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Interview With Kentucky Senator Rand Paul; El Chapo Captured; Presidential Race Tightening; Interview With New York Congressman Peter King; Trump on Attack as Cruz Closes In; Chelsea Clinton Hitting the Trail for Her Mom. Aired 6-7p ET

Aired January 11, 2016 - 18:00   ET



WOLF BLITZER, CNN ANCHOR: Happening now, dangerous liaisons, dramatic video of the raid that resulted in the capture of the Mexican drug lord known as El Chapo, and, tonight, new information about the controversial interview Sean Penn did with El Chapo while he was on the run.

Bomb-maker's threat. Al Qaeda's explosives expert releases a new recording, the man behind the underwear and printer cartridge bomb vowing al Qaeda will never give up efforts to attack the United States. Is he working a new bomb that could slip past airport security and onto an American passenger plane?

Rand's plan. Republican presidential candidate Senator Rand Paul at risk of being relegated to the undercard in the next Republican showdown. Will he drop out of the debate if he doesn't make the main stage? We're standing by for his decision. Rand Paul joins us live this hour.

Campaigning solo. Chelsea Clinton poised at the campaign trail before her mother, headlining a number of splashy and unusual fund-raisers, including one on the seat of a bike. Will the escalating war of words between Hillary Clinton and Donald Trump affect Chelsea's friendship with Trump's daughter Ivanka?

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 deadly operation that nabbed one of the world's most wanted criminals, and, tonight, there is dramatic new video of the raid that put the notorious Mexican drug lord Joaquin "El Chapo" Guzman back in prison.

Also tonight, Mexico's attorney general is saying the controversial interview the actor Sean Penn conducted with the fugitive criminal was in his words essential to his capture.

Also, a new threat from al Qaeda's explosives mastermind. The bomb- maker whose previous devices have been smuggled on to commercial planes is now vowing the terror group will never stop trying to attack the United States. There are also new developments in the ambush of the Philadelphia

police officer allegedly by a man who says he pledged allegiance to ISIS. Tonight, investigators are looking into a tip that the suspect had ties to a radical group and the FBI is confirming that he previously traveled to the Middle East.

We're covering all that and much more this hour with our guests, including Congressman Peter King. He's a member of the Homeland Security and Intelligence Committees. And our correspondents and expert analysts, they are all standing by.

Let's begin with the dramatic new video of the raid that captured the notorious drug lord El Chapo.

CNN's Martin Savidge is working the story for us.

Martin, you're outside the Mexican prison where El Chapo is now being held. What's the latest?

MARTIN SAVIDGE, CNN CORRESPONDENT: Mexican authorities haven't gotten quite to the point where they are thanking actor Sean Penn, but they have just about said that, saying that his role, that interview was crucial to rearresting El Chapo.

But when you look at the dramatic takedown, you realize that the Mexican authorities played a critical role as well Wolf.


SAVIDGE (voice-over): Tonight, dramatic new video of the deadly raid that led to the capture of one of the world's most wanted fugitives, five people killed in a shoot-out at the safe house of Joaquin Guzman, better known as El Chapo.

(on camera): This may have been the next stop in this incredible drama. Look down here. That appears to be some kind of storm drain, sewer, but, as you can see, large enough for a person to get through. And, according to the authorities, El Chapo and an associate managed to escape from the home through a sewer.

(voice-over): But they didn't get far and El Chapo was captured soon after, this as new details are emerging about a "Rolling Stone" interview published over the weekend revealing the notorious Mexican drug lord met with a Hollywood A-lister, Sean Penn, Mexican actress Kate del Castillo.

The meeting, along with a short on-camera interview, was conducted in the Mexican jungle back in October, when El Chapo was still on the run. In it, the drug kingpin talks candidly about his business.

JOAQUIN "EL CHAPO" GUZMAN, SINALOA CARTEL (through translator): Well, it's a reality that drugs destroy. Unfortunately, as I said, where I grew up, there's no other way, and there still isn't a way to survive, no other way to work.

SAVIDGE: Penn's written article describes a seven-hour face-to-face meeting with El Chapo that began with a hug and notes the drug lord is -- quote -- "remarkably well-groomed" -- unquote -- as he sipped tequila and bragged about his fleet of submarines, airplanes, trucks and boats.

Penn says the interview was set up by Castillo. El Chapo wanted her help to create a biopic about his life. The American actor was asked by the Associated Press about images published in the Mexican news media today which appear to show officials watching he and Castillo before the meeting with El Chapo.


Penn's response -- quote -- "I got nothing to hide" -- unquote.

Authorities want to question Penn, but it's not clear if he broke any laws. El Chapo, meanwhile, is back in the same prison he escaped from.

Officials have started the process of extraditing El Chapo to the U.S., where he faces several drug trafficking charges.

DENIS MCDONOUGH, WHITE HOUSE CHIEF OF STAFF: This braggadocios action about how much heroin he sends around the world, including to the United States, is maddening. We see a heroin epidemic, opioid addiction epidemic in this country. So, we're going to stay on top of this, with our Mexican counterparts.

(END VIDEOTAPE) SAVIDGE: Wolf, you can debate whether it was Sean Penn, whether it was the Mexican actress or whether it was a combination of other intel that led authorities to Joaquin Guzman, El Chapo. But the reality is it was really Guzman himself. He's the one that wanted the article. He's the one that invited them to come to him. In the end, it's his own fault -- Wolf.

BLITZER: Certainly is. All right, thanks very much, Martin Savidge in Mexico.

We're also following a new terror threat tonight from al Qaeda and a terror leader considered one of the most dangerous bomb-makers in the world.

Tonight, he has a chilling new warning from the United States.

Our chief security national correspondent, Jim Sciutto, is working the story for us.

This is the man behind some very frightening earlier plots.


Terrorism, it is a competition, and in recent headlines, it's ISIS that has been grabbing not just the headlines, but the attention with successful operations in San Bernardino, in Paris, bringing down a Russian passenger jet, typically the strength of al Qaeda in the Arabian Peninsula. So, now you have a defiant and ominous reminder from al Qaeda in the Arabian Peninsula that they are still targeting the U.S.


SCIUTTO (voice-over): With ISIS dominating the headlines today, al Qaeda's master bomb-maker made it clear that his terror group is still targeting the U.S.

Ibrahim al-Asiri, speaking directly to Americans, vowed, "We will not leave you alone as long as we have a pulsing vein in us."

Al-Asiri, a senior leader of al Qaeda in the Arabian Peninsula and widely considered the most creative and dangerous bomb-maker in the world, designed the notorious underwear bomb intended to a bring down a U.S. passenger jet on Christmas Day in 2009. His ability to make bombs that can slip past airport security is a primary concern of U.S. counterterror officials and one reason that U.S. intelligence views AQAP along with ISIS as the two most severe terror threats to the U.S. homeland.

COL. CEDRIC LEIGHTON (RET.), U.S. AIR FORCE: Because al-Asiri has a capability that very few other members in al Qaeda possess, we have to pay very close attention to what he says because he may very well be able to carry out what he threatens.

SCIUTTO: Today, al-Asiri also directed his anger at Saudi Arabia after the kingdom executed several al Qaeda militants as part of a mass execution earlier this month. Al-Asiri said he knew many of them personally and vowed revenge.

The reference to the executions that ignited large protests across the Middle East a clear indication al-Asiri is still alive and still a threat, as is ISIS in Iraq. Two weeks after losing the Western city of Ramadi, it launched two bold attacks today, simultaneous coordinated assaults on a cafe and a shopping mall, killing more than three dozen people.

LEIGHTON: Any time that they attack the capital, that ISIS can attack the capital of Baghdad or anything on the Syrian side in Damascus, is a big win for them because it shows the weakness of those particular governments.


SCIUTTO: When I speak to U.S. counterterror officials, they consistently point to ISIS and al Qaeda in the Arabian Peninsula as the gravest threats to the U.S. homeland and typically what they will say is that ISIS the most capable of carrying out some sort of attack, even a low-level, particularly because of lone wolf threats and their appeal to lone wolves, but al Qaeda in the Arabian Peninsula the most capable of a larger attack.

And it's principally because of this bomb-maker and their ability to put bombs on planes.

BLITZER: As much as the U.S. is focusing on ISIS, don't lose sight of al Qaeda.

SCIUTTO: No question.

BLITZER: Jim Sciutto, thanks very, very much.

There are also new developments tonight in the shooting of a Philadelphia police officer by a man that told investigators he pledged allegiance to ISIS.

Our justice correspondent, Pamela Brown, has been talking to her sources.

Pamela, you're learning new information about the suspect and the investigation. Update us.


Law enforcement sources we have been speaking with say they are looking into an anonymous tip from a woman in Philadelphia alleging the suspect, Edward Archer, is affiliated with a radicalized group.

Now, local and federal investigators are still trying to determine how credible this tip is. Philadelphia police say a woman stopped an officer on the street over the weekend and reported Archer had an affiliation to a group with radical beliefs and that everyone knows it.


Police are not saying what group that might be or where the group is, but they are still trying to look into this tip to see if there's any veracity to it. Meantime, surveillance cameras captured the horrifying moment last Thursday when a gunman walked up to that officer Jesse Hartnett's police car and shot him, firing off 13 rounds, striking the officer three times.

And even officer Hartnett was seriously wounded, he jumped out of his car, pursued that suspect and shot him. Other officers then arrested Archer and police say that his claim that he shot the officer in the name of ISIS, telling investigators -- quote -- "I pledge allegiance to the Islamic State and that's why I did what I did."


RICHARD ROSS, PHILADELPHIA POLICE COMMISSIONER: According to him, he believed that the police defend laws that are contrary to the teachings of the Koran.


BROWN: The FBI has confirmed that Archer previously traveled to Saudi Arabia in 2011 and Egypt in 2012, but they are still trying to determine if he had any contact with terrorists. We know that he was not under investigation by the FBI, according to sources.

And the FBI will now be looking into his communications, as well as his social media footprint, but at this point, law enforcement sources are telling us they don't have any evidence that indicates he was indeed affiliated with any radicalized group -- Wolf.

BLITZER: Pamela Brown, thanks very much for that report.

Let's dig deeper into all of this.

Republican Congressman Peter King of New York is joining us. He's a member of the House Homeland Security and Intelligence Committees.

Congressman, thanks for joining us.

We know the White House confirmed today they are in touch with officials, law enforcement and others, in Philadelphia. Do you have any indication that Edward Archer, this 30-year-old suspect shooter in this case, was in fact plotting with others or had any contact with terrorists?

REP. PETER KING (R), NEW YORK: No, I really haven't heard anything beyond what Pamela Brown has reported. I'm hearing the same thing.

They haven't been able to track down whether or not he did this at the direction of ISIS or if he was just inspired by ISIS. That again is part of the ongoing investigation, whether or not when he was overseas he actually was in contact with anyone from ISIS or any other terrorist organization.

And, again, what he said the other night certainly indicates, not indicates -- it demonstrates that he was inspired by ISIS. Whether or not there was any direct contact instructing him to do this, that so far, as far as I know, there is no evidence of that.

BLITZER: Police say he did take trips, Archer, to both Egypt and Saudi Arabia. Do we know who paid for those trips, what he was doing while in Egypt? He was there for several months and also Saudi Arabia.

KING: No. Again, my understanding is that that is certainly a key part of the investigation is to find out, did he have the money on his own? Was it supplied to him? Again, it's not that cheap to fly back and forth.

Did he have the resources to do it? Again, all part of an ongoing investigation. And it really is early on it. But I can assure you this is a full-court press that is going on, one, to find out why he did it, but also to find out whether or not there could be any others involved with him and whether or not this is part of a pattern of attacks that's going to be carried out.

BLITZER: This is at least the fourth attack here in the United States believed to have been at least inspired, if not directed by ISIS. I assume you believe these attacks will continue on U.S. soil. So here is the question. What can you U.S. do about it?

KING: Again, I think we need extensive surveillance. We have to monitor what is going on in the Muslim community. We have to, again, get as many sources as we can and as many undercovers as we can. And also we have to again maintain close cooperation with our allies overseas. There is no easy answer to this. And ISIS has, more than any other al Qaeda groups or affiliates, has managed to really master the art of appealing to those on the edges of society, those on the fringes.

As you said, there has been a series of attacks carried out by people inspired by ISIS. And they are much more effective with that than core al Qaeda ever was, for instance.

BLITZER: Jesse Hartnett, the police officer, 33 years old, heroic, and, fortunately, will in fact survive. We wish him and his family, of course, only the best.

Congressman, stand by. We have a lot more to discuss, new developments unfolding in the war against ISIS.

KING: Sure.

BLITZER: Much more with Peter King when we come back.



BLITZER: We're following a terror threat from al Qaeda tonight, a senior terror leader and master bomb-maker sending a message directly to Americans, saying -- and I'm quoting now -- "We will not leave you alone as long as we have a pulsing vein in us."

We're back with Republican Congressman Peter King of New York. He's a member of the Homeland Security and Intelligence Committees.

Congressman, you heard Jim Sciutto report that AQAP, al Qaeda in the Arabian Peninsula's chief bomb-maker, Ibrahim al-Asiri, is out with this new threat against the United States. You have previously said that ISIS is now more powerful than al Qaeda was on 9/11, but does AQAP still pose a major, direct threat to the United States?

KING: Yes, AQAP's main threat is not so much carrying out war in the Middle East, as it is they want to launch an attack against the United States.

More than any of the al Qaeda affiliates, AQAP is the one who has wanted to attack the United States. You mentioned the underwear bombing in 2009. They also had the cartridge bomb that they put on a flight that was coming to the United States in 2010. Fortunately, that was stopped.

But al-Asiri is probably the master terrorist bomb-maker in the world. He's extremely lethal. And even though we're focused on ISIS, I can assure you, the intelligence community is constantly monitoring what out al-Asiri might be doing and trying to find ways to counter any type of device that he may come up with.


BLITZER: Congressman, let's talk about what is being called an extremely unusual U.S. airstrike on central Mosul in Iraq.

Two U.S. bombs destroyed a building, contained huge amounts of cash that ISIS was using to pay its troops. U.S. commanders had been willing to consider up to 50 civilian casualties from the airstrike due to the importance of the target, destroying all this cash that ISIS uses.

Does this signal an increased willingness by the U.S. to potentially kill innocent civilians if necessary to fight ISIS in this war?

KING: Well, Wolf, obviously, I can't comment on the details, other than to say that I have advocated for a long time that the United States cannot have this strict policy against having collateral damage.

Listen, in war, it's tragic. Civilians are going to be killed. We should do what we can to minimize it. But the fact is that, if you take out, for instance, all that cash, that is going to save maybe hundreds or thousands of lives.

You have to balance one against the other. Certainly, in World War II, there were many civilians killed and that was a very legal and moral and just war. So, listen, nobody wants to kill civilians, but the fact is our main job is to protect Americans, to protect the world from ISIS. And I think it's about time that the administration does ease the restrictions they put on our pilots when they try to carry out these missions.

BLITZER: As you know, Jordan's King Abdullah is here in Washington right now. He arrived over the weekend. He's here today, tomorrow and Wednesday. But even though he's meeting with the vice president, the secretary of state, the secretary of defense, he won't be meeting with the president.

The White House, a senior administration official telling us that due to scheduling conflicts, including the president's State of the Union address, he's not going to be able to meet with his majesty King Abdullah on this visit.

What's your reaction to that?

KING: Well, again, I don't know all the details.

I would just say that we have no stronger ally in the Middle East than King Abdullah. I have the greatest regard for him. I know a number of us do intend to meet with him. We meet with him whenever he's here. And certainly whenever we go to Jordan, we meet with him. King Abdullah, we can't say enough what an outstanding job he does. What a loyal and trusted ally he is. And the extent of cooperation we get from him, we should make sure that neither the president or anyone else does anything at all to interfere with that relationship.

He is really, literally on the front lines more than any of us. And there is no one I have greater regard for than King Abdullah.

BLITZER: The senior administration official says President Obama and King Abdullah did meet in February of last year. The president looks forward to meeting him down the road.

But would you see this as some sort of snub, if you will? Because you're correct. King Abdullah has been a great friend to the United States all of these years.

KING: You know, only the president can answer that.

I would just say that, to me, the president of the United States whenever possible should meet with someone like King Abdullah, first of all, to send him a message as to how much we value his aid, his cooperation and also to send a signal to other countries in the Middle East that the U.S. does stand by its allies.

We have been hurt by the president's treatment of Benjamin Netanyahu, but again, as far as Jordan, I don't want to read into what the president is doing or not doing tomorrow, other than to say that I think at every opportunity, the president should grasp it to show his support for King Abdullah and his thanks for all that he's done for us.

BLITZER: Maybe he should invite the king who is going to be here tomorrow night to his State of the Union address, sit up in the gallery. That would be a nice gesture, I'm sure, on the part of the president of the United States, given the longstanding friendship between the United States and Jordan, specifically King Abdullah and his later father, King Hussein. Just a thought on my part.

KING: I think it's a great thought. I think it's a great thought, Wolf.

BLITZER: Yes. All right. Well, let's see what the president decides to do on that particular front.

By the way, I'm going to be sitting down with King Abdullah of Jordan Wednesday. We will have a special exclusive interview right here in THE SITUATION ROOM.

I'm looking forward to that.

KING: Well, if I could just say, I remember, after 9/11, when President Bush had Tony Blair in the gallery and how much that meant to show the solidarity.

So, I agree with you. I think having close allies in situations such as that drives home the importance of these very strategic relationships.

BLITZER: Good point. All right, thanks very much for that, Congressman Peter King.

KING: Thank you, Wolf.

BLITZER: Just ahead, Donald Trump on the attack, as rival Ted Cruz closes in, in the critical early voting states.

And Rand Paul, he's here THE SITUATION ROOM with tonight. Will he drop out of the next presidential debate if he doesn't make the main stage? I will ask him.



BLITZER: We're just three weeks out from the Iowa caucuses. And the polls show Donald Trump's substantial lead in that key state evaporating, Ted Cruz gaining, even taking the lead over Trump in one poll. And that has the billionaire businessman on the attack tonight.

Our chief political correspondent, Dana Bash, has the latest from the campaign trail.


DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT (voice-over): Who does Donald Trump see as his stiffest competition? Here's a hint.

DONALD TRUMP (R), PRESIDENTIAL CANDIDATE: Ted Cruz is a problem. I mean, he's got a problem.

BASH: Trump used this New Hampshire rally to once again hammer at questions about Ted Cruz's eligibility to be president since he was born in Canada.

TRUMP: You can't have a nominee who's going to be subject to being thrown out as a nominee. You just can't do it.

BASH: Today, there's fresh evidence that Trump is right to hone in on Cruz.

SEN. TED CRUZ (R-TX), PRESIDENTIAL CANDIDATE: God bless the great state of Iowa.

[18:30:00] BASH: In Iowa, several new polls show the two men neck and neck. One shows Cruz with a four-point lead. Another gives Trump a two-point advantage. Both were within the margin of error. And though Trump is way ahead here in New Hampshire with 32 percent in a new Monmouth University poll, Cruz is climbing, now tied for second with John Kasich.

CRUZ: I'm not going to be taking legal advice any time soon from Donald Trump.

BASH: Despite the drubbing, Cruz, a Harvard-educated lawyer and former Supreme Court clerk, insists he is eligible since his mother was born in America.

CRUZ: The Constitution and laws of the United States are straightforward. The very first Congress defined the child of a U.S. citizen born abroad as a natural-born citizen.

BASH: Now another influential Republican is sowing doubts about that, popular GOP Governor Terry Branstad.

GOV. TERRY BRANSTAD (R), IOWA: When you run for president of the United States, I guess any question is fair game, you know, so let the people decide.

BASH: Branstad hasn't endorsed but his son runs an Iowa group slamming Cruz for opposing ethanol subsidies critical to many Iowa farmers.

TRUMP: We're going to win. We're going to start winning. We don't win anymore. We're going to win so much.

BASH: Here in New Hampshire, Trump may have a huge lead, but there is a warning sign. More than 40 percent of Granite State voters say they're not entirely settled on their first choice.

TRUMP: We will build a wall.

UNIDENTIFIED MALE: Build that wall!

UNIDENTIFIED MALE: Build that wall!

UNIDENTIFIED MALE: Build that wall!

TRUMP: Who's going to pay for the wall?




BASH: He may be a first-time politician, but Trump knows enough not to take New Hampshire for granted.

Dana Bash, CNN, Witham, New Hampshire.


BLITZER: Let's get some more with our senior Washington correspondent, Jeff Zeleny; our CNN political commentator, Ana Navarro. She's a good friend of Marco Rubio, a supporter of Jeb Bush. And our CNN political commentator, the Democratic strategist, Donna Brazile.

Jeff, take a look at these Monmouth University polls. Dana mentioned them. In New Hampshire Trump is way ahead. He's at 32 percent. Cruz and Kasich, John Kasich, the Ohio governor, both tied at 14. Rubio as a 12.

In the Quinnipiac poll, likely Iowa Republicans, Trump and Cruz, they're neck and neck, 31 for Trump, 29 for Cruz. Rubio is down at 15. Everybody else in single digits. The ground game in Iowa, as they call the political activists, that is critical right now.

JEFF ZELENY, CNN SENIOR WASHINGTON CORRESPONDENT: It's critical. Especially let's start with Iowa three weeks from now.

The caucuses are different than a primary vote. We can't say that enough times. And the reason that that is, you can't vote all day. You show up at 7 p.m. on the night of February 1, come snow, come rain, come whatever. So the ground game is important.

Each campaign knows how many people will be coming. The question is, is Donald Trump going to expand this universe?

Four years ago, Rick Santorum won the Iowa caucuses with 29,000 people supporting him. Donald Trump has spoken to so many more than that, just as at all these big rallies in Iowa. The question is, are they going to show up? Are they going to come, or have they been sort of window shopping here?'

We have reason to believe, just on our reporting on the ground, Ted Cruz has a good ground game. He's built a 99-county network, every county across Iowa, with evangelical leaders, home-school leaders, pastors and networks. He's been at it for a long time, spending a lot of time there. His ground game, it seems solid.

We don't know about Donald Trump's, because it's more of an air game. He's been talking a lot. So we'll have to see. But the ground game is so, so critical.

BLITZER: People are willing to wait two or three hours in line to go see a Trump rally. Maybe they'll spend two or three hours at a caucus, as well. It's not just like going in a polling booth and voting. You've got to invest some time.

Is this shaping up, Donna, as a two-man race right now, at least in Iowa? Cruz and Trump?

DONNA BRAZILE, CNN DEMOCRATIC STRATEGIST: I think so, Wolf. But you know, as you know, you can come in third place and still have a lot of momentum to go to New Hampshire and really restart your campaign.

Jeff is absolutely right in terms of the amount of time it takes to not just get the pledge cards. You've got -- you've got people who pledge to support you. They show up at these various precincts. They have to stand up, listen to speeches from 11 candidates on the Republican side, and then pledge their support. So this is a very, very tough test.

Ted Cruz has run a textbook campaign with not just the number of volunteers that he has in the state and staffers, but he's been paying attention to gathering the names of people. And I'm sure he has an operation to turn them out.

BLITZER: Ana, we're only three weeks from tonight the Iowa caucuses. It's very close between Cruz and Trump right now in all of these polls in Iowa. So what do you expect Donald Trump to do over the next three weeks?

ANA NAVARRO, CNN POLITICAL COMMENTATOR: Well, I think we know what Donald Trump is going to do. He's going to attack, attack, attack. You know, I think Donald Trump is a first-time politician, but he's clearly gotten a taste for this.

And at this point, he's in it to win it. I think he's going to go all out. We saw him try the attack on Ted Cruz a few weeks ago, saying he was a little bit of a maniac. That didn't work well. We saw him attack Ted Cruz, saying that Cubans couldn't be evangelicals. That didn't work too well.

[18:35:10] But this attack on the citizenship issue, there's two ways of looking at it: the legal aspect and the political aspect. From the legal aspect, most scholars agree that it is not a legal issue.

But that doesn't mean that it is not a political issue. And Donald Trump is gaining some traction in turning the citizenship question into a political issue.

Clearly, it is a two-man race in Iowa. If anybody else wins, it's going to be frankly amazing and shock all of us.

And New Hampshire is a completely different ball game. Really, the race there is for second place and who wins the establishment lane?

BLITZER: It's intriguing, though, Ana, that the Harvard Law School scholar, Laurence Tribe, says there is a legal issue at stake here, and let's see if it's pursued.

On the Democratic side, let's talk a little bit about the Democratic side, Jeff. Bernie Sanders, he's doing remarkably well against Hillary Clinton in both Iowa and New Hampshire. Just a little while ago, he had this to say to reporters.


SEN. BERNIE SANDERS (D-VT), PRESIDENTIAL CANDIDATE: I think the most important point to be made is that Secretary Clinton and her campaign now know that she is in serious trouble. I think a candidate who was originally thought to be the anointed candidate, to be the inevitable candidate, is now locked in a very difficult race here in Iowa and in New Hampshire.


BLITZER: You just wrote an article, co-wrote an article on, in which you said that there is a sense of anxiety inside the Clinton camp right -- right now. So does Senator Sanders, he has a good point.

ZELENY: Of course he has a point. And why wouldn't there be anxiety, because the loss from eight years ago still weighs so heavy on her. And there is no question that Bernie Sanders has a populist appeal to him that so many people are drawn to.

But I have an equal question on the ground game for Bernie Sanders. I think that he also is attracting some new people. The party regulars, a lot of them are going to support her, although the Iowa caucuses, they skew liberal. There's always, you know, the liberal activists that will turn out. But I think the electability argument is the big question. Will Hillary Clinton entice people by that, saying, "I'm the only Democrat that can win the White House"? Or will she turn them off by saying that and say, "Wait just a minute"?

And voters have an interesting way of sometimes slowing down the process here of saying, "Hold on just a second." They want to test her a little bit. So that could be happening. But boy, the Clinton supporters from Brooklyn to Iowa to New Hampshire, they're nervous and worried about what could happen in there weeks.

BLITZER: A lot of Bernie Sanders supporters tell me they think the senator will win Iowa and then go on and win in New Hampshire, which is right next door to his home state of Vermont. What happens if he does?

DONNA BRAZILE, CNN POLITICAL COMMENTATOR: Well, if you're a Clinton supporter, and I'm neutral, you would say, "Thank you," because you know what? Finally you can lower expectations. Just two months ago, everybody was saying she was blowing it out with 60 percent. Now it's a very competitive race. Bernie Sanders has momentum. There's no question about it.

But Secretary Clinton has a tremendous organization. I visited both campaigns when I was in Iowa recently. They both have strong teams on the ground. Good people. At the end of the day, it's going to be a turnout game. I don't think we'll match the number that we saw in 2008, with 240,000 people caucuses for the Democrats, but if Bernie Sanders can bring new people like Barack Obama did back in 2008, then it's a different ball game.

But Clinton has a strong, very experienced people there. They know what they're doing.

BLITZER: Ana, can Senator Sanders beat Hillary Clinton for the Democratic presidential nomination?

NAVARRO: I think he can. I think he can. I think we all under- estimated him way at the beginning. In some ways, I think he's already won. Look, he is the new mantle holder. He's the new voice for the progressive movement.

When was the last time you heard any of us mention Elizabeth Warren? He has already superseded any expectation anybody had raising money. His poll numbers, the crowds he is attracting to events. So most definitely, somebody that nobody thought was going to give her a run for her money is making her sweat under the collar.

BLITZER: Ana Navarro, Donna Brazile, Jeff Zeleny, guys, thanks very much.

Just ahead, my interview with a Republican presidential candidate. Senator Rand Paul. Will he drop out of the next presidential debate if he doesn't make the main stage?

And Chelsea Clinton poised to hit the campaign trail for her mother. We have details of the flurry of high-profile and unusual fundraisers on Chelsea Clinton's agenda.


[18:44:06] BLITZER: The next Republican presidential debate is set for Thursday night. We're waiting to learn the official lineup. FOX Business Network says the top six candidates of the five most recent national polls, and any candidate in the top five in Iowa or New Hampshire, will be on the main stage. The rest will face off in a separate undercard debate.

Republican presidential candidate Senator Rand Paul of Kentucky is with us right now.

Senator, thanks very much for joining us. You've already said earlier that if you're not on the main stage, if you're relegated to the under card, you're not going to the under card. Is that still your position?

SEN. RAND PAUL (R-KY), PRESIDENTIAL CANDIDATE: I don't think the media should have the power to predetermine elections. And I think that it's a significant thing to try to tell voters you're either in the first tier or a second tier.

I think the polls have been wildly inaccurate, but even just last week, CBS had a poll I was one point out of fourth place. The last five or six polls I've been in the top five or six in all of them.

So it would be very, very arbitrary to exclude me from it, and we just won't take the bait.

[18:45:01] We're not going to be designated by any media outlet as not being able to compete in any election.

BLITZER: Well, they are supposed to announce momentarily Fox who is on the main stage. I assume somebody has already informed you whether or not you're going to be on the main stage or relegated to the under- card, as it's called.

PAUL: Yes, we were just told that they have a mathematical problem over there and they're adding the numbers. And we think they are confused because they are not including us on the main stage, and we think they are really wrong with that. Because if you look at the poll numbers, the last half a dozen polls that have come out, we have been in either fifth or sixth or one point away from four.

But we think it's a big mistake to do it, and we do not think anyone should be able to characterize our campaign as anything less than first-tier. We've raised $25 million. We have -- we're going to be on the ballot in every state. And we just announced the other day we have a thousand precinct chairs in Iowa.

So we think it's a rotten thing to do to try to designate which candidates have a chance and don't. And so we will not participate in anything that's not first tier.

BLITZER: And they have officially told you, though, now, you're not going to be on the main stage. And you have told them in response you're not going to go to the earlier debate.

PAUL: We told them they've made a mistake, and really even looking at the recent polls, they've made a mistake. We've been rising in the polls. We've been fifth or sixth in the polls for the last couple of weeks, and it's really a mistake.

Because the thing is is that the Republican Party needs a voice like mine. I'm the one anti-war voice on the stage. I'm the one voice that says we shouldn't be collecting all the phone records. I'm the one voice advocating for criminal justice reform.

So, I think it's a mistake for the Republican Party to try to say OK, we're going to pre-decide things and exclude certain people from the stage. And I object to it, and I will protest and I'll spend the next couple of days protesting and letting people know that we do have a voice that does need to be heard.

BLITZER: What was the explanation that the Fox representative in calling you and giving you the courtesy of this advance notification that you won't be on the main stage. What was their explanation when you expressed your protest?

PAUL: I didn't -- I didn't discuss it with them, but I think that the definition is very arbitrary. We were in a debate just recently with CNN, and there were nine people on the stage. I thought we got a lot of information, a lot of useful information.

In fact, the last debate was probably the best debate we've had with bringing out foreign policy. Is regime change a good idea or a bad idea? And actually, I think I was an important part of mixing it up and saying, you know what, when we toppled Gadhafi in Libya, it wasn't good for the country. We actually are less safe because Libya is now a failed state.

So, we think we do bring an important part to the debate and will continue to make sure -- I'll be taking my campaign directly to New Hampshire and Iowa. I'm not going to be in South Carolina but I will be Iowa. Our campaign rolls on. And we've seen nothing but bigger crowds and more enthusiastic crowds.

Like I said, I have more precinct chairmen in Iowa than any other candidate in Iowa at this point.

BLITZER: How well do you have to do in Iowa, which is exactly three weeks from tonight, for you to stay in the race?

PAUL: I think nothing is known until the election happens. In fact, I think the polls are somewhat irrelevant in the sense that I don't think they are very accurate. The real poll is that night in the election that obviously we do -- we want to do very well.

But I grew up in athletics. I grew up, you know, swimming meets, track meets, football. We always played to win. We didn't play to show or anything like that. So, we'll be in it to win it. And we think we have a -- maybe the best ground game in Iowa at this point.

BLITZER: Ted Cruz is doing well in Iowa, according to these polls. Donald Trump is as well. You side actually with Donald Trump in raising questions about whether or not Senator Cruz is what the Constitution defines as a natural-born citizen. Why?

PAUL: Well, I said without question, you know, he's a natural-born Canadian. And the question is, can you be naturally born in Canada and also be a natural-born American at the same time? And the courts just haven't decided this.

I'm not bringing this up, but the Democrats have already brought this up, and I think the Democrats will sue in court and it will be extraordinary. It will be the first time that we've ever had a president or a nominee, if he were to become the nominee, that's born in a foreign country. So, it will be an extraordinary thing.

I'm not saying that he can't or he's ineligible. I'm just saying that I think the Democrats will bring this up.

BLITZER: John McCain, who ran for president, got the Republican nomination was born in the Panama Canal Zone on a U.S. military base, and he was seen as eligible to run for president.

PAUL: I think the courts have decided that. You know, when Goldwater ran, he ran from originally being born in the territory of Arizona. And the court decided U.S. territories, you were eligible. And I think Panama was a U.S. territory when McCain was born there. So, I think his was already decided.

But nobody is really alleging that Canada is a U.S. territory. So, being a foreign country, there will have to be a decision. I'm not saying it will go against him; I'm just saying it will be something that voters have to consider.

BLITZER: You're also running for reelection in your home state of Kentucky. At some point, you got to start focusing on that, as well.

PAUL: Well, we don't have an opponent. So that's kind of a good place to be in. No one's chosen to run against me at this point. And so we think we're in pretty good shape.

[18:50:01] I do my job, though. I show up everyday to vote. I'll be -- you know, tomorrow, I have audit the Fed, a big bill I've been working on for five years. We've been bringing that up, and I'll be on the floor debating and hopefully getting a bipartisan support for this bill.

BLITZER: All right. So just to wrap it up where we began, Fox News -- the Fox Business channel has told you, you will not be on the main stage in the Thursday night debate, and your response to them was --

PAUL: It's a mistake, because the thing is, we actually have been in the top five or six in most of the recent polls. In fact, last week in a national poll, we were just one point out of fourth place. I think it's a mistake to try to exclude me from the national debate, and we're going to make sure the voters know that. But we're going to take our message directly to Iowa, directly to New Hampshire. We're going to let voters decide this.

BLITZER: So, that means you will not go to that debate? You won't be in the so-called under-card?

PAUL: No, I think -- I think an artificial designation as being in the second tier is something that -- we don't want to accept that because it really sort of points fingers and says, well, are you really going to be a contender? We are a contender. We think we have a national campaign that can contend for victory, and we can't accept sort of an artificial designation by anybody.

BLITZER: So, you won't attend this debate, you won't be in the under- card? I just want to be precise here.

PAUL: Absolutely. I won't participate in anything that is not the first tier, because we have a first-tier campaign.

BLITZER: And you notified Fox of that?

PAUL: We let them know that.

BLITZER: Senator, thanks very much for joining us.

PAUL: Thank you.

BLITZER: Senator Rand Paul of Kentucky.

Just ahead, it's getting nastier out there as Chelsea Clinton hits the campaign trail for her mom. Can't she keep her close friendship with Donald Trump's daughter Ivanka intact?

Stay with us.


[18:56:16] BLITZER: Chelsea Clinton is hitting the campaign trail for her mother. But with the political rhetoric getting nastier by the day, can the former first daughter maintain her close friendship with Donald Trump's daughter?

CNN's Sunlen Serfaty has been looking into that for us.

So, what's Chelsea Clinton about to do, Sunlen?

SUNLEN SERFATY, CNN NATIONAL CORRESPONDENT: Well, Wolf, Chelsea Clinton has largely just had a private role in her mother's campaign, really just mainly giving advice and support to her mother. But as voting on the early primary states gets closer, another Clinton is about to be deployed.


SERFATY (voice-over): The Clinton campaign is now a family affair as Chelsea Clinton steps out solo, barnstorming New Hampshire tomorrow for her mother's campaign just days after her father's debut on the trail. The pregnant former first daughter, herself a mother has remained in the background until now.

This month alone, she'll hold at least ten splashy and unusual fund- raisers all without her parents, riding a bicycle for a $500 a seat event at a soulcycle studio in New York, hosting an afternoon tea with "Vogue's" editor in chief, Anna Wintour, and headlining an event focused specifically on the LGBT community.

This weekend, Chelsea will join forces in Iowa with her famous father. But like her dad, Chelsea will face challenges, including rehashed accusations from the '90s, and a new war of words between her mom and Donald Trump.

DONALD TRUMP (R), PRESIDENTIAL CANDIDATE: He was impeached. He lost his law license, couldn't practice law. He had to pay a massive fine or a massive amount of money to, whether it was Paula Jones, whoever, and this was all done in the White House.

HILLARY CLINTON (D), PRESIDENTIAL CANDIDATE: Well, it's been a fair game, going back to the Republicans for some years. It didn't work before. It won't work again.

SERFATY: Sources say you don't expect Chelsea to engage. One of her friends just happens to be Trump's daughter.

IVANKA TRUMP, DONALD TRUMP'S DAUGHTER: She's been a great friend to me and I've been a great friend to her. So the politics of our parents is not relevant to our friendship.

SERFATY: While both women are fiercely loyal and big boosters of their parent's campaigns, for now both say they are trying to stay above the fray.


UNIDENTIFIED FEMALE: Yes, me, too. Me, too.

CHELSEA CLINTON: And our friendship is so much more important than anything that happens in politics and I think probably anyone and everyone could understand that.

SERFATY: In the meantime, Clinton's campaign hopes Chelsea's new role will bring excitement to the trail and that the once shy first daughter will make a forceful impression not only as a mom but as a fund-raiser.


SERFATY: And this could be one of her biggest assets of the campaign. As a new mom herself, helping to soften her mom's image, being a grandmother is something that Hillary Clinton likes to bring up a lot on the campaign trail and, of course, we'll be able to talk more about it this summer, Wolf, that's when Chelsea's second baby is due.

BLITZER: I'm intrigue. What is the soul cycle thing she's going to be doing? SERFATY: Well, it's a fitness class, very popular in big cities like

New York. They have three pairs of tickets where you can cycle on a stationary bike with Chelsea Clinton. Tickets start at $500, go to 2,700 bucks.

BLITZER: They have Soulcycle here in Washington, D.C. as well. Have you been?

SERFATY: I have not, Wolf. I'll have to try it out.

BLITZER: Thanks very much. Good report. We'll see you on the campaign trail with Chelsea Clinton tomorrow.

And this is an important note to our viewers. Please be sure to join us tomorrow as we set the stage for President Obama's State of the Union Address, his last State of the Union as president of the United States. And on Wednesday, Jordan's King Abdullah will be our exclusive guest right here in THE SITUATION ROOM.

Remember, you can always follow us on Twitter. Tweet me @WolfBlitzer. Tweet the show @CNNSitRoom. Be sure to join us again right here tomorrow in THE SITUATION ROOM.

I'm Wolf Blitzer in Washington. Thanks very much for watching.

"ERIN BURNETT OUTFRONT" starts right now.