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Interview with Donald Trump; VT Says There's No Longer an Active Threat on Campus; Iran: We Have U.S. Drone; Newt Gingrich Fighting to Stay on Top; Jon Corzine Forced to Explain How Billions Went Missing From His Firm

Aired December 8, 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 to our viewers here in THE SITUATION ROOM, happening now, Donald Trump dangles his endorsement in front of the Republican field while telling me he might still run for the presidency himself.

This hour, Trump on the candidates who impress him, the candidates who said no to him and whether he's part of a GOP whack pack.

Plus, an ugly fight between frontrunners. Mitt Romney's camp launching a blistering attack to try to slow down Newt Gingrich's bandwagon.

And a stunning reversal of fortune for a former political and financial power house. Jon Corzine tells his ex-colleagues in Congress he's clueless about the whereabouts of hundreds of millions of dollars of missing money.

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

For better or worse Donald Trump is positioning himself as a king maker in the Republican presidential race and as a possible independent candidate. Trump's political influence is under renewed scrutiny as he prepares to moderate a Republican debate in Iowa that's getting a poor response from most of the candidates. Just today Rick Perry announced he will not, repeat, not participate.

For all those reasons, I went to Donald Trump's office here in New York to talk about him, to talk about the campaign, the issues, and, of course, a lot more.

(BEGIN VIDEOTAPE)

BLITZER: Donald Trump, thanks very much for joining us.

DONALD TRUMP, CHAIRMAN AND PRESIDENT, THE TRUMP ORGANIZATION: Thank you.

BLITZER: Nice building you've got here.

TRUMP: It's pretty good. We've had some fun in this building, you and I, over the years. BLITZER: We're going to talk about the book, "Time to get Tough, Making America Number One." Talk about it later. Let's talk about the debate. Right now it's a debate between Santorum and Gingrich. Not much of a debate.

TRUMP: I think you'll have others coming in. And don't forget, this is really a News Max debate. It's not a Trump debate. But I think you're going to have others coming in and coming in strongly. And we'll see what happens.

But people are afraid that I'm going to run as an independent candidate and some of the people who are supposed to be in the debate have expressed that. And I don't want to give up that option because it certainly is an option if the Republicans pick the wrong candidate or if the economy and everything continues to be bad and we have the wrong candidate. That would with be the worst of all.

I'd love to see the economy get better. I don't think it will get better under this administration. So we'll have to see what happens. But we do have Newt and we have Santorum, who in all fairness shows a certain degree of courage. And Newt has been amazing. He's been a rocket ship. What's happened to him in the last few weeks is really unprecedented. And I have great respect for the fact he was so willing and so able, he's a very able guy, to get in there and do the debate.

BLITZER: Because Reince Preibus, I don't know if you've seen what he's said. He's the chairman of the Republican National Committee. He said he's got a problem with you moderating a Republican debate.

TRUMP: He said it very respectfully.

BLITZER: Because if you're still holding out the option, because you apparently are, that if you don't like the Republican nominee, you'll run for president. He said it would be malpractice as the chairman of the Republican Party not to complain, not to raise that problem.

TRUMP: I don't think so because I intend to endorse somebody. And if I endorse somebody and that somebody happens to win, obviously I'm not going to be running against somebody that I endorse, so I don't think it would be. But if they pick the wrong candidate, they have a few candidates, and I'm not going to get into it as to who they are, but they have a few who absolutely would be the wrong candidate, then I want my options open.

BLITZER: Steve Schmidt, who managed John McCain's campaign four years ago, he says this about you. He says "For three-and-a-half years, a lot of people who should have known better have been complicit in kowtowing to a Republican whack pack of which Trump is a leading member. The result is a diminished Republican brand that appears unhealthy to millions of Americans who are looking for an alternative to the status quo."

TRUMP: I can only say this. Steve Schmidt is a lightweight. He is a guy who did a horrible job running John McCain's campaign. John McCain lost. He did a horrible job running it. I watch him on your show and I don't know how he gets on your show, and I'm sure the ratings are very bad as he speaks.

BLITZER: He's an MSNBC contributor. He's been on my show in the past, but not now.

TRUMP: He's a lightweight, total lightweight.

BLITZER: He's a smart guy.

TRUMP: I don't know if he's a smart guy. All I can tell you is this -- when I left because of equal time provisions, I do a big show called "The Apprentice." Frankly, I have no choice. When I leave, they have equal time provisions.

When I left, I was number one on the polls. On "Meet the Press," the day before I announced, "Trump is leading in the polls." I think I would have done extremely well had I run, but unfortunately, you know, it's a very unfair thing. If you have a show, you can't run because of the equal time privileges.

BLITZER: Which raises this question from a Twitter viewer. "Please ask @RealDonaldTrump," that's your Twitter name, "if you love your country so much, shouldn't you be running for president instead of hosting "Celebrity Apprentice?"

TRUMP: Absolutely true, and I can run. I have to option if I want to run because after May 15th or so, I'm a free agent. But I have a contract. I have a signed contract with a very big network known as NBC. I have a show that's one of the top shows on television and just about I think the number one show in the 10:00 hour, and it's not so easy to break contracts. I have a contract with NBC.

Now, you have a rule or a law that if you have a show, you have equal time. You have to give everybody else equal time. I don't think NBC's going to give every candidate two hours on primetime television, so I have no choice.

Now, when the show is off, the season ends around the middle of May, then I can do what I want to do. But by that time hopefully, a great Republican is chosen. I will be endorsing somebody, and that Republican will go on to beat Obama, which is imperative because Obama is doing a terrible job as the president of the United States.

BLITZER: Just to wrap this up, you're still leaving open -- Reince Priebus, the chairman of the RNC, says he's concerned even slightly you're leaving open that possibility after May of running as a third party candidate if you don't like the Republican nominee.

TRUMP: First of all, I like and respect the chairman. In fact, they had their most successful fundraiser at my club in Virginia/Washington right outside of Washington, the Trump National. They had a tremendous fundraiser and they raised a lot of money. I think it was one of the best they've ever had. So I like and respect him a lot.

I will tell you, I'm going to be endorsing somebody. I think will go on to get the nomination and maybe will go on to win. That would be very good. I love what I'm doing, Wolf. You know that as well as anybody.

BLITZER: You were disappointed Romney said no to you.

TRUMP: I was surprised he said, because, as you know, he wants my endorsement very, very badly. I've spoken to him since. He was very nice, he called me. But I was surprised. Frankly, if I was losing in the polls, I wouldn't be saying no to anybody.

BLITZER: I was surprised when I interviewed Rick Perry yesterday and he's still on the fence. He hasn't made up his mind.

TRUMP: I was a little bit surprised with him, too, but I was particularly surprised with Mitt Romney because he wants my endorsement very badly, as you know. We speak. I like him a lot. I think he's a terrific guy. But I was really surprised that he didn't want to do the debate. And I'll tell you, I was very impressed with Newt, who's leading in the polls, immediately said I want to do that debate. That sounds great.

BLITZER: He loves to debate.

TRUMP: He loves to debate, and he's good at it. And Romney's good at it. What do they have to lose when they're in fourth place and third place and even second place, what do they have to lose?

BLITZER: What surprised me maybe even more, not that Ron Paul and Jon Huntsman said no to you, but that they took those swipes at you and said what they said about you. Was that surprising to you?

TRUMP: You know, honestly, they're not going to win.

BLITZER: Ron Paul has a big following.

TRUMP: But he's not going to win. He's a wacky candidate and he's not going to win. It's a joke. And you know it and I know it. That's why he complains he doesn't get coverage. You cover people who are going to win.

As far as Huntsman is concerned, I really don't know him. I never met him. He called once. He wanted to come up and see me. I didn't do it. But he seems like a nice guy. And the thing I like about him, he's a big supporter of the Wharton School of Finance.

WHITFIELD: His kids went there.

TRUMP: Right, and I went there. And it's the best business school in the country, in the world. And he is a big supporter of the Wharton School.

Now, Huntsman really seems like a nice guy to me, but I just don't know him. I just don't know him. Yes, they took it a little bit personally, but it's OK.

BLITZER: Here's a question from Twitter. "Is a business man better prepared to be president rather than a politician?"

TRUMP: It depends on which businessman and which politician.

(CROSSTALK)

BLITZER: Romney is a businessman, Gingrich is a politician. Which one is better to be president?

TRUMP: First of all, I think Romney is a politician and a businessman, and I think in a certain way, so is Newt. Newt has donor very, very well in business after he left Congress. He's done very, very well. Some would say, oh, he made a lot of money. Isn't that terrible?

I think that's a great thing. I think that's a positive thing because we need somebody that can lead this money so we can become a rich nations again. We're a very poor nation. We don't have money for Social Security and Medicare and Medicaid and all the things we have to have money for, because, you know why, China and OPEC and South Korea and India and virtually every country in the world, Colombia in South America, took $4 billion last year right out of our pockets like we're children. Everybody does.

BLITZER: So, you could support, and correct me if I'm wrong, either Romney or Gingrich?

TRUMP: I don't want to say that yet, but I'll be announcing --

BLITZER: They're the front-runners.

TRUMP: That doesn't matter.

BLITZER: If one of those two got the nomination, would that be good enough?

TRUMP: Let me tell you this -- I really have become impressed with Newt. I've been impressed with Romney. I'm disappointed that he didn't seem to, I don't want to use the word "courage," but didn't seem to have the courage to do the debate. I'm very disappointed in Mitt from that standpoint, but it won't have any impact on my decision.

I'm going to pick the one that's best for straightening out this country because somebody has to straighten this country out fast. We are going to hell in a hand basket.

BLITZER: Did you look at Romney's record in running Bingham Capital for 25 years?

TRUMP: Yes.

BLITZER: What did you think of that, because the criticism was the outsourcing, the killing of jobs.

TRUMP: But you have to understand he's being put in a position where he has to compete with other people that are doing the same thing. I looked at his record and his record is fine. He did well. His record is fine. He's competing with other people that are doing the same thing. That was his world at that time.

(END VIDEOTAPE)

BLITZER: Stand by for more of my interview with Donald Trump. He says he'd deal with Iran's president Ahmadinejad and his nuclear defiance by doing something that the Obama White House won't do.

Also, lawmakers get an apology but few answers from a former colleague about hundreds of millions of dollars that are missing.

(COMMERCIAL BREAK)

BLITZER: Donald Trump has very strong views on virtually every issue out there, though they're not always what you may think. Here's another taste of vintage Trump during our interview here in New York.

(BEGIN VIDEOTAPE)

BLITZER: You may disagree with most of these Republican candidates on the whole issue of gay rights. Is that right?

TRUMP: Well, I don't know about that. Why would I be disagreeing with them?

BLITZER: Would you support gay people's right to get married?

TRUMP: No.

BLITZER: Do you support gays serving openly in the military?

TRUMP: Well, you know, that's an issue I don't want to talk about now because I don't want to get involved unless I'm actually a candidate. But I've made myself pretty clear when I was thinking about running. This wasn't a Ross Perot who said I'm running and then I'm not running and then I'm running. I never ran. And this is the first time I've ever looked at it very seriously.

People have said I've looked at it over the last 12 years. I haven't. I've studied it for minutes, because people would say, we would love to have Trump run, but I haven't. This is the first time I've ever really seriously considered it, and the primary reason is because the country is in such trouble. Not because I want to do it, but because the country is in such trouble. I don't support gay marriage, and the rest of it I'd rather not talk about. For instance, the military thing, that's over with now. It's over with.

BLITZER: You wouldn't try to change it.

TRUMP: It's over with now. It's been done. Whether you agree with it or don't agree with it, maybe something's going to happen that's going to be very bad, and they'll have to change it at some point, who knows. But right now, it's over with and I don't really want to discuss it because it's only really a discussion point if you're a candidate.

BLITZER: Let's talk about some national security issues. You write about them in your book, "Time To Get Tough." You tweeted this not that long ago. You do your own tweeting or just somebody do that?

TRUMP: Sometimes, but basically, I have other people.

BLITZER: You tweeted that -- you expressed fear that President Obama would start a war with Iran in order to get re-elected?

TRUMP: Oh, I think he would. Look, nobody's even talking to Iran. Now, maybe they're the evil empire, maybe they're the bad people, and maybe they're not, you know, got to talk (ph). Nobody talks. This guy comes over to this country, goes to Columbia University where the idiot that runs Columbia University invites him to make a speech. He then ridicules him before he goes up and makes a speech.

Ridicules, I've never seen anything like it. He gets invited to make a speech in Columbia, and the fool that runs Columbia University, he's a fool, gets up, made the most insulting introduction I've ever heard. Now, I'm not a fan of him.

But, you know, when you invite somebody to make a speech and then ridicule him and the man actually said the worst introduction -- it's a worst thing I've ever seen. Now, he leaves this country hating us. I'm not saying --

BLITZER: He hates the United States before that.

TRUMP: Yes. Well, maybe for good reason, maybe for things like that. Now, I'm a person that's probably more militaristic than anybody, OK? I'm very heavy. I'm a hawk times five, all right? But I'm also somebody that believes in negotiation rather than, you know, killing millions of people. And Obama has no way of communicating.

He can't even get his own Democrats, Democratic Party to do what he wants to do. He can't get the Republicans and the Democrats together. How is he going to make a deal with Iran?

BLITZER: Could you talk to Ahmadinejad?

TRUMP: Absolutely, I'll talk to him. I don't say it's going to go anywhere, might not, but I'm going to say, man, you're in trouble. You got a lot of missiles pointed your way. I can't believe you're not talking. I can't believe that you're not talking. You better straighten up.

And I'll tell you what, I would be willing to bet a deal could be made, but when you have a man who's our president that can't even get the Republicans to do things that everybody wants, I mean, you look at some of this legislation, both sides want it, and he can't get it passed.

(END VIDEOTAPE)

BLITZER: All right. Part three of my interview with Donald Trump coming up. Can he give me an answer to this question?

(BEGIN VIDEO CLIP)

BLITZER: Give me one positive thing about President Obama.

(BEGIN VIDEO CLIP)

BLITZER: He's thinking and thinking and thinking. We'll tell you what he eventually has to say.

Also, Iran airs what it says is proof it now has a downed U.S. drone, but is this video a fake? There's new information just coming out of the Pentagon.

(COMMERCIAL BREAK)

BLITZER: And the latest on the shooting deaths at Virginia Tech University. Lisa Sylvester is monitoring that and some of the other top stories in THE SITUATION ROOM right now. What do you have, Lisa?

LISA SYLVESTER, CNN CORRESPONDENT: HI, Wolf. Well, Virginia Tech says there's no longer an active threat on campus. This, after two people were killed including a police officer. Virginia Tech says a weapon was discovered near the second person described as an unknown male. The school has lifted the lockdown that lasted over four hours.

The deadly day started when a Virginia Tech police officer was shot and killed at a routine traffic stop. Police say the suspected shooter was not the driver being stopped. The shooter allegedly walked up to the officer's vehicle and opened fire. Back in 2007, 33 people were killed when a Virginia Tech student went on a shooting rampage.

Iranian television is airing images of what it says as a U.S. drone that crashed in Iran last week. There is disagreement, though, in the Pentagon right now as to whether the drone in the video is real. U.S. officials say the drone was tasked to fly over Western Afghanistan looking for insurgents, but there was no directive to fly into or spy on Iran from Afghan air space.

And the Senate has blocked President Obama's pick to run the Consumer Financial Protection Bureau. The Senate voted along party lines against confirming former Ohio attorney general, Richard Cordray. President Obama says he might sidestep Congress with a recess appointment.

Republicans say they want more oversight of the consumer bureau, and it has become a symbol of the administration's efforts to reign in Wall Street -- Wolf.

BLITZER: Lisa, thank you.

I asked Donald Trump a question about President Obama, a question that seemed to stump him. Stand by for the question and Trump's answer. That's coming up.

And some allies of Mitt Romney are taking off the gloves, telling voters that Newt Gingrich can't be trusted.

(COMMERCIAL BREAK) BLITZER: Donald Trump is rarely at a loss for words, but he seemed stumped by one of my questions today. Let's get some more of our interview.

(BEGIN VIDEOTAPE)

BLITZER: Give me one positive thing about President Obama.

TRUMP: It's very hard. That's a very hard -- that's the only really tough question you've asked me this morning. That's a very hard thing to say. I'll tell you what I thought, and I really felt strongly about this. When he won the election, which you know, was very hard in all fairness for John McCain to win because Karl Rove did such a rotten job with Bush.

So, it was a very hard thing for anybody to win that election. So when he won, I said at a minimum, he's going to be a great cheerleader for this country, and he's turned out to be a negative force. He's creating class warfare. He's creating all sorts of things including so-called Occupy Movement.

But when he won, I really thought at a minimum that he was going to be a great cheerleader for the country, and he's not even a good cheerleader. There's very little I can say --

BLITZER: He killed Bin Laden.

TRUMP: He didn't kill Bin Laden. He gets so much credit for that. Ok, excuse me.

BLITZER: He authorized.

TRUMP: Excuse me.

BLITZER: He had the guts to make that decision.

TRUMP: Excuse me. Guts. You're sitting in the White House. They come to you, and here's the question. We can take him out. We have him. You're the president. We can take him out with a missile or we can go get him. Now, the third thing is leave him alone, and only a very stupid person would say that.

So, we can take him out with the missile or we can get -- either way. Either way, it's OK. All right? Either way, it's OK. So, he said, all right, let's go get him. Why does he get so much credit? You know, they give him credit for that. He shouldn't get so much credit. He happened to be sitting --

BLITZER: It wasn't a slam dunk.

TRUMP: Excuse me.

BLITZER: You remember Jimmy Carter --

TRUMP: Jimmy Carter was incompetent. Look, very nicely, we can take him out with a missile or we can pick him up. He's sitting in the White House. These military guys were there long before he was there. They found him. Now, the bad news is, Pakistan should have told us this years before because they knew exactly where he was.

He's sitting right next to one of their major military bases. So, I mean, for them not to have told us is very insulting, but I don't know why Obama gets credit for the whole Bin Laden thing. He's sitting there. He's got three choices. Leave him alone which nobody would do, take him out with a missile, or take him out with the military. So, he said take him out with the military. OK. Congratulations.

BLITZER: If wouldn't found him, it would have been a disaster.

TRUMP: One, you should get the -- yes, it would have been a disaster. It could have failed, but he's not the one that --

BLITZER: Some of those navy SEALs would have been killed.

TRUMP: They were great. They were great. They're great guys.

BLITZER: It was a dangerous mission.

TRUMP: They're great guys, but anybody in that position sitting happened to be president, if you walk in, say we have Bin Laden, we can either get him this way or that way. Honestly, either solution's OK.

I almost think the other would have been better, except this way there's a little more proof.

A lot of people disagree with what happened after the fact and the way he was treated so solemnly. I mean, they treated him so solemnly after the fact -- cleansed the body, washed -- I mean, give me a break.

Anybody sitting in that office, Wolf, would have -- I keep hearing about, oh, Bin Laden. The military did an incredible job, and they called him and they said, we have him. And he said, go get him. What's he going to say, don't get him? And he gets all this credit? It's a lot of crap.

BLITZER: One final question. I interviewed Steve Forbes. You know Steve Forbes.

TRUMP: Yes.

BLITZER: A good man.

TRUMP: A good man.

BLITZER: This week. He says you're worth $2.9 billion. You say you're worth $7 billion.

TRUMP: Well, look, Steve is a good guy.

(CROSSTALK) TRUMP: They don't have access to my numbers. And what I did is this -- I was going to file a financial disclosure form because I was getting ready to run, but then I had the equal time provisions and NBC was desperate to keep me. OK? Like desperate to keep me, and you can understand, because they get ratings, just like your show right now will get ratings. If you get ratings, you have me on.

If I don't get ratings -- I can be the greatest guy in the world. If you don't get good ratings, you don't want to interview Trump. Is that a correct statement?

BLITZER: I interview a lot of people --

TRUMP: OK.

BLITZER: I like interviewing you because you're not afraid to say --

TRUMP: I'm not afraid. So, I said, you know what? I'm going to do a financial disclosure.

They're like 78 or 98 pages. It's a huge form, but they have summary sheets.

And I said to myself, you know, I'm doing a book, and I decided that I was going to -- at least for the time being, I was going to pass on this thing because of the equal time provision. And I said to myself, why don't I just take the summary sheets and put them in the book? So, it showed over $7 billion. It showed a tremendous amount of cash. I have friends that are more impressed, frankly, with the cash.

BLITZER: Three hundred million dollars.

TRUMP: Yes, close to $300 million in cash. That's cash. That's not like buildings and brick and mortar and all sorts of crap. That's, I mean, cash.

BLITZER: So, you invest in treasuries?

TRUMP: I put them in banks that are good. You've got to watch for good banks today.

BLITZER: You're not getting much interest.

TRUMP: I don't even put them in treasuries. I put them in banks. You get very little interest. You get, like, nothing. You get less than a percent, but at least it's there. But only strong banks, if there is such a thing. You have to be careful.

BLITZER: You'll let me know.

TRUMP: That could hurt me very badly, if these banks start cratering.

But the fact is, so I had the thing. It came out to over $7 billion, very little debt. You've seen it. Very little debt, tremendous cash, which is, by the way, the position our country should be in.

But in all fairness to Forbes, they don't have my numbers. They don't have my -- this is the first time I've done this.

I actually printed the statements and I put them in. So, instead of giving them to the government, I gave them to the public and I gave them to the book.

Now, I may have a chance to do a financial disclosure. But I said to myself, why do I want to do this?

I'm proud, the fact is, of having built a great company. I built a great company in a relatively short period of time with billions of dollars of net worth, with hundreds of millions of dollars of cash, with very little debt, with -- by the way, like, this asset, would you say this is about as good as it gets? I have many of these in terms of the quality assets. What I own is real, real quality.

I've always been into the world of quality. This country needs quality.

We're laughed at by the world. I deal with the world. I deal with the Chinese, I deal with Turkey. We just made a big deal with Turkey. I deal with a lot of the people of the world.

They cannot believe -- they tell me, they're friends of mine. They say, we don't believe what we're getting away with, with the United States. They tell me that. I don't know if they know I'm going to be on your show saying that, but they can't believe how stupid -- and I use the word "stupid" -- how stupid our leaders are. They can't believe it, that they can get away with this.

So maybe some day they won't and we'll be a rich nation again.

BLITZER: The book is entitled, "Time to Get Tough: Making America Number One Again," Donald J. Trump.

Put the J. in there, too.

TRUMP: I might as well. A little formal.

BLITZER: Thanks very much.

TRUMP: Thank you very much, Wolf.

(END VIDEOTAPE)

BLITZER: Mitt Romney's campaign is letting loose, trying to convince voters Newt Gingrich can't be trusted. Will the attacks pay off?

And more than a billion dollars missing on Jon Corzine's watch. Now members of Congress are demanding answers from their former colleague.

(COMMERCIAL BREAK)

BLITZER: All right. Let's talk about what we just heard from Donald Trump, also the latest in the GOP presidential campaign.

We're joined by Rick Stengel. He's the managing editor of "TIME" magazine. It's owned by the same parent company of CNN. The new issue, "How America Started Selling Cars Again." Also -- there it is. There's the cover of "TIME" magazine, "How America Started Selling Cars Again."

Also joining us, our chief political analyst, Gloria Borger.

Gloria, let me quickly start with you on Newt Gingrich. He was in South Carolina trying to rally support once again. He's trying to maintain this amazing momentum without imploding, if you will.

How's he doing?

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Well, he's trying to keep his cool, and so far, he's done it. You know, the most trouble Newt Gingrich gets into is when he becomes very expansive. We haven't really seen that from him.

It's clear that his handlers are telling him, be positive, keep your answers short, keep your answers direct. He's also courting constituencies. They're very skeptical about him, Wolf.

He met yesterday with a group of conservatives in Virginia. There are clearly some disagreements with conservatives, most largely on the health care mandate that he once supported. But he did go and ask for their support. He's going to continue to do that, even with Evangelical voters, so this is a different Newt Gingrich than we've seen in the past.

BLITZER: Some of his Republican candidates, challengers, if you will, Rick, including Ron Paul, especially Ron Paul, they are going after him, making it clear they'll do what it takes to try to beat him.

I want you to listen to this exchange, Ron Paul and a reporter today.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: You've been fairly aggressive in your criticism of Congressman Gingrich lately in terms of your campaign ads.

REP. RON PAUL (R-TX), PRESIDENTIAL CANDIDATE: Who's that? Oh, that guy that used to be the Speaker? I have to expose him for what he's been trying to do over the years. That's all we're doing, trying to present the facts.

(END VIDEO CLIP)

BLITZER: If you didn't hear, he said, "I have to expose him for what he's been trying to do over the years."

So he's not holding back.

RICK STENGEL, MANAGING EDITOR, "TIME": He's not holding back. You know, Freud defined something called the anxiety of little differences. That's when two people are alike and they dislike each other because they're so much alike. Ron Paul and Newt Gingrich have a lot more in common with each other than either of them have with any of the other candidates. They're both independent. They both don't stick to the conservative line. They're contrarians.

And so, that, actually -- they are competing with each other. But I think Newt has a far better chance of getting the nomination, a far better chance of captivating Republican voters, than Mr. Paul does.

BORGER: You know, I think it is personal.

BLITZER: Go ahead, Gloria.

BORGER: I think it is personal with Ron Paul and Newt Gingrich, Wolf. Don't forget, he served in the Congress when Newt Gingrich was Speaker. He is somebody who really doesn't like him.

I was told by one conservative that Ron Paul is going to be happy to be the candidate who frontally attacks Newt Gingrich, as opposed to having surrogates do it, which is what we saw from Mitt Romney today. He had a couple of surrogates, one of whom came out and called Newt Gingrich irrational. I don't think you'll hear that from Mitt Romney, but you might hear it from Ron Paul.

BLITZER: I asked Newt Gingrich when I interviewed him yesterday, Rick, about his ex-colleagues, his former colleagues when he was Speaker. Republicans who worked with him in '94 and '95, the Republican revolution, the Contract With America, why so many of them have serious doubts about him. Listen to what he said. This is Newt Gingrich yesterday.

(BEGIN VIDEO CLIP)

NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: I was there as the Leader, and my job was to drive through change on the scale that Washington wasn't comfortable with. And if you are a genuine outsider forcing change, you're going to leave some bruised feelings. And I don't apologize for that. I think I probably learned some more. I think I'll probably be more effective this time.

(END VIDEO CLIP)

BLITZER: As you know, some of these colleagues are pretty brutal in condemning him.

STENGEL: They are, but let's look at what he did accomplish. I mean, I know he likes to think of himself as a world historical figure, but he did do something extraordinary. He brought the Republicans back to power, he changed the whole focus of the party. The Contract With America was something which has set a template for everything that we're seeing now.

Yes, he probably rubbed a lot of people the wrong way. And certainly now people have reservations about endorsing him. But he's a true historical figure who has done a lot more to change politics in America and make America the way it is now than anybody else in the Republican field.

BLITZER: And there's no doubt -- you remember this, Gloria, as much as I do -- that after he stumbled after he became Speaker, and after the government shutdown, and he was blamed for that, he did work closely with President Bill Clinton in balancing the budget, getting welfare reform. There was a real cooperation on many of these issues.

BORGER: You know, right. And there are two sides to Newt Gingrich, somebody who could work across the aisle with Bill Clinton, and somebody who was completely unpredictable, who came up with ideas and spouted them, and his membership of his caucus had no idea what he was talking about, and then had to go home to their districts and try to explain what their Speaker had said.

I think the problem that lots of these Republicans have is they don't see Newt Gingrich as somebody who can sustain a predictable level of leadership. They're not denying that he's smart. They're not denying that me might be brilliant. But what they're saying is, that he might not have the right temperament to be president of the United States, who would be able to inspire people to follow him over an extended period of time.

Don't forget, some of them threatened to stage a coup against Newt Gingrich just a couple years after he became Speaker.

BLITZER: Mitt Romney's got a limited window to go after him. He's got to step up his rhetoric.

STENGEL: And by the way, the Speaker is in a very good position, because he can hang back now. He doesn't have to be critical. Newt has to attack him. And I think, speaking to what Gloria said, I do think voters now will look at how he behaves and how he conducts himself in the moment.

BLITZER: Newt Gingrich?

STENGEL: Exactly. So much of what he's done is in the past. They know that, so they're looking at him now and they're saying, do you have the temperament now to make me think I can vote for you?

BLITZER: Rick Stengel, thanks very much.

Gloria, thanks very much.

A humbling return to Capitol Hill for a former Senate heavyweight. We're talking about Jon Corzine, who's being forced to explain how more than a billion dollars went missing from his now bankrupt mortgage firm, MF Global.

Let's bring back Lisa Sylvester. She's been working this story for us.

And what a story it's been, Lisa. What's the latest?

SYLVESTER: Well, Wolf, just some context here. First, of all, Jon Corzine, he's a former senator, former governor of New Jersey, former head of Goldman Sachs. He was subpoenaed by the House Agriculture Committee, and this is the first time he has spoken publicly about MF Global. Corzine says MF Global had so many transactions, particularly in the final chaotic days of the company, that he is not certain what happened to the customer money.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Do you solemnly swear that the testimony you're about to give --

SYLVESTER (voice-over): A contrite former senator, Jon Corzine, on Capitol Hill, in a much different role. The former chief of MF Global was asked how his firm cannot account for more than a billion dollars in missing customer funds.

JON CORZINE, FMR. CEO, MF GLOBAL: I simply do not know where the money is or why the accounts have not been reconciled to date.

SYLVESTER: Federal regulators and the FBI have now launched investigations. Corzine didn't take the fifth, but he couched his responses, noting that he did not have access to relevant documents that he says are essential to him testifying accurately.

REP. JAMES LUCAS (R), OKLAHOMA: Did you authorize (AUDIO GAP).

CORZINE: I never intended to break any rules, whether it dealt with the segregation rules or any of the other rules that are applicable.

SYLVESTER: Keeping customer funds separate from company accounts is a bedrock in the investment world. It appears that cardinal rule was broken.

MF Global placed risky bets on the European sovereign debt market, investments that led to a spectacular collapse in bankruptcy. In testimony, Corzine acknowledged that the company's chief risk officer warned him and the board that the firm was overexposed. Within months, the risk officer was let go, but Corzine said there were other reasons why.

James Koutoulas represents MF Global customers now trying to recover their money.

JAMES KOUTOULAS, COMMODITY CUSTOMER COALITION: You've got a guy here who points out exactly what they're doing, is a whistleblower, in effect. I mean, he came to the board, and Corzine, is like, no, how dare someone question me?

SYLVESTER: Corzine offered this to those impacted --

CORZINE: I mean this with all sincerity. I apologize, both personally and on behalf of the company, to our customers, our employees and our investors.

SYLVESTER: Former MF Global customer James Mayer found little comfort. Mayer had $200,000 with the brokerage firm. Only $11,000 now recovered.

JAMES MAYER, FMR. MF GLOBAL CUSTOMER: At this juncture, if we don't get any money in the next couple weeks, the only money we have left that wasn't in these trading accounts is my son's college money.

(END VIDEOTAPE)

SYLVESTER: And there are two more congressional hearings next week. The Senate Agriculture Committee and the House Financial Services Committee also intend to subpoena Corzine. And as for money getting back to the customers, well, the trustee in this case hopes to get about 70 percent of the money restored to the customers in the coming weeks, and there is a bankruptcy hearing on that tomorrow -- Wolf.

BLITZER: Unbelievable story. Thanks very much for that, Lisa.

Lisa Sylvester, reporting.

Now playing, an epic battle between Hollywood bigwigs and Internet moguls that could affect the movies, the TV shows you watch. Stand by.

And the prized possessions of legendary Hollywood icon Elizabeth Taylor could be yours if the price is right. Jeanne Moos, that's coming up as well.

(COMMERCIAL BREAK)

BLITZER: An unlikely clash of the titans unfolding in Washington right now between Hollywood and some major Internet powerhouses over so-called movie and television pirating.

Let's bring in CNN's Brian Todd. He's working the story for us -- Brian.

BRIAN TODD, CNN CORRESPONDENT: Wolf, there's general agreement that pirating is a big problem with billions of dollars lost each year. The problem of how to tackle it is so tough and complex, that two very powerful economic machines have found themselves lived up against each other.

(BEGIN VIDEOTAPE)

TODD (voice-over): Taylor Hackford's career track shouldn't have him worried about his livelihood. One of Hollywood's legendary directors, he's put out well-known hits like "An Officer and a Gentleman." But he is worried because of experiences like what happened in 2004, when his biopic "Ray" was released.

He says it had taken him 13 years just to get the financing for it. He was in New York on the day it opened in theaters.

TAYLOR HACKFORD, MOVIE DIRECTOR: I went down to Canal Street, and before the box office opened for its first day in the movie theaters, I can buy "Ray" on the street at Canal, had great artwork on the cover, and I had the DVD. TODD (on camera): For how much?

HACKFORD: They were charging $20.

TODD (voice-over): Hackford says he watched people buy pirated copies of his movie. He and other directors are now joining forces with executives from the big entertainment conglomerates that produce movies and TV shows on a crusade against pirating. They are supporting bills being debated in the House and Senate which tighten up enforcements by going after the Web sites where people can place stolen content.

JIM GIANOPULOS, CEO, FOX FILMED ENTERTAINMENT: Well, we lose billions of dollars cumulatively as an industry, but virtually every film is pirated from the day it's available, from the first screen that it goes on.

TODD: Jim Gianopulos, head of Fox Filmed Entertainment, says his company's movie "The Descendants" was pirated from the moment it came out.

(on camera): The industry leaders who produce movies, TV shows, and other content say it's not just about their product, it's about all the people who work behind the scenes, the people who run and work in movie theaters across the country having their job threatened. On the other side, it's an argument about free speech.

(voice-over): Big Internet companies like Google and Yahoo! are fighting these new enforcement measures. That makes this a clash of entertainment titans, the high-tech companies versus the big studios. But the free speech concerns are Internet-wide.

Brandon Butler, with the Association of Research Libraries, says if these bills pass, the movie studios would have the power to squeeze pay services like MasterCard and Visa and ad companies to stop doing business with even legitimate Web sites which might post an occasional link to a pirated film. He calls those sites free speech platforms which could be shut down by those actions.

BRANDON BUTLER, ASSOCIATION OF RESEARCH LIBRARIES: So there are hundreds of thousands, millions of blogs, millions of people using these sites to talk about their life, to talk about their art, to share their art, to make art. And when you take down the whole thing to target a few pirates, all of those people go with it.

(END VIDEOTAPE)

TODD: Movie industry officials say the new measures would only take down Web sites that are exclusively dedicated to posting stolen content, but the Internet speech advocates say they interpret some language in these bills as giving those studios some latitude to go after legitimate Web sites which only occasionally post pirated films.

Wolf, this is a big, big battle.

BLITZER: So, if these bills, Brian, pass -- and there's a strong chance they will -- would we see the big studios really trying to shut down powerhouses like Facebook and Google?

TODD: Well, experts say that's probably not going to happen because they are just too big. But they say it's the next generation of Facebook and Google that could be vulnerable. Remember, Viacom was in a major lawsuit against YouTube over pirating. Experts say if that lawsuit had been filed a few years earlier, YouTube could have been taken down by that.

BLITZER: Fascinating story, Brian. Thanks for doing it.

Brian Todd, reporting.

Meanwhile, Republican presidential hopeful Jon Huntsman is speaking out. That's coming up on "JOHN KING USA" at the top of the hour for our North American viewers.

Also, Elizabeth Taylor's dazzling Hollywood life going up for sale. Jeanne Moos is next.

(COMMERCIAL BREAK)

BLITZER: The legendary life of Hollywood icon Elizabeth Taylor is going up for sale.

Jeanne Moos has a closer look at the prized possessions that could be yours during an auction next week.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): Liz Taylor is eyeing her own auction. She is eyeing her jewels. She's eyeing the line of people waiting to get in at Christie's. She's watching your back as the clothes off her back go up for bid.

From her beaded Versaces to --

MEREDITH ETHERINGTON-SMITH, FASHION COLLECTION CURATOR: I do like the chorus line of kaftans.

MOOS: Or maybe you'd prefer to own her tiara, the one given top her by husband number three, film director Mike Todd, who said --

RAHUL KADAKIA, CHRISTIE'S HEAD OF JEWELRY: "Elizabeth, you are my queen. You must have a crown."

MOOS: You can even bid on her wedding dresses. She wore yellow the first time she married Richard Burton. A hippie kaftan the second time she married him, her fifth husband --

ETHERINGTON-SMITH: By that time you've run out of white.

MOOS: But she never ran out of diamonds.

KADAKIA: It's the size of a cherry.

MOOS: Richard Burton gave it to her. KADAKIA: She would call it her baby because she wore it every single day.

MOOS: She even wiggled it at Larry King.

(on camera): Most people have a jewelry box. What did she have?

KADAKIA: She had a jewelry room.

MOOS (voice-over): Christie's created a mockup featuring all her jewelry boxes with her labels. For instance, the ping pong diamonds from a match she played with Burton.

KADAKIA: He said, "Elizabeth, if you beat me by 10 points or more, I'll buy you a diamond."

MOOS: She won. He bought her three.

Looking for something a little cheaper? Imagine slipping into Elizabeth Taylor's daisy hot pants. She wore this outfit at the age of 39, the day she first became a grandmother.

They are not just hot pants.

ETHERINGTON-SMITH: They're kind of like, where's the fire engine?

MOOS: You can even bid on her size 10 shoes, the very feet that stomped on a fellow who insulted her in "Butterfield 8." The auction includes her portrait by Andy Warhol and a monkey necklace that Michael Jackson gave her.

KADAKIA: She said, "They're great. These monkeys are like Michael and myself. We're such great friends."

MOOS: So close, that her boa once got stuck in his sequin jacket.

If your neck is starting to feel weighed down --

(on camera): This is for those who can't quite afford the real thing?

KADAKIA: Well, it's a great Christmas gift.

MOOS: Christie's is selling paper cutouts of Liz Taylor's jewels for 25 bucks. It seems as if every possession like this 500-year-old pearl comes with a great Liz Taylor story attached.

KADAKIA: And she almost lost it and they found it in her puppy's mouth.

MOOS: The only thing more glittering than her diamonds were the flashbulbs.

Jeanne Moos, CNN, New York.

(END VIDEOTAPE)

BLITZER: That's it for me. Thanks for watching.

I'm Wolf Blitzer in THE SITUATION ROOM.

The news continues next on CNN.