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Jackson Revealed as "Number Five"; Governor's Wife Caught on Tape; Jet Crash Kills Entire Family; No Nukes vs. New Nukes

Aired December 10, 2008 - 17:00   ET

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


WOLF BLITZER, CNN ANCHOR: And to viewers, you're in THE SITUATION ROOM.
Happening now, she's being called a modern day Lady Macbeth -- the wife of the Illinois governor allegedly plotting against his enemies. Her foul-mouthed tirades caught on tape. New details of her role in the explosive scandal threatening to bring both of them down.

Also, Barack Obama apparently at odds with the man he's asked to stay on as Defense secretary. One says no nukes, the other wants new nukes.

How do the president-elect and Defense secretary bridge their divide?

And Obama now embracing the name critics tried to use against him during the campaign -- his middle name, Hussein. Will it help his outreach to the Muslim world?

James Carville and Bay Buchanan -- they're weighing in. They're standing by live.

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

All that coming up. But first, the breaking news. A Congressman with a famous last -- a famous name, that is -- now associated with the staggering corruption scandal swirling around the Illinois governor. We're talking about Jesse Jackson, Jr. . He's now been officially revealed to be "Candidate 5." The FBI says governor Rob Blagojevich referred to him on those secretly recorded tapes believing he could shake down Jackson for money or favors in exchange for an appointment to Barack Obama's Senate seat.

Congressman Jackson spoke out about this in the last hour, strongly denying he sought anything from Blagojevich.

(BEGIN VIDEO CLIP)

REP. JESSE JACKSON (D), ILLINOIS: I reject and denounce pay to play politics and have no involvement whatsoever in any wrongdoing. I did not initiate or authorize anyone at any time to promise anything to Governor Blagojevich on my behalf. I never sent a message or an emissary to the governor to make an offer, to plead my case or to propose a deal about a U.S. Senate seat -- period.

(END VIDEO CLIP) BLITZER: Drew Griffin of CNN's Special Investigations Unit is in Chicago.

He's working this story.

It's called pay for play. It's a huge scandal -- Drew, what are you finding out?

DREW GRIFFIN, CNN SPECIAL INVESTIGATIONS UNIT CORRESPONDENT: Yes, the congressman had to make those public statements today after his name was dragged into this investigation. And meanwhile, the person at the center of the investigation practically in hiding -- Wolf.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: Here he is.

UNIDENTIFIED MALE: Governor...

UNIDENTIFIED MALE: Governor...

UNIDENTIFIED MALE: Governor, why are you running away?

UNIDENTIFIED FEMALE: Governor...

GRIFFIN (voice-over): Call it business unusual for the Illinois governor -- now ducking media staked out at his home and racing past cameras as he was driven to his Chicago office. One day after his arrest and amid calls from every corner of the state for his resignation, the governor was silent.

Not so silent, Congressman Jesse Jackson, Jr. , who suddenly found himself defending his quest to fill the U.S. Senate Democrat Governor Blagojevich was alleged trying to sell.

JACKSON: I've done nothing wrong. This is a very serious matter. But that is going to restore confidence -- at the end of this process -- in government in Illinois. And that is long overdue.

GRIFFIN: A law enforcement source with detailed knowledge of the investigation confirms to CNN's Kelli Arena that Democratic Congressman Jesse Jackson is the "Senate candidate No. 5" talked about in the federal complaint against the governor. That same federal source and Congressman Jackson's newly hired attorney say the congressman has done nothing wrong.

JAMES MONTGOMERY, SR. JACKSON'S ATTORNEY: The congressman and I have spoken with the U.S. attorney's representatives and have been assured that the congressman is not a target of this investigation.

GRIFFIN: And while Congressman Jackson is not named, is not charged and no one in the federal investigation is insinuating any wrongdoing on his part, if he is "No. 5," what is what's explained in the document is at least troubling. On December 4th, Blagojevich tells an adviser "he was giving "Senate Candidate 5" greater consideration" because he would raise money for the governor. Blagojevich adds he might want to "get some money up front maybe" from "Senate candidate No. 5" to ensure the promise is kept, prosecutors say.

Then the governor allegedly recalls a conversation from October 31st with an associate of "Senate Candidate No. 5": "We were approached pay to play that, you know, he'd raise me 500 grand. An emissary came. Then the other guy would raise a million if I made him -- "Senate candidate No. 5" -- a senator."

JACKSON: I am confident that we have engaged in no wrongdoing. The facts are going to bear themselves out. And our state is going to be all the better for it.

Thank you.

(END VIDEOTAPE)

GRIFFIN: Wolf, you know, Congressman Jackson has been waging a very public candidacy to get that Senate nominee appointment from Governor Blagojevich. But today, he said he hadn't spoken with Governor Blagojevich about anything for four years until they met on Monday. And while there was no resignation from the governor of Illinois today, there was a governor's office resignation. A deputy governor named Bob Greenlee has resigned today. No reason given -- Wolf.

BLITZER: And we'll see how many more people start resigning, as well.

Thanks very much. Drew is working the story in Chicago.

The governor's wife is also heard on those tapes, sometimes unleashing profanities. And we're learning more about her role in her husband's career and the scandal that could be his downfall.

CNN's Susan Roesgen is also in Chicago with more on this part of the story -- Susan, what are you picking up?

SUSAN ROESGEN, CNN GULF COAST CORRESPONDENT: Well, I think what we're all picking up here, Wolf, is that the first lady of Illinois is not charged with anything.

However, in looking at transcripts of those federal tapes, she is portrayed as a political player behind-the-scenes, egging her husband on like Lady Macbeth.

(BEGIN VIDEOTAPE)

ROESGEN (voice-over): Patti Blagojevich is her husband's partner in life and politics. Her father is a powerful Chicago alderman credited with putting his unknown son-in-law right at the top of Illinois politics. And she has been under scrutiny, accused of brokering multimillion dollar real estate deals with her husband's political cronies. She's been supportive of her husband and the Feds say he was going to support her.

PATRICK J. FITZGERALD, U.S. ATTORNEY: The tapes reveal that Governor Blagojevich wanted a number of things in exchange for making an appointment to the Senate seat -- an appointment as secretary of Health and Human Services or an ambassadorship, an appointment to a private foundation, a higher paying job for his wife or campaign contributions.

ROESGEN: By all accounts, Patti Blagojevich is no shrinking violet. And on the government's tapes, investigators say she can be heard forcefully expressing her opinions. The Feds say the governor demanded that "The Chicago Tribune" newspaper get rid of editorial writers who didn't like him or the "Tribune's" owner would not get state money to help in the sale of the Cubs baseball team.

In the background, investigators say the Illinois first lady is cursing. "Hold up that blanking Cubs blank blank them."

The Feds say the bottom line was money. They say the governor is heard asking his chief of staff at one point -- now his co-defendant, John Harris: "Is there a play here with these guys, with her, to work for a firm in Washington or New York at a significantly better salary than she's making now?"

FITZGERALD: He wanted to do it to see if he could help his wife work as a lobbyist. He wanted to do it to remake his image to run for office in 2016. And he wanted to do it to see if he could generate speaking fees.

ROESGEN: Over the years, a powerful couple -- now partners in political scandal.

(END VIDEOTAPE)

ROESGEN: And, Wolf, we are here in front of the governor's house, waiting to see him possibly come back tonight, a little more activity. And we don't know which newspaper they read here in Chicago, but if the first lady looked at the "Sun-Times" today, this is what she saw -- "Foul-Mouthed First Lady."

Neighbors here say they're a nice couple, but they just are appalled by what's alleged in the federal wiretaps -- Wolf.

BLITZER: And we know the governor reads all those newspapers, the "Sun-Times," the "Tribune." He's very sensitive to what they report about him.

Susan, thank you.

Of course, Governor Blagojevich has not been convicted. The allegations against him run counter to the image he's tried to project over the years.

(BEGIN VIDEO CLIP)

GOV. ROD BLAGOJEVICH (D), ILLINOIS: Over the last several years, our state has been adrift. Corruption has replaced leadership. I'm running for governor because I believe Illinois can do better.

(END VIDEO CLIP)

BLITZER: And that ad is from the governor's winning 2002 campaign. He ran against political corruption.

All right. Let's go back to Jack Cafferty.

He's got The Cafferty File -- Jack.

JACK CAFFERTY, CNN ANCHOR: A lovely couple, don't you think?

There's a deal -- or there was, at least in principal -- for a $14 billion auto industry bailout with some strings attached. Republicans reportedly are balking at this thing now. But earlier, it was thought they might have something in place that would work.

The big three have three months to restructure under the watchful eyes -- presumably -- of a government car czar. So that's it. A few billion dollars, some government interference, Detroit will be just fine, right?

This car czar, to be appointed by the president, will write the guidelines for the $14 billion loan. The appointee will also set the terms for the loans and oversee the restructuring of the automakers who take the money. There will supposedly be a report to Congress every 15 days.

Hold your breath on that.

In short, this person will have extraordinary power. The deal is a short-term solution. It's supposed to give G.M. and Chrysler enough cash to avoid filing for bankruptcy, at least until Barack Obama takes over in January and can negotiate a longer-term solution.

Ford apparently has enough cash on hand. They say they don't need a loan -- at least not yet.

If the government does as good a job with this as it's done with overseeing the $700 billion bailout package, well, you get the idea.

Some are calling the arrangement bankruptcy lite -- saying that it avoid the dangers of bankruptcy that scare consumers away from buying products -- in this case, cars.

So here's the question: Is a government car czar the answer to Detroit's problems? I can't even say this with a straight face. Go to CNN.com/caffertyfile and you can post a comment on my blog. A car czar -- Wolf.

BLITZER: It would be car-car, except you add a Z and it becomes a car czar.

CAFFERTY: Well, that's a good point. Otherwise, his card would read John Smith, Car-Car.

(LAUGHTER)

CAFFERTY: And that wouldn't be any good. So they had to put in car czar, right? That's maybe like the drug czar.

That's worked pretty well, right?

BLITZER: Right. Yes.

OK, Jack. Thanks very much. We'll see you soon.

His entire family was killed when a military fighter jet crashed into their neighborhood.

(BEGIN VIDEO CLIP)

DONG YUN YOON, HUSBAND AND FATHER OF CRASH VICTIMS: Such a horrible thing to happen, especially right here, you know, right our house.

(END VIDEO CLIP)

BLITZER: Now this grief-stricken husband and father is speaking. And he's delivering an amazing message to the pilot. This is a story you shouldn't miss.

Also, the president-elect has made a decision about using his Muslim middle name when he takes the oath of office. We'll talk about it with James Carville and Bay Buchanan.

Plus, Obama at odds, apparently, with the man who will be his secretary of Defense over America's nuclear arsenal.

Can they bridge their divide?

Stay with us.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Both of California's U.S. senators are now calling for an investigation into an F-18 military jet crash in hopes of preventing another catastrophe like the one that killed four people, including two young children, in San Diego.

Let's go there. CNN's Ted Rowlands is following this really tragic story for us. We heard from this devastated father today and it was so, so sad -- Ted.

TED ROWLANDS, CNN CORRESPONDENT: Yes, Wolf. Actually, it was last night.

Dong Yoon lost his entire family. He spoke publicly about the incident. And what he said has moved people around the world.

(BEGIN VIDEOTAPE) YOON: Such a horrible thing to happen, especially right here. I believe my wife and two babies and mother-in-law are in heaven with God.

ROWLANDS (voice-over): As military jets ironically flew overhead, forcing him to pause, Dong Yoon talked about the pilot that ejected safely from the jet that killed his family.

YOON: I heard the pilot is safe. Please pray for him not to suffer from this accident. I know he's -- he's one of our treasures for the country. And I -- you know, I don't blame him. I don't have any hard feelings. I know he did everything he could.

ROWLANDS: People around the world were watching Dong Yoon as he asked people to pray for the pilot. Since then, the phone at the Korean church where Yoon worships has been ringing off the hook with people to donate or to simply thank Yoon for his compassion and faith.

Church Reverend Daniel Shin says he was surprised by what Yoon said about the pilot.

REV. DANIEL SHIN, YOON FAMILY PASTOR: You know, I've been in the ministry for over 21 years now. And this is a rare, rare, rare experience. Sometimes hardships bring out the best part out of you. And I didn't know he had this kind of resolve in him.

ROWLANDS: Dong Yoon came to the United States in 1989. He became a U.S. citizen and works at a Korean convenience store. That's where he was when his family was killed.

YOON: You know my wife -- it was God's blessing that I met her about four years ago. And we got married. And she's just such a lovely wife and mother who always loves me. You know, I -- I just miss her so much. I had two daughters. The first one is Grace. She's only 15 months old. And I have a second one, Rachel. She was just born October 17th. That's just a little over a month. I can't -- you know, I can't believe that they're not here right now.

(END VIDEOTAPE)

ROWLANDS: And, Wolf, Yoon has heard from people around the world. The one phone call the family hasn't received yet -- anybody from the U.S. military. They, meanwhile, are continuing their investigation as to exactly what happened.

There's a prayer service in San Diego tonight. A lot of people are expected.

BLITZER: Yes. I would hope.

What a courageous young man and what a heartbreaking, heartbreaking story.

Our deepest condolences to him.

Thank you, Ted, for bringing that story to us. President-Elect Barack Obama and the Defense secretary he's asked to stay on at the Pentagon have a seriously different opinion when it comes to nuclear weapons -- or at least that would be -- seem to be the case.

Let's go to our senior Pentagon correspondent, Jamie McIntyre. He's been looking at this story for us. All right, where do these two men stand -- Jamie?

JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT: Well, Wolf, this is another case where the lofty rhetoric of the campaign trail has come into direct conflict with the realities of the real world.

(BEGIN VIDEOTAPE)

MCINTYRE (voice-over): Barack Obama says he's committed to ridding our planet of its deadliest WMDs.

SEN. BARACK OBAMA (D-IL), PRESIDENT-ELECT: It's time to send a clear message to the world -- America seeks a world with no nuclear weapons.

MCINTYRE: But his holdover Defense secretary, famous for his pragmatism, has a different view.

ROBERT GATES, U.S. SECRETARY OF DEFENSE: Try as we might and hope as we will, the power of nuclear weapons and their strategic impact is a genie that cannot be put back in the bottle -- at least for a very long time.

MCINTYRE: Robert Gates sees the world with the gimlet eye of the old spy master he is and argues forcefully America not only needs its atomic arsenal, but needs new, improved bombs to strike fear in future foes.

GATES: Let me be clear. The program we propose is not about new capabilities -- suitcase bombs or bunker busters or tactical nukes. It is about safety, security and reliability.

MCINTYRE: The U.S. hasn't tested its nukes for 16 years. It's one reason Defense Secretary Gates is anxious to replace America's aging nuclear weapons with a new, smaller arsenal of modern warheads. But even without testing, the newer nukes would be far more reliable, he argues. And they could be outfitted with high tech safeguards to prevent their use if they ever fell into the wrong hands.

So President-Elect Obama wants no nukes and Gates wants new nukes. Good thing Obama gave himself plenty of wiggle room.

OBAMA: As long as nuclear weapons exist, we'll retain a strong deterrent. But we will make the goal of eliminating all nuclear weapons a central element in our nuclear policy.

MCINTYRE: So what exactly does Barack Obama have to decide?

One thing is whether to build the so-called reliable replacement warhead -- a multi-billion dollar program to replace aging weapons. Congress so far has rejected money for that.

(END VIDEOTAPE)

MCINTYRE: And the other issue is whether the U.S. joins the countries of the world who have agreed never to test nuclear weapons again. That treaty has not yet been ratified by the Senate.

And the answers to those questions, Wolf, will determine whether Barack Obama's pledge to eliminate nuclear weapons remains an elusive goal or a more solid promise -- Wolf.

BLITZER: I know you'll watch it for us. Jamie, thank you.

It's the name his opponents tried to use as a slur -- Barack Obama's Muslim middle name, Hussein. But will he use it when he takes the oath of office on January 20th? He's now made a decision.

And Oprah Winfrey admitting she's back on what she calls her drug of choice. That would be food. Her very public confession and her ongoing battle. We'll update you right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Deborah Feyerick is monitoring some other important stories incoming into THE SITUATION ROOM right now -- Deb, what's the latest?

DEBORAH FEYERICK, CNN CORRESPONDENT: Well, Wolf, violent protests are rocking Greece for a fifth straight day. Protesters have been smashing windows and looting stores. Today, the prime minister of Greece condemned the riots and promised to help affected business owners. The fatal shooting of a 15-year-old boy by police sparked the riots. A lawyer for the accused officer says ballistic tests show the bullet, which was allegedly fired in the air, ricocheted off an object before hitting the teen.

And Wal-Mart says it will pay up to $54 million to settle a class action lawsuit in Minnesota. The suit alleges that the discount giant cut workers' break times and refused to stop managers from having employees work off the clock. The class action lawsuit dates back 10 years and includes about 100,000 current and former hourly workers.

And that glittery silver glove that Michael Jackson first wore in his "Billie Jean" video is being auctioned off. The pop star also plans to sell the gates that once led to his Neverland Ranch and more than 2,000 other personal items. The auction will take place next April. Jackson plans to donate some of the proceeds to Musicares, the charity that helps musicians in need.

So, Wolf, you can have that glove if you want it.

BLITZER: No. You're going to be bidding for some of those items, as well.

FEYERICK: Definitely the glove.

BLITZER: The glove, for sure.

All right. Deb, thank you.

It's his middle name, but during the campaign, some opponents used it as a slur.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: On November 4th, let's leave Barack Hussein Obama wondering what happened.

(END VIDEO CLIP)

BLITZER: Now we're learning the president-elect plans to use his middle name when he takes his oath of office on January 20th.

Can it help repair U.S. relations with the Muslim world?

We'll speak about that and much more with James Carville and Bay Buchanan. They're standing by live.

And there are fast-moving developments right now on Capitol Hill, where passage of an auto industry bailout is in doubt.

So what happened?

And why is CNN's Anderson Cooper swimming with sharks? He's standing by live to explain.

Stay with us.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: To our viewers, you're in THE SITUATION ROOM.

Happening now, the White House and Democrats wrap up work on a $14 billion plan to save U.S. automakers from bankruptcy -- but it could hit new roadblocks. Senate Republicans are now voicing strong, strong opposition.

It was the focus of some negative attacks during the campaign, but President-Elect Barack Obama is now embracing his middle name, saying he will follow tradition when he takes the oath of office on January 20th.

And Jesse Jackson, Jr. joins President-Elect Barack Obama in calling for the Illinois governor, Rob Blagojevich, to step down. We're following all the latest developments in this scandal over the allegations the governor tried to sell Barack Obama's Senate seat.

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

The president-elect will not only be the country's first African- American president, he'll also be the first with a Muslim name -- one from which he says he won't be shying away.

Let's go to our State Department correspondent, Zain Verjee. She's looking at the story for us -- explain, Zain, what's going on. What is the president-elect planning to do?

ZAIN VERJEE, CNN STATE DEPARTMENT CORRESPONDENT: Wolf, the president-elect is essentially planning on rebuilding bridges with the Muslim world.

(BEGIN VIDEOTAPE)

VERJEE (voice-over): Barack Hussein Obama will use his full name when he takes the oath of office on January 20th. The president-elect told the "Chicago Tribune" newspaper, "I think the tradition is they use all three names and I will follow the tradition," he said. "I'm not trying to make a statement one way or another. I'll do what everybody else does." His middle name Hussein a focus during the campaign.

UNIDENTIFIED FEMALE: I can't trust Obama. I have read about him. And he's not -- he's a -- he's an Arab.

SEN. JOHN MCCAIN (R), ARIZONA: No, ma'am no, ma'am.

VERJEE: Former secretary of state Colin Powell objected saying Obama is not a Muslim. And so what if he was?

COLIN POWELL, FORMER SECRETARY OF STATE: To throw in the sort of Muslim connection, you know, he's a Muslim and a terrorist. It was taking root. That kind of negativity troubled me.

VERJEE: Obama himself joked about it.

OBAMA: And I got my middle name from somebody who obviously didn't think I'd ever run for president.

VERJEE: Obama's father was a Muslim and that's where he got his middle name.

IMAN FEISAL ABDUL RAUF, FOUNDER, CORDOBA INITIATIVE: The son of a Muslim. All the whole narrative of Obama put together is what gives us hope.

VERJEE: The president-elect is a Christian but says he wants to reach out to the Muslim world and reboot America's image there. Analysts say the world's $1.3 billion Muslims want reassurance that the U.S.-led war on terror is not a war on Islam. Obama's victory already has sent a message.

UNIDENTIFIED MALE: The photo of President Bush and President- elect Obama at the White House did volumes in the broader Middle East and throughout the world to show what America is.

(END VIDEOTAPE)

VERJEE: Some experts say it really boils down to one thing amongst others, solving the Israeli/Palestinian issue, a core issue for the Arab and Muslim world --Wolf?

BLITZER: All right, Zain. Thank you.

Let's get more on what's going on. Joining us now, our two CNN political contributors, the Democratic strategist James Carville and the Republican strategist Bay Buchanan. Can we call you a Republican strategist?

BAY BUCHANAN, REPUBLICAN STRATEGIST: Absolutely.

BLITZER: I think we can call you that. He says he's going to do what every other president has done when they're sworn in on January 20th. I Barack Hussein Obama, blah, blah, blah, blah, blah, blah. What do you think?

JAMES CARVILLE, DEMOCRATIC STRATEGIST: It's his name. It's not like people didn't bring it up. They were saying it all the time. I think it's wonderful we have a president like this. His name is his name. And he'll be sworn in with his name. I think it would have been absurd for him not to. Ronald Wilson Reagan or John Fitzgerald Kennedy.

BUCHANAN: Wolf, it's not tradition. Ronald Reagan did not use his middle name when sworn in, neither did Jimmy Carter. Eisenhower used just a middle initial. Ford used a middle initial. It's not tradition. I say use whatever you want. Don't give us a phony excuse why you're doing it. It's his father's name and he has very right to say absolutely I'm using his name. But don't use tradition as an explanation for doing something that it's right to do just on the face of it.

BLITZER: There's nothing wrong with the name of Hussein. One of America's greatest friends ever in the Arab world was king Hussein of Jordan who made peace with Israel.

BUCHANAN: What's interesting, about six months ago I was on the set. Is the frenzy around the fact that Bill Cunningham in Cincinnati had used the name Hussein when describing Barack Obama, and you all were saying, what's he mean by all this. It's his middle name. And John McCain and the media.

CARVILLE: I beg to differ.

BUCHANAN: You just now said it's no big deal.

CARVILLE: Let me log in because I saw when he said that. He meant it in a very different way. I just have to point that out.

BLITZER: I think it's fair some people using his middle name during the campaign were trying to use it as a slur.

BUCHANAN: It reflects who he is. So the use of his middle name is completely legitimate by him. It will certainly was legitimate by Republicans.

BLITZER: Let's talk about the governor of Illinois. He's in deep trouble I should say right now, Rob Blagojevich. The question is this. And I've gotten a lot of e-mails. Does this kind of stuff always go on or is it simply a matter of we know about it because it was caught on audiotape?

CARVILLE: I've got to tell you, maybe I'm naive or Pollyanna or something. I don't think people go around talking about selling Senate seats. I'm not saying it's never happened. I just think that's outside of the norm. And I'm going to continue to believe that. And I'm going to teach my children that this is really a bad thing to be doing.

BUCHANAN: You know, I agree with James entirely. But he even has more credibility than I do on this because he's from Louisiana. If he doesn't think this happens and all the corruption in Louisiana, it's just like Illinois. I agree with him. This is another level of a completely outrageous cam that's been going on.

CARVILLE: Let me defend Louisiana. The most corrupt Congressman was from north San Diego County. One of the most affluent places in the United States. We've had some trouble in Louisiana. But there's an awful lot of really honest people down there, too. To my knowledge, I mean, I think this was an extraordinary thing and I just -- I want to believe that this doesn't go on all the time. I really do believe that.

BLITZER: If the allegations and these are still allegations if they're proven to be true, I guess some people say what's the difference between the blatant and brazen way it's described in that 76-page U.S. attorney's document as opposed to let's say a little bit more subtle ways when people say if you go out and raise all this money, maybe there's a job for you in the administration.

BUCHANAN: Because I got a job that way. I worked for the better part of four years for Ronald Reagan and ended up as treasury of the United States. I never had an expectation I was going to get the job. I worked because I believed in the man and then he went and chose people just as other presidents have who they trust and who they're friends with, with they know and brought them into the administration. Those were appointed positions. To the victor goes the spoils. This is as entirely different circumstance. You give me the money and here, 500 first and a million afterwards and we'll give you the seat. That is selling a U.S. Senate seat.

CARVILLE: We should also note that this is Blagojevich saying this, this is not the man with the most credibility of anybody in the United States. So let's consider the possibility that he's lying on the telephone. It's a real, real possibility.

BLITZER: Not just his telephone. They also bugged his campaign office.

CARVILLE: Right.

BLITZER: He was speaking to a couple of his aides.

CARVILLE: Even the just the conversation I find it shocking. Appalling. It was --

BLITZER: This is really a wake-up call to politicians out there, isn't it?

BUCHANAN: The level of arrogance that this fellow just openly talks about. There's lots of tapes listen, if we gave it to him it might be good for this or that and it might not be as pure as it should be, but this is a wake-up call. I hope to think that it doesn't need to be a wake-up call, that we don't have politicians out there actually plotting and playing on how they can benefit from their office.

CARVILLE: The Norm Coleman FBI's investigating him. These things happen. They happen in both parties. There's no doubt about this. This strikes me from what we know so far, we've got to use the usual caveats that he's entitled to the presumption, but there's something about a United States Senate seat that just it's very appalling to hear somebody talk about selling it.

BLITZER: A Democratic governor of Illinois.

CARVILLE: A Democratic governor of Illinois. He is the Democratic governor of Illinois. As a Democrat I'm particularly appalled by this. To be fair too, to the president-elect.

BLITZER: What if he decides not to step down and says I'm going to stay in office?

CARVILLE: I think that it's going to be very difficult. The Senate Democrats, Senator Reid and others, Senator Durbin may not even seat -- the Senate can seat who it wants. They might not even seat his appointee.

BLITZER: That would be pretty brazen for him to say.

CARVILLE: Who's going to get to take it?

BLITZER: Would you accept it if he said you're going to be the next senator?

BUCHANAN: I'd head right up there. Absolutely I would take it. At this stage, whoever he appoints, you can see what happens afterwards. You can always step down and say let's open it up when this thing gets cleared up. There's many ways of doing it. This fellow, if I were he, you listen to your attorney, I would not step down as the governor. That's a chit he can use.

CARVILLE: I think his ability to do anything is nil. His ability to have any credibility is nil. I think that the state legislature is going to move pretty quickly in the write direction.

BLITZER: Thanks very much. Thanks for coming in. One additional note we should point out, the president, the next president of the United States, his middle name is Hussein. The next White House chief of staff, you know what his middle name is?

CARVILLE: Israel.

BLITZER: That's correct. Rahm Israel Emmanuel.

CARVILLE: I like that about America.

BLITZER: America's a special country. You've got a president whose middle name is Hussein and a chief of staff whose middle name is Israel. Thanks very much.

More roadblocks for a big three bailout. Why Republicans are criticizing the latest plan to rescue U.S. automakers.

And why Oprah Winfrey is mad at herself and embarrassed.

Stay with us. You're in THE SITUATION ROOM.

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BLITZER: We've certainly been hearing a lot about helping the U.S. car companies. Today the man in charge of the $700 billion bank bailout took a lot of heat from members of Congress. Let's go to Capitol Hill. CNN's Brianna Keilar is standing by. What happened?

BRIANNA KEILAR, CNN CORRESPONDENT: Wolf, lawmakers are very angry about two recent reports that say the Treasury Department isn't doing nearly enough to keep track of where all this money is going.

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KEILAR (voice-over): The questions came fast and furious.

UNIDENTIFIED MALE: This is the taxpayers' money and we need some answers.

REP. MAXINE WATERS (D), CALIFORNIA: What is your resistance to helping homeowners stay in their homes and stop these foreclosures?

UNIDENTIFIED MALE: What are we buying? Who's getting the money, where is it going?

KEILAR: Lawmakers are not happy with Neel Kashkari, the man in charge of the Wall Street bailout. Republicans and Democrats want to know, why banks and other companies took bailout money and hoard it had instead of lending it as Congress intended. Some companies used it to buy other banks and pay executives large incentive packages that some lawmakers call bonuses by another name.

REP. DONALD MANZULLO (R), ILLINOIS: Mr. Kashkari, an executive at AIG just got a bonus of $3 million. I'm asking you if that's the case, is T.A.R.P. going to ask for the money back, if you got the $3 million bonus?

NEEL KASHKARI, TREASURY DEPARTMENT: Again, Congressman, I'm going to have to get back to you.

MANZULLO: Mr. Kashkari, when you sit there and cannot take a position as to whether or not a $3 million bonus to a failed company and as to which the taxpayers have put $125 billion in assets perhaps you're not the right person for the job.

KEILAR: Lawmakers were also angered to find out some money was used to pay shareholder dividends. Kashkari defended the practice as an incentive for sound financial institutions to take part in the bailout program.

KASHKARI: To come in to healthy banks and wipe out all their dividends would drive away private capital. We want to encourage private capital.

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KEILAR: Congress is not without some blame here. It's supposed to have its own oversight board and Wolf, it's barely off the grounds so far.

BLITZER: Brianna Keilar on Capitol Hill with that report.

The economy, by the way, continues to bleed jobs. Another 50,000 jobs announced so far this month gone. Just today, Office Depot announced plans to cut 2,200 jobs, Office Depot and Yahoo!.com, the first of some 1,500 employees get their pink slips today. More Silicon Valley jobs Electronic Arts which makes some of the most popular video games says it's cutting 450 jobs. And in St. Louis, Anheuser-Busch now owned by Belgium's Inbev says it will cut 1,400 jobs.

A very public struggle with weight becomes public again.

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UNIDENTIFIED FEMALE: I think Oprah did this to tell people you know what? I'm human. You're human. A lot of us deal with this issue.

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BLITZER: Oprah Winfrey opens up. We'll have a full update on what's going on.

And underwater thrills. You're going to watch CNN's Anderson Cooper dive into his latest story. You're not going to believe what he did, what he saw. Standing by live right here in THE SITUATION ROOM.

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BLITZER: Oprah Winfrey is opening up and admitting she's embarrassed by her weight. CNN's Alina Cho has more -- Alina?

ALINA CHO, CNN CORRESPONDENT: Hey, Wolf. Over the years, we've all watched Oprah's very public battle with her weight, her ups and downs and everything in between. She's been honest about her struggles but the new cover of "O" magazine caught a lot of us by surprise. By Oprah's her own admission she now weighs 200 pounds, a benchmark. She's the first to admit she's not proud of it.

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CHO: How did I let this happen again? It's the cover story in the new issue of Oprah Winfrey's magazine. She says she's gained 40 pounds since 2006. Hitting in her words, the dreaded 200, 200 pounds.

ELISA ZIED, AMERICAN DIETETIC ASSOCIATION: I think Oprah did this to tell people, you know what, I'm human and you are human and a lot of us deal with this issue.

CHO: Irresistible topic on the "View."

JOY BEHAR, CO-HOST "THE VIEW": They would have to waterboard me to tell my weight.

CHO: And Oprah's struggle has gone on for decades.

OPRAH WINFREY, TALK SHOW HOST: I have lost as of this morning 67 pounds. This is what 67 pounds of fat looks like.

CHO: That was 20 years ago. Oprah in her skinny jeans. She lost that weight on a liquid diet. In 1994, she ran a marathon. But in May of this year, Oprah says she hit bottom, and almost skipped out on a show with Tina Turner and Cher.

WINFREY: How do you feel, though, about getting older?

CHER, ARTIST AND SINGER: I think it sucks.

CHO: Oprah said she felt awful and next to them she says, I felt like a fat cow and I wanted to disappear. How did it happen? Complications with the thyroid condition and combined with what she calls is the drug of choice, food.

Dr. David Cats writes a monthly column on nutrition for "O" magazine.

DR. DAVID CATS, WRITER "O" MAGAZINE: With all of the resources that Oprah has comes an awful lot of responsibility, a lot of stress and food often is the band aid that we apply to much of that.

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CHO: Oprah says that over the past year she's been so embarrassed about her weight that regular "O" magazine subscribers will notice that she never shot a head to toe cover. She just didn't want to be seen. Now she says she's making more of an effort to eat healthier and to work out more. Remember there's no magic formula and in the coming year, Wolf, Oprah says she has a new goal, not to be thin necessarily but to be healthy, strong and fit. Sounds good to me. Wolf back to you.

BLITZER: Sounds great to me as well. All right. Thanks very much and good luck Oprah. Oprah will be here in Washington for the inauguration as you know. Oprah's struggle with weight is something that millions of us can identify with according to the centers of disease control and prevention, more than 66percent -- 66percent of Americans age 20 and over are overweight or obese, and in fact, 32percent. 32percent are obese.

Let's go back to Jack Cafferty with the Cafferty file -- Jack?

CAFFERTY: Is that the same as fat?

BLITZER: Obese is fatter than fat.

CAFFERTY: I mean, is it no longer politically correct to say that somebody is just fat.

BLITZER: Yes, it is overweight and obese.

CAFFERTY: You can't just say they are fat.

BLITZER: No.

CAFFERTY: But they are fat.

BLITZER: Right.

CAFFERTY: Aren't they?

Question this hour: Is a government car czar the answer to Detroit's problems?

Nancy writes from Michigan: "The government is rarely the answer to any problem and more often than not, they are the cause of the problem. If the country provided health care like other civilized nations do, our carmakers would be more competitive. A car czar is too much power given to one person."

Warner says: "For those of us living at ground zero of the economic terrorism, the large GM complex in Lordstown, Ohio, this is a matter of life and death for the entire community. Republican senators who refuse to release the $14 billion loan should be charged with treason. After all, it was a Republican president, Lincoln who says all that harms labor is treason to America."

And John in Alabama says: "Somebody needs to oversee how the American automobile industry spends the money they are receiving. We are loaning the money with a repay plan with interest should be part of the deal. The loans should be made very public and Congress and the new president should keep their feet to the fire. Car czar might not be a bad idea."

Jena in Roseville, California: "Did the drug czar take care of America's drug problems?"

Don writes: "How about Bob Barr, car czar. I like it. The reality is we would be better off with Roseanne Barr."

George writes: "Hold your fire. Car czar? Yes or at least maybe if it's a retired bankruptcy judge. Nobody else. Then in March, Toyota buys GM and we get our money back."

Billy in New Orleans writes: "Only if it helps to bail out the Detroit Lions."

If you didn't see the e-mail here, you can go to my blog at CNN.com/Caffertyfile and look for yours there among hundreds of others. Fat, Wolf.

BLITZER: Thank you, Jack.

Congressman Jesse Jackson, Jr., is talking about being candidate five. You will hear his side of the story. Standby. Our own Anderson Cooper is diving with sharks and he is standing by to explain what is going on.

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BLITZER: Imagine going face to face with great white sharks? Our own Anderson Cooper did it. He is standing by live to join us in a moment. But first, watch this.

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ANDERSON COOPER, CNN ANCHOR: When great white sharks start to circle your boat, the feeling is unsettling. 15-feet long and thousands of pound pounds, these are the animals of so many nightmares.

UNIDENTIFIED MALE: This is the famous shark Ellie.

COOPER: We have come to dive with these great whites to get and up close look at them and the battle that is being waged around them.

UNIDENTIFIED MALE: Please do not go down unless we tell you to.

COOPER: Mike takes tourists cage diving with great white sharks off of the coast of South Africa.

UNIDENTIFIED MALE: And then you can lean back and it is all comfortable.

COOPER: It has become a big business, but it is also he says a conservation effort. He thinks that if people can see the endangered animals underwater, he will appreciate them and want to help protect them. Cage diving however is highly controversial, and I will tell you why in a second, but right now the water is filled with blood and fish parts called chum. And the great whites have arrived. Any recommendations for what to do?

UNIDENTIFIED MALE: Well, basically, don't scare the sharks. You are going into the water --

COOPER: Don't worry about scaring the sharks. It is usually the other way around.

Once we get used to the sharks in the water inside of the cage, we have the chance to do what few others ever have, going swimming with the great white sharks without a cage.

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BLITZER: Wow, that is amazing. Anderson is standing by live. So, Anderson, what was it like? I am fascinated by what you saw?

COOPER: Well, it is amazing and these are the animals of so many of our nightmares and to see them up close, you do get a greater appreciation of them and that is the whole point of the shark operators to show people the reality of sharks and kind of make them understand their role in the sea, because they are top predator in the sea, and the ecosystem is dependent on them, and yet they are eliminated in huge numbers, tens of millions of them every year.

BLITZER: This is all part of the "Planet in Peril" special we are all anxious to see tomorrow night?

COOPER: Yes at 9:00 p.m. eastern.

BLITZER: He goes swimming with Michael Phelps and going searching for sharks out there. I don't know which is more courageous, but they are both important.

COOPER: Foolish of me.

BLITZER: No. Don't forget to watch "Planet in Peril" tomorrow at 9:00 p.m. eastern, and that is why the CNN in the corner is green. Standby for that.

And to our viewers you are in THE SITUATION ROOM.