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The Situation Room

New Details Emerge in Alleged Domestic Terror Plot; ATF Probe Escalates; Interview With New York Congressman Peter King; U.S. Claims Iranian Quds Force Behind Recent Assassination Plot; Interview With Undersecretary David Cohen; Herman Cain And His 9-9-9 Plan; Jeb Bush 'Impressed with Mitt Romney'; Dems Controlled Senate Votes Against Jobs Bill

Aired October 12, 2011 - 16:00   ET

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

WOLF BLITZER, HOST: Happening now: a failed entrepreneur, a victim of violent crime, now a suspect in an international terror plot. We're learning surprising new details about the man charged with plotting to assassinate the Saudi ambassador to the United States.

Also, the probe into a controversial ATF gunrunning program now escalating with a subpoena targeting the U.S. attorney general, Eric Holder.

And Republican presidential candidate Herman Cain is blasted by his rivals over his so-called 999 tax plan. We will show you what it would really do.

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

We're following new developments today in the alleged Iranian terror plot to assassinate the Saudi ambassador to the United States. Among the latest developments, the U.S. has slapped sanctions on an Iranian airline it says provided material support for the plot.

In Tehran, meanwhile, the Foreign Ministry is strongly protesting the allegations to a Swiss diplomat in Tehran. Switzerland represents U.S. interests in Iran since the two countries do not have formal diplomatic ties. Saudi officials are blasting Iran over the alleged plot. Prince Turki al-Faisal, the former Saudi intelligence chief, the former Saudi ambassador here in Washington, warning today -- and I'm quoting Prince Turki -- "Someone in Iran is going to have to pay the price."

We're also digging deeper into the American citizen charged in the case, Manssor Arbabsiar.

CNN's Lisa Sylvester is here in THE SITUATION ROOM. She has been investigating Manssor Arbabsiar.

What are you learning today, Lisa?

LISA SYLVESTER, CNN CORRESPONDENT: Well, Wolf, 56-year-old Manssor Arbabsiar is the man investigators say is at the center of this plot and authorities are describing him as ruthless, unconcerned about killing innocent people. But Arbabsiar's closest friends say they have a hard time making sense of all of this. They describe the guy they know as a nice guy, someone who's disorganized, forgetful and incapable of being a mastermind of this kind of plot.

(BEGIN VIDEOTAPE)

SYLVESTER (voice-over): Manssor Arbabsiar went by the name Jack according to Mitchel Hamauei, a friend of his, who describes him as a normal guy.

MITCHEL HAMAUEI, FRIEND: He didn't care about what happened with governments. And that's why I found it very shocking to see that he was, you know, accused of doing this.

SYLVESTER: Arbabsiar lived a relatively quiet life. In the early 1980s, he attended Texas A&I University, which has since become Texas A&M University in Kingsville, Texas. But he dropped out there. He tried his hand as small business man. At one point, he co-owned this used car lot in Corpus Christi, Texas.

He also owned a kebab restaurant in a local mall. But his businesses, one by one, folded. Investigative reporter Rick Spruill interviewed several of Arbabsiar's colleagues. They said money was his main driver.

RICK SPRUILL, INVESTIGATIVE REPORTER: He was always looking for the deal. He was just a money hound. And they said there's just in their minds no question that he -- whatever he put himself into, it was specifically to make money, that there was no ideology, there was no jihad. There was nothing abstract about it. It was just money.

SYLVESTER: Arbabsiar's home was up for foreclosure sale in September 2010. Court records show some business disputes and an IRS lien from 2003 for $5,800.

But a former college roommate who asked that we not use his name said Arbabsiar was the victim of a violent mugging in the 1980s and from that, he had short-term memory issues for most of his adult life.

UNIDENTIFIED MALE: All the time, he was forgetting titles to the cars. He would forget his keys, forget his documents for vacations. He was traveling one time. And he left all his documents in my store here. And then he was gone driving and he had to come back two hours.

"Did I leave my stuff here?"

"Yes, you left it here."

(END VIDEOTAPE)

SYLVESTER: Now, friends say Arbabsiar moved back to Iran in 2010 and they didn't hear much from him or about him until they turned on the news and they started seeing the reports.

We should say also that Rick Spruill, he is with "Caller-Times" in Corpus Christi. He has done a great job digging in some of these details, but we're really now getting a picture and a sense of exactly who this guy, Arbabsiar, really is.

BLITZER: Yes. It sounds like a strange guy indeed with a lot of history there. We're going to learn more about him, I'm sure.

Lisa, thanks very much.

Let's continue our discussion with Congressman Peter King. He's the chairman of the House Homeland Security Committee.

Congressman, how good is this evidence against Arbabsiar?

REP. PETER KING (R-NY), HOMELAND SECURITY COMMITTEE CHAIRMAN: Wolf, from all that I have seen, it's extremely solid evidence.

I was a briefing this afternoon with FBI and National Counterterrorism Center. And I would just say that the accumulation of evidence to me seems to be overwhelming. There's no doubt from what I have heard that this was a very serious plot and that Arbabsiar was the center of it.

And without going into detail, I would just say that the case is very strong and I have no reason to dispute it. Obviously, there will be a trial and there will proceedings, but from all I have seen so far, this was very effective law enforcement, very strong cooperation between the DEA and the FBI and all the components of our national security team, including, again, interrogation groups within the FBI and our Counterterrorism Center, all of whom did an outstanding job.

BLITZER: How high do you believe, based on what you have heard from authorities, did this go in the Iranian government?

KING: Well, without going into what I was told at a briefing, just looking at the public record, the fact is, the Quds Force is an elite operation. To even contemplate an attack of this magnitude, to be actually carrying out attacks and murders and bombings in the United States, this violates all international law.

It would have been an act of war if it was carried out. So I just have to believe that, considering what an elite force it is, that this would not have been done unless it was sanctioned by the very highest levels of the Quds Force. And I can't imagine they would sanction it unless they have been given the sign-off by people higher up in the government, perhaps all the way to the top.

But, again, that is really just based on my analysis of the public record and common sense, because this is different from anything. I can't emphasize that enough. This is different from anything that has happened before, to actually have an act of war carried out in the United States by Iran. And that's what this was contemplated to be.

This is serious business. And I can't imagine so many at any lower or middle or even upper-middle level carrying this out without authority from on high. BLITZER: Because U.S. administration officials have been very precise. They have suggested that elements of the Iranian government, that high elements in the Quds Force, but they have specifically not said that the president, Mahmoud Ahmadinejad, or the grand ayatollah personally was responsible or even knew about this.

Have you heard something different about these two individuals, Ahmadinejad or the grand ayatollah?

KING: No, Wolf, what I'm saying is that, just looking at the record, it's hard to believe -- the public record -- it's hard to believe that this didn't go very high, if not to the top, to just below the top.

But again I'm not telling you anything I have learned. This is just my analysis of knowing that it was within the Quds Force, knowing how disciplined they are, knowing how their chain of command works, that I can't believe an attack of this magnitude involving so much money, involving all the money transfers that had to occur, and again just the enormity of it, where we're attacking -- contemplating attacking embassies, killing, potentially murdering hundreds of Americans and killing a foreign ambassador on American soil. That had to be at a very, very high level.

BLITZER: Is it your sense, Congressman, that this operation was in fact, even though it was not successful, an act of war?

KING: I would consider this to be an act of war.

Certainly if it had have been carried out, it would have been an act of war. And to me, conspiring to carry out an act war as a practical matter, there is no difference. Certainly as a moral issue, as a legal issue, I don't really see the distinction.

So I think we have to, as a country, realize that, that there's a red line that has been crossed here. We are now in a different level of our relationship with Iran than before. And we have to rethink really all of our thought process up until now.

But I don't think anyone really contemplated at this stage Iran would be willing to contemplate an act of war, such an attack like this against the United States. So this has to -- talk about pushing a button. This has to force us, I believe, to plan very differently and to assume the worst from Iran.

BLITZER: Well, when you say plan very differently, the administration is ratcheting up sanctions, but are you suggesting military action right now is appropriate?

KING: Well, what I'm saying is we shouldn't take military action off the table.

But, listen, the president's the commander in chief. I don't want to get out in front of him. But I think we certainly should very seriously contemplate removing the Iranian agents from the United Nations, the Iranian representatives that are here in Washington, because very often, Iranians, elements of their missions or their representatives are involved in espionage or involved in terrorism.

I think it would send a strong signal if we removed all their staff at U.N. and all of their staff here in Washington, order them out of the country as soon as possible.

BLITZER: Based on what you know, how do we know that this individual, this suspect in this case, Manssor Arbabsiar, was not just some individual who made up all these stories, was telling this informant what was going on, just simply seeking to make some money, but really didn't have any direct contact with high elements in Iran?

KING: Well, first of all, there's no way this could have been done without involvement of high elements.

Secondly, there is an accumulation of evidence which backs up or confirms what he has admitted to. There's -- just talking about the amounts of money involved, to have that type of money transferred, how it was done, how sophisticated that had to be and to get that over here or get it to Mexico, no, this was not a work of someone who's delusional. This is not someone who is making it up.

From all I have seen, this was -- again, this was very a sophisticated plot and it had to go beyond one person. And, again, there's enough there to -- more than enough to confirm virtually -- I would say everything that he's saying can be confirmed independently.

BLITZER: Well, we will see what happens in the courtroom.

On the second part of this allegation, this alleged plot, the blowing up, the attack on the Saudi and Israeli embassies here in Washington, how advanced was that? How serious is that part of the story?

KING: I would say it was very serious. It was certainly very seriously contemplated. And all I will say is that, at the briefing I got, I took it very seriously.

BLITZER: Could you elaborate a little bit on that? The other allegation was that they also talked about blowing up the Israeli Embassy in Buenos Aires.

KING: I would say all three of those, the Israeli Embassy in Washington, the Israeli Embassy -- the Saudi Embassy, Israeli Embassy in Buenos Aires, all of that, I would say -- I would take it very seriously.

BLITZER: Here's one final question and I wrote about it on my blog today, on THE SITUATION ROOM blog.

Why Adel Al-Jubeir, the 49-year-old Saudi ambassador in Washington, well-known to many of Us, A graduate of Georgetown University? Why target -- what's in it for the Iranians? Why would they want to allegedly kill him?

KING: Well, he's the ambassador to the most high-profile country in the world, the United States, just the fact that you said, you know him, all of us know him. We have all met with him. He's extremely prominent here in Washington.

Why he's not a member of the Saudi royal family, he is very close to the Saudi royal family, and certainly moves in their circles. And this would have had a devastating personal impact on the Saudi royal family if the ambassador had in effect been killed. And it also would have sent a strong message I think to the Saudis that the Iranians are coming after them and that, as we go through a whole situation with the Arab spring, this would be a strong signal to the Saudis to stay out, not to be getting involved in other countries such as Syria, whatever.

So this is a -- I think this was a decision made by Iran to send a strong signal to the Saudis, an extremely strong signal to the Saudis, and also the fact that they'd be willing to do it in the United States just shows, would show the Saudis and others how serious the Iranians were and how that they are willing to stop at nothing.

So I think it was clearly thought out. You and I might think it was erratic behavior, or crazy behavior, or irresponsible behavior, but I think they were trying to send a clear signal that, yes, they can be irresponsible, but they know what they're doing, if that's not a contradiction.

BLITZER: Congressman Peter King is the chairman of the House Homeland Security Committee.

Congressman, thanks for coming in.

KING: Wolf, Thank you.

BLITZER: And let's once again point out the Iranian government has flatly denied all of these allegations, totally disputing what the Obama administration is alleging.

Meanwhile, a subpoena targeting the attorney general of the United States, a major escalation of the probe into the controversial ATF gunrunning operation. Now it's getting personal.

Plus, we will have much more on the alleged Iranian plot to assassinate the Saudi ambassador to the United States. We will talk about alleged additional plots as well. We will have the Treasury Department's top expert, top official on terrorism who will join us live.

(COMMERCIAL BREAK)

BLITZER: Jack Cafferty is here, with the "Cafferty File"

JACK CAFFERTY, CNN CONTRIBUTOR: Here's just one more sign Wolf, that President Obama's in deep trouble headed into a re-election year. The Democrat-controlled Senate has failed to pass the president's job bill, his top legislative priority. The Senate voted 50 to 49 against the $447 billion package falling far short of the 60 votes needed to pass.

President Obama's been barn storming the country promoting this thing, but it didn't make any difference. Not a single Republican voted for the jobs bill, not a surprise, I suppose, but even worse, two Democrat senators up for re-election in conservative states voted against it.

President Obama insists this isn't the end of the road for the jobs bill. He's vowing now to break it into smaller separate packages and have Congress vote on each of these smaller bills, one at a time. Some of the popular elements include a payroll tax cut and the extension of the unemployment benefits.

But it's far from certain that a bitterly divided Congress will pass any of it. Headed into the 2012 elections. Republicans call the whole thing a political stunt. They say Obama's jobs bill is nothing more than another failed stimulus plan.

Meanwhile, Democrats up for re-election will have to decide soon whether or not to stand by this president. Experts tell Reuters that at least a few dozen democrats might duck president Obama in 2012 since unpopular presidents traditionally hurt their party in Congress.

It's early and that number could go up or down depending on a couple of other numbers. Mr. Obama's approval rating now in the low forty's. That's at or near a record. And the nation's unemployment rate, which has been stuck at over 9 percent.

Here's the question: What does it mean for President Obama, that he can't even the Democrat controlled Senate to pass his jobs bill?

Go to CNN.com/CaffertyFile, post a comment on my blog or go to our post on THE SITUATION ROOM's Facebook page -- Wolf.

BLITZER: Will do, Jack, thank you.

Meanwhile, the Congressional probe into a controversial ATF gunrunning program is escalating and now, it's getting personal. The latest twist. A subpoena directly targeting the attorney general, Eric Holder.

CNN's Brian Todd has been working this story for us since day one.

Brian, what happened today?

BRIAN TODD, CNN CORRESPONDENT: Wolf, the lead Congressional investigator in this case now wants Eric Holder to hand over key documents on Fast and Furious, specifically sensitive communications at the very top levels.

(BEGIN VIDEOTAPE)

TODD (voice-over): Congressional investigators are Zeroing in like never before on What Eric Holder knew about the Fast and Furious gun tracking Program and when he knew it.

A new subpoena from the House oversight and government reform committee to the Justice Department demands records of communications on Fast and Furious between the attorney general, his chief of staff Gary Grindler, and the head of the department's criminal division, Lanny Brewer.

The subpoena requests information on the probe into the murder last December of border patrol agent, Brian Terry. And the committee wants correspondence between Holder's office and the White House. The lead investigator on the committee, Republican Congressman Darrell Issa, has accused Holder and his aides of stone walling him.

REP DARRELL ISSA (R), CALIFORNIA: We don't get cooperation as many people even when we do a subpoena, we get often get overly redacted documents. This is not the most transparent administration at least in some areas.

TODD: Holder denies stone walling Issa's committee.

ERIC HOLDER, U.S. ATTORNEY GENERAL: We have sent thousands of pages of documents up to the hill. We'll look at the subpoenas. I'm sure we will undoubtedly comply with them.

TODD (on camera): And Holder has disputed claims by Congressman Issa that justice department memos show that Holder knew about Fast And Furious last year. Holder has testified, that he didn't know about the program until this Spring.

(voice-over): Investigators say, in Fast and Furious, federal law enforcement let thousands of assault rifles and other weapons get into the hands of suspected Mexican drug and weapons traffickers. The program was supposed to take down those operations, but the weapons wound up at murder scenes, including Brian Terry's. In recent days, a letter from Holder to Issa implied that Issa was more interested in using this regrettable incident to score political points, than in addressing the underlying problem.

Issa fired back questioning Holder's competence and credibility and saying you own Fast and Furious.

JEFFREY ROSEN, GWU: Darrell Issa is getting personal. When he says to Holder, you own this scandal, I've lost confidence in your credibility as attorney general. He's really getting personal and he's trying to get a rise out of Holder.

TODD (on camera): What happens in this town when It gets personal like that? Where does it usually lead?

ROSEN: It doesn't look good for either guy if they take the bait.

(END VIDEOTAPE)

TODD: This is likely to boil down to when Eric Holder knew of the crucial details, the tactics of Fast and Furious. He said he didn't know about those until this spring. Those memos to holder cited by Issa, those memos from last year, don't have a lot of detail in them, Wolf but Issa complains those were redacted as well.

BLITZER: You mentioned some of Holder's aides, two of them in particular, what did they know? TODD: Well, Issa claims that aides right under Holder knew about this program and knew some details of it as early as March of last year. That's going back a ways. Justice officials have denied that saying they were not briefed on the tactics of it. This is going to be a nasty fight for probably months to come.

BLITZER: And you'll be all over it, Brian. Thanks very much.

A surprise today at the trial of the accused Christmas Day bomber. You're going to hear how the man charged with attempting to blow up a device in his underwear shocked the courtroom today.

And why Warren Buffett is now telling the world exactly how much money he made last year. Can you imagine saying that a federal tax bill of almost $7 million is not enough?

(COMMERCIAL BREAK)

BLITZER: A courtroom surprise today in the trial of the alleged Christmas Day bomber. Lisa Sylvester is monitoring that, some of the other top stories in THE SITUATION ROOM.

What happened, Lisa?

SYLVESTER: Hi, Wolf.

It is a big surprise. The man accused of trying to bring down an airliner on Christmas Day in 2009 by detonating a bomb in his underwear pleaded guilty today to all the charges against him. Umar Farouk Abdulmutallab had already pleaded not guilty to charges, that included attempted use of a weapon of mass destruction. He will be sentenced July 12th.

Billionaire Warren Buffett is revealing what he made last year. Stepping up his push to get Congress to raise taxes on the very rich. He says he made almost $63 million last year and that his federal tax bill was a little more than 17 percent of his taxable income. It's a low percentage because a lot of his money came from investments, which are taxed at a lower rate than wages.

And if you are a man over the age of 60 taking vitamin e supplements, researchers say you need to talk to your doctor. There's a new study that finds that taking too much vitamin e, much more than what's in a multivitamin, may increase your risk of prostate cancer. Researchers at the Cleveland clinic, found that men taking 18 times the recommended daily amount had a higher cancer risk. Of course you would have to be taking 18 times that, so that's a lot of Vitamin E.

BLITZER: Way too much. You said July 12th. It's January 12th.

SYLVESTER: If I did, I misspoke. It is January 12. Glad you corrected that.

BLITZER: Just want to correct it. Thank you Lisa.

We'll have much more on our top story coming up. The U.S. is laying out its case that Iran plotted to assassinate Saudi Arabia's Ambassador to the United States. Did the highest levels of Iran's government actually know about the alleged plot?

And Herman Cain under the spotlight with his so-called 999 Plan. His fellow Republican candidate's now taking direct aim at that plan. But would his plan actually be able to restructure the tax code? Would it really work?

(COMMERCIAL BREAK)

BLITZER: Harsh words for Iran today after revelations of an alleged plot to assassinate the Saudi ambassador to the United States perhaps at the expense of lots of innocent Americans. The House speaker John Boehner this afternoon called it a serious breach of international behavior. Vice President Joe Biden warning the U.S. response could move beyond diplomatic sanctions.

Let's bring in our chief White House correspondent Jessica Yellin. She's working the story for us. Jessica, the White House press secretary was peppered with questions about this alleged plot. What did we learn?

JESSICA YELLIN, CNN CHIEF WHITE HOUSE CORRESPONDENT: He called it an attempted act of terrorism. He vowed the U.S. would ratchet up pressure on Iran. But what was most interesting was what he would not say, whether this reached to the highest levels of the Iranian government, to the Supreme Leader and president.

(BEGIN VIDEO CLIP)

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: The United States disrupted a conspiracy to assassinate an ambassador. Clearly, the plotting of this attempted assassination happened at senior levels of the Quds force. Beyond that, I can't get any more specific, but we believe it's clear that senior levels of the Quds force were engaged in the plotting.

(END VIDEO CLIP)

YELLIN: The administration emphasizes that the Quds forces are deeply tied into the Iranian government, justifying whatever sanctions or other actions the international community decides to take. But noteworthy they wouldn't make that tie.

BLITZER: What are you learning about the timing of this announcement yesterday?

YELLIN: Well, this is interesting, Wolf. You'll remember the suspect in custody, Arbabsiar, was arrested on the 29th. That's just days after the release of those American hikers arrested and held in Iran for more than two years. Now, when asked about this timing, White House Press Secretary Jay Carney said that's just a coincidence.

BLITZER: Maybe it is. Jessica, thanks very much.

Let's dig a little bit deeper right now with David Cohen. He's the Treasury Department's undersecretary for terrorism and financial intelligence. He's joining us from the White House.

Mr. Cohen, thanks very much for coming in. Do you believe the grand ayatollah of Iran personally knew about this alleged plot?

DAVID COHEN, TREASURY DEPARTMENT UNDERSECRETARY FOR TERRORISM: Well, Wolf, as Jay Carney said earlier today, what we know is that this is a plot that was undertaken by the Quds force, by senior Quds force officials and in the designations that the Treasury Department announced yesterday, we also made clear that the head of the Quds force is responsible for what the Quds force undertakes. Beyond that, Wolf, I really don't have any other comment on who else in Iran may have known about it and been responsible.

BLITZER: So, you can't say whether Mahmoud Ahmadinejad, the president, knew about this because in your treasury department announcement yesterday, you included elements of the Quds force, but none of the political leaders of Iran.

COHEN: Right. The designation we did yesterday described the role of the Quds force, which is an important element of the Islamic revolutionary guard core, which is sort of the premier military operation inside Iran. The Quds force responsible for external terrorist operations outside of Iran. It's a very important organization within the government of Iran.

But the information that we have relates to the Quds force and the Quds force's role in supervising and organizing this plot.

BLITZER: Any plans to raise these sanctions beyond these individuals, beyond the Iranian airline that you sanctioned today to go, to the central bank for example of Iran and say that any country having any commercial dealings with Iran at all would be suggest to U.S. sanctions?

COHEN: Well, the sanctions that we announced today on air as well as the sanctions that we announced yesterday on these Quds force officers are a part of a long standing effort by this administration to expose the Quds force and the IRGC's role in illicit activity, illicit behavior, whether it be terrorism or the support of Iran's nuclear program. We are going to continue to look for ways to expose that, to increase the pressure on Iran.

I'm not going to speculate about what our next steps may be, but we are proceeding down the path we've been on, which is to continue to ratchet up the pressure on Iran in particular until it reins in its international terrorist activity and also is willing to engage with the international community in a meaningful way with respect to its nuclear program.

BLITZER: Because, as you well know, a lot of countries, not only Russia and China, but many European countries have very good commercial dealings. Several countries in the Middle East do as well. You're not ready at this point, from what I hear you saying, to ratchet up that sanction level and say that any country that deals for example with the central bank of Iran will not be dealing with the United States. COHEN: The reality is, Wolf, that the extent to which countries in Europe, Russia, China, you name it are involved with commercial activity with Iran is decreasing. The Iranian economy is in stagnating. They are increasingly isolated, and largely in part because of the sanctions that we and others around the world including the U.N. and EU have applied to the IRGC. So the truth is that the commercial activity that countries around the world are engaged in with Iran is decreasing.

BLITZER: How did they manage allegedly to transfer $100,000 from Iran to this bank account that was supposedly under the control of Manssor Arbabsiar, but was actually controlled by the FBI?

COHEN: Well, as the complaint that was unsealed yesterday made clear, there was two financial transfers from a third country bank, so a non- Iranian bank into the United States. There was also money provided to Arbabsiar in Iran. The particular transmission network is something we are continuing to unravel.

But I think the important point for your viewers to understand and for banks to understand is that the bank that was involved in transferring that $100,000 from the third country to the United States was not an Iranian bank. It was a bank in a third country that has now found itself involved in helping to facilitate an international state sponsored murder for hire plot.

And it really points up the risk that any bank that is involved in financial transactions with Iran runs, which is that if you're going to expose yourself to the Iranian financial market, you can find yourself unwittingly involved in Iranian behavior, whether it's state sponsored terrorism or support for their nuclear program or other sorts of nefarious behavior that the Iranian government is involved in.

BLITZER: Which third country was involved and which bank was involved?

COHEN: Wolf, I can't go into that.

BLITZER: Why not?

COHEN: Because that is both a matter of intelligence and it's part of the ongoing law enforcement investigation.

BLITZER: Is it a friendly county to the United States or not so friendly?

COHEN: Good try, Wolf, but I can't get into it.

BLITZER: Maybe I'm missing something, but it's going to come out I assume if there's a trial in this case, is that right?

COHEN: It may. But at this point, the investigation is ongoing and I'm just not at liberty to discuss it.

BLITZER: And what can you tell us, because there are skeptics saying this individual, Mr. Arbabsiar, may have been desperate for money and he was just making up all this and he got you guys to go along with it, and you're blowing this way out of proportion. And you know all the allegations are being firmly denied by the Iranian government.

COHEN: That's no surprise that the Iranian government is denying this. But I can assure you, Wolf, that before the Justice Department is prepared to bring the charges they brought and before the treasury department was prepared to do the designations we did yesterday that we looked long and hard at the evidence here and were persuaded that this was a real plot that involved the Quds force, involved Mr. Arbabsiar trying to recruit some Mexican drug cartel to conduct this operation, and that, as I said, the head of the Quds force in his role of supervising all of the operations of the Quds force was himself responsible as well.

BLITZER: David Cohen, thanks very much for joining us.

COHEN: Thank you.

BLITZER: Mr. Cohen is the undersecretary of the treasury for terrorism and financial intelligence.

One suspect is still missing in that alleged terror plot. Who is he, and is he still a threat? That's coming up. Plus, a high stakes debate for Rick Perry is closely watched after his last debate flop. How did he do? We'll talk about that and much more. That's coming up in our "Strategy Session."

(COMMERCIAL BREAK)

BLITZER: Herman Cain has certainly made a surge in the polls recently. He found himself in the hot seat last night. His fellow candidates took aim in particular at his so-called 9-9-9 plan to try to restructure the tax code. Tom Foreman is looking into the plan for us. Tom, the other candidates, the Republican candidates, they really went after him.

TOM FOREMAN, CNN CORRESPONDENT: Yes, it was, Wolf. Welcome to the big league, Mr. Cain. It was quite an attack. Listen to some of the things they said about his plan and what he said as well.

(BEGIN VIDEO CLIP)

REP. MICHELE BACHMANN (R-MN), PRESIDENTIAL CANDIDATE: One thing I would say is when you take the 9-9-9 plan and you turn it upside down, I think the devil's in the details.

RICK SANTORUM, (R) PRESIDENTIAL CANDIDATE: How many people here are for a sales tax in New Hampshire? Raise your hand. There you go, Herman, that's how many votes you'll get in New Hampshire.

JON HUNTSMAN, (R) PRESIDENTIAL CANDIDATE: I thought it was the price of a pizza when I first heard it.

(LAUGHTER) HERMAN CAIN, (R) PRESIDENTIAL CANDIDATE: It will replace the corporate income tax, the personal income tax, the capital gains tax, the death tax, and most important, the payroll tax.

(END VIDEO CLIP)

COHEN: Think about what he said there at the end, because that's really key. The 9-9-9 plan will essentially replace all current sources of revenue. It will be revenue neutral. That's what he saying, and that's what we put to our truth squad down in Atlanta, this terrific team of researchers.

And what we've come up with is pretty interesting. The basic idea behind this plan is that it would include 9 percent of three different things -- 9 percent flat income tax minus charitable donations plus some credit if you're dealing with empowerment zones. Empowerment zones are basically areas that are struggling economically where he's trying to get some incentive to help either work there or help out there or open businesses there.

A 9 percent business tax minus the money he spent on investments for purchases, dividends paid, and also a credit for empowerment zones. This gets very tricky. Once you take out purchases, well, how much is that going to be? What's that going to add up to?

And then when you add a 9 percent national sales tax, what's happening is economic analysts are saying this all gets really murky as to what this adds up to. For example, total expenditures by consumers in this country have dropped for two years in a row, so even if you knew what this would be, it's based on people's behavior.

If you had a 9 percent national sales tax on top of everything you buy, to what degree might we change what we buy and when we buy it? And if we do, 300 million of us, that's going to affect the bottom line down here.

So, the problem when you look at the 9-9-9 plan is that, Wolf, it's like changing everything. As I said earlier, it's kind of like saying let's tear up the roads, rewrite all the laws and rebuild it. Now, what's the speed limit going to be?

Nobody has any idea. So in the end, what will determine revenue be? Basically, what everyone seems to be saying right now is we don't know. He says it will replace current sources of revenue. We just don't really know that. That's why we have to say until we know more, this could be true, but mainly, it's incomplete -- Wolf.

BLITZER: We'll be learning I assume -- assuming his poll numbers stay high a lot more about this 9-9-9 plan. Thank you, Tom.

A global communications crisis and it's a real one for millions of Blackberry users in the United States and around the world. Details in our next hour of what has gone wrong? What's happened to all your messages? Stand by.

(COMMERCIAL BREAK) BLITZER: The former Florida Governor Jeb Bush is weighing in on the 2012 Republican presidential field. He sat down today with CNN's Piers Morgan and says there's one candidate catching his eye.

(BEGIN VIDEO CLIP)

JEB BUSH (R), FORMER FLORIDA GOVERNOR: I continue to be impressed with Mitt Romney's performance in these debates. He's cool, calm and collected. He's quick. He's agile. I think he could do well going up against President Obama in the fall.

PIERS MORGAN, HOST, CNN'S "PIERS MORGAN TONIGHT": He's consistent, isn't he?

BUSH: He's very consistent and very disciplined and all the things you would want in a candidate. And other candidates have moments where they're done extraordinarily well as well. I'm proud of the entire field.

MORGAN: Are you edging towards an endorsement of Mitt Romney? I mean, Chris Christie came out yesterday. I saw that he's not in significant weight behind him. Are you prepared to do this?

BUSH: Well, I don't have as much weight behind me as Chris Christie, but I'm getting up there. You know, I don't know. I'm going to wait. There's no urgency to this.

(END VIDEO CLIP)

BLITZER: Full interview with Piers, by the way, later tonight, 9:00 p.m. Eastern on "PIERS MORGAN TONIGHT." Let's talk about this and a lot more.

Joining us, our CNN contributor, the Democratic strategist, Maria Cardona and the Republican strategist, Tony Blankley. It certainly sounds to me like Jeb Bush, Tony, is at least hinting that he likes Mitt Romney potentially enough to follow Chris Christie in the not too distant future endorsement.

TONY BLANKLEY, EXECUTIVE VICE PRESIDENT AT EDELMAN PUBLIC RELATIONS: Yes, I mean, that's not a surprise and it reflects what he said about Romney's campaign and performance is true. On the other hand, I think if the Republican elite try to quick quote this race, they're going to get a lot of resistance.

I mean, you're watching Cain come up and I don't dismiss him. We Washingtonians sometimes tend to dismiss outsiders because they're not part of the Washington crowd and Newt, my old boss is moving up in the polls although he is a Washingtonian.

I think that there's some resistance. The question is, 25 percent that Romney has, is it the floor or ceiling? If it's a floor, he's in great shape. If it's a ceiling, then he's got a challenge if somebody can be credible against him.

BLITZER: All right, Maria, from the Democratic perspective, what do you think?

MARIA CARDONA, DEMOCRATIC STRATEGIST: I think that Romney has been consistent in terms of how he's done on debates, but you know what else he's been consistent on? His flip-flops.

It just baffles me on how his opponents on that stage last night and on any other debate, and Perry had a terrific opportunity to do this, did not go at him where he had several sound bites.

The latest in 2008 talking about how he would be happy if the model of his health care plan he passed in Massachusetts would be used as a model for a national health care plan.

BLITZER: The whole flip flopping was a big thing for Romney when he was running in 2008, but since 2008, he really has -- flip-flopped earlier. But since then, he's been pretty consistent on all these issues.

BLANKLEY: Flip-flopping is the other side of the advantage of experience. If you've been in the business for 20, 30 years, you've taken positions, you've changed positions is inevitable.

If you're just coming to the game, you come away with the popular positions at the moment. I mean, he went in with the individual mandate, for instance, on health care back in '93 when the Heritage Foundation came out.

For a time, that was the conservative position against Hillary care. I think that as the years pass and as Romney has been now pretty steady in his positions for almost half a decade, the charge of flip- flop is less effective than it was.

BLITZER: I was surprised about Rick Perry because Rick Perry, this debate last night was strictly on the economy, strictly on economics.

He's coming out with his economic plan later this week, but he could have come out with it earlier so he could have something to point to. Were you surprised he didn't have that economic plan that he's announced earlier?

CARDONA: Absolutely, I was surprised that he didn't have that in his back pocket. He could have announced it yesterday. He could have I think more effectively announced it this week and then been able to talk about it. Exactly what Herman Cain has done.

Everyone's now today talking about 999. I think Rick Perry really missed a lot of opportunity. I still think the flip-flop thing with Mitt Romney is huge. It really focuses on a politician with zero conviction and that is important to the American people.

BLITZER: Do you believe as far as Rick Perry's concerned it's basically over for him?

BLANKLEY: No, I think even though he's got $17 million, which he raised in 49 days, which is impressive, I think it's over for him and it wasn't just he missed the opportunity to come out with a plan. He said I've only be been at this for eight weeks. It's almost like saying I'm not ready to run for president. I mean, it was a terrible thing to rhetorically to say.

And of course, when it comes to flip-flops in the general election, everybody including the current incumbent has changed his positions as they do. So it's less and less of an issue as time --

BLITZER: Herman Cain going anywhere? Do you think this is going to be a short lived honeymoon?

CARDONA: Well, we'll see. I think it's up to Herman Cain. But last night, it was clearly the Romney-Cain show and Herman Cain I think has done a lot. We were talking about this earlier in the green room.

Everyone's talking about 999 from a communications perspective. That is a huge win for Herman Cain. I think it all depends on what happens from here on out.

But I will say, it is very early in the process and believe me, having worked for Hillary Clinton four years ago, it is way too early to say that anybody is the inevitable frontrunner.

BLITZER: Not over yet. We have a debate next Tuesday night in Las Vegas, October 18th, the CNN debate. You're going to want to check that out, 8:00 p.m. Eastern only here on CNN.

Iran accused of more than an assassination. You're going to hear how Israel is planning to respond after the suspects allegedly discussed attacking the Israeli embassy here in Washington as well as in Buenos Aires.

(COMMERCIAL BREAK)

BLITZER: Jack's back with the "Cafferty File" -- Jack.

CAFFERTY: Question this hour, what does it mean for President Obama that he can't even get the Democrat-controlled Senate to pass his jobs bill?

Randy writes, "Nothing. It wasn't meant to pass. It was meant to be a bludgeon to bang over the heads of his Republican opponents for election season. Same old song and dance both parties do for the cameras to keep the 99 percent occupied while their corporate and billionaire masters, the top 1 percent continue the rape of America."

Wilhem writes, "What in the world are you talking about, Cafferty? The damn Republicans once again filibustered the bill, which meant that 60 votes were needed. This garbage has been going on since President Obama took office. The Republicans would filibuster free beer at the ball park if it was proposed by Obama.

The bill had many things in it that were originally Republican ideas. But they're willing to kill it in an attempt to put one man in Washington out of work at the expense of millions of unemployed nationwide." Bob writes, "You're not a leader unless people follow. No one is following this president."

Cliff in New York writes, "It means President Obama is again a victim of the new math in Washington where it now takes 60 out of a 100 votes to start debating legislation. Never mind that a 51 vote majority was already secured for passage. In a town that allows filibusters to be texted in from the Capitol Grill while taking special interest contributions, this charade highlights we are a democracy in name only and not in practice."

Harriet on Facebook writes, "What it actually means is that Obama needs to sell it better. It also means that nobody is afraid of him."

And Dee writes, "Did I hear anyone say, lame duck?

If you want to read more on this, go to my blog, cnn.com/CaffertyFile or you can go to the post on THE SITUATION ROOM's Facebook page -- Wolf.

BLITZER: All right, Jack, thanks very much.