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Egypt's Morsy Doesn't Show Up For Trial; Gates Slams Obama In New Book; Price Of Deep Freeze; Navy Chopper Down And Search Underway; Bae Family Appalled By Rodman; Stars Who Performed For Dictators; Obama And Biden Meet For Lunch; Obama & Biden Meet for Lunch; JP Morgan Fallout; Utah Same-Sex Marriage; Cost of Deep Freeze; FTC Crackdown

Aired January 08, 2014 - 13:00   ET

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

WOLF BLITZER, CNN ANCHOR: Right now, fallout from a new book by former defense secretary, Robert Gates. He takes shots at the president and the Obama administration. Now, the White House is firing back in its own way.

Right now, a big hit to the economy from the big chill sweeping the country. We're taking a closer look at the cost of the polar freeze.

And right now, the federal government is cracking down on some diet products deemed just too good to be true. You'll want to hear what's going on.

Hello, I'm Wolf Blitzer in Washington. We start with the somewhat scathing memoir from the former secretary of defense, Robert Gates. In it, he takes aim at President Obama and the vice president, Joe Biden, and other administration insiders.

Our senior White House Correspondent Jim Acosta is joining us with some of the bombshells right now -- Jim.

(BEGIN VIDEOTAPE)

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT (voice-over): At his farewell ceremony in 2011, after serving nearly every president since Richard Nixon, former defense secretary, Bob Gates, left the Pentagon, hinting he had issues with Washington.

ROBERT GATES, FORMER DEFENSE SECRETARY: I spent a good deal of time venting frustrations with the Pentagon bureaucracy.

ACOSTA: As it turns out, that wasn't the half of it. In his new memoir, "Duty", hitting book shelves next week, Gates launches a blistering attack on President Obama. His White House was by far the most centralized and controlling of national security any I had seen since Richard Nixon, Gates writes in one excerpt. On Afghanistan, he says the president doesn't believe in his own strategy, doesn't consider the war to be his. For him, it's all about getting out.

And he goes on to say, suspicion and distrust of senior military officers by senior White House officials, including the president and vice president, became a big problem for me. SEN. JOHN MCCAIN (R), ARIZONA: I think people -- his words will have a significant impact. And, frankly, I'm a little surprised because a lot of times people are not quite as candid as it appears that his book is.

ACOSTA: How is this for candid? On Biden, Gates writes, "I think he has been wrong on nearly every major foreign policy and national security issue over the past four decades." On former secretary of state, Hillary Clinton, Gates said, "Hillary told the president that her opposition to the 2007 surge in Iraq had been political." Considering Gates' place in history, sitting in the White House situation room with Mr. Obama, Biden and Clinton during the killing of Osama Bin Laden, the memoir is seen by some critics as an act of betrayal. That's despite Gates' assessment that "the Bin Laden mission was one of the most courageous decisions I had ever witnessed in the White House."

LARRY KORB, SENIOR FELLOW, CENTER FOR AMERICAN PROGRESS: You owe your loyalty to that man or woman in the White House, and if you can't handle it, you leave. And you're quiet. But Gates wanted to have it both ways.

ACOSTA: Back at that farewell ceremony in 2011, the president praised Gates as an example of service to country.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The integrity of Bob Gates is also a reminder, especially to folks here in Washington, that civility and respectful discourse and citizenship over partisanship are not quaint relics of a bygone era.

(END VIDEOTAPE)

BLITZER: Jim Acosta is joining us now from the White House. He did have some positive words to say in the book about the White House as well, didn't he?

ACOSTA: That's right, he did. There are a few moments in the book, Wolf. We have seen some excerpts, a source close to the administration has been e-mailing out some excerpts to CNN. And there are moments within the book, we mentioned one during that piece there where he praised President Obama's handling of the killing of Osama Bin Laden, said it was a courageous decision.

But he also complimented President Obama on his decision-making style. So, it is sort of a mixed bag. There were sort of those OMG moments that came out yesterday when the excerpts were released. But a source close to the administration is also pointing out there is plenty of praise from Robert Gates for President Obama, for Vice President Joe Biden, for Hillary Clinton also throughout this book.

One other interesting thing we want to note, Wolf, is that right now happening here at the White House, the president and the vice president are having lunch together. Now, you may say that's not unusual. What is unusual is that for the first time in a very long time, the White House is permitting a still and now video camera photographers inside the room to observe the president, to observe the vice president having lunch together.

Now, this may be perceived by some people as sort of a show of support from the president for the vice president. This is coincidentally, according to the White House, happening one day after the revelations started to come out from this book. But a White House official has told me, Wolf, that this has nothing to do with the book, that this is really about opening up access to White House events, presidential events because the news media has basically been clamoring for this over here at the White House.

But I did talk to one administration official who said that they see this as sort of a happy coincidence -- Wolf.

BLITZER: Are they letting in a reporter in addition to the videographers or the photographers? A reporter who might be able to ask a question or two to the president or the vice president?

ACOSTA: No, they are not. That was not a part of the arrangement for this press access for this event. Now, one of these photographers could conceivably ask a question of the president, ask a question of the vice president. We're waiting to see what the material is like when it comes back out of this meeting. But so far, we haven't seen it yet -- Wolf.

BLITZER: Because, as you know, at least when I was a White House correspondent, when we had a pool going in for an event like this, there would always be, in addition to the photographers, a reporter who would go in, could throw out a question. They don't necessarily have to answer the question. But we would always insist that someone be there representing the news media, ask a question, instead of just taking simple pictures. But this may be a different situation right now. So, we'll continue to follow what's going on, taking our viewers a little inside the political world of journalism over at the White House.

ACOSTA: We certainly would like to ask that question, that's right.

(CROSSTALK)

BLITZER: My instinct has always been, if you send in photographers, you send in at least one print reporter, a pool reporter, or a network, or radio reporter, a wire service reporter, who could at least ask some questions instead --

ACOSTA: That's right.

BLITZER: -- of just taking pictures. But that's -- we'll see what happens. I'm no longer a White House --

ACOSTA: We've been clamoring for more access, Wolf.

BLITZER: Yes.

ACOSTA: Absolutely, that's right.

BLITZER: All right, let's see what happens. We'll get a picture out of it if we don't get anything else. Thanks very much.

ACOSTA: You bet.

BLITZER: Another story we're following right now, a search and rescue mission is underway off the coast of Norfolk, Virginia. A Navy helicopter went down in those frigid waters during a routine mission this morning. Officials say there were five people on board, four of them have been rescued. The search for the fifth person is continuing at this hour.

The family of an American jailed in North Korea is outraged and appalled after a profanity-laced tirade by Dennis Rodman. He suggested Kenneth Bae had done something wrong. The former basketball star went off yesterday when our own Chris Cuomo asked if he was planning to advocate for the release of Kenneth Bae while in North Korea for an exhibition basketball game.

Chris Lawrence is here with more on what's going on. First of all, what is the family of Kenneth Bae saying about this?

CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: Wolf, they basically are saying one thing, this is not a game. Despite Dennis Rodman's sort of, you know, basketball diplomacy, to the family, this is a very, very serious matter and they spoke to CNN about how they're feeling right now.

(BEGIN VIDEO CLIP)

TERRI CHUNG: I was shocked by his words. And I think -- I don't think Dennis Rodman -- I'm not sure where he's getting his information. And I'm not sure how much credence I would give to his outbursts. I don't think -- he's certainly not a diplomat, and not an authority on this case at all. And I don't think he has any -- in any kind of position to remark on his case -- specially after making it clear he has no intention to help.

(END VIDEO CLIP)

LAWRENCE: And that's the key for Terri Chung, the fact that Dennis Rodman would insinuate that Kenneth Bae did something wrong and committed a crime and therefore deserves to be in prison right now.

BLITZER: A lot of our viewers probably don't know much about Kenneth Bae. What he was he doing in North Korea? What was this whole trip about?

LAWRENCE: Yes, the family says he was running a tour group in North Korea, something he had done many times before. That he was there legally. Now he is a prisoner, serving about 15 years of hard labor. Kenneth Bae has been in prison in North Korea for well over a year. Been there since around November of 2012. He is accused of hostile acts against the regime. The family says that's not the case. He had no intention to try to overthrow the North Korean government. And he is married. He's a father of three. And the big thing is the family says his health is now deteriorating. Wolf, they worry that with no movement, there's no way that he's going to last 15 years hard labor. BLITZER: Yes, let's hope he gets out and gets out soon. All right, thanks very much.

LAWRENCE: Yes.

BLITZER: Chris Lawrence reporting.

The basketball game with the North Korean national team was a so- called birthday gift from Dennis Rodman to the leader, Kim Jong Un, whom Rodman has called his, quote, "best friend." Rodman paid tribute before the game with this.

(BEGIN VIDEO CLIP)

DENNIS RODMAN, ATHLETE: Happy birthday to you. Happy birthday to you. Happy birthday --

(END VIDEO CLIP)

BLITZER: This is not the first time a celebrity has serenaded a dictator. Last year, Jennifer Lopez sang happy birthday to the president of Turkmenistan whose regime has been described as one of the world's most oppressive. And Beyonce performed at a 2010 New Year's party hosted by family members of the then Libyan leader, Moammar Gadhafi.

Other news. There's new information now on a scandal surrounding the New Jersey governor, Chris Christie. CNN has obtained e-mails written by some of his top aides that could shed some -- shed some new light on this story.

Jake Tapper, the anchor of "THE LEAD," is joining us now with what's going on because the intrigue here is intense political revenge, all sorts of allegations out there.

JAKE TAPPER, CNN CHIEF WASHINGTON CORRESPONDENT: Well, they've been -- it's been nothing more than allegations until today. And today, we got ahold of some of these e-mails and text messages sent from individuals affiliated with Governor Christie, some top aides that seem to suggest, in fact, that the lane closures that took place in September that caused so much havoc among commuters and parents of school kids, actually were borne from something of a vendetta against the mayor of Fort Lee, New Jersey, one of the Democrats who refused to endorse Chris Christie in his re-election effort.

Let's take a look at some of these e-mails. Here's one from Bridget Anne Kelly, who is a deputy chief of staff for Christie, to David Wildstein, who is a political appointee to the Port Authority, that's the regulating body that oversees the bridges and ports and tunnels between New York and New Jersey. It said, time for some traffic problems in Fort Lee. That's a few weeks before these bridge closures, the lane closures on the bridge.

Then in September, on the first day of the lane closures, the mayor of Fort Lee, New Jersey, this Democrat who had not endorsed Governor Christie for re-election, calls and says there's an emergency. All his constituents are calling and writing and saying, there's so much traffic. There are first responders, school buses, et cetera, that can't get through into New York. Bridgette Ann Kelly says to David Wildstein, did he call him back? And Wildstein writes back, radio silence. His name comes right after Mayor Fulop -- Mayor Fulop, we should say, is another Democratic mayor from Jersey City who had refused to endorse Governor Christie, who also alleges that there was retribution against him for not doing -- for not endorsing him.

The next day, on September 10th, mayor -- the mayor of Fort Lee, New Jersey texts to a different political appointee on the Port Authority, saying the bigger problem is getting kids to school. help, please. It's maddening. Somebody -- we're not sure, because the name was redacted -- somebody writes, is it wrong that I'm smiling when David Wildstein forwards this message, complaining about how horrible things -- how horrible things are. Is it wrong that I'm smiling? Then this person writes, I feel badly about the kids. And then writes about a minute later, I guess. Wildstein writes, they are the children of Bueno voters. Now, Barbara Bueno was the Democratic opponent of Governor Christie. Again, this note of politics, a vendetta of revenge in this.

We should point out, there is, as of now, absolutely no evidence that Governor Christie himself knew about any of this but also no response from Governor Christie's office.

BLITZER: Earlier, he did deny any involvement and anything sordid, if you will.

TAPPER: Right. And, in fact, top aides of Christie, appointees to the Port Authority who had resigned said that this was just a traffic study gone bad, gone incompetent. People on the Port Authority said they didn't know anything about a traffic study. Christie said all he knew was that these individuals said it was a traffic study gone bad and he took them at their word. Now, there is evidence that maybe it wasn't a traffic study.

One more I want to show to you. In the early mornings of September 18th, David Wildstein, this Port Authority political appointee, friend of Governor Christie's who had -- has resigned a few weeks later after the scandal became known, forwards a story from the "Wall Street Journal" about this controversy.

Now, Bill Stepien was Christie's campaign manager. Bill Stepien writes back, it's fine. The mayor is an idiot though. Win some, lose some, he said. He spelled win wrong. Wildstein writes back, I had some empty boxes to take to work today, just in case, alluding to being fired, perhaps. It will be a tough November for this little Serbian, that's an allusion to the mayor of Fort Lee, New Jersey. There is a lot for Christie and his aides to explain in these e-mails. They are potentially very damning.

BLITZER: I want you to stick around for a second on a totally different story. We just got some videotape of the president and the vice president in the White House. They were having lunch. I think we're going to roll that tape. We don't -- oh, we're going to get it in about 30 seconds. TAPPER: I'll stick around.

BLITZER: When you were a White House correspondent --

TAPPER: Yes.

BLITZER: -- and a pool went in of photographers, was there always a reporter who would go in with that pool --

TAPPER: No.

BLITZER: -- in order to ask questions?

TAPPER: No, and I was only a White House correspondent full time under the Obama administration. Sometimes it would just be photographers and they would not necessarily --

BLITZER: Because when I was a White House correspondent, we would let a pool go in, unless there was a journalist that was -- you know, a credible journalist, either print, wire service, magazine, T.V. network, who would ask questions as well. They don't have to necessarily answer the questions, but there would always be someone who could throw out the questions. Watch the tape here.

TAPPER: Well, back in -- back in --

BLITZER: Watch the tape here.

TAPPER: OK.

BLITZER: This is the luncheon. There you see the president and the vice president. Let's listen in.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: (INAUDIBLE)

UNIDENTIFIED MALE: I can skip going up.

UNIDENTIFIED MALE: OK, (INAUDIBLE)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: (INAUDIBLE) But -- what (INAUDIBLE)

UNIDENTIFIED MALE: Come back over.

OBAMA: But the weather (ph) was good, though?

BIDEN: The weather (ph) was nice. Yes. Yes. I'm sure the weather (ph) was (INAUDIBLE).

OBAMA: It was actually the best (INAUDIBLE).

BIDEN: Well, (INAUDIBLE) because usually in December and January (INAUDIBLE).

UNIDENTIFIED MALE: All right, thanks, guys.

UNIDENTIFIED MALE: OK, guys, thank you.

UNIDENTIFIED FEMALE: Thanks, guys.

(INAUDIBLE)

UNIDENTIFIED FEMALE: Thank you, guys.

UNIDENTIFIED MALE: Thank you, guys. (INAUDIBLE). Thank you.

UNIDENTIFIED MALE: Just glad to be (ph).

(END VIDEO CLIP)

BLITZER: All right, so there you see it. They got in there. They had 30 seconds. They took some pictures, took some video, but there were no questions asked of the president or the vice president.

JAKE TAPPER, CNN CORRESPONDENT: What would you ask? I would ask, if I had been there, I would have said, President Obama, what's your response to Bob Gates' suggestion --

BLITZER: Obviously.

TAPPER: Bob Gates' suggestion that Joe Biden has been wrong on every major --

BLITZER: Nearly -- nearly --

TAPPER: Well, four -- nearly every major foreign policy and national security issue of the past four decades. What's your response to that?

BLITZER: I would have asked a similar question. I would have -

TAPPER: No, you can't crib mine.

BLITZER: No, I would have asked, you know, what do you say to Bob Gates? You know, anything like that.

TAPPER: Right.

BLITZER: But, you know, it's so frustrating. You see an opportunity there. And I speak as someone who spent many years as a White House correspondent. You have an opportunity to ask the president or the vice president a simple question like that, get their response -

TAPPER: But they're not letting the reporters in. They're only letting in the cameramen.

BLITZER: I know. Isn't that frustrating?

TAPPER: It's very frustrating.

BLITZER: Yes.

TAPPER: But, like, look, the White House had to clamor for that. I mean the White House press corps.

BLITZER: They had to. That was only - because they only wanted an official White House photographer to go in.

TAPPER: Right.

BLITZER: To post a picture on Instagram or whatever and that would be that.

TAPPER: That's progress these days is getting photographers in there.

BLITZER: It's not progress in my -- my opinion, it's better than just letting in official White House photographers, Jake, but they should let a reporter in to ask questions.

TAPPER: But that's all I mean by progress, Wolf.

BLITZER: Yes, it was very limited progress.

TAPPER: Small. I'm not satisfied but it's progress. That's all I'm saying.

BLITZER: I'm not satisfied either, as you can tell. A sensitive issue for those of us who have worked over there. Thank you. See you at 4:00 p.m. Eastern.

TAPPER: I'll see you - I'll see you then.

BLITZER: I know you're going to have a lot more on this.

TAPPER: Yes.

BLITZER: The big chill sweeping the nation, taking a toll in more ways than you may think. We're taking a closer look at the economic hit from the polar freeze.

(COMMERCIAL BREAK)

BLITZER: We're learning about a key meeting between federal prosecutors and the chief regulator of JP Morgan Chase, the biggest bank in the country. It happened as prosecutors wrapped up their investigation of JP Morgan's dealings with the notorious Ponzi schemer, Bernard Madoff. Our justice reporter, Evan Perez, is joining us. He's been digging on this story.

Tell us what you know, Evan.

EVAN PEREZ, CNN JUSTICE REPORTER: Well, Wolf, I'm told by sources that a few weeks ago, as prosecutors in Manhattan were trying to wrap up this investigation, they came down to Washington to meet with the main regulator of JP Morgan Chase. That's the treasury's office of the comptroller of the currency. I'm told that the meeting got tense, in some respects, because prosecutors wanted some assurance that if they charged JP Morgan with crimes, and if they got some kind of guilty plea, that the regulator wouldn't pull the bank charter of JP Morgan Chase. Now, as you know, Wolf, if you do this to a banker, you pull their license, in essence, you're dooming hundreds of thousands of jobs and probably causing a lot of damage to the U.S. economy, which is what -- why you see yesterday, in Manhattan, the prosecutors announced that they had reached a deferred prosecution agreement with JP Morgan Chase under which the bank is paying $1.7 billion in restitution to victims of the Madoff scam. And in essence, for the next two years, JP Morgan Chase has to keep its nose clean and there would never be any charges against them, Wolf.

BLITZER: Let me turn to another subject that's just moving. I know you're learning about Utah. Apparently they've decided that in Utah they are not going to recognize those same-sex marriages performed in recent weeks before a court ruled that they should put a stay on all those marriages. What's going on?

PEREZ: Well, yes. You and I were just talking about this a few days ago. And one of the questions you had was, what happens to this -- about 1,000 same-sex couples who got married in the 17 days that gay marriage was legal in Utah before the supreme court put a stay. Just as we were beginning the segment, Utah announced that they will not recognize these marriages, so now these people are in limbo while we wait to see the state's appeal go through the circuit -- the appeals circuit court in Denver. These people have to wait and see whether or not these marriages will end up being valid, Wolf.

BLITZER: We'll get more on this story as it develops, obviously. Thanks very much, Evan Perez, joining us.

Other stories we're following.

How much will the polar freeze, still gripping some of the United States, wind up costing? One estimate says about $5 billion -- that's with a b -- billion dollars. Let's bring in our own Alison Kosik. She's over at the New York Stock Exchange.

So, Alison, how does this add up, the losses, where do they come from?

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: So, Wolf, you know, you think about the deep freeze that we've been in. So many of us have been in. It really hit a lot of places and literally kept people from leaving the house. And that affects the economy.

So when things kind of grind to a halt, there's this domino effect. Think about it. Many people didn't go to work, so that's lost productivity and lost wages. Many of us didn't go out to the grocery store or go out to eat. We'd rather stay at home and cook. That's lost consumer spending, less money for waiters and waitresses and local businesses. Trains and buses stopped running. Less money for transportation providers like Amtrak. No shopping mall. Many of us didn't want to venture out to the shopping malls and go to the movies either.

So weather economist, Evan Gold (ph), I spoke with him earlier, and he says there was such an impact on the economy because the brutal cold hit so many people. Did you know that every state yesterday, Wolf, went below the freezing mark? That's hundreds of millions of people.

Wolf.

BLITZER: That's a lot of people, obviously. All right, thanks very much, Alison, with that report.

You've heard the warning, if it seems too good to be true, it probably is. Now the FTC is going after some diet companies saying they're making false claims.

(COMMERCIAL BREAK)

BLITZER: With the new year, lots of us are certainly looking to lose some weight, but be careful if you plan to use some diet products. The Federal Trade Commission is cracking down on companies it says have made false claims. Brian Todd is here. He's been working on this story.

"Operation Failed Resolution," that's what they're calling it.

BRIAN TODD, CNN CORRESPONDENT: "Failed Resolution," right. This time of year, it hits home with a lot of people, Wolf. And, you know, we all have seen these ads. They're enticing. They're really too good to be true. And the FTC has essentially said that they are.

Here are some of the ads we're talking about. An ad for a company call Sensa that advertises a powder that you can put on your food. Quote, "get a gym body without going to the gym." A powder that you can put on your food that makes you feel fuller faster. L'Occitane, the boutique store, markets an almond scented cream, two of them, where they advertise you can significantly slim your thighs in a matter of weeks by putting this cream on your thighs.

The FTC saying it's all too good to be true. None of it is supported by scientific evidence. The FTC is charging those two companies and two others with deceptively marketing these products and on unfounded promises, these weight loss products. And they're going to pay a total of about $34 million in fines and pretty much in refunds to customers for these products.

And, again, we talked about the Sensa product that's a powder. It's supposed to be sprinkled on food to make you feel fuller. The two skin creams. You know, these are things that we all see, and that dieticians and nutritionists will tell you, it really is too good to be true.

BLITZER: If it sounds too good to be true, it usually is too good.

TODD: Right.

BLITZER: So what -- basically this one company, that you put some cream on your thigh, your thigh is going to look a lot thinner -

TODD: Yes.

BLITZER: And you're going to lose some weight. You know, they've been -- now they have to pay a fine for that.

TODD: They do. They're paying -- the four companies total are paying $34 million. And just about all that's going to go to refunds of customers. We literally, in the last few minutes, have gotten statements from a couple of them. Sensa says it stands behind its products. That they're incorporating changes to their marketing. A lot of -- some of these companies are blaming their marketers for this and not necessarily the products. L'Occitane says that they've taken steps to review their ads and implemented some changes in their products.

One of the companies, Lean Spa, which is accused by the FTC of having fake websites to promote these colon cleansing products, says that Lean Spa was an excellent company with clinically tested products and was itself a victim of deceptive and fraudulent conduct by its marketing partner. So some of these companies blaming their marketers for this.

BLITZER: All right. A good (ph) story. I know you're going to rework (ph) and get some more later in "The Situation Room" as well.

TODD: Right.

BLITZER: Thank you, Brian.

TODD: Sure.

BLITZER: Robert Gates taking shots at the Obama administration. The former defense secretary also with some unkind assessments of Joe Biden and Hillary Clinton. Could his new memoir actually have an impact on the 2016 presidential race? Gloria Borger standing by live to discuss.

(COMMERCIAL BREAK)