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Amanpour

David Petraeus' Iraq Aide Speaks; Alan Simpson on Solving the US Financial Issue

Aired November 12, 2012 - 15:00   ET

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

CHRISTIANE AMANPOUR, CNN HOST: Good evening, everyone, and welcome to the program. I'm Christiane Amanpour.

The world is still reeling from the shock resignation of one of America's most visible and powerful leaders, CIA Director David Petraeus, credited with turning the Iraq War around. Tonight, Petraeus faces a slew of questions and conspiracy theories. Members of the U.S. Congress say they will conduct an inquiry into the FBI's handling of the Petraeus affair.

So here's what we know.

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AMANPOUR (voice-over): Petraeus has admitted to the affair and so has the woman, his biographer, Paula Broadwell. She is 20 years his junior, a married mother of two and, like him, a graduate of both Harvard University and West Point, America's elite Army college.

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AMANPOUR: She says they got to know each other in Afghanistan, when he was commander of U.S. forces, and she sometimes interviewed him on his daily long-distance run.

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PAULA BROADWELL, AUTHOR: This is a typical mechanism he uses to get to know young people. He's done it throughout his life. So it was an opportunity for me to interview him on a run and I think it was -- I was -- I thought I'd test him; but he was going to test me and it ended up being kind of a test for both of us, since we both ran pretty quickly.

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AMANPOUR: And in the wake of the revelations this weekend, U.S. officials say that Petraeus is not under any criminal probe, nor is there any question of a national security breach.

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AMANPOUR (voice-over): But there are questions about whether Broadwell had access to sensitive materials through her relationship with Petraeus.

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AMANPOUR: A tawdry and banal tale of an extramarital affair derailing the career of one of America's storied modern war heroes.

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AMANPOUR (voice-over): And so with no crime and no breach of national security, why did Petraeus resign? And how big of a gaping hole does his departure leave for the United States on the international stage? All questions that I will ask my exclusive guest tonight, a close confidant and former senior adviser to General Petraeus.

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AMANPOUR: But first, here's what's coming up later this half hour.

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AMANPOUR (voice-over): Before he faced the fiscal cliff, President Obama asked Bowles-Simpson to get America out of debt then ignored their prescription. My exclusive interview with Alan Simpson, who says it is still the right medicine.

FORMER SEN. ALAN SIMPSON, R-WYOMING: We don't B.S. him. We tell him the truth.

AMANPOUR (voice-over): And scandals in stars and stripes, one of America's greatest generals having an affair -- but it's not who you think.

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AMANPOUR: We'll get to that in a bit, but first, joining me right now to talk about Petraeus, his downfall and his legacy is Said Othman.

He was the senior adviser and interpreter to General Petraeus throughout the Iraq campaign and former Secretary of Defense Robert Gates commended him for his great service to the United States and called Othman a direct link between the Iraqi and U.S. governments. He remains in close contact with David Petraeus and he joins me right now.

Thank you for being here.

SADI OTHMAN, SENIOR SPECIAL ADVISOR TO GEN. DAVID PETRAEUS: Thanks for having me.

AMANPOUR: Did you have any idea? Did you know about this affair?

No, I did not.

AMANPOUR: What was General Petraeus' comportment with women in his office, in Iraq and elsewhere when you were there? Was there any hint that this kind of thing could happen?

OTHMAN: Nothing, Christiane. General Petraeus was a very professional soldier. He was a great leader. And very careful about how he handled himself with people in general, just (inaudible).

AMANPOUR: Do you believe that this started in Afghanistan, in other words, while he was still in uniform or afterwards?

OTHMAN: From what I know, from very reliable sources and today, no. It started afterwards.

AMANPOUR: You've spoken to David Petraeus; you've been in contact with him since this all broke, since all of this news broke. How is he holding up? What is his view of what's happened?

OTHMAN: Well, I talked to him a few hours ago, earlier this morning. He's very sad, very remorseful about what happened, about what he did. His focus now is on his family and to repair the damage that has been done because of this mistake that he made.

AMANPOUR: The damage with his wife, presumably?

OTHMAN: Yes, his wife and children.

AMANPOUR: This all started because of a series of emails, a woman in Tampa complained that she was getting harassing emails. The FBI traced them back to Paula Broadwell and that's how they stumbled on this communication between Broadwell and Petraeus.

This woman -- her name is Jill Kelly, the one in Tampa. Now you know her. You know her husband. Is there any question that there might have been an improper relationship between Jill Kelly and David Petraeus?

OTHMAN: No, no, not that I know of. I met Jill and her husband at a function in Tampa. She and her husband hosted a farewell party, dinner for Ms. Petraeus after General Petraeus left to Afghanistan. So that's where I met them and got to know them.

AMANPOUR: You have been around him in his command in Iraq and before that. What is it like around somebody as charismatic, successful, powerful as General Petraeus? Was he surrounded by anybody who would say, General, watch out; don't do that? In other words, could this have happened while he was still on the road?

OTHMAN: You know, General Petraeus was, again, so professional, I mean he did not need anybody -- really -- to tell him, you know, be careful; don't do this, don't do that.

AMANPOUR: (Inaudible) people were worried about the optics of her being in Afghanistan.

OTHMAN: I wasn't there. You know, if I was there and if I would have noticed anything, I would have gone to him and told him, "Sir, be careful."

AMANPOUR: People are asking, particularly around the world, no crime, no breach --

(BREAK)

AMANPOUR: -- did General Petraeus, director of the CIA, David Petraeus, why did he have to resign? What has he told you about why he resigned?

OTHMAN: Well, he resigned -- for him, that's doing the honorable thing for having done the dishonorable thing.

AMANPOUR: He said that, that he did something dishonorable?

OTHMAN: Yes, yes. He did say that. So he felt that's the right thing to do and I believe that is the case.

AMANPOUR: Let's talk about why this is important, because of the legacy and the experience that he had. Now many people disagree with the Iraq War, both here in the United States and around the world. But he is credited with at least shortening that war and turning the tide. What is, do you think, his biggest legacy?

OTHMAN: Well, his biggest legacy is, again, you know, turning the war in Iraq. And it wasn't only General Petraeus, you know, it was, of course, you know, the thousands of American men and women in uniform and civilians who worked with him. But he was the leader. That's the biggest legacy.

The other thing is that General Petraeus, his personality, he is able and was very able to establish very, very good relationships with the leaders throughout Iraq and then throughout the Middle East. And I worked for him when he was at CENTCOM. And they trusted him, you know, even though, you know, even people who did not like U.S. foreign policy, but they liked General Petraeus.

And that's very important. That's his legacy and I've been receiving phone calls from all over the world, and people are very sad and worried about his departure.

AMANPOUR: Well, giving an idea of who you've been receiving calls from, and what specifically are they worried about?

OTHMAN: Well, number one, they are sad because they love the man. You know, they really like General Petraeus and they trust him. And they know -- they know -- that's very important -- that he's a patriotic American, but who also cares about the people in the Middle East, the Arabic world, where, you know, where I was very much involved with him in that part of the world.

People called me; leaders called me. Again, they all told me to extend their sympathies and to let him know that they are praying for him, but also just regular people. I'll leave you one example (inaudible), you know. A friend of mine, who only met General Petraeus once -- his name is Walid al-Mala (ph) --

(BREAK)

OTHMAN: -- he met him once. We were on a visit to Jordan. You know, he was going to see King Abdullah. And you know, I introduced him and we left and he called me, and he was really, really -- he said, Sadi, all I want to tell you -- and please pass on this message to him -- I am sad. And please let him know that I'm praying for him.

AMANPOUR: Now beyond said, as you know and I know, relationships in that part of the world are very personal. Business is done through personal relationships, foreign policy is conducted with personal relationships that are based on trust and mutual respect.

How much of a damage to that has this resignation done? Because even though he's no longer CENTCOM, he's no longer General Petraeus, as CIA director, he was also the man who traveled out and met all these people. He's built up relationships for the last 10 years in that region.

OTHMAN: Yes. You know, Christiane, I'm sure that there are people who will fill his place and do a good job. But, again, we go back to these personal relationships, personal relationships, as you said, matter in everything, but especially in that part of the world.

And that's where I'm worried. You know, I mean, General Petraeus still has a lot to offer and to give. The man is very talented. He's a true patriot and he really loves to serve his country and serve people in general.

So I just hope that we don't turn the page and stop taking advantage of people like General Petraeus, who have very close contacts and very good personal relationships throughout the Middle East, and I'm sure throughout the world.

AMANPOUR: So you think he still has a role to play on the international stage, even if it's not an official government role?

OTHMAN: I believe so, yes.

AMANPOUR: Sadi, you must have thought long and hard since Friday about why this could have happened. You describe him as a top professional, as a honorable man who grew up with a code of military conduct. Have you thought why, how something like this could have happened?

Is it the stress of leading the military? Is it finding yourself back in Washington behind a desk? What is it?

OTHMAN: You know, you know, Christiane, I've been thinking about this the minute, the second I heard about this. I was in Washington. I had just come back from the Middle East. I arrived back in the States on Thursday and was in Iraq and Jordan and the United Arab Emirates.

And the people I met, including leaders, some leaders, you know, we were all talking about him. And they had messages for him. And I was about to see him next week, hopefully, and to relay these messages to him, in person.

I don't know. I don't know. I mean, this is very uncharacteristic --

AMANPOUR: Uncharacteristic?

OTHMAN: -- right, of General Petraeus. I mean, you could tell me anybody else, I would say, yes, yes. I noticed. But not him. What happened? I don't know. How? I don't know. It happened. You know, we - - you know, we had knowledge of it. We all know it now. It is terrible. It is sad.

But let's hope that he will be able to repair the damage done because of this and we need to give him the space, you know, to focus on his family.

AMANPOUR: Sadi Othman, thank you very much indeed.

OTHMAN: Thank you, Christiane.

AMANPOUR: Not just the family, but also, of course, General Petraeus was due to be called before the U.S. Congress this week to talk about Libya, Benghazi and what happened there. His deputy, the acting CIA director, Mike Morell, will take his place before Congress this week.

Now President Obama barely had time to celebrate his reelection when he was rocked by the Petraeus resignation. And if that was a blow to the post-reelection glow, what about the even bigger threat of the impending fiscal cliff?

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AMANPOUR (voice-over): Simpson and Bowles had a plan to bring America back from the brink. And when we return, I will ask Alan Simpson himself, will their plan still work before it's too late?

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AMANPOUR: And welcome back to the program. A terrifying fiscal cliff looms for the United States economy and therefore the global economy. That is the $600 billion tax, billion-dollar mix of spending cuts and tax hikes that'll automatically be triggered on New Year's Day -- unless, that, is, Congress and the president can work out a deal before then.

Going over the fiscal cliff, say economists, would plunge the U.S. economy back into a recession and cause unemployment to soar again. While Americans and the world look on in horror, the clock is ticking and politicians are scrambling.

There is one new element, though, and that is the reelection of Barack Obama. Does that change the bargaining positions of each side after a deadlock that has endured for more than two years? And there is a solution to the long-term deficit reduction. It is called Simpson-Bowles, after the two men -- one Republican, one Democrat -- who hammered it out back in 2010.

Here's the crisis Simpson-Bowles tackled. The U.S. national debt today is nearly 73 percent of GDP. That is up from about 54 percent just three years ago, and it keeps going up.

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AMANPOUR: President Obama commissioned the panel to fix the problem. But he never endorsed its findings. So is it time now to revive it? I am delighted to be able to ask Alan Simpson himself, the former Republican senator, who, along with Democrat Erskine Bowles, headed up the National Committee on Fiscal Responsibility and Reform, Senator Simpson joins me from Wyoming.

Welcome, Senator. And your solution today is lauded by many as the perfect starting point to restoring America's fiscal soundness.

So should President Obama just start out by going ahead and endorsing Simpson-Bowles?

FORMER SEN. ALAN SIMPSON, R-WY: Well, first of all, they always say it's a framework and then they begin to look into it, because we slaughtered every sacred cow in the field. And the report, which was called "The Moment of Truth," 64 pages long, hit everybody. And don't think those groups aren't out there, let me tell you. They're galvanized.

And it isn't about Obama now or it isn't about Democrats or Republicans. It's about the markets who are watching, who have loaned us 16 trillion bucks and every day we spend 41; we've spent a buck and borrow 41 cents; every day we borrow 3,600,000,000 bucks.

And these guys dug their own pit when they made their deal back August a year ago. And now they thought no one will be stupid enough to let this happen. Well, don't bet the ranch.

AMANPOUR: Well, let me ask you, do you think they're going to be quote-unquote, "stupid enough" to go over the fiscal cliff? Obviously, the world is watching in horror at this gridlock. It's the 11th hour. We're just less than two months away from this. Do you hear anything since the election that makes you believe this will be resolved?

SIMPSON: I have no idea. But I can tell you this: there are Democrat leaders and Republican leaders who believe that letting it go over the fiscal cliff will be to their party's advantage. Believe that or not, that, to me -- to me, it's stupefying.

But let me tell you, as Erskine says, that's like betting your country. Why would you ever get to that point? But there's plenty of that talk, or else they're going to kick the can down the road, except the can now is a 55-gallon drum filled with explosives. And they can't keep doing that.

All they have to do is do a plan, signed by a bunch of Democrats and Republicans, with some teeth in it, with some triggers to make them do what they do. And the markets will get off our back.

But if they don't, the markets are going to come up. And they don't care about Rs or Ds or the president. They care about their money and they're going to say, we're going to loan you more because you're addicted to that. And interest rates will go up and inflation will go up and the guy that gets hurt the most is the little guy. What a nuthouse.

AMANPOUR: Yes, what a nuthouse. And we've been watching it for a long time. And Speaker Boehner came out, I think, the day after the election and said that they're willing to compromise. He talked about new revenues.

He stuck very firm to no new tax rate hikes and President Obama, for his part, has basically called the election a mandate to enforce what he ran on, and that is raising taxes for the wealthy. Those two facts, do they lead you to think that there's any wiggle room for negotiation? Or are we going to be back at square one?

SIMPSON: Well, the wiggle room is very simple. You don't have to, quote, "raise taxes." You go back and look at our report, and we got rid of 1,100,000,000 bucks' worth of tax expenditures, which are just -- which are spending by any other name or earmarks. You call them whatever you wish. And we said, dump those and then we'll give you what you've been crying for.

We'll give you flat tax rates of 0 to 70 grand. You pay 8 percent 70- 110; you pay 14 percent; over that, you pay 23 percent and take the corporate rate to 26 percent from 36 percent and go to a territorial system so you don't get taxed twice when you bring it back. Everything is there. And the interest groups will continue to just terrify these 506 -- 45 people.

AMANPOUR: Do you think, though, just to be clear that new taxes are necessary?

SIMPSON: Oh, you have to have revenue. Look, you can't grow your way out of this baby. And we worked for eight months. We never had a single economist tell us we could grow our way out of this. If you add double- digit growth for 20 years, you can't cut spending your way out of this hole. That'll never get you there.

You cut the economy to ribbons and you can't tax your way out of this hole. You could confiscate the taxes of everybody who makes over a million bucks, take every yacht, every aircraft. That'll ruin the country for nine months. Who is kidding who?

AMANPOUR: Well, then, what do you need to see? What would you like to see as a specific point of compromise, one specific action, that the Democrats could do right now and that the Republicans could do right now that would lead the world -- the markets, as you say, to take them seriously?

SIMPSON: Take a very close look at what the Gang of Eight -- that's four Republican senators, four Democrat senators -- take another look at Senator Domenici and Alice Rivlin, Democrat and Republican.

Take another look at what we're doing. There's no new ground to plow, no new things to find. Look, all you have to do to stop this horrendous thing is get people on a plan. You don't even have to go to legislation. We've put legislation in front of them, said, there. You get groaning and bitching that you didn't have it. Now you've got it.

They have that in front of them. But if they can't do that, some kind of document, signed by 24 Republicans and 25 Democrats, or 150 Democrats from the House or 150 Republican, something to let the world know that in the real world you have a bipartisan suggestion or a plan which might go into effect in July 4th, 2013, it would be called Independence Day from Debt.

But that's where you got to have something that's visible, signed by both parties; none of this one-party government crap, which will kill this country.

AMANPOUR: And just finally, Senator, President Obama has not indicated whether he will go over that fiscal cliff or not, and there are serious voices urging him to do so. You addressed that.

But do you believe that he has a mandate just to raise taxes on the wealthy and don't forget, he's got union leaders on his back; he's got all the progressives who believe they put him back in office in order to enact those campaign promises. Does that put him in a straitjacket?

SIMPSON: Well, he is an American first, not a Democrat president first. And if he can't take whatever he's -- make a mandate to him, look, I took the job on. He asked me to do it. I respect the office of the presidency. I respect that very much.

But let me tell you, unless he starts to lead and he has not led yet on this issue, then it will not be resolved. You can't just sit here and blame Republicans and Democrats or Boehner -- I'd love to blame Grover Norquist or the AARP. I'd love to blame them. But you got to be a leader. And to be a leader, you got to take a lot of crap. So get in the game and take some flak.

AMANPOUR: Senator Simpson, always good to get your unvarnished truth. Thank you very much for being with me

SIMPSON: It's a great pleasure.

AMANPOUR: And we'll be right back after a break.

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AMANPOUR: And finally tonight, affairs of the heart have stained the reputations of some of America's greatest presidents, from Thomas Jefferson to William Jefferson Clinton. But imagine a world deprived of one of its greatest generals because of a sex scandal.

If you're thinking of General Petraeus, think again. Let's go back to World War II, when Dwight Eisenhower was the supreme commander of allied forces in Europe. He was also a married man. But there were rumors even then that Ike was having an affair with his driver, Kay Summersby.

Years later, to the horror of his family, she wrote about it in her memoirs. But imagine if there had been emails in those days. Imagine if Ike had been forced to resign before D-Day and final victory.

That's it for tonight's program. Meantime, our inbox is always open, amanpour@cnn.com. Thanks for watching and goodbye from New York.

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