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Rep. Mike Rogers Interview; 190 Arrested In Child Porn Raids; E. Coli Sickens 14 in Six States; Intelligence Leaks; Violence in Syria; Jeopardy of E-Mails; Young Marine Survives; Bio-Fuels; Lucky Dog

Aired June 08, 2012 - 17:00   ET

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

WOLF BLITZER, CNN ANCHOR: And you're in THE SITUATION ROOM.

Happening now...

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The notion that my White House would purposely release classified national security information is offensive.

(END VIDEO CLIP)

BLITZER: An angry President Obama comes out swinging, for the first time slamming allegations his administration authorized leaks for personal gain.

Plus, Syrians risking their lives to show U.N. observers the scene of a vicious massacre they say left almost 80 people dead.

And a nomination for one of the country's most sensitive government positions now in questions over sordid e-mail, allegedly with a prominent reporter.

We want to welcome our viewers in the United States and around the world.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

A fiery President Obama putting anyone on notice, his motives are subject to swift rebuke from the president. He told a news conference today, he has zero tolerance for leaks of classified information and that those responsible would suffer consequences.

This after sensitive intelligence information recently turned up in books and newspaper articles, prompting Republican Senator John McCain to accuse the White House of authorizing the leaks for political gain.

Our Congressional correspondent, Kate Bolduan, is here in THE SITUATION ROOM.

You've been following this story. And he came out swinging today.

KATE BOLDUAN, CNN CORRESPONDENT: He came out swinging today. You heard -- you just played that sound earlier. "Offensive" is one of the words that the president used today, strong push back from President Obama on the brewing controversy over who is behind a string of intelligence leaks in recent weeks.

As -- as Wolf said, Senator John McCain is calling the leaks politically motivated, to make President Obama look good in an election year.

Well, President Obama fired back today, calling the accusation his White House would purposely leak this information offensive and wrong.

(BEGIN VIDEO CLIP)

OBAMA: And we're dealing with issues that can touch on the safety and security of the American people, our families or our military personnel or our allies. And so we don't play with that. And it is a source of consistent frustration, not just for my administration, but for previous administrations, when this stuff happens. And we will continue to let everybody know, in government, or after they leave government, that they have certain obligations that they should carry out.

But as I think has been indicated from these articles, whether or not the information they've received is true, the writers of these articles have all stated unequivocally that they didn't come from this White House.

And that's not how we operate.

(END VIDEO CLIP)

BOLDUAN: Senator McCain, though, is not satisfied by the president's remarks, releasing a statement late today accusing the president now of trying to distance himself and his administration from the leaks and saying, quote, "What the president did not unequivocally say today is that none of the classified or highly sensitive information recently leaked to the media came from the White House. I continue to call on the president to immediately appoint a special counsel to fully investigate and, where necessary, prosecute these gravely serious breaches of our national security."

That's unlikely to happen any time soon, even though McCain, as well as the chairman of the House Intelligence Committee, Mike Rogers, they are both pushing for outside counsel to be brought in.

Other key Democrats and Republicans, as you know, Wolf, they are satisfied, at least for now, that the FBI is investigating the matter.

BLITZER: The FBI can do the job. The Justice Department can do the job and not a special counsel would necessarily be put into place.

BOLDUAN: As of now, they -- they -- a lot of them are saying it's too soon to say, we need to let it run its course in terms of the FBI investigation.

But as you -- as we've seen so far, day to day, we're basically learning something new on this. This just continues to develop.

BLITZER: Kate Bolduan, thanks very much.

Let's dig a little bit deeper into this story right now with the chairman of the House Select Committee on Intelligence, Republican Mike Rogers of Michigan, himself a former FBI agent.

So you -- you do think, though, that they need a special counsel, a Ken Starr, if you will, to -- to investigate, independently, the Justice Department and the White House?

Is that what you're saying, Mr. Chairman?

REP. MIKE ROGERS (R-MI), CHAIRMAN, HOUSE INTELLIGENCE COMMITTEE: Well, I -- just to make the record clear, I have not pushed for a special counsel nor have I called for a special counsel. I have raised the question and I have done this in conversations with the attorney general, with the FBI director and others just to make sure that we can do this in a fair and balanced and non-partisan way.

And -- and, you know, it took a lot to have all four of the Republican and Democrat leaders on the two Intelligence Committees from the Senate and the House together to come out -- and think of the threshold that must have been crossed for all of us to stand at the microphone and say this is as serious a leak problem as we have ever seen. That took a lot.

So I want to make sure, given the -- the senior level of -- of people who had to have this classified material, that we have the ability to do -- do the investigation in a fair and non-partial way and complete way, complete meaning, Wolf, that can you talk to the senior leadership of DOD or CIA or the National Security Council and -- without being unfettered and without having anyone who had access to the information in that chain of command?

That's what I'm trying to determine.

So I haven't called for it yet. Senator Feinstein and I have had some good conversations. We just want to find the right forum so that you can get that unbiased investigation. It's that important.

BLITZER: Yes, like you, she -- she's irate, the chair of the Senate Intelligence Committee, your counterpart in the Senate. She was here in -- in THE SITUATION ROOM earlier in the week. She's -- unlike John McCain, she's -- she's not ready to call for a special counsel, or at least not yet, and she's certainly not ready to suggest, as John McCain does, that the president and his advisers are deliberately authorizing these leaks for political purposes to help the president, for example, get reelected.

How far are you on -- on this specific accusation, that there's a political motive for these leaks? ROGERS: Well, as chairman -- and -- and I think you know this, what I have -- I have not gone down that route. I think we need to keep this in the realm, as an old FBI guy, you never want to come to a conclusion before you've asked the first question. That's always a dangerous place to be for the investigative side. And that's where I'm at.

And so I want the answers. And I think we should try to keep this as non-partisan as we possibly can, because this is as serious a national security breach as I think I've ever seen in my time, over a pattern of years. And the -- and that pattern has grown more emboldened.

And I will tell you, it is having real consequences today. We know that sources, lives may be, in fact, in jeopardy. And we know that operations that may be underway are going to have to be reconfigured and done other ways, again, over the course of these years, this very sensitive information being leaked out and talked about publicly. Pretty damaging stuff.

So we've got to get to the bottom of it. And I will tell you -- and the only reason I even looked at the special counsel statute was because that's the way they did it on Valerie Plame. It was a very sensitive issue. A -- an officer of the CIA's name was released. Pretty damning stuff, dangerous stuff. A special counsel was believed to be the best way to try to get at that -- the cause of that leak. Somebody went to jail because of it -- and, I argue, rightly so.

This makes the Valerie Plame case look tiny in comparison, by the level of damage done to our national security.

So I just have been asking the question, can the people who are in the chain of command of this investigation, who, by the way, many of who are involved, who had this information, can they do this investigation in a fair and unbiased way?

I -- I don't -- I haven't come to the conclusion yet, but I'm asking a lot of questions.

BLITZER: And the Valerie Plame, the CIA officer, there was a special counsel, Patrick Fitzgerald, the U.S. attorney in Chicago. He investigated. I don't think anyone went to jail. "Scooter" Libby, the vice president's chief of staff, he was found guilty of -- of lying, if you will. But he -- he never went to jail.

Is there somebody else I'm missing who went to jail in that case?

ROGERS: "Scooter" Libby was not pardoned. As a matter of, there was an argument that he should be pardoned but he was not.

BLITZER: He -- he wasn't pardoned, but he -- his -- his sentence was -- was -- was -- was not -- he -- the president said that he didn't have to go to jail or anything like that.

ROGERS: Well, I'm -- my point being that somebody was...

BLITZER: It was commuted, the sentence... ROGERS: -- found guilty and somebody was punished...

BLITZER: -- the sentence was commuted.

ROGERS: Yes. Well, I mean somebody was punished for the crime. And I argue, if you think that was serious enough to have a special counsel, maybe -- and I don't -- I don't know. I mean maybe this isn't -- doesn't rise to the level of special counsel because we can do it.

I just think that we'd be remiss if we don't ask the question, Wolf, that, hey, listen, is that the right way to do it?

I'm not sure it is. But I will tell you this. We know that over a course of time, some of the most damaging national security leaks have happened. And it has no public interest, by the way. This isn't some whistleblowing case that would give some credibility to the papers to say, well, we thought we were doing America a favor.

You did America no favor. And whoever believed that they could leak this, for whatever purpose, committed a crime, a serious crime. And I'm just asking a question, how do we determine who it was to take care of that problem?

And then how do we move forward?

And that's what Senator Feinstein and I have been talking about.

And, by the way, this isn't Mike Rogers, Republican, saying all this. This is Republicans and Democrats from both of the Intelligence Committees saying this is as huge a problem as we have seen. We'd better do something about it.

BLITZER: Yes. And we even heard from the president today himself, saying lives potentially could be at stake.

ROGERS: Yes.

BLITZER: Certainly sources and methods, this is obviously very serious stuff.

Mr. Chairman, thanks for coming in.

ROGERS: Hey, thanks, Wolf.

I really appreciate it.

BLITZER: The president didn't just play defense on intelligence leaks, he also attempted to get out in front of the struggling economy. Just ahead, why it could be the perfect storm threatening, though, his presidency.

And the death toll climbing in Syria right now, as demonstrators took to the streets in droves.

And he's tapped to be the next United States ambassador to Iraq, but some alleged racy e-mail with a prominent reporter may put his nomination on hold.

(COMMERCIAL BREAK)

BLITZER: President Obama didn't just play defense on the intelligent leaks -- intelligence leaks today, he also struggled to get ahead of a dismal jobs outlook and a European debt crisis threatening to hurt the U.S. economy even more.

But did it do more political harm than good?

It's all raising serious questions about whether he can turn it all around before it's too late as far as his reelection is concerned.

Let's bring in our -- our White House correspondent, Dan Lothian.

He's working the story for us -- Dan.

DAN LOTHIAN, CNN CORRESPONDENT: Well, Wolf, you know, you heard the president today trying to point to some of the positives in this struggling economy. But he ran into a messaging problem when he said that the private sector is doing fine. He later had to clarify those remarks. But Republicans pounced, even releasing a quick Web video.

It is all about the economy. And computer models indicate that it could be the president's greatest opponent.

(BEGIN VIDEOTAPE)

LOTHIAN (voice-over): The price at the pump is dropping, but still high. The stock market remains volatile. Unemployment ticked up again. And the Eurozone crisis lingers.

It's the perfect storm that threatens to sink the president's prospects of a second term.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The hole we have to fill is much deeper, and the global aftershocks are much greater.

LOTHIAN (voice-over): This computer model created by George Washington University associate political science professor, John Sides, is one indicator of the economic pressure on the campaign.

PROF. JOHN SIDES, GEORGE WASHINGTON UNIVERSITY: The forecasting models suggest a very close race with maybe a slight edge to Obama, but not necessarily a large edge. Nothing he can be very confident in.

LOTHIAN: Here's how Professor Sides does it. He uses approval rating, economic condition, and consumer confidence and compares these factors to past presidential races.

SIDES: Carter loses to Reagan in 1980.

LOTHIAN: What his models show? That President Obama is facing similar conditions to what former president Jimmy Carter faced when he lost to President Ronald Reagan in 1980 with one exception. SIDES: Both were facing difficult economies. Carter was clearly much worse, but he was also, at the same time, much less popular than Obama, especially among his own party.

LOTHIAN: And one other indicator he's watching, the headlines that scream "doom and gloom."

SIDES: So, in some sense, the best thing the president can hope for is not just a good economy, but good economic headlines.

LOTHIAN: Voters frustrated with the slow recovery don't have faith that either candidate can fix the problem according to a CNN/ORC poll, but a slight majority believes former Massachusetts governor, Mitt Romney, has the right kind of business experience for the task, despite attacks on his record at private equity firm, Bain Capital.

UNIDENTIFIED MALE: If he's going to run the country the way he ran our business, I wouldn't want him there. He would be so out of touch with the average person.

LOTHIAN: Romney hits back with the struggling economy, accusing the president of not only failing, but playing the blame game.

MITT ROMNEY, (R) PRESIDENTIAL CANDIDATE: And the president's message in all this is, have you heard his campaign slogan? Forward. Forward. Forward over a cliff.

(LAUGHTER)

ROMNEY: And so, he's looking around. He's trying to find someone to blame.

(END VIDEOTAPE)

LOTHIAN (on-camera): Now, there are several experts out there who use various economic indicators in order to predict the outcome of presidential races. Many are right spot on. This is the first time, first presidential race that Professor Sides has crunched the numbers, and they are in line with many of the current polls that are out there.

Now, one other point, Wolf, today in the president coming out to the briefing room. He wanted to, again, put pressure on Congress to take action on his to-do list, but Republicans countered by talking about the more than 30 bills that are currently in the Senate. They're passed by the House that they say will create jobs.

WOLF BLITZER, CNN ANCHOR: Dan Lothian, thanks very much.

Let's talk a little bit about this and more with the "Time" magazine managing editor, Rick Stangel. Let me show the cover of "Time" in a moment. Oh, there it is right there. "The Decider" about Anthony Kennedy. Let me get to that in a moment, but let me pick your brain on what we just heard.

This has been a pretty bad week for the president right now. You know Mark Helper (ph) and he writes in "Time" magazine. He said this, "with five months until Election Day, "Barack Obama faces a grim new reality. Republicans now believe Mitt Romney can win, and Democrats believe Obama can lose." Is it a whole new ballgame out there right now, Rick?

RICK STENGEL, TIME MANAGING EDITOR: I don't know about that, wolf. It certainly hasn't been a sterling week for the president to use the term Bill Clinton used to describe Mitt Romney's business career. There's just so much out there that looks so ominous, including what's happening in Europe, in Greece, and Spain.

The jobs figures are anemic. GDP growth is poor, the president's remark today which he then recounted about the private sector doing fine. All of that -- all of those things don't help him. And he's running against a structural ship.

I mean, what we've seen in terms of looking at the figures from previous races because it's very hard for even a sitting president to win when unemployment is this high, when GDP growth is this slow. So, he has a lot of headwinds to use the phrase often uses.

BLITZER: And for the first time now, the Romney campaign last month raising more money than the Obama campaign, and we know the Republican Super PACs are going to raise a lot more money than the pro-Obama Super PACs. The bad news potentially could get even worse. Let me refer to your cover story in the new issue of "Time" magazine on "The Decider," Justice Kennedy.

A lot of people think when it comes to healthcare, the healthcare law within the next few weeks, this month, we will know whether or not the Supreme Court rules it is constitutional or unconstitutional. Give us a sense of what you're seeing there.

STENGEL: Well, it's a wonderful story, and one of the things that's in the story that we explain is that other justices on the court aren't even sure how Anthony Kennedy will vote on these kinds of things. You know, it's a 4-4 split. He is the decider in the sense that he's often a swing vote in oral arguments before the court about the Affordable Care Act, what everybody calls Obamacare.

He had questions on both sides, one doing -- whether it's a violation of the commerce clause, but also saying that the government can impose a tax on people. So, it's not clear what will happen. And it's also not clear even if the law is declared unconstitutional who that hurts and who that helps.

There are those who say that, suddenly, the Republicans will have to come up with a policy regarding healthcare if Obamacare is overruled.

BLITZER: It will be a huge, though, embarrassment to the president of the administration if what they worked so hard to achieve is deemed unconstitutional by the U.S. Supreme Court. The cover story, "The Decider" from gay marriage to Obamacare, Justice Anthony Kennedy is the decider.

Rick Stengel is the managing editor of "Time." Thanks, Rick, very much.

STENGEL: Thank you, Wolf.

BLITZER: Hopes of a Triple Crown winner are dashed once more before the third race is even run. I'll have Another, that's the name of the horse, will race no more. We're going to tell you why.

And the Super Bowl champion, New York Giants, visiting the White House. They told Washington it could benefit from their winning strategy.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Playing in harmony for each other for the good of everyone. Wouldn't it be nice if Congress operated the same way?

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BLITZER: The feds announced a big sweep of child porn. Mary Snow is monitoring that, also some of the other top stories in the SITUATION ROOM. What's the latest, Mary?

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, 190 people arrested and 18 victims rescued. U.S. Immigration and Customs Enforcement issued a release today hailing that result from a month-long nationwide operation targeting child pornographers. ICE says "Operation Ryan" was a joint venture with Homeland Security.

It targeted everything from possession to video production of child pornography. ICE calls it a warning to people who think they can use the internet to exploit children.

Federal health officials have their eyes on a strain of E. coli. The Centers for Disease Control and Prevention says 14 people in six states have been sickened all by the same strain of the bacteria. The CDC says onsets occurred from April 15th to May 12th. It reported cases in Florida, Alabama, Georgia, Tennessee, California, and Louisiana where one person died.

No Triple Crown winner this year. Hot contender, I'll have Another, has been scratched from tomorrow's Bellmont Stakes. His team has, in fact, unanimously decided to retire him from racing.

Trainer, Doug O'Neal (ph), said today that the Kentucky Derby and Preakness winner is showing the beginnings of tendinitis in his left foreleg, a development he calls freakish. O'Neal says they're taking no chances.

And President Obama today surrounded himself with winners. He welcomed the New York Giants to the White House to honor the team members and their Super Bowl victory this year. And he got a tip from the team about gearing up for big contest.

(BEGIN VIDEO CLIP)

OBAMA: The night before the Super Bowl, they watched a highlight reel set to Justin Tuck's good luck song, "In the Air Tonight." I don't about, you know, a little Phil Collins before a big game. I may try that before a big meeting with Congress.

(END VIDEO CLIP)

SNOW: Now, the giants presented Mr. Obama with a customary team jersey commemorating their win and their White House visit. And, Wolf, I hope the Giants repeat their win again this year.

BLITZER: Well, maybe you do, but a lot of other folks don't necessarily hope so, but you know what, good luck. Thanks, Mary.

United Nations observers get their first look at the aftermath of the most recent Syrian massacre. Meantime, dozens more dead. Can a solution to the carnage in Syria be reached?

And she's an international journalist, married to a nominee for a sensitive U.S. diplomatic post, now suggested passed e-mail allegedly written between them are emerging, putting the nomination in jeopardy.

(COMMERCIAL BREAK)

BLITZER: The bloodbath worsens in Syria. Another 55 people reportedly killed just today as the U.N. Special Envoy Kofi Annan and Secretary of State Hillary Clinton meet to determine what the international community can do to get the violence to stop. It all comes on the heels of this week's reported massacre. U.N. observers got their first glimpse of the aftermath earlier today. Arwa Damon is monitoring what's going on in Syria. She is joining us now from Beirut. Arwa, on this Friday yet more deaths in Syria, the slaughter doesn't seem to stop. What's the latest?

ARWA DAMON, CNN INTERNATIONAL CORRESPONDENT: It doesn't stop, Wolf, but I think what's incredible is that the demonstrations don't stop either, and as we've been seeing on every single Friday since this uprising began, people continuing to take to the streets throughout the entire country, even though in numerous locations they were still being targeted by Syrian security forces and the of course the shelling continues as well in some parts of Syria like the flashpoint (ph) city of Homs. Very dramatic images emerging from there showing smoke billowing and you can hear the massive explosions caused by -- the sound of the explosion caused by those incoming artillery shells. Also in the capital of Damascus, the very center of it, some pretty intense clashes between members of the Free Syrian Army and government forces. So most certainly the cycle that we have been seeing, a tragic cycle does still continue there -- Wolf.

BLITZER: Kofi Annan, the former U.N. secretary-general, now the special envoy in Syria, when you hear from the opposition to the regime of President Bashar Al-Assad, do they think he has any credibility right now? Do they think he's accomplishing anything?

DAMON: No, they don't, Wolf, and they never really were holding out all that much hope that his six-point peace plan was going to work either. For them a lot of what was said when Kofi Annan was briefing the United Nations, they already knew it. They already expected that that was going to take place that the Syrian government was basically not going to adhere to its pledges when it came to the six-point peace plan, and they also believe that it is pretty much stating the obvious when Mr. Annan and others say that if there is not a change in the course of action in Syria there are only going to be more massacres, more sectarian killings, more violence and potentially, of course, a full-on civil war and that is why it is so critical that the global community unite when it comes to finding a solution.

BLITZER: I'm not holding my breath. Unfortunately it looks like the Chinese and the Russians, permanent numbers of the U.N. Security Council still, still not onboard. Arwa thanks very much. We'll stay in close touch.

All right let's continue the conversation right now with a Mideast Fouad Ajami, he's a senior fellow at the Hoover Institution. He's also the author of the important new book, "The Syrian Rebellion". Fouad let me pick up on that last point, any chance the Russians and the Chinese will join the rest of the international community if the U.N. Security Council authorizes a resolution that would take some action, serious action in Syria to stop the slaughter?

FOUAD AJAMI, AUTHOR, "THE SYRIAN REBELLION": You know, Wolf, there's a very short answer, none whatsoever. The idea that we would go and lie on the sweet mercy of Vladimir Putin is laughable. The Russians and the Chinese have declared themselves and they have said it over and over again, they have vetoed one resolution after another. They are committed to the regime, the Bashar regime, particularly in the case of the Russians. I think we go to them; the Obama administration goes to the Russians and the Chinese in order to run out more time and to simply just run out the clock.

BLITZER: Well why did they agree to allow a U.N. Security Council resolution to be passed as far as Libya and Moammar Gadhafi is concerned, but they're refusing to do so as far as Syria and Bashar Al-Assad is concerned.

AJAMI: Well Wolf, there you have it. In fact the Security Council resolution passed over Libya became a kind of alibi for the Russians and the Chinese. It became the proof positive that you can't trust NATO with any resolution that we would use that resolution, whatever resolution, even water-down resolution in order to overthrow the Bashar regime. I think the game of the United Nations has no merit whatsoever and I think what's going on in this YouTube war, which we know, we can see it every day and I think you have done the same as I have.

Go, let our -- let our audience go and take a look at the YouTube that is coming out in Syria. Look at the children who have become the target of this war and look at the killings, and in fact, all kind of things, gruesome things are happening in Syria. Now the Allawis (ph) are killing these villagers whether it's in (INAUDIBLE) and then they're taking their bodies as trophies to their own villagers, we are there and I think we are in the midst of a sectarian war. BLITZER: When I interviewed the former president, Bill Clinton, yesterday in Chicago, he said there are significant differences between Libya and Syria. Among other things he said the opposition in Libya was very well organized unlike the opposition in Syria and then he made this point. Listen.

(BEGIN VIDEO CLIP)

BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: This is not like Libya where there are vast stretches of land you could bomb opposition forces without hurting a lot of civilians.

(END VIDEO CLIP)

BLITZER: What do you make -- what do you make of that argument that these are different situations and as a result the U.S. militarily should stay away from Syria.

AJAMI: You know Wolf I want to be respectful to a former president. In fact these arguments could have been used against his own campaigns, both in Bosnia in 1995 and particularly in Kosovo in 1999. We pummeled (ph) Belgrade for something like 11 weeks. We had 30,000 sorties and we finally broke Milosevic and to have a former president utter these kinds of statements, he's just covering up for the Obama administration and he's covering up for his wife.

He has gotten in trouble with President Obama because he's sort of been off message and this is just a service to the Obama administration. It has no intellectual or political merit and let's remember one thing. All of the things which are now being said about Syria were also said about Libya. The opposition was divided. We don't know where they were. They're penetrated by Islamists. It's (INAUDIBLE) a great power wants to do things it can do it when it wants, alibis, there are all kinds of alibis.

BLITZER: You heard Arwa just report that Syria seems to be on the verge of an all-out civil war. I'm not exactly sure how much worse it can get, but I assume it could get a whole lot worse. What do you make of that?

AJAMI: You know Wolf we are already in a civil war in Syria and we are already in a sectarian war. The most interesting thing about the recent massacres, both in (INAUDIBLE) is that the killing was done not by the (INAUDIBLE) not by the Special Forces, not by the Army, but, in fact, villagers. Allawi (ph) villagers came and converged on these poor villagers, the Sunni (ph) villagers and massacred them. So we have it. I mean it's just we are in the middle of a civil war. And we keep saying oh you know we want to avoid a civil war. We are in the middle of a civil war.

BLITZER: Fouad Ajami is the author of the brand-new book "The Syrian Rebellion". It's a powerful and important read. Thanks very much Fouad for joining us.

AJAMI: Thank you, Wolf. BLITZER: He is tapped to become the next United States ambassador to Iraq, but now some allegedly racy e-mail with a prominent reporter may stand in the way. And it costs about $4 a gallon for gas, so why is the Navy spending $26 a gallon to fuel its fighter jets? You're going to find out. That's coming up next.

(COMMERCIAL BREAK)

BLITZER: A nominee for a key post at the U.S. Diplomatic Corps could see his ambitions dashed. Brett McGurk (ph) is being considered to head the United States mission in Iraq, but e-mail exchanges he allegedly had years ago with a journalist who now happens to be his wife could derail his candidacy. CNN's Brian Todd has been investigating this story for us. What's in these e-mails? What's going on?

BRIAN TODD, CNN CORRESPONDENT: Well some suggestive phrases in there, Wolf, but what's really raising concerns on Capitol Hill is the implication that Brett McGurk (ph) may have given too much access to this reporter who he was romantically involved with.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Are you really urging the Iraqis to do this?

TODD (voice-over): He's tapped for one of the most sensitive positions in the U.S. government, America's ambassador to Iraq, but Republican Senate sources tell CNN there are concerns among a number of senators on the Foreign Relations Committee over the nomination of Brett McGurk (ph) to that post. Their concerns stem from leaked e- mails from 2008 between McGurk (ph) and "Wall Street Journal" reporter Gina Chang (ph), both at the time were in Baghdad.

McGurk (ph) was a top U.S. negotiator on the status of American forces in Iraq. In June of 2008 he apparently writes to Chang, "thanks again for the dinner conversation. Please let me know when you might want to get together. I'll tell you what I know if you can teach me something about cars." The same day he writes to her "if treated to many glasses of wine, you could be the chosen vultures." The e-mails raise questions in Congress about McGurk's (ph) judgment. While they don't reveal significant details on negotiations --

HOWARD KURTZ, CNN'S RELIABLE SOURCES: It is hard to avoid the impression from these e-mails that sensitive information was leaked in the context of a romantic relationship at a time when this now candidate to be ambassador to Iraq was engaged in extraordinarily sensitive negotiations.

TODD: The communications seemingly got more suggestive later. Another apparent e-mail from McGurk (ph) to Chang (ph), "I had a good day with the Iraqis, the best yet. Can't tell you about it, of course, but you should definitely stay past Sunday."

She writes back. "Stop being such a tease. This is like a journalist's version of (blank), a term for sexual frustration." McGurk (ph) writes back "Well it's only fair since I had a very real case of (blank) last night. I think they're still blue." "Poor baby, she writes back. Well you can come by here afterwards."

McGurk had married another woman in 2006. It's not clear whether they divorced before or after his e-mail exchanges with Gina Chang (ph), but McGurk and Chang (ph) subsequently married. She was behind him this week during a Senate hearing on his nomination when the e-mails were not discussed.

BRETT MCGURK, NOMINEE, U.S. AMBASSADOR TO IRAQ: My eyes are wide open to the recent challenges ahead.

TODD: The e-mails were posted anonymously this week on the website "Flickr". CNN could not verify their authenticity, but a State Department spokeswoman said there are e-mails quote "out there for everyone to see." The spokeswoman said officials at State are standing by McGurk, saying he's uniquely qualified to serve as ambassador. They say he's been fully vetted.

(END VIDEOTAPE)

TODD: But the concerns on Capitol Hill are building up. An aide to Republican Senator James Inhofe, a key member of the Foreign Relations Committee told us that until his concerns over these issues are resolved Inhofe will not meet with Brett McGurk as he usually does with nominees. Despite repeated attempts we were not able to reach Brett McGurk or Gina Chang (ph) for comment. A spokeswoman for "The Wall Street Journal's" parent company says they are looking into the matter regarding Gina Chung (ph) -- Wolf.

BLITZER: What's her status with "The Wall Street Journal"?

TODD: She is still with the paper. She works with their money and investing unit. She had asked for a leave of absence in March when it became apparent that Brett McGurk would be nominated for the ambassadorship. Her leave of absence is scheduled to begin this summer, but still she's still a viable member of the paper.

BLITZER: Brian Todd thanks very much for that report.

It costs about $4 a gallon for a gallon of gas, so why is the Navy spending $26 a gallon to fuel its fighter jets?

Also still ahead, the story of one dog's unfortunate encounter with a plastic milk jug. How social media played a big role in saving her life.

(COMMERCIAL BREAK)

BLITZER: We want to update you on a remarkable story of survival of a young Marine in Afghanistan. An unexploded rocket propelled grenade became lodged in his leg. Thanks to some risky decisions by fellow Marines he lived to tell about it. Our Pentagon correspondent Barbara Starr has now spoken to the corporal himself about the rescue. She's joining us with the latest -- Barbara.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Wolf, you know you saw that video just there of help coming to Corporal Winder Perez who had a rocket-propelled grenade about a foot long embedded in his body. I was finally able to sit down and chat with him. Let's get right to it. I want you to hear what he had to say.

(BEGIN VIDEO CLIP)

CPL. WINDER PEREZ, U.S. MARINE CORPS: All of a sudden just -- I just saw the RPG coming toward me, and it hit me and, you know, I was hit and my boys they knew exactly what to do and they came down. No hesitation, no nothing. The RPG had struck the battery in my radio, so I tried calling it in and I'm like what the hell? The radio wasn't working and thank God Corporal Perrera (ph), he came right away. He called it in. The helicopter was already inbound and it was coming in for a little girl that got injured and thanks to Corporal Perrera (ph), you know he redirected the helicopter. Obviously, they had I guess -- they had their issues. I don't know. You know I did have a live rocket in my leg so eventually they did come. They got me in there.

(END VIDEO CLIP)

STARR: So the Marines on the ground, the helicopter crew, the medics on the ground all risking their own lives to help this young Marine and pull a live grenade out of his body. He just finished his last surgery yesterday. I want to tell you, Wolf, I had an e-mail from Winder Perez this morning, 23-year-old Marine saying he was feeling just fine. And that everything was OK. You can watch the full interview with him on Sanjay Gupta's show this weekend. That's 6:30 on Saturday, 7:30 -- pardon me -- 4:30 on Saturday -- I don't want to make a mistake -- and 7:30 Sunday morning. A young 23-year-old Marine who had a death-defying experience and says he is just fine.

BLITZER: 4:30 p.m. Eastern, 7:30 a.m. Sunday morning Eastern. Don't forget the Eastern.

STARR: You bet.

BLITZER: You got people in a lot of different time zones out there. Thanks very much, Barbara.

Some members of Congress are having sticker shock and may try to force the Defense Department to save money by scrapping more expensive bio- fuels. Is it the right move for now or is it short-sighted? Here is our Pentagon correspondent Chris Lawrence.

(BEGIN VIDEOTAPE)

CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT (voice-over): The military can fuel a fighter jet for under $4 a gallon.

(SOUNDS)

LAWRENCE: So congressional critics were shocked when the Navy paid $26 a gallon for bio-fuel.

UNIDENTIFIED MALE: It is huge back home. It's huge to the taxpayers who had to fund that. LAWRENCE: Representative Mike Conaway inserted a provision into the new defense bill. It says the Pentagon must buy the cheapest available fuel --

(SOUNDS)

LAWRENCE: -- especially while planning to cut 100,000 troops from the payroll.

REP. MIKE CONAWAY (R), TEXAS: We ought to be saving every single dollar we can everywhere else in the budget to protect the people.

LAWRENCE: But every day, the Pentagon burns through 300,000 barrels of oil. If the price goes up just $1, it costs the military well over $100 million.

UNIDENTIFIED FEMALE: We have to get out from under the oil markets.

(SOUNDS)

LAWRENCE: The military has been testing ships, planes and vehicles to accept alternative fuel. The Pentagon wants future flexibility especially as it shifts focus to Asia Pacific.

SHARON BURKE, ASSISTANT DEFENSE SECRETARY: It is really important because when you are talking about projecting and sustaining troops, forces that far from your own country. So we're opposed to any efforts that restrict our options in this area.

LAWRENCE (on camera): The secretary of the Navy has argued that bio- fuels are a young industry. Of course they can't compete price wise with fossil fuels that have been around for centuries.

CONAWAY: Well is it the federal government's responsibility to start that industry? If he can find it at $4 a gal, terrific, buy it, but he can't. And it is not the Department of Defense's role to build that fuel market.

LAWRENCE (voice-over): Bio-fuel advocates say that ignores the billions meant to ensure the free flow of oil.

PHYLLIS CUTTINO, PEW CHARITABLE TRUSTS: We keep those shipping lanes open for countries that are oftentimes hostile to our interests like Iran.

LAWRENCE: But Congress is poised to drop an economic anchor on the Navy's great green fleet.

(on camera): Is this the time to pour this money into bio-fuels?

CUTTINO: Absolutely. You know, it is really about investment today for payoff tomorrow. How much did the first pair of night you know vision goggles cost us, a lot more probably than they cost now.

(END VIDEOTAPE) LAWRENCE: It is a good point and Pentagon officials say this over- reliance on foreign oil is a matter of national security. But it looks like these restrictions are going to go into effect because enough members of Congress say the alternative just isn't affordable -- Wolf.

BLITZER: Chris Lawrence thanks for that report. Her head was stuck in a jug and now she is living high on the hog and looking for a new home. How one dog's life took a lucky turn thanks to social media and the kindness of strangers. Jeanne Moos is next.

(COMMERCIAL BREAK)

BLITZER: Here's a look at this hour's "Hotshots". In Kenya, children emerge from their classroom amidst streets plagued by poor sanitation.

In India, a woman covers her face while riding her scooter in the scorching heat. In New York, one of the first Apple computers created by the late Steve Jobs is put up for auction.

And in Spain -- look at this -- a psychic octopus predicts Spain to be the winner of the Euro 2012 Games. We'll see -- "Hotshots" pictures coming in from around the world.

If a dog gets her head stuck in a jar in the woods, does anyone know? They do after a photo of her ends up on a social media Web site. Then it is volunteers to the rescue. CNN's Jeanne Moos has the story of one lucky Tennessee stray.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): We've seen a squirrel driven squirrelly by a cup stuck on his head and a skunk that would have preferred skipping the jar of peanut butter but when this photo went out over Facebook, animal lovers in Memphis knew they had to act.

BETH GRESHAM, DOG RESCUER: We just -- we have to get her. She doesn't have a whole lot of time with that over her head.

MOOS: Beth Gresham took the photo after a friend spotted the pit bull mix in a wooded area off Interstate 41. The frightened dog ran back into the woods and Beth put out the alert on Facebook. Plastic container stuck over this baby's head, cannot eat or drink. Ten to 20 people at a time went out searching. By late the next day --

CHESTER BURNS, FOUND DOG: I seen him coming down the pathway with the jug on his head.

MOOS: Chester Burns said he had to corner the dog against a fence with his jeep. They used wire cutters to cut off the jar.

(on camera): Now obviously any dog that is getting her 15 minutes of fame is going to need a name.

(voice-over): People suggested Pickle, Jughead, Astro after the Jetson's dog and her head wear did resemble the first dog the Soviets sent into space. Not to mention the movie "Space Dogs" --

UNIDENTIFIED FEMALE: Good-bye world.

MOOS: -- but rather than a floating astronaut, her temporary owner says --

UNIDENTIFIED FEMALE: She is an angel.

MOOS: They named her Miracle. Jesse Sidle, an animal hospital vet tech, says she ate ravenously from the moment they got the jar off --

UNIDENTIFIED FEMALE: Sweet girl.

MOOS: -- dog food, cat food, a rotisserie chicken.

JESSE SIDLE, DOG'S FOSTER OWNER: She was starving. She was 27.7 pounds and she should be around 45 pounds.

MOOS: X-rays showed a broken pelvis and fractured jaw. She may have been hit by a car.

UNIDENTIFIED FEMALE: Somebody shot her with a BB gun down here.

MOOS: But already, she has gained five pounds and is up for adoption. She may no longer be stuck in a jar.

UNIDENTIFIED MALE: Remember that.

MOOS: But she got stuck doing her first Skype interview.

(on camera): Miracle, here, Miracle. Does she answer to her name?

UNIDENTIFIED FEMALE: Not yet.

MOOS: The pickle she was in raised eyebrows or in Miracle's case, eyebrow.

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.