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The Situation: Tuesday, February 21

Editor's Note: The Situation Report is a running log of dispatches, quotes, links and behind-the-scenes notes filed by the correspondents and producers of CNN's Washington Bureau. Watch "The Situation Room" with Wolf Blitzer on CNN 4 p.m. ET to 6 p.m. ET and 7 p.m. ET to 8 p.m. ET weekdays.

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_{Posted: 9:40 a.m. ET
From Mark Preston, CNN Political Unit}

DeLay's Primary

Early voting begins today in Texas and all eyes are focused on the 22nd District where Rep. Tom DeLay (R-Texas) faces opposition in next month's primary election.

DeLay and attorney Tom Campbell are both claiming momentum in the run-up to the March 7 Republican contest with both campaigns noting that their respective get-out-of-the-vote operations have been activated.

And Campbell will release his third television ad today where he pledges not to go negative in the campaign despite the "attacks being made on me." While acknowledging that DeLay "has done some good things" in Congress, Campbell also argues in the ad that "his personal and legal problems and the threat of further disclosures hanging over his head, he simply can't be effective in Washington." DeLay continues to fight charges that he broke Texas campaign finance law, allegations that forced him to step down from his powerful position as House Majority Leader.

A Campbell consultant described the ad buy in the "tens of thousands" -- a relatively small sum -- and noted it will run locally on CNN and Fox.

A DeLay spokeswoman dismissed Campbell's assertions in the ad as "resorting to Democratic attacks to just get some attention."

"He has very little support here in the district and very few people know who he is," said Shannon Flaherty, DeLay's spokeswoman. Flaherty notes that DeLay is actively encouraging supporters to vote early and is sending out three separate mailings this week to GOP voters highlighting his anti-abortion rights record, his support for gun rights and his commitment to the overall Republican philosophy of tax cuts and budget reform.

"While (Campbell) is still trying to introduce himself to Republican primary voters in his home county, Congressman DeLay is already targeting folks who have supported him and getting them to the polls," Flaherty said.

T.J. Campbell, the challenger's son who is overseeing the campaign's get out the vote operation, said they are currently "calling all registered Republicans who have voted in the last two Republican primaries."

While the halls of Congress are relatively empty with most lawmakers back home during this recess period, there is growing bipartisan concern on Capitol Hill and elsewhere over a proposal to give a Dubai-based company control of six major domestic ports.

United Arab Emirates-based Dubai World Ports is set to take over management of ports in Baltimore, Miami, New Jersey, New Orleans, New York and Philadelphia after a British based company was purchased by a subsidiary of DPW. Congressional Republicans and Democrats as well as two governors have raised red flags over the deal because two of the Sept. 11, 2001 hijackers were from the UAE and funding for the terror plot originated from that country.

"I would urge the president to freeze the contract, hold this contract, until a full and thorough and complete investigation can be conducted," said Rep. Peter King (R-New York), who has been briefed on the transaction. King, chairman of the House Homeland Security Committee, said Americans will be wary of the deal because "there was never a thorough investigation done of the Dubai ports."

This afternoon, King and Sen. Chuck Schumer (D-New York) will announce a legislative effort to put the port deal on hold until it can be further investigated. And the legislation would also allow Congress to prevent the sale it felt it was not in the best interest of the country. The 1:45 p.m. ET news conference will take place in Schumer's New York City office.

Sen. Robert Menendez (D-New Jersey), who is running for a full six-year term in November, dismissed assertions by the White House that the proper security measures are in place to allow this transaction to move forward.

"You can't just simply tell us, 'Trust us,'" said Menendez, who has proposed a new law with Sen. Hillary Rodham Clinton (D-New York) forbidding foreign control of U.S. ports. "We trusted the government response to Hurricane Katrina -- and the people of the Gulf were largely left on their own."

Maryland Gov. Robert Ehrlich (R) and New York Gov. George Pataki (R) are also exploring legal options to stop the deal, The Associated Press and The New York Times report.

But so far, the White House has shown no signs of taking steps to reject the deal and note the UAE is a key ally in the war on terror.

"The process was done by the book," Presidential Counselor Dan Bartlett said. "If you start deciding these issues in a guilt-by-association method you will have a situation which has deep and harmful ramifications to the economic interests of this country."

With both Democrats and Republicans echoing similar concerns about the deal, it is unlikely this will become a major issue in the midterm elections. But this subject is expected to dominant the headlines for the foreseeable future.

Many people view the midterm elections as a warm-up for the 2008 presidential contest, where for the first time in recent memory there will be open primaries on both sides of the aisle. More than half the country (51 percent) believe that Clinton should make a White House bid, while nearly as many Americans (48 percent) think Secretary of State Condoleezza Rice (R) should seek the presidency, according to a Hearst/Siena College poll released yesterday. And perhaps more telling is that 64 percent of American thinks the country is ready for a woman president, the poll found.

Tonight, Clinton hosts a low donor fundraiser at the Crobar in New York City featuring Miri Ben-Ari, the Grammy award winning violinist that has performed with artists such as Kanye West, Jay-Z and Alicia Keys.

Meanwhile, President Bush wakes up in Colorado this morning and later tours the National Renewable Laboratory in Golden before participating in a 9:30 a.m. MT discussion on "Energy Conservation and Efficiency." He is scheduled to arrive back in Washington by 4:05 p.m. ET.

Political Hot Topics

_{Posted: 9:40 a.m. ET
From Stephen Bach, CNN Washington Bureau}

JACK GIVEN $1.2M TO ARRANGE BUSH MEETING W/ EX-MALAYSIAN PM: Former Prime Minister Mahathir Mohamad said disgraced U.S. lobbyist Jack Abramoff was paid $1.2 million to organize a meeting between him and President Bush in 2002, but denied the money came from the Malaysian government. Mahathir told reporters late Monday he was aware the payment was made to Abramoff, but he didn't know who made it. "I understood some people paid a sum of money to lobbyists in America but I do not know who these people were and it was not the Malaysian government," Mahathir said. AP via Yahoo! News: Ex-Malaysia PM: Abramoff Was Paid $1.2M

BUSH HITS THE ROAD FOR ALTERNATIVE ENERGY: President Bush visited one of the nation's leading producers of energy-efficient technologies on Monday and hailed the company's innovations as proof that the United States can one day wean itself off foreign oil. Speaking at Johnson Controls, a Fortune 500 company that produces batteries for hybrid vehicles and energy-saving devices for buildings, Bush said, "In order to seize the moment, this country needs to remain technologically advanced." Reiterating his belief that the nation is "addicted to foreign oil," the president renewed his call for increased spending on science research, development and education and greater government incentives for the makers and users of alternative sources of energy. "I think we're in an important moment in history," Bush said. "We have a chance to transform the way we power our economy, and the way we lead our lives." Washington Post: Bush Urges Funding for Alternative Energy

BUSH, FOX TALK BORDER VIOLENCE: President Bush and Mexican President Vicente Fox agreed yesterday to try to reduce violence on the U.S.-Mexico border and pledged to have their countries' domestic security departments work together on the issue. In a telephone conversation, Mr. Bush designated Homeland Security Secretary Michael Chertoff to be the top U.S. contact on border violence, and Mr. Fox tapped Interior Secretary Carlos Abascal Carranza as his point man. "The two leaders talked about the importance of working together to improve our border security and stop the violence," said White House spokesman Scott McClellan. Concern over border violence is growing as violent encounters in Mexico increase, spreading rapidly throughout northern Mexico from the lawless confines of Nuevo Laredo, which lies across the Rio Grande from Laredo, Texas. Washington Times: Bush, Fox join forces to cut violence on border

RICE OFF TO MIDEAST: U.S. Secretary of State Condoleezza Rice arrives in the Middle East today aiming to persuade Arab allies to cut support for the Hamas-led Palestinian government and help deny Iran a nuclear weapon. Rice visits just three days after a new Palestinian legislature was seated and chose Hamas leader Ismail Haniya as prime minister. Israel, which calls Hamas unrepentant terrorists, responded by freezing about $43 million in monthly tax and customs fees it collects for the Palestinian Authority. One of Rice's main goals is to line up Egyptian and Saudi Arabian officials to tell Hamas leaders that they must "make choices" or face a funding cut-off from Islamic charities, says Dennis Ross, former U.S. chief negotiator for the Middle East. Bloomberg: Rice to Ask Allies Egypt, Saudi Arabia to Constrain Hamas, Iran

"NOT ENOUGH" FOR THE NEOCONS: The riots surrounding the Danish cartoons of Prophet Mohammed are driving a wedge between the White House and President Bush's neoconservative allies, raising new questions about whether the administration intends to follow the neocon line beyond the Iraq war. The White House has slowly amped up Bush's condemnations of the cartoon protests, but always taken pains to declare, as spokesman Scott McClellan did earlier this month, that ''we understand fully why people, why Muslims, find the cartoons offensive."... But that hasn't been enough for leading neoconservatives. In their global view, the cartoons are props in the hands of US enemies in the Arab world, and the protests are a stage-managed effort to deflect the world's attention from the misdeeds of Middle Eastern regimes. Boston Globe: Bush's response to riots not enough for neocons

INTEL AGENCIES RECLASSIFY THOUSANDS OF HISTORICAL DOCS: In a seven-year-old secret program at the National Archives, intelligence agencies have been removing from public access thousands of historical documents that were available for years, including some already published by the State Department and others photocopied years ago by private historians. The restoration of classified status to more than 55,000 previously declassified pages began in 1999, when the Central Intelligence Agency and five other agencies objected to what they saw as a hasty release of sensitive information after a 1995 declassification order signed by President Bill Clinton. It accelerated after the Bush administration took office and especially after the 2001 terrorist attacks, according to archives records.New York Times: U.S. Reclassifies Many Documents in Secret Review

MD, NY GOVS UNEASY ABOUT PORT DEAL: New York Gov. George Pataki and Maryland Gov. Robert Ehrlich on Monday voiced doubts about the acquisition of a British company that has been running six U.S. ports by Dubai Ports World, a state-owned business in the United Arab Emirates. The British company, Peninsular and Oriental Steam Navigation Co., runs major commercial operations at ports in Baltimore, Miami, New Jersey, New Orleans, New York and Philadelphia. Both governors indicated they may try to cancel lease arrangements at ports in their states because of the DP World takeover. AP via Yahoo! News: GOP Governors Threaten to Block Port Deal

REINER'S ADS RAISE QUESTIONS: Police sirens wail as a scruffy teenager, clutching a bag, runs frantically through the streets. Entering a schoolyard, he reaches into the bag. Out comes ... a graduation gown, which he dons to receive a diploma. The scene is from a television ad, paid for with tax money and made by consultants close to Hollywood producer Rob Reiner. It aired across California this winter, touting the benefits of preschool. "When kids go," the narrator says, "we all benefit." The release of the ad, and two others, by a state commission Reiner heads coincided with his launch of a ballot initiative that would tax the rich to fund preschool for all California 4-year-olds. Although Reiner did not directly approve the spots, their timing and substance highlight ties between the public commission and his private political campaigns and raise questions about whether the state-funded commercials were used to boost the initiative's prospects. Los Angeles Times: TV Ads Put Focus on Reiner

AZ SENATE CANDIDATE'S SON ARRESTED: The son of U.S. Senate candidate and Valley real estate developer Jim Pederson was arrested over the weekend on drug charges. The Maricopa County Sheriff's Department arrested James Robert Pederson, 24, at his Phoenix home on various drug-related charges. The elder Pederson is a top Valley shopping center developer and the former chairman of the Arizona Democratic Party. He is looking to unseat Republican U.S. Sen. Jon Kyl in the November election. Phoenix Business Journal: Pederson's son arrested on drug charges

"CULTURE OF CORRUPTION" IN PEDERSON HOUSEHOLD, SAYS AZ SEN: Arizona senators exchanged harsh words during a floor session Monday as Republican Sen. Jack Harper criticized the arrest of a Democratic candidate's son and was in return denounced by another GOP lawmaker. Harper, R-Surprise, said the arrest Friday evening of 24-year-old James Robert Pederson, son of former state Democratic Party Chairman Jim Pederson, "points to a culture of corruption in the Pederson household."... Fellow Republican Sen. Carolyn Allen of Scottsdale immediately rose to denounce Harper's comments as "totally inappropriate." "This kind of attack has got to stop on this floor," she said. "It is one thing to discuss and attack a candidate. We're talking about a son." After several other senators weighed in with remarks sympathetic to Pederson's family troubles, Allen called on Harper to apologize. Harper, who periodically criticizes Gov. Janet Napolitano and other prominent Democrats during floor speeches, refused. "Jim Pederson's a big boy," said Harper. AP via Yahoo! News: Ariz. Candidate Lambasted for Son's Arrest

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