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Bomb Suspect's Link to Taliban; No-Fly List Crackdown; Could Massive Oil Spill Soon be Stopped?

Aired May 05, 2010 - 17:00   ET

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

WOLF BLITZER, HOST: Rick, thank you.

Happening now: America's top terror interrogators are now grilling the Times Square bomb suspect; and federal officials are scrambling to plug some dangerous holes in homeland security that could have let Faisal Shahzad slip through their fingers.

In Pakistan right now, people are being rounded up and questioned about the Times Square case and CNN has new information coming into THE SITUATION ROOM about Shahzad's alleged links to the Taliban in Pakistan.

And a new weapon against the oil that's spewing into the Gulf of Mexico and threatening the coastline. Will it work? We're watching as a giant containment dome has moved closer and closer toward the source of the spill.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

(MUSIC)

BLITZER: We begin with breaking news on the Times Square bomb case. We're getting new information right now out of Pakistan about Faisal Shahzad's alleged links to known terrorists.

Our homeland security correspondent, Jeanne Meserve, is standing by. But let's go to CNN's Reza Sayah. He's in Islamabad where he's working this story.

Reza, tell our viewers what you're learning.

REZA SAYAH, CNN CORRESPONDENT: Yes, Wolf, very interesting and really conflicting developments here in Pakistan. Of course, for the past couple of days, we've heard a lot about the Pakistani Taliban. Were they behind the attempted bombing in Times Square, New York?

Well, today in a phone call to CNN, the spokesperson for the Pakistani Taliban, Azam Tariq, told us that absolutely not, they were not involved in this attempted bombing.

Here's what Azam Tariq had to tell CNN. "That we appreciate Faisal Shahzad, but he has no link with the Tehrik-i Taliban Pakistan. He might have received training from other militant groups, but not the Tehrik-i Taliban Pakistan. There are other groups that can provide that type of training, too." So, there you have that spokesperson for the Pakistani Taliban saying, we have no links with this young man.

But here's where the mystery deepens -- an intelligence source telling CNN, that indeed, during his last visit to Pakistan, which was back in July of 2009, Faisal Shahzad did indeed meet with at least one Pakistani senior Taliban leader.

So there, Wolf, you have conflicting accounts. The spokesperson for the Taliban saying, no, we don't have any links with this young man. But the intelligence source telling CNN there may be some links.

BLITZER: There's a newspaper called "The Dawn" in Pakistan, as you know, Reza. It says it now has a photo of this individual as he came into Pakistan, what, in 2009?

SAYAH: Yes. This is a picture actually by "Dawn" news that was released on Wednesday and it shows Faisal Shahzad arriving in Karachi airport in July of 2009. And that's when our intelligence source tells us he met up with a man by the name of Muhammad Rehan. Muhammad Rehan, according to this intelligence source, is linked with another bad militant group, Jaish-e-Muhammad. This intelligence source telling CNN, the two then drove up to northwest Pakistan, eventually ending up in the Waziristan area, and that's where, according to this intelligence source, they met with at least one, maybe more, senior Taliban leaders.

By the way, Muhammad Rehan in custody, picked up in the Karachi area by security forces. We can't verify independently this account by this intelligence source. But if it's accurate, it corroborates with some parts of what Faisal Shahzad is telling U.S. investigators. That he did spend some time in Waziristan, the nerve center of the Pakistani Taliban, Wolf.

BLITZER: What are you learning about his family in Pakistan? And do you know, specifically, whether his wife and two kids are in Pakistan right now?

SAYAH: Yes, no word where his wife and kids are. Just like he did, they went back and forth between the U.S. and Pakistan. Most of his family is where he's from, northwest Pakistan, the Nowshera district, which is right next to Peshawar.

We've gone to his father's house -- very interesting, his father a retired vice marshal for the air force. By all accounts, an upstanding citizens. We've talked to friends and family members. All of them are shocked, Wolf, at what this young man is being accused with.

BLITZER: Reza Sayah is digging and digging in Islamabad, throughout Pakistan for us.

We'll check back with you, Reza. Thanks very much.

This hour also, the trail of the Times Square bomb suspect has led investigators to a northeastern Pennsylvania store. A federal law enforcement official tells CNN, that is where Faisal Shahzad bought fireworks used in the failed bomb attack. The president of that company, by the way, the Phantom Fireworks Company, is quoted as saying that the m-88s that Shahzad bought, in his words, "wouldn't damage a watermelon."

The federal government has now called in its top terrorist interrogators who focus on high-value suspects to help in the questioning of Shahzad.

Let's bring in our homeland security correspondent, Jeanne Meserve.

This case is revealing some apparent gaps in homeland security procedures, Jeanne.

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: That's right, Wolf.

But, first, a bit of new information here from a federal law enforcement official, who says, at this point, there is no indication that Shahzad had any associates here in the United States working with him to put together the Times Square plot. Though, of course, that investigation is continuing.

Now, back to those holes -- Faisal Shahzad was recently added to the no-fly list after investigators became aware of him on Sunday night. And administration officials say a special notice about him had been sent out to the airlines. But under the rules in place at that time, Emirates Airlines had 24 hours to update its list. As a result, they were not aware of Shahzad's addition and he made it on to that flight.

To prevent a repeat, TSA today changed the rule. Now, airlines will be required to check the web board where no-fly information is posted within two hours of getting a special notice from TSA -- Wolf.

BLITZER: Jeanne, the FBI surveillance team lost him around the time he was going to the airport. There were, what, five, six hours he didn't know where he was. How did that happen?

MESERVE: Well, the exact period of time isn't clear at this point of time. I've heard something a little bit shorter than that. But we don't know definitively how long they lost him. Law enforcement officials say it was a fast-moving investigation at that point. It involved multiple locations. In addition, they were taking pains not to tip him off to the fact that he was under surveillance.

Here's what New York's police commissioner had to say about it.

(BEGIN VIDEO CLIP)

COMM. RAYMOND KELLY, NEW YORK POLICE: I can't give you the specifics. I don't know why they lost surveillance on him, but this is not that unusual in surveillance matters.

(END VIDEO CLIP)

MESERVE: There were other traps set to catch him, and, of course, one of them did. A little bit of detail about the arrest from law enforcement administration officials. Shahzad was leaving the country because he had been spooked by news reports. When he was on the plane, about to be arrested by law enforcement, he said, "I've been expecting you. Are you the NYPD or FBI?" The agent then exposed his badge and said, "CBP, Customs and Border Protection."

A little bit like a movie, Wolf.

BLITZER: Yes, that's got all the plot there of a movie. But, unfortunately, this is all very, very true.

Jeanne is working the story for us as well. Thank you.

Counterterrorism officials were asking questions about Faisal Shahzad six years ago. What were they looking for back then? Coming up this hour: I'll be speaking with the chief of staff of the president's National Security Council, Denis McDonough. We'll talk about the investigation. Stand by.

We're also following other breaking news. A new attempt to try to cap the leaking oil well in the Gulf of Mexico. Will a giant containment dome do the trick? Brian Todd got a firsthand look.

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Let's go right to Jack for "The Cafferty File" -- Jack.

JACK CAFFERTY, THE CAFFERTY FILE: Welcome to our big city.

BLITZER: It's always a pleasure to be here.

CAFFERTY: Wouldn't you rather actually be here every day than in Washington?

BLITZER: I love Washington.

CAFFERTY: This is the big apple.

BLITZER: I love the politicians in Washington.

CAFFERTY: You can talk about things from here. We have satellites.

(CROSSTALK)

BLITZER: We've got politicians.

CAFFERTY: We can fraternize, we can commune.

Sixty percent of Americans say that Arizona's tough new immigration law is either about right or doesn't go far enough. Question is: is Washington listening? Does Washington care? The answer is probably not and no.

A new CBS/"New York Times" poll shows 51 percent of those surveyed say the law is about right and 9 percent more say it doesn't go far enough; 36 percent think the controversial law, which gives police broad powers to detain people they think are in the country illegally goes too far.

The new poll also shows broad majorities of Americans say that illegal immigration is a very serious problem and that this country's immigration policies need a major overhaul, although people are divided on what the right solution to the problem is. Even though most people think the Arizona law will result in racial profiling and overburden local police forces, large majorities think it will reduce the number of illegal aliens in Arizona. It will reduce illegal border crossings, and it will reduce crime.

It's pretty clear what's going on here. The issue of illegal immigration has suddenly developed into a national crisis and the American people have had a belly full of the federal government's unwillingness to address it.

Despite all the rhetoric from our lawmakers, there is no legislation pending in Congress on this issue. But more importantly, almost nine years after 9/11 and four days after some terrorist tried to blow up Times Square right here in New York City, the federal government refuses to secure this nation's borders.

Here's the question: What message does it send to Washington that a majority, 60 percent of Americans, support Arizona's new immigration law?

Go to CNN.com/CaffertyFile to post a comment on my blog.

You know, if you'd move up here, we'd build you a big suite of offices, get you extra staff. You'd love it here

BLITZER: I would love it. I'm staying in Washington, Jack. I'm staying in Washington. Don't go far away.

It could be the best hope for stopping that massive spill spewing at least 210,000 gallons of oil a day into the Gulf of Mexico. And right now, a giant white containment dome is preparing to leave for the leak site, where for the first time ever, it will be deployed 5,000 feet beneath the water to try desperately to contain the mile-deep gusher. B.P. announced this morning that it's capped the smallest of the three leaks at the well -- a step it says will make it easier to stop the remaining two leaks.

Our Brian Todd got a firsthand look at that containment dome before it left the shore.

(BEGIN VIDEOTAPE)

BRIAN TODD, CNN CORRESPONDENT: Wolf, we've got special access to the construction of a pollution containment chamber. This is the dome that we've been talking about for the last several days. It may be one of the most tangible hopes of containing this leaking well.

We've got special access to it and we're going to take you close up, and show you exactly how this thing is going to work.

(voice-over): It looks like a huge, rusty box. But after so much futility, this might be the device that stops the massive oil flow in the Gulf. Forty feet high and weighing nearly 100 tons, the pollution containment chamber is almost ready to be lowered on top of the leaking wellhead from the destroyed rig.

(on camera): They've been working on this device for about a week now and they're essentially cutting it to specs to fit this particular that's leaking. We can't go up to the top there where those guys are welding because of the dangers and hazards here.

But here's how it's going to work -- these two openings are going to be lowered on top of the leaking well. The leaking end of it is going to come out that window right there. There's another part of the well that's jutting out that will come out that opening right over there. This will be lowered and those flaps there in the middle will be sitting on the ocean floor to prevent this from sinking any further.

(voice-over): The idea is for this plant down, clamp, and then channel the oil to waiting surface containers.

(on camera): This is what they call the top hat, the cap to the dome. It's going to be placed on top of it, essentially acting as the top of the funnel that's going to siphon the oil to the surface. Risers are attached to the other side, almost like a straw going to the surface to a ship that will carry the oil out.

(voice-over): Smaller versions of this have been successful before. Officials say this dome may be able to capture as much as 85 percent of the oil spewing from those pipes.

(on camera): Is this the last best hope to contain this spill?

JASON HOLVEY, WILD WELL CONTROL: I don't believe that's the case. If for some reason this did not work, there are a lot of brilliant minds working for B.P. right now. I'm sure there are multiple efforts going on parallel to ours.

TODD (voice-over): But at the moment, those other efforts either aren't working or won't be ready as quickly.

(on camera): They're also building a smaller version of the pollution containment chamber. You see the construction of that going on right there. That's not going to be ready as quickly as the larger one.

Now, as for that larger one, they hope to lower that on to the leaking well within one week -- Wolf.

(END VIDEOTAPE)

BLITZER: Brian Todd on the scene for us -- thank you, Brian.

We're going to continue to watch as this ship moves closer and closer to the site of that leak. We'll be all over this story. This note, by the way: The Obama administration now says it supports increasing the amount in damages the companies responsible for oil spills would have to pay. When asked about pending congressional legislation that would raise the damage limit, the White House press secretary, Robert Gibbs, said the administration would back the move. But he wouldn't provide a specific ceiling figure.

Current law limits liability on damages to only $75 million. Gibbs added that B.P. will be responsible for all damages from the spill.

What was Faisal Shahzad's motive for allegedly attempting to explode that SUV in Times Square here in New York? I'll ask a top national security official in the Obama administration. Stand by for that.

Also, what's causing such havoc on the streets of Greece? So far, it's left three people dead. We're going to Athens.

And he spent almost 30 years in prison for a crime he did not commit. Now, he's free. That story -- coming up.

(COMMERCIAL BREAK)

BLITZER: Alina Cho is monitoring some of the other important stories incoming to THE SITUATION ROOM right now.

Alina, thanks for doing this.

ALINA CHO, CNN CORRESPONDENT: Oh, thanks for having me, Wolf. Good to be here, as always.

In the news this hour, three people have died following massive riots in Greece today. Tens of thousands of people took to the streets in a nationwide strike. They're protesting new taxes and spending cuts required for the country to get an IMF and European Union bailout package that's worth more than $100 billion. Greece is now facing a May 19th due date on debt it says it cannot pay without help.

On the eve of a highly contentious election in the U.K., many Brits are getting ready for the possibility of no outright winner among the three main candidates. Now, polls are suggesting that tomorrow's voting will end up in what's known as a "hung parliament." Should that happen, the sitting prime minister, Gordon Brown, will get the first crack at forming a government through a coalition. But Mr. Brown is unpopular and he may not get the support that he needs.

"You're free" -- those are the words one Ohio man has been waiting to hear after spending almost 30 years in jail for a crime he did not commit. Fifty-two-year-old Raymond Towler is his name. He was released today after DNA evidence proved that he did not rape an 11- year-old girl back in 1981. And a judge said he can sue over the ordeal. Towler was serving a life sentence.

And retiring Supreme Court Justice John Paul Stevens is weighing in on the confirmation process that will likely impact his successor. Stevens says it's unfortunate that senators are trying to pin down judicial nominees on their views during confirmation. Now, he says talking about cases already decided is one thing, speculating about issues that could come before the court is something entirely different.

But, Wolf, somehow, I think that questioning will continue.

BLITZER: And by all accounts, we're hearing that the president's going to nominate someone within only a few days. So, that will be a huge story as well.

CHO: I'm sure there'll be lots of contentious debate.

BLITZER: We will have lots of coverage.

Alina, thanks very much. Don't go far away.

We're going to get back to the breaking news in a moment. We'll have a much closer look at the Times Square bombing suspect. There's new information coming into THE SITUATION ROOM right now about his alleged links to the Pakistan Taliban and how the terror training camps work.

Also, how -- what could have been his motive. I'll speak about that with the chief of staff of the president's National Security Council, Denis McDonough. He's over at the White House. We'll ask him what the interrogators are getting from this suspect.

And later, more on the store where Shahzad bought a key piece of his botched bomb.

(COMMERCIAL BREAK)

BLITZER: You're in THE SITUATION ROOM.

Happening now, we're getting new details that are emerging about the store where the suspect Faisal Shahzad allegedly bought fireworks used in his terror plot. We're going to take you there. Stand by for new information.

And could the fact that Shahzad was able to purchase a firearm lead to new gun control legislation? There is a new and heated debate underway in Washington right now.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

(MUSIC)

BLITZER: The New York police commissioner told lawmakers the Times Square bomb suspect began planning some two months ago around the time he bought a gun. One of the most important questions still unanswered is this: why?

(BEGIN VIDEOTAPE)

BLITZER: And joining us now, Denis McDonough, he's the chief of staff over at the National Security Council. He's joining us from the White House.

Denis, thanks very much for coming in.

DENIS MCDONOUGH, NATIONAL SECURITY COUNCIL CHIEF OF STAFF: Thanks for having me, Wolf. It's really good to be with you.

BLITZER: What can you tell us about Faisal Shahzad's motive in apparently going to Times Square and allegedly wanting to blow people up?

MCDONOUGH: You know, Wolf, beyond what the attorney general said yesterday, which it's clear that this was an effort to kill and maim Americans, we don't really have anything additionally. I don't have anything additionally to give you right now on motive.

BLITZER: Well, maybe you don't have anything to give me. But do you, guys, inside, do you know what his motive was, without releasing the details to us, publicly?

MCDONOUGH: Well, we're trying to get to the bottom of it, Wolf. We're obviously continuing to get very important and helpful information in this case. We're obviously peeling back the onion on this to make sure that we can gather additional information -- both about what was a motivation for him, but as importantly, what this tells us about what other threats might be out there.

And so, we're taking a very proactive stance on that. We're getting additional information. And we're going to take -- continue to take the fight to those who would do harm to Americans.

BLITZER: There's one report that he wanted revenge for the U.S. drone attacks in Pakistan. Is that something that's on your radar screen?

MCDONOUGH: You know, Wolf, I don't have anything on that. What I do know is that we are taking the fight to the extremists in this vitally important region. You saw the president -- right out of the box here -- dedicate additional resources to Afghanistan early last year.

Late last year, we dramatically increased those assets, as we take the fight to the Taliban to stop their momentum, to ensure that they can't use Afghanistan or Pakistan for the kinds of attacks that we saw on 9/11. We learned our lesson in that effort. We're not going to let it happen again.

BLITZER: Was he part of the Pakistani Taliban or some other foreign terror group?

MCDONOUGH: Not ready to come no any conclusions on that. That's one of the motives. To get back to your first question, we're wanting -- we're digging at and working very aggressively, across our government, working with our liaison partners internationally, to make sure we get to the bottom of just that.

BLITZER: Have you been able to confirm that he did train in Pakistan with some of these terror groups?

MCDONOUGH: I'm not going to get into any of those details right now, Wolf, but those are the kind of questions we're asking. Those go-to motive and those are the kind of things that, obviously, in the case they'll be looking at. But as importantly, those go-to the kind of information and intelligence we'd want to get in incidents like this. We'd want to get it from a suspect, from an alleged terrorist and get it out into the field so that we could use it.

Those are the kind of innovations that we're undertaking over the course of these 15 months in office, and those are the kind of innovations that we're taking advantage of as we undertake what is a very aggressive fight against extremists worldwide.

BLITZER: Is he cooperating still, right now, as we speak?

MCDONOUGH: You know, I've just come from a series of other meetings, Wolf, so I can't speak to exactly right now. But I do know that our law enforcement and intelligence professionals, drawing on all the resources of the federal government, including those new resources that we've put in place and put together over the course of the last couple of months are taking advantage of new leads and new opportunities as a result of everything they've been able to undertake.

BLITZER: Let me read --

(CROSSTALK)

MCDONOUGH: As it goes to right at this specific moment, I'm just not in a position to answer that.

BLITZER: All right. Let me read to you a sentence or two that was in a "New York Times" report today. And I'm going to read it as is. "George LaMonica bought his two-bedroom condominium in Norwalk, Connecticut, from Mr. Shahzad for $261,000 in May of 2004. A few weeks after he moved in, Mr. LaMonica said investigators from the national joint terrorism task force interviewed him, asking for details of the transaction and information about Mr. Shahzad. It struck Mr. LaMonica as unusual, but he said detectives told him they were simply checking everything out." Has he, Faisal Shahzad, been on the radar of the joint terrorism task force going back to 2004?

DENIS MCDONOUGH, NATIONAL SECURITY COUNCIL CHIEF OF STAFF: You know, Wolf, I saw the report this morning. Obviously, Robert got some questions about it this afternoon. I don't have anything more than what you've just read. But what I will say is this. When this explosion went off, when this fire started in Times Square on Saturday night, New York NYPD, the FBI, the national joint terrorism task force, the New York joint terrorism task force went to work on this case. And I think we're all very proud of the work that they did. In just 53 hours, they cracked this case and found this fellow. And we're going to, obviously, take every appropriate step as it related to him and his alleged conduct, but we're also going to use the information that we're getting out of this to make sure that we stop other would-be terrorists. So as it relates to "The New York Times" report of this morning, I don't have anything more on that, Wolf. But I will tell you this. Our professional law enforcement, intelligence, military professionals, when they get information, they act on it. And the country should know that in this instance, it was exactly that way.

BLITZER: We're told that the law enforcement lost him for a few hours as he made his way from Connecticut to JFK where he was boarding that flight on emirates air to Dubai with continuing service to Islamabad. What happened? How come law enforcement lost him during that period?

MCDONOUGH: Well, I'll tell you, Wolf. We had a lot of resources on this case. We obviously bailed in redundancy across a range of opportunities and a range of efforts, and that's exactly what we did in this case. So we had federal, state law enforcement. We had custom and border patrol working closely with the FBI. And it was because of that redundancy that we were able to make sure that we apprehended him and got him. So I don't have anything specifically on the question you just asked as it relates to that surveillance, but I do know that in this instance, this redundancy was a very important effort and that layered effort really paid off in this instance.

BLITZER: He was on the no-fly list as of about 12:30 p.m. that day, but he still managed at 7:30, 8:00 at night to buy a ticket and get on this plane that was going to go to Dubai. What happened? What was the problem there?

MCDONOUGH: Been a very important innovation overnight here, Wolf, which is that one of the things when we're working with international carriers, they didn't necessarily have to immediately check the no-fly list for updates. What we've put in place is now a effort that says, two hours after updates have been added to the list that foreign carriers, as well as domestic carriers, will have to check that list. Let's make one thing clear here, Wolf, that we're not just relying on the carriers. In this instance, the heroes over at customs and border patrol and at many of the watch list support groups we have throughout the government saw that this fellow was on a manifest and they took care of that situation very aggressively. And I think we're all very proud of them for that.

BLITZER: Denis McDonough, the chief of staff at the National Security Council, Denis, thanks very much for coming in.

MCDONOUGH: Great to be with you, Wolf. I appreciate the opportunity.

BLITZER: The failed bomb attack in Times Square could have, could have an impact on the November election. We're watching the story. More coming up.

Also, is there a link between U.S. drone attacks in Pakistan and the terror threat here in the United States?

And you're about to see for yourself what happens when an 18-wheeler loaded with fuel explodes.

(COMMERCIAL BREAK)

BLITZER: The failed Times Square bombing driving home for a lot of Americans the terror threat that's still very much exists out there. And that could have serious implications in the November midterm elections. Let's bring in our senior political analysts, Gloria Borger and David Gergen. As far as looking ahead, David, to November, give us your initial gut reaction, how this terror plot is going to play out in the months to come leading up to the midterms.

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: The only thing we're sure of, Wolf, is if we had failed to catch this guy, if he had gotten away on that plane, it would have come back to haunt the Democrats. But, I mean, apprehended him within 53 hours, as they did, I think most of the country is very pleased. Gives credit to the administration and especially local law enforcement officers. And, you know, things have been well done. My sense of it is, it's not likely to play much of a role in elections, unless it takes an unexpected turn. This is the kind of incident when you're successful from the administration's standpoint, unfortunately, you know, people don't have great memories. They do have memories of what goes on with jobs and spending and deficits and the like.

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: You know, it's interesting, Wolf. It's almost like health care reform in a way. If the president had not been successful in health care reform, it would have been a real problem for him. But even though he succeeded, you don't get a lot of credit for it. And so, you know, that's kind of where the Democrats are right now. If the president had made a huge mistake in this situation, if this hadn't been handled well, he would have had a real downside risk. But is there an upside for this, necessarily? Probably not.

BLITZER: Let's talk about a little bit -- go ahead.

GERGEN: I want to say one thing, briefly. There's a difference between this and health care, in that I think there is still a backlash out there about the passage of the health care bill. Whereas, I don't see any significant negative, I think it's likely --

BORGER: The only one negative that could be, David, is the debate on the mirandizing this guy could continue and there will be questions raised about whether we should have mirandized him, whether we did it too soon, you know, all those questions come back that were asked with Abdulmutallab, for example, at Christmas.

BLITZER: David, Faisal Shahzad is a naturalized U.S. citizen. And Joe Lieberman, the Democratic -- independent Democratic senator from Connecticut, as he likes to call himself, said this yesterday, and it's causing a stir. Let me read it to you. "I think it's time for us to look at whether we want to amend that law to apply to American citizens who choose to become affiliated with foreign terrorist organizations, whether they should not also be deprived automatically of their citizenship and therefore be deprived of rights that come with that citizenship when they are apprehended and charged with a terrorist act." The criticism of Lieberman is that he's convicting naturalized American citizens before the court actually convicts someone. When you're just charged, you're supposedly innocent until proven guilty.

GERGEN: Wolf, I thought in reading that, he was applying it to all citizens, in effect, and trying to enlarge the law that's on the books now, that if you join a foreign army, you're stripped of your American citizenship, in order to make it easier to avoid the mirandaization of suspects. But I'm sure I'm in league with a lot of other Americans. This fellow, Shahzad, took the oath to become an American citizen, pledged loyalty to the United States in April of 2009. Less than two months later, he was on an airplane on his way, eventually, to Pakistan, apparently for terrorist training. I have no sympathy for him keeping his citizenship. I don't care whether he's mirandized or not. The guy violated the terms of his oath --

BLITZER: David, let me interrupt. Should he be stripped of his citizenship were before convicted, even while standing trial?

GERGEN: I think he should be stripped of his citizenship, once convicted. But beyond that, I think the country -- and this was a good case for us, because the guy was seen before the Miranda rights were applied. But what if we get the next guy who isn't cooperative and then we read him his Miranda rights and we really don't understand what's going on? In that situation, I think the U.S. Government ought to have a lot of latitude before it applies to Miranda rights to some naturalized citizen.

BORGER: You know, you understand the theory of this and what Joe Lieberman is getting at and I agree with David on that. I think the question is the constitutional issues here. Are naturalized citizens different from American-born citizens? When, in the process, would you be able to deprive him of his citizenship, if, as you point out, Wolf, he's not convicted? So there are all kinds of constitutional questions that have to be answered about this. Obviously, we have no sympathy for somebody who admits to a crime.

BLITZER: We've got to leave it there, guys. We'll continue this conversation, though, later. Good points.

Claims the thwarted terror attack could be linked to Pakistan. We're getting new information into THE SITUATION ROOM. Our Tom Foreman has a closer look at how the U.S. is now combating terrorists in that country.

And could the Senate be one step closer to passing financial reform?

(COMMERCIAL BREAK)

BLITZER: We'll get back to the breaking news on the Times Square terror plot momentarily. But Alina Cho is back. She's got some other important stories we're following right now. Alina?

ALINA CHO, CNN CORRESPONDENT: That's right, Wolf. We want you to check out these big, black clouds of smoke over San Antonio, Texas. They came from a refinery where an 18-wheeler was willing loaded with fuel and then it exploded. Residents within about a mile were evacuated from the area. Officials say some workers were hurt. AEG Refining Company is trying to account for all the 100 workers who were on the job when it happened.

There is word that North Korean leader Kim Jong-Il is in Beijing for secret talks. He's reportedly trying to get additional economic aid from the Chinese. Now, that's in exchange for restarting international nuclear negotiations sponsored by China. North Korea quit the talks about a year ago and then conducted a nuclear test that led to tighter U.N. sanctions.

And it's been slow going for financial reform, but there is new evidence that the legislation is moving forward, inch by inch. Top senators on the banking committee released details of a bipartisan deal on how to unwind those big financial firms considered too big to fail. Democrats are officially dropping a proposed tax on banks for a fund designed to help take down failing banks. I know the big question, Wolf, that we all have is, when will we see this in final form. And hopefully it will come soon. We all want to know the details.

BLITZER: Usually works slower, then faster. Thanks very much, Alina.

A veteran lawmaker of a key committee is now calling it quits. What does David Obey's retirement mean for fellow Democrats and for Republicans? Mary Matalin and Donna Brazile are standing by for our strategy session.

And Jack Cafferty is asking, what message does it send to Washington that a majority of Americans support Arizona's new immigration law? Jack will be back in a moment with your e-mail.

And on the trail of the Times Square bombing suspect. We have new clues from a fireworks store no Pennsylvania.

(COMMERCIAL BREAK)

BLITZER: Let's get to our strategy session. Joining us, our CNN political contributors, Democratic strategist Donna Brazile and Republican strategist, Mary Matalin. Guys, I want you to listen to what the homeland security secretary Janet Napolitano told our Nic Robertson last December. Listen to this little clip. Listen to this little clip --

JANET NAPOLITANO, HOMELAND SECURITY SECRETARY: There are young Americans who have gone through a process and breaking away from, you know, the community in which they were brought up, traveling to Pakistan, maybe Afghanistan, going to a camp, learning how to conduct military-type operations and then coming home. And, like I said, if we don't have any other information about them, they're free to travel. I mean, they're American citizens, but it is something about which you need to be situationally aware in case they go from becoming radicalized in thought to becoming violent in action.

BLITZER: It's sort of chilling, Donna, to hear that, knowing what we now know about Faisal Shahzad.

DONNA BRAZILE, DEMOCRATIC STRATEGIST: Well, Wolf, I think it's a reminder, once again, that we face an enemy that is hell-bent on destroying this country, that will exploit any divisions within this country, and that is radicalizing certain youth in this country. So, I think this is, again, a reminder that we all have to, especially as we continue to fight al Qaeda and the Taliban and others who are trying to hurt American interests, that we have to stick together as one country and try to combat these cases of terrorism with everybody working together.

BLITZER: Mary, when you heard Janet Napolitano, this was back in December, say what she said, what did you think?

MARY MATALIN, REPUBLICAN STRATEGIST: Just to pick up on Donna's point, this is not a dumb enemy. This is a very smart enemy, and they keep adjusting and changing and morphing into something that can continue to terrorize us. We seem to be okay on the after-the-fact apprehension, but we haven't improved and we need to improve with these cells in the homegrown terrorists on the -- on the pre- capturing, on thwarting in the first instance. You know, we're going to have another big round of fights now about personal liberties and civil liberties versus personal security. And most Americans are going to come down on the side, and rightly so, of personal security.

BLITZER: We'll have plenty of time to discuss this. I want to get into a little politics while I have both of you. Donna, first to you, David Obey, the powerful chairman of the appropriations committee, he's been there a long time. Suddenly today he announces he's going to retire. Listen to what he says --

REP. DAVID OBEY (D), WISCONSIN: There's a time to stay and a time to go, and this is my time to go. Frankly, I hate to do it. There is so much that needs to be done, but even more frankly, I am bone tired.

BLITZER: He was in a tough re-election campaign. How big of a blow is this to the Democrats, Donna?

BRAZILE: Well, as you know, Wolf, 20 Republicans have announced retirement, some of them are moving on, looking for other positions, and 17 Democrats. Look, chairman Obey has been one of the tireless fighters for the middle-class, representing the seventh district of Wisconsin. He's been a champion of health care and education. I hate to see him go, because he's really one of the true believers on the progressive side. But I think Democrats will retain this seat. President Obama carried this seat. John Kerry, Al Gore. It leans Democratic. We have a real good bench of state lawmakers who I believe can step up to the plate. But I don't think anybody can replace David Obey. He's one of a kind.

BLITZER: Mary, what does it say to you?

MATALIN: It says that the trajectory that began almost a year ago of independents moving away from Democrats in the electoral terrain becoming better for Republicans continues. Obey's stepping down in combination with the radically reduced Democratic turnout last night is just more of what we've been seeing for the year. There's a double-digit advantage to Republicans on intensity, on enthusiasm, on party identification, the generic ballot is closing, and the -- the passing health care was supposed to be a big boon to incentivize and mobilize the Democratic base, not happening. No bounce, no coattails.

BRAZILE: Well, we face a tough --

BLITZER: All right. BRAZILE: -- a real significant hit, Mary, but do you know what, Democrats, they'll pick up the interest as we get closer to the fall election.

BLITZER: We'll leave it on that note, guys. Donna and Mary, as usual, thank you.

BRAZILE: Thank you.

BLITZER: Jack Cafferty is reading your e-mail right now, but he'll be back in just a moment with "the Cafferty file."

And the inner workings of those terror training camps in Pakistan. We're investigating alleged links to the Times Square bomb suspect.

(COMMERCIAL BREAK)

BLITZER: Jack Cafferty is here once again with "the Cafferty File."

JACK CAFFERTY, CNN CORRESPONDENT: There are actually two questions this hour. The first question is -- to what do we owe the honor of your presence here in Gotham? Why are you here?

BLITZER: Because our big boss, Phil Kent, head of Turner Broadcasting --

CAFFERTY: Whoa.

BLITZER: He's being honored tonight at a big dinner, the Museum of the Moving Image.

CAFFERTY: You're a guest.

BLITZER: I'm a guest at the dinner and he's being honored. He's a great guy.

CAFFERTY: I've worked here ten years and I don't think I've ever met him.

BLITZER: You should meet him.

CAFFERTY: We travel in different circles.

BLITZER: Thank you, Phil, for all the work you do for CNN.

CAFFERTY: You can express my thanks when you see him.

BLITZER: You can say it.

CAFFERTY: Here's the question -- the other question. What message does it send to Washington that the majority of Americans support Arizona's new immigration law?

Greg writes, "In my opinion the majority of Americans supporting the new immigration law in Arizona sends no message to Washington. I seem to remember a majority of Americans didn't want the recent health care bill passed either, but it did anyway. It appears that our opinion is no longer relevant."

Dave writes, "Most Americans probably supported the internment of Japanese immigrants during World War II. So what? Just because it's popular doesn't mean it's the right thing to do. But in Washington, the message, enforce the law. If we have federal laws on the books to deal with people in the country illegally and those laws are ignored then the states should have rights to enact countermeasures to protect their own borders."

Darrell writes from Wisconsin, "I must be in the minority but I don't agree with such a one-sided bill. There are two laws being broken when illegal immigrants enter the U.S. and work. The first being their illegally entry and the second being illegally hired by U.S. businesses. Where's the anger and discontent from businesses that profit from this and don't employ American citizens?"

Betsy writes, "We live in Tucson, Arizona, and back this law because we cannot be safe on the interstate between Tucson and the Mexican border with illegal aliens being smuggled day and night at high speeds often going in the wrong way. Plus, we can't feel safe in our nearby national park called organ pipe where there are stashes of marijuana and drug smugglers, too."

And Ryan writes from Utah, "If you cross the border from North Korea illegally, you could get 12 years hard labor. If you cross the border with Afghanistan illegally, you might be shot. When you cross the American border illegally, you get a job, a driver's license, free health care, free education, freedom of speech, and Americans spend billions of dollars so you can read the document in your native language. What's wrong with this picture?"