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The Situation Room

Sarah Palin's New Show; President Obama Losing International Clout?

Aired November 12, 2010 - 18:00   ET

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

WOLF BLITZER, CNN ANCHOR: We are going to Havana, Cuba, right now where the Cuban officials are claiming that over the years there are hundreds of plots to kill Fidel Castro, but what if a video game succeeds where others have not. It's generating a lot of controversy in the process. CNN's Shasta Darlington is in Havana and she explains.

SHASTA DARLINGTON, CNN CORRESPONDENT: A new American video game literally takes aim at Cuba's Fidel Castro. One of the first missions in "Call of Duty Black Ops" is to rub out the leader of the Cuban revolution. Unlike in real life the players appear to do just that in disturbing gory detail. No official reaction from the government here in Havana, but this state-run website denounced the game for glorifying assassination and inciting the American youth to behave like violent sociopaths. The Cuban government site also ridicules the CIA. What the United States could not accomplish in more than 50 years, they are trying to do virtually, it says.

In real life, Castro survived scores of assassination attempts and outlasted ten U.S. administrations. Illness forced him to step down in 2006, but after four years of seclusion, Fidel Castro is back in action. He is not in power, but he as the trademark fatigues on and tours Havana delivering endless speeches about the risk of the nuclear war. Cuba has taken a different path when it comes to keeping the cold war alive for its youth. The attempts on Castro have been reenacted in a big-budget TV series. In one episode, the CIA has scientists develop a poisonous cigar for Castro's visit to the U.N. in New York. The plot is foiled when the New York police chief refuses to deliver them.

UNIDENTIFIED ACTOR: You're dead. We killed you.

UNIDENTIFIED ACTOR: No, you killed a double.

SHASTA DARLINGTON, CNN CORRESPONDENT: Even in "Call of Duty," Castro proves immortal at the end.

UNIDENTIFIED ACTOR: It is my gift to you, in honor of our new relationship.

DARLINGTON: Shasta Darlington, CNN, Havana.

(END VIDEOTAPE)

BLITZER: You're in THE SITUATION ROOM.

Happening now: President Obama with little to show for his high- profile performance with the world leaders at the G20 summit. What did they actually accomplish? And is the president's international star losing its luster?

Also, reality and politics collide in Sarah Palin's new TV show debuting this weekend. What impact if any will it have if she decides to run for president in 2012?

And my colleague and friend Soledad O'Brien talking candidly about fear, growing up biracial, and being dissed by the Reverend Jesse Jackson as a black newswoman. It is all new in her brand-new book. She opens up and talks to us this hour about it.

We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer. You're in THE SITUATION ROOM.

President Obama is about to embark on a new round of meetings with world leaders. This time, it is the Asia Pacific Economic Cooperation summit. But economic issues at home are trailing the president as he moves across Asia, specifically the Bush era tax cuts set to expire in only seven weeks.

Our senior White House correspondent, Ed Henry, is traveling with the president in Japan right now. Let's go the Japan.

Ed, what is happening right now on this new day?

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Well, Wolf, the president had a news conference earlier in Seoul, and my colleague Dan Lothian pressed him on whether or not he's basically backpedaling, and into the Republicans who want to push extension of those Bush tax cuts for the rich.

There was that report in Huffington Post suggesting that David Axelrod had said, look, that they are ready to give in here, because that is the only way they're going to get through an extension of middle-class tax cuts as well. The president answering Dan's question really pushed back hard, said that he is not giving in, but if you listen closely to what he is saying, the key is that he is saying he does not want permanent extension of those tax cuts for the rich.

That leaves a lot of room in the negotiations for having a short- term extension of those tax cuts for the rich. Take a listen.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I haven't had a conversation with Republican and Democratic leaders. Here's the right interpretation. I want to make sure that taxes don't go up for middle-class families starting on January 1st. That's my number-one priority -- for those families and for our economy.

I also believe that it would be fiscally irresponsible for us to permanently extend the high-income tax cuts. I think that would be a mistake, particularly when we've got our Republican friends saying that their number-one priority is making sure that we deal with our debt and our deficit.

So there may be a whole host of ways to compromise around those issues. I'm not going to negotiate here in Seoul on those issues.

(END VIDEO CLIP)

HENRY: So, what it really looks like the president is doing, trying to stake out some negotiating ground, not give everything obviously up front, but he is opening the door to a compromise here by basically saying, look, don't permanently extend those tax cuts for the rich, but there is a lot of room here for a deal that would extend the tax cuts for the rich, as well as the middle class, on some sort of short-term basis, a year or two, Wolf.

BLITZER: And he also expressed his support for the outgoing speaker, Nancy Pelosi. What did he say?

HENRY: Very interesting, because just a few days ago the White House has said, look, we're not going to get involved in that leadership race, Nancy Pelosi now running for Democratic minority leader in the House.

And the president got a question from a reporter, look, do you think there should be some new blood in the Democratic Party up there on Capitol Hill? And rather than saying yes, the president basically came out and said, look, Nancy Pelosi has been an outstanding partner in passing my agenda. So, while he is technically not weighing in on the leadership race, it is essentially a tacit endorsement that he thinks Pelosi should stick around, Wolf.

BLITZER: Domestic politics following the president halfway around the world.

All right, Ed, thank you.

Reviews of the just completed G20 summit in South Korea are best summed up by "The Financial Times," which writes -- and I'm quoting now -- "Little agreement was expected and none was achieved."

President Obama in particular will return home on Sunday with little to show for his two days in Seoul.

(BEGIN VIDEOTAPE)

BLITZER: And joining us now from Abu Dhabi, our correspondent Richard Quest.

Richard, it seems the president of the United States didn't get a lot of love at the G20 summit, not only from South Korea, but from some of the other countries as well, especially when it comes to China. What is going on?

RICHARD QUEST, CNN CORRESPONDENT: Well, what is going on is that the nations of the G20 are at very different points now in the economic cycle.

Some are barely growing, like the United States and some countries in Europe. Other members, particularly the Southeast and Asian members of the G20, Brazil, India, China, they are all growing very fast indeed. And what they are seeing is that the laggards, the countries like the U.S., are now trying to export their problems, for instance, the United States with its quantitative easing two, QE2 policy of last week, which is causing great currency issues for other nations, and the question of whether the United States is actually doing a de facto devaluation of the dollar, which, again, would cause problems.

And the U.S.' answer to all of this, the president's answer remains the same. It is in everybody's interests for the U.S. to grow and grow quickly and that's why we are doing what we are doing.

BLITZER: Because the accusations are being hurled against the U.S. that the U.S. is doing what they have blamed the Chinese for doing, artificially trying to devalue their own currency to increase exports.

QUEST: Yes, I think there's a bit of a nuanced difference there.

The U.S. denies quite clearly. Tim Geithner came out full- throttle and said Alan Greenspan in that recent article was wrong, that there was no policy of devaluation, a strong dollar in the U.S.' best interests. They always say that. We can tell by the time by that particular statement.

The Chinese are a lot more reluctant to actually talk about what they are doing with the Chinese yuan. Ultimately, the two sides are at diametrically opposed differences of opinions on how this should be resolved.

And it is that that caused the G20 to almost fall apart. This is the communique. It is three pages long. It's extremely woolly in its terminology. I have plowed through a few of these in my time, and I have to say I have rarely seen one that has said so little in so much space.

(END VIDEOTAPE)

BLITZER: Richard Quest, thank you.

Let's get some more with our senior political analyst, David Gergen, who is joining us.

David, when you saw the headlines coming out of the G20 summit, what immediately went through your mind?

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: Oh. Oh, Wolf, after the president had a, really, very fine trip to India, did a lot of good things there, and he had a good trip to Indonesia, he had a diplomatic train wreck in Korea, in South Korea.

Seeing that headline -- Wolf, you have seen this. Presidents and their teams plan for weeks and months to make sure , when the president of the United States goes overseas and tries to get an agreement, he gets a triumph and he gets big headlines back home and around the world: The United States pulls off another deal on this or that.

And yet, in South Korea, he got rebuffed on several fronts. He asked the South Koreans to back down on some -- so he could get a trade agreement out of there. He had announced to the world we would have a trade agreement. They refused. He asked the Chinese to set firm plans for raising the value of their currency. They refused.

He asked other nations to reduce their trade imbalances and set firm numerical goals for that. They refused. Instead, he got lectures from China and from Germany and from Brazil, and even from Britain, that we are manipulating our currency, as Richard Quest just said in his conversation with you.

So, this was a real -- it was a train wreck. And the president is recovering, trying to go on, but I don't think it helped him. In fact, I think it hurt him on the world stage.

BLITZER: Did the Democrats' losses and his losses in the most recent U.S. elections weaken his hand globally?

GERGEN: That is an interesting question, Wolf. I think probably not in one sense. In other words, I think that people understand those things happen. They all have paid their prices.

But I do think, from a journalistic standpoint, the two stories got woven together. A president wounded at home goes overseas and is rebuffed. That all sort of adds up in the way the journalistic community is presenting it, as a weakened president both at home and abroad.

So I think he has paid a price for it. I think the real reason he is running into problems though, Wolf, is America is increasingly seen as a country unable to get its economic house in order, while other countries, particularly China and India and Germany, are moving ahead. They have got high growth rates and there is a tendency now to be more dismissive of the United States and for the United States to lose some of its influence. That is the real danger.

We are in serious danger unless we get our economic house in order. And that includes dealing with the deficits. We're in serious danger of losing influence and leadership around the world.

BLITZER: And if the president thinks he had troubles with the G20 leaders in Korea, wait until he comes back to the United States and has to deal with the new Republican leadership here in Washington.

David, thank you.

GERGEN: Thank you.

BLITZER: They couldn't stop it in Congress. Now Republicans are making a new attempt to try to kill health care reform, this time in court. We have details of their effort. Brian Todd is standing by.

And John McCain and his wife, Cindy, they are at odds right now over the very sensitive issues of gays serving openly in the U.S. military. We are going to show you what she is saying. She is speaking out dramatically.

Plus, my colleague and friend Soledad O'Brien reveals how she was once dismissed as a black newswoman by Jesse Jackson. It is in her brand-new book. And Soledad O'Brien is here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: It is sweeping, it's controversial, and lot of its critics say it is unconstitutional. We are talking about the new health care reform law. It is in the Republicans' crosshairs right now, and it is in court as well.

CNN's Brian Todd has been looking into the story.

They are trying to kill the law, the new law in court. What's the latest?

BRIAN TODD, CNN CORRESPONDENT: The latest, Wolf, is that some prominent Republican politicians are hopping on to the biggest legal challenge to health care, because they know they likely won't be able to kill it in Congress.

(BEGIN VIDEOTAPE)

TODD (voice-over): It was the Republicans' favorite campaign weapon, attacking President Obama's health care plan.

SEN. JOHN MCCAIN (R), ARIZONA: Repeal and replace Obamacare.

(CHEERING AND APPLAUSE)

UNIDENTIFIED MALE: We will not rest until we repeal Obamacare.

TODD: Fresh off of their midterm victory, though, comes the hard reality for the GOP. They likely won't have the votes, at least in the Senate, to completely repeal the health care law. So, they are attacking it in the courts.

Senate Minority Leader Mitch McConnell is leading that charge.

SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: We can compel the administration officials to attempt to defend this indefensible health spending bill.

TODD: McConnell is filing a legal brief supporting a massive multistate lawsuit led by Florida's Republican attorney general. Other big-name Republicans, including Governor Minnesota Tim Pawlenty, a possible presidential candidate, also support the suit.

It is the main legal challenge to the president's health care plan, saying it is an overreach of the government's power and unconstitutional, because it forces people to buy health insurance and taxes them if they don't.

(on camera): An aide to Senator McConnell tell us his friend-of- the-court briefing does carry significant weight, because the bill had to go through the Senate to become law. But there are serious questions as to whether a legal challenge to health care can really stand up in the courts.

(voice-over): A federal judge in Florida recently ruled that parts of the lawsuit can go forward.

I asked Stephen Vladeck, law professor at American University, about the prospects for challenge health care.

(on camera): Realistically, is there a chance to overturn this in the courts?

STEPHEN VLADECK, AMERICAN UNIVERSITY: There's a chance, but I really do think it is a long shot. There are two different legal issues here. One is, does the federal government have the power under the commerce clause to require individual consumers to have health insurance? The other is, can the federal government tax individual consumers who actually do not purchase health insurance?

The federal government needs to win on only one of those two arguments, whereas the states, the challengers, have to convince the courts that it is unconstitutional on both sides. And I think that is a very difficult sell.

(END VIDEOTAPE)

TODD: The president's team obviously agrees that it is a difficult sell, a White House official pointing out to us that other scholars, including three Nobel Prize winners for economics, wrote briefs against that same Florida lawsuit, arguing that the health care market is unlike any other market in the country, that no one can realistically opt out of that market. No one is not going to get sick.

Experts say at least some of the health care law should reach the Supreme Court, but probably not for a year or two -- Wolf.

BLITZER: What would be its prospects if it should reach the Supreme Court?

TODD: Despite the conservative majority in the court, analysts say it is unlikely they are going to toss out the entire thing. They say the Supreme Court doesn't like to toss out sweeping laws passed by Congress. But some aspects of the law could be tossed out. That one aspect of making people buy health insurance, we're going to see how that fares in court. It's going to be very interesting.

BLITZER: It's going to be a fascinating development. We will watch it with you every step of the way.

TODD: All right. All right.

BLITZER: Thank you.

He says/she says. The wife of Senator and former presidential candidate John McCain break ranks with her husband. Stand by -- the issue that has Cindy McCain taking sides against her husband. We will explain.

And, later, CNN's Soledad O'Brien takes us inside the pages of her brand-new book, why Jesse Jackson told her -- and I'm quoting him now -- "You don't count."

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

(COMMERCIAL BREAK)

(NEWS BREAK)

BLITZER: Nancy Pelosi on the defensive. The outgoing House speaker says she is not the reason Democrats lost so badly in the midterm elections, and she reveals her theory behind what happened.

And a preview of Sarah Palin's reality TV show. What it will mean for her political future?

Plus, CNN's Soledad O'Brien, she is sharing some candid and sometimes very emotional stories of her career, her family. She is here to talk about her new book with us.

(COMMERCIAL BREAK)

BLITZER: The U.S. Supreme Court is weighing in on the ban on gays serving openly in the U.S. military. And the justices have ordered that the don't ask, don't tell policy will remain in effect, at least for now.

Our Pentagon correspondent, Barbara Starr, is following the latest developments for us.

So what happens now, Barbara?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Wolf, this is a very significant ruling from the Supreme Court.

Today, they turned aside a homosexual rights group's request to temporarily suspend enforcement of that controversial don't ask, don't tell policy on gays in the military. The impact, now it all remains legally in place for the foreseeable future, still likely to wind its way through the courts for some months to come.

But there is also a political football in play now. Here's the question. We are approaching a lame-duck Congress. Will Defense Secretary Robert Gates still aggressively push for repeal in the remaining weeks of the Democratic majority on Capitol Hill? A survey of the troops and their feelings about all of this is going to be sent to Gates around December 1, so time is tight.

Another wrinkle that has just emerged, the commandant of the Marine Corps expressing reservations, General James Amos saying he wants to know more about the potential risks.

Here is a statement, Wolf, from General Amos. He said -- quote -- "There is nothing more intimate than young men and young women. And when you are talking about infantry, we are talking about our young men laying out, sleeping alongside one another, and sharing death and fear and the loss of their brothers. So, I don't know what the effect of that would be on unit cohesion. I mean, that's what we are looking at, unit cohesion and its combat effectiveness."

So, here is a major figure in the U.S. military still saying he has questions. Democratic lame-duck just a few weeks to act on it if they do want to repeal it.

BLITZER: And there is word, Barbara -- you know about this -- that the secretary of defense is furious about a leak on this issue as well.

STARR: Livid beyond belief, is our understanding.

This survey that is going to him December 1, they surveyed tens of thousands of U.S. troops about what they thought. It was all supposed to be very confidential, no results leaked just yet. It all came out in the newspapers. Gates has ordered an investigation into who leaked it, Wolf.

BLITZER: Good luck finding that out.

STARR: You bet.

BLITZER: We know a lot about these leak investigations.

All right, thanks very much.

We will see if this becomes an issue during the lame duck. They have got a lot of other stuff to do in the few weeks before the new Congress comes in, which will have a lot more Republicans, a lot more conservatives, and will make passing legislation even more difficult than it would be...

(CROSSTALK)

STARR: Very tough.

BLITZER: ... right now, with the Democrats having a lopsided majority.

Thanks very much.

She breached gender and racial barriers, then was told by a leading civil rights activist -- and I'm quoting him now -- "You don't count."

Its just one episode among so many in a captivating new book by a top CNN journalist and colleague who has the right stuff.

(BEGIN VIDEOTAPE) BLITZER: And joining us now, our own Soledad O'Brien. She is the author of a brand-new book, a really great book, entitled "The Next Big Story: My Journey Through the Land of Possibilities."

Soledad, it is a very, very moving, very personal story about yourself and your career and your life. I was touched.

And let's start off right at the beginning, growing up in Long Island. You have a white Irish dad, a black Cuban mom. You're growing up. And it was the first encounter really that you had with a photographer. I want you to share that story with our viewers.

SOLEDAD O'BRIEN, CNN SPECIAL CORRESPONDENT: Yes, needless to say, with that makeup, we did not really blend in our family in the 99 percent white community of Long Island.

Yes, I was 11 years old going to get a picture with my older sister Estela, who is three years older than me, for my parents' anniversary. And the photographer said to us as we came in to his little photography store in Smithtown, he said: "Well, excuse me if I'm offending you, but are you black?"

And I remember, as an 11-year-old, thinking, huh, what a weird way to put that. What does that mean? My sister, who was much more mature than I was, basically started chewing the guy out. But -- and she eventually grabbed my hand and we just walked out.

But it was really the first time that I thought, so there are people who just won't like you for who you are, because, at that time, even though we were probably among two black families in the part of Smithtown where I lived, it was the first time I felt like, wow, we clearly don't belong here, and there are people who think that there is something offensive about being black.

That was a -- it was -- I remember that very clearly.

BLITZER: And you also open up about really not dating in high school. Tell us what that was all about.

(LAUGHTER)

O'BRIEN: Well, I would have if anybody had asked me.

(LAUGHTER)

O'BRIEN: But, no, I mean, it was very clear, and I think for my older and brothers and sisters, too, that, in a community where most of the people are white, you were not going to date kids in the black family.

I was a good student, too. I was an excellent student. And I always sort of felt like, well, you know, I am smarter than a lot of the boys, and I have homework to do, and my mom would not let me date anyway. So, you know, those were all side reasons.

But, really, my parents made it very clear, it is not going to happen for you, and, when you go off to college, you will meet people, all different kinds of people, and you won't have to worry about that. But, you know, nobody really asked me, so I didn't.

BLITZER: Well, you did all right for yourself.

O'BRIEN: It worked out fine.

BLITZER: Now you went -- you went on to Harvard. All your siblings went to Harvard so obviously all of you are smart. But you really also opened up about the whole issue of affirmative action and the suggestion that you got benefits because of your background.

O'BRIEN: Absolutely. And I did. I mean, one of my first jobs in television news was to be the minority writer trainee. That's an affirmative action job. And I got that job because I'm black. It taught me how to write.

One of the reasons I needed that job in television news is that TV news, certainly in Boston at the time and even to this day is not diverse. They had virtually no people of color in the newsroom in a community that was quite diverse. Boston, obviously, is a diverse community even back in the '80s when I was working there.

So I think that, yes, there was no question I got opportunities that affirmative action provided and I'm sure at Harvard, as well, because, you know, that was something that was going on at that time in the '80 and the '70s when my sister went off to school. I think that the key thing for me and my parents was always to work as hard as you possibly could and get the most out of every experience that you had, and that you would ultimately be judged on what you had accomplished, on the good that you did, the quality of the work that you turned out, not how you got there.

BLITZER: I know your mom. I've met your mom. I've had the pleasure of meeting your mom, so I can see the apple doesn't fall far from the tree, as we -- as we say.

Tell us about the story, you write openly about it, and the exchange you had with the Reverend Jesse Jackson one day when he was complaining about CNN.

O'BRIEN: Yes, you know, he was annoyed that CNN didn't have enough black anchors. It was the 2006 midterm elections that were coming up on that, and the big posters had gone up with all of the anchors. And he said, you know, "CNN has no black anchors."

And I remember thinking, well, I was anchoring the morning show at the time. I said, "Well, I'm -- what are you talking about it?"

And he was very mad about it, and then he leaned over and sort of touched my skin and said, "You don't count."

And I guess what was most disappointing about that to me was not what the Reverend Jackson said, but was sort of my response because now, when I'm dealing with race and ethnicity questions and issues I push hard back -- push back hard every time and ask those sort of uncomfortable questions.

But at the time I was stunned. I mean, that was something I'd kind of grown up with, you know, "You don't count. You're not one of us. You don't fit in." I was a little stunned. I was taken aback.

And we've talked about it since. When I was writing the book, I sat -- you know, called him and talked about it. And I was embarrassed, but I never sort of called him on it, or asked him about it. I'd run into him all the time. And I said, you know, I just -- what did you mean?

And he said, "I didn't mean if I offend you. I'm sorry. I didn't mean to. I thought you were Latina. I didn't think you were black. So I'm saying, you know, you don't count as a black anchor."

But to me, it was really raising the issue of, you know, what it is - what does it mean to be black? Is it all about skin color? Is it about identity? I mean, that's -- those are the kinds of questions that I get to tackle in the work that I do in our documentary unit when we do "Black in America" and "Latino in America."

BLITZER: And you do amazing work.

O'BRIEN: Thank you.

BLITZER: But sometimes you're on the road for seven days in a row, and a lot of our viewers don't know you're balancing that with raising four kids.

O'BRIEN: I'm not sure balance is the right word.

BLITZER: Well, whatever. You know, it's not easy raising four little kids.

O'BRIEN: Yes.

BLITZER: Not big kids. They're not grown ups

O'BRIEN: Yes.

BLITZER: They're still little kids. They're all growing up, including your twins. How do you do it?

O'BRIEN: Yes, my twins are 6 and my girls are 8 and 10. And, you know, some days you just don't do very well. I mean, one thing that we've done well, I think, is to set a low bar about expectations so that we don't get too stressed about it.

But certainly, if you're going to go cover Katrina or a tsunami or Haiti, you're gone. And you're gone for weeks at a time. But you know, like kids as they get older, I think they find value in what I do. And I think that -- my daughter said, for example, when we were trying to get into Haiti at one point, I was calling everybody I knew to see how can I get into Haiti.

And my daughter said, "Oh, somebody better send Mommy to Haiti, because mommy is going to lose her mind if she doesn't go to Haiti." And I think they understand that my work is so important to me, as they are to me, too.

But when a story breaks, I want to be there and I need to be there. And then they can also, you know, follow what I'm doing through the reports or online. And then, you know, Mom comes back. I always come back, and we talk about it, and it's an experience that they can be part of, as well. So I try not to travel that much all the time, but sometimes, as you well know, certainly, the work necessitates it.

BLITZER: And sometimes you don't want to really be on the front lines of a dangerous story, I guess because you have four kids.

O'BRIEN: Yes, I'm not a danger girl at all. I do not go to Iraq. I don't go into Afghanistan. I think CNN has a number of correspondents who are incredibly brave and talented who are willing to go, and I don't have to be one of them.

I like to go into stories in aftermath, when you can cover the story and the impact on the people, and really bring that story to an American public that may not know what's going on, especially if it's international, but even in stories like Hurricane Katrina; and do long-form pieces.

So, yes, I've never been danger girl, and I had no intention of -- even before I had kids, I had no intention of starting now. But sometimes -- sometimes there's a big aftershock. Sometimes there's a scary moment. Sometimes something bad happens, and you know, that is the nature of the gig, frankly.

BLITZER: We worked together on election night, and you were still hobbling on crutches.

O'BRIEN: Yes.

BLITZER: How are you feeling, first of all, right now? And tell our viewers what happened.

O'BRIEN: I'm feeling fine. I fell off my horse and tore my knee. ACL, PCL, LCL, MCL, and my meniscus, and I had knee surgery about two and a half weeks ago. And my doctor says I'm, you know, right on track for doing perfectly, you know, 100 percent recovery. So I have got another week and a half on crutches, which is such a raging pain, because I'm so slow. But then after that, I can start walking with a smaller brace and then I should be back riding in five months or so.

BLITZER: Good luck.

O'BRIEN: Knock on wood.

BLITZER: Good luck. I'll go -- if I were you, I wouldn't be riding that much anymore, but that's just -- just me. I'd be worried about it. Let me -- let me plug the book, because it is an excellent read, and all of our viewers who love you, they will want to read this book, Soledad, because they'll learn even more about you than they just learned over the past two minutes. It's entitled "The Next Big Story: My Journey Through the Land of Possibilities."

Soledad, thanks so much.

O'BRIEN: It's my pleasure. Thank you, Wolf.

BLITZER: The House speaker, Nancy Pelosi, defends her run for minority leader in the new Congress, despite charges that she's to blame for the loss of Democratic control of the House. The California Democrat says it's not her fault.

And politics clash head on with reality TV. Sarah Palin's "Alaska" debuts this weekend. Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: The outgoing speaker, Nancy Pelosi, is standing by her decision to run for leader of the soon-to-be House minority. That would be the Democrats. While some blame her for the party's crushing losses on election day, Pelosi says that's simply not true. Listen to what she told National Public Radio.

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE: We didn't lose the election because of me. In any circumstance when you have 9.5 percent unemployment, any party that cannot turn that into a political gain should hang up the gloves.

(END VIDEO CLIP)

BLITZER: Let's discuss with our senior political analyst Gloria Borger and John King. He's the host of "JOHN KING USA," which starts right at the top of the hour. She's blaming the economy for the Democrats' setback. Some are already suggesting, you know, it's a sort of a subtle dig, though, at the Obama administration.

GLORIA BORGER, CNN POLITICAL ANALYST: Yes, she was saying that, using that same line before the election that she's using after the election.

If you talk to Democrats, it's no secret that they believe that the Obama administration was not out there forcefully enough selling the agenda that they took the hard votes on, particularly in the House. She pushed a tough agenda. She got folks in line to vote for it, and there are lots of Democrats who felt that they were kind of left out there hanging on a limb.

So, yes, I believe this is a not so subtle dig, but on the other hand, she's been a really good trooper for Barack Obama, and that's why she's running again, because she wants to protect what she's done. BLITZER: Well, a lot of Democrats in the House who have gotten re-elected or are coming to Washington, they're not very happy with her, but they're afraid to say that, because she is a strong and powerful leader.

JOHN KING, CNN ANCHOR: And she's been a great fundraiser for the party, and she's been a disciplined and compassionate leader, if you will. She knows everybody's family concerns.

Most of the liberals are saying, "You know what? Of all of our choices, we'll stick with Nancy Pelosi." Because remember, as the minority leader, the Democrat leader, much lower profile than the speaker. The president will be now the defining Democrat. In the campaign, the Republicans were successful in making Nancy Pelosi an issue, without a doubt. Harder to do when she's leading the minority.

The people who are most concerned are the blue dog, the centrist Democrats who in their districts, even if she were still the speaker next year, they would have trouble sometimes going home and explaining the votes for the Democratic agenda. But Wolf, one of the things that happened in this election, when the Republicans won 60 seats, a lot of the Democrats who lost are those moderate blue dogs and they will complain about this next week. In the leadership elections, there aren't enough of them.

BLITZER: She's got the votes. That's clear.

Sarah Palin, her reality show on Alaska, it's debuting this weekend. I'm going to play a little clip, because we've got a little trailer.

(BEGIN VIDEO CLIP)

SARAH PALIN, FORMER GOVERNOR OF ALASKA: That whole misperception about being a diva, it kind of cracks me up. That is stuck to my lip. I would describe myself and my family as just normal, average, everyday Americans. If you're planning on visiting her, she can visit you for, like, 20 minutes.

Willow, come here. No boys go upstairs. Willow. Willow.

I think that my kids will always call Alaska home. The opportunities that we have, the epic landscape.

Oh, my gosh. Look at this. I'd rather be out here being free.

This is what life is all about.

And on a really clear day, you can see Russia from here.

(END VIDEO CLIP)

BLITZER: All right. Is this a smart vehicle for someone who's thinking about becoming president of the United States?

BORGER: You know, you watch that trailer, though, Wolf, and you think, well, if Alaska is so great, why would you ever run for office to come to Washington, D.C.

BLITZER: Right, right.

BORGER: So that's question No. 1. But of course, it's good for her. This isn't really a reality show. This seems to be more like a travelogue with Sarah Palin as your -- as your host. And it's going to show her in a very good light. It's going to show her at home with her family, and in Alaska and in the outdoors. So, you know, fine. Nothing to lose there.

KING: She was introduced to the country in a huge hurry, when she was a surprise pick to be the vice-presidential candidate. And she had some problems. She has a huge conservative support base, and we saw that again in this campaign. And we saw it in 2008.

She has problems with moderate suburban women. She has problems with independent voters, and so one of the problems, No. 1, she does have a substance challenge. Even some Republicans say this is not such a great idea, because they want to see her talking about world affairs, talking about the big issues of the day. But she can do that separately.

The other issue was her personal image, so you see her as a mother. You see her outdoors. You see her in a rugged environment, and "I'm not a diva." Remember the big dispute about her using party money to shop, go shopping, and the big, high-priced shopping spree?

BORGER: Sort of like "I'm not a witch," though. Isn't it?

KING: It's reintroduction in American politics. We have seen politicians with image problems in the past recreate their image. This is a very, very high-profile way of doing that.

BORGER: You know, we're also seeing the flipside, as you alluded to. She is now giving some very serious policy speeches. She's got a team around her. She's talking about Ben Bernanke and the Fed and the Fed policy. So she's -- she's trying to kind of round out the -- her image, and take away some of those rough edges that we saw.

BLITZER: What you'll see (ph) is a huge audience when the show debuts. But we'll see. We'll check it out.

KING: Alaska -- Alaska is beautiful. A lot of people will watch just for that.

BORGER: Alaska is beautiful.

BLITZER: We were just there. It's not that long ago.

All right. Thanks very much.

Agents on a raid. An alleged kickback scheme and a quick flush. When we come back, why the FBI called a plumber to help catch some suspects.

And it was a $42 million scam that went undetected for 16 years, allegedly, just ahead. An update on the alleged Holocaust scam that one of the victims is calling unconscionable. Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: A plumber's curious role in a new investigation. Let's go back to Fredricka Whitfield. She's monitoring that and some other top stories in THE SITUATION ROOM right now.

What's going on, Fred?

FREDRICKA WHITFIELD, CNN CORRESPONDENT: Hello, again, Wolf.

Hello, everyone.

Well, it sounds like a Hollywood script. As the FBI closed in on Prince George's County executive Jack Johnson and his wife this morning, the couple allegedly panicked. The FBI affidavit shows the Johnsons raced to find a $100,000 check or an alleged kickback and flushed it down the toilet. This explains why the FBI reportedly called a plumber to the Johnsons' house, who said he was, quote, "checking the toilets to make sure there is nothing in them," unquote.

According to the affidavit, Mrs. Johnson also stuffed some $80,000 in cash into her bra. This dramatic ending came to a year's long alleged kickback scheme. The couple was taken into federal custody today. They have been charged with witness tampering.

And Finland has built the world's first permanent nuclear waste bunker. It's made up of a huge system of underground tunnels that will last 100,000 years. The radioactive toxic waste will be secured with multiple barriers, and the $4 billion site called -- will require no surveillance or management by future generations. It's located about 200 miles northwest of Helsinki.

And steep losses for the U.S. Postal Services, which says it lost $8.5 billion in fiscal year 2010. That's more than double the previous year's losses and comes despite the fact that the service made huge cuts, including layoffs. The postal service blames the recession and the increasing use of e-mail. It has asked Congress to let it cut back delivery to now five days a week.

And more than 700 pieces of baseball history will be on the auction block at the Louisville Slugger Museum in Kentucky. They include Babe Ruth's autographed 702nd home run baseball and a 1903 Cy Young autographed bat. It's believed the bat was used in the first- ever World Series.

Also for sale, a Marilyn Monroe autographed photo to Joe DiMaggio -- Wolf. Some good finds there.

BLITZER: Yes, that's pretty cool.

WHITFIELD: Yes.

BLITZER: All cool stuff for those who love that. And there are a lot of people who do.

WHITFIELD: That's right. And who have deep pockets.

BLITZER: That's right. Rich ones.

WHITFIELD: Going to cost you.

BLITZER: Thanks Fred.

An alleged scheme scamming millions away from Holocaust survivors, and an act one victim says was based on pure greed.

(COMMERCIAL BREAK)

BLITZER: The U.S. attorney's office in New York has charged 17 people with stealing millions of dollars from World War II Holocaust survivors. Our national correspondent, Susan Candiotti, is joining us from New York with more on this story.

What have you learned, Susan, about this alleged fraud?

SUSAN CANDIOTTI, CNN CORRESPONDENT: You know, Wolf, you can sum it up like this: disgusting, perverse and pervasive is what federal prosecutors and the FBI are calling a fine-tuned scheme, a scam to rip off a compensation fund for Holocaust survivors, many poor who count on it for food and health care. Over about ten years, the fraud was allegedly run in New York's Brighton Beach, home to a large number of Russian Jewish immigrants.

(BEGIN VIDEO CLIP)

PREET BHARARA, U.S. ATTORNEY: More than $42 million that was intended for Holocaust survivors instead found its way into the pockets of corrupt employees of the Claims Conference and an elaborate network of fraudsters as the charging documents described.

(END VIDEO CLIP)

CANDIOTTI: Almost 60 years ago, the German government set aside 415 million deutschemarks to the Claims Conference to Jews who were forced to live in the ghetto and concentration camps. Investigators say the $42 million alleged rip-off went undetected for about ten years because it was so well organized.

(BEGIN VIDEO CLIP)

GREG SCHNEIDER, VICE PRESIDENT, CLAIMS CONFERENCE: The reason they were able to pull it off for so long is that it was such a sophisticated group of people. It was many of them, and they were organized.

So each group within this -- within this gang had specific assignments. Some people recruited people to pretend to be survivors. Some people created false documents. Some people were on the inside approving applications with the false documents.

When you put it all together, it was this whole gang who were able to perpetrate the crime.

(END VIDEO CLIP)

CANDIOTTI: Eight-two-year-old Aron Krell survived several concentration camps but lost his mother and two brothers during the Nazi occupation. He's received a legitimate compensation from the German government and calls the scam infuriating and based on pure greed.

(BEGIN VIDEO CLIP)

ARON KRELL, HOLOCAUST SURVIVOR: It's unconscionable what they did. But to the Holocaust survivors, it is very uncomfortable to live with the stigma of what these people created.

(END VIDEO CLIP)

CANDIOTTI: Investigators say the alleged ringleader oversaw the two affected funds and recruited others. The 17 people charged so far, each face up to 20 years in jail and fines of up to a quarter million dollars if convicted.

Wolf, it's hard to understand how something like this could happen for so long.

BLITZER: Yes. Good report. Thanks very much, Susan, for that.

We'll take a quick break. More news right after this.

(COMMERCIAL BREAK)

BLITZER: Here are some of the week's best late-night jokes.

(BEGIN VIDEO CLIP)

CONAN O'BRIEN, HOST, TBS'S "CONAN": The Carnival cruise ship finally docked after losing power for three days, which resulted in small portions of bad food and smelly toilets. Yes, the ship's being repaired and turned into a Taco Bell.

DAVID LETTERMAN, HOST, CBS'S "THE LATE SHOW WITH DAVID LETTERMAN": They hooked it up, and they're towing it now into San Diego. And it's going to be a couple of days before they get to San Diego, but when they get there, all of the passengers will be greeted by the president of Chile. It's going to be a...

President Bush is everywhere. He's been on the Larry King show. He's been on "The Today Show." He's with Matt Lauer. He's been on all of the programs. He was on "Rachael Ray" this morning, water- boarding a veal cutlet.

O'BRIEN: Last night's Soul Train Awards, true story, Wolf Blitzer accepted an award on behalf of Eminem. Yes. It was "Soul Train's" prestigious All You White People Look the Same to Us Prize. Yes. They didn't..

(END VIDEO CLIP)

BLITZER: If you don't believe him, you can see it on BET on November 28. It will be fascinating to see it, I think. I had a lot of fun.

Thanks very much for watching. I'm Wolf Blitzer in THE SITUATION ROOM.

"JOHN KING USA" starts right now.