MR. MCLAUGHLIN: Issue One: Many different faces.

PRESIDENT GEORGE W. BUSH: (From videotape.) Today, George Tenet, the director of the CIA, submitted a letter of resignation. I met with George last night in the White House. I had a good visit with him. He told me he was resigning for personal reasons. I told him I'm sorry he's leaving. He's done a superb job. He's been a strong leader in the war on terror and I will miss him.

GEORGE TENET (former CIA director): I have decided to step down as Director of Central Intelligence. This is the most difficult decision I have ever had to make. And while Washington and the media will put many different faces on the decision, it was a personal decision and had only one basis in fact: the well being of my wonderful family.

MR. MCLAUGHLIN: Question: Was Tenet's resignation based on personal reasons or on principle or on protest or on scandal, or did he fall on his own sword?

James Harding.

MR. HARDING: Well, I'm interested -- all of those things, but clearly the biggest of them is WMD. I think that this was a highly welcome resignation. It was just short, possibly, of a dignified dismissal, but highly welcome to the White House. The president's capacity to stand behind people -- stand behind Rice, stand behind Rumsfeld -- was becoming a liability. He was beginning to look ignorant -- arrogant, sorry, and unable to accept blame for a mistake. And Tenet's departure, coming as it does before what's going to be weeks and weeks of highly critical reports from the Senate, from the House, from the 9/11 commission, must be highly welcome to the White House, and frees the president up to now look at intelligence reform without being encumbered by his loyalty to the CIA director.

MR. MCLAUGHLIN: Do you see it as voluntary?

MR. HARDING: I see it as highly welcome by the White House. So I think he wanted to go, but he was -- the White House did not stand in his way.


MS. CLIFT: He got out while the gettin' was good. I mean, he knows that these critical reports are about to come out -- the 9/11 commission next month, the Senate report in a couple of weeks -- and he's been talking about leaving since at least December. His resume is circulating on Wall Street. He's going to land very nicely in the private sector. I think the timing was his own choosing. And I don't think he did the president any favors because if you're just a voter sitting out there and you hear the CIA director has resigned in the wake of all of the things that have gone wrong in the last six or eight weeks and you're five months before the election, it looks at lot like the wheels are coming off of this administration.

MR. MCLAUGHLIN: Well, do you really think it was voluntary? Five months from a presidential election, he resigns and his deputy director of operations resigns at the same time? Don't you think that Harding is naive in thinking it's at all voluntary? You just don't do that. You don't expose the president into either keeping his subordinate or to putting someone new in there.

MR. BLANKLEY: We don't know. The truth is we don't know. All we do know is, I think, that he asked to leave and the president didn't say stay. So the president was glad to have him go in that regard. So everything else is speculation.

One of the things being speculated about is does this relate in any way to the Chalabi story and the leak of information. I don't know. But I can tell you --

MR. MCLAUGHLIN: We're going to get into that.

MR. BLANKLEY: -- there are people in town who are speculating that that may be. The other explanation people are using, of course, are all the tough hearing decisions that are going to come out of the Senate over the next few weeks.k

MR. MCLAUGHLIN: There is a possibility that with the 9/11 report, they will recommend an intelligence czar, and of course, Tenet was violently or vigorously opposed to that. He felt that the director of the Central Intelligence Agency should remain the director with no one over him. That would be a resignation on principle. He's capable of doing that, because he told Clinton he would resign if Clinton were to pardon Jonathan Pollard. So he's capable of that kind of principle.

I'm going to go to you in just a moment, but --

MR. PAGE: Please do.

MR. MCLAUGHLIN: Why Tenet alone? House Minority Leader Nancy Pelosi doesn't think Tenet should be the only one to resign, pointing to the small clique of super-Hawkish neocons at the Pentagon, and a few at the White House -- not the CIA -- who argued for war based on false information from the wealthy Iraqi exile Ahmed Chalabi, a reputed international charlatan who falsified Iraqi WMD and fed it to the U.S.

REP. NANCY PELOSI (D-CA) (House minority leader): (From videotape.) The responsibility goes far beyond George Tenet. The CIA never placed much confidence in Chalabi; the White House did. It was on the basis of much of the information that Chalabi gave the administration that a decision was made to go to war. All of the "dream team" that the president supposedly put together and you know who they are -- turned out to be a nightmare for the American people.

MR. MCLAUGHLIN: Question. Pelosi is taking aim at the "dream team" -- Condoleezza Rice, Dick Cheney, Donald Rumsfeld, also Paul Wolfowitz, Douglas Feith. And now that Tenet has resigned -- I ask you this, Clarence, because I know you're a man of great perspicacity --

MR. PAGE: (Inaudible.)

MR. MCLAUGHLIN: -- and you don't hide it -- does his resignation shield any of these remaining members of this administration?


MR. PAGE: Well, it doesn't shield him, John, but it does take some of the pressure off --

MR. MCLAUGHLIN: You think?

MR. PAGE: -- because there has been a lot of pressure on Tenet. And it is true, as Tony and Eleanor were saying, the 9/11 commission -- and the Senate report, from what I hear, is going to be quite damning, and with Tenet out of the picture, it will somewhat muffle the impact of it. But it's also -- the timing is fortuitous right now in early summer, because Tenet will be gone long before the political conventions and the fall.

MR. MCLAUGHLIN: Could you argue the exact opposite? As Nixon said under one set of circumstances, you won't have me to kick around anymore. If they don't have Tenet to kick around -- and there's been a lot of kicking around from the Congress and perhaps behind closed doors, because Tenet is the one who made clear the problem that Dick Cheney objected to, getting public with the Chalabi dirt, and in so doing, destroying Chalabi, who was very much a favorite of the White House crowd. So that caused tumult --

MS. CLIFT: Yeah, but Tenet --

MR. MCLAUGHLIN: Let me get to my -- the long question is, are these not more exposed, these remaining people, standing up?

MS. CLIFT: But you can't treat them in a group. First of all, Rumsfeld has set the terms for his own resignation -- that is if he no longer can be effective. I mean, I think that Rumsfeld still has a question mark over his head, and if he goes, Wolfowitz goes. I think Condoleezza Rice is safe no matter what.

MR. HARDING (?): Why?

MS. CLIFT: Why? Because she's the closest to the president of all of these officials --

MR. MCLAUGHLIN: Well, look how --

MS. CLIFT: -- basically his tutor and the loyalty is much too strong there.

MR. MCLAUGHLIN: Look how Tenet shielded her when she claimed that the 16 words in the State of the Union were due to Tenet. He fell on his sword in that instance. Is the heat off Condi Rice? Are you trying to make a point in the other direction?

MR. BLANKLEY: No, no, I don't think -- I think she's not vulnerable because she's a black woman, so she's least likely to be fired. But you have to look at the other players -- Powell, Rumsfeld, Cheney are all still standing, and you know, each of them in their time have been peeved at Tenet. Now whether any of them were part of this process or not, we don't know, but --

MR. PAGE: What's your gut instinct there? (Laughs.)

MR. BLANKLEY: My gut instinct is that Tenet lost an internal game.

MR. PAGE: I think you're right, I think you're right.

MR. MCLAUGHLIN: Okay, more on Chalabi.

The controversy surrounding the promoter of the war against Saddam Hussein deepened this week. The CIA is looking into whether Chalabi leaked U.S. intelligence to Iran, namely that the U.S. had broken one of Iran's intelligence codes, a very serious matter; and if so, who was the drunken U.S. official who disclosed it to Chalabi? Iran denies this claim, as does Chalabi, who is doing his own finger- pointing. AHMED CHALABI (Iraqi National Congress): (From videotape.) George Tenet was behind the charges against me that claimed that I gave intelligence information to Iran. I denied these charges, and I will deny them again.

MR. MCLAUGHLIN: Question: The Iranians now know that we know how to decode their intelligence code. How serious is this a U.S. intelligence loss?


MR. HARDING: Well, plainly it's very serious. If you were up on the Hill this week, saw Pat Roberts, the head of the Senate Intelligence Committee, he was fuming about it, Porter Goss is fuming about it. People are very, very concerned about this. But this is --

MR. MCLAUGHLIN: So now the Iranians can change their codes and they can continue to hide what they're doing. Is that devastating for the United States, not to be able to penetrate what they are doing with regard to, say, the bomb, what they are probably doing in trying to play politics with Iraq, right next door? Is this not devastating?

MR. HARDING: Clearly, if it's true, if it's true, it's very bad news for U.S. intelligence. But the real issue -- this is not what the story is really about. The story is about an intelligence community that is at war with itself. And Ahmed Chalabi is just the personification of that battle, whether it is the CIA versus the Defense Intelligence Agency or the State Department.

MR. MCLAUGHLIN: All right. Now, Chalabi says that it was a drunken official that told him that we had penetrated the Iranian code; Chalabi communicated that to a top diplomatic official at the Iranian Embassy in Baghdad; within a matter of two weeks, that Iranian official was killed, murdered. Are Chalabi's days numbered, do you think?

MR. HARDING: Well, there are a whole --

MR. MCLAUGHLIN: Are you following this?

MR. HARDING: Yeah, and there are a whole bunch of questions in that question. Firstly, there are a number of people who, of course, say that this is all complete nonsense and no Iranian official would be so stupid as to transmit that information by cable to Tehran if those codes had already been broken. So we don't know the full story. That's a fact.

But are Chalabi's days numbered? I think his problems much more lie with the Iraqi people these days than they do with the --

MR. MCLAUGHLIN: That's why his days may be numbered.

MS.. CLIFT: The end result is that we have lost a valuable pipeline into Iranian doings in the Middle East. And Chalabi, it seems to me, he is a con man and he has been discredited not only by Mr. Tenet, but the president himself asked about him this week, basically said, "Chalabi who? I barely heard him," when in fact he was the main supplier of the information that gave us, this country, the premises to go to war.


MR. BLANKLEY: Let me -- fascinating point.


MR. BLANKLEY: The fact that our government decided to release the information that we'd lost the code, given how valuable that information was, you know, we've given up a lot. The question is, why did that information come out? Why did our government go after Chalabi and, in doing, admit to the Iranians --

MR. MCLAUGHLIN: The guy was drunk, according to Chalabi.

MR. BLANKLEY: Or maybe --

MR. MCLAUGHLIN: Was he a CIA operative, by the way?

MR. BLANKLEY: A lot of very senior CIA --

MR. MCLAUGHLIN: If it was a CIA operative, would that be grounds sufficient for Tenet to tender his resignation?

MS. CLIFT: Maybe it's disinformation.

MR. BLANKLEY: All I'm saying is that if somebody gave this information up publicly that we'd lost the code, did they use this as a silver bullet to get Tenet even at the price of the damage it did to our intelligence to let the Iranians know that we know that we lost it?


MR. MCLAUGHLIN: Exit question: What is the most likely explanation for Tenet's resignation? A, personal; B, principle; C, protest, and that could be, for example, if he knew that the president knew who was responsible for revealing the identity of and the work of Valerie Plame; he could stand on principle on that. Or is it the scandal that did it, the collective scandal that we're talking about here? Or did he fall on his sword?

MR. HARDING: I'm sorry, John, I go back to the first point I made about WMD. I think he could have weathered the failure of a 9/11. I think all of these other scandals are small inside-Washington scandals. The real issue is that this summer there is going to be a real raking over of the coals of why the U.S. went to war based on faulty intelligence about weapons of mass destruction. This is a back-breaking job, no doubt, but his back has really been broken by the failure of the intelligence community on weapons of mass destruction.

MR. MCLAUGHLIN: So you're saying it was not for personal reasons.

MR. HARDING: I think that -- I'm sure he's exhausted, but what has really exhausted him is the failure on Iraq.

MR. MCLAUGHLIN: Well, does he think he's going to be any less exhausted after he leaves office with the Congress back in town for the month of September? Am I right on that? Does he think he's not going to be facing further interrogation? Is he also one who should be looking for a lawyer or lawyers? I mean, why is the heat off him, and therefore, how does his explanation make sense?

MR. HARDING: This is the thing that I don't agree with Eleanor about. The big issue that happened this week is that the president has increasingly had an accountability problem. As you know, you look at this week -- fantastic jobs numbers, more fantastic jobs numbers. And you go back, and this is the president who fired his economics team. But he hasn't fired anyone on the national security team. This has really alleviated some pressure on that dream team, because now they can say, "Well, yes, people go," and the president is too dignified a man to say that he fired Tenet. But this was a very elegant dismissal.

MS. CLIFT: Yeah, it -- (laughs).

MR. MCLAUGHLIN: You don't think he's a fall guy, do yo? You don't think that the people he should really be firing is Rumsfeld or Wolfowitz or Feith over at the Pentagon?

MR. HARDING: I know Al Gore thinks that.

MR. BLANKLEY: (Laughs.) Right.

MR. MCLAUGHLIN: Over Tenet-- but he also thinks Tenet should go.

MR. HARDING: Of course.

MS. CLIFT: This had the feel of a negotiated departure. I won't rat on you if you don't rat on me, and I think we won't be looking for a book from Mr. Tenet. But I don't think he wanted to defend the people working at the CIA, because the word on the Hill is that some of the CIA employees were not fully candid when they were initially interviewed, and that's going to be an issue as we move ahead.

MR. BLANKLEY: I don't know -- no one does -- but my best hunch is it has something to do with Chalabi.

MR. MCLAUGHLIN: What do you think?

MR. PAGE: I think the Senate report is going to be a powerful release, and this is something that -- as was said earlier, Tenet leaving now relieves some of the pressure. I don't think Bush wanted Tenet to go. I think he honestly did not want him to go, and the pressure just got to be too great.

MR. MCLAUGHLIN: The answer is the accumulated scandal; that's scandal in quotes. You've got the 9/11 report going to blame intelligence. You've got the Senate committee report coming in. It's quite possible that someone at the CIA might have leaked to that Iranian ambassador in a state of intoxication; spies love to drink as we know.

MS. CLIFT: Except they're giving everybody at the Pentagon lie detector tests.

MR. MCLAUGHLIN: When you put it all together, he had to go.

When we come back: did the U.S. undercut Lakhdar Brahimi, the U.N. envoy, in his mission to select the Iraqi caretaker government?


MR. MCLAUGHLIN: Issue two: government in waiting.

PRESIDENT BUSH: (From videotape.) Today in Baghdad, U.N. Special Envoy Lakhdar Brahimi and Iraqi Prime Minister Iyad Allawi announced the members of Iraq's new interim government.

I had no role. I mean, occasionally somebody said this person may be interested or that, but I had no role in picking. Zero.

It was Mr. Brahimi's selections, and Ambassador Bremer and Ambassador Blackwill were instructed by me to work with Mr. Brahimi.

MR. MCLAUGHLIN: Well, Sir, that's not quite the way the U.N. special envoy, Lakhdar Brahimi, tells it: "Mr. Bremer is the dictator of Iraq. He has the money. He has the signature. Nothing happens without his agreement in this country."

So, who heads the new Iraq order, the six month interim caretaker government-in-waiting? The prime minister -- the person who will be calling the shots -- is Iyad Allawi, a secular Shi'a, a longtime opponent of Saddam Hussein, and a former member of the Iraq Governing Council. How was he arrived at? Besides Ambassador Bremer's role, we also have the role of the second presidential envoy, newly-arrived Ambassador Robert Blackwill.

"While American officials maintain that Dr. Allawi was Mr. Brahimi's choice, people close to Mr. Brahimi say he reluctantly endorsed him only after American officials aggressively recommended him. One person conversant with the negotiations said Mr. Brahimi was presented with a 'fait accompli' after President Bush's envoy to Iraq, Robert D. Blackwill, 'railroaded' the Governing Council into coalescing around him," Dr. Allawi. So reports The New York Times.

MR. MCLAUGHLIN: Question: Brahimi is worried that Allawi is too close to the CIA and MI6, and that will inflame the insurgency. Namely, they will see the caretaker government as a puppet government, headed up by our CIA operative in Baghdad. Is that a fair concern?


MS. CLIFT: Well, Mr. Allawi strikes me as Chalabi light. I mean, he's got CIA and the U.S. government stamped all over him. Now he has done some honorable things over his career. The question is, how will the Iraqi people see him and will he have credibility with them? And when the U.S. ambassador gets there, Mr. Negroponte, will he allow this interim government to govern? And what happens when the first flashpoint arrives and the Iraqi government doesn't want the U.S. -- coalition to wage some sort of military action? That is still all very vague.

MR. MCLAUGHLIN: Has the question of legitimacy of this government been compromised, do you think, by what was stated in that intro?

MR. BLANKLEY: No. Look, I mean --

MR. MCLAUGHLIN: Or is this much ado about nothing?

MR. BLANKLEY: No government under this condition is completely legitimate, obviously. It's questions of how much -- how willing of the public in Iraq to accept whatever they got. This seemed to me the product of a pretty evenly negotiated battle between the Governing Council, the Iraqis -- between -- and between Brahimi and the U.S. government representatives, Bremer, et cetera. And I think they were all giving and taking. They all had some stick in that fight, and this was very much of a compromise deal --

MR. MCLAUGHLIN: What impact --

MR. BLANKLEY: -- which is not a bad way to do it under the --

MR. MCLAUGHLIN: Clarence, what impact is this going to have on the U.N. resolution? The U.N. resolution. Is the U.N. now going to be resistant to what it sees as the United States inserting itself once again unilaterally and aggressively to create a surrogate government over there? And are they going to make any special demands like, for example, withdrawing the troops before the end of 2005?

MR. PAGE: Ah. Well, it's hard to say if they're going to draw the line there, but they are already upset with Allawi's pick because he does appear to be too much of a "lite" version of Chalabi and too much of an indication that America wants to extend its control there. And Allawi's got his work cut out for him so far as showing he's got some --

MR. MCLAUGHLIN: How are you reading this?

MR. HARDING: I think the really interesting thing is not about the insertion of the U.S. in this process, it is about what we're learning about U.S. withdrawal this week. What I think is really interesting is that everyone is now talking quite clearly, as part of the U.N. diplomacy, about the withdrawal between January of 2005 and the end of this year. By the time the president goes to the polls, it will be very clear that U.S. troops are coming home within a period of three to 12 months.

MR. MCLAUGHLIN: Okay, let's be fair to Brahimi. Here's some brighter Brahimi. "When you are engaged in a process like this, you don't go in with preconceived ideas and say, `If I don't get' -- you know, like a spoiled brat -- `If I don't get my choice, then I'll start stamping my feet.' What you do is, as I said, work out compromises. If the overall picture is positive, I think it's all right. And I do think that the overall picture is very much a positive one." "As I said before, there is a great deal of talent in this cabinet."

Now, the cabinet is four people: two vice presidents, a president and a prime minister. Then he has also -- they have also chosen about 30 ministry heads. And he's saying that with regard to this government-in-waiting. So doesn't that brighten the picture somewhat?

MR. HARDING: It clearly brightens the picture. The interesting thing here has been that there has been a dynamic between Blackwill, between Brahimi, between Bremer and the Governing Council. The thing that's the most extraordinary and the most intriguing is the role the Iraqi Governing Council played. It seemed to be the most fleet of foot in forcing its own choices on both the U.S. and U.N.

MR. MCLAUGHLIN: Right. It rejected Chalabi.

MR. HARDING: Absolutely. And, of course, it rejected Shahristani, the one that was originally floated by Brahimi, the nuclear scientist who was imprisoned by Saddam --

MR. MCLAUGHLIN: Right. Right.

MR. HARDING: -- who was then, you know, who was then --

MR. MCLAUGHLIN: Why was that?

MR. HARDING: They were --

MR. MCLAUGHLIN: I think perhaps he didn't have any political skills. You see, what Brahimi wanted was technocrats who would not run for public office between now -- or in July through January. But of course these four people, at least two of them, Allawi and someone else is going to run for public office. And Allawi has said that it would be a disaster if American troops leave. But the obvious position against that, which could be a demogogic position, which would probably play very well, is the American troops must leave now. So this is still a very --

MS. CLIFT: Well, if the American troops left, these people would be instant targets and they would be assassinated. So they don't have any choice but to ask the troops to stay. But this is a wonderful invitation that the Bush administration would love to receive --


MS. CLIFT: -- and that is, "Please leave our country," and then the president can say --

MR. BLANKLEY: No, I completely disagree. I think the last thing they'd want is to be kicked out right now militarily.

MR. MCLAUGHLIN: But they want an exit plan.

MR. BLANKLEY: Well, who knows? But --


(Cross talk.)

MR. MCLAUGHLIN: You know that.

MR. BLANKLEY: We've been arguing this for months. They don't want to leave now. And if they were forced to leave, they would be over a barrel.

MR. MCLAUGHLIN: All right. I think we all see that Brahimi's position is dominantly more positive than it is dominantly more negative; we're agreed on that.

Okay, the human toll. The U.S. military dead in Iraq: 819. U.S. military medical evacuees: 22,200. Iraqi civilian dead: 16,100.

We'll be right back.


MR. MCLAUGHLIN: Predictions.


MR. HARDING: Whoever wins in November, the dream team will all be gone by the end of the year.


MS. CLIFT: Don't cry for George Tenet. He'll land a fat job on Wall Street. (Chuckles.)


MR. BLANKLEY: The economy will create 2.9 million jobs before the election.


MR. PAGE: Your favorite ex-mayor, Marion Berry, is heading back to the city council.

MR. MCLAUGHLIN: Great! We miss him. (Laughter.)

Ahmed Chalabi will be found to be and to have been far more poisonous than is currently recognized.



MR. MCLAUGHLIN: Issue three: Emergency election plan.

REP. ALCEE HASTINGS (D-FL): (From videotape.) The tragic events of September 11, 2001, made clear that, as much as we might wish otherwise, at some point in the future it may be necessary to replace a large number of members of his body killed in some type of a terrorist attack.

MR. MCLAUGHLIN: It's another catastrophic scenario -- a terrorist attack that kills many members of the U.S. Congress. So, two years and seven months after 9/11, the House finally passed a plan. If 100 or more of the House's 435 members are killed, the speaker calls for special elections in the congressional districts affected to fill the vacancies. Within 10 days, parties nominate candidates, and 35 days after that, the special elections are held, thus fulfilling the U.S. Constitution's mandate that House members be directly elected by the people. So, no emergency appointments, as happens in the Senate, where governors can fill sudden vacancies.

But not everyone is buying this emergency election process.

"These elections would be a sham: no chance for a range of candidates to emerge and test their appeal to the electorate; no chance for alternative voices; no real opportunity for debate and give-and-take" -- so writes Norman Ornstein, scholar, columnist, and member of last year's Continuity of Government Commission.

This week the House made very clear that it does not want appointments -- emergency or not -- 353 to 63.

Question: Are Norman Ornstein's fears justified or are they exaggerated?


MR. BLANKLEY: I think Norm Ornstein has it about right, that --

MR. MCLAUGHLIN: You want an appointment?

MR. BLANKLEY: In the disaster that's anticipated, you need the House to be able to act within days to vote appropriations and whatever, as we did after September 11th to get money up to New York to get it up and running again. Either you make the appointments or you don't have a functioning body. So it's an extreme situation.

By the way, Tom Foley and Newt Gingrich, the two former Republican and Democrat speakers, both endorsed an effort to get to the appointment -- Norm Ornstein ran an article in my paper, The Washington Times, endorsing it, and I endorse him. (Laughter.)

MR. MCLAUGHLIN: Well, you and Ornstein, two elitists -- bring back the elections.