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The Situation Room
Funding for the Wars; Misspending in Iraq; N. Korea Makes Nuclear Vow; Guilty Pleas in Home Grown Plot; Hard Choice for Soldier's Sister
Aired December 14, 2007 - 17:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAFFERTY: Beth writes from Maine: "Yes, we've got to pay for what we need somehow. Who better to pay for it than those who can best or most afford it? If I paid half my income in taxes, I'd feel fortunate to be so wealthy."
Tyler in North Carolina: "Personally, I think it's the right tactic, as long as it doesn't affect my middle class wallet."
And Corinne writes: "It's the only strategy to get us out of the situation that eight years of Republican reign always puts us in -- recession and putting us -- putting the little -- putting it to the little guy in this country. Doesn't anybody have a memory?"
Or the ability to speak clearly?
I'll work on this and try to do better next hour.
BLITZER: You will, I am sure, Jack.
Thanks very much.
And to our viewers, you're in THE SITUATION ROOM.
Happening now, reports of his political demise greatly exaggerated. President Bush getting his way with Congress -- at least for now. It's prompting a change in tone. We're going to have details of what the president is saying to lawmakers.
Also, North Korea's nuclear standoff with Washington -- you're going to find out how Kim Jong Il is responding respond to President Bush's personal letter to him and whether the North Korean dictator can be trusted.
And CNN's own Richard Quest paying a holiday visit to the first lady, Laura Bush, over at the White House. She reveals details of her daughter's upcoming marriage.
Will there be a White House wedding?
I'm Wolf Blitzer.
You're in THE SITUATION ROOM.
President Bush is toning down his rhetoric as he gains the upper hand, at least for now, in his battle with the Congress over war funding. It's turning out to be a much happier holiday season over at the White House than many had expected only a few months ago.
Let's go to our White House correspondent Ed Henry.
He's standing by live -- Ed, so what is the president saying?
ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Well, Wolf, it's interesting. The president is making clear he will not stand for Congress leaving town without funding U.S. troops. And it appears Democrats are going to blink on war funding, because the president has a stronger hand in this budget battle.
(BEGIN VIDEOTAPE)
HENRY (voice-over): This may be as close to a victory lap as you'll see from President Bush. After weeks of bashing lawmakers, he actually had a few warm words for Congress finishing its work.
GEORGE BUSH, PRESIDENT OF THE UNITED STATES: Lawmakers have made some important progress in working out such differences. I'm pleased to hear that they're close to reaching an agreement on a budget.
HENRY: The shift in tone is a sign the president feels he's getting his way on key issues -- like securing tens of billions of dollars more for the wars in Iraq and Afghanistan.
BUSH: I also understand that Congress may provide a downpayment on the war funding I requested without artificial timetables for withdrawal. These are encouraging signs.
HENRY: The downpayment comment was a nod to the fact the president was not getting all $200 billion in the war money that he wanted. But Democrats privately admit they're likely to give the president up to $70 billion for the wars -- just weeks after Speaker Nancy Pelosi vowed Mr. Bush would not get another dollar this year.
REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE: The Republicans have made it very clear that this is not just George Bush's war, this is the war of the Republicans in Congress.
HENRY: Pelosi notes Democrats have succeed on other matters, like the sharpest increase in fuel-efficiency standards for cars and trucks in a generation, a point Mr. Bush acknowledged.
BUSH: I want to thank the Senate and to congratulate the Senate for passing a good energy bill. And now the House must act.
HENRY: But the year began with people writing the president's political obituary, as Democrats swept into power.
BUSH: Congratulations, Madam Speaker.
HENRY: The year ends with a the president in a stronger political position thanks to his use of the veto pen and splits among the Democrats on the war and other issues.
(END VIDEO TAPE) HENRY: Now, the White House doesn't want to celebrate just yet. They realize that anything can change in these last minute budget negotiations. One top aide here saying there are not going to be any victory dances. But the bottom line is that the president is getting more in these budget talks, I think, than either side ever expected -- Wolf.
BLITZER: Ed Henry joining us from the White House.
Thank you.
A new Pentagon audit is uncovering stunning waste and fraud in Iraq -- with millions of U.S. taxpayer dollars simply going down the drain.
Let's go to our senior Pentagon correspondent, Jamie McIntyre.
He's watching this story for us.
So what's the bad news in this audit -- Jamie?
JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT: Well, Wolf, follow me here. Let's say you wanted to build a $30 million Army barracks in Iraq and then you decide, you know what, we don't want it after all.
You wouldn't pay the $30 million, would you?
Apparently, that's not the way it works in Iraq.
(BEGIN VIDEOTAPE)
MCINTYRE (voice-over): The U.S. Congress authorized more than $5 billion back in 2005 for the vital task of building the Iraqi Army. But millions of those U.S. tax dollars have been stolen or wasted, according to the latest report from the Pentagon's inspector general.
SEN. BYRON DORGAN (D-ND), POLICY COMMITTEE OVERSIGHT CHAIRMAN: Having been at this for about four years, I have not ever seen the waste, the fraud and the abuse that now exists. And I think it is shameful.
MCINTYRE: Take the case of Ellis World Alliance Corporation based in Gainesville, Florida, which was supposed to build Iraqi Army barracks in Ramadi. According to Pentagon auditors, the contractor did not renovate or build any new facilities, yet collected $31.9 million of the $34.2 million total. It turns out the project was canceled because the Iraqi Defense Ministry couldn't get rights to the land.
The Pentagon watchdog agency sharply criticized the Air Force Center for Engineering and the Environment, which administered the contract, for a lack of oversight.
But an Air Force spokesman insisted to CNN that taxpayers were not billed and for one thing, they did get $15 million worth of equipment and supplies. MICHAEL HAWKINS, SPOKESMAN, AIR FORCE CENTER FOR ENGINEERING AND THE ENVIRONMENT: Along the way, work was done. And materials and equipment were purchased. We have the materials and equipment in hand to be used down the road when they're needed. I believe that the business process that we have in place is working.
MCINTYRE: A spokesman for Ellis World Alliance did not return CNN's phone calls. The Pentagon I.G. did say the company operated a construction camp and procured raw materials, but that cost vouchers submitted did not support the claim. And it said it may require litigation to get some of the money back.
(END VIDEO TAPE)
MCINTYRE: And, Wolf, in a separate development that's dripping with irony, some of the Pentagon's investors are themselves now under investigation. Law enforcement sources confirming to CNN that the FBI is looking to the Office of the Special Inspector General for Iraq Reconstruction, investigating allegations of possible wrongdoing or questionable practices involving finances and e-mail monitoring -- Wolf.
BLITZER: All right, Jamie.
Thanks very much.
What a story.
That same audit, by the way, says that over $1 billion worth of equipment meant for the Iraqi Army simply missing. And that includes crates of machine guns and rocket-propelled grenades, more than 2,000 generators, six garbage trucks, among other things.
Let's go to Jack Cafferty in New York.
He's got the Cafferty File -- you know, that's our taxpayer dollars at work right there.
CAFFERTY: Well, they probably use those garbage trucks to haul all that other stuff away and they had to have something to carry it in. It's just disgraceful. You know, it's going to be like the other stuff that we've reported on for the last four years in conjunction with this war. They'll go yes, the money is missing, the guns are missing, the trucks are missing, everything is missing -- so what?
Next?
Mike Huckabee is the Howard Dean of the 2008 presidential race. This is according to a piece by Rich Lowry in the "National Review". He suggests Republicans are making a major mistake if they nominate Huckabee. Lowry writes: "Like Dean, Huckabee is an under vetted former governor who's manifestly unprepared to be president of the United States. Like Dean, he's rising to the top of the polls in a crowded field based on his appeal to a particular niche of his party. As with Dean, his vulnerabilities in a general election are so screamingly obvious that it's hard to believe that primary voters -- once they focus seriously on their choice -- will nominate him."
Here's the string on Lowry's piece. Lowry works for the "National Review". The "National Review" has endorsed Mitt Romney -- one of Huckabee's main opponents.
Nevertheless, it's an interesting story. Huckabee goes on to say this, that Huckabee would take religion -- a strength of the Republicans -- and make it into a weakness by overplaying it. He suggests other vulnerabilities would be Huckabee's tax history as governor of Arkansas and his lack of national security experience. In fact, Lowry says, Democrats have to be looking at Huckabee as a shiny Christmas present that's too good to be true.
Here's the question then -- do you think the Republicans will be making a mistake by nominating Mike Huckabee for president?
E-mail your thoughts to Caffertyfile@CNN.com or go to CNN.com/caffertyfile, where you can post a comment on my blog. And a lot of you have been doing that, because the people that know about that stuff around here say the thing is -- it's just a rock song now. It's just going like a house of fire.
BLITZER: (INAUDIBLE).
CAFFERTY: You know, they look at Huckabee like the other side looks at Hillary -- they look at him as beatable. The Republicans look at Hillary as beatable and the Democrats look at Huckabee as beatable.
BLITZER: This contest is getting exciting, though. I don't care what anybody says.
CAFFERTY: Oh, yes. It's getting good.
BLITZER: It's getting really -- it's going to be down to the wire in Iowa and then New Hampshire.
Jack, thanks very much.
And Jack will be joining us in our 6:00 p.m. Eastern hour with the best political team on television.
She's losing ground in key states.
Does that mean she'll replace her team?
Listen to this.
(BEGIN VIDEO CLIP)
SEN. HILLARY RODHAM CLINTON (D), PRESIDENTIAL CANDIDATE: I called my campaign and I said are we having a shake up?
I don't know anything about it.
(END VIDEO CLIP)
BLITZER: So how will Senator Clinton respond to the challenges out on the campaign trail?
And what does that say about what kind of president she could be?
I'll speak with one of her biographers, the journalist, Carl Bernstein. He's standing by live.
Also, new developments in that nuclear standoff with North Korea. You're going to find out how Kim Jong Il is now responding to President Bush's personal letter to him.
Plus, a homegrown terror plot hatched behind prison walls. Now the two American suspects have entered their pleas.
Stay with us.
You're in THE SITUATION ROOM.
(COMMERCIAL BREAK)
BLITZER: Her once dominant lead slipping in some key states. It's prompting Democratic presidential candidate Hillary Clinton to go on the offense. In a news conference over in Iowa today, she argued that she is the most electable Democrat. Clinton also says she'd be happy to reach an agreement with her Democratic presidential rivals to stop the negative campaigning, but she says pointing out differences is not -- repeat -- not being negative.
(BEGIN VIDEO CLIP)
CLINTON: I think contrasts are legitimate, Mark. My goodness. I mean there are big differences between me and, say, Senator Obama, on health care. I think that is a legitimate issue in this campaign. You know, he has a health care plan that doesn't cover every American. My plan does. I think for voters who care about health care and who fall into those second two categories that Leonard was talking about, it is a defining contrast.
(END VIDEO CLIP)
BLITZER: All right, let's get some analysis now from an expert.
We're joined by our CNN contributor, Carl Bernstein. His best- selling book about Hillary Clinton is called "A Woman In Charge". Carl, she's got a crisis, I think, on her hands right now, with her lead slipping in Iowa and New Hampshire and perhaps elsewhere nationally, as well. How -- how she deals with this crisis could help us better understand how she would deal with crises if she were president of the United States. And you've have studied her for the last several years.
What do you think?
CARL BERNSTEIN, CNN CONTRIBUTOR, AUTHOR, "A WOMAN IN CHARGE": When there is a crisis with both Clintons, the result is they deal with it as a kind of schizophrenia. You see the good Hillary on one side, the bad Hillary on the other. So you'll see her there saying well, we're not going to do any negative campaigning and it's really about differences in health care when, in fact, nobody was talking about health care, when they were talking about negative campaigning. They were talking about her campaign going after Obama on his purported cocaine use as a young man.
It's, again, this factor of disingenuousness. And it's very typical of what has happened to the Clintons when they're in a jam. On the one hand, their apparat acts like thugs in many instances, especially the press apparat, now run by a guy named Howard Wolfson. And then there are also very smooth operators that are trying to win and convince and charm, including Hillary and Bill Clinton personally, the "Des Moines Register" and its columnists to get its endorsement.
BLITZER: You're...
BERNSTEIN: So it's a fist and a glove.
BLITZER: Your book is entitled "A Woman In Charge".
Do you get the sense she's in charge of this campaign, that she's clearly the dominant figure in making the critical strategic decisions?
BERNSTEIN: Absolutely. She and Bill Clinton and, to a lesser extent, Mark Penn, who comes from the Clinton apparat in the Clinton years in the White House, they are running this campaign. It is no accident that Howard Wolfson, again, himself, has been talking in private about this supposed cocaine past of Obama -- that Obama himself talked about in his book many years ago. They're running the campaign.
And, also, they are dealing with the fact that it's becoming apparent that this is a campaign about restoration -- The restoration of Bill and Hillary Clinton -- or Hillary and Bill Clinton -- to the White House. And it's a factor that they probably had not planned on becoming such a divisive aspect of the campaign. And people obviously are saying -- and Obama is reaching into people's doubts by saying do we really want to go back to this?
BLITZER: She has a new ad focusing in on three generations of Clinton women, if you will.
I want to play a little clip.
Listen to this.
(BEGIN VIDEO CLIP FROM HILLARY CLINTON FOR PRESIDENT CAMPAIGN AD)
CLINTON: I'm thrilled that I have my mother and my daughter with me tonight. My mother, Dorothy Rodham, and my daughter, Chelsea Clinton.
(APPLAUSE).
(END VIDEO CLIP) BLITZER: It's really a soft touch -- obviously going after women voters out there. And it's coming on the heels of the Oprah campaign events for Barack Obama.
What do you make of this so-called softer side of the former first lady, the current U.S. senator?
BERNSTEIN: Well, first of all, it's true. Hillary Clinton, her daughter Chelsea and her mother Dorothy are all remarkable women. And they are all women who have withstood remarkable humiliation -- though, I'm sure that's not the theme that Hillary wants to raise there. It's a very logical appeal. She's in trouble with women. The -- obviously, that Oprah was out there has hurt her in some respects. And she's called in her family to undo the hurt.
Whether it's enough or not, we're not going to know. What we do see is something we've seen throughout the Clinton years both on the campaign trail and in the White House, and that is flailing when difficulty arises. But as often as not, the Clintons have been able to pull themselves out of terrible jams. So don't discount her or Bill or Dorothy or Chelsea or Mark Penn or anybody else here.
And, at the same time, the polls that we see nationally that show her with a commanding lead, that is just a snapshot of a while ago. And there's a video going that we need to look at right now. And that video shows her in much more trouble than those polls would indicate. And certainly the polls in South Carolina, New Hampshire and Iowa are very dire right now for the Clinton apparat.
And somehow, the press is beginning to focus -- finally -- on the apparat itself and some of its uglier sides. And the campaign has got to figure a way to deflect that, as well, because it's not always a pretty picture the way the Clintons -- and Hillary, in particular -- operate when the chips are down.
BLITZER: Carl Bernstein's book is entitled "A Woman In Charge".
Carl, thanks for coming in.
And we're just getting some video now in of a scare involving a plane over at Chicago's O'Hare Airport.
Carol Costello will bring us that story.
That's coming up in a moment.
Also coming up, North Korea says we will if you will. The country is making a verbal response to President Bush's personal letter to Kim Jung Il. New developments in that nuclear showdown.
Also, a homegrown terror plot targeting U.S. military sites, Jewish sites -- details of the suspect's day in court. We'll share that with you.
And the first lady, Laura Bush, welcomes CNN's Richard Quest to the White House. You're going to find out what she told him about the values of this, the Christmas season.
Stay with us.
You're in THE SITUATION ROOM.
(COMMERCIAL BREAK)
BLITZER: Carol Costello is monitoring some other important stories incoming into THE SITUATION ROOM right now.
Let's go to Carol -- Carol.
CAROL COSTELLO, CNN CORRESPONDENT: Well, let's start with a scare at O'Hare. This is a developing story, Wolf. This is a runway at O'Hare International Airport in Chicago. You can see the emergency slides deployed on that airplane, a Boeing 777. This is United Airlines Flight 836.
Apparently, there were reports of smoke in the cabin. This is according to our affiliate WLS. The captain called for an emergency landing. The plane was coming in from Shanghai and was supposed to land in Chicago. But, as you can see, emergency vehicles were standing by. And they're trying to figure out what went wrong. There were 269 people onboard that flight. All of them got off safely. We don't know what caused the smoke. I'll keep you posted.
In other news this afternoon, police in Boca Raton, Florida, are urging holiday shoppers to be "vigilant and conscious of their surroundings" after a mother and daughter were found moderated outside of a popular a mall. The 47-year-old woman and her 8-year-old daughter were found dead in their car in the mall parking lot. Police say robbery may have been the motive.
In the waning hours at a U.N. conference on climate change in Bali, there is renewed hope for an agreement on a road map to fight global warming. U.S. and European Union delegates worked late into the night to break an impasse on targets for cutting greenhouse gas emissions. An extra session is now scheduled for tomorrow morning. Several high-ranking delegates say they're confident a compromise will be reached.
And final exams going on right now for lots of college students around the country. So this piece of news is especially relevant. A new study finds that students who pull all-nighters to cram for their finals actually end up with a lower grade point average. Go figure. Researchers say the brain just doesn't work as efficiently without sleep.
Somehow, Wolf, I don't think that bit of knowledge will end the tradition, though.
BLITZER: It's either you pull the all-nighter and you get a grade or you don't, and you just flunk.
COSTELLO: Or you don't study at all. That's right.
BLITZER: That's it. I remember those days vividly. I suspect you have some friends who probably remember that, Carol.
Thank you.
COSTELLO: Of course, I was always prepared.
BLITZER: Of course.
Thank you, Carol.
All right, check this out behind me. You can see it right here. These pictures coming in from TrafficLand.com. These are views from Upstate New York, where we're seeing some extremely dangerous driving conditions right now. The region is digging out from one major winter storm and now being told get ready for another.
Let's go to our severe weather expert, Chad Myers.
He's monitoring these developing stories -- this developing severe weather picture for us.
What's the latest, Chad?
CHAD MYERS, CNN METEOROLOGIST: The problem with today, Wolf, was that it was in the 30s and 40s, well above freezing in all the cities that you were showing. And tonight it's going to be down to the 20s. So anything that tried to melt but didn't make it all the way is now going to be refreezing here right around sunset. So you need to watch that. Especially by morning, everything will be frozen solid again.
(WEATHER REPORT)
BLITZER: Chad, thank you.
We'll check back.
CNN's Richard Quest -- he dropped in on the first lady earlier today at the White House.
(BEGIN VIDEO CLIP)
LAURA BUSH, FIRST LADY OF THE UNITED STATES: Come in.
How are you?
RICHARD QUEST, CNN CORRESPONDENT: Hello.
L. BUSH: Good to see you.
Thanks.
QUEST: Thank you so much.
L. BUSH: Thank you for coming.
Happy holidays.
QUEST: Right. Let us -- let us -- let us make our way and talk.
(LAUGHTER)
(END VIDEO CLIP)
BLITZER: And that they did. They talked. You're going to want to hear what Mrs. Bush had to say about commercializing Christmas and what the holidays are really all about.
Also, new details about that sordid love triangle among NASA astronauts that led to charges of assault and attempted kidnapping last year. We're going to show you their very personal e-mails. They've now been released. And we'll share with you some of them.
And disgraced NFL star Michael Vick's plea from prison. We have details on his handwritten note to the judge.
Lots of news still unfolding right here in THE SITUATION ROOM.
(COMMERCIAL BREAK)
BLITZER: To our viewers, you're in THE SITUATION ROOM.
Happening now, the attorney general, Michael Mukasey, refusing to provide details on those videotaped CIA terror interrogations. Congress is investigating why those tapes were destroyed. Mukasey said he doesn't want to politicize the inquiry and says there's no need now to name a special prosecutor.
Senate Republicans are blocking a bill that would ban waterboarding, mock executions and other harsh CIA interrogation techniques. The measures were last minute additions to an intelligence bill approved by the House yesterday.
And stocks close out a losing week on Wall Street. The Dow lost 178 points today. It was down more than 2 percent for the week.
I'm Wolf Blitzer.
You're in THE SITUATION ROOM.
(COMMERCIAL BREAK)
WOLF BLITZER, CNN ANCHOR: To our viewers, you're in THE SITUATION ROOM.
Happening now, the attorney general Michael Mukasey refusing to provide details on those videotape CIA terror interrogations. Congress is investigating why those tapes were destroyed. Mukasey said he doesn't want to politicize the inquiry and said there is no need now to name a special prosecutor.
Senator republicans are blocking a bill that would ban waterboarding, mock executions and other harsh CIA interrogation techniques. The measures were last-minute additions to an intelligence bill approved by the house yesterday. Stocks close out a losing week on Wall Street. The Dow lost 178 points today, was down more than 2% for the week.
I'm Wolf Blitzer. You're in THE SITUATION ROOM.
Letter received. Now, a verbal response to President Bush's appeal to North Korea's Kim Jong-Il. Mr. Bush urging him to come clean on his country's nuclear programs.
Let's turn to CNN's Brian Todd. He's watching this story for us. What are the North Koreans saying right now? They got a personal letter from the president earlier.
BRIAN TODD, CNN CORRESPONDENT: They did, Wolf. Now they're saying something that gives real hope for a peaceful solution to this standoff but the key question, as always, can the North Koreans be trusted?
(BEGIN VIDEOTAPE)
TODD: Inside a key communication from a secretive paranoid regime to the White House. A signal the president's personal message to North Korea's leader may have worked. Senior State Department officials tell CNN of a verbal response they got over the phone. The North Koreans say they appreciated President Bush's letter to Kim Jong-Il earlier this month saying they'll hold up their end of negotiations on getting rid of their nuclear weapons if the Americans hold up theirs.
PRES. GEORGE W. BUSH, UNITED STATES: I got his attention with a letter and he can get my attention by fully disclosing his programs, including any plutonium he may have processed.
TODD: In his letter to the man he once reportedly called a pygmy, Mr. Bush offered the prospect of diplomatic ties if nothing breaks down in talks aimed at dismantling the nuclear weapons. The North Koreans have until the end of this month to reveal all their nuclear secrets. Under U.S. supervision, they've already taken down part of the reactor that makes plutonium for nuclear bombs and the U.S. is promising more energy aid if they follow through. But some seriously doubt the regime will reveal everything or destroy all of its arsenal.
JOHN BOLTON, FORMER U.S. AMBASSADOR TO U.N.: North Korea has yet again for probably the fourth or fifth time in the last 15 years, promised to give up their nuclear weapons. They promise a lot, they never actually do it.
TODD: A huge problem, verification. Experts say this about America's intelligence on North Korea.
DEREK MITCHELL, CENTER FOR STRATEGIC AND INTL. STUDIES: It's one of the great intelligence failures in essence that we had for the past 50 years. Basically the human intelligence we have are the defectors. I think we're really actually riding somewhat blind on exactly what they have. (END VIDEOTAPE)
TODD: Still, most observers agree the communication between the two leaders is a very positive sign. One congressional source says that this shows trying to get the North Koreans to be transparent is like walking through deep snow. It's slow, arduous, and you have to keep showing them the right direction. Wolf?
BLITZER: I know you have been talking to U.S. officials. What is their immediate fear, Brian, on North Korea's nuclear program?
TODD: One very key concern is the regime's effort to get highly enriched uranium. That's a key component in nuclear weapons. U.S. officials believe they're pursuing it. Sources say they may not have a full-blown program right now, but the U.S. is pressing them to come clean with it.
BLITZER: Brian, thanks very much. A significant story unfolding. He'll stay on top of it.
Meanwhile, guilty pleas in a homegrown terror plot. Prosecutors now say a targeted U.S. military bases and Jewish sites, all of it put together behind prison walls.
Let's go to our homeland security correspondent Jeanne Meserve. She's watching this story. What do we know about this case, the latest developments, Jeanne?
JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Wolf, the charge is conspiracy to levee war against the United States. The plea from two of the defendants -- guilty.
(BEGIN VIDEOTAPE)
MESERVE: The plot took shape inside California's new Fulsome Prison where Kevin James founded a radical Islamic organization called JIS. Its goal to wage jihad against the U.S. government and replace it with an Islamic caliphate. Lavar Washington was a JIS member and once he left prison, a recruiter. Friday they pleaded guilty to plotting attacks on U.S. military bases, as well as Israeli and Jewish sites in the Los Angeles area. Authorities say they plan to hit synagogues on Jewish holidays to increase the number of victims.
THOMAS O'BRIEN, U.S. ATTORNEY: Because these men were driven by ideological fervor, had a demonstrated ability to obtain and fire weapons and had planned attacks on identified targets, an untold number of lives may have been saved when this terrorist cell was dismantled.
MESERVE: The plot was uncovered by sheer luck and in the nick of time, officials say. The group was raising money by robbing gas stations. At one, a conspirator dropped a cell phone which led investigators to the men, a list of targets and even a media statement to be released after the first attack. "This incident is the first in a series in a plight to defend and propagate traditional Islam in its purity," it says. James and Washington are Americans with no known connections to any other terror group. Their case has opened eyes about the threat of prison radicalization and American-born terrorists.
ROBERT MUELLER, FBI DIRECTOR: These homegrown terrorists may prove to be as dangerous as groups like al Qaeda if not more so.
(END VIDEOTAPE)
MESERVE: James faces a maximum sentence of 20 years and Washington 25 years. A third defendant is expected to enter a guilty plea Monday. A fourth has been found unfit to stand trial and receiving psychiatric care. Wolf?
BLITZER: All right. Jeanne, thanks very much; Jeanne Meserve reporting.
Coming up, what drove the astronaut Lisa Nowak over the edge? A glimpse into the so-called love triangle that led to her arrest on charges of assault and attempted kidnapping.
Also, NASA makes some personal e-mail public.
And as the ad wars heat up in Iowa, we'll take a closer look at a new spot from Senator Barack Obama. What's the candidate saying or perhaps more significantly not saying?
Stay with us. You're in THE SITUATION ROOM.
(COMMERCIAL BREAK)
BLITZER: Who to vote for in the critical New Hampshire primary. It's a very difficult choice for a lot of people and for some a very personal reason begins to unfold.
Let's go to our chief national correspondent John King. He spoke with one woman who wants her vote to serve U.S. troops. John?
JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Wolf, there's no doubt the emotions of the Iraq war debate have calmed some in recent months, yet the war remains the number one issue here in New Hampshire. And for some mulling their choice for president, it is intensely personal.
(BEGIN VIDEOTAPE)
KING: Erin Flanagan has three reasons to get excited about Christmas and one gaping hole.
ERIN FLANAGAN, NEW HAMPSHIRE UNDECIDED VOTER: My little brother, Michael Cleary. First Lieutenant Michael Cleary was killed in action in Iraq.
KING: It was two years ago this week. The anniversary clouds the holidays and the choice Erin has just a few more weeks to make.
FLANAGAN: I want my vote to best serve the troops and the families of the military.
KING: Her decision matters more than some. She is a New Hampshire independent, able to vote in either party's primary and torn between the two candidates who's faith here could be determined by how many independents come their way; Barack Obama and John McCain.
FLANAGAN: His ability to be able to reach across the aisle and attempt to get things done. I think that is something that we vitally need in a leader, which is why I'm attracted to both of them. And I am considering both of them. And I know that that's a unique consideration. I could vote either way and they are, obviously, extremely different candidates.
KING: McCain won her respect at a republican debate here six months ago.
FLANAGAN: As a member of an American family who has suffered so greatly at the choices made by the current administration, I desperately would like to know what you, as commander in chief, would do.
SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: This war was very badly mismanaged for a long time. This is long and hard and tough, but I think we can succeed.
KING: He called after the debate. She invited him to dinner, along with her mother who believes the war was a disaster.
FLANAGAN: He was respectful and so very kind to her with these two very special people sitting at our kitchen table, he maintained his position.
KING: Yet, Erin is not sure she can vote for him.
FLANAGAN: I want to do what's right and that's what I'm struggling with.
KING: Struggling because she's not sure whether McCain is right and she says the United States must stand and succeed or Obama says bring the troops home as soon as possible.
FLANAGAN: I don't know the best way for us to get out of the situation that we're in now.
(END VIDEOTAPE)
KING: Erin says making her choice is harder because the anniversary of her brother's death stirs up so much sadness. She keeps in touch with some members of his unit and for those still serving, she wants to make sure that her vote is not a mistake. Wolf?
BLITZER: John King reporting for us from New Hampshire. John, thanks for that moving account.
The holiday spirit, we've all felt it and now CNN's Richard Quest is on a mission right now to try to find out what it's really all about and it brought him to the White House for a special conversation with the first lady Laura Bush.
Richard is joining us here in THE SITUATION ROOM. Richard, welcome.
RICHARD QUEST, CNN CORRESPONDENT: Have a cookie.
BLITZER: I will have a cookie later.
QUEST: This is Bush's cookies.
BLITZER: I know. I've had some before. Stand by for a moment. I want to play a little excerpt. You had a chance to sit down with Laura Bush earlier today. Here's a little clip. Let's play it and then we'll talk.
(BEGIN VIDEOTAPE)
QUEST: Does it worry you that Christmas has become a lot more --
LAURA BUSH, FIRST LADY: Commercial.
QUEST: You said it.
BUSH: Well, sure, but I also know that the values are there and that's what I see when I travel around our country. Everywhere and especially at this time of year. I think there is always this idea of charity at Christmas that we want to have all year. We want that idea to be a part of our national values. But, certainly, at Christmas. I think that's an expression of faith and an expression of hope, as well.
(END VIDEOTAPE)
BLITZER: A nice touch. Talk to us a little bit about this exchange you had with the first lady.
QUEST: It was absolutely extraordinary. We didn't really know we were going to get an interview with Mrs. Bush. I'm on a quest, if you'd like, for the festive spirit. What is it inside us that wells up at this time of year? Whether you're Christian, Hindu, Muslim, Jewish, all the festivals have something and it all surrounds light into dark, December. The whole idea of it. So when I said and we asked the White House would Mrs. Bush talked to us about this, we waited and waited and waited and they said, yes. What she came across this morning was being extremely passionate, not only on the religious grounds. She's an extremely religious woman, as you know. But also on this idea of spirit, of generosity and this idea that at Christmas this is the moment when that generosity of spirit comes out.
BLITZER: We'll get to the cookies. So, stand by, the quest, was it achieved? Did you better understand this spirit right now?
QUEST: No question about it. Yes. The festive spirit lies within all of us. And when you let it out, it feels good. And that's what we learned today, I think, when we were at the White House. We saw just how you can take what is the center, if you like in many ways, of the western world. And you decorate it with a few of this and a some cookies and you get that spirit.
BLITZER: She also spoke to you about another festive occasion that is about to develop, the wedding of one of her twin daughters. I'll play another excerpt when she spoke about that.
(BEGIN VIDEOTAPE)
QUEST: There will be many people that would say, what you going to do next?
BUSH: We're going to retire to Dallas.
QUEST: No, I mean in terms of Christmas.
BUSH: The final Christmas. Assuming you won't have a wedding, of course.
QUEST: We won't have a wedding at Christmas, we will have a wedding this year, though. In fact, this national park that's represented behind us on this Christmas tree is Acadian National Park in Maine and it has the little cookies that have the carriages on them because that's one of the fun things to do there and the fish because it's on the sea shore and, actually, Acadia National Park is where our daughter, Jenna, was proposed to by Henry. So, we will have a wedding this year.
(END VIDEOTAPE)
BLITZER: And congratulations to them on that. When she says this year, she means in the coming year. Go ahead, talk.
QUEST: I tell you, will it be at the White House? Is it going to be in Texas? Is it going to be at the Acadia National Park? This is Bush giving a little bit of a hint there, of which I was completely unaware, necessarily. What can we say? All we know is that there are cookies on the White House Christmas tree.
BLITZER: That's about all we know. We don't know where the wedding is going to be, only that it is within a year. Show us some of those cookies.
QUEST: Have a cookie.
BLITZER: I will have one.
QUEST: Barney or Mrs. Beasley.
BLITZER: This is an adorable little cookie.
QUEST: We scoffed a whole lot of them and then they sent me some more.
BLITZER: Very delicious cookies.
QUEST: You had some?
BLITZER: I had some last night. We had the White House Christmas party last night.
QUEST: I wasn't invited.
BLITZER: It was lovely. There were hundreds of journalists there.
QUEST: I wasn't invited.
BLITZER: Stand by. Richard Quest on his own quest here in THE SITUATION ROOM. thank you.
Coming up, new details of that love triangle that rocked NASA and ended an astronaut's career. Their intimate e-mail revealed. We'll show you what's inside.
Also, Michael Vick's plea for leniency. His letters to the judge are now out. You'll find out why he says, I'm quoting now, I'm not a beast.
And Hillary Clinton losing ground it Barack Obama now trying to get some of it back. We'll show you what she's doing.
Lot's more coming up right here in THE SITUATION ROOM.
(COMMERCIAL BREAK)
BLITZER: There's some new developments in that sorted love triangle involving NASA astronauts that made headlines earlier in the year.
CNN's Carol Costello has been checking into all of this and e- mails that have been made public. What are you picking up?
CAROL COSTELLO, CNN CORRESPONDENT: Well you know Wolf, there was a hint of love triangle, flirty e-mails written at work. As you know, Nowak is accused of driving hundreds of miles complete with a knife, a b.b. gun and some diapers to allegedly attack a romantic rival.
(BEGIN VIDEOTAPE)
COSTELLO: NASA has now released more than 200 pages of e-mails between former astronauts Lisa Nowak, Bill Oefelein and air force captain Colleen Shipman who were involved in a love triangle. This one dated January 3rd, 2007. It was sent by an office e-mail by Bill Oefelein shortly after he returned from a space mission. It's to Lisa Nowak. It's titled "Halfway Happy Hour Thursday." Oefelein asked Nowak, "Going to this?" She responds one minute later, "Only if you are." There is little sign of what was to come just a month later when Lisa, who authored that e-mail, turned into this Lisa Nowak, an alleged stalker, one who police say drove from Houston to Orlando to attack his girlfriend, air force captain, Colleen Shipman.
LISA NOWAK, FORMER ASTRONAUT: I know it must have been hard for Colleen Shipman and I want to know how very sorry I am about having frightened her in any way and about the subsequent public harassment. COSTELLO: Hard? Police also found a pellet gun, a knife and soiled diapers in Nowak's car. But in the e-mails released by NASA, the relationship between Nowak and Oefelein doesn't seem obsessive at all.
This from February of 2004. Oefelein writes to Nowak of an upcoming rodeo, "Might be nice after a long week away. If it works, sign us both up." The married Nowak responds, "I signed us up for that one." But by 2007, Oefelein is e-mailing another woman, air force captain Colleen Shipman and his shoutouts to Shipman are decidedly flirty.
On January 29th, 2007, a few weeks before the alleged attack, Oefelein addresses Shipman by typing "Hey, cutie." He signed off with, "Love you." Days later he emails Shipman again about an upcoming trip to Alaska telling her "They want your size for arctic gear," he adds, "I think I can figure that, size sexy and athletic." And the post script, due to noise requirements, I have asked Gina to get us a room. We need some privacy.
(END VIDEOTAPE)
COSTELLO: Now, keep in mind that NASA only released some of the e-mails between the three and that's prompted Nowak's lawyer to say they tell a deceptive story of the relationship between Nowak and Oefelein. Nowak, by the way, will begin court in April.
BLITZER: All right, Carol, thank you very much for that.
The former NFL quarterback Michael Vick is asking a judge for leniency in his dog fighting ring case. That request is now public.
Let's go to our Internet reporter, Abbi Tatton. She's watching this story. What does Vick say, Abbi?
ABBI TATTON, CNN INTERNET REPORTER: Wolf, he says, I'm not the beast I've been made out to be. This is a five-page handwritten note from Michael Vick to the judge asking for leniency. In it, he says that he accepts responsibility for his crime, but at the same time, that he grew up with dog fighting and didn't understand the severity of it. In this letter, you can see the points he's trying to highlight to the judge. He says he promises that he will use his money to help people and also says that he will be assisting animal rights group PETA.
We posted this online, a number of letters not just from Michael Vick but from others as well, from his mother, Brenda Body, who makes a heartfelt plea. There's also a letter from baseball great Hank Aaron and a letter from George Foreman who says in his letter to the judge, I turned myself around as a teenager. Michael Vick can, too. Michael Vick was sentenced this week to 23 months.
BLITZER: Abbi, thanks very much.
Let's check in with Jack for the Cafferty file. Jack. JACK CAFFERTY, CNN CORRESPONDENT: The question this hour is would republicans make a mistake by nominating Mike Huckabee for president?
Joe writes, "It would absolutely be a mistake for us republicans to nominate Huckabee. Not only will he be an easy target for the democrats in November, but he's hardly the conservative that he's made out to be. If you look past his Christian conservative label, you can see that his policies on immigration, taxes and the war in Iraq are much closer to Hillary Clinton's than they are to any of the other republican candidates."
Matt writes, "Huckabee is a wolf in sheep's clothing. He thinks he's the chosen one and looks down upon little people. If he's elected, with the new powers of the president at his disposal, you're looking at a very scary situation. I would vote for Hillary 500 times before I would vote for Huckabee and I'm a republican. However, I'll be voting for Ron Paul because I think he has integrity unlike Huckabee or Hillary."
Melvin in Colorado, "I haven't voted for a republican candidate since 1972, but Huckabee is a man I could vote for. After what they've offered the country the last few years, he would be a breath of fresh air."
Ricky writes. "Huckabee, unlike most of the rest of the pack, seems like a confident and likable kind of guy. I don't think the country would go down in flame physical he were to get elected."
Michael writes, "It would be a mistake if he actually became president. One religious nut case a century is enough for this country. But he probably is the best man available to ensure that a democrat is our next president. Liberal comedians new material, the Bush jokes are getting old."
And Michael in Massachusetts writes, "Jack, republicans would make a mistake nominating anyone." Wolf?
BLITZER: See you back here in a few moments, thanks, Jack, very much.
The battle between Hillary Clinton and Barack Obama and now she's on the offense and major changes in a key primary state. Will it help Mike Huckabee gate the republican nomination?
Stay with us. You're in THE SITUATION ROOM.
(COMMERCIAL BREAK)
BLITZER: Lou is getting ready for his show that begins in one hour. He's joining us now live.
Lou, you're about to lose a familiar face on your program, Ed Rollins, he's been a regular but he is now getting ready to go over and take charge of the Huckabee campaign. What's going on? LOU DOBBS, CNN ANCHOR: Are you assuming that standards and practices under Rick Davis will prevail in this just because Ed Rolllins is becoming the national chairman of the Huckabee campaign. You're right. The fact that Ed, one of our best contributors here, joining Huckabee today.
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