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The Situation Room

Cain Huddles with GOP Lawmakers; Cain Accuser Wants to Go Public; Syria Agrees to End Brutal Crackdown; Sexual Harassment Scandal Surround Herman Cain Continues to Unfold; President Criticizes Congress regarding Jobs Bill; Interview With Transportation Secretary Ray LaHood; Feds Probe Firm's Missing Money; Newt Gingrich Comes in Third in Presidential Poll

Aired November 02, 2011 - 17:00   ET

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

WOLF BLITZER, HOST: And to our viewers, you're in THE SITUATION ROOM.

Happening now, Syria tells the Arab League it will end its crackdown on anti-government protesters. But there are new deaths. They are reported today in a hot spot of unrest.

One of Herman Cain's accusers may be closer to going public. And now, a Republican pollster is coming forward to say he actually witnessed inappropriate behavior by Herman Cain.

And President Obama takes a new detour around Congress. And the House speaker says -- I'm quoting now -- "Are you kidding me?"

Welcome to our viewers in the United States and around the world.

Breaking news, political headlines and Jeanne Moos all straight ahead.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

The stress on Republican presidential candidate, Herman Cain, is starting to show. He's been in meetings behind closed doors for most of the day with Republican lawmakers on Capitol Hill and elsewhere, a respite of sorts from reporters' questions about sexual harassment allegations.

Our Joe Johns has been following the Herman Cain controversy.

He got sort of testy with journalists today, Joe, and there's more coming out right now.

What's the latest?

JOE JOHNS, CNN CORRESPONDENT: It certainly seems that way. Herman Cain may have talked too much about this too soon, is what we've been hearing from Republican strategists and others, Wolf. Regardless of whether he is bound by an agreement, some experts we've talked to say it's hard to keep a damage control effort on track if you start out with a bunch of seeming contradictions.

(BEGIN VIDEOTAPE)

JOHNS (voice-over): What was really behind this moment?

Herman Cain has got all the lights and cameras on him, pressure is building to unlock a confidentiality agreement and allow an accuser to go public with her sexual harassment allegations against him, and suddenly Cain gets a little testy.

HERMAN CAIN (R), PRESIDENTIAL CANDIDATE: So don't even bother asking me all of these other questions that you all are curious about, OK?

Don't even bother.

JOHNS: Sure, it's got to be frustrating. But if Cain was also slamming the brakes on his non-stop talk-a-thon to save his campaign, it would be none too soon for many who say he's already put his foot in his mouth.

Chris Metzler is a conservative independent who consults for companies on human resources issues.

PROF. CHRIS METZLER, GEORGETOWN UNIVERSITY: Crisis Communication 101 -- you've got an issue, come out with the story. He's given at least five or six shifting accounts. And that's why he finds himself in the position that he finds himself in.

JOHNS: It turns out, though, that the Cain accuser, whose lawyer is trying to shake her free from a nondisclosure agreement, is not the only mystery guest in this confusing story. There's also a question about who leaked the details to reporters at Politico, who first broke the story, which could be important, because some Cain supporters claim it's a smear tactic to take out a strong black conservative.

Some say it's equally likely that it came from someone in Cain's own party, though, either another contender's campaign -- no one has fessed up so far -- or some other Republican who wanted this potential dirty laundry out in the open sooner rather than later.

CHERI JACOBUS, REPUBLICAN STRATEGIST: And he lives to fight another day, I believe. So better to have this now and to -- if it's uncomfortable for him to go through it, well, this is politics and it matters. So I'm not sure that I would even consider it a favor that somebody did, bringing this out now.

(END VIDEO TAPE)

JOHNS: Now, Joel Bennett, the lawyer for the complainant in the Cain case, told me today it's his understanding the tip on this story came from a current or former member of the board at the National Restaurant Association. We've reached out to the Association. Some current and former members just haven't gotten back to us on that.

If you want to know how all of this is playing out in the country, it's still too early to tell. The latest poll doesn't really give you any information on it. On the one hand, it does show a solid 7 point lead for Cain, which is outside the margin of error. But this survey was taken almost entirely before the allegations of sexual harassment went public. So we've got to wait a little longer to see how it's playing out there -- Wolf.

BLITZER: We certainly do.

Stand by. A Republican pollster now is coming (AUDIO GAP).

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: -- toward a female employee in the late '90s. He gave an interview on this to an Oklahoma radio station. And he confirmed to CNN what he said in the radio interview.

And he said, Wolf, that it was really only a matter of time, because, he said, so many people were aware of what took place and aware of the situation, the fact that she left. Everybody knew that this would eventually come up.

So I think it's -- the circle, if you will, is getting a little bit larger, among people who claim to have some knowledge of inappropriate behavior.

BLITZER: And it's a -- it's certainly, the legal part of this -- Jeffrey, you're with us, as well.

Jeffrey Toobin is joining us -- Jeffrey, as we take a closer look at these allegations, the fact that Herman Cain has said some things about one or both of these women who -- who made these initial allegations, does that automatically nullify this confidential -- confidentiality agreement?

In other words, does this give one or both of these women the opening to speak out publicly, because he, as the former head of the National Restaurant Association, already has?

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: Well, the problem with -- with answering a question like that is that it all depends on what the agreement itself says. There is a general form for these agreements. And I'm familiar with the general form. But I don't know if that's exactly what was signed here.

Usually, both sides are -- are barred from speaking badly about the other. And it is not clear what the remedy is if one side breaches that.

I mean, frankly, these only -- it only matters, you know, the letter of the law, of the contract, if there's litigation down the line. The odds that there will be litigation are extremely, extremely small. I think this woman -- the woman who received this money, the two women have to decide, do they want to expose themselves to the kind of criticism, to the kind of ridicule, to the kind of attacks they're going to get?

That's really the question. It's not -- it's not really a legal question at this point. Nobody is going to sue them. Nobody is going to try to enforce, take their money back 12 years later.

But their question is, do they want to get in the middle of this and start exposing themselves to what will be a lot of ugly attacks?

BLITZER: Would it be smart, Gloria, politically speaking, for Herman Cain to go to the National Restaurant Association and say you know what, I waive my confidentiality, I'm authorizing you to go ahead and release all this information. If the women don't want to go public, keep their names confidential. They don't have to go public.

But from -- from my standpoint, I have nothing to hide--

BORGER: Right.

BLITZER: I want to American people to know what's going on. I want to be the president of the United States. No more secrets. Go ahead and let everyone know what happened 10 or 12 years ago.

BORGER: You know, Wolf, I've thought all along that that was, in fact, what Herman Cain should do. And there has been some discussion today about that may be, in fact, exactly what he does intend to do.

But, you know, this is a political campaign. They're also worried about who leaked this. You know, there are charges and counter charges flying. I mean the person that I spoke with today, Chris Wilson, is somebody who works for Rick Perry's super PAC. And he told me in no uncertain terms, because he knew that he would come under some criticism from the Cain people. And he said let me quote you here -- this to you, Wolf. He said: "I had nothing to do with leaking this in any way. I've never discussed or shared this story with any of my clients, period."

So Cain is pursuing two tracks, one, trying to figure out who leaked the story, and, two, trying to figure out how to manage the story.

And so far, we have no answers.

BLITZER: And, Jeffrey, even if Herman Cain were to say that to the National Restaurant Association, the trade association which he worked for before from 1996 to 1999. He headed that lobbying organization.

Even if he were to say to them now, you know, ahead -- go ahead and release the information, that -- that doesn't necessarily mean they would. They -- they could have their own reasons for not doing so.

TOOBIN: That's right. I mean the National Restaurant Association, which is usually a somewhat low profile organization -- I mean, obviously, it has interests in certain issues -- they do not want to be the focus of national attention. They, I assume--

BORGER: It's too late.

TOOBIN: -- and I am sure, want this whole thing to just go away. But Cain, again, if this follows the normal course, was not a signatory to this agreement. This was an agreement signed by the Restaurant Association.

So Cain doesn't have the right to tell the Restaurant Association, go ahead and release it. He can say it's OK with me. But, ultimately, if it's just the Restaurant Association that signed this document, as is usually the case, they're going to have to decide it on their own.

And I think they're going to have to figure out what's better for them and their members.

Do they just dump this all on the public and let, you know, the chips fall where they may or do they try to keep stonewalling it?

I think it's -- it's a tough call for them. But Cain is not the ultimate authority here.

BLITZER: Good point.

All right, Gloria and -- and Jeffrey both, please stand by. We have many more to dissect. New information coming in. I'm just getting word that we're about to get some more information out on this.

Also, some other news that we're watching, including what's going on in Syria. Ben Wedeman is in Cairo, where the Arab League has just supposedly worked out an agreement with the Syrian regime.

Stand by. Much more news coming up right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: More on the Herman Cain story coming up.

But right now, the Syrian government is making some big, new promises to try to hold onto power and diffuse more than seven months of anti- government unrest. The Arab League announcing today that Syria has agreed to end its crackdown on protesters, withdraw troops from the streets and release jailed demonstrators.

The big question, of course, will President Bashar al-Assad make good on his pledge to stop all the violence?

Our senior international correspondent, Ben Wedeman, is covering all of this.

He's joining us from Cairo, where the Arab League was meeting.

I guess a lot of U.S. officials are saying and they're asking right now, can they really believe the Syrians.

What exactly is going on -- Ben?

BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, Wolf, this is the agreement that the Syrian government reached with the Arab League. Very simple. It covered those points that you mentioned. But there's still a variety of matters that aren't altogether clear.

For instance, this agreement calls for a meeting between the opposition and the Syrian government. The Syrian government is insisting that that meeting be held in Damascus. But, of course, the opposition, which has seen too much blood, in a sense, flow under the bridges in recent months, doesn't really trust the Syrian government.

The Arab League is proposing that this national dialogue be held in neutral ground here in Cairo.

That's just one of these points they can agree on. And, of course, there just is such level of distrust between the government and opposition that, for instance, the government has, in the past, released small numbers of prisoners, but nothing compared to the total number they had behind bars.

They have promised in the past to pull their forces out of Syrian cities and towns, but that never really happens. So the feeling among many in the opposition is this is just a way to gain time, that the Syrian government will continue to crackdown brutally on these anti- regime protests -- Wolf.

BLITZER: And there are reports, Ben, as you well know, that even today as this agreement was being signed, the bloody crackdown was continuing and political prisoners, peaceful activists, still being round up. What are you hearing actually from the demonstrators, the opposition on the streets of Cairo -- excuse me, the streets of Syria?

WEDEMAN: One of the basic problems is Wolf, there's a feeling among some of them is that Bashar al Assad, who really is a newcomer to Syrian politics, isn't really in control of the country. He can tell his foreign minister to come to Cairo and agree to this initiative, but on the ground, it's the Syrian intelligence chiefs, the generals who are very shadowy, not very public figures, who are really calling the shots in Syria. And they're the ones who are conducting this bloody campaign against this anti-regime movement in Syria -- Wolf.

BLITZER: Ben Wedeman in Cairo for us. We'll stay in close touch with you. Thank you.

Let's get back to the top story here in the United States right now, what's going on with Herman Cain, allegations of sexual harassment by two women in the late 1990s when he led the National Restaurant Association. There are new developments coming in, our friends over at "Politico" watching this story. They broke this story Sunday night.

Jim Vandehei is joining us now. He is the executive editor at "Politico."

JIM VANDEHEI, "POLITICO" EXECUTIVE EDITOR: Hey, Wolf.

BLITZER: Jim, this is a startling development, because all of a sudden in your reporting it right now, Herman Cain is directly accusing someone of leaking, getting the story going the other day. Tell us what he's saying and what is going on.

VANDEHEI: He is accusing Kurt Anderson, who is a Republican strategist who now works for Rick Perry, he believes that Anderson's the root of these stories because he had worked for Cain in one of his previous political campaigns. Anderson, who we talked to, denied it, said he's definitely not the source, hasn't talked to anyone off the record or on the record about Cain and respects him.

BLITZER: And you guys aren't saying who tipped you off initially to the story, is that right?

VANDEHEI: That is a very safe assumption, Wolf. We don't talk about our sources.

BLITZER: I assumed.

There's another development that you're breaking right now. I just got this from "Politico" breaking news alert coming in about the Associated Press getting more information. Tell us what's going on in this?

VANDEHEI: I'd say there's three incremental developments on the allegation side of this story. The first, the Associated Press in the last hour has reported that a third woman, not the two we discussed in our initial story, but a third woman has complained to them of inappropriate behavior by Herman Cain. We do not have confirmation of that, but that's what the AP is reporting, and it appears to be based on one source, the person subjected to this alleged treatment by Cain.

We have two other incremental developments. One, there's this Republican pollster in Oklahoma who you guys have been talking about. I want to get this right. It's Chris Wilson. And what he told us is that he was the pollster at the time for the National Restaurant Association, and that's where Cain was CEO at the time. At a restaurant in Crystal City, Virginia, not far from where I am now, there was several people at a table and he was saying very inappropriate things to women at the table, so inappropriate that people at the table were very uncomfortable and told him to tamp it down a bit.

And so he's saying that on the record. He's talked to us. He's talked to a radio station in Oklahoma. I think he might have talked to someone over at CNN.

The third development is a radio host. A fellow named Steve Deace. He's sort of the Rush Limbaugh of Iowa. And he's told us on the record that during a visit Cain had said awkward and, quote, "inappropriate things to things to staffers at his radio station." He did not provide any more detail but did provide that assertion on the record.

So all of these sort of build upon the story we wrote about several days ago of these two other women who have made allegations of inappropriate behavior by Cain when he was at the National Restaurant Association between the years of 1996 and 1999.

BLITZER: This third woman now suggesting some inappropriate behavior. This third woman has gone public or not public? Has this third woman giving any specific details as far as we know?

VANDEHEI: She is not. All I know about that is that's an AP report, an Associated Press report. I've read it. It appears to be based on one source and the source appears to be this woman who is subjected to the behavior by Cain. So we have not confirmed that incident.

I will say in our reporting on this we want to have at least two sources or somebody who can corroborate an allegation by somebody before going with it. That's what AP has on their side. The Iowa radio host, and the Oklahoma pollster, that you can find on "Politico" right now.

BLITZER: All right, Jim Vandehei, we'll stay in close touch with you. "Politico" obviously all over this story. We're going to have much more this hour here in THE SITUATION ROOM as well. Thank you.

Let's go to Jack Cafferty right now. He's got "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN CONTRIBUTOR: While millions of Americans struggle under a weak economy, members of Congress keep getting richer, a lot richer. "Roll Call" reports that members of Congress had a collective net worth of more than $2 billion in 2010. That was up an astonishing 25 percent from 2008, which was the height of the recession.

And these wealth totals usually underestimate how rich Congress really is because they don't include homes and other non-income generating property, which could come out to hundreds of millions of dollars more.

This wealth is split fairly evenly between Democrats and Republicans. Overall, about 200 members of members of Congress are millionaires. Once again, this doesn't include the value of homes.

There are even a handful of lawmakers who are worth tens or hundreds of millions of dollars. The "Roll Call" analysis shows that 90 percent of Congress's increase in wealth since 2008 benefitted the 50 richest members. Sounds a lot like what's going on in the rest of the country, doesn't it? What a surprise, Congress gets richer faster than the rest of us.

One economist says aggregate household worth went up 12 percent between 2008 and 2010, less than half of the increase Congress saw. Another expert suggests members of Congress do better with their investments than the average American because they are privy to inside information. Really? Seriously, they'd take advantage of that, something that's clearly illegal for the rest of us? Nah.

The bottom line is this body of lawmakers has next to nothing in common with the average American citizen, and yet we keep sending the same rat pack back there year after year after year.

Here's the question. What does it say when members of Congress got 25 percent richer during the height of the recession?

Go to CNN.com/CaffertyFile and post a comment on my blog or go to our post on THE SITUATION ROOM Facebook page.

BLITZER: Jack, thanks very much. We'll get back to you shortly.

We're getting reaction right now from the Herman Cain campaign to these latest allegations. Stand by. We'll bring that to you right after this. Also, our Americans better off than they were four years ago? House Speaker John Boehner says he can't believe his ears when he hears the president of the United States.

Plus, the feds are going after a failing brokerage firm that reported millions of dollars missing.

(COMMERCIAL BREAK)

BLITZER: We are just getting a statement in from Herman Cain's campaign reacting to this report suggesting a third woman has now stepped forward making these allegations inappropriate conduct by Republican presidential frontrunner Herman Cain. This statement according to J.D. Gordon, the campaign spokesman, tells CNN this. He says "Mr. Cain has said over the past two days at public events that we could see other baseless allegations made against him as this appalling smear campaign continues." J.D. Gordon goes on to say "He has never acted in the way alleged by inside-the-beltway media and his distinguished record over 40 years spent climbing the corporate ladder speaks for itself."

The Cain spokesman adds "Since his critics have not been successful in attacking his ideas, they are resorting to bitter, personal attacks. Mr. Cain deserves better." That statement coming in from J.D. Gordon, the spokesman for Herman Cain's campaign. We'll have more on the story coming up. Obviously it's escalating in dramatic ways today.

Other important though that we're following, important news today, new steps by President Obama to try to repair bridges and roads, create jobs along the way all across the country. His latest attempt to bypass Congress is pouring more fuel on the tensions between the two parties in Washington. Let's bring in our White House correspondent Dan Lothian with more. Dan?

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: Wolf, today the president invoked both god and Ronald Reagan as he continued to point the finger at what he has referred to as a do nothing Congress, all part of his big push to create more jobs, bring down the unemployment rate.

The backdrop today was the key bridge that spans from Washington into Virginia. It is, according to the department of transportation, a bridge that needs some repair, does need some maintenance as well. The president believes this is the kind of project that can benefit from the transportation of his jobs bill that would pump about $50 billion in investments into roads and bridges, another $10 billion into an infrastructure bank.

To make his point, the president took a swipe at Republicans and also brought god into the jobs debate.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Congress tells you they don't have time, they've got time to do it. We've been -- in the House of Representatives, what have you guys been debating? John, you've been debating a commemorative coin for baseball? You have legislation reaffirming that "in god we trust" is our motto? That's not putting people back to work. I trust in god, but god wants to see us help ourselves by putting people back to work.

(APPLAUSE)

(END VIDEO CLIP)

LOTHIAN: A Republican house aide said those two things the president was referring to were procedural matters that look less than 20 minutes, and the aide reporting there are more than 15 bills that are still stuck in the Senate. I asked Jay Carney whether or not it was a fair jab that the president took at the Republicans today, and here's what he had to say.

(BEGIN VIDEO CLIP)

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: Whether it took 20 minutes or not, the fact is they were out of town by 3:00 p.m. The point the president is making broadly is that if not for the president's insistence on pushing the American jobs act, would we be having a debate about jobs and the economy right now in Washington? So, yes, I think it's a fair jab.

(END VIDEO CLIP)

LOTHIAN: The bottom line is that a lot of construction workers have lost their jobs because of what happened in the housing market. The president believing that with investments in infrastructure, in transportation, that hundreds of thousands of these construction workers can get back to work -- Wolf.

BLITZER: All right. Thanks very much.

Dan Lothian, at the White House.

Let's continue this conversation with President Obama's transportation secretary, the former Republican congressman from Illinois, Ray LaHood.

Mr. Secretary, thanks very much for coming in.

And I want to get right to a direct comment the president made today on the Republican leadership in the House and Senate. Listen to this.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: OK, so if the Speaker of the House, the Republican Leader in the Senate, al the Democrats all say that this is important to do, why weren't we doing it? What's holding us back? Let's get moving and put America back to work.

(END VIDEO CLIP)

BLITZER: I always assumed looking at the president's proposal for a half a trillion dollars to try to create jobs, this was one area where Republicans and Democrats, historically, have always worked together repairing roads and bridges, transportation. What's happened here? What's going on?

RAY LAHOOD, TRANSPORTATION SECRETARY: Too much politics, Wolf. We need to set politics aside.

Hopefully, the Senate will set politics aside tomorrow and pass the American Jobs Act, $50 billion, and then a $10 billion infrastructure bank. People all over America would go to work quickly.

Wolf, the $48 billion we received in economic stimulus money, we spent in two years, and we put 65,000 people to work in 15,000 projects. We've proved at DOT, you give us the money, we'll show you the jobs. You give us the money, we'll fix up infrastructure in America.

People really trust in the fact that when DOT has the money, we work with our partners out in the states and we do a lot of good. Most importantly, we put Americans to work.

BLITZER: If it goes down to defeat tomorrow, what happens?

LAHOOD: We're going to continue to press for the Congress to pass a jobs bill, Wolf. We need a jobs bill.

Everybody in America knows somebody who's unemployed. Everybody, every family knows somebody, a family member that's unemployed. America's hurting. And the American Jobs Act infrastructure will put Americans to work.

There's no secret about how to do this. It's very simple. Pass an infrastructure bill where we can build roads and bridges and runways and transit systems all over America. Americans will go to work in American jobs, building American's infrastructure.

You know, Wolf, transportation has also been bipartisan. It's never been about politics. And unfortunately, too much politics has intervened here, and it's not fair to the American people. It's not fair to people unemployed. It's not fair to American workers.

Congress needs to pass a jobs bill.

BLITZER: You were a Republican congressman from Illinois for a long time, one of the few Republicans in the cabinet in the top leadership of the Obama administration.

Have you ever seen the atmosphere, Mr. Secretary, as poisonous, as confrontational as it is in Washington right now?

LAHOOD: It's the worst I've ever seen it, Wolf. There's way too much politics, way too much "gotcha" politics, way too much one-upmanship politics, and it's not fair to the American people.

It's not fair to American workers. It's not fair to people who are out of work. And transportation has always been bipartisan.

Set aside the politics for one day, for one vote, just one vote to put Americans to work building America's infrastructure. That's all we're asking. If Congress were to put politics aside for one vote, for one day, we could put Americans to work very quickly, in good-paying jobs, fixing up America's crumbling infrastructure.

BLITZER: I want you to listen to the House Speaker, John Boehner, a man you know well. You worked with him for many years when you were in the House of Representatives.

Listen to what he said today. Listen to this.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: The president was asked yesterday by a CBS (ph) affiliate if the American people were better off than they were before he took office. He answered in the affirmative. Do you agree with that sentiment?

REP. JOHN BOEHNER (R-OH), HOUSE SPEAKER: Are you kidding me? Why don't you go ask the 14 million Americans who are out of work, whether they're better off today than they were four years ago?

(END VIDEO CLIP)

BLITZER: "Are you kidding me?" Strong words from the Speaker of the House.

Go ahead and give us your sense.

LAHOOD: Well, America's hurting, Wolf. They really are. And there's no question about it.

The reason that Congress is the lowest that they've ever been in the history, the 235-year history of Congress, because they haven't done anything. They make great speeches about putting people to work. Put away the speeches and take a vote.

That's all we're asking. Take a vote for American jobs, for America's infrastructure.

We've heard all the great speeches. We've heard all the ideas about how to put Americans to work. Now take the vote. Now pass a bill. If you do that, Americans will go to work, infrastructure will be rebuilt, people will have good-paying jobs, and it will send a signal that we really do care about getting Americans back to work.

There's not a feeling about this in America right now. I think the president has shown he wants to do it, and we wouldn't be having this debate, you and I talking about this on your show this evening, if it hadn't been for the president going to the Key Bridge, going to Cincinnati, traveling the country, really pushing the Congress on one vote, a vote to put Americans to work building America's infrastructure.

It's not complicated, Wolf.

BLITZER: We'll see what happens.

LAHOOD: Put politics aside and let's do it.

BLITZER: We'll see what happens tomorrow, Mr. Secretary. Thanks very much, as usual, for coming in.

LAHOOD: Thank you, Wolf.

BLITZER: Appreciate it.

Erin Burnett is standing by. We're going to speak with her. She had an important interview with the former House Speaker, the Republican presidential candidate Newt Gingrich today. We'll hear what Newt Gingrich has to say about all of this and a lot more.

Stay with us. We'll be right back.

(COMMERCIAL BREAK)

BLITZER: A family brokerage firm is in the crosshairs right now over millions of dollars of missing money. We're following up on this unfolding story, questions about possible wrongdoing emerging as well.

Lisa Sylvester has been reporting on this for us.

What's the latest, Lisa?

SYLVESTER: Well, Wolf, there was a hearing in a U.S. bankruptcy court in New York. It just wrapped up really within the last few minutes here, and we learned that the amount of the missing money, according to a federal regulator, now stands at $600 million.

The judge in that case agreed to a motion filed by the trustee overseeing MF Global liquidations to transfer some 50,000 MF Global customer accounts to other brokerage firms. Those accounts up until now have been frozen.

Meanwhile, the trustee and its forensic accountants have been at the offices of MF Global trying to figure out, where did the money go?

(BEGIN VIDEOTAPE)

SYLVESTER (voice-over): CNN has learned federal regulators investigating MF Global have voted to issue subpoenas to company executives. The Commodity Futures Trading Commission is trying to unravel what happened to more than $600 million in customer accounts that the company earlier this week reported missing.

Among those worried is Jim Mindling, a customer who has about $100,000 in a brokerage account with MF Global that is now frozen.

JIM MINDLING, MF GLOBAL CUSTOMER: If they invaded my funds, it means they played with my funds, they took my segregated funds, used it for their own benefit, and lost it. So, as far as I'm concerned, that's really a serious criminal act.

SYLVESTER: MF Global was run by former senator and governor Jon Corzine before its rapid collapse earlier this week. The brokerage firm invested more than $6 billion in European sovereign debt and was heavily exposed. The large commodities exchange where MF Global operated has said the company failed to keep separate its customer accounts from its corporate funds.

SCOTT PELTZ, RMS MCLADREY: The segregation of customer funds is the bedrock upon which the industry is built, and there are regulators and others who supervise that segregation.

SYLVESTER: MF Global's employees are still showing up for work, and a bankruptcy judge granted the company an $8 million lifeline to keep them afloat until mid-November. JPMorgan and Deutsche Bank hold more than a billion dollars each in MF Global debt.

But Jim Mindling says that the biggest thing is the loss of trust from its Main Street customers.

MINDLING: What MF Global has done is they've undermined the entire integrity of the system of protections and balances from the clearinghouse down to the segregated account.

(END VIDEOTAPE)

SYLVESTER: Now, there is a Web site that has been set up for customers. It's mfglobaltrustee.com. And if there is missing money, the Securities Investor Protection Corporation will cover up to $500,000 in potential customer losses -- Wolf.

BLITZER: Lisa Sylvester, all over this story.

Thank you.

Newt Gingrich comes in third in a brand new Republican presidential poll. He's talking to our own Erin Burnett about the volatile race and more.

Stand by.

(COMMERCIAL BREAK)

BLITZER: Republican presidential contender Newt Gingrich is gaining new momentum in the race for the White House. Tonight, he's weighing in on that and much more in an interview with our own Erin Burnett.

Erin's joining us now from New York with a preview.

He always has something to say. What did he say about all this, Erin?

ERIN BURNETT, HOST, "ERIN BURNETT OUTFRONT": Well, he didn't mince words, I have to say.

I asked him about the latest back-and-forth in this Herman Cain situation, where, Wolf, as you know, Herman Cain accused Curt Anderson, who had advised him back in 2004, but now works for Rick Perry -- had accused him of being the one to leak this. Anderson has denied it, but I asked Newt Gingrich what he would think if it turned out that someone in the Perry campaign had been involved at all, and he did not mince words.

Here he is.

(BEGIN VIDEO CLIP)

NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: I have no idea. I'd want to see the evidence, but I would say if it turns out that a Republican presidential candidate deliberately went out and created this kind of a story about a fellow candidate, that they would pretty rapidly become a pariah among the rest of us, and they'd better fire the people who did it.

(END VIDEO CLIP)

BURNETT: He's saying fire them in the next 24 hours, Wolf. He was pretty passionate about that, and I know there's been a lot of back- and-forth about how this happened, who's to blame, what the facts are, and still a lot of questions.

So the Speaker talked about that. We also had a very frank conversation about his desire to cut tax rates to an optional flat similar to Governor Perry's, actually, of 15 percent. Obviously, that is something that would be far from revenue-neutral, Wolf.

I had done the math on Rick Perry's 20 percent tax rate, which would require an additional $892 billion in cuts just to hit his limits in the first year. Obviously, Gingrich, with a lower tax rate, would require even more.

He answered that question. And he also talked about his recent rise in the polls.

And most importantly, Wolf, the thing that's been very interesting today is the president's jump in the polls, which seems to me to be directly linked to the fact that, despite all the doom and gloom out there, you had the economy grow faster than people thought, and you had some positive market moves for the month of October. And that's something that's sort of -- I think has affected confidence a little bit, even though it's far from enough.

So he talked about that as well.

BLITZER: And Erin, we just got a statement in from the Rick Perry campaign. Ray Sullivan. the communications director, saying, "No one at our campaign was involved in this story in any way. Any claim to the contrary is patently false. The first we learned of it was when we read the story in Politico." And he also got that (INAUDIBLE) from Curt Anderson as well.

So, there's a lot moving. I'm sure you're going to update our viewers when you come up at 7:00 p.m. Eastern.

For our North American viewers, 7:00 p.m. Eastern, "ERIN BURNETT OUTFRONT."

Erin, we'll be watching for all the latest on that front and so many other fronts as well.

Thank you.

Jack Cafferty is asking, so what does it say when members of Congress got 25 percent richer during the height of the recession? Jack and your e-mail, that's coming up.

And it's bottoms-up in Iran. Just ahead as well, Jeanne Moos with a video that's going viral.

(COMMERCIAL BREAK)

BLITZER: Let's check in with Jack once again for "The Cafferty File" -- Jack.

CAFFERTY: The question this hour is: What does it say when members of Congress got 25 percent richer during the height of the recession, between 2008 and 2010?

Lenny in Illinois says, "They're playing with a stacked deck of cards. They're in a position to manipulate the game, and they set us up to fail so they benefit."

"That's what happens when you have too much power and you're not accountable to anyone and you get to make the rules. This is no accident. It's a well-thought out fleecing."

Rick in Detroit writes, "It's called insider trading. Remember that whole debt ceiling thing? When you know what laws are going to go into effect at a certain time, it's easy to short-sell your stocks and make a profit, because you can create anxiety in the markets and then alleviate that anxiety afterwards."

"Honest people try to follow the market, but markets are dictated by policies that are influenced by lobbyists. Therefore, why wouldn't Congress be 25 percent richer?"

Bud writes, "Don't think it means that much, Jack. Most of these people are pretty well off to start with. And let's face it, with the kind of cash they probably have available, they can grow their wealth with pretty conservative investment portfolios."

"But you have to have money to start with. The insider trading charge, I doubt. Some might take the chance, but by and large, I think most do not."

David on Facebook says, "We ought to throw them all out. Now."

Jayne in New Hampshire, "It means we've got the best government corporate money can buy. In addition, if you happen to be in the House of Representatives, you only have to work two days a week for your $174,000 annual salary, plus solid gold benefits."

Peg in New York, "It says that we are a nation dangerously out of whack, Jack." And Susan writes, "It means I'm sick to my stomach. We elect and pay these people to work for our needs, but they don't even know who we are."

If you want to read more on this, go to my blog, CNN.com/caffertyfile, or through our post on THE SITUATION ROOM'S Facebook page -- Wolf.

BLITZER: Thanks very much, Jack, for that.

We're also just learning about a new pill being hailed as a major milestone in the fight against cystic fibrosis.

Lisa Sylvester is monitoring that and some of the other top stories in THE SITUATION ROOM right now.

What's the latest here, Lisa?

SYLVESTER: Hi again, Wolf.

Well, a new study shows the drug helps patients with a specific type of cystic fibrosis to improve lung function, gain weight, and fight other aspects of the disease. One of the study's authors says it's the first time there has been a therapy like it. There is no cure for cystic fibrosis, and most people die before they turn 40.

New video into CNN showing the rescue of six would-be unauthorized immigrants who got stuck in a tunnel leading from Mexico to San Diego. Authorities spotted people entering a manhole overnight on the Mexican side. There were no serious injuries.

And Viktor Bout, the Russian arms trafficker known as "The Merchant of Death" has been convicted by a federal jury in New York on four counts of conspiring to kill Americans and provide material support to a terrorist organization. He was arrested for trying to sell surface- to-air missiles to undercover agents -- Wolf.

BLITZER: Lisa, thank you.

Two soccer players in Iran now the butt of a lot of jokes. Jeanne Moos is next with the video that's going viral.

(COMMERCIAL BREAK)

BLITZER: It's the squeeze that's going viral. Here's CNN's Jeanne Moos.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): Giving your teammates a hand to celebrate does not include a hand on the butt. Not in Iran.

Call it a fanny pat, call it goosing, a bottom pinch, a butt squeeze. It's called immoral in Iran.

Iran's most popular team, Persepolis, was celebrating a goal.

Apparently, it's OK to kiss, but don't try this. Yikes!

Number 13 jumped, and so did the video, to YouTube, in slow motion and with a helpful arrow. Number 13 was also seen giving not quite as good as he got a more subtle butt grab, but nonetheless, caught on camera.

The two bottom pinchers got more than a spanking. The Iranian Football Federation said, "Both have been banned indefinitely from all football activities for committing immoral acts."

(on camera): And talk about getting squeezed. Each player was fined almost $40,000.

(voice-over): A member of Iran's parliament called it a very ugly thing. Guy-on-guy contact isn't appreciated there. After all, remember what Iran's president said?

MAHMOUD AHMADINEJAD, IRANIAN PRESIDENT (through translator): In Iran, we don't have homosexuals like in your country.

MOOS: That got a laugh from the audience at Columbia University.

(on camera): Here in the U.S., we don't penalize butt-grabbing, we honor it.

(voice-over): Take, for instance, the 25 greatest butt-grabbing moments in sports history compiled on a blog. The more blatant the butt grab, the more popular.

There are butt pats between the sexes and between celebrities, on the stage and in the movies --

ALEC BALDWIN, ACTOR, "ALONG CAME POLLY": There (ph) are good things.

MOOS: -- and on TV.

UNIDENTIFIED MALE, "FRIENDS": Good to have you aboard.

MOOS: On "Friends," even among girlfriends.

JENNIFER ANISTON, ACTRESS, "FRIENDS": I would never congratulate Monica on a great stew by grabbing her boob.

MOOS: But even in the West, the butt pat is usually a playful, gentle thing. As one person posted about the Iranian players, "He was trying this guy a colonoscopy."

Goal!

Jeanne Moos, CNN, New York.

(END VIDEOTAPE)

BLITZER: That's it for me. Thanks very much for watching.

I'm Wolf Blitzer, in THE SITUATION ROOM. The news continues next on CNN.