TRANSCRIPT:

BLITZER:John McCain's campaign is facing a growing controversy over his wife's tax returns and her adamant refusal to release them.

CNN's Carol Costello is here in THE SITUATION ROOM watching this story.

Why is this a potential issue, a potential problem out there?

COSTELLO: You know what they say. Perception is reality sometimes. It could be called perception problem for John McCain. Every other candidate and their spouses have released their tax returns. It just makes you wonder why Cindy McCain won't. (BEGIN VIDEOTAPE)

COSTELLO: Cindy McCain made it clear again she will never, ever release her tax returns.

CINDY MCCAIN, WIFE OF SEN. JOHN MCCAIN: My husband and I have been married 28 years and we have filed separate tax returns for 28 years. This is a privacy issue. My husband is the candidate.

COSTELLO: She won't even release them if her husband is elected president.

NAOMI SELIGMAN, CITIZENS FOR RESP. & ETHICS IN WASH.: I've heard her say it's about privacy. This is about transparency. Her husband has made himself a paradigm for integrity and you can't be a paradigm for integrity if you're hiding behind privacy issues.

COSTELLO: McCain has released his tax return. He made $405,409 last year. Tax attorneys tell me he and other presidential candidates or their spouses are under no legal obligation to release any financial information.

PROF. DENNIS VENTRY, AMERICAN UNIVERSITY: The argument for the McCains is, you know, until the American people really want this information to be made public or think that it's pertinent, there's -- there's not a whole lot they can do except for ask their Congress to enact laws that would require such information.

COSTELLO: But critics say law aside, we already know Mrs. McCain is loaded. She's an heiress to her father's beer distribution empire, chairman of her family's company. Some estimate she's worth $100 million. What's the big deal? Unless, they say, she has something to hide.

SELIGMAN: Trust but verify. That's why Mrs. McCain must release her tax returns.

COSTELLO: Senator McCain doesn't buy that argument. He's not the only presidential candidate whose wife refused to release her tax returns. In 2004, John Kerry's wealthy wife wouldn't pony up either. But Teresa Heinz Kerry did eventually partially relent releasing the first two pages of her tax return after intense pressure from Republicans.

(END VIDEOTAPE)

COSTELLO: Others say given McCain's role of the leader of the campaign's finance management, it's hypocritical of McCain to refuse to give voters a more complete picture of how his wife's financial resources may have supported his political campaign.