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CNN TONIGHT

Terror Suspect Pleads Not Guilty; State Department Failures; New York City Terror Plot Charges; Arctic Blast; Animals Chilling; Unemployed in America; California Budget Cuts

Aired January 8, 2010 - 19:00   ET

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


(BEGIN VIDEOTAPE)

SOLEDAD O'BRIEN, CNN ANCHOR (voice-over): Tonight, the notorious Christmas Day terror suspect claims he's not guilty -- in court today for the first time and facing life, the most serious charge, using a weapon of mass destruction to try to kill nearly 300 people.

Also a new year, but no new jobs, millions of Americans still can't find work, and relief may not be coming soon.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The road to recovery is never straight.

O'BRIEN: When will the jobs come back?

And the king may be dead, but can he still draw a crowd, especially at Graceland on his 75th birthday, 30 years later, the magic indoors -- Happy Birthday Elvis.

(END VIDEOTAPE)

ANNOUNCER: This is CNN TONIGHT live from New York. Here now Soledad O'Brien.

O'BRIEN: Good evening, welcome, everybody. The man accused of trying to blow up a Northwest airliner on Christmas Day pleaded not guilty in a federal courtroom in Detroit this afternoon. Authorities say Umar Farouk Abdulmutallab was traveling from Amsterdam when he tried to ignite explosives hidden in his underwear.

A federal grand jury indicted the 23-year-old Nigerian on six charges including the attempted use of a weapon of mass destruction to kill nearly 300 people. That charge could send him away for life. His defense lawyers will certainly be tested considering all the evidence against him. Some say the case has no place in a civilian criminal court to begin with. Deb Feyerick has more on the terror suspect's first day in court.

(BEGIN VIDEOTAPE)

DEBORAH FEYERICK, CNN CORRESPONDENT (voice-over): Arriving at federal court, Umar Farouk Abdulmutallab walked into the courtroom slowly and with apparent difficulty. The alleged Christmas Day suicide bomber having suffered second and third-degree lap burns after detonating explosives hidden in his underwear. Standing before the judge his feet were shackled, his white t-shirt and khaki pants too big for his thin frame.

The public defender for the 23-year-old Nigerian entered a plea of not guilty. Abdulmutallab told the judge he is on pain killers apparently for his injuries. His lawyers saying despite that, Abdulmutallab understands the charges against him, they include attempting to blow up a U.S. jetliner and kill some 290 people on board. Heabbe Aref (ph) was on Northwest flight 253 from Amsterdam sitting six rows in front of Abdulmutallab. She said it was important for her to see the proceedings firsthand.

HEABBE AREF, NORTHWEST FLIGHT 253 PASSENGER: He looked the same, but he had a little bit more actions. When I saw him on the plane he was very blank, he didn't move, he didn't struggle.

FEYERICK: Several dozen people came to protest against the alleged bomber, holding signs that read "Islam is not terrorism." Abdulmutallab is being represented by Detroit's chief federal defender Miriam Cipher (ph). She did not fight his detention.

(END VIDEOTAPE)

FEYERICK: Now the hearing was very brief. The whole thing start to finish really took less than 10 minutes. When it was over Abdulmutallab was led from the courtroom surrounded by some very large U.S. marshals, whatever dreams of glory he may have had, really watching him in that courtroom you got the impression that he never expected to be where he is now -- Soledad.

O'BRIEN: Deb, there was word that Abdulmutallab's family might be in the courtroom, especially particularly his father. Was he there?

FEYERICK: No. The father did not come. The father was the one really who had alerted U.S. officials to begin with that he felt his son was becoming radicalized and was missing. There was a member representing the family in court, but she said that she did not speak for the family; she was just there for the family. When we tried to press her she seemed a little bit rattled and just sort of left immediately following the proceeding.

O'BRIEN: Deb Feyerick in Detroit for us tonight -- Deb, thanks.

A misspelled name and overlooked visa, the State Department's mistakes in the days leading up to the Christmas Day airliner attack are now becoming clear, as we hear tonight from Jill Dougherty.

(BEGIN VIDEOTAPE)

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT (voice-over): A mea culpa from the secretary of state.

UNIDENTIFIED REPORTER: How serious are these issues and what do you plan to do about them? HILLARY CLINTON, SECRETARY OF STATE: We are in the State Department fully committed to accepting our responsibility for the mistakes that were made.

DOUGHERTY: One of the first mistakes, an employee at the U.S. Embassy in Nigeria misspelled the suspect's name while searching a visa database and found nothing. That spelling mistake in November was corrected within two days, but in a second mistake no one ever followed up to check whether he had a U.S. visa. No one either at State or in the intelligence community even knew he had a visa until after he almost blew up the plane.

JANICE KEPHART, CENTER FOR IMMIGRATION STUDIES: What we're seeing is the intelligence is not reaching the visa process in real time.

P.J. CROWLEY, STATE DEPARTMENT SPOKESMAN: It probably did affect the recognition within the system that there was a valid visa, you know, that this individual had a valid visa. It does not appear as the White House reports said yesterday that this affected the risk assessment.

DOUGHERTY: There was no requirement for the State Department to check the suspect's visa status, even after his father raised concerns about his son's radicalization. The president's review says the suspect's visa would have been revoked only if there had been a successful integration of intelligence, which would have put him on a watch list or a no-fly list. But a former counsel to the 9/11 commission says that should have been corrected years ago.

UNIDENTIFIED FEMALE: On the 9/11 final report what we said was that terrorists used travel documents as a weapon. We've seen that here very much so with the abuse of the visa and pre-boarding processes. What we see now also which makes this of even higher priority is that the travel itself has become a weapon.

DOUGHERTY (on camera): One senior official admits there's got to be a better way to put visa information front and center. The State Department in a switch already is including visa information in any initial reports on suspicious persons, and now the government is considering making it a part of any risk assessment -- Soledad.

(END VIDEOTAPE)

O'BRIEN: That's Jill Dougherty reporting for us.

In New York today, two suspects in a terror plot appeared in federal court. They were arrested in connection with a plan to attack New York City with homemade bombs. Susan Candiotti joins us with the very latest.

(BEGIN VIDEOTAPE)

SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT (voice-over): Law enforcement sources say Adis Medunjanin crashed into another car while the FBI's terror task force was tailing him. The sources say he was going faster and faster before he rear ended another car. Just before the wreck sources tell CNN Medunjanin inexplicably called 911. Before Thursday's accident the FBI served a search warrant at Medunjanin's home to get his passport. They said he voluntarily turned it over. After the FBI left, his family says he took off. Agents were following him. His attorney says he does not know why authorities moved against his client.

(on camera): Do you have any idea why they wanted to seize his passport now?

UNIDENTIFIED MALE: I have absolutely no idea.

CANDIOTTI (voice-over): Law enforcement says after Medunjanin was treated for minor injuries he agreed to questioning. Hours later he was arrested. His attorney says authorities were on notice to call him before any questioning but they did not.

UNIDENTIFIED MALE: This is not a joke. This is not something to look the other way, when basic constitutional rights are violated, it was a despicable display of what is going on in this country by certain people, not everybody in this case, shame on them.

CANDIOTTI: After Medunjanin was taken into custody another man, New York cab driver's Zarein Ahmedzay was arrested. Law enforcement sources describe both men as friends of Najibullah Zazi. He's pleaded not guilty to buying and testing bomb making ingredients with the aim of blowing up a New York area target. It's been called the biggest post-9/11 terror investigation. Last fall the homes of both men were searched and his attorney says Medunjanin was questioned for 14 hours. Agents made no secret they were following the two men. Sources say the surveillance never stopped.

JEFFREY TOOBIN, CNN SR. ANALYST: The very nature of anti-terror investigations is that there is long-term surveillance of people under suspicion. Often that leads to nothing. Sometimes it can lead to a mother load of evidence that people were up to no good.

CANDIOTTI: Medunjanin's attorney says he has nothing to hide.

UNIDENTIFIED MALE: He denied being involved in any terrorist activities. He spoke to them for countless hours, explaining his relationships and that he's not involved in terror.

(END VIDEOTAPE)

CANDIOTTI: And tonight there are still many questions, for example, coming from the attorney representing Mr. Medunjanin. He says that late today he was told by prosecutors that his client no longer wants to be represented by him because according to prosecutors, apparently his client thought that he's charging too much money.

The attorney says he doesn't believe a word of it, because he was in contact with his client only yesterday, and they have never discussed a price for his representation. There will be an arraignment for Mr. Medunjanin tomorrow morning here in Brooklyn at 10:00 in the morning so there are still a lot of questions to be answered about why he decided to talk with authorities when he had an attorney.

O'BRIEN: Now all of this dates back, of course, to September of '09. It's part of another investigation really.

CANDIOTTI: It's an investigation that started around that time, and it is billed as the largest terror investigation in the country since the 9/11 attacks and we still are trying to learn a lot about it. There are still, according to sources, a number of people that are under surveillance. We are yet to have answers to many questions involving, for example, the key suspect in that case, Mr. Najibullah Zazi, for example, what exactly was his intended target. So it's an investigation we are told that is far from over -- Soledad.

O'BRIEN: But as you said and many, many questions remain. Susan Candiotti for us tonight -- Susan, thanks.

Still ahead the Super Bowl of court cases for the NFL. We'll tell you what's at stake when the league makes its case in the Supreme Court.

And also the answer to that classic question, how cold is it? Well it's so cold iguanas are falling out of trees.

(COMMERCIAL BREAK)

O'BRIEN: Unbearable winds, snowdrifts too deep to plow in the Midwest, roads and crops coated with ice in the South. Tonight the country is suffering from a serious case of frostbite. Chad Myers is at the CNN Weather Center with a look at the freezing forecast for us. Chad, it is bad at over a lot of the country. Good evening.

CHAD MYERS, AMS METEOROLOGIST: Yes, at least two-thirds of it, Soledad. Hi, I haven't talked to you in a while. Good to see you there.

O'BRIEN: Likewise.

MYERS: It is slippery and it is icy and it is glazy and when I was coming to work today I wanted to drive a Zamboni. For the most part the glaze is through where the roads are, where the tracks of the tires are, you can find a little bit of traction on the side from our IReporter here, the Georgia (ph), the GA Kahuna (ph), as he around today and took that picture.

Temperatures are cold everywhere and in fact the wind chills are probably the most severe that I've seen all week, 33 below in Fargo and Bismarck right now and eight in Billings. Temperatures are going up and down depending -- wind chills going up and down depending on just the gust that comes by every once in a while. We will watch that.

We will also watch a warm up. I know it's going to be slow, but the highs today were only in the single digits. The highest today in Minneapolis got to five, five, but look, Soledad, they'll be in their shorts by Tuesday, 28 degrees there.

O'BRIEN: Uh-huh.

MYERS: Let me show you some of the pictures though that we have for you from today and some of these are quite striking. This is Elkhorn, Nebraska about 10 miles west of Omaha. I don't think those buses are going anywhere any time soon with snow and ice on them, and they're trying to do a little bit here in Elkhorn to blast them, get rid of some of that water with some hot water and deicing equipment, but boy that looks like a very cold job today, doesn't it? I can imagine how cold it was to be a baggage handler trying to put bags on airplanes today.

(CROSSTALK)

MYERS: Switching gears -- go ahead.

O'BRIEN: I said absolutely brutal. Look at those pictures. It's crazy. Now what's this, this looks like Atlanta?

MYERS: Yes, not too far from my house, Marietta, Georgia in fact.

O'BRIEN: Really? Did you take this picture?

MYERS: No, but I felt these people's pain today although I didn't dent my car -- on top of the hill just basically coming on down almost like people just sliding down. They couldn't stop at all. The problem is, Soledad, we don't get a lot of practice slowing down here in Georgia. We just go fast and so when it gets to be icy...

O'BRIEN: I've seen that in the South. You're not used to the ice...

(CROSSTALK)

O'BRIEN: ... even a little bit. Everybody's all over the road.

MYERS: Yes...

O'BRIEN: You got to go slow in bad weather. Come on...

MYERS: That's exactly what happened.

O'BRIEN: We learn that in New York.

MYERS: Well people don't understand that brakes are not your friend when it's icy here, and so slow down naturally, let the car slow down by itself, and take your time.

O'BRIEN: When does it end? Obviously I'm looking at your map and I'm not counting the 28 degrees as an end.

(CROSSTALK)

O'BRIEN: No, no. MYERS: I would say April.

O'BRIEN: Oh you're funny, you know. Chad, I haven't seen you in a long time but your sense of humor has not changed a bit. Chad Myers for us -- thank you, Chad.

MYERS: Sure, Soledad.

O'BRIEN: Well obviously the big chill is not a big hit in America's subtropical areas especially among animals, warm-blooded and cold-blooded creatures alike are coping, some with a little help from their human friends. John Zarrella takes a look at the animal kingdom fighting back or maybe more like chilling out.

(BEGIN VIDEOTAPE)

JOHN ZARRELLA, CNN CORRESPONDENT (voice-over): Just throw me a blanket, will you? Even with all that hair, Bonnie the orangutan wasted no time wrapping up against the cold at Miami's Metrozoo. Her buddy, Mango, sipped on a cup of hot chocolate, vet approved. The tortoises, well they're not too swift with their feet or their brains.

RON MAGILL, MIAMI METROZOO: We have to take actually plywood and lock them in there because they're not bright enough to know to stay in there. They'll go out and then they'll freeze and (INAUDIBLE) they're frozen and that's it.

ZARRELLA: In Florida the animals are no more used to this kind of cold than people. Zoos are doing what they can to provide creature comforts.

(SOUNDS)

ZARRELLA: Space heaters for the parrots and the komodo dragons, boxes for the primates. This little guy shut his own door. Don't ever say dumb animals. For beekeepers in Tallahassee where the temperature's been in the teens the only hope save the queen.

UNIDENTIFIED MALE: As long as the queen and some of the bees make it through the winter then we're fine.

ZARRELLA: No, you're wrong, that's not protozoa under a microscope. They're manatees 300 of them. The heating system at a power plant was turned on to warm the waters for them. Sea turtles, lethargic and stunned by the cold, are being rescued and brought to marine life sanctuaries, nearly 100 so far.

(on camera): Now to be honest there are some animals here in Florida that just don't get and won't get any love.

(voice-over): So how do you feel about rats? Maybe a foot long? They're not crazy about the cold either. Well, they're scrambling and slithering and squeezing their way into nice warm homes.

UNIDENTIFIED FEMALE: The kind of rat should be in New York. It shouldn't be in Florida and it certainly shouldn't be in my apartment with my kids.

ZARRELLA: And there are the iguanas, invasive species, overrunning South Florida. The cold weather puts them literally in a state of suspended animation, not good when you live in a tree -- Florida's version of Groundhog Day -- when the iguana falls out of the tree six more weeks of winter.

(END VIDEOTAPE)

ZARRELLA: Soledad, we had some good weather here today. It actually warmed up to about 60, 70 degrees but tomorrow the bottom is expected to fall out again here in Miami, Broward County, Fort Lauderdale area, in the 30's, by our standards that's cold, so we expect to see a lot more iguanas falling out of those trees the next couple of days and on top of that Florida Fish and Wildlife Commission is saying we may even see a lot of pythons, those invasive -- other invasive species we have here because they'll be out sunning themselves trying to stay warm. Florida is a great place to live, Soledad.

O'BRIEN: Yes and there's that woman who wants the rats to go back to New York. What's that about? I didn't realize that iguanas lost consciousness and then fell out of a tree and died.

ZARRELLA: Well they don't -- no, here's -- if you got a second...

O'BRIEN: I got time for this, yes, bring it on.

ZARRELLA: All right. I was told that people will go around and they will collect them, and a lot of times people will -- when they're down there and they're in suspended animation, put them in their cars and the urban legend is that one man put a bunch of them in his car, he was going to take them away, and they all started waking up because it was warm in his car, and while he's driving, he's got iguanas crawling all around and all over him.

O'BRIEN: And you believe that story...

ZARRELLA: I don't know if it's true.

O'BRIEN: You believe that story?

ZARRELLA: It was told...

O'BRIEN: I got a bridge to sell you that...

(LAUGHTER)

O'BRIEN: ... New York and Brooklyn -- please, please, please -- John Zarrella for us tonight.

ZARRELLA: It's a good story.

O'BRIEN: It's a very good story; it makes no sense at all. Thanks, John. Coming up tonight, unemployment soars in the month of December, but what about the nearly one million people who have been out of work so long they're not even counted anymore?

And then the state of California can't make ends meet so Governor Schwarzenegger wants the rest of the country to help foot the bill. We'll have that story coming up next.

(COMMERCIAL BREAK)

O'BRIEN: There was some mixed news on the job front today. Employers slashed more jobs in December than was expected, 85,000 jobs were lost during the month. Economists expected payrolls to stay steady with no loss no gain. But revised November numbers showed a job gain of 4,000 jobs and that ended 23 straight months of job losses. January though off to a rough start, UPS today says it's going to cut 1,800 jobs as part of a restructuring plan.

The company says some employees will be offered a buyout; others will be cut and given severance packages. The December job numbers though are a clear indication that despite some improvements in the economy, job losses continue to climb. El Centro, California, had the nation's highest unemployment rate at 29 percent, Yuma, Arizona, 21 percent. Eleven metropolitan areas in California, three in Michigan had unemployment rates over 15 percent.

And the major city of Detroit has the highest unemployment at more than 15 percent. So long-term unemployed, those who are out of work for six months or more, the prospects of finding a job are even bleaker. Lisa Sylvester reports on the impact in one hard-hit Michigan city.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): In Warren (ph), Michigan, drive down 9 Mile Road and there's sign after sign of businesses that have gone under. The result is a dismal unemployment rate. Nationally the unemployment rate is 10 percent, but in the Detroit metro area, it's 15.4 percent, the highest of all the major cities. Jason is an out of work painter who has come to this Detroit area food pantry with his 4-year-old daughter. It's the first time they've had to come here for help.

JASON, UNEMPLOYED: I try to work every day, but (INAUDIBLE) this economy is just horrible.

SYLVESTER: The food pantry is a reminder that while the stock market may be up and some employers are starting to hire, there's still a lot of pain and suffering out there. Volunteers were serving about 100 families a month a year ago. Now they're serving 600 families a month. Many of those needing help once had steady middle class jobs working for the auto industry.

KATHY GASOWSKI, PANTRY DIRECTOR: It chokes me up sometimes when I hear the stories, because, you know, we're all people, we're all good people, and it's sad that we're living under such stressful times.

SYLVESTER: According to the Bureau of Labor Statistics, many people are so discouraged they have stopped looking for work all together, 661,000 workers left the labor force in December alone.

UNIDENTIFIED MALE: Thank you very much.

SYLVESTER: Jason leaves the pantry with a box full of food, supplies to last a month, while the volunteers prepare boxes for the next wave of families.

BOB COMBS, PANTRY VOLUNTEER: But I think everybody that's around here knows somebody. If it's not a family member, it's a neighbor or something that's been out of work, a couple have gone back to work but a lot of them are just sitting waiting, looking for hope.

(END VIDEOTAPE)

SYLVESTER: And troubling is the fact that long-term unemployment continues to rise. Nearly 40 percent of all unemployed workers have been without a job for more than six months -- Soledad.

O'BRIEN: The folks who run that food bank who are serving 100 people a month a year ago, and now that number is six times as many, how concerned are they that there are going to be able to keep doing that at that pace?

SYLVESTER: You know it's tough. They rely on donations from the county and from parishioners, but it's really hard. I mean their cupboards were bare coming off of the Christmas and the holiday season, so it is a constant challenge for them to keep replenishing so that they can serve the many people and there are so many people, Soledad, who have a need right now.

O'BRIEN: It is so true. Lisa Sylvester for us tonight, she's in Washington, D.C. -- thanks, Lisa.

California Governor Arnold Schwarzenegger today revealed his plan to close another $20 billion budget shortfall in the struggling Golden State. So why should the rest of the country care? Here's why. He wants the nation's taxpayers to pick up a third of the tab -- Casey Wian reporting for us from Los Angeles tonight.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): California Governor Arnold Schwarzenegger is running out of state programs to slash with his budget cutting knife, so he wants $7 billion in help from federal taxpayers to close California's $20 billion deficit over the next 18 months.

GOV. ARNOLD SCHWARZENEGGER (R), CALIFORNIA: Federal funds must be part of our budget solution because the federal government is part of our budget problem.

WIAN: The governor says California only receives 78 cents for every $1 it sends in taxes to Washington. He also blames federal mandates, including a takeover of the state's prison health care system, and federal failures, such as illegal immigration, for increasing costs to California taxpayers. Schwarzenegger also issued a threat to the White House and Congress, for every $1 the state fails to receive from the feds it will cut state programs, including welfare and health care for the elderly. That's on top of $8.5 billion in spending reductions the governor says are needed even if California receives federal help.

UNIDENTIFIED FEMALE: He has left the state at the brink of disaster.

WIAN: A coalition of labor and anti-poverty activists gathered at the governor's star on Hollywood Boulevard to protest.

PATRICIA MCKNIGHT, PROTESTER: He's basically trying to kill off the most vulnerable and helpless members of society with his cuts instead of looking to their own mismanagement and excesses in cleaning house there first.

CENCHITA MILAN, PROTESTER: I went down from 17 hours working per work at Cal State L.A. to five hours and then my financial aid got cut and I can't afford housing anymore.

WIAN: The governor's budget also proposes a five percent pay reduction for state workers, a five percent increase in the retirement fund contributions, and layoffs of five percent of the state's workforce.

SCHWARZENEGGER: I know many of these cuts are painful. There's simply no conceivable way to avoid more cuts and more pain.

WIAN: The governor plans to raise revenue by expanding oil drilling off the California coast and eliminating some corporate tax breaks. He made good on an earlier promise to leave education funding intact. That was reduced by more than $8 billion last year, when California faced an even larger shortfall.

(END VIDEOTAPE)

WIAN: Now all of the governor's proposals are, of course, just proposals. They must now be considered by a bitterly divided state legislature. In fact the Democratic leader of the State Senate reacted to the governor's proposed budget by saying simply "you've got to be kidding me" -- Soledad.

O'BRIEN: Oh, that's a hopeful sign. So if he's looking at a five percent reduction in pay, five percent increase in retirement contributions, maybe five percent layoffs, can -- can he do all that? I mean how -- how likely, how realistic is that?

WIAN: Well it's not going to happen without a fight in court, that's for sure and that's one of the issues that Democrats brought up today, is that a lot of these state worker jobs are under collective bargaining agreements that the government doesn't have the -- governor does not have the power to unilaterally change. And that's one of the reasons why California is in a bigger budget mess because some of the proposals the governor put forward last year are tied up in court.

O'BRIEN: Slows it is all down. All right, Casey Wian for us, tonight. Thanks, Casey, appreciate it.

Coming up tonight, underestimating al Qaeda. How did U.S. intelligence agencies fail to recognize its lethal potential?

And President Obama's next step, the President orders a security upgrade, but is it enough?

Three of the nation's top political minds will join me, coming up next.

(COMMERCIAL BREAK)

O'BRIEN: Shocking admission this week from the Obama administration. Officials say they underestimated the capabilities of al Qaeda in the Arabian Peninsula. Many question just how that's possible given the group's growing strength and past terrorist attacks. Jeanne Meserve has our report, tonight.

(BEGIN VIDEOTAPE)

JEANNE MESERVE, CNN NEWS CORRESPONDENT (voice-over): Yemen has been a very high priority of the intelligence community, according to a U.S. counterterrorism official. The U.S. was well aware of al Qaeda in the Arabian Peninsula's growing strength, but the intelligence community didn't realize the group had the operational capability to attack the U.S. homeland.

JOHN BRENNAN, ASST TO PRES COUNTERTERRORISM & HOMELAND SEC: We he had a strategic sense of sort of where they were going, but didn't know they progressed to the point of actually launching individuals here.

MESERVE: U.S. Officials knew that the group used a bomb concealed in underwear in the attempted assassination of a Saudi official, but analysts didn't marry that up with al Qaeda's interests in striking the homeland and aviation.

One former intelligence official says like 9/11, it reflects a failure of imagination. But, a current counterterrorism official rejects that comparison saying, "we didn't have information about a specific plot. It is wrong for anyone to suggest that U.S. counterterrorism agencies didn't take a real hard look at the possibility that Yemeni extremists might try to do something abroad to include the homeland."

Thursday the CIA announced it is increasing the number of analysts focused on Yemen and Africa.

CHRISTOPHER BOUCEK, CARNEGIE ENDOWMENT FOR INT'L PEACE: Arabic language skills are difficult to acquire and take a long time and a lot of dedication and it will take a long time to gear up these capabilities. MESERVE: Offshoots of al Qaeda are growing in Algeria, Somalia and elsewhere, but one expert says one region should get the lion's share of the intelligence community's attention and resources.

UNIDENTIFIED MALE: Yemen is an important subsidiary of the main al Qaeda core, but the strategic direction, overall planning and most importantly the propaganda instrument remains in Afghanistan and Pakistan and that's where we need to keep our focus and our activities.

MESERVE (on camera): Does the intelligence community have the capability to cover all these bases at once? A U.S. counterterrorism official says, yes, but no one is saying it will be easy.

Soledad, back to you.

(END VIDEOTAPE)

O'BRIEN: All right, Jeanne Meserve for us, thanks, Jeanne.

Joining me with more on the intelligence failure, the president's response and more than that, is Julian Zelizer, he's a Princeton University professor. He's also the author of the telling new book, it's called "Arsenal of Democracy: The Politics of National Security from World War II to the War on Terror." Ed Rollins is a Republican strategist, former White House political director and CNN contributor. And Robert Zimmerman, Democratic strategist and CNN contributor.

All of you all are getting some seriously long titles. We have to work on shortening all of that in the future. Here's what the president said last night. He said, and said it a few times before, "the buck stops with me." Listen.

(BEGIN VIDEO CLIP)

BARACK OBAMA (D), UNITED STATES PRESIDENT: I am less interested in passing out blame than I am in learning from and correcting these mistakes to make us safer, for ultimately, the buck stops with me.

(END VIDEO CLIP)

O'BRIEN: He talks about learning from mistakes. This information is absolutely shocking, and to hear that the buck stops with him, he said that about the AIG bonuses, he said that about the economy, the buck stops with him. When you hear that, what exactly does that mean -- Ed Rollins.

ED ROLLINS, REPUBLICAN STRATEGIST: Well, the whole thing yesterday was a little scary to me and I'm always about national security, and we're all Americans, not Republicans or Democrats. When 9/11 occurred our guard was down. We had spent eight years trying to build a defense mechanism all over the world to make sure this doesn't happen again.

We have been hit in many places, we lost, two weeks ago, our CIA principal people in Afghanistan, we had people get into the White House past the secret service, we had a guy who literally almost blew up a plane and would have if he hadn't been totally inept and everybody who stood up yesterday said everything is wrong. There was not agency that stood up and said we did everything right. It was every agency was a failure and I walked away from watching that press conference yesterday, not just the president, but everybody else saying, if I was a terrorist sitting out there, I'd say man, now is the time to go. This team doesn't know what they're doing and I think that was frightening to me.

O'BRIEN: The level of mistakes was surprising, it was shocking, I thought.

ROBERT ZIMMERMAN, DEMOCRATIC STRATEGIST: Absolutely, also I would also say if a terrorist was watching this broadcast they also might wake up to the reality that the United States is going to revamp their program and approach a much greater resolve and much greater determination. I thought the president's resolve was important and critical in terms of his presentation yesterday and there's no question, the mistakes that were made were stunning, and absolutely shocking to see eight years later.

What concerns me and where I differ with many Democrats is that it's not about assessing blame, it's holding people accountable. And there are individuals who didn't execute properly or train properly and they have to be removed.

O'BRIEN: And resolve is one thing, but at the end of the day and I guess Julian, this question is for you, there's the appearance of how you're doing, which is how you come across, or resolve, and the actually how are you doing. How are the Democrats doing when it comes to national security?

PROF JULIAN ZELIZER, PRINCETON UNIVERSITY: I don't think they've had a good few weeks. I mean, you have the policy and you have the politics, in terms of the policy, what President Obama spoke about in terms of reforms that might be needed in the post 9/11 system, I think there's a lot of agreement on that, areas we did fix that the 9/11 commission had pushed the country to deal with, like congressional oversight and centralizing the way Congress looks over at the policies.

But then there is the politics, the kind of halting and slow response by the president, and recent discussion of all the problems that went wrong don't play well politically for the president, or for the Democratic Party.

O'BRIEN: You, professor Zelizer, you have compared this national security problem, crisis, whatever you want to call it, to LBJ's Vietnam. Is that a fair comparison, do you think?

ZELIZER: Well, the comparison is that when LBJ took over, Democrats had been attacked as being weak on defense for having lost China to communism for the stalemate in Korea, and that really shaped President Johnson's policies in 1963, and 1964, and I think Obama comes out of a period where Democrats faced similar criticism and I do think it constrains the White House and sometimes causes them actually to be timid on reforms for taking certain steps that they fear will open them up to that attack.

O'BRIEN: Robert Zimmerman is about to break his neck shaking his head no, no, no to what you're saying.

ZIMMERMAN: All I'm saying -- I agree with you that Democrats do think defensively on this issue, but the reality is Democrats have got to come out of group therapy and stop doing defensive, especially this president, in particular.

You know, Teddy Roosevelt had the famous expression, "speak softly and carry a big stick." Barack Obama's administration has launched more drone missile attacks against al Qaeda in one year than the Bush administration during their entire tenure and they've expand the war against al Qaeda. But, perhaps speaking softly isn't the best approach, they've got to let that record be known.

ROLLINS: First of all, we have to forget George Bush and the Republicans.

ZIMMERMAN: Did you forget Jimmy Carter during the Reagan years?

ROLLINS: We never talked about that. We're beginning fourth year with Democrats in charge of the Congress, including all of the homeland apparatus. We're beginning our second year of the president. The bottom line here is as Americans we have a right to make sure that when we spend billions of dollars making sure the things work and the president said he's going to make it accountable and I take him at his word. But, the bottom line is today we have a system that needs to put this front and center. We've got too many other things front and center. We're in a war on two fronts, we have terrorists all over the world who basically want to kill Americans.

O'BRIEN: You've got a health care debate, you've got immigration debate, you've got people who are calling for education reform, because that's critical, too. Is there too much on the plate?

ROLLINS: Well, there's a lot on the plate, but the bottom line is this has to get back front and center again and not anybody be afraid of it, not be afraid of basically going after these people and doing whatever it takes to keep them from coming at us.

O'BRIEN: It was very shocking news, I got to tell you. Gentlemen I appreciate your time this evening as always. Julian Zelizer joining us from Princeton University and of course our friends Ed Rollins and Robert Zimmerman, nice to see you guys, thanks.

Still ahead tonight, an anti-trust case against the NFL could impact fans and other professional sports, as well.

And then happy birthday, Elvis. We're going to tell you how fans are celebrating what would have been "The King's" 75th birthday.

(COMMERCIAL BREAK)

O'BRIEN: Thousands of fans gathered at Graceland to remember the life of music legend Elvis Presley. It's hard to fathom that Elvis Presley would have been 75 years old today. As Bill Tucker reports Elvis will always be the king of rock 'n' roll, who reshaped popular music forever.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN NEWS CORRESPONDENT (voice-over): Maybe this is the ultimate measure of a performer's impact -- 33 years after his death, more than is 1,000 people showed up at Graceland, Elvis's former home, to celebrate the anniversary of his 75th birthday.

Maybe the measure is by the numbers, Elvis sells the more records for the most top 40 hits, most top 10 hits, most consecutive No. 1, the most weeks at No. 1. He made 31 campy movies and concert films and then there was his historic 1968 comeback, television special.

He was rock 'n' roll's first mainstreamed face capturing the spirit of rebellion, motorcycles and sex. Little wonder that Harley- Davidson is celebrating his 75th birthday with a special exhibit that includes "The King's" hog and photos on loan from Graceland.

JIM FRICKE, CURATOR, HARLEY-DAVIDSON MUSEUM: Rock 'n' roll, motorcycles always kind of went together, that kind of black leather jacket image was a big part of that kind of symbol of rebellion, and Elvis was a symbol of kind of musical rebellion.

TUCKER: He wasn't the first, but he was the rock 'n' roll star who brought it all together.

FRICKE: Without Elvis there probably would not have been rock 'n' roll, at least not to the extent of its ongoing popularity and influence and importance and there probably would not have been a Rock 'n' Roll Hall of Fame, either.

TUCKER: Maybe he endures because it's easy to see him as one of us, a regular guy from a poor background, religious upbringing, blessed with good looks, and an artist who walked into Sun Records and into immortality.

(END VIDEOTAPE)

Elvis was in the first group inducted into the Rock 'n' Roll Hall of Fame in 1986, Soledad.

O'BRIEN: Now, they measured the success of the estate, right? So, like how much money this -- so, Elvis is No. 1 of all.

TUCKER: He was. He was about $55 million last year, probably not surprisingly Michael Jackson passed him last year with about $90 million. But, more interesting to me is the fact that the projected No. 1 guy in 2012 is the estate of Bob Marley.

O'BRIEN: Really?

TUCKER: Yeah.

O'BRIEN: That's a shocker. TUCKER: Surprising to me, as well.

O'BRIEN: Very surprising. All right, Bill Tucker for us, thanks, appreciate that.

Coming up next, the Supreme Court prepares to hear a landmark anti-trust case against the NFL. What the decision means for football, and other professional sports, straight ahead.

(COMMERCIAL BREAK)

O'BRIEN: The Supreme Court, next week, will decide if the NFL is shielded from anti-trust laws. A victory for the NFL would allow owners to restrict players' and coaches' salaries. Players could also lose the rights to be free agents. The case says implications far beyond the NFL. More on the case tonight, Lester Munson, he's an ESPN senior writer and legal analyst, and CNN legal analyst Jeff Toobin joins us as well.

Nice to see you, gentlemen.

All right, Jeff...

JEFF TOOBIN, CNN LEGAL ANALYST: The Jets will beat the Bengals, tomorrow. I just wanted to make that clear.

O'BRIEN: You know what, since you're not the ESPN guy, I don't care what you think about that. We're going to start with you for the legal questions, Jeff, if we may.

TOOBIN: OK, I guess we'll have to do the anti-trust...

O'BRIEN: Obviously, the basic question is about is the NFL one business or is it the sort of 32 businesses. That's the question that's at the heart of the Supreme Court case.

TOOBIN: Right, and what's interesting about this that the NFL has said that we have the right to sell merchandise: hats, you know, imitation uniforms -- for every team, and this company, the American Thread Company, they said wait a second, we want to negotiate...

O'BRIEN: American Needle, right?

TOOBIN: American Needle, right, they want to negotiate with each team individually. Said, we want to negotiate with the Cowboys, we think their merchandise will sell, nobody wants to buy the Bills merchandise, because they stink.

O'BRIEN: Tuche.

TOOBIN: That's the, you know, and that's what the fight is about.

O'BRIEN: So, that -- the whole case really is over apparel. But at the end of the day, Lester, the court, does -- won't the court sort of examine how the NFL has been acting. I mean, has the NFL been acting as a single entity or has it been acting as 32 businesses? Isn't that going to be relevant in this case?

LESTER MUNSON, ESPN: It is going to be relevant and the NFL for 20 years has argued in various courts across the country that it is a single entity, and it should be immune to anti-trust laws. The implications of the case go far beyond the American Needle Company or hats and caps, that's why the players union has become involved. There's an organization of coaches that has entered into this case. The NCAA has entered the case, hockey, basketball and baseball; they've all come in because they know that this could be a historic turning point in the structure of the sports industry in this country.

O'BRIEN: All right, so obviously that's why we're talking about tonight, too, because it's really not about the American Needle Company.

TOOBIN: Right.

O'BRIEN: It's the far-reaching implications. You kind of listed, Lester, everybody who is involved. So, both of you, explain to me what those implications are. What are the implications?

TOOBIN: You know, there was a very good piece op-ed piece in the "Washington Post" written by Drew Brees, the quarterback.

O'BRIEN: It's online, now, I think it comes out Sunday.

TOOBIN: Oh, it's not out yet?

O'BRIEN: But, it's online.

TOOBIN: The quarterback of the Saints, who, you know, was really making the point that we want to have competition, here, and the players' interest here is obvious, because they don't want the NFL setting rules about how teams compensate players. They he want free agency, they want their ability -- and you know, the amazing thing about sports is that there is still a cartel in all sports, even though there's more free agency than there used to be, in the NFL, if a player's contract expires, he cannot simply negotiate with anyone he wants. If these other teams have to pay compensation, there are limits, and that's something the players obviously want to get away from.

O'BRIEN: Lester, what are the other implications. You mentioned the NCAA and others.

MUNSON: The NCAA has been losing anti-trust cases for a long time. They are tired of it, as Jeff points out. The NCAA is a cartel, just like the four major team sports, and if the NFL gets what it wants from the Supreme Court, then it will be able to impose salary scales on players, on coaches. It will have an impact on fans because there will be more strikes, more lockouts, more games with replacement or scab players. The cost of paraphernalia, hats, caps and jackets will increase geometrically, and the costs of tickets and concessions and parking will also go up. So, it's something that if you're a consumer or a player, or a coach, you have to be interested in this. This could be a disaster. TOOBIN: Now, in fairness, the NFL has won this case in the lower courts. This is going up to the -- and the remarkable thing is that these leagues, though they seem to be in clear violation of the anti- trust laws, they keep winning these court cases, the famous, infamous Supreme Court case involving Curt Flood, he lost challenging baseball. The NFL has done well in court, even though it's hard to fathom why they keep winning.

O'BRIEN: But you know, when Lester was just laying out that list, I mean, you know, it sounds like fairly dire when you read Drew Brees' online op-ed, which will be, I think, in the Sunday's " Washington Post," he basically says this, if the Supreme court agrees with the NFL, "the absence of anti-trust scrutiny will enable the owners to exert total control over this million tie billion-dollar business." I mean, that's basically what Lester was saying to us in a nutshell. I mean, how concerned should people be?

TOOBIN: Well, I, mean, in fairness to the NFL, their argument is that we are building a bigger pie. It is more efficient, it is better for the teams including the less popular teams, the Buccaneers, the Bills, the Chiefs, not just the Cowboys and the Giants, to sell it all as a group and divide the revenue that way. Everybody is better off.

O'BRIEN: Do you agree with that, Lester?

TOOBIN: They say it's just about apparel, not the rest of the...

(CROSSTALK)

MUNSON: Well, what Jeff is describing is the posturing that the NFL has always taken in these anti-trust cases. They say one thing, and then they turn around and do another thing. Players have free agency...

O'BRIEN: The slippery slope argument, basically.

TOOBIN: There you go.

MUNSON: Exactly. Players have free agency only because they are able to win anti-trust cases. If that is taken from them, the entire structure of the league changes, players salaries will level off and decrease, owner profits will increase incredibly. So, you can see why the owners are interested in this decision, even though, as Jeff points out, they already won the case in the court below.

O'BRIEN: OK, so now what...

TOOBIN: Don't kid yourself, though, ticket prices will go up whichever side wins.

O'BRIEN: And jerseys are going to still cost a ridiculous amount of money, these fake jerseys that kids like to wear. What are the options for the court? Does the court have to make the wide-ranging ruling that basically weighs in on free agency?

TOOBIN: No, chances are, they will not do that. They will say look this is a decision about apparel. Apparel is a unique set of circumstances, it's not about salaries, it's not about free agency. Now, that's where lawyers start to make a slippery slope arguments, but the courts generally try to limit rulings to just the issue before them.

O'BRIEN: It will be interesting to see what happens. Lester, we're out of time, so I'm going to give Mr. Toobin the final word on that, Jeff Toobin and Lester Munson joining us this evening. Thanks gentlemen, appreciate it.

TOOBIN: Thank you.

O'BRIEN: My pleasure.

Coming up at the top of the hour, Campbell Brown.

Hey Campbell, good evening.

CAMPBELL BROWN, CNN NEWS ANCHOR: Hi there, Soledad. At the top of our hour, advice for the president from the man who invented the phrase "it's the economy, stupid." James Carville is here with his take on what the president should do about the economy, about terrorism, about health care.

Plus, a former Marine who says we can defeat al Qaeda in three easy steps.

And big trouble for the Obama administration's top man on the economy. Tim Geithner, we'll have the latest on that. All the details, in a bit.

O'BRIEN: All right, Campbell, wait for that.

Still ahead, a sailor's surprise homecoming to the thrill and delight of his daughters. I love these pictures so much. Can't wait for this one. Back in just a moment. Oh, so sweet.

(COMMERCIAL BREAK)

O'BRIEN: A sailor just back from Afghanistan gave his daughter the surprise of her life. Take a look at these pictures. Petty Officer Eddy Cooliard (ph) showed up unannounced at his 10th grade daughter's school in Florida. Look at this young lady. Ten months since Ashley's (ph) seen her father. Hugged him, had a really hard time letting him go, as you can see. He spent his time in Afghanistan as a medical mentor advising Afghans on running a hospital. He said the reunion with his daughter was priceless.

Love that hug. Love those pictures.

Thanks for joining us tonight. Campbell Brown's up next.