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THE SITUATION ROOM

Al Qaeda Leader Claims Responsibility for Capture of American Development Worker; Some Conservatives Call For Herman Cain to End Campaign; Interview with Columnist Joe Klein; Boeing Deal Could Defuse Controversy; Targeting Iran's Central Bank; Alleged Hackers Funneling Money to Terrorists?

Aired December 1, 2011 - 17:00   ET

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


WOLF BLITZER, CNN HOST, "THE SITUATION ROOM": And you're in "THE SITUATION ROOM." Happening now, mounting calls inside the GOP for the embattled contender Herman Cain to get out of the race amid growing questions about an alleged 13-year extramarital affair. Why he says the final decision comes down to one person, his wife.

Plus, one of the largest job creators in the America potentially making peace with big labor in the wake of a bitter political battle over manufacturing. Just ahead what this major Boeing deal could mean for the future of a desperate economy.

And yachts, luxury cars, diamonds, even skyscrapers, all part of a more than $1 billion government money making effort to see justice served.

We want to welcome our viewers in the United States and around the world. Breaking news, political headline, and Jeanne Moos all straight ahead. I'm Wolf Blitzer. You're in "THE SITUATION ROOM."

We'll get to all of that, but first, a stunning development out of Pakistan unfolding right now. There are now reports the new Al Qaeda leader Ayman al Zawahiri is claiming responsibility for the capture of an American development worker in the region last August. Let's go straight to our Pentagon correspondent Chris Lawrence. He's got the latest. Chris?

CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: Yes, Wolf, a bold declaration from the new head of Al Qaeda that perhaps shows that the terrorist organization is still alive and well. We're talking about an American, 70 years old. He's name is Warren Weinstein, and he's been missing, abducted in Pakistan for the past several months. He's got years and years of experience as a developer. He used to work for the State Department.

Now, Al Qaeda and Ayman al Zawahiri, the new head of Al Qaeda, is claiming they have him. One signal though, in this message that was received by the website called Sight, which tracks terrorist threats, it does indicate that Al Qaeda seems to be indicating that Warren Weinstein is still alive. In fact, the terrorist group blames the United States, saying just as the Americans abduct or detain those who they even suspect of being affiliated with Al Qaeda, we have now abducted and detained an American who has been working in Pakistan. Now, Weinstein was abducted in a rather brutal fashion just a few months ago. He had been living and working there, working for a development company there in Lahore, Pakistan, when gunmen posed as his neighbors offering food. They ended up pistol whipping him and his driver, tying up his guards and abducting him. But now for the first time, we're hearing responsibility for that kidnapping taken by Al Qaeda.

And the big question is to get beyond just this one abduction, what does this say about Al Qaeda's strength not only in the region, but around the world? There are some in the building and in the intelligence community who believe Al Qaeda is really is only two to three more captures or kills away from being irrelevant, that the Obama administration has decimated its leadership ranks. There are other people who say now the group has really filtered out to so many smaller subsidiaries around the world that really even taking out these last few leaders won't really change what Al Qaeda has now become about 10 years after 9/11.

BLITZER: We'll stay on top of this with you. Chris Lawrence at the Pentagon, thanks very much.

Let's turn to the escalating political controversy embroiling the Republican presidential hopeful Herman Cain who, for now, is pressing ahead on the campaign trail despite an intensifying cloud of questions over an alleged sexual affair. We've just received a statement from his Iowa staff saying, and let me quote right now, "Herman Cain is in it to win it and that has not changed." CNN's Jim Acosta has been following him all day. The candidate is now revealing more about the allegations. What's the latest?

JIM ACOSTA, CNN POLITICAL CORRESPONDENT: That's right, Wolf. Herman Cain met with the editorial board of the "New Hampshire Union Leader" this afternoon. He was pressed on his deliberations about his next move. He also offered some new information about what his wife knew about his mistress, Ginger White.

In the meantime, fellow Republicans and at least one close personal friend are urging him to get out of the race.

(BEGIN VIDEOTAPE)

HERMAN CAIN, (R) PRESIDENTIAL CANDIDATE: Hello, New Hampshire.

ACOSTA: It was a question asked at the news conference in New Hampshire that opened up a window into Herman Cain's troubled world.

UNIDENTIFIED MALE: Who's the Ginger that you know?

CAIN: Let me answer this way -- nine-nine-nine is going to turn this economy around.

ACOSTA: Nine-nine-nine, not the 411 on Ginger White, the woman who said she had a 13-year affair with Cain, an allegation he has denied. Asked when he'll decide whether or not to continue his campaign, Cain said he had yet to discuss the matter in person with his wife of 43 years, Gloria. His political fate, he added, hinges on her support.

CAIN: This is another reason why that I am not going to make a decision until after we talk face to face.

ACOSTA: In an interview with the "New Hampshire Union Leader" editorial board, Cain said he was only offering White financial support. "My wife did not know about it," Cain said, "and that was the revelation. My wife found out about it when White went public with it." None of that is sitting well with many conservatives, including his close friend, talk radio host Neal Boortz.

NEAL BOORTZ, RADIO TALK SHOW HOST: How quick do you think I'm going to get back to my wife and try to straighten this out? Am I going to wait two days? Three days? Five days? I'm chartering a jet.

ACOSTA: After allegations first surfaced last month that Cain had sexually harassed a handful of woman in the late 1990s, Mrs. Cain stood by her husband's denials.

GLORIA CAIN, HERMAN CAIN'S WIFE: I know that's not the person he is. He totally respects women.

ACOSTA: Earlier this year, Cain was adamant on a conference call with conservative bloggers that he had no skeletons in his closet. The conversation was recorded by "The Daily Caller's" Matt Lewis.

CAIN: I don't have anything for them.

ACOSTA: Polls show Republicans are starting to have their doubts. A new poll in Florida finds Cain's support has plummeted to 10 percent, down from 34 percent back in October.

UNIDENTIFIED FEMALE: It's time for the truth.

ACOSTA: A political action committee backing Cain is running this ad in Iowa that suggests the conservative businessman is innocent.

UNIDENTIFIED FEMALE: Now that you know the truth, let's focus on what matters.

ACOSTA: But some Republicans say a different truth is emerging.

KENNETH BLACKWELL, FORMER OHIO SECRETARY OF STATE: He has to make a choice between his family and getting these issues behind him or staying on the campaign stage and watch his campaign die a slow death.

(END VIDEOTAPE)

ACOSTA: Earlier today, a Cain campaign spokesman confirmed the campaign still plans to open up a new national headquarters in Atlanta this weekend, and that could be a sign of life. But asked whether that opening might be postponed, the spokesman did not respond, Wolf.

BLITZER: And, Jim, you say that the face-to-face meeting between Herman Cain and his wife, Gloria, that will take place in Atlanta tomorrow? ACOSTA: That's right. And Cain has said that and he even reiterated that today with reporters going into that editorial board meeting, that his family and the way they feel about this matter is the number one concern driving his decision on whether or not he's going to stay in this race. So if his family doesn't approve of what they've been hearing, if his wife, mainly first among them, does not approve of what she's been hearing, that could be it for Herman Cain.

BLITZER: Jim Acosta, thanks very much.

Herman Cain's top rival, Mitt Romney, may have some trouble of his own amid new signs his longtime frontrunner status could be in jeopardy right now. Joining us the "TIME" magazine columnist Joe Klein. He's written a powerful cover story on the new issue of "TIME" magazine on Mitt Romney called "Why don't they like me? Mitt Romney's Quest for Republican Hearts and Mind," a really strong article. Joe, thanks very much for coming in.

Let me read a couple of lines and then we'll discuss your reporting on Mitt Romney. He's too rich, too polished. He's an elitist in a party that's become home to disaffected white working class workers. He's a Mormon, which usually goes unspoken but is a matter of real mistrust for many evangelical Christian voters. He's too moderate.

What's the bottom line as far as your reporting is concerned, Mitt Romney getting the Republican presidential nomination?

JOE KLEIN, COLUMNIST, "TIME" MAGAZINE: Well, I think all of those reasons are out there. But there's an even greater cause for doubt among Republicans, which is that he's changed his position on almost every issue out there except for basic economic issues, and he's even changed on some of those.

This is a guy, you know, I've followed him closely for maybe 20 years now. And when she was governor of Massachusetts and pushing his health care plan gave me a fair amount of access, although he's not talking to me or you or many of the rest of us this year. And I think that that's really problematic. He has never really been comfortable in any race that he's ever run. He's always had to be someone he wasn't quite.

I think that when he ran for governor when you look back deeply into his record on issues like abortion, he was probably being a little bit more liberal than he actually was. He was an elder of the Mormon church and followed church positions on a lot of those social issues.

Now, he is being a lot more conservative than he probably is on a bunch of major policy issues like universal health care, where he passed the first individual mandate in the country. So, I think that the accumulated weight of all this is really beginning to tell on him now.

BLITZER: He did sit down with me a few weeks ago for an interview, but I was shocked. "TIME" magazine is doing a cover story on Mitt Romney. Joe Klein is writing it and he doesn't sit down with you for a face- to-face interview? How is that possible? KLEIN: He hasn't sat down with "The Washington Post" or "New York Times." Robert Draper has a new article in the "Times" Magazine this Sunday, didn't sit down with him either because this was a tactical decision his campaign made.

And, you know, you look at the interview he did on FOX News this week, which should be friendly interview for him. It's a conservative news organization. And Bret Baier just ripped him apart asking him questions about the flip-flops. The campaign allowed this to happen. It allowed this to get to the point where this is the only question we want to ask him. We want to know where he really stands on these issues. I think it was a major miscalculation on their part.

BLITZER: You also write this in the article, and it's a fascinating article, "The sideshow has worked to Romney's tremendous advantage. That he is an excellent debater hasn't hurt either. It has made him seem constant and confident by comparison, the most presidential of the bunch. But the question always remains, who is he really? Do we have any clues as to what he actually believes?" Go ahead and elaborate.

KLEIN: I think we do have some clues. We know that he identifies himself as a businessman. He spent most of his life as a particular sort of businessman, the sort that rung out inefficiencies, that laid off workers, that, you know, increased executive pay in a lot of the companies he reorganized. It made corporate America far more efficient than in the 1980s and 1990s, but now people are wondering whether that model of large corporate pay, lots of layoffs, is what we need going forward.

BLITZER: You know, this challenge, he's faced out of nowhere, Newt Gingrich all of a sudden, doing amazing. You saw poll numbers in Florida what's going on right now. How worried should Mitt Romney be right now that Newt Gingrich is going to emerge as the Republican nominee?

KLEIN: Well, we got a month until Iowa, which means we have about a million years for Newt to say something really ridiculous or for some other candidate to rise, even maybe Romney. These things move, as you well know, Newt, Newt -- Wolf, these things move very, very quickly.

But the Gingrich challenge is particularly serious because Newt is pretty serious. Republicans respect his intelligence. He's been around for a while. He seems able to put together the anti-Romney coalition that a lot of the other candidates haven't been able to.

And most remarkable thing about this, Wolf, is that Gingrich has flip- flopped on many of the same policy issues. Cap and trade, health care, that Romney has. But because he is so vehemently who he is as opposed to Romney, who is carefully who he is, I think the Republican audiences have a greater tolerance for the changes that Newt has made over the years.

BLITZER: The cover story in the new issue of "TIME" magazine, our sister publication, "Why don't they like me?" Thanks very much, Joe, for that, appreciate it. All right, we're standing by. The president of the United States, the first lady getting ready to light the national Christmas tree here in Washington. What a beautiful sight it is over there. There you can see. We're waiting the lighting of the national tree. It's not lit yet, but be lighting more of it. That's coming up. Stand by.

Also, an end now potentially in sight to the bitter political battle between air giant Boeing and big labor. Ahead, what one lawmaker says it could mean for the ailing U.S. economy.

Plus, luxury cars, yachts, even mansions all potentially owned by the federal government. You're going to find out why it's part of a billion dollar effort to see justice severed.

And a new bipartisan effort on Capitol Hill to get tougher with Iran. The White House though is saying not so fast. We'll explain.

(COMMERCIAL BREAK)

BLITZER: Get right to Jack Cafferty for the "Cafferty File" -- Jack.

JACK CAFFERTY, CNN CONTRIBUTOR: Wolf, it's high stakes gain the Republican nominees for president are playing. If the election was held today, President Obama would probably lose. At this moment, he is vulnerable and then some. A recent Gallup Poll puts President Obama's approval rating almost three years into his first term lower than any other president in modern history, including Jimmy Carter.

Now, that's vulnerable and then some. Jimmy Carter? Gallup has the president's approval at 43 percent. The only other president in modern times with an approval rating almost that low three years into his first term was Lyndon Johnson, 44 percent, and he didn't bother to run for a second term.

Over on the Republican side, Newt Gingrich has got to be just scaring the hell out of long time presumed nominee, Mitt Romney. Big time. Gingrich's jump to the top of the pack in the national polls. He's leading in key early voting states like Iowa and South Carolina. And check out these numbers in the critical swing state of Florida. These are phenomenal if you're Gingrich.

A new American research group poll shows Newt Gingrich with 50 percent to Romney's 19. That's a 39-point jump for Gingrich since last month. If numbers like these hold in a state like Florida, well, it might be very difficult for any other candidate to touch Gingrich, but we've got a ways to go.

Actually, at this point, it's probably safe to say the Republican nomination boils down to a race between Romney and Gingrich. A recent CNN Opinion Research Corporation poll shows 40 percent of Republicans think Romney has the best chance to beat President Obama, 21 percent say Gingrich. But maybe this particular poll didn't ask you, so we will.

Here's the question, which republican candidate, Mitt Romney or Newt Gingrich, is more likely able to beat President Obama? Go to CNN.com/CaffertyFile, post a comment on my blog or go to our post on the SITUATION ROOM's Facebook page and my compliments on your interview with the frog.

BLITZER: Kermit the Frog. Who would have thought? I've interviewed presidents and kings and prime ministers, but Kermit the Frog. My journalistic career is right at the top. Thanks very much, Jack, for that.

CAFFERTY: OK.

BLITZER: Let's get back to some serious news. Boeing has experienced some very turbulent relations recently with labor unions. A spat over a plant in South Carolina has become a very hot button issue, but a new deal could lead to labor peace and defuse a huge political controversy and be enormously important for the American job market and for the U.S. economy.

Lisa Sylvester has been all over this story for us, and I say you can't underestimate or overestimate how important this potential deal is.

LISA SYLVESTER, CNN CORRESPONDENT: Yes. This is pretty big, Wolf. The union and the company have been locked in a bitter dispute over a decision to open up a new factory in South Carolina. It is a case before the National Labor Relations Board that's become a political talking point for Republicans, but in a surprise move, the two sides have struck a deal that could bring thousands of new jobs to Washington State and Oregon.

(BEGIN VIDEOTAPE)

SYLVESTER (voice-over): This is a mock up of the 737 max. It has not even been built, yet, there are already 700 pending orders for Boeing's newest plane. It's a huge jobs opportunity. Jobs that will likely stay in the Pacific Northwest.

MARK BLODIN, MACHINISTS UNION: The 737 Max has landed here in the state of Washington, will be assembled at our rented plant. The parts will continue to be manufactured in our unionized plants throughout Puget Sound.

SYLVESTER: The agreement which still has to be ratified by rank and file members includes a new four-year contract. For Boeing and the Machinists Union, this is also a step toward ending a bitter feud. The union accused Boeing of punishing workers by opening up the 787 dream liner factory in South Carolina, a right to work state, where labor costs are generally lower.

The National Labor Relations Board signing with the union filed a lawsuit against the company. That sparked the ire of Republicans who accused the Obama administration of hamstringing private companies, a point often repeated by GOP candidates on the campaign trail.

RICK SANTORUM, (R) PRESIDENTIAL CANDIDATE: Doesn't at least want to tell us how to run our lives, our businesses like Boeing where they can locate their planes. SYLVESTER: But a union spokeswoman said if their members finalize the accord and the new planes are built in Washington state, they will consider their NLRB complaint resolved. That's big for Boeing, which has recently attracted a number of big plane orders from the United Arab Emirates and American Airlines among others, and it hoped to resolve its labor dispute.

It's also good news for the broader economy. After years of hemorrhaging manufacturing jobs, Senator Patty Murray sees this as a turn around.

SEN. PATTY MURRAY, (D) WASHINGTON: We have watched the turmoil of the last few years, particularly, in the aerospace and manufacturing. It's really disconcerting. Is this country going to be able to build things in the future? This announcement by Boeing and the Machinists tells us that, yes, we can and we can do it well.

(END VIDEOTAPE)

SYLVESTER (on-camera): The NLRB had been pushing the two sides to come up with a settlement. The next step is the union will have to vote on the deal that is scheduled for next Wednesday. If that goes through, that's the end of the controversial case before the NLRB. The case potentially could have set up a new president on how much say the labor board has on how companies expand their operations, Wolf.

BLITZER: Yes, it's going to be huge. You would point out the UAE Emirates, they want to spend billions and billions of dollars buying Boeing aircraft made in the United States as supposed to airbus or whatever. That's huge.

SYLVESTER: That order was 55 planes with an option to buy dozens of warplanes and that's why it's a really big moneymaker. So, that was a big deal for Boeing. You also had American Airlines signing up to buy, purchase more planes. So, Boeing, you know, its future was looking pretty bright, and they decided, you know, this was a way to have peace (ph) the union.

Everybody's happy. Boeing's happy. Union's happy. But, of course, key thing here is they still have to ratify -- the workers have to ratify the steel. That vote scheduled next Wednesday.

BLITZER: It will be a bonanza for workers in the United States, manufacturing jobs, high-tech, high paid manufacturing jobs. Really important especially at this time. Thanks very much. Good report.

The U.S. has tried almost everything to pressure Iran into ending its nuclear program, but there's one option that would punish Tehran like nothing else. We're going to explain why the White House, so far, hasn't gone there, why Congress, though, could.

And politicians like to talk about government officials wasting money. One U.S. attorney's office is raking in the dough (ph). That's ahead.

Plus, this week's "Next List."

(END VIDEO CLIP)

UNIDENTIFIED MALE: Roll down and then roll up in the count of five. One, two, three, four, five. Good.

UNIDENTIFIED FEMALE: People have spent entire careers, like lifetimes, thinking about what gesture means. So, as we explore this realm of social robotic robotics, for the first time, I believe that collaborating with performers and with different artists can actually help us good strap to development and the creation of these technologies.

UNIDENTIFIED MALE: And arms down. Here we go. Excellent.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BLITZER: The White House is certainly talking a tough game as far as Iran is concerned, but the Obama administration has yet to pull the trigger on one of the harshest sanctions available. That would be targeting Iran's central bank. Our pentagon correspondent, Barbara Starr, has more on what's going on. Barbara, what's the latest on this very sensitive issue?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, look, Wolf, you know, the White House has always said that military action would be one of the last options against Iran. They want to go for sanctions, but these kinds of sanctions are now becoming a big problem.

(BEGIN VIDEOTAPE)

STARR (voice-over): The U.S. has long used sanctions to try to stop Iran's cash flow for financing its nuclear efforts and support for terrorism. But now, the administration is saying not so fast to a tough new bipartisan sanctions proposal from Congress. The idea, target Iran's central bank by cutting off U.S. banking with any foreign banks that bank with Iranians.

Much of the banking with Iran is done to pay for Iranian oil. The administration is considering action against Iran's bank, but officials warn the Congressional proposal could be a bad idea in today's fragile economy.

DAVID COHEN, UNDER SECRETARY OF THE TREASURY: It is a very, very powerful threat. It is a threat to essentially for the commercial banks to end their ability to transact in the dollar and their ability, really, to function as major international financial institutions.

STARR: According to OPEC, Iran exports about $2.5 million barrels a day of crude oil, earning it more than $70 billion a year. Countries around the world buy Iranian oil, pay for it through transactions conducted by the Central Bank of Iran. For those countries --

COHEN: It would say to them that if they continue to process oil transactions with the Central Bank of Iran, their access to the United States can be terminated.

STARR: Such a sanction could trim world oil supplies and cut Iran's ability to sell oil to European allies, but that, too, could backfire. Western economies would be hurt by the cost of higher oil prices in reaction to less supplies. Plus, those higher prices -

WENDY SHERMAN, UNDER SECRETARY OF STATE: Which would mean that Iran would in fact have more money to fuel its nuclear ambitions, not less.

MARK DUBOWITZ, FOUNDATION FOR DEFENSE OF DEMOCRACIES: We don't want to create a situation where we spook oil markets, we drive up the price, and we inadvertently enriched Ali Khamenei and the regime, who would enjoy a massive windfall if that were to happen.

(END VIDEOTAPE)

STARR: So, the administration has a dilemma here. How bad do they want to hurt Iran, but then possibly Americans in the pocketbook in an election year?

Wolf.

BLITZER: Tough questions, sensitive issue. Thanks very much for that, Barbara.

Authorities, meanwhile, in the Philippines have uncovered an alleged high-tech terrorist financing operation that hacked into the phone accounts of businesses, some potentially right here in the United States.

CNN's Brian Todd has been investigating the story for us.

Brian, what are you learning? How did this all work?

BRIAN TODD, CNN CORRESPONDENT: Well, it's unclear right now how it all worked. We may never know the real extent of the damage, Wolf, that these alleged hackers did, but if Philippine authorities are right, the four people they caught might have done enough hacking to pay for several terrorist operations.

(BEGIN VIDEOTAPE)

TODD (voice-over): Philippine police say they've uncovered an efficient, potentially deadly, operation, a small group of phone hackers funneling money to terrorists. Working with the FBI, Philippine authorities say, they arrested four people in the Manila area who they say hacked into the system of AT&T and ripped off nearly $2 million. AT&T says its network was not targeted or breached by the hackers, but individual businesses with AT&T counts were, and AT&T wrote off the fraudulent charges.

(on camera): We spoke with people familiar with how this likely worked, and here's the scenario they laid out. Say I'm working in a store or other business that has an AT&T account. The hackers would tap into the AT&T business phones, use those phones to call premium service phone lines like 900 numbers, which charge extra for those calls. Except, in this case, the premium service companies were bogus, set up by the hackers themselves. The hackers would use the premium service lines to bill back the AT&T business account and collect the money.

Anup Ghosh, founder of cybersecurity firm Invincea, says it would have been relatively easy for hackers to tap into business phones and set up the bogus premium service companies.

(on camera): How could they have racked up all these charges, and me, as an official of that business, not find out about it until it's too late?

ANUP GHOSH, INVINCEA: Well, you're going to get your phone bills and essentially have a 30-day window in which they can rack up these charges as much they want before you even get a chance to review it. At that point, if you're in a large business, you have lots of employees making calls, you may or may not notice that these are legitimate or illegitimate calls.

TODD (voice-over): The Philippine police say the group which paid these hackers is linked to Jemaah Islamiah, an al Qaeda-affiliated terrorist network responsible for the 2002 bombings in Bali, Indonesia, that killed more than 200 people. Western law enforcement officials we spoke to could not corroborate that, but $2 million in the hands of any terrorist group is significant.

(on camera): How much does it take to finance a major terrorist attack?

PETER BERGEN, CNN NATIONAL SECURITY ANALYST: Well, you know, the 9/11 attacks cost about $500,000, but even like the attack in London on July 7, 2005 cost about $15,000. That killed 52 people.

(END VIDEOTAPE)

TODD: Peter Bergen says that Bali, Indonesia, attack by Jemaah Islamiah in 2002 cost about $50,000 so, that means that three of the highest profile attacks against Western targets cost less than one- third the amount these hackers made away with. All of that money going directly to a terrorist group, Wolf. There's plenty of money --

(CROSSTALK)

BLITZER: You've spoken -- it's pretty chilling.

TODD: It is.

BLITZER: You've spoken to a lot of experts. How could a business protect itself from this?

TODD: Well, that expert we spoke to, Anup Ghosh, says it's impossible to completely shield yourself, but he says three things you have to do.

Number one, an external firewall has to be very strong on the outside.

Number two, the business has to review its phone records very carefully. The businesses, most of them, don't do that.

And third, everyone inside the business, like here at CNN, everywhere else, should have a strong password for your own phone. A lot of people, once in their own office buildings, don't have that.

BLITZER: What about private individuals who may have AT&T phone service?

TODD: Again, that's up to you. Review your own phone records.

Again, businesses, they go a long time sometimes, thousands of calls. You, as a private phone owner, can do that pretty easily.

Also, if you can come up with some kind of password for your cell phone -- with your home phone, that's hard. With your cell phone, come up with a strong password. That's the key. These hackers can get through a lot of it, but if you have those things in place, you may be able to protect yourself.

BLITZER: A chilling new world out there.

TODD: Yes.

BLITZER: Thanks very much, Brian. Pretty scary stuff.

Billy Graham has been counselor to presidents since Harry Truman. Now the renowned Evangelist, he's in the hospital. We'll have an update on his condition. That's coming up.

And Hillary Clinton goes barefoot in Myanmar. We're going to show you why.

And we'll also show you the lighting of the national Christmas tree. That's here in Washington.

(COMMERCIAL BREAK)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Two, one -- that's a good looking tree.

(APPLAUSE)

OBAMA: Thank you, everybody.

(END VIDEO CLIP)

BLITZER: A beautiful tree indeed. You can see the White House, the president, the first lady, the first family. They lit that Christmas tree just a little while ago here in Washington.

Lisa Sylvester, it's always lovely to see that, isn't it?

SYLVESTER: I love that. And you know what? It puts you in the holiday spirits. The nice lighting of the Christmas tree, an annual tradition. It's very great to see. Beautiful, beautiful tree. BLITZER: And people can drive right by near the White House take a look, walk around. It's a special moment for so many Americans and tourists who come from around the world.

SYLVESTER: Yes. We're going to have to drive by later on and check out that tree. I want to see that thing in person.

BLITZER: I'll do the same thing later tonight. Thanks very much.

Lisa, there's some other important news you're following. What's going on?

SYLVESTER: That's right, Wolf.

Well, Egypt's military leaders are postponing the announcement of results from the historic election until tomorrow or Saturday. Two Islamist parties claim the lead so far, but election officials haven't confirmed that.

The vote was the first step to choosing the lower House of parliament. Those lawmakers will e writing Egypt's new constitution.

And a new account of chaos at Solyndra. Just weeks before President Barack Obama visited the California solar company to tout his green jobs agenda, Reuters reports that Solyndra's entire executive team was in a "mutiny" as the price of solar panels plummeted, jeopardizing its business strategy. The turmoil was revealed in e-mails released by Republicans investigating Solyndra. The company notoriously received a $500 million loan guarantee from the U.S. government.

And the spokesman for Billy Graham says the 93-year-old Evangelist is resting comfortably at a hospital one day after being evaluated for evaluation of his lungs. The Billy Graham Evangelical Association said he's being tested for possible pneumonia. No date has been set for Graham's discharge, but he is said to be looking forward to spending the holidays at home.

And televangelist Joel Osteen is developing a reality television show with a mission, in his words. He signed a deal with "Survivor" producer Mark Burnett to create the as yet unnamed show. Osteen says the show will feature members from his Houston megachurch. His 16,000 seat church is the largest in the United States. No network has picked up that show yet.

And this is something that you won't see, Secretary of State Hillary Clinton barefoot. But she went shoeless today on a visit to a holy Buddhist site in Myanmar, also known as Burma. There were no exceptions. Even her security detail had to strip off their shoes.

Clinton rang a bell three times to grant her wishes. She also made offerings. The secretary of state's visit to Myanmar is the first by a high-ranking American official in over a half a century.

There's something about those pictures that are kind unique. It's nice to see that.

BLITZER: It's amazing. And there were tweets earlier in the day about what color her toenails were in all of that.

Can you imagine?

SYLVESTER: No, but now I'm curious and I want to go back and take a look.

BLITZER: Yes. Take a look at the video. You'll see.

SYLVESTER: OK.

BLITZER: Red.

SYLVESTER: Is that what it is?

BLITZER: Thanks very much.

They're potentially billion-dollar moneymakers for the federal government. Ahead, what luxury cars, mansions and diamonds have to do with seeing justice severed.

(COMMERCIAL BREAK)

BLITZER: During such tough economic times, you may wonder what use the federal government would have for posh luxury items. It turns out it has a very, very serious purpose.

Deborah Feyerick has a CNN exclusive she's been working on.

What are you finding out, Deb?

DEBORAH FEYERICK, CNN CORRESPONDENT: Well, Wolf, imagine if you had a business with an operating budget of about $60 million, and imagine if that business brought in $800 million in a single year. Well, you're about to meet someone who has turned his office into a moneymaking machine.

Guess who it benefits? You, the taxpayer.

(BEGIN VIDEOTAPE)

FEYERICK (voice-over): Name any luxury item -- yachts, mansions, art collection, racecars, diamonds, even ancient artifacts, and chances are the U.S. government likely owns it. That's right, your government. It's all legal. In fact, it's justice.

PREET BHARARA, U.S. ATTORNEY, SOUTHERN DISTRICT OF NEW YORK: Whether they're narcotics traffickers, arms traffickers, terrorists, publicly corrupt officials, or your standard securities fraudsters, in every single type of case that we bring, we try to make sure that we are looking at ways in which we can take the profit out of the crime and return money to the victims.

FEYERICK: It's called asset forfeiture. This year alone, the Justice Department made $1.6 billion seizing property. Almost half of that money, $800 million, came from cases prosecuted in New York's Southern District, run by U.S. attorney Preet Bharara. BHARARA: In the last fiscal year alone, we have managed to bring in, through the concept of forfeiture, approximately $800 million in funds or in property, which is about 16 times what our annual operating budget is, which I believe is better than most hedge funds these days.

FEYERICK: Prosecutions of white collar crimes, Ponzi schemes and financial fraud are at an all-time high.

(on camera): Given the caliber of criminals you're going after in certain cases, the Bernie Madoffs, the Marc Dreiers, are you ever surprised at simply what certain people own? Do you think, oh, my God?

BHARARA: You know, not much surprises us these days. Oftentimes, the motivation for engaging in some of this criminal conduct is greed, and the fact that some of these items are so ostentatious is a reflection of what the motivation was for engaging in those crimes in the first place.

FEYERICK: This is just a small sample of what the government has. Want a Bentley? Well, a new one will cost you up to $250,000. Like most everything here, these two will be auctioned off to the highest bidder.

(voice-over): Ponzi schemer Bernie Madoff's beach home, sold for over $9 million. Jewelry given as a gift to actress Anne Hathaway by her currently incarcerated ex-boyfriend, sold for more than $63,000.

(on camera): Some people may wonder, do you ever think about the cases you're going to pursue based on the amount of money you're likely to bring in?

BHARARA: No. We pursue cases for one reason and one reason only -- to hold people accountable for their crimes.

(END VIDEOTAPE)

FEYERICK: Now, the $800 million goes into two federal funds that pay for law enforcement programs. U.S. attorney Bharara expects next year to be an equally good year financially, but with a government hiring freeze, it's going to make it challenging to keep up the current pace of these intensive investigations -- Wolf.

BLITZER: Good point. Good report. Thanks very much, Deb.

Jack Cafferty is asking, which Republican candidate, Mitt Romney or Newt Gingrich, is more likely to beat President Obama? Your e-mail, that's coming up.

And two guys claim to shoot a beer into space. Jeanne Moos, that's coming up as well.

(COMMERCIAL BREAK)

BLITZER: There he is, my good friend, Kermit the Frog. He's speaking to the first lady over at the national Christmas tree lighting ceremony. Kermit, he is amazing. He's a great guy. He was here in THE SITUATION ROOM just a little while ago.

But you know who's here right now? Jack Cafferty.

Jack, it's tough to follow Kermit.

CAFFERTY: Kermit immediately traded up after leaving you, didn't he?

BLITZER: He did.

CAFFERTY: He's over there at the White House.

BLITZER: Went from me over there, that's right.

CAFFERTY: With the real power structure.

BLITZER: Yes.

CAFFERTY: All right. That's good stuff.

The question this hour: Which Republican candidate, Mitt Romney or Newt Gingrich, would be more likely to beat President Obama?

Mark, in Oklahoma City, "Hopefully Gingrich will be the nominee. He'd eat Obama alive in a series of debates. In fact, I'd be willing to bet my vast future Social Security trust fund that Obama will not debate Gingrich if he's the nominee. Just wait and see."

Scott, in Bloomington, Indiana, writes, "Neither -- but seriously, neither."

H., in Riverside, California, "Still perplexed. Out of 300-plus million people, this is best we can do? I feel the same way as I did when I had to choose between a peanut farmer and an actor. Being a conscientious voter is not an easy job. Unless the GOP has another candidate waiting in the wings, neither of these two will rise to the occasion and President Obama will prevail."

James writes, "This is a misleading question. If Gingrich or Romney were to be in the Oval Office, nothing would change. A vote for either of them, simply asking for more of the same failed policies that Bush and Obama have brought to your once great nation."

Stephen, on Facebook, writes, "Really? Neither one. Romney is nothing more than a used car salesman and Gingrich has a God complex. Ron Paul would get the Republican vote and swing voters alike. And if you ask me, he's the only one who stands a chance."

By the way, my producer, Sara Leiter (ph), tells me that this question generated the biggest response we've ever gotten on THE SITUATION ROOM Facebook page.

Randy, in Hampton, Virginia, writes, "Newt, for sure. Would love to see Newt debate Obama. Like a lamb to the slaughter, Newt would have him for lunch." And Richard writes, "Romney, hands down. Not because Romney's anything fantastic, but who the hell would elect a man named after a lizard for president? I mean, Newt? Come on. The Geico gecko has a better chance on a ballot than Newt."

"I couldn't keep a straight face pulling a lever. Maybe if it was Kermit or Miss Piggy. But no way in hell will I vote for a guy named Newt as the leader of the free world."

If you want to read more of this highbrow political discourse, you'll find it on my blog, CNN.com/caffertyfile, or through our post on THE SITUATION ROOM'S Facebook page.

There's Santa and Kermit as we speak.

BLITZER: How cool is that? I love that.

CAFFERTY: It's great.

BLITZER: Kermit the Frog, he's a great guy, I've got to say.

CAFFERTY: Giving Santa an earful.

BLITZER: Yes. We're going to post that interview I did, special interview I did with Kermit, on our SITUATION ROOM Web site. I want our viewers to go check it out.

Meanwhile, Herman Cain meets with a New Hampshire newspaper and says he regularly gave money to Ginger White without telling his wife. The publisher gives details on that meeting. That's next for our North American viewers on "JOHN KING USA."

And straight ahead, does a beer go boldly where no brew has gone before?

(COMMERCIAL BREAK)

BLITZER: A beer in space is a novel idea. It would certainly make one heck of a commercial.

CNN's Jeanne Moos takes a closer look at a video that could be both.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): Forget "99 Bottles of Beer on the Wall." How about one can of beer in space?

UNIDENTIFIED MALE: How you guys doing? We're going to shoot a beer into space today.

MOOS: Attached to a weather balloon? That at least is what Danny Burns (ph) and Rich Toma (ph) claim.

UNIDENTIFIED MALE: Welcome to Mission Control, a.ka. my parents' garage.

MOOS: The two say they saw YouTube videos of people sending lame stuff up into space, like an iPhone. So why not the first beer in space?

And we happened to be drinking a couple Natty Lights at the time --

UNIDENTIFIED MALE: Yes, definitely.

UNIDENTIFIED MALE: And we were like, "Duh."

MOOS: Some say you would have to be "duh" to believe this story, but we'll get to that.

The guys say they contacted the makers of Natty Light.

UNIDENTIFIED MALE: And they were like, "Hell, yes."

MOOS (on camera): Natty Light is not exactly known for being known, shall we say, out of this world.

(voice-over): "Beer Advocate" Web site gives it a D minus. Reviews range from, "This is a great beer for the money," to "Perfect to clean your toilet with."

Danny and Rich say they packed a can of Natty into a Styrofoam cooler along with a camera, positioning it to shoot the journey with an empty can of beer on the outside as a decoration.

UNIDENTIFIED MALE: Let it go.

UNIDENTIFIED MALE: See you later, buddy.

MOOS: Next, come the lovely images of the beer going up, up, and away, above the clouds, to 90,000 feet, then atmosphere. Pithy little subtitles and music added.

(MUSIC)

MOOS: The balloon seemingly pops and the cooler plummets down, slowed by a parachute until splashdown. GPS on the cooler supposedly allows the guys to locate it.

(on camera): Do I smell a rat? Perhaps a guerilla viral marketing campaign?

(voice-over): The date when the guys say the launch took place is wrong, Anheuser-Busch now admits. Further opening a can of worms, we believe at least one of the guys has a marketing company and may have done some event planning for Anheuser-Busch a few years back. Anheuser-Busch assured CNN that the video is real, not computer- generated, and that Danny and Rich approached the company to do this and were not paid.

UNIDENTIFIED MALE: The beer's intact.

UNIDENTIFIED MALE: How about that?

MOOS: But is there a story? Someone posted, "One small step for man, one giant leap for alcoholics." Jeanne Moos, CNN, New York.

(END VIDEOTAPE)

BLITZER: Thanks very much, Jeanne.

This note. Tomorrow, Ron Paul, the Republican presidential candidate, he will be here in THE SITUATION ROOM. We'll speak with him live.

Until then, thanks very much for watching.

I'm Wolf Blitzer.

The news continues next on CNN.