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THE SITUATION ROOM

Dead Heat in Iowa; Gingrich's Past Haunting Him?; 40 Dead In Syria; Neighborhood Pounded by Tanks; Blame Game in Pakistan Airstrike; Santorum Meets With Iowa "Kingmaker"; Santorum Flounders In Iowa; Gingrich Off Virginia Ballot; Romney Profiting From Pink Slips?

Aired December 26, 2011 - 16:00   ET

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


WOLF BLITZER, CNN ANCHOR: Happening now, first on CNN, we have dug up the court papers that cast down Newt Gingrich's account of his first divorce. In a Republican race where family values matter strongly, his past may be coming back to haunt him.

A new poll shows him trailing badly, but Rick Santorum is the only candidate on the trail in Iowa today and he is hunting for an endorsement from the state's GOP kingmaker.

And they fought wars over their borders. Now a strange bit of saber-rattling by India and Pakistan's turning once again into a big tourist attraction.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

The first vote in the 2012 presidential campaign is only eight days away. We're talking about the Republican caucuses in Iowa. And the latest poll there shows what amounts to be a dead heat. Ron Paul is on the rise. He's the current favorite of likely Republican caucus-goers.

The ARG poll shows him with 21 percent. Mitt Romney is next at 20 percent. And Newt Gingrich who's been slipping a bit lately is at 19 percent. There's a big drop-off to Rick Perry at 9 percent, Michele Bachmann 8 percent, Jon Huntsman at 6 percent. Rick Santorum, who has been to every Iowa county, and there are 99 Iowa counties, he gets only 4 percent in this ARG poll.

With time running out, you would think the candidates would be pounding the pavement in Iowa, but Santorum on this day is the only one on the campaign trail and he is getting a visit with a man considered to be a kingmaker in Iowa GOP circles. We will have more on this story coming up.

Meanwhile, family values and fidelity are hot topics in the countdown to Iowa caucuses. And while Newt Gingrich says he is a changed man, his failed marriages, especially the controversial end to his first marriage, they are drawing some fresh scrutiny today. And in a story brought to you first on CNN, we have uncovered the official documents that clearly seem to contradict Newt Gingrich's version of that first divorce.

CNN's Alan Duke has seen the court records. He's joining us now live.

Alan, tell us what you have learned.

ALAN DUKE, CNN CORRESPONDENT: Well, this is a divorce that happened more than 30 years ago, and yet there is still a debate going on about how it ended.

(BEGIN VIDEOTAPE)

DUKE (voice-over): Newt Gingrich met his first wife, Jackie Battley, in high school. She was his geometry teacher. They married a year after he graduated. Eighteen years and two daughters later, the first-term Georgia congressman filed for divorce while she was being treated for cancer and after he began dating a younger congressional aide who would then become his next wife.

Three decades and two wives later, the way Gingrich handled the end of his first marriage is still controversial. What is new is how Gingrich, now a presidential candidate, is defending it, saying on his Web site and through spokesperson that his then wife requested the divorce.

But the court file was not in the Carroll County, Georgia, records room when CNN searched for it this month. It was found later, stashed away in 1994 by a retired clerk who says he wanted to preserve it from vandals. The document showed Jackie Battley Gingrich told the court she does not admit that this marriage is irretrievably broken. While she has adequate and ample grounds for divorce, she does not desire one at this time.

Jackie Battley Gingrich did not want to be interviewed.

As for the campaign, a spokesman told CNN in an e-mail that court documents accurately show Gingrich filed for the divorce, but it was Jackie Battley who requested the divorce. The same court filing accused Gingrich of failing to provide enough money for his wife and then two teenage daughters to live on during their separation. Water, gas, garbage, electric and telephone services were about to be cut off for nonpayment.

GERALD JOHNSON, GINGRICH CHILDHOOD FRIEND: I didn't get the impression that she was willing to end the marriage.

DUKE: Gerald Johnson was a close friend of the couple. He was in Gingrich's Sunday school class in the 1970s and says he donated $100 to his church's collection to help pay Jackie Gingrich's bills during the separation.

JOHNSON: And they didn't really have the resources as far as food and everything in the house in Carrollton to provide for the family and asked for financial assistance in doing that. And I agreed to make a contribution, as many others did.

DUKE: A judge finally ordered Gingrich to pay up.

Still, Johnson said there should be forgiveness and he would like to see Gingrich win the White House.

JOHNSON: Newt, to me, he is definitely the smartest candidate in the Republican primary field. And I think Newt will bring a level of intelligence to national politics. And I would think he would make a great president.

DUKE: Which is just what the candidate's spokesman says.

"Gingrich has admitted he hasn't had a perfect life and at times has had to go to God for forgiveness," he told us. "Over 30 years later, the family has long put these matters behind them."

(END VIDEOTAPE)

DUKE: So we are still talking about it 30 years later, the Newt Gingrich and Jackie Gingrich divorce. And we are learning something new this month.

BLITZER: And this notion, Alan, that she may have asked for the divorce, but he actually did the paperwork, he filed for it, what do you make of that?

DUKE: Well, it is not unheard of that a couple would decide mutually that they would want to have a divorce, and, well, I will file, I have got the money, I will get the lawyer.

But then why would a couple months after that Jackie Gingrich hire her own lawyer and file a challenge, in fact, filing a petition asking the judge to reject the divorce and denying that it was irretrievably broken?

So that calls into question. I can tell you that I have talked to a lot of people who are adults, close friends to the Gingriches at the time and they are surprised with the notion that Jackie Battley Gingrich didn't want -- or that she wanted to divorce Newt Gingrich.

BLITZER: Alan Duke doing the reporting for us -- Alan, thanks very much.

As these divorce documents come to light, Newt Gingrich has already been slipping in the polls.

Our political editor, Paul Steinhauser, is joining us now from Iowa.

Paul, first, the divorce -- the divorce file, I should say, is this new revelation going to be any serious problem for Newt Gingrich over these next eight days in Iowa?

PAUL STEINHAUSER, CNN DEPUTY POLITICAL DIRECTOR: It really depends, Wolf, on how much this story takes off here in Iowa and across the country.

This is not the message Newt Gingrich wants to talk about. He wants to talk about the economy and jobs. Listen, his three marriages have been a storyline this entire campaign. Wolf, the two debates you moderated and a bunch of the others, this has come up. Newt Gingrich continues to say, I have made mistakes. I have asked the lord for forgiveness.

And he hopes that voters understand that. We have seen rival campaigns go after Gingrich. We have just seen the last couple days here in Iowa Ann Romney and Anita Perry in ads touting their husbands' family values and social values. Maybe that's a dig at Gingrich.

What do American voters think or more importantly Republicans? Look at this. This is ABC News/"Washington Post" poll just about a week ago and it asked if Newt Gingrich's marital history is a factor. Look at that -- 72 percent at the bottom there say not a major factor in their vote for the GOP nominee.

But what about here in Iowa? Listen, we know social conservatives here in Iowa and also in South Carolina, which holds the third contest, they are very influential. In fact, exit polls indicate that six out of 10 Republicans here in Iowa consider themselves born-again Christian conservatives.

I spoke to a leading Christian conservative out here earlier today and he says he likes Newt Gingrich but he is troubled by all this, by his three marriages. It could be a problem for voters out here, Republican voters in the caucuses -- Wolf.

BLITZER: On another matter, we're only eight days away from the Iowa caucuses, Paul. Rick Santorum though I take it is the only Republican candidate, is this true, on the campaign trail in Iowa today. Where are the other candidates?

STEINHAUSER: I guess they're laying low.

Listen, it is a federal holiday. We were driving around town, Steve Brusk, and I today and it was very quiet here, Wolf. It was very, very quiet. The other candidates are laying low today. Everybody picks up tomorrow.

As you mentioned, Santorum, the former senator from Pennsylvania, he will be pheasant hunting with some Republican conservative out here in the next hour. But, Wolf, I'm as surprised as you. Eight days to go and every minute counts. I know it is a federal holiday, but I would think the candidates would be out there making the most of their few remaining minutes and hours they have until the caucuses -- Wolf.

BLITZER: I'm surprised, too. You're working, I'm working. They should be working as well. Maybe they are on the phone making phone calls, raising money. Who knows what they are doing. All right, I don't want to be overly judgmental. I will see you in Iowa tomorrow, Paul. Thanks very much.

I will be in Iowa for two days beginning tomorrow. I will have SITUATION ROOM interviews with two of the candidates. Tomorrow, I will go one on one with Newt Gingrich. Wednesday, I will one on one with Mitt Romney along and his wife, Ann, and son Josh.

Mitt Romney boasts of his business experience, but is the GOP candidate still profiting from the pink slips handed out by his former company? We are digging deeper.

And tanks in the streets and dozens more dead. Residents of a besieged city say they are being pounded, pounded right now by Syrian troops.

(COMMERCIAL BREAK)

BLITZER: More than 40 people are reported dead today in Syria, most of them in the city of Homs, where residents say they're under a bloody siege and being pounded by Syrian tanks.

An Arab League mission is supposed to visit the city tomorrow. But right now, the violence is frenzied and furious. Watch and listen to this.

Syrian authorities have restricted access by journalists. CNN's Mohammed Jamjoom is tracking developments from Cairo. Mohammed is joining us now.

What else is going on there, Mohammed?

MOHAMMED JAMJOOM, CNN CORRESPONDENT: Wolf, the words that we have heard from residents of the flash point city of Homs today most, carnage, massacre, bloodbath.

This is what they are saying to describe what is going on in Homs, especially the neighborhood of Baba Amr, dozens killed they say and hundreds wounded. That is according to opposition activists there, this on the same day that members of an Arab League delegation are coming into the country to help try to end the violence.

(BEGIN VIDEOTAPE)

JAMJOOM (voice-over): As the Syrian government crackdown intensifies, the first of a small group of outside observers is beginning to arrive in Damascus. We have no idea if the Arab League observers will be able to get close to the scenes of violence that continue to pour out of Syria.

Here, a tank rolls down a street in Baba Amr, a neighborhood in the flash point city of Homs. Activists say thousands of Syrian troops have recently surrounded it and are shelling it almost daily. CNN can't verify many of the videos posted from Syria, but one Homs resident describes the carnage he has witnessed, explaining how everyone has become a target.

UNIDENTIFIED MALE: In the last two days, there is a lot of injury, more than 200 injury. In the last three days, they executed little children because they shout against the Assad. They are bombing one house, a civilian house.

JAMJOOM: In the past week, the Syrian government's bombardment has escalate escalated. The same day a protocol was signed allowing those Arab League observers into Syria, activists say the Syrian army stormed the town of Kafrouaid in Jabal al-Zawiya, a part of Idlib province. This video purports to show family members mourning loved ones who died in what is called the massacre of Kafrouaid. Residents of Idlib have become accustomed to the violence. Many even fear to bury their dead in public cemeteries.

In this video, taken in November, some bury their loved ones near a deserted road. At a hospital, one injured demonstrator lays in his bed and tells of the horrors he's seen.

"I have seen wounded people taken by security forces with their oxygen masks still on," he says.

Another man described a crackdown he experienced. "I was injured by gunfire in a protest in Jisr Al-Shugur," he says. "Security forces fired on us and injured many youth, and one was killed. I went to a hospital and was treated."

With many Syrian neighborhoods deserted and besieged, many people are now questioning how effective the Arab observers' mission will be.

(END VIDEOTAPE)

JAMJOOM: We have heard horror story after horror story all day long. Opposition activists and residents in the cities of Homs telling us the situation has gotten so bad that the violence and the brutal violence has escalated so much that they are fearful that if something isn't done soon to stop the violence, that a genocide could happen -- Wolf.

WOLF BLITZER, CNN ANCHOR: At least 5,000, maybe 5,500 people, mostly peaceful protesters, have been killed over these past several months by Syrian authorities.

What do we know about these Arab League observers who are supposed to be there? What are they going to be able to do?

JAMJOOM: Well, that's the key question, Wolf. The Arab League observers seem optimist about their mission. They're telling us that about 50 have arrived so far in Damascus. But some of them will be going tomorrow to the city of Homs. Some of them will be going to flash point provinces like Idlib where a lot of violence has taken place.

But the activists on the ground there fear that the Arab League observers won't be given the unfettered access that they need. And we've been told that the observers will be taken around to the cities and these provinces by Syrian security forces by their own protection.

So, the question is: will the Syrian government actually allow these observers who are supposed to monitor the situation, who are supposed to bring an end to the violence, close to the neighborhoods where the crack down is going on? In Syria, a lot of the activists don't believe that will happen -- Wolf.

BLITZER: At least 5,000 people killed, many thousands more injured, and thousands of others apparently arrested or simply missing right now, what a situation in Syria. Mohammed, we'll stay in close touch with you.

We are also learning more about the deadly U.S. airstrikes which killed 2,000 Pakistani troops. Part of the fallout from that incident, a freeze, yes, a freeze on the separate anti-terror campaign involving U.S. drone aircraft.

Our Pentagon correspondent Barbara Stars got some new information. She is working the story.

What are you learning, Barbara?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, you know, Wolf, one sign of just how sour the relationship is between Washington and Pakistan. The U.S. is at least temporarily now giving up on what officials have always said is a valuable tool to keep America safe.

(BEGIN VIDEOTAPE)

STARR (voice-over): The CIA suspended drone airstrikes over Pakistan for the last several weeks in an effort to restore still icy relations after U.S. military border strike accidentally killed 24 Pakistani troops. Though the CIA has never openly acknowledged years of drone raids aimed at al Qaeda and Taliban fighters, an administration official confirmed the halt. The U.S. military investigation into that border incident found plenty of blame to go around.

GEORGE LITTLE, PENTAGON SPOKESMAN: Inadequate coordination by U.S. and Pakistani military officers operating through the border coordination center, including our alliance on incorrect mapping information shared with the Pakistani liaison officer resulted in a misunderstanding about the true location of Pakistani military units.

STARR: Furious, Pakistani intelligence officials insist the U.S. fired first during a night time raid near the Afghanistan/Pakistan border. Not so, said the military investigators who concluded the hours of confusion began with a fatal mistake. U.S. troops go into an Afghan village didn't know Pakistani border posts were nearby.

BRIG. GEN. STEPHEN CLARK, INVESTIGATING OFFICER (via telephone): Two locations that are in question here were not identified on any chart.

STARR: Eleven-o-nine p.m., U.S. forces come under fire. They ask Pakistan if it has troops nearby and are told, no. But the Pakistanis are there, firing back. Believing they are under attack, NATO airstrikes are called in.

Eleven-forty-four p.m., U.S. forces are fired upon again. The Pakistanis say their troops are being hit. The U.S. isn't sure where all this is happening.

CLARK: There is confusion caused by this because there is a lack of precision as it where this is occurring. When asked, the general answer back was, well, you know where it is because you're shooting at them, rather than giving a position.

STARR: Furthering the confusion, Pakistan again says there are no troops in the area. But nobody realizes the U.S. has used a wrong map. The firefight is 14 kilometers from where everyone is looking.

At 12:40 a.m., a third round of firing begins. By 1:00 a.m., the U.S. confirms Pakistani military are in the area, and the firing stops.

(END VIDEOTAPE)

STARR: Investigators said a major problems remains, neither side trusts each other. And in this case, Wolf, it was the worst possible scenario. They just couldn't tell each other, wouldn't tell each other, where they were on the battlefield.

BLITZER: And if there is lack of trust before, that lack of trust has only intensified.

STARR: Absolutely.

BLITZER: A tragedy.

All right. Thanks very much, Barbara.

A long time nuclear adversaries, India and Pakistan, they are talking -- at least on a border -- a daily standoff that's posturing and a whole lot of stomping. We are going there.

And another hot border has cooled at least a bit for now, as North Korea receives unexpected visitors with condolences from its neighbor in the South.

(COMMERCIAL BREAK)

BLITZER: Christmas in Nigeria takes a deadly turn.

Lisa Sylvester is monitoring that and some of the other top stories in THE SITUATION ROOM right now.

What happened?

LISA SYLVESTER, CNN CORRESPONDENT: Hi there, Wolf.

Well, officials in Nigeria now say the death toll has risen to at least 32 in a string of Christmas Day church bombings. That was in the city of Madala. Bomb attacks were reported in churches in five Nigerian cities. In all, up to 39 people are dead and dozens more are wounded. Officials say the Muslim extremist group Boko Haram has claimed responsibility.

And a delegation of South Koreans has traveled from Seoul to North Korea to pay respects to its late leader, Kim Jong-il. The 18- member civilian delegation was led by the widow of former South Korean president, Kim Dae-Jung. Seoul sent condolences and cleared the way for the delegation but says it will not send an official delegation to the communist North.

And the Obama administration has made a drastic change on federal law that has outlawed online gambling up until now. The Justice Department now says the Wire Act of 1961 bars Internet betting on sports events only. So that clears the way for states to allow online games like poker or lotto as a way to boost revenue. The Justice Department opinion was dated September but it wasn't released until Friday.

And it looks like another night in the hospital for Britain's Prince Philip. A royal spokesman says the husband of Queen Elizabeth II is recovering well from a heart procedure. The 90-year-old duke of Edinburgh was taken Friday to the Papworth Hospital where he was treated for a blocked artery and the queen did visit him on Saturday.

Prince Philip is said to be in good spirits and he is eager to go home. Of course, we wish him well.

BLITZER: Yes, we wish him a speedy recovery. The fact that he is 90 and can undergo surgery like that indicates he is in generally good health.

SYLVESTER: Yes, hopefully, he'll get out of the hospital within a few days.

BLITZER: Let's hope. All right. Lisa, good to have you back.

SYLVESTER: Thanks.

BLITZER: Thank you.

Rick Santorum is meeting with an Iowa kingmaker. Dana Bash is standing by to tell us why Congressman Steven King's potential endorsement matters so much going into the caucuses. Well see if the congressman endorses anyone.

Plus, Newt Gingrich couldn't get himself on the ballot in the key primary state of Virginia. What, if anything, does that say about chances to get elected?

We are taking a closer look at that and a whole lot more -- that's coming up in our strategy session.

(COMMERCIAL BREAK)

BLITZER: Rick Santorum may be trailing in the polls but it's not for lack of trying. He is the only candidate to visit all of Iowa's 99 counties. And today, he is out hunting with Congressman Steve King, who's got a reputation as the potential GOP kingmaker in Iowa.

Our senior congressional correspondent Dana Bash has been working the story for us. He got a chance to speak with Congressman King earlier in the day.

These endorsements potentially could be very significant.

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: That's right. And for Congressman King, look, he is a prominent Republican who, of course, has rock solid conservative credentials and his endorsement really is highly coveted. He endorsed Fred Thompson four years ago, jumped on a bus with him and Thompson ended up coming from nowhere in the polls to third in Iowa, which really allowed him to survive the race through South Carolina.

Now, I did talk to Congressman King by phone from Iowa today as he was driving to meet Rick Santorum for this hunting trip. And he told me that he planned to endorse in this race months ago, but just like many Iowa voters, he is having really hard time picking a horse in this field.

(BEGIN AUDIO CLIP)

REP. STEVE KING (R), IOWA: It's different for me than it is for someone who is going to the caucus to put. They can put their vote up and walk away. And, you know, I will -- there are other things that change and living with that decision for the rest of my life. And I'm confident that I get to this conviction that if I get to this conviction that I'm happy do that. But I've said all along, I want my head and my heart to come together and then when that happens, I'll jump with both feet. That just hasn't happened yet.

(END AUDIO CLIP)

BLITZER: Dana, he did have some very interesting things to say about some of the specific candidates.

BASH: That's right. Let's start with Newt Gingrich. King said that he thinks Gingrich is very, very strong when it comes to economic policy. He thinks that he is a great idea man. But he is troubled by Gingrich's position on immigration, a path to legality for some illegal immigrants.

King told me that is not a deal-breaker for him, but it is troubling. Now one person rising in the polls in Iowa King made clear he does not like is his congressional colleague, Ron Paul.

Why is that? Foreign policy. Paul has said that he would call the U.S. military back to the U.S., which King does not like.

(BEGIN VIDEO CLIP)

KING: Of course, the commander in chief has the authority to make that kind of decision. That's troubling to me. I do not want the Chinese knocking at our door as with the Russians, as with anybody else out there with aspirations.

I think that would dramatically upset the power in the world and that something that could go down in history as one of the greatest mistakes this country would have ever made.

(END VIDEO CLIP)

BLITZER: What about candidates who are struggling right now in the polls? What did he have to say about that?

BASH: Well, he likes Rick Santorum obviously. He is hunting with him today. He also very much likes Rick Perry and Michele Bachmann. In fact, Michele Bachmann, I can tell you, is one of Steve King's closest friends in the U.S. Congress.

But King told me that he struggle with all three of those candidates' viability. None really has at this point, the ability to get the nomination and beat Barack Obama. But King made clear that may not stop him from endorsing any of those three.

What he said is, you know what, maybe because this is so tough for him, he would not worry so much about viability this time and pick somebody who he thinks he could help position in Iowa for the next go round, for the next presidential election.

But again, he told me he had planned to endorse. He thought by now would he have endorsed monthSand months ago, but just he hasn't made up his mind. Eight days before, he might not.

BLITZER: Chuck Grassley, the Republican senator, he hasn't endorsed anyone either, has he?

BASH: He has not endorsed and he will not endorse.

BLITZER: And the governor as a Republican, he hasn't endorsed anyone either.

BASH: Correct. Both are very, very Republicans in that state. Both have said that they are going to stay neutral.

BLITZER: All right, Dana, thanks very much.

Let's dig a little bit deeper in our "Strategy Session" right now. Joining us the Democratic strategist, Jonathan Prince, he is joining us from New York, here in Washington, Republican strategist, Terry Holt.

All right, thanks guys very much. We are going to see Rick Santorum next hour. He's hunting with Congressman Steve King. Santorum, he has worked really hard. He did get an endorsement, if you will, from Bob Vander Plaats, a family leader, if you will, in Iowa.

Terry, first to you, is this going to help Santorum come from way back if the polls to emerge second, third, fourth in Iowa?

TERRY HOLT, REPUBLICAN STRATEGIST: I wouldn't count Rick Santorum out in Iowa at all. Twenty years ago, he was running as a no-name candidate in the suburbs of Pittsburgh.

He came out of nowhere as a congressman because of his hard work ethic. Because of his committed conservative values resonate with average people, and wide open is the Iowa race.

We have a majority of people undecided. People have changed their mind a number of times. Rick Santorum has the kind of profile and attitude it takes to surprise people in Iowa and I look for a surprise from Rick Santorum in the first in the nation caucus.

BLITZER: No matter what happens in Iowa, Jonathan, and correct me if I'm wrong because you are well plugged in with a lot of Democrats. They simply assume it is Mitt Romney's if you will, no matter what happens in Iowa, is that right?

JONATHAN PRINCE, DEMOCRATIC STRATEGIST: Well, I think this race still looks a lot like Mitt Romney's race to lose. I don't think, you know, as you look at the ups and downs of this race over the course of the last year, there's been a lot of fluidity.

Especially in Iowa, there is a lot of movement, but Mitt Romney has always stayed at the top or near the top of the pack. It still looks like Mitt Romney's race to lose. You know, something else we will talk about in a minute is Virginia and what happened to the ballot access there is indicative of that. Romney shows up in a suit and tie and that's how you run for president.

BLITZER: Yes, Mitt Romney and Ron Paul, they got on the ballot in Virginia, Terry, but Newt Gingrich, Rick Perry, they tried, but they failed.

What does that say, first of all, about Newt Gingrich's organizational leadership that he couldn't get his name on the ballot in early March, in Virginia where he lived the last 20 years?

HOLT: Well, it says that maybe he didn't look that far ahead. But in terms of organizational leadership, I'm not sure what it says because here is the thing. You can be popular and can you lead in the polls.

But it is a terrible burden to get on the ballot in most states. People don't understand how much of a burden that is. I think one of the challenges for all of these second tier candidates is that once they win a race or two, if they do in early going, how do they leverage that and get on the ballot if it is not too late and a lot of these later states?

We're going to see a lot of scrambling, if this thing opens up, and is someone besides Romney in early states. And ballot access is going to be a key issue for some of these candidates.

BLITZER: But he's been running for at least since the spring. Some would argue he is running for years, thinking about this, Jonathan. What did it say to you he couldn't get 10,000 signatures to be on Virginia's ballot in March?

PRINCE: Look, I certainly agree with Terry that the ballot access is a challenge, but is it is the challenge that someone running for president could build organizations that they can meet. You don't get elected on string and duct tape. This was well known. The new law in Virginia is well known. The common wealth it said, make sure you get 15,000 signatures minimum to make sure you qualify. The hurdle was well known.

And something that all these candidates who are serious about this rate ought to have been able to overcome, you know, we didn't have that ballot access issues in 2004 really on either side.

BLITZER: Hold on. I think Jonathan makes a fair point. Remember four years ago, Barack Obama, community organizer, state senator, a senator for a couple years, he got on all 50 state ballots. He had organization that delivered.

HOLT: It is a key test for a national candidate to be able to get on the ballot. It is a test that doesn't necessarily grab headlines or raise you money.

n some ways it is a real drag on your campaign because you are spending money to do something that you don't see in the immediate benefit for. But I agree completely. If you can't get on the ballot then all of the popularity in the world wouldn't elect you president of the United States.

BLITZER: Will this, Jonathan, convince some caucus goers in Iowa that maybe Newt Gingrich or Rick Perry who couldn't get on the ballot either, that they are not necessarily best qualified to be their candidate?

PRINCE: You know, generally speaking, I would say that I don't think ballot access and other states is a voting issue. Now as we all know caucus goers in Iowa are so famously plugged in and in tune with details that sure, it's possible that there's a couple of caucus goers paying enough attention that they'll care.

Typically though, I mean, I think it is more of a process indicative about the candidates preparedness to run a federal government let alone a national campaign.

BLITZER: I disagree with you on one point. There only about a hundred thousand people showing up for these caucuses in Iowa and they are all very, very well plugged in.

PRINCE: That's what I'm saying. That's my point.

BLITZER: They are watching very closely.

PRINCE: I was saying, anywhere else, I kind of dismiss the idea that ballot access in another state would have impact in the state. In Iowa, they are so plugged in, it could.

BLITZER: I think it potentially could.

PRINCE: Everything can make a difference.

BLITZER: I will speak with Newt Gingrich about this tomorrow. I'll be in Iowa. We will have a chance to review this and a whole bunch of other issues.

Guys, stand by, we have more to discuss. Mitt Romney is about to use his business skills to get people working again.

Just ahead, our own Brian Todd examines a fresh scrutiny of that promise may come back to bite him.

And later, the daily closing of the gate at the India-Pakistan border. Why people come from far and wide to watch this decades old act between nuclear adversaries.

(COMMERCIAL BREAK)

BLITZER: Mitt Romney says if he makes it to the White House, as a business executive he could help turn the economy around. Is he still making money off the misfortune that his old firm may have brought to some others? Our Brian Todd takes a closer look.

(BEGIN VIDEOTAPE)

BRIAN TODD, CNN CORRESPONDENT (voice-over): It is one of his strongest campaign talking points. He will get the jobs back. And as someone who once led a successful investment firm, he says he has the experience to do it.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: In every investment we make was designed to grow that investment, grow that enterprise, ultimately to add jobs and success. That's been my hope and my record.

TODD: But there's fresh scrutiny of Mitt Romney, criticism that at that investment firm, he was involved in large scale layoffs and he is still profiting from that firm's deal with result in layoffs.

According to his financial disclosure form for this year, Romney negotiated a retirement deal from that firm, Bain Capital, when he left the company in 1999.

(on camera): As part of that deal, Romney received an undisclosed share of the firm's profits. Since then, he hasn't had any say in what the firm does, but Romney does still have holdings in Bain Capital that generate income for him.

(voice-over): The disclosure form say Romney made over $3 million in income from transactions made by Bain or its affiliated companies this year. What does Bain do?

DAN PRIMACK, SENIOR EDITOR, FORTUNE MAGAZINE: Bain's primary business is acquiring companies, trying to improve those companies, and then sell that company or take that company public hopefully for a higher value than it originally paid.

That's the essence of its business. Sometimes that means they shrink the company before they going to grow it, pushes when referred of layoffs or streamlining. Sometimes they truly do buy a company and start adding employees in various divisions. TODD: Contacted by CNN, Romney's campaign said Bain Capital had a good track record creating jobs with companies like Staples and Dominos Pizza. Fortune editor, Dan Primack says Bain also drove some companies like medical equipment maker, Dade Industries out of business and people out of work.

When it first made those companies slightly profitable, but then took dividends from them while adding to their debt. In a new interview with "Time" magazine posted on-line, Romney responded to that.

ROMNEY: In any case where I was involved in an investment in a company that was not successful, one would have to feel terrible about someone losing their job.

TODD: It's a record that analysts say Romney will have to defend at every step of his campaign.

(on camera): Does it hurt him politically to talk about the economy and building jobs when his work for the company actually resulted in a lot of layoffs, even with successful ventures?

RON BROWNSTEIN, CNN SENIOR POLITICAL ANALYST: Nothing will be more important to Mitt Romney if he is the Republican nominee than being able to defend his record at Bain.

TODD (voice-over): Ron Brownstein says Romney has dealt with this before in 1994 when he ran for Senate against Ted Kennedy. Brownstein says Kennedy attacked Romney with ads slamming Romney's record at Bain Capital, the job losses, bankruptcies. He says Romney didn't handle that well and it cost him that election. Brian Todd, CNN, Washington.

(END VIDEOTAPE)

BLITZER: Let's dig a little bit deeper now with Democratic strategist, Jonathan Prince and Republican strategist, Terry Holt. Jonathan, Romney's work at Bain, is it an asset or liability for him, politically speaking?

PRINCE: Well, I think Ron kind of nailed it on the head there. I think it really depends how he is capable of portraying it and how President Obama and his campaign portrays it as well.

I think if he is out there trying to defend his record as a maker of big investments, and in a way to cost lots of jobs, while at the same time, he is fighting against tax cuts on the very wealthiest -- sorry, tax hikes on the very wealthiest.

Trying to make sure millionaires get more tax hikes, people see an alignment of kind of personal interest and policies that can be damaging for him. If he's able to get out there and convey that he is a job creator that will probably be an asset.

BLITZER: How should he handle it, Terry, going forward?

HOLT: I think he is handling it well so far. You know, in capitalism sometimes you win and sometimes you lose. He's stated that the objectives of his investments were to grow the business to make it more successful, you're not always going to be able to do that.

He's demonstrated that he is a compassionate person. He's talked about how much it would hurt to be in a position of making people lose their jobs. I think that's really part of it. It is the tone in which you deal with it. The sensitivity you display.

And ultimately, he doesn't come across as an Ebenezer Scrooge. He comes across as a guy with a clear plan. I like this candidate because he is smooth, he is steady. He doesn't get rattled too easily. That is how you weather the storm of these political attacks.

BLITZER: Take a look at this, Jonathan. This is a new ad, Romney campaign, has just put forward. You will see it is very positive, very nice, doesn't go after Republicans. It almost seems like a general election campaign commercial. Watch a little of it.

(BEGIN VIDEO CLIP)

ROMNEY: Do something to government. I'm going it make it simpler and smaller and smarter. Getting rid of programs, turning programs back it states and finally, making the government itself more efficient.

I'm going to get rid of Obama care. It is a moral imperative for America to stop spending more money than we take in. It is killing jobs and keeping kids from the prospects they deserve.

The experience of balancing budgets is desperately needed in Washington and I will take it there. I'm Mitt Romney, and I approve this message.

(END VIDEO CLIP)

BLITZER: Is he already running as if he is the nominee, Jonathan?

PRINCE: I think that is a smart ad strategically in terms of the early nominating contests because you have Gingrich now throwing bombs. You know, and Romney is in a position where he is still near the top.

It is a good idea to get out there and just, you know, try to capitalize on the favorability that he's got. Build them up a little bit, set his sights on the president in terms of demonstrating caucus goers and New Hampshire primary voters.

What kind of candidate he can be in a general election and gave his campaign a little lift in final days. I think this it is smart.

BLITZER: You have that luxury, Terry, because there are pro-Romney super pacs out there right now that are slaughtering Newt Gingrich, if you will. So he can take the high road with his own campaign and let the super pacs do the dirty work, if you will.

HOLT: Exactly. This is a classic, closing argument. It's extremely effective and it plays to two or three things. First of all, that people want to vote for something. They don't want to vote against something unless maybe the general election and it is President Obama on the ballot.

But they also want to see that somebody has a vision for the future. And that he can become the general election candidates and part of Romney's message in the closing days of Iowa is ultimately, I'm your nominee. And it's going to work. People will respond to that ad, I think.

BLITZER: Yes, he has good organization. He's got money. He is doing well right now.

PRINCE: And really the story line of this campaign all along has preconditions of believing that.

BLITZER: We will see what happens. All right, thanks very much. Jonathan Prince, Terry Hold, good discussion. I'm heading out to Iowa. I'll be speaking with Republican presidential candidate Mitt Romney, his wife, Ann, their son, Josh. That's coming up this Wednesday.

We'll be reporting from Iowa, December 28th right here on THE SITUATION ROOM.

The country ruled for more than 30 years is in upheaval now with nowhere to go. The president of Yemen is seeking admission into the United States. Will President Obama allow him to come in?

And later, forget about putting a foot in your mouth. President Obama got a little different taste in Hawaii.

(COMMERCIAL BREAK)

BLITZER: Now the Obama administration facing a very delicate diplomatic dilemma. Whether or not to allow Yemen's controversial president into the United States for what's being described as medical treatment.

Our foreign affairs correspondent, Jill Dougherty is joining us from the State Department. All right, Jill, what's the background here?

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: Well, Wolf, the administration says that it is considering this request by the president to come to the United States.

But the real question is whether or not this promise to leave Yemen is actually another way for Saleh to try it stay in power.

(BEGIN VIDEOTAPE)

DOUGHERTY (voice-over): After months of promising to step down then back tracking, Yemen's president says he wants it come to the U.S. for a while.

PRESIDENT ALI ABDULLAH SALEH, YEMEN: I will go to the United States, not for treatment because I'm fine, but to get away from attention, cameras and allow the unity government to prepare properly for elections. I want to be away from the elections because whether it fails or succeed, people may blame the president.

DOUGHERTY: But the Obama administration is weary of giving a visa to a dictator. A senior administration official says the only way Saleh would get one is for legitimate medical treatment.

Saleh was severely burned in a June 3rd attack. And an Arab diplomat tells CNN he may need specialized surgery. But for Saleh's political opposition, it feels like deja vu. One more attempt by Yemen's strong armed leader of 33 years to stay in power.

This ignited a national uprising in a bloody crackdown. In June, after the assassination attempt, Saleh fled to Saudi Arabia for treatment, only to return in September fuelling even more violence.

Monday, pro-Saleh forces killed nine demonstrators. President Barack Obama's anti-terror adviser, John Brennan phoned Yemen's vice president to urge maximum restraint and to remind him of the peace deal including Saleh stepping down and new presidential elections in February.

(END VIDEOTAPE)

DOUGHERTY: All of this, Wolf, is a reminder of something uncomfortable can happened 30 years ago and that's when the Shaw of Iran requested medical care here in the United States. We all remember what happened after that, the takeover of the embassy in Tehran.

BLITZER: We remember it vividly. All right, Jill, thanks very much.

Here's a question I will be asking for the next 10 months, will President Obama win re-election? We will explain why you might potentially make lots of money if you answer that question correctly.

Plus, a bizarre border face off between two nuclear rivals. Stand by. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Here is a look at this hour's "Hot Shots." In the Philippines, boys play on bridge destroyed by flooding from a catastrophic tropical storm that hit last week.

In Prague, in the Czech Republic, swimmers hop on to a river for a traditional swim the day after Christmas. In England, hounds lead the way for an annual Boxing Day hunt.

And an Indian control Kashmir, check it out, a fisherman smokes while battling sub zero temperatures during cold week. "Hot Shots," pictures coming in from around the world.

Tension between nuclear neighbors, India and Pakistan mark everyday with a gate closing ceremony at the border. It is all part -- dance all part cluster and as our Reza Sayah found, it's a big tourist attraction.

(BEGIN VIDEOTAPE)

REZA SAYAH, CNN INTERNATIONAL CORRESPONDENT (voice-over): Who's tougher? Who's stronger? Who's got more swagger? This is the daily showdown between nuclear neighbors Pakistan and India at the border crossing just outside of Lahor.

This war dance is a symbol of six decades of bad blood and mistrust sparked by a violent separation in 1947 after British rule and fuelled by three wars, a nuclear standoff, and a seemingly endless barrage of accusations on both sides.

Ever since 1959, the long time rivals border guards have met here at sunset and faced off in a flag lowering ceremony.

UNIDENTIFIED MALE: And it is just about spirit and patriotism.

SAYAH: Each angry stomp, each glare, another dagger in this battle of bravado.

(on camera): If you want to know what Pakistan's off then bitter rivalry feels like, this is where you come.

(voice-over): The ceremony starts with a furious 50-yard march to the border gates. Then comes the stair downs followed by the synchronized lowering of the flags. This is one of the most popular tourist attractions.

Thousands line the stands on each side of the border, the stronger the scowl, the louder the roar. Few electrify the Pakistani crowds more than Sergeant Tarek Mahmud at 6'6 tall, 240 pounds. No border guard here is bigger.

He doesn't speak on camera, but makes clear that his country is not to be messed with.

(on camera): But over the past year, there's been some developments and some signs that show maybe, just maybe, this icy relationship is gone.

(voice-over): Pakistan and India are meeting again. Leaders talking peace, not point willing fingers. And work is under way to expand trade. Despite signs of improved relations, the border gates are still slammed shut after every ceremony, raising half century of mistrust, takes time, analysts say until then conflict not peace defines Pakistan-India relations. Reza Sayah, CNN, Wagah, Pakistan.

(END VIDEOTAPE)

BLITZER: I have been to that the ceremony. I was there back in Wagah in 1999. That same ceremony going on all of these years. Additional note, by the way, earlier today and all day tomorrow, Pakistani and Indian officials are holding bilateral meetings in Islamabad on the use of nuclear weapons. It's part of a new phase of discussions between the rivals.