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THE SITUATION ROOM

The Latest Developments in the Case Against Governor Rod Blagojevich; Exclusive Video: Military Jet Slams Into Homes

Aired December 11, 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 our viewers, you're in THE SITUATION ROOM.
Happening now, President-Elect Barack Obama sucked into what's being called the black hole of Illinois politics. The governor accused of trying to sell Obama's Senate seat so far refusing to step down. The Illinois attorney general says she'll take legal action to oust Rod Blagojevich. She's standing by to join us live this hour.

Also, some are calling this Barack Obama's first presidential scandal.

So how is he handling it?

James Carville and Tucker Eskew -- they're standing by live to evaluate.

And a CNN exclusive Lisa Ling risks her life and comes face-to- face with one of the world's most notorious militant groups, waging a violent and deadly battle over oil. Her treacherous journey -- punctuated by gunfire -- and her meeting with armed fighters -- they're armed to the teeth. Stand by for that.

I'm Wolf Blitzer. And you're in THE SITUATION ROOM.

Illinois Governor Rod Blagojevich silent amid a hurricane-force scandal threatening to bring him down. But President-Elect Barack Obama, whose old Senate seat lies at the center of this storm, is speaking out -- and he's speaking out in new detail.

Drew Griffin is standing by. He's with the CNN Special Investigations Unit. He's got important information on what's going on in Chicago right now.

But before we get to Drew, let's go to CNN's Brian Todd.

He's working this story and he's taking a look at legal options for the Illinois governor.

(BEGIN VIDEOTAPE)

BRIAN TODD, CNN CORRESPONDENT (voice-over): From Rod Blagojevich's lawyer, a declaration.

UNIDENTIFIED MALE: He feels that he didn't do anything wrong.

TODD: Proving that may be a grim task. At the moment, the prosecution's case against Blagojevich looks strong on paper and...

(BEGIN VIDEO CLIP)

PATRICK FITZGERALD, U.S. ATTORNEY: These tapes reveal that Governor Blagojevich wanted a number of things in exchange for making the appointment to the Senate seat.

TODD: One expert says just wanting that may not get Blagojevich convicted.

STANLEY BRAND, DEFENSE ATTORNEY: Horse trading in the political arena, as it's called, is a perfectly legitimate enterprise. What's not OK is doing it for money or something of substantial value.

TODD: So what is of value that prosecutors say Blagojevich wanted?

FITZGERALD: 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.

TODD: But Stanley brand, who once represented Dan Rostenkowski in his corruption case, says if no job was actually offered or taken, if no payments were actually made, Blagojevich's defense may have an opening. But Blagojevich is charged with conspiring to obtain personal financial benefits, conspiring to commit mail and wire fraud. That, says Brand, doesn't require to you actually complete the deal.

BRAND: It simply requires you to take overt acts with the intent to commit a crime against the United States.

TODD: So where would Brand start as Blagojevich's defense lawyer?

BRAND: I think you would want to press the procedures that were used, see whether the wiretaps have been legitimately authorized, whether all the material that was wiretapped, including some things that we lawyers call exculpatory -- that is, things that tend to prove your innocence -- are not on the tapes or that should be on the tapes and available to you.

(END VIDEOTAPE)

TODD: Now that's one reason Brand says, at the moment, he would not necessarily advise Blagojevich to plead out. And he says very simply, we've only seen one side of this case.

Now, something else Rod Blagojevich has in his corner -- his own experience, political and legal. Take a look at this resume. He was a private attorney for two years in the '80s. He was a prosecutor -- the assistant Cook County state's attorney. Then he went to the Illinois House of Representatives -- that for about four years. He was elected a U.S. Congressman in 1996 and then governor in 2002.

This guy, Wolf, knows his way around the courtroom, as well as the state house. He could be a formidable foe in court. BLITZER: We'll see how long he lasts on this front.

All right, Brian, thanks very much.

I want to go to Chicago right now.

Drew Griffin is looking into the story, as well.

And it's a fast developing story in Chicago, amid all of these allegations of political corruption -- Drew, what's the latest?

DREW GRIFFIN, CNN SPECIAL INVESTIGATIONS UNIT CORRESPONDENT: The very latest is The Chicago Tribune Company announced it's been subpoenaed in the government's probe into the Blagojevich affair. The government wants to see the documents relating to that Blagojevich deal, where the governor allegedly would help The Tribune Company sell Wrigley Field if the paper would fire some critical journalists.

Also today, Governor Blagojevich himself did not resign, but apparently went to work. He showed up for work with his accused chief of staff. Neither one of them making it statements publicly.

In the spotlight today, Wolf, was the president-elect -- completely denying he had any involvement in any Blagojevich dealings. But when it came to his staff, he left the door open.

(BEGIN VIDEOTAPE)

SEN. BARACK OBAMA (D-IL), PRESIDENT-ELECT: I was as appalled...

GRIFFIN (voice-over): We already knew President-Elect Obama was appalled. We already knew he wants Governor Blagojevich to resign. That hanging cloud is what he or his team or anyone representing him knew about the deals -- that at least the governor allegedly thought he was cooking up with the president-elect's administration. Like it or not, says Jay Stewart of the Better Government Association of Chicago, Obama is dealing with his very first presidential scandal. And it grew out of the same political swamp Obama, the politician, was raised in.

JAY STEWART, BETTER GOVERNMENT ASSOCIATION OF CHICAGO: The president-elect had a lot of serious issues to deal with. He really shouldn't be dealing with this. But, you know, Illinois politics is like a black hole -- it keeps sucking you back in.

GRIFFIN: Sucking him in the deal mentioned deep into the government's 78-page complaint against the governor -- specifically, the deal to put "Candidate No. 1" -- believed to be Valerie Jarrett -- in the vacant U.S. Senate seat. She is one of Obama's closest confidantes, money raiser and now White House staffer, who was considered a frontrunner for the seat before suddenly pulling out.

The complaint outlines how Blagojevich and his chief of staff were allegedly cooking up what they called a three-way deal, that would leverage the president-elect's desire to have "Senate Candidate 1" appointed. Prosecutors say "Candidate 1" would become senator, Blagojevich would resign to become a high paid leader of a political action group affiliated with a labor union called SEIU and the president would then help SEIU by supporting its political agenda.

Convoluted, complicated and simply not true, according to the president-elect -- at least as far as he is aware.

OBAMA: What I want to do is to gather all the facts about any staff contacts that I might -- that may have taken place between the transition office and the governor's office. And we'll have those in the next few days.

GRIFFIN: Valerie Jarrett did not respond to CNN's requests for an interview. The Service Employees International Union sent only a statement, saying: "We have no reason to believe that SEIU or any SEIU official was involved in any wrongdoing."

(END VIDEOTAPE)

GRIFFIN: All of this amid calls, Wolf -- renewed calls for the governor to resign. The lieutenant governor went to Springfield today and said Blagojevich should resign. And it's looking more and more likely that the legislature will take up impeachment proceedings when they meet next week in Springfield -- Wolf.

BLITZER: And we're standing by to speak live with the attorney general of Illinois, Lisa Madigan.

Drew, stand by for that. Appreciate it very much.

Jack Cafferty is in New York. He has "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: News on the economy, Wolf, just keeps getting worse. We are officially now in a recession and have been for a year. Unemployment filings at a 26-year high. More layoffs reported every day. Nobody knows if the end is near. There's no indication at this point it is.

Two-thirds of Americans don't see our economy turning around anytime soon, according to a Gallup poll. Most of those surveyed think that a turnaround is at least -- at least two years away.

Here's how it breaks down. Twenty-nine percent say it will be two years before the economy begins to recover; 20 percent say three to four years; and 17 percent say five or more years. Only 15 percent think the economy will begin to recover within a year.

Now, this is mostly unchanged from how Americans felt on this subject just three weeks ago, despite the fact that the news has continued to get worse during that time.

This recession thing becomes a bit of a vicious cycle. Public fears of a lengthy recession lead consumers to pull in their horns. They stop spending. That makes the recession worse.

It's been a year since this one started. As the folks at the Gallup poll point out, if it takes two more years for recovery to start, this will wind up one of the worst economic downturns in our nation's history.

Here's the question: What will it take for the economy to begin improving?

Go to CNN.com/caffertyfile and you can post a comment on my blog -- Wolf.

BLITZER: Jack, thank you.

A woman with ties to Al Qaeda arrested in connection with a new terror plot. Listen to what she told CNN just two years ago about the leader she loves.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE (THROUGH TRANSLATOR): Osama had a beauty in his face. It is a stunning face.

(END VIDEO CLIP)

BLITZER: Now she's suspected in a plot to killed world leaders. We have chilling and exclusive details of her role in Al Qaeda. Stand by.

Also, the Illinois attorney general says she's getting ready to oust the governor if he doesn't resign. Lisa Madigan is standing by live. She's joining us with details of what's going on.

And how is Barack Obama handling the scandal over alleged efforts to sell his old Senate seat?

James Carville and Tucker Eskew -- they're standing by this hour, right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: The Illinois attorney general, Lisa Madigan, is among those calling on Governor Rod Blagojevich to resign over allegations he tried to sell Barack Obama's Senate seat. And Madigan says she's moving forward on legal steps if he refuses to step down.

Lisa Madigan, the attorney general, is joining us now live from Chicago.

Thanks very much for coming in. You certainly have your hands full. What are your options? How do you get this guy to step down?

LISA MADIGAN, ILLINOIS ATTORNEY GENERAL: Well, obviously, you know, the best situation would be he would realize that the best thing to do for the people of the state would be to step aside and to resign. But at this point, he doesn't show any signs of doing that. And then there are really only two other options that are out there. One is for the legislature to move forward on impeachment proceedings. They convene in session on Monday and they are likely to start taking that up. The other is for me to go to the Illinois Supreme Court and ask them to determine that he is simply unable to serve and either to temporarily or permanently remove him from office.

BLITZER: Will you do that?

MADIGAN: Well, it's certainly something that we're considering. I mean, these are extraordinary circumstances. But, you know, any of these actions -- you know, you can't take it lightly and you don't want to take that too soon.

So since Tuesday, we have been looking at the law and, obviously, looking at the circumstances. And we are getting prepared to make a decision.

BLITZER: But that would take a long time. Either of those two options -- the impeachment process and the Supreme Court option, wouldn't those take at least weeks, if not months?

MADIGAN: It could well. And that's one of the problems. You know, impeachment or a lawsuit could take an undetermined amount of time. But we have issues rate now where we need a governor in place who can make decisions. And because of the unimaginable allegations that were in the federal complaint, it really calls into question absolutely everything that the governor has authority to do.

Because it was made very clear that absolutely everything -- whether it's signing a bill into law, providing Medicaid funding to children's hospitals, finance -- public financing on deals for our highways, as well as for Wrigley Field -- all of that was being essentially sold, obviously, in addition to the Senate seat, you know, for things that the governor thought would benefit him personally or politically.

So I don't see how we move forward right now unless we have somebody with credibility and legitimacy serving as our governor. We don't have that now.

BLITZER: If the evidence is as strong as it appears to be in that 76-page document that the U.S. attorney released the other day, Patrick Fitzgerald, he doesn't have a whole lot of leverage if he wants to cop a plea -- if he wants to get into some sort of plea negotiations with the U.S. attorney right now. But one piece of leverage he does have is he's the governor of the State of Illinois.

Would it be reasonable to think that as part of a plea agreement, he would step down as governor and perhaps accept some sort of reduced sentence or reduced punishment?

Is that something acceptable to the people of Illinois?

MADIGAN: I think the people of the State of Illinois are so fed up with the situation that we have right now. They want him to resign. They want him to be removed so that we actually can have some legitimate government here in the state. And so I don't know if that's something that's acceptable.

Obviously, you know, the Feds would make a determination on that. But, you know, you point out he doesn't seem to have a lot of leverage. The evidence contained in that federal complaint is powerful -- you know, from the wiretapping and the bugs, they have the governor, allegedly, on tape making unimaginable statements about how he's going to sell the Senate seat and the other situations.

So, right. I guess if I was the criminal defense attorney -- and I'm sure you've had others, you know, talk about this -- he probably should resign and maybe make that part of a plea deal.

BLITZER: Make that part of a simultaneous moment. Most of viewers never heard of Rod Blagojevich before this week, although he's well-known in Chicago, certainly in Illinois. You've met him, I'm sure, on many occasions. What is this guy really like?

MADIGAN: You know, to be honest with you, Wolf, I have almost no communication with him. This year, I've spoken with him once. And it happened to be at the Democratic National Convention in Denver, when we were on the floor on that Wednesday night, when Barack Obama was -- was made our nominee for the presidency.

And that's the only time I've spoken with him all year long. I don't even think I talked to him last year.

That sounds incredible, because do I serve as the attorney general, so I'm the lawyer for the state. But we've been well aware for years that there are problems with this governor and so I haven't had anything to do with him.

BLITZER: And just to be precise, you're a Democrat, right?

MADIGAN: I am. We're in the same party.

BLITZER: All right. And he's a Democrat, as well.

All right, a strange situation, indeed. I've covered politics for a long time. This one is right at top. I want you to know that.

MADIGAN: Unfortunately, you're right.

BLITZER: All right. Lisa Madigan, the attorney general of Illinois.

Good luck.

MADIGAN: Thank you, Wolf.

BLITZER: Hillary Clinton tried and failed -- so how can newly announced Health secretary Tom Daschle succeed in getting health insurance for all Americans?

James Carville and Tucker Eskew -- they're here to discuss. Stand by.

And gripping video of a brutal battle now being seen for the first time -- U.S. commandos surrounded by insurgents in Afghanistan.

(BEGIN VIDEO CLIP) UNIDENTIFIED MALE: Hey, I'm hit. I think I'm hit. I'm hit.

UNIDENTIFIED MALE: Roger. I'm trying it.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

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

DEBORAH FEYERICK, CNN CORRESPONDENT: Well, Wolf, Iraqi officials believe a group of politicians having lunch were the target of a suicide bombing in the northern city of Kirkuk today. The blast went off as the Arab and Kurdish leaders met at a restaurant to talk about easing tensions in the city. At least 55 people were killed in the blast. More than 100 were wounded. None of the politicians was seriously hurt.

Anxiety over the fate of Detroit's automakers is blamed for sending stocks sharply lower on Wall Street today. The Dow Jones Industrial Average lost 196 points, to close at 8565. And the government dished out unsettling news on the U.S. job pictures. It says initial unemployment claims jumped to a 26-year high last week -- 4.4 million people continue to receive jobless benefits.

Police in Orlando, Florida are at the site where remains of a small child were found, near the home of the missing toddler, Caylee Anthony's, grandparents. A utility worker found the remains in a plastic bag in an area that had been underwater when 3-year-old Caylee varnished in June. Her 22-year-old mother, Casey Anthony, is already facing charges in connection with her death and disappearance.

And the Department of Transportation expects traffic deaths across the U.S. to decline 10 percent this year. Transportation Secretary Mary Peters says projections suggest about 3,400 fewer deaths on American highways than in 2007. According to government statistics, traffic deaths have declined steadily over the past 20 years, after peaking at more than 47,000 in 1998.

So the highways are a little bit safer -- Wolf.

BLITZER: That's good news. Thanks very much, Deb. Stand by.

Coming up, a CNN exclusive -- Lisa Ling on a very dangerous voyage to meet some of the world's most notorious militants.

(BEGIN VIDEO CLIP)

LISA LING, CNN CORRESPONDENT: So we've just been brought to this dock. And we're being asked to get into these boats. We can't tell you where we are and we're not where we're going, but let's go.

(END VIDEO CLIP)

BLITZER: Lisa Ling coming face-to-face with armed men responsible for hundreds of deaths.

What's at the center of their deadly campaign?

Also, will Republicans make Bill Clinton testify at his wife's confirmation hearings before the Senate?

She's slated to become the next secretary of State. Long time Clinton friend James Carville -- he's standing by live to offer his take, along with Tucker Eskew.

And gripping new video of the firefight that earned 10 American commandos the Silver Star. Their bravery under fire -- and it's all caught on videotape. This is the first time you will see it.

(COMMERCIAL BREAK)

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

Happening now, President-Elect Barack Obama peppered with questions about the corruption case surrounding the Illinois governor, Rod Blagojevich.

How is Obama handling the heat?

We'll ask CNN's always outspoken political contributor, James Carville. He's standing by, together with Tucker Eskew.

And in Belgium, a plot to kill world leaders is thwarted and a notorious Al Qaeda figure is arrested. CNN's Christiane Amanpour will have the full story of how she was captured. What's more, we're going to hear from this Al Qaeda icon in her own words.

And the country's treatment of African-Americans, a controversial take on Sarah Palin and gays in the U.S. military -- all fodder for an exclusive conversation with the former secretary of State, Colin Powell. That's coming up in our next hour.

I'm Wolf Blitzer.

And you're in THE SITUATION ROOM.

ANNOUNCER: This is CNN breaking news.

BLITZER: But first breaking news. We've just obtained exclusive video of Monday's military jet crash in San Diego, California, only moments after that U.S. Marine Corps F-18 crashed into a heavily populated neighborhood. Four people, as you know, were killed -- a mother, the grandmother and two young kids.

Let's go right to CNN's Abbi Tatton -- Abbi, this is very dramatic video that we're about to see. I just want to alert our viewers.

ABBI TATTON, CNN INTERNET REPORTER: Wolf, it shows an inferno. This is video that we're just seeing for the first time -- Monday's military jet crash in San Diego. This shot by a University of California at Santa Barbara student who lives nearby and who clearly got to the scene just moments after this crash.

Let's listen in.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: It's getting pretty hot. I want to go to that side.

Do you want to go with me?

Go the other way?

UNIDENTIFIED MALE: Fire department. (INAUDIBLE). Fire department. We have confirmed that there is no ordinance on that aircraft.

UNIDENTIFIED MALE: Oh, good.

UNIDENTIFIED MALE: There is no ordinance on the aircraft.

BLITZER: And go ahead and tell us some of the background of what's going on.

ROWLANDS: As you mentioned, just the immediate aftermath. This young man heard the crash, quickly ran out with his cell phone camera that takes video and he -- just unbelievably dramatic. This is just after an FA-18 crashed into a neighborhood. The pilot had ejected just a few seconds before this plane made impact. But the plane actually hit on that street that you see in front there and then bounced, if you will.

The debris -- you can barely see in front of that street, that little indentation, the dark mark. That's where the impact was. Then the plane basically scattered into different pieces and went into two separate houses. In one of those houses, nobody was home, thankfully. But, of course, we know that in the other home there were two little girls, a mother and a mother-in-law.

Dong Yoon, whom we've heard about -- or heard from over these last couple of days -- lost his entire family. They were inside that home.

But you can see where this pilot -- now, another thing is this pilot just barely missed an open area. This is sort of the last string of houses before a canyon in San Diego in this area. And if the pilot would have been able to steer the plane just for another few seconds, according to witnesses, he might have been able to get it into this canyon.

Military experts say that this pilot literally -- when he lost that second engine in an F18, it's so heavy, it drops like a rock. He had three, four, five seconds to point the plane and get out before it started to turn and he would have lost his life, as well.

He told eyewitnesses on the scene -- the pilot did -- that he was very concerned about the damage that he had obviously caused. The pilot would have witnessed this from his parachute as he was coming down into a tree. And you can see just the utter devastation of the two homes affected -- and then, conversely, the areas that weren't hit by the debris virtually untouched.

A car right in front. This is the Yoon vehicle right there. This is the Yoon house that you're seeing right now. That vehicle was their vehicle. And you can see -- untouched.

It was just a matter of bad luck that the debris from this plane hit the pavement and went where it did -- directly into this home, that had a mother and two children and another adult woman in the house at the time.

BLITZER: And Ted, as you know, there's a U.S. military air base not very far away first of all, the pilot, how is the pilot doing, the pilot who ejected and secondly, what is the military saying now three or four days after this event?

ROWLANDS: Well, the pilot is -- was taken to the hospital really just as a precaution immediately after. Physically he is fine. He apparently told witnesses he was distraught about the fact his plane had hit this home. Undoubtedly this young man described as being in his 20s is going to be haunted by this for a long time.

As far as exactly what happened, Congressman Duncan Hunter gave us more insight today with a press release. He was in a meeting on Capitol Hill basically being briefed on what happened. According to hunter, what he was told by the military and other folks in that meeting was that the decision to land at Miramar was the correct decision according to the military at this point.

Here's why. Miramar is very close to the ocean. There is this strip of development there. But this plane lost its initial engine over the pacific after it took off from an aircraft carrier and that is not -- it's an emergency but it's not that big a deal. A plane can come in with one engine with little trouble. The problem was this plane lost the other engine. They say the odds of that happening were astronomical. The time this plane was over the residential we're was very slim.

Other factors were involved in the decision to land at Miramar, one of them being air traffic and another one being the altitude and speed of the aircraft at the time that this F-18 ran into trouble by losing that first engine. Not a lot of second-guessing from experts or anybody at this point as to the decision made to land at Miramar. That initially was the big question. What would you land over this residential area? At this point, according to Duncan Hunter, the military sticking by that decision saying it's plain unlucky that was the decision they made and they stand by it.

BLITZER: This is breathtaking. So scary, so frightening. Ted, stand by because in our next hour we have more exclusive video including pictures of the F-18 that went down. We're going to show that to our viewers here in the United States and around the world in our next hour. What a tragic, tragic story and our heart goes out to that Korean American father who lost his wife, his mother-in-law and two little babies in that awful, awful tragedy. There he is in much happier days. Oh, my god, what a sad sad story this is.

We'll move on though right now Barack Obama bombarded with questions today about the Illinois Governor Rob Blagojevich and allegations he tried to sell Barack Obama's Senate seat.

(BEGIN VIDEO CLIP)

OBAMA: I have never spoken to the governor on this subject. I'm confident that no representatives of mine would have any part of any deals related to this seat. I think the materials released by the U.S. attorney reflect that fact. I've asked my team to gather the facts of any contacts with the governor's office about this vacancy.

(END VIDEO CLIP)

BLITZER: And he promised all that information would be released publicly in the days to come. So how is the president-elect handling this very delicate political situation? Let's bring in our CNN political contributor, the Democratic strategist James Carville and Republican strategist Tucker Eskew, he was a senior adviser to the McCain/Palin campaign.

How did Barack Obama do today James?

JAMES CARVILLE, DEMOCRATIC STRATEGIST: I thought he did fine. He and Blagojevich were not very close at all and secondly that the United States attorney has said that Obama has nothing to do with this. And they're going to release whatever contacts they had. I have no idea of how anyone could have a problem with what he said.

BLITZER: Do you have a problem with what he said, Tucker?

TUCKER ESKEW, REPUBLICAN STRATEGIST: He has a problem with what he said. There's been a lack of transparency about this matter. They skated around a lot of tough questions in the election on Illinois politics. He did a poor job yesterday. They scripted him today. He sounded still a little defensive and they've got more information to get out.

CARVILLE: I have no idea what he's talking about other than the fact that he's not close to Blagojevich and the united states attorney says it has nothing to do with this, I guess somebody's got to make up something out of thin air here. He said they're going to release whatever obviously the people have a right to call the government or lobby for any candidate. Like I said, and by the way, the United States attorney has a record of all his phone conversations. Anything there he certainly knows about it.

ESKEW: Let's get those records out. The fact is, it's rather strange, isn't it, that the senator who currently holds this seat in Illinois who is also our president-elect didn't have conversations with the governor's office about his replacement? That in and of itself seems a little strange. More answers to these questions. CARVILLE: Let me get there straight. You're saying that the president-elect of the United States lied when he said he never talked to the governor?

ESKEW: Don't put words in my mouth.

CARVILLE: You said it's strange. What exactly is the implication you? Know that the United States attorney has every recorded phone conversation.

ESKEW: And Barack Obama knows that. Which is probably why they need to collect this information and answer the questions.

CARVILLE: Barack Obama said he never had a conversation with Blagojevich.

ESKEW: I believe him. But it's still strange.

BLITZER: They did shake hands at the Republican governors' convention briefly. There was a photo op. He was shaking hands when he went to Philadelphia at the National Governors Association.

CARVILLE: I cannot tell you the number of people I shake hands with. God knows what they may or may not have done. What is clear, there's no dispute of this, they were not.

BLITZER: That's the picture, by the way in, Philadelphia at the National Governors Association. If you'll turn around, you can see it. It was a quick handshake. That was clear.

CARVILLE: They're not politically close. The United States attorney said Barack Obama had nothing to do with this. Other than that.

BLITZER: I think the point is that almost certainly, Barack Obama had nothing to do with the governor. I think based on what we heard from the U.S. attorney and all the other information. But what is still open is whether any of his aides may have had contact with the governor's office. What we heard from the president-elect today is he wants canvas all of them, get all the information to him so that he can release it to the news media and to the public, which I think would show the transparency that you're looking for.

ESKEW: Perhaps by then, the American people will come away with a sense he's been fully transparent. You just don't get that from the video or what's happening on his website where people who ask these questions are really having their questions suppressed often by perhaps people outside the transition. That's also lends an air of mystery and unanswered questions.

CARVILLE: I have no idea what a suppressed question is.

ESKEW: Go online and you'll find it.

CARVILLE: He said I never had a conversation. I'll release any conversation anybody in my staff had. When you lose that bad, you've got to make something up.

ESKEW: There's nothing being made up here. There are legitimate questions. Let's answer them so that we can all move on.

BLITZER: No one has more of an interest in getting all this out than Barack Obama himself. He doesn't the focus of attention on this. He's got other interests. He announced Tom Daschle will be his secretary of health and human services. Here's the question to you. Can Tom Daschle do now what Hillary Clinton back in '93, Hillary care as you well remember what, she and President Bill Clinton were unable to do after he was elected president of the United States?

CARVILLE: First of all, I don't know if Senator Obama like promised universal health care.

BLITZER: He didn't promise universal but major health care reform.

CARVILLE: If anybody can, that Senator Daschle can. This has been a passion of his all his political career. He understands this issue in and out. He served in the Senate. It's very important you know the political side. I think he saw the uniquely, he is qualified for this position and obviously they're going to make major reforms.

BLITZER: They're acknowledging they've learned from the mistakes made in '93.

ESKEW: And learned the American people are deeply reluctant to have a broad government-run health care program in this country covering all Americans. They may try to back into it.

BLITZER: They deny this is going to be a government-run health care program. If you like the insurance have you right now, you can go ahead and keep it for as long as you want.

ESKEW: If you expand your programs to the aged downward and expand upward your programs to the poor and try to cover everybody through misdirection.

BLITZER: Don't you think that's something that needs to be done to help 45 million American who's can't even get a shot for their child if they don't have the right health insurance?

ESKEW: Indeed. Smart Democrats will join some Republicans in pushing for bold action. Let's go into four or even a half dozen states and model it. We don't know what would fix this mess and it is a mess.

CARVILLE: I'm so out of it, I thought the Republicans ran the country for the last eight years. Maybe I'm just sitting here.

BLITZER: They ran the White House for the last eight years and Congress for the last eight.

CARVILLE: I don't know. I hate to bring that up but it's a fact. ESKEW: Democrats like James will be able to trade on that for a little while along longer. They ought to work with Republicans to do the right thing.

BLITZER: Can Barack Obama over the next four years get something close to universal health care for Americans which exists as you know in almost every industrialized country in the world?

CARVILLE: I'm kind of reminded of the line in the superman movie, the guy says I ask you to do one simple thing, I asked you to kill superman and you couldn't even do that. It's been tried by President Eisenhower, by President Truman, by President Nixon and President Clinton. At the end of four years, universal coverage is a lofty goal but we'll see.

BLITZER: Especially in this economic environment. It's not going to be cheap.

ESKEW: And the promises are getting bolder and bigger in these tough times. Republicans will be loyal opposition asking some tough questions.

BLITZER: Good discussion. Thanks for coming in.

CARVILLE: Thank you.

BLITZER: An alleged terror attack stopped in its traction. Under arrest, a woman police call an al Qaeda living legend. She spoke to CNN before the plot came to light. What she told us about her love, yes her love for Osama Bin Laden and her life in the terror camp.

Plus, true courage under fire. U.S. Special Forces outmanned and outgunned by insurgents in Afghanistan. Their only thought, how to save each other.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: We just got hit. We're going south.

UNIDENTIFIED MALE: I just fired. Just fired.

UNIDENTIFIED MALE: I hit it.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BLITZER: There are stunning new developments in the war on terror. A woman with extensive ties to al Qaeda has been arrested in Belgium. That's the home of NATO along with 13 other suspects. Authorities say they had just 24 hours to stop a planned terror attack. Timed to coincide with an EU summit under way in Brussels. Right now, the woman arrested Malika El Aroud spoke to CNN only two years ago. Here's CNN's chief international correspondent Christiane Amanpour with a report she filed back in 2006. Watch and listen. (BEGIN VIDEOTAPE)

CHRISTIANE AMANPOUR, CNN CHIEF INTERNATIONAL CORRESPONDENT (voice-over): Malika El Aroud, a devout Muslim who had emigrated from Morocco as a child was living in Belgium when she first saw Osama Bin Laden on television. His image mesmerized her and her husband.

MALIKA EL AROUD, WIFE OF EXECUTED ASSASSIN (through translator): He was watching. There was a fascination, a love. It was very clear, and I felt the same. Osama had a beauty in his face. It is a stunning face. When you hear his voice it, makes you want to stand up right away and leave and join him.

AMANPOUR: And that's what her husband did when he traveled to Afghanistan in 2000. Malika el Aroud followed the next year. Life with Bin Laden meant living without.

AROUD (through translator): There were windows without glass, just a big hole in the wall. And it was the middle of winter. There was no bathroom, no kitchen. We really thought we had gone back to the middle ages.

AMANPOUR: Her husband who had spent six months in al Qaeda training camps, was given a secret deadly assignment. One that would move Bin Laden closer to his ultimate goal.

AROUD (through translator): He told me he would be home in 15 days.

AMANPOUR: That would be the last time she would ever see him. Then, the assassination of Ahmaad Shaw Mehsud, a friend of the U.S. and legendary leader of the northern alliance, a formidable Afghan militia. Two men claiming to be television reporters an arranged an interview with Mehsud. They were suicide bombers armed with explosives. One had them strapped to his body. The other hid innocent camera.

PETER BERGEN, AUTHOR, "THE OSAMA BIN LADEN I KNOW": There's no doubt that Bin Laden ordered these assassination of Mehsud. He knew that the 9/11 attacks would likely provoke some kind of American reaction and he need the Taliban to protect him. What he gave them was the one thing they wanted most which was his head on a plate.

AMANPOUR: The explosion killed Mehsud and also killed one of the two attackers, the cameraman. The other assassin was executed by Mehsud's men. He was Malika El Aroud's husband. This had been his secret mission. And she was very proud.

(END VIDEOTAPE)

BLITZER: Now she Malika El Aroud, is under arrest along with a bunch of others and remember, EU leaders are meeting in Brussels today and tomorrow. Not clear if they were the targets of the planned attack. But authorities have rounded up about 20 of these suspected terrorists. And remember, NATO head quarries outside of Belgium -- outside of Brussels, Belgium, itself. We're going to stay on top of this story, an important development potentially, a major terrorist plot uncovered only with hours to spare.

A U.S. special forces surrounded by insurgents in a rugged Afghan valley and now we have dramatic new video coming into THE SITUATION ROOM of the brutal battle that's earning a silver star for some of those American commandos. Let's go to the pentagon. Our correspondent Barbara Starr has been working the story. Very gripping stuff. Give us the background, what's going on?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Absolutely, Wolf. Some of the extraordinary footage everyone is about to see comes from the commandos themselves on the ground with cameras, a band of brothers who fought against overwhelming odds.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: I'm hit, I think. I'm hit.

UNIDENTIFIED MALE: Roger, I'm trying.

STARR (voice-over): April 6th this year, Afghanistan Shok Valley north of Allahabad. U.S. Special Forces and Afghan commandos on assault mission to kill or capture insurgents.

UNIDENTIFIED MALE: We just got hit. We're going fight.

UNIDENTIFIED MALE: Adjust fire, and just fire.

UNIDENTIFIED MALE: I hit it.

STARR: 50 U.S. army Special Forces troops landed along with more than 100 Afghan commandos.

CAPT. KYLE WALTON, U.S. SPECIAL FORCES: Many soldiers were wearing up to 60 pounds of equipment and jumped off the helicopters into jagged rocks, running water and 40 degree temperatures at approximately 10,000 feet.

UNIDENTIFIED MALE: Coming up now.

STARR: Captain Kyle Walton is one of ten commandos being awarded a Silver Star for what happened in these mountains when the U.S. troops suddenly found themselves pinned down by 200 insurgents.

WALTON: We were completely surrounded on 360 degrees and were taking heavy enemy sniper, machine gun and RPG fire from all around us.

UNIDENTIFIED MALE: For the medevac, over. Roger, I confirm nine casualties. Over [ bleep ] we're starting to you take machine gunfire.

STARR: U.S. machine gun and missile fire rocketed insurgent positions.

UNIDENTIFIED MALE: Roger, I copy. Impact. STARR: As he pulled the wounded to safety, Walton called in air strikes to keep his men from being overrun. That decision bought the Americans just enough time to carry the wounded down 60-foot cliff to waiting Blackhawk helicopters.

WALTON: At one point we had a soldier missing his leg continuing to apply contact to his soldier's wounds, and it was one of the things that was conducted to get them off of the mountain. He carried his leg down the mountain.

STARR: The battle raged on for these men to save others and themselves.

(END VIDEOTAPE)

STARR: Wolf, ten Silver Stars to be awarded at Fort Bragg tomorrow. Wolf?

BLITZER: And they deserve these metals. There's no doubt about that. Thank you, Barbara, for bringing us that piece.

There is an important development up on Capitol Hill right now involving the future of the U.S. auto industry. Let's go to Dana Bash. She is working the story. What do we know?

DANA BASH, CNN CORRESPONDENT: Well, new signs of life for the auto bill and that is because Senate Majority Leader Harry Reid said that the talks going on all day between Democrats and key Republican Senator Corker trying to find a way to get Detroit $14 billion they need in quick money, there is a possibility that the talks are bearing fruit, but not only that, Wolf, he said if they can come to an agreement, this particular measure would pass overwhelming in the Senate. Those are words that we have not heard when it comes to this issue that has slowly making its way through the Senate. So, we understand that Senator Corker wants to make sure that the companies get rid of their debt, and he had wanted to slash wages for unions, and that has been really the key in the talks. Democrats and union representatives from Detroit have been talking about a way to sort of come up with compromise on, that and again, they say they will be close.

BLITZER: All right. Dana, stand by and you will give us the latest. Dana Bash working the hill. The clock ticking up there.

Let's go to Jack Cafferty. He's got "The Cafferty File" -- Jack?

CAFFERTY: Some guy's named Corker?

BLITZER: Yes Bob Corker.

CAFFERTY: Well, if his piece of legislation is the one that finally takes the day, he ought to be the car czar maybe?

Our question this hour is what will it take to get the economy to begin improving? John writes from Colorado: "One of these months when the new jobs created beats the jobs lost, the economy will improve. The unemployed can't afford to buy much of anything. Those worried about losing their jobs are not spending. Hopefully Barack Obama's new "New Deal" will get the employment rolling again, but it's hard to imagine there is a meaningful turn around in the next couple of years. This could be the "grapes of wrath" part two."

Bruce in Georgia: "As far as I'm concerned that the economy has turned the corner as soon as Obama takes over the executive branch of the government and Bush is out. Leadership matters."

Jerry from Texas writes: "I'm tired of trickled on. Let's try trickle up, and change the mortgage rate for everybody to 1.5%. That will help the ones who have mortgage problems and give everyone else extra money to spend."

Hugh in California says: "The economy will turn around when America quits outsourcing the jobs. If you don't work, you won't have any money to buy anything but food and clothes and hopefully shelter until the banks foreclose on the homes. At least we can still keep U.S. farmers employed, but the clothes will be made in other countries. Unemployment will continue to rise until major changes are made in this country."

Alex in New York says: "Priorities have to change. We can be the breadbasket of the world again. People will built electric cars for $20 an hour and buy the food we grow and raise right here. Farmers and manufacturers are like bread and water. Without them, we just have bankers playing with money and Wal-Mart brainwashing the masses into buying cheap crap from China on credit."

Ken in Dallas writes: "We have to hit rock bottom first. There is entirely too much debt out there. Racking up more will hold us down longer. We are paying for the cheeseburger we ordered in 2002."

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

BLITZER: See you in a few moments Jack. Thank you.

Heavily armed men on the campaign for oil. Lisa Ling risks her life to come face-to-face with them. It's a CNN exclusive.

And a chilling report of the jet fighter crash that killed a family of four is coming into THE SITUATION ROOM right now.

(COMMERCIAL BREAK)

BLITZER: We have an exclusive look into the front line battle for oil, the second installment of CNN's award winning "Planet in Peril" document series that airs tonight. Lisa Ling risked her life for this report.

(BEGIN VIDEOTAPE) LISA LING, CNN CORRESPONDENT (voice-over): It is dawn in Nigeria. We have been driving for hours with armed escorts to meet up with one of the world's most notorious militant groups. They are called M.E.N., the Movement for the Emancipation of the Niger Delta. They are waging a violent battle that has killed hundreds of people. We look outside the window show you what they are fighting about, oil. This country makes billions of dollars from it. But the average Nigerians get almost none of it, and that is what M.E.N. is violently trying to change.

We arrive at the rendezvous point and are told to follow this man. We walk through back alleys, and then come to the water. We have been brought to the dock and asked to get into the boats. We can't tell you where we are and we are not sure where we are going. We drive for hours by boat, passing small villages, winding through creeks. Then, suddenly, they appear, a checkpoint and a boatful of men fighters armed to the teeth. They circle around us chanting and say they are taking to us see their commander. After a two-hour boat ride, we finally arrive, and this is -- this is the movement for the emancipation for Niger Delta and we are just joined the shooting range apparently.

(END VIDEOTAPE)

BLITZER: Wow, Lisa, this is really, really scary stuff. And you are one courageous journalist and how scared were you when this unfolded?

LING: Well, I won't lie. There were moments when I certainly felt uneasy. They are very well arm and have high-tech weaponry, but the reality is that after spending time there, there is sort of a rag tag army and not very good with the weapons, but yet, their attacks on oil pipelines have been successful in raising the price of oil worldwide. So regardless, they are making an impact. This is one example of armed conflicts that are happening all over the world as a result of this severe competition for dwindling resources.

BLITZER: Amazing, amazing story, and this was only the beginning. Lisa, thank you so much for doing it. I just want to alert the viewers that "Planet in Peril, Battlelines" airs tonight right here on CNN-- 9:00 p.m. eastern. You will want to see this. 9:00 p.m. eastern tonight. Lisa, and Anderson Cooper and own Dr. Sanjay Gupta.

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