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David Letterman Apologizes On-Air For Sex Scandal; Violence in The Workplace Among Co-Workers Increasing; New Interrogation Technology Sparks Controversy; SEC Officer Who Failed to Stop Madoff Scheme Doing Well

Aired October 06, 2009 - 17:00   ET

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

WOLF BLITZER, CNN ANCHOR: Yes. A lot of people are indeed.

Jack, thank you.

And to our viewers, you're in THE SITUATION ROOM.

Happening now, a desperate American soldier takes drastic action, deserting his unit and living life on the run. Now, a final dramatic move -- he turns himself in. But not before telling his story exclusively to CNN.

And as Jack just reported, there's growing outrage, at least among some, over David Letterman's admitted affairs with his female employees. But now one prominent criminal defense attorney says Letterman's accused blackmailer may not even go to jail.

And security screening technology that some say goes way too far -- how intimate is too intimate when it comes to preventing terror attacks?

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

The troubled war in Afghanistan topic number one at the White House this afternoon, where President Obama talked strategy with Congressional leaders from both parties. The meeting just wrapped up a little while ago. Democrats calling it a success. Republicans saying they will support the president if he deploys the thousands more troops requested by the top U.S. military commander in Afghanistan.

At the same time, we're learning new details of this weekend's Taliban attack on a remote U.S. outpost, resulting in the single deadliest day for U.S. forces in Afghanistan in more than a year.

Our Pentagon correspondent, Barbara Starr, has been digging into this painful story for us -- Barbara, tell our viewers what you're finding out.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Wolf, what we are finding out is a group of outmanned and outgunned U.S. Army soldiers last Saturday morning fought and died to save each other.

(BEGIN VIDEOTAPE)

STARR: (voice-over): The first caskets return home from one of the most brutal firefights for U.S. forces in Afghanistan -- eight killed, 25 wounded. CNN has learned new details of the fierce battle that happened here, at Forward Operating Base Keating. The 80 U.S. troops and Afghan forces were surrounded on all sides by high mountains, shown in these 2007 photos obtained by CNN. Insurgents were hiding in the ridge lines.

A U.S. military official with access to the latest intelligence tells CNN it was about 5:00 a.m. when the attack began at the outpost near the village of Kamdesh. The U.S. believes about 200 local insurgents planned the assault for days -- hiding mortars, rockets and heavy machine guns in the mountains. The U.S. troops were extraordinarily vulnerable.

JOHN NAGL, CENTER FOR NEW AMERICAN SECURITY: In a successful counter-insurgency strategy, you don't put small groups of soldiers over watching infiltration routes from Pakistan.

STARR: During the seven hour firefight, attackers got inside the compound. Several sources describe intense close combat, as the U.S. troops fought to defend the base. Within 30 minutes of calling for air support, Apache helicopters were overhead moving into the valley in waves, firing against enemy positions. But the narrow valley, cloud cover and billowing smoke from a fire that erupted at the base made it you have to launch an effective counterattack. MediVac helicopters also had trouble getting in because the landing zone was under attack.

It would take hours to evacuate the dead and the wounded. Even then, some of the wounded troops didn't want to leave their buddies behind.

(END VIDEOTAPE)

STARR: Wolf, the base had been scheduled to shut down in the next few days. And the belief now is the insurgents knew that and were watching the base, watching the soldiers make the preparations to depart and they chose to strike at the most vulnerable time. It's exactly the same tactic that the U.S. saw in another firefight about 15 months ago in an area quite close by -- Wolf.

BLITZER: So does that mean the U.S. troops in Afghanistan, Barbara, can't rely -- can't trust their Afghan partners?

STARR: Well. I don't think it's quite that. The feeling is that insurgents were watching all of this and they were -- you know, what the U.S. troops have seen is that the insurgents are very savvy. They keep their eyes open. They keep watch. And they do see U.S. troops and Afghan troops move about and launch their strikes against both forces when they are at their most vulnerable.

These combat outposts along the Pakistani border are scheduled to shut down. The insurgents know that. They're watching them. And there is a good deal of concern about the vulnerability of U.S. troops right now on that border -- Wolf.

BLITZER: All right, Barbara.

Thanks very much.

Barbara Starr is at the Pentagon.

For one American soldier, war simply proved to be too much. Like many of his fellow fighters, he says he developed Post-Traumatic Stress Syndrome. But unlike the rest, he says it drove him to take drastic action.

CNN national correspondent Gary Tuchman has this exclusive story.

(BEGIN VIDEOTAPE)

GARY TUCHMAN, CNN NATIONAL CORRESPONDENT: (voice-over): Don Gartin is saying good-bye to his girlfriend. He's a fugitive. Over the last half year, he's been on the run.

SPC. DON GARTIN, AWOL FROM U.S. ARMY: I need to get this behind me. I can't keep looking over my shoulder.

TUCHMAN: So with his tearful mother also watching, this soldier, who served in the infantry for 16 months, is about to walk into an Illinois State Police station.

We'll show you what's about to happen in a second. But first, some background.

Gartin is a deserter. He's been on the run for nearly a half year. We interviewed a much different looking Gartin last week on the Internet because he was fugitive and we did not know his location. He says he has Post-Traumatic Stress Disorder, didn't get the help he needed from the military and basically felt he was a danger to his fellow soldiers.

GARTIN: Would you want to be that person that gets a phone call that says your brother, your sister, your significant other was killed today by another soldier because of mental problems he was dealing with?

TUCHMAN: The 25-year-old comes from a military family, was in ROTC in high school and re-enlisted in the Army just last year. He says he was then sent to Texas.

GARTIN: Once I got down to Fort Bliss, it was all downhill and my mental stability just slowly started dwindling away.

TUCHMAN: The Army specialist says he didn't turn himself in earlier because he was afraid he would be sent back to active duty.

(on camera): And you think you made a responsible decision to desert?

GARTIN: Yes. TUCHMAN: (voice-over): His mother lives in a farmhouse surrounded by cornfields in Central Illinois. She says she did not know her son's whereabouts for the last several months, although she did arrange rendezvouses to see him.

When he told her he was going to leave the Army...

JERRI HYDE, GARTIN'S MOTHER: I said this will follow you the rest of your life. You're a good person. You've served your country. It made me really angry and I was incensed that my kid was trying to get help.

TUCHMAN: The Army says that while desertions are up because of the wars in Iraq and Afghanistan, it has treatment options for troubled soldiers like Gartin. But Gartin claims he had no choice and that's why it's come to this.

GARTIN: I mean, I was a horrible person. I was in a dark place.

TUCHMAN: (on camera): So what will happen with Don Gartin?

A U.S. Army spokesman we talked with told us that for soldiers like Gartin, here's what could occur -- a dishonorable discharge, forfeiture of pay and up to five years in a military lockup.

(voice-over): When Gartin emerges from the police station, he's in handcuffs. He's led to a squad car by surprised Illinois State Troopers, who didn't expect to see a military deserter today. He will be transferred to U.S. Army custody.

(on camera): Do you still consider yourself a patriot?

GARTIN: I think it would be foolish for me to consider myself a patriot being in the situation that I am in.

TUCHMAN: What do you consider yourself?

GARTIN: I'm just a person who's trying to live my life. And I can't live my life in the military.

TUCHMAN: Gartin is now living his life behind bars. He is not eligible for bond.

Gary Tuchman, CNN, Metamora, Illinois.

(END VIDEOTAPE)

BLITZER: What a story.

All right. Let's go back to Jack for "The Cafferty File" -- Jack?

JACK CAFFERTY, CNN ANCHOR: Wolf, tomorrow marks eight years since the U.S.-led invasion of Afghanistan -- eight years, 865 U.S. troops killed and the Obama administration now says that leaving there is not an option. With both violence and troops deaths on the rise, this White House is caught up in a rather public discussion about what we should do next. They're playing down reports of divisions over strategy among members of the administration.

But some of these disagreements seem hard to ignore. The top U.S. commander, Stanley McChrystal, has made no secret of his opinion that more troops are needed -- perhaps as many as 40,000 more -- or else, he says, the mission will fail.

Others, like Vice President Joe Biden, want fewer U.S. troops, targeting only Al Qaeda, along with more training of Afghan troops and increasing use of Predator drone strikes.

McChrystal says that approach would lead to what he calls "Chaosistan" and he says he would not support it.

Well, so much for everybody being on the same page.

It's no wonder that Defense Secretary Robert Gates is calling on all military and civilian leaders to keep their advice to the president on the war in Afghanistan private.

Meanwhile, President Obama said he needs time to meet with advisers to figure out the best way forward. Today, he did talk with a group of bipartisan Congressional leaders to get their opinions.

As for the American people, well, it doesn't seem like there's too much of an appetite for this conflict anymore. A recent poll shows support for the war in Afghanistan has hit a new low of 39 percent.

Here's the question then: When it comes to the 8-year-old war in Afghanistan, the White House says leaving the country is not an option.

What are America's options?

Go to CNN.com/caffertyfile and post a comment on my blog -- Wolf.

BLITZER: All right, Jack.

Thank you.

And by the way, coming up, the videos are so disturbing we can't even show them to you. But they're at the center of a U.S. Supreme Court battle right now pitting animal cruelty against free speech.

Also, are some insurance companies labeling domestic violence as a "pre-existing condition?"

We have a reality check coming up.

And will David Letterman's accused blackmailer avoid prison?

Will he even go to trial?

I'll ask a top criminal defense lawyer. (COMMERCIAL BREAK)

BLITZER: We want to warn you, this next story contains some very disturbing video. But that same video right now at the center of a United States Supreme Court battle over free speech.

CNN's Elaine Quijano is joining us right now -- Elaine, what's this case all about?

ELAINE QUIJANO, CNN CORRESPONDENT: Yes, and some pretty interesting questions here, Wolf.

Should videos that show animal cruelty be protected as free speech or should they be banned?

That's the unusual issue the Supreme Court is deciding.

And a warning now -- some of the video in this report could be disturbing to some viewers. It shows animals moments before or just after acts of animal cruelty.

(BEGIN VIDEOTAPE)

QUIJANO: (voice-over): They're called "crush videos" -- so graphic, we can't even show you what happens next -- videos sold for sexual thrills, of women in high heels crushing small animals. Ten years ago, Congress wanted to put "crush video" makers out of business, so it outlawed the sale of graphic videos showing animal cruelty.

UNIDENTIFIED MALE: This is our newest release, "Japan Pit Fights."

QUIJANO: Then, a few years ago, Virginia resident Robert Stevens tried selling some videos, including this one of dog fighting in Japan, where such fights are legal. Authorities nabbed Stevens, charged him with violating the federal law and prosecuted him.

But an appeals court threw out his conviction and tossed out the law itself.

Now, the Obama administration wants the Supreme Court to find the law Constitutional.

And groups like the Humane Society say as long as these videos are legal, it will encourage animal cruelty.

WAYNE PACELLE, PRESIDENT, HUMANE SOCIETY: These are illegal activities in every state in the nation. And you shouldn't be able to get an exemption just because you're -- you're filming it and claiming that this is -- that this is expressive content.

QUIJANO: Robert Stevens' lawyers argue these videos, though unpopular, are protected speech.

PATRICIA MILLETT, ROBERT STEVENS ATTORNEY: If someone is really, really, really being harmed, then Congress has means to deal with that. The problem in this case was that Congress chose to attack speech and to control what the people in this country could see and hear.

QUIJANO: Several justices worried the law is too broad. Chief Justice John Roberts asked: "How can you tell these aren't political videos from groups trying to fight animal cruelty?"

Justice Samuel Alito appeared to defend the law, asking sarcastically: "What about people who like to see human sacrifices, live Pay-Per-View, you know, on the Human Sacrifice Channel? They have a point of view they want to express. That's OK?"

(END VIDEOTAPE)

QUIJANO: Now, several media organizations have come out against this law, saying it could affect legitimate reports on activities like deer hunting and even extend to depictions of bull fighting in Ernest Hemingway novels.

A ruling is expected in a few months -- Wolf.

BLITZER: All right. A tough case. We'll watch it very closely with you.

Thank you.

The battle over health care reform is putting spotlight on some disturbing practices by the insurance industry. But in the supercharged atmosphere of the reform debate underway right now, not every charge is what it appears to be.

CNN's Mary Snow is looking into one allegation in particular -- Mary, what's the story?

What's going on?

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, top House Democrats today called for the need for several health insurance reforms for women. And one that grabbed our attention was the call for changes when it comes to victims of domestic violence.

(BEGIN VIDEOTAPE)

SNOW: (voice-over): House Speaker Nancy Pelosi and fellow Democrats vow to wipe out gender discrimination when it comes to health care. Among their provisions, one calling for changes dealing with women who've been abused.

REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE: Think of this -- you've survived domestic violence and now you are discriminated in the insurance market because. You have a pre-existing medical condition. Well, that will all be gone.

SNOW: A federal measure would fill in what some states currently don't have. Eight states and the District of Columbia, according to the National Women's Law Center, don't have laws specifically banning domestic violence from being considered a pre-existing condition.

We contacted insurance representatives from the states named who say they have other laws that would prevent abuse victims from being denied health insurance. And they say it's not an issue that's come up.

Still, several of those states now say they are working to add new laws to eliminate any gray areas. And that's something the insurance industry advocates, saying, "No one should be denied coverage because they are a victim of domestic abuse. Health plans strongly support the National Association of Insurance Commissioner's model legislation that prohibits discrimination against victims of abuse and we are urging all states to promptly adopt it."

TERRY FROMSON, WOMEN'S LAW PROJECT: We think that we need a very specific law that says you cannot take this into account with regard to any insurance action.

SNOW: Terry Fromson of the Women's Law Project says she started working on the issue in the 1990s and it was then she learned that women were denied coverage by insurance companies, who, at the time, claimed the women were living dangerous lifestyles.

FROMSON: They were comparing domestic violence to sky diving or riding a motorcycle -- a very dangerous comparison to make with domestic violence.

SNOW: The outrage, she says, has led to reforms, with a majority of states adopting specific laws. But she thinks a federal law is needed.

(END VIDEOTAPE)

SNOW: And, Wolf, what's unclear is how pervasive the problem is. Legal advocates say it's not something that's well-documented. And they also point out that abuse victims may be very reluctant to come forward -- Wolf.

BLITZER: Understandably so.

All right. Thanks very much for that, Mary Snow.

A disaster unfolding in real time -- we've just obtained video of that killer earthquake in Indonesia, recorded as it was happening.

Stand by.

And extraordinary images of an accident at an annual Hot Air Balloon Festival.

(COMMERCIAL BREAK)

BLITZER: Betty Nguyen is monitoring some other important stories incoming into THE SITUATION ROOM right now -- Betty, what's going on?

BETTY NGUYEN, CNN ANCHOR: Well, Wolf, there is a gold rush on Wall Street. The price of the precious metal today hit an all time high. It surged nearly $22, settling at $1,039.70 an ounce. This after a British report about the U.S. dollar being unseated as the currency for trading oil. But the dollar regained some ground after officials from Saudi Arabia, Japan and Russia denied that such a plan was in the works.

And a terrifying moment caught on camera. You've got to check this out. This is surveillance camera footage of people running for an exit when a massive earthquake hit Sadang, Indonesia last week. Look at that. About 200 people were believed inside when that hotel collapsed. All of them are now presumed dead. The official death toll from the quake has risen to 704 people.

And a death defying fall from a hot air balloon after it struck a tent -- a passenger here fell head over heels out of the basket. Oh, my goodness.

Can you imagine?

He is in serious condition in a hospital with a dislocated hip. We'll check this out once again. After the sudden loss of weight in the balloon, the pilot then came crashing to the ground and suffered only minor injuries. The accident occurred at the Albuquerque Balloon Festival. It's always a, you know, a great festival to see, but not when it ends like that for a particular balloon.

BLITZER: Yes.

NGUYEN: All right, Wolf.

BLITZER: Definitely, Betty. Very nice to watch, as you point out. But when tragedy strikes, not so good.

NGUYEN: Oh, man. But he should be OK -- serious condition, dislocated hip.

BLITZER: Yes, let's hope for the best.

NGUYEN: Yes.

BLITZER: Thank you.

They are some of the healthiest foods all of us could eat, but according to an activist watchdog group, they could still make us all sick. Researchers say leafy greens, eggs, tuna, oysters and potatoes are among the top 10 riskiest foods regulated by the FDA. They're said to have caused 1,500 food borne outbreaks since 1990 and 50,000 reported illnesses. The severity of the bacterial and viral illnesses ranges from stomachaches to death. The Center for Science in the Public Interest says there's no reason to give up on any of these foods, but it is urging the Senate to follow the House and pass some legislation -- the reforms, they say, that would, "improve on some of the food safety laws."

Food producers are criticizing the report, saying safety practices have been stepped up in recent years. Keep on eating. Just be careful about everything you eat.

The David Letterman scandal -- what more could come out?

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: He's gotten away with the way he's announced it so far.

But what is going to happen when he undergoes cross-examination by a real lawyer and all of this stuff could come pouring out?

(END VIDEO CLIP)

BLITZER: We're going to talk to a criminal defense attorney about the case.

Also, new details about the affairs the "Late Night" host admits he had with staff.

And what's happened to some of the key figures who were supposed to investigate Bernard Madoff's financial schemes?

You'll be surprised to hear.

(COMMERCIAL BREAK)

BLITZER: To our viewers, you're in THE SITUATION ROOM.

Happening now, Pakistan's foreign minister -- what does he think about U.S. drones going into Pakistan and killing Al Qaeda and Taliban militants?

I'll ask him about that and why success in Afghanistan is so important.

Also, Republican Senator John Ensign talks about the ethics investigation against him over an affair. His exclusive comments to CNN -- that's coming up.

And machines that read minds and body language -- they could be the next step in fighting terrorism.

But is it technology too invasive?

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

We're learning new details about the affairs of the "Late Night" TV host David Letterman now admits he had with employees are and there are signs the scandal he's facing simply won't be blown over any time soon.

Howard Kurtz of "Washington Post" and the host of CNN's "RELIABLE SOURCES" is on the story -- Howie? HOWARD KURTZ, HOST, "RELIABLE SOURCES": Wolf, it must have been a long weekend at home for David Letterman.

When the late night comic again addressed his past sexual relationships with staffers last night, he spoke less about being the victim of an extortion scheme and more about how sorry he is.

(BEGIN VIDEOTAPE)

(BEGIN VIDEO CLIP FROM "THE LATE SHOW WITH DAVID LETTERMAN," COURTESY WORLDWIDE PANTS INC.)

DAVID LETTERMAN, HOST: Chilly outside my house, chilly inside my house.

KURTZ: (voice-over): More details have emerged in the days since Letterman disclosed what he called his "creepy behavior." One sexual relationship, Letterman's side confirms, was with his personal assistant, Stephanie Birkitt, who's gotten a prominent role on "The Late Show." After they broke up, the 34-year-old Birkitt moved in with Joe Halderman, the CBS News producer charged in a $2 million blackmail plot against Letterman. Halderman has pleaded not guilty.

It was after Birkitt recently broke up with Halderman that he allegedly left a threatening note in Letterman's limo containing Birkitt's photos and correspondence, prosecutors say. Another ex, a former "Late Show" intern, who told the Web site TMZ that she dated Dave in the early '90s, raising the specter of another famous public figure and a young intern.

That has to be hard on Regina Lasko, who's been Letterman's partner for two decades and the mother of their 5-year-old son, before they were married in March.

(BEGIN VIDEO CLIP FROM "THE LATE SHOW WITH DAVID LETTERMAN," COURTESY WORLDWIDE PANTS INC.)

LETTERMAN: My wife Regina, she has been horribly hurt by my behavior. And when -- when something happens like that, if you -- if you hurt a person, then it's your responsibility. You try to fix it. So let me tell you, folks, I've got my work cut out for me.

KURTZ: The CBS comic also apologized to his staff, but seemed surprised that journalists would start investigating.

LETTERMAN: It did not occur to me last week when I was discussing having had sex with women who worked on this show that then what would happen is reporters and newspaper people and radio and TV would start hounding the staff and saying, well, what do you say? Are you and this and that? It was very, very unpleasant.

KURTZ: But he also apologizing to his audience and trying to repair his public image.

And there could be more embarrassing revelations to come. Halderman's lawyer, taken to the airwaves, made clear that he plans to dig for more dirty laundry in an effort to undermine Letterman's credibility.

GERALD SHARGEL, LAWYER FOR JOE HALDERMAN: It's not only the motive and intent and conduct of Joe Halderman. It's the motive and intent and conduct of Dave Letterman as well. As I've said I look forward to cross-examining David Letterman.

Even Letterman realizes this is far from over.

LETTERMAN: Ladies and gentlemen, I want to remind you one thing. This is only phase one.

(LAUGHTER)

This is phase one of the scandal. Phase two, next week I go on Oprah and sob.

(LAUGHTER)

(END VIDEOTAPE)

KURTZ: Unlike some of the philandering politicians he ridicules, Letterman has gotten out ahead of the story by fessing up to a point. We still don't know how many women were involved over what period of time. That means Letterman and CBS still have reason to be nervous -- Wolf?

BLITZER: And joining us now Gerald Lefcourt. He's the past president of the National Association of Criminal Defense Lawyers and a famed criminal defense attorney in his own right. Thanks very much, Mr. Lefcourt, for coming in.

GERALD LEFCOURT, CRIMINAL DEFENSE ATTORNEY: Sure.

BLITZER: If you were representing Joe Halderman right now, what would you be doing?

LEFCOURT: Well, I'd be preparing a case that sounds like he was doing a treatment on a potential screenplay article or what have you which alleged all of the affairs that David Letterman supposedly had, and he wanted to know whether Letterman would rather buy it rather than see it in print.

And by the way, I find this not unusual. There have been freelance journalists who have done precisely that, and if you're rich and powerful, sometimes you'd rather buy it then see it in print.

BLITZER: But doesn't that sound like blackmail?

LEFCOURT: Well, you know, it's a fine line. And, again, it's going to turn -- the devil is in the details. What was actually said on these tape recordings that supposedly occurred between Letterman's lawyer and Mr. Halderman and whether that makes out blackmail.

It is a little unusual to ask for a check, I might say. I mean, blackmail is -- you'd rather have something hidden.

BLITZER: But some alleged criminals, they do stupid things, as you well know.

LEFCOURT: Yes, but it doesn't sound like Mr. Halderman, as experienced he is in journalism and in being a producer, I don't think that that sounds like he would be very stupid.

BLITZER: If you had a bet now, Mr. Mr. Lefcourt, would this go to trial, or will there be some sort of out-of-court settlement?

LEFCOURT: I think it will probably settle out of court. The reason is I don't think David Letterman wants the dirty laundry spread out for the world to see, you know. He's gotten away with the way he's announced it so far.

But what is going to happen when he undergoes cross-examination by a real lawyer and all of this stuff could come pouring out and could hurt him as bad as it hurts Halderman.

BLITZER: But it could hurt the women, too, that were involved in these sexual relations. I'm sure he doesn't want to hurt them, and I'm sure they don't want this thing to go forward and have to start giving testimony.

LEFCOURT: Something tells me it's not over in the sense that there may be some of those women who are upset already at the fact that he has talked about other women and implicated them. The media will be all over trying to find out who they are.

Maybe these women are going to approach him and ask for settlements. Would that be called blackmail, too?

BLITZER: But can David Letterman tell the U.S. or the district attorney Robert Morgenthau in this particular case what to do? Morgenthau said the other day --

(BEGIN VIDEO CLIP)

ROBERT MORGENTHAU, DISTRICT ATTORNEY: New York will not tolerate the coercion or extortion of anyone, be they victim rich or poor, famous or anonymous. The lawyer prohibits conduct like the defendant's and attaches severe penalties to it. We intend to enforce the law.

(END VIDEO CLIP)

BLITZER: So the question is can David Letterman tell Morgenthau whether or not to prosecute this case?

LEFCOURT: You know, Mr. Morgenthau is one of my favorite prosecutors of all time. He's had a wonderful career.

But here you have an important figure in our society who maybe would say to the district attorney, you know what? I've already been victimized once. I don't want to be on that witness stand. I don't want to be victimized twice, because I know that the lawyers for this guy are going to try to make me look horrible. And wouldn't it be better for everyone if it was resolved with some kind of a disposition that gets him to admit misconduct, but on the other hand saves me the trouble of going up there and being cross- examined?

BLITZER: Because Halderman is facing 15 years potentially in prison. Do you think an out-of-court settlement could avert going to prison at all?

LEFCOURT: I think it's possible that ultimately down the road, rather than have Mr. Letterman undergo this onslaught which he would certainly experience, that maybe a disposition could be worked out where perhaps Mr. Halderman pleads guilty to something, gets probation.

He has a clean record. You know, it was almost out in the open in the sense that he was asking for a check. I don't know what the real facts are, and I don't want to prejudge them, but I could see a disposition of no jail.

BLITZER: If you were representing Halderman, and I know ire not, what would you ask David Letterman on the stand?

LEFCOURT: I would ask him about every single thing that has happened with all the women under his control, because he's the boss. What he did in order to make those women have sex with him. Put him through the wringer.

BLITZER: Why would the judge allow that?

LEFCOURT: Because it may become relevant, a, because there may be things in the material that we don't know exists yet, namely the so-called treatment or the tapes which makes that relevant, or the defendant himself may take the witness stand and testify to that.

And every time somebody testifies, their credibility is in issue. And judges usually give quite a bit of leeway to defense attorneys in cross-examining the alleged victim of a crime.

BLITZER: He has pretty good representation, Mr. Halderman right now. I assume you know his attorney.

LEFCOURT: I do. I know him very well. I've actually tried cases with him. He's very experienced and very knowledgeable, and I'm sure Mr. Letterman would not want to be in a courtroom with him.

BLITZER: On that note we'll leave it. Gerald Lefcourt, thanks very much for coming in.

LEFCOURT: You're welcome.

BLITZER: Your breath, your heartbeat, the size of your pupils and more -- a new screening technology that some say simply goes way too far.

(COMMERCIAL BREAK) BLITZER: A man accused of murdering a Yale grad student was in court today. Raymond Clark, a lab technician who worked with Annie Le, did not enter a plea. However, the lawyers say they expect he will plead not guilty.

Police have called Le's death a case of workplace violence. So what are the signs an annoying coworker could turn violent? CNN's Carol Costello reports.

(BEGIN VIDEOTAPE)

CAROL COSTELLO, CNN CORRESPONDENT: We hear it often after a crime is committed. A man or woman just snaps and becomes a killer. It's a theory experts say that's rarely true, especially in the workplace.

UNIDENTIFIED MALE: I've studied literally thousands of cases of person at risk at work. About 82 percent of the time there are signals that a person is having difficulty.

COSTELLO: Subtle things like an overreaction to criticism, anger directed at coworkers on blogs or in letters, obsession with people or work policy, or bullying others to do things a certain way, subtle, but obvious signs that are often overlooked.

In 2005, Erin Sperrey, a 20-year-old supervisor at a fast food restaurant, was beaten to death by a coworker. Her mother, Johna Lovely, says there were plenty of signs her daughter's killer exhibited obsessive bullying behavior.

JOHNA LOVELY, DAUGHTER MURDERED BY COWORKER: Their supervisors complained that he would rub up against them and made them feel bad. And I don't think, really, anyone took it seriously or said anything.

COSTELLO (on camera): Why do you think they didn't?

I don't think people are trained in doing that. I don't think they know to do that.

COSTELLO (voice-over): At the national oceanic and atmospheric administration, or NOAA, near Washington, D.C., they're trying to make sure employees know how to read the signs.

BAKER: We have a new program, which is called Respect.

COSTELLO: The program is just a month old. It spells out if a coworker's behavior should concern you on its Web site. And if employees still aren't sure, NOAA has set up a hotline to take complaint anonymously or to offer guidance.

It's actually one of the few companies taking steps to identify potentially violent employees before it's too late.

According to the Bureau of Labor Statistics, in 2005, only 30 percent of employers had formal programs that addressed workplace violence. COSTELLO (on camera): Why do you think more employers aren't doing something like this?

CHARLES BAKER, DEPUTY DIRECTOR, NOAA SATELLITE AND INFORMATION SERVICES: I think there is initially a fear in embarking upon a new program that it will cost money, it will suck up people's time and will become a burden to the organization.

COSTELLO: NOAA says its program costs very little. Its hotline is manned by one of its human resources employees trained in workplace violence.

And in case you're wondering, NOAA does not believe employees just snap. There are always signs. You just need to know how to read them.

Again, what are those signs? They can be as simple as the co- worker doing something that makes you uncomfortable, like say rearranging your desk while you're away or bullying you in a meeting.

The key is this. If the behavior is an ongoing pattern, tell your supervisor. Trust your gut. If it doesn't feel right, act. It could save your life.

Carol Costello, CNN, Washington.

(END VIDEOTAPE)

BLITZER: Sophisticated sensors capable of potentially reading body language. They could be the next step in counterterrorism. But is this an invasion of privacy? Our Homeland Security Correspondent Jeanne Meserve has been looking into the new technology for us -- Jeanne?

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Wolf, this research marries together a lot of existing technologies in a unique way with the goal of finding bad guys before they act.

(BEGIN VIDEOTAPE)

MESERVE: In this reenactment a screener poses questions.

UNIDENTIFIED MALE: Do you intend to use an explosive device?

UNIDENTIFIED MALE: No.

MESERVE: As the screener evaluates the verbal response, an array of sensors picks up the physical response, looking for clues that this individual may intend to do harm.

ROBERT BURNS, DEPARTMENT OF HOMELAND SECURITY: There's been a large field of research that ties your reaction, your physical reactions to your mental state, your emotional state. We're looking for those signals that your body gives off naturally.

MESERVE: One sensor maps the face and takes its temperature. FRANK MARCHAK, VERIDICAL RESEARCH AND DESIGN: If there's a stress response, a physiological stress response, the temperature of your face is going to change.

MESERVE: Another sensor tracks eye movement, pupil size, and blinking.

JOSH MCKENNA, DIGITAL SIGNAL CORPORATION: If you're trying to conceal information, there's two possible ways that can be displayed. One is if you're stressed or aroused, the other is if you're trying to think hard. You tend to blink less and for shorter periods of time.

MESERVE: Researchers are experimenting with two systems monitoring breathing and heartbeat.

UNIDENTIFIED MALE: If maybe you were stressed, that heart rate would either increase or decrease depending on what kind of questions you were asked.

MESERVE: Fidgeting might be another indicator. Using a board from a Wii fit game, researchers are measuring, that, too.

Data from all the sensors is fed into a computer which indicates whether a traveler needs additional screening.

BURNS: It's looking at the combination of factors so they cross- correlate, so they corroborate each other. It's that complete package is what's going to give it to us. It's not any one individual point.

MESERVE: The research has been vetted by privacy experts within the Department of Homeland Security. Nonetheless, there are critics.

UNIDENTIFIED MALE: Number one, it is an invasion of privacy. Nobody has the right to look at my intimate bodily functions, my breathing, my heart rate from afar.

MESERVE: And some experts are doubtful the system can distinguish between potential terrorists and people stressed for other reasons like a late flight.

UNIDENTIFIED MALE: There's not much science here. In fact, there may be no science here. And I'm really worried that we're going to get carried away by the hype, and there's just nothing here. The emperor may have no clothes.

(END VIDEOTAPE)

MESERVE: The people involved in the project are adamant that the science is sound, but they acknowledge they have more research to do before a decision is made on deploying the system at real world checkpoints, where it could complement, not replace, human screeners.

Wolf, back to you.

BLITZER: All right, Jeanne, thank you. They investigated Bernard Madoff and missed the massive Ponzi scheme he's in prison for. But incredibly CNN finds some of those SEC examiners are still very much on the job. Others have brand new careers.

And exposed -- thousands of Hotmail and e-mail account passwords posted online. How could this happen? Stay with us. You're in "THE SITUATION ROOM."

(COMMERCIAL BREAK)

BLITZER: CNN is chasing down what has happened to some key players in the Bernard Madoff drama. He's in jail right now for one of the largest criminal financial schemes ever.

But some people who investigated Madoff and missed his massive Ponzi scheme are doing very well in their new lives. Here's CNN's senior correspondent Allen Chernoff.

(BEGIN VIDEOTAPE)

ALLEN CHERNOFF, CNN CORRESPONDENT (voice-over): The SEC's failure to find the Bernard Madoff fraud is a black eye that just won't heal.

UNIDENTIFIED MALE: How did this happen? Massive, complete, total bureaucratic incompetence.

CHERNOFF: Yet while the Commission gets skewered, most staffers who investigated Madoff have suffered few consequences, many enjoying successful careers.

Richard Walker led the SEC's New York office when it missed its first good chance to catch Madoff in the early '90s. Today Walker is general counsel of Deutsche Bank.

Among those cited in the SEC's inspector general's report on the failure is one of Walker's former examiners, Dmitrious (ph) Vaselackis (ph). He now works for a New York hedge fund, Atticus Capital, as chief compliance officer. Marcopolos told Congress he was shocked by Ward's financial illiteracy.

HENRY MARKOPOLOS, MADOFF WHISTLEBLOWER: You pay peanuts then you shouldn't wonder why you end up with monkeys.

CHERNOFF: Then there is the former SEC investigator who married Madoff's niece, Eric Swanson, who now general council of stock trading firm Backed Exchange.

Swanson's romantic relationship did not affect the investigations, but his actions created the appearance of a potential conflict of interest, one of many failings the inspector general uncovered.

UNIDENTIFIED MALE: The SEC never conducted a competent and thorough investigation or examination of Madoff's operating a Ponzi scheme.

CHERNOFF: And the SEC director who OK'ed the closing of a Madoff investigation last year, Mark Stonefeld, is now a partner in the law firm Gibson, Dunn, and Crutcher.

Arthur Levitt chairman of the SEC during some of the failed Madoff investigations, is with the private equity investment firm the Carlyle Group.

ARTHUR LEVITT, FORMER SEC CHAIRMAN: It never occurred to me or anyone on my staff that Madoff was anything except a market maker.

CHERNOFF: At least six SEC staffers who were directly involved in examining Madoff's books at his office remain at the commission, including Simona Salt.

SEN. ROBERT MENENDEZ, (D) NEW JERSEY: How many have been fired because of this gross incompetence?

DAVID KOTZ, SEC INSPECTOR GENERAL: Well, I don't believe anybody's been fired.

CHERNOFF: Aside from Arthur Leavitt, former and current SEC regulators declined to comment for this story, only two high profile SEC officials resigned after the scandal, Lori Richards, head of compliance inspections and examinations, and former SEC enforcement chief Linda Thompson. Ms. Thompson has landed nicely. She's now a partner in the firm Davis, Paulkin and Wardwell.

Allen Chernoff, CNN, New York.

(END VIDEOTAPE)

BLITZER: It's being called an industry wide fishing scheme. Several thousand e-mail addresses and their passwords from major email services like Yahoo!, Hotmail, and G-Mail posted online for the public to see.

Abbi Tatton is here working the story. Abbi, how could this happen?

ABBI TATTON, CNN INTERNET CORRESPONDENT: This is a staggering amount of information, some of it we're looking through today, these lists of more than 10,000 e-mail addresses and passwords posted online, posted anonymously. The owner has been working to remove that information, and the web mail companies have been working to protect the users who accounts have been compromised.

Google has forced resets on effected G-Mail accounts and Microsoft has frozen several thousand Hotmail accounts because the information on these is out there.

BLITZER: How did these passwords end up online?

TATTON: At some point the information was given up, probably by the users themselves. Microsoft, Yahoo! Google all saying this was a likely fishing scheme, so the users thought at one point they were giving information over to a genuine Web site. It wasn't. It was actually a malicious website and they were giving over their personal details.

It was rounded up and then dumped by someone online.

So now the e-mail companies are taking this opportunity to remind people how to keep your information secure. If you're asked to verify your information, an unsolicited, e-mail, be wary. Also change your password regularly to something secure.

Wolf, we were looking through these thousands of passwords today, and through several dozen who all say the same thing, 123456. So obvious. So time to pick something -- upper case, lower case, something more complicated to keep your password secure.

BLITZER: Thanks, Abbi, very much.

An exclusive interview with an embattled United States senator. It's his first time talking publicly since the explosive new allegations surrounding his extramarital affair.

Plus billions of dollars in U.S. aid to Pakistan's military, only a fraction though said to be trickling down to the troops fighting Al Qaeda and the Taliban. What's going on here? The foreign minister of Pakistan is standing by live. He's here in "THE SITUATION ROOM."

(COMMERCIAL BREAK)

BLITZER: We're right back to Jack Cafferty for "The Cafferty File" -- Jack?

CAFFERTY: When it comes to the eight-year-old war in Afghanistan the White House says leaving is not an option. So what are America's options?

Gretchen in Denver says: "I guess we could leave Afghanistan, but when I think about the women and children who are persecuted and murdered by the Taliban, I feel like we should fight for them. When I see the decisions our president has to make, my everyday stress seems really trivial."

Tom in Georgia says: "We have no options. Options imply choice, and it seems at this point our only choice is to stay long enough for them to stabilize their government and their society regardless of how long it takes or how many American lives are lost.

We should have learned from the Russians. We didn't, so here we are once again embroiled in an unwinnable war fighter for a cause that's undefinable."

T. in Texas says: "If the president says leaving is not an option, I say Afghanistan is fast becoming Obama's war."

Tom in Pennsylvania: "Afghanistan is not a nation-state. It's a collection of warring tribes recently removed from the Stone Age. It's border are determined by its neighbors, it's major exports are narcotics and Islamic fundamentalism. Women, comprising half the population, are treated as third-class members, less valuable than camels.

As for America's options, how about declaring victory and abandoning that hellhole?"

Jill writes: "Shut down some of the bases in western European countries and allocate the resources to Afghanistan."

And Joan in Vermont writes: "I honestly wish I had an answer to this question. My country has been at war my whole lifelong. Not one of those wars has improved the state of the world one iota. It seems wars are good for business, and so they go on."

If you didn't see your email here, go to my blog, CNN.com/caffertyfile -- Wolf?

BLITZER: Jack, thank you.

And happening now, the best political team on television on these big stories.