILLIAMS: It's a very tenuous situation. I mean, America is a very strong supporter of Israel because America sees its problems as the same as Israel. We had our 9/11, Israel has it almost every two weeks in that country. I've spent time there.

The United States must be cautious, because they're trying to hold the unity together there. They're still trying to build relationships with the Palestinians in that part of the world. And they cannot allow themselves to appear as though they allow Israel to just go totally out of control in doing whatever they want to do.

BLITZER: So you support the president in allowing the U.S. to abstain rather than veto?

WILLIAMS: Yes. Oh, I support it, because it does not take away our strong support. I mean, just look at the president's actions over his administration. Israel had no better ally than this president in the last 20 or 30 years.

BLITZER: All right. Bernie, what do you think?

WARD: I think it was an act of moral cowardice to abstain. I think the United States should have made it 15 to nothing. You have Israelis opening up with tanks on demonstrators who are unarmed. Ten, 15 people killed there.

Less than two hours later, they're firing missiles into the Rafah camp. They announced that every male over 16 in parts of Rafah have to walk out and surrender or all their homes will be demolished.

Listen, what Bush has done is despicable. He's decided that he needs Jewish votes in Florida. And so -- and there is no masking it. The Republicans think they can peel away Jewish voters from the Democrats, with Bush simply saying that Sharon can do pretty much anything that he wants.

BLITZER: But in fairness to the president, Bernie, if that were his objective, he would have vetoed, rather than abstained.

WARD: No. The veto or the abstention sends little message to Sharon, who has been told through back channels and told -- with pride stood with the president when he was here as the president endorsed his plan for abandoning a couple settlements while enshrining the illegal ones and the rest in Palestinian. This administration has been worse on the situation in Israel and Palestine.

The United States is no longer seen as an honest broker. The United States is no longer seen as anybody that you can talk to. Colin Powell said in Bob Woodward's book he was told by Condoleezza Rice he couldn't even make a deal, he couldn't make any kind of agreement when he was talking to Arafat or even approach those kind of things.

This administration has totally gone over the top for Israel. And Sharon is so confident that they can go into Rafah and do what they did yesterday knowing that the United States in the long run wasn't going to do anything about it.

BLITZER: All right, Armstrong.

WILLIAMS: But the United States did do something. They did abstain. And, like you said, they did not do what they normally would do, is use their veto power. They used a measured approach here.

Look, the United States, especially when President Clinton was in the White House, made every kind of concession to Arafat to try to bring about peace. Listen, they're not really interested in peace, let's just face it.

I mean, they're dispensing these homicidal bombers at will into Israeli territory. I mean, this government has compromised. Even Sharon was willing to put it all on the line, compromising the settlers in the West Bank. He was voted down, but at least he's tried.

The violence has not stopped. And so the United States see their parallels between itself and Israel. And Israel is our ally. She has never abandoned us. She may not be perfect, but it's the best democracy we have going in the Middle East.

BLITZER: All right. Let's switch gears. I want to talk about the price of gasoline.

Bernie, I'll begin with you. Is there anything that anybody can do to stop the price of gasoline going up as high as it is, over $2? I don't know what it is in San Francisco.

WARD: It's up to almost $3 in San Francisco. First of all, I'm embarrassed by both John Kerry and George Bush. I'm embarrassed by Kerry saying don't put money in, don't put oil into the strategic petroleum reserve because everybody says it would drop it by a penny or two if you didn't do that. If that's the best he has to offer, he ought to shut up. And as for Bush, to say you should have passed my energy package, none of which would come into fruition for 10 years, he ought to shut up.

Here's what has to be done. The oil companies control it from the moment it leaves the ground from the moment it goes into your car. They control it coming out, they control the refining, they control the gas stations that are being sold. That monopoly has to be broken. Neither one of these parties is willing to do that.

And secondly, you can declare a moratorium on gasoline taxes for six months. That would drop the price of gas in California, for example, more than $1, and would really have an impact on the economy in California and the economy in general in this country. Yes, you would lose some revenue, but in the long run, it would be more beneficial.

Neither one of these people are willing to even approach that kind of (UNINTELLIGIBLE). There are a lot of things that can be done, Wolf, but neither one, Kerry or Bush, are going to do them.

BLITZER: All right -- Armstrong.

WILLIAMS: You know, it's not just so simplistic. Listen, many analysts have said that this is just something that's going on with the market right now and that it has sort of peaked out, and that it will level itself and correct itself eventually. I mean, I think the president and Senator Kerry is correct. If you were to tap into the reserves, it will only affect gas prices by two or three percent.

WARD: Two or three cents, not two or three percent..

WILLIAMS: I did not interrupt you. It would not make a huge difference. The bottom line is it is something we have to do.

Under the Clinton administration, the Congress tried to pass legislation where we would start mining our own resources here in this country, where we would not be dependent on these Arab countries for our oil. The president vetoed it, President Bush has tried it in his administration. Congress has talked about this.

We have to get to the point where we have to start using our own resources to control our own future when it comes to oil and gas prices in this country. And until we do that, we will be at the will and the mercy of these Middle Eastern countries who can manipulate us at every whim. And this is what must change in this country.

BLITZER: All right. Gentlemen, we're going to have to leave it there. Wait a minute. Bernie, ununfortunately, we are all out of time. But I know both of you will be back. We'll continue this conversation.

WARD: Thanks, Wolf.

BLITZER: Thanks to both of you. Bernie Ward joining us from San Francisco. Armstrong Williams here in Washington. A good debate. Thanks very much.

What's the relationship between Ralph Nader and Senator John Kerry? What came out of their face-to-face meeting yesterday? Where do they go from here? Presidential politics, that will come up in the next hour on "LIVE FROM," among other subjects.

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BLITZER: I'll be back later today, every weekday, 5:00 p.m. Eastern, for "WOLF BLITZER REPORTS." The 9/11 investigation, what did we learn from the hearings in New York City and where does the commission go from here? 9/11 Commission member Tim Roemer will be among my guests. Until then, thanks very much for joining us. I'm Wolf Blitzer in Washington.

"LIVE FROM" with Fredricka Whitfield and Drew Griffin is up next.

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(BEGIN VIDEO CLIP)

AHMED CHALABI, IRAQI GOVERNING COUNCIL: Let my people go. Let my people be free. We are grateful to President Bush for liberating Iraq, but it is time for...