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The Situation Room

Greece Debt Drama Rocks G-20 Summit; Interview with Condoleezza Rice; Herman Cain Campaign Criticized for Mishandling Sexual Harassment Scandal; Study: 30 Big Corporations Paid No Income Taxes

Aired November 03, 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: Slow but steady, maybe. Let's see. Lisa, thank you.

And you're in THE SITUATION ROOM.

Happening now, world leaders in talks and in turmoil, as the financial rescue plan for Europe threatening -- threatens, right now, to fall apart. This hour, dramatic new developments in Greece and the economic shockwaves around the globe.

We're also waiting to see if one of Herman Cain's accusers releases a statement about her past claim of sexual harassment. This controversy keeps exploding. Cain keeps raking in campaign cash at the same time.

And Cain is blaming his troubles on Rick Perry's campaign. Stand by for Perry's first on camera response in an exclusive interview with our own John King.

We want to welcome 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.

Right now, economies around the world have a huge stake in what's happening in Athens, Greece and in Cannes, France. The Greek prime minister has backed down from holding a vote that could jeopardize an international bailout for his country. But the future of his government and the rescue plan remain very uncertain right now.

World leaders attending the G20 summit in France are focused on instability in Greece and Europe's broader debt crisis, the implications -- the ramifications for the world enormous right now.

Our chief business correspondent, Ali Velshi, is covering the summit for us.

He's in Cannes -- Ali, will Greece hold this controversial vote or not?

ALI VELSHI, CNN ANCHOR: Wolf, all we've learned in the last 24 hours is everything is uncertain in Greece.

At the moment, as you said, Prime Minister George Papandreou has backed off the -- the idea that that vote will be held, because he feels he can get some opposition support.

But Greece is a -- is a tenuous place to govern. He's only got a two seat lead in parliament. And in about 18 hours from now, they're going to hold a confidence vote. If he survives that confidence vote, perhaps that -- that referendum that is planned for December 4th, won't be held. But if fails to win that vote or something else happens in the next 18 hours, it's unclear.

All we've learned is that in the late, over the last 24 hours, is how unstable the situation is in Greece.

Remember the debt ceiling debate in the United States?

It's sort of writ large in Greece -- internal squabbles about how to cut back, how to -- how to manage that country's budget, are having ripple effects all across Europe and really overshadowing the work that the G20 was planning to get done here in Cannes -- Wolf.

BLITZER: It's -- it's having an enormous impact on the markets here in the United States -- one day way down, the next day, up. Up today.

VELSHI: Yes.

BLITZER: I never -- I could never understand what's going on and how it affects these markets on Wall Street.

But maybe you can.

Explain.

VELSHI: Yes. Well, look, Greece is the 32nd biggest economy in the world, not a particularly large or influential economy. And yet today, Greece is the most influential country in the world because of this debacle.

And here's the situation, Wolf. If Greece defaults on its debt, it will be a reflection on the other 16 countries that use the euro, that they can't enforce their own rules. And that will send a shiver through banks -- central banks and private banks around the world, who say can Europe be trusted to borrow money, to pay their debts back?

Well, we're already seeing an effect in Italy, where it's become very expensive for that government to borrow money.

Now, the net effect of that could be a slowdown -- a further economic slowdown in Europe, which is already near recession levels. Europe is the biggest trading partner for the United States. So if Europe slows down and people stop spending, well, that could have an effect on job creation in the United States and around the world.

You just mentioned markets. Today, they're up because there's a sense that -- that Greece is going to pull back from this referendum and that things will get settled. But if that turns around, we could see markets tumble again tomorrow.

And finally, Wolf, the most important thing that we learned in the 2008 financial crisis is how intertwined our international lending is. So if lending cracks down in Europe, you'll find the same banks having lending restrictions in other parts of the world. So it could end up affecting Americans' ability to get mortgages or small businesses loans if we have another credit crisis.

So everybody in the world tonight should be very focused on what's going on in Athens, because it will affect all of us if things go south -- Wolf.

BLITZER: You're at the G20 summit in France. President Obama is there.

What's his role in all of this?

VELSHI: Well, unfortunately, it's marginalized and very small. He's here. Tim Geithner, who's been keeping an eye on these negotiations in Europe since August, is here, as well. But ultimately, this has come down to an internal political battle in Greece. And Greece's battles with the strong European countries -- France, which is the host country of the G20, and Germany, which is the biggest economy in -- in Europe. Those countries have got to put pressure on Greece to say, you've got to get in line. The Europeans reached a deal on October 27th. Everybody thought it was a done deal. And then the surprise announcement that they'll hold a referendum in Greece. So Europe is putting a lot of pressure on -- on Greece right now.

The role of President Obama at this point, at this meeting, is a little bit marginalized -- Wolf.

BLITZER: Ali Velshi on the scene for us.

Ali, thanks very much.

Let's get to the firestorm here in the United States right now surrounding Republican presidential candidate, Herman Cain.

We should know, perhaps within 24 hours or so, whether one of his accusers will release a statement on her past claim of sexual harassment. The National Restaurant Association here in Washington says it will decide by tomorrow whether the statement conflicts with the woman's confidentiality agreement with the group.

Cain had more to say about this controversy just a little while ago.

Let's bring in CNN's Brian Todd, who's been digging on the story for us -- what's the latest, Brian? BRIAN TODD, CNN CORRESPONDENT: Wolf, Herman Cain just did appear on a conservative radio talk show. He told host Sean Hannity that the charges against him are baseless. He said Americans are tired of, quote, "gutter politics." And he had some choice words for Attorney Joel Bennett, who represents one of the women who accuses Cain of sexual harassment. Bennett is trying to get the woman released from that confidentiality agreement.

Cain launched into Bennett when asked a question about that deal.

(BEGIN VIDEO CLIP)

HERMAN CAIN (R), PRESIDENTIAL CANDIDATE: I didn't sign anything. The Restaurant Association signed it. Secondly, he's out there trying to stir up stuff because he's trying to get famous and make some money. That's all I can say. Now, as far as I have never mentioned this woman's name. And when it first came up, I didn't even know her name. I haven't broken any confidentiality agreement.

(END VIDEO CLIP)

TODD: Now we just got a response from that attorney, Joel Bennett. He said, quote, "He is representing his client in an honest, ethical way and publicity and fame are not related to that."

Here's another quote from him: "If I was interested in publicity and fame, I would be accepting all of the television invitations I have received, which are dominating my life."

I can attest. We've asked him for a few of those interviews, Wolf.

Also, Herman Cain, just a short time ago, had some choice words for Politico, the publication -- the online publication that broke this story.

Take a listen.

(BEGIN VIDEO CLIP)

CAIN: Politico had no documentation. We asked for it. They had not talked to either one of the women that supposedly made the accusation. When one -- when the writer was asked on "Anderson Cooper" was it -- were they -- were they tipped off or encouraged from another rival campaign, they refused to answer the question."

TODD: I just got an e-mail here on my BlackBerry from Politico responding to that. Editor-in-chief, John Harris, point by point, says on the documentation, Cain's charge that they didn't have documentation, here is John Harris' response: "We did review documents at the -- as the story said. We declined a request from the Cain campaign to share those documents, as I would a request for anyone asking for our reporting materials."

This is their response to Cain's comment that they didn't talk to the women involved from John Harris at Politico: "The Cain campaign is not aware of who we talked to. We are not in a position to tell them who our sources are." And then when asking them to respond to Cain's comment that Politico didn't respond when they asked him if a -- when -- when Cain's campaign asked Politico if a rival campaign leaked the information to them, John Harris' response said: "We didn't -- we did respond by declining to answer. We don't share our sources."

This just coming from Politico to Herman Cain's accusations -- Wolf.

BLITZER: A very evolving story, shall we say?

Brian, I know you're working on it.

We'll get back to you. We have more later coming up, as well.

Brian Todd reporting for us.

Let's get to Jack Cafferty right now.

He's got The Cafferty File -- Jack.

JACK CAFFERTY, CNN CORRESPONDENT: It's starting to get ugly when it comes to those Occupy protests going on around the country.

In Oakland, California, violent protests succeeding in shutting down the fifth busiest port in the nation last night. Officials used tear gas on protesters who refused to leave the port. Hundreds of protesters threw rocks and shot fireworks at police officers, who asked them to leave. And dozens of people were arrested. The late night violence in Oakland followed thousands of people marching in a largely peaceful protest during the day in that city. They effectively shut down Oakland, California, calling it the first general strike in the U.S. since the 1940s.

And the protests aren't only heating up in California. Seattle police used pepper spray on protesters who disrupted rush hour traffic. Hundreds of demonstrators surrounded a Seattle hotel where JPMorgan CEO, Jamie Dimon, was speaking. And protesters clashed with police in riot gear.

As for New York City, where it all began, the Occupy Wall Street protesters have been at it for almost 50 days now and it looks like our mayor, Michael Bloomberg, is getting tired of them. He's using a stronger tone, saying that the city may quote, "take actions," unquote, against protesters who are disrupting the quality of life.

Meanwhile, a growing number of Americans are identifying with the Occupy movement as they learn more about it. A new ORC International Poll shows 36 percent of Americans, more than a third, say they agree with the overall positions of the movement -- more than a third of the population. Nineteen percent say they don't agree and 44 percent are unsure.

So here's the question -- are general strikes that shut down cities the way for Occupy Wall Street to get its point across? Go to CNN.com/caffertyfile and post a comment on my blog or go to our post on THE SITUATION ROOM'S Facebook page.

BLITZER: Jack, thank you.

We also have some eye-popping new figures on big and profitable U.S. corporations that simply don't pay income taxes. We'll explain.

Plus, you're going to find out why a police car crashed into a plane. You'll see the dramatic video for yourself.

And after years and years of war in Iraq, is that country an ally of the U.S. or not?

I'll ask the Bush administration's secretary of State, Condoleezza Rice. She's here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: A new report on the state of Iran's nuclear program will be released next week.

Israel may be preparing for the worst.

(BEGIN VIDEOTAPE)

BLITZER: And joining us now from the University of Miami, Condoleezza Rice,

Secretary of State,

National security adviser.

She's also the author of a brand new book entitled "No Higher Honor: A Memoir of My Years in Washington".

Madam Secretary, thanks very much for coming in.

CONDOLEEZZA RICE, FORMER SECRETARY OF STATE: It's nice to be with you, Wolf.

BLITZER: All right, let's get to some of the current issues, then we'll talk a little bit about the book.

You probably have been seeing these reports that Israel might be preparing to launch some sort of military strike at Iran because of its nuclear program.

Would that be wise?

RICE: The fact that we're even talk about that shows the danger of the Iranian program. My view has been that there's still time for diplomacy with Iran. But really the international community has got to be a lot tougher than it's been willing to do in the past. I really don't have any insight as to what may or may be going on in Israeli calculations, but I do know that there's much more than can be done to Iran through sanctions, and it's high time that it get done.

BLITZER: For eight years, you were consumed with this concern about Iran and its nuclear program. What should the U.S. do, because sanctions don't seem to have had much of an effect?

RICE: Well, I think the sanctions have had some effect. I think the Iranian are having some trouble with their program. Probably many of the kinds of equipment and the materials that they need are harder to get thanks to the embargoes, and those should be stepped up.

But it's possible to put a lot more pressure on the Iranian economy, too. Perhaps people should really start looking at an oil and gas embargo and what effect that would have. But the Iranian regime is dangerous, but not 10 feet tall, and a concerted effort here building on what has been done over the last several years, we really did manage to bring together an international coalition around Iran. We did manage to get the Iranian to the Security Council a number of times. And it is extremely important that those sanctions be toughened.

Now, the president of the United States should never take off the table military action, but I think everybody understands that has a lot of potential hi unintended consequences.

BLITZER: The Iraqi prime minister Nouri al-Maliki seems to be aligning himself with Iran. He refused to allow the United States to maintain a military presence beyond the end of this year with the kind of immunity that would require and he's increasingly supporting Bashar al Assad in Syria. Is this why the U.S. went to war, spent $1 trillion or whatever, lost so many lives, to see Iraq emerge as strategic partners of Iran?

RICE: Wolf, I think that significantly overstates the case about what's happening. The Iraqis don't really like the Iranians very much. They are Arabs, not Persian. Maliki himself actually left Tehran, didn't go into exile there, went instead to Syria, which may explain some of the linkage of Bashar al Assad. And he ought to be pressed to get in line with the Arab spring because Maliki is an elected leader, not a dictator.

But we also have to look at the fact that Iraq has now become the fourth largest purchaser of foreign military sales from the United States. We have to look at the fact that even though we were unable to work out an arrangement for residual force, there's still some talk of perhaps doing that.

I don't know what happened in the immunity deal. We actually did work out an immunity deal with the Iraqis that they were willing to accept. But we should try and revisit the issue of a residual force. But it's highly overstating the case to say that Iraq has become a strategic ally of Iran. I think it's actually something not the case.

BLITZER: It's moving in that direction increasingly. Why could Kuwait, for example --

RICE: Don't even -- BLITZER: I said, why would Kuwait allow 30,000 U.S. troops have a presence there, have the immunity that the U.S. troops require, but a country like Iraq where the U.S. invested so much is saying no to the United States?

RICE: Well, first of all, I was not inside the negotiations and I don't know who said no to whom. I know that we were able to work out an immunity clause with the Iraqis that was acceptable to them and the president and Pentagon.

BLITZER: Beyond the end of this year? Beyond the end of 2011?

RICE: My point, Wolf, is that we were able to work out an immunity clause, and I don't know whether or not that same clause might have applied -- had it been looked at, that it might have applied to our forces going forward. I was not inside the negotiations, so I don't know where the breakdown was.

But when you have the Iraqis buying military equipment from us, you will have some training of Iraqi forces. The Iraqi people are no particular friends of the Iranians. And so let's not overstate the case they're somehow moving into the Iranian camp. I think there's simply not the evidence for that at this point.

BLITZER: And $2 billion a week the United States is still spending in Afghanistan, worth $100 billion a year for at least another three years through the end of 2014. Is this money well spent given where Hamid Karzai is right now and where the opposition to the U.S. presence in Afghanistan is right now?

RICE: Well, Hamid Karzai is not a perfect partner. That's quite obvious. But he isn't is Taliban, either, and he's not harboring Al Qaeda in his country. This is a country that no longer has an Al Qaeda safe haven. It is a country that actually has made some progress toward decent governance.

Yes, Pakistan is a continuing problem for Afghanistan and a continuing problem for us. It's really that frontier between the two countries that is the most dangerous threat to not just Afghanistan but I think also to Pakistan.

So yes, there's a lot of work yet to do in Afghanistan, but I think we can in a reasonable amount of time train Afghan security forces that are capable of preventing an existential threat to the Afghan government, help the Afghans to create more decent governance, particularly perhaps in the provinces. And the real wild card is whether or not Pakistan is really going to go after the extremists in that northwest frontier. That's really where the issue is.

BLITZER: In your book "No Higher Honor" this line really jumped out at me on one or your visits to Saudi Arabia. "The crown prince pulled out a gift-wrapped package. "I have a gift for you," he said. It was a full length, beautifully embroidered abaya, the black robe and veil Saudi women traditionally wear. "I had it made especially for you," he said tenderly. "Our women wear them." Yes, as a sign of oppression, I thought." How do you balance the oppression of women in Saudi Arabia where they can't even drive a car let alone fully vote with the need for their oil and the U.S. Saudi relationship maintaining that balance? How frustrated were you?

RICE: Well, this is a deeply conservative society. And I'll say one thing for King Abdullah. He is a reformer within his own context. He after all has put in place a multibillion dollar university that is a technical university where women will study even though they'll study separately.

He himself has said women should be able to vote by 2015. That may not sound like much to us, but from the Saudi king, that's really a revelation. And so this is a society that is deeply conservative and you are not going to change it overnight.

I think the real issue is how out of step will Saudi Arabia will with the democratizing trends within the rest of the region? And that's why we have to keep pressing Saudi Arabia to make reforms, to make changes.

It's not just about their oil. It's strategically located ally as well, and the United States isn't a nongovernmental organization that can simply press for human rights. It also has interests. But I think we've learned over time that our interests are ultimately better served if our values are well severed, too. And yes, it's a balancing act with a country like Saudi Arabia.

BLITZER: Everything seems to be a balancing act in all of the negotiations all over the world. Madam Secretary, eight years you served in Washington, and I know you're enjoying the private sector right now. Good luck. Let me remind our viewers, the name of the book is entitled "No Higher Honor, a Memoir of my Years in Washington." Thanks very much for joining us.

RICE: Thanks very much, Wolf. Take care.

(END VIDEOTAPE)

BLITZER: The trial of Michael Jackson's doctor moves into the final critical stage. You're going to hear some of what the prosecutors said in closing arguments today. That and a lot more coming up right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Here in the United States, Herman Cain's campaign donors are rallying behind him big time even as he fights against allegations of sexual harassment. The Cain campaign says it's raised a whopping $1.2 million since Sunday night. That's when the story first broke. CNN's Jim Acosta has been following all of the political fallout and more on this story. It keeps on going and going and going, drip by drip by drip.

JIM ACOSTA, CNN POLITICAL CORRESPONDENT: And unlike yesterday, we've seen Herman Cain keep a lower profile today. He did meet with Henry Kissinger up in New York City, meeting at the former secretary of state's home. But he has been staying away from the press, a sign that he is clamping down on this story.

But we had a chance to talk to a former executive at Godfather's Pizza who told CNN there's a good reason why Herman Cain is having such a bad week, and it has nothing to do with sexual harassment.

(BEGIN VIDEOTAPE)

HERMAN CAIN, (R) PRESIDENTIAL CANDIDATE: Excuse me. Excuse me!

ACOSTA: Perhaps as baffling at the sexual harassment accusations facing Herman Cain are the shifting stories coming in from the candidate and the campaign. One moment it's a D.C. gotcha culture that's out to destroy him as he said to Supreme Court Justice Clarence Thomas's wife and Tea Party conservative Ginni Thomas.

CAIN: That is the D.C. culture, guilty until proven innocent.

ACOSTA: The next, he's accusing his rival Rick Perry's campaign of leaking the story.

CAIN: And we've been able to trace it back to the Perry campaign that started this up in order to discredit me, my campaign, and slow us down.

ACOSTA: But the messy message comes as no surprise to the one man who said he saw the GOP contender's management style up close when Cain was running Godfather's Pizza.

TIM MCMAHON, FORMER EXECUTIVE, GODFATHER'S PIZZA: Cain's weak side is his ability to organize, clearly.

ACOSTA: Tim McMahon, a professor at Creighton University and former Godfather's Pizza executive, says Cain was known as a charismatic leader who left the organizational details to others. McMahon believes Cain lacks competence on his campaign team and is paying the price.

MCMAHON: And he hasn't been able to surround himself with people to compensate for his organizational issues. Clearly these are organizational issues

ACOSTA: After Cain left the National Restaurant Association where the alleged harassment occurred, he moved on from the business world to politics, mounting two unsuccessful campaigns, one for president in 2000 and the Senate in 2004.

UNIDENTIFIED MALE: So, I suppose you want me to vote Republican, like you, your soldier buddies?

UNIDENTIFIED MALE: Not at all. You've got no reason to.

ACOSTA: In 2006, Cain was the spokesman for a political action committee that ran controversial anti-abortion ads. One spot that ran on African-American radio stations referred to women as "hos." UNIDENTIFIED MALE: If you make a little mistake with one of your hos, you'll want to dispose of that problem toot sweet, no questions asked.

UNIDENTIFIED MALE: No. Now that's too cold.

ACOSTA: At the time, Cain told FOX News the ad was offensive, but he defended it.

CAIN: That ad might be wedged in between two hip hop ads that have language that is much more offensive to me than that particularly language. And that's what we're up against, because all we're trying to do is give people a wakeup call and get them to think for themselves.

ACOSTA: CNN political contributor Donna Brazile remembers speak out against the ad.

DONNA BRAZILE, CNN POLITICAL CONTRIBUTOR: That ad was clearly misleading. It was insensitive. And it clearly -- it backfired on not just Herman Cain, it was a waste of money.

(END VIDEOTAPE)

ACOSTA: And we made repeated attempts to the Cain campaign for response to that ad and got no response from his advisers.

And Wolf, you can look at that ad, and the way Herman Cain handled it back then, again, going back to what this former Godfather's Pizza executive said, when Cain has competent advisers around him, his visionary style, his charismatic style can really shine through, but when he doesn't have those people around him, he can make critical mistakes.

BLITZER: I think that's good advice for all of us.

ACOSTA: It is.

BLITZER: We all need good people surrounding us.

ACOSTA: That's right.

BLITZER: Certainly if you want to be president of the United States. It's a lot more important.

ACOSTA: You need a good team.

BLITZER: Yes. Excellent. Jim Acosta, thanks very, very much.

Let's talk a little bit more about the Cain controversy with the managing editor of CNN's corporate cousin. We're talking about "TIME" magazine and Rick Stengel. Rick's joining us from New York.

What do you make of what's going on here, Rick? I know you've got some articles in the new issue of "TIME" that has just come up. What a baffling, surprising turn of events this week. RICK STENGEL, MANAGING EDITOR, "TIME": Well, Wolf, I think we have to look at whether the Herman Cain candidacy was a real candidacy to begin with. I find the fact that experienced political reporters like yourself are hovering around the polls, analyzing how he's doing based on how he's doing in the polls, rather than he has a genuine platform, whether he has a policy for Medicare and Medicaid, whether he knows anything about Social Security or NATO -- and there are lots of folks who thought from the beginning, that Cain, he never hired a staff in Iowa, he never hired a staff in New Hampshire, that, in fact, his candidacy was about Herman Cain and publicity and selling his own book.

BLITZER: Well, you know, let me read to you in the new issue of "TIME" what Joe Klein, your political reporter, writes. And Joe's one of the best.

"I'm generally opposed to the press's setting moral standards that most of us can't meet, especially when there is far more important business like Herman Cain's prohibitive lack of knowledge about almost every relevant issue to be discussed."

So, how do you explain the gaffes he's made on foreign policy issues, on other issues, but at the same time, he's raising a lot of money now, and his poll numbers, and this new poll in South Carolina, for example, that just came out today, he's doing remarkably well? He's way atop the pack.

STENGEL: Well, of course those polls are a minority of a minority. And, of course, primary voters are important because they do vote in the primaries. But it's not indicative of how someone would do in a general election campaign.

I have to say I agree with Joe in the sense that Cain doesn't really seem ready for prime time. I mean, it's a serious business running for president.

I mean, as Newt Gingrich said, it's not as easy as it looks. And I think that Herman Cain is discovering that it's not as easy as it looks.

At the same time, voters are looking at how candidates handle matters that are in a crisis like he's doing now, and they make certain evaluations about that. And obviously, he's not handing it in a very smooth way, and in the long run, I'm sure that can't help him at all.

BLITZER: Can he bounce back out of this crisis?

STENGEL: I don't know. I mean, it depends on Republican primary voters.

I think, in the end, it helps the preemptive favorite, which is Mitt Romney, in the sense that all of the folks around him seem to be struggling, and yet he seems to be going forward. So I don't see Cain coming back in a strong way unless he actually has policy prescriptions that people are interested and feel are valuable. BLITZER: He's got 9-9-9. We've heard that for weeks -- indeed, months -- right now.

Rick Stengel, thanks very much.

By the way, the cover, an excellent cover of the new issue of "TIME" magazine. There it is: "Can You Still Move Up in America?" It's a powerful question.

You guys have done an excellent article on it. I recommend it to our viewers.

Rick, thank you.

A police car slams into a plane. Ahead, details of what's behind this unbelievable chase all caught on videotape.

Plus, two workers trapped on a church steeple for hours and hours. We're going to have the latest on a rescue effort.

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

(COMMERCIAL BREAK)

BLITZER: With the grassroots movement against what's called corporate greed growing stronger and stronger by the day, a new study is revealing some disturbing findings about big corporations which could further fuel all this momentum.

Let's bring in our own Mary Snow in New York with a closer look at just how much, if anything, some of these huge companies are actually paying in federal taxes -- Mary.

MARY SNOW, CNN CORRESPONDENT: And Wolf, this is a hard one to believe, but zero is how much many of America's biggest companies are paying in income taxes. That's according to a new study which looked at tax bills for 280 major companies over the last three years, and that zero tax rate is all perfectly legal.

(BEGIN VIDEOTAPE)

SNOW (voice-over): As protesters rally against big corporations and big profits, there is talk of corporate tax reform. Authors of a new study on company tax bills are hoping the results may inspire action. Citizens for Tax Justice, along with the Institute on Taxation and Economic Policy, two left-leaning groups, found that 30 major corporations paid zero income taxes over the last three years.

How is that possible? Robert McIntyre is the lead author of the study.

ROBERT MCINTYRE, CITIZENS FOR TAX JUSTICE: It didn't happen by magic. The corporations are good at lobbying, and the Congress is good at rolling over for them. And over the years, the last 25 or so years, loopholes have crept back into the tax code, and companies have found ways to shift their profits offshore and invest in tax shelters that cut their taxes.

SNOW: The corporate tax rate is 35 percent. This study found that, on average, of the 280 companies studies, they paid about half that rate.

The report also finds that some companies had so many tax breaks, their tax burden went negative, meaning they got money back. General Electric is near the top of the list.

The report finds it paid zero income tax for the last three years, while their U.S. profits in that time amounted to $10 billion. GE challenged the report, telling CNN, "The report is inaccurate and distorted. GE paid billions of dollars in taxes in the United States over the last decade, and we expect our overall tax rate will be approximately 30 percent in 2011. GE, which is a multinational company, favors tax reform," it says, "to close all loopholes and lower (AUDIO GAP) the court is hoping for major reform like the kind he advocated for in the 1980s, when then-President Reagan rid the tax code of special breaks.

DANIEL SHAVIRO, NEW YORK UNIVERSITY: If you don't keep cleaning things up, the lawyers and accountants will beat you. And we haven't had a clean-up in 25 years, and we desperately need one.

SNOW: Tax law professor Daniel Shaviro isn't holding his breath, noting changes in policy since the 1980s.

UNIDENTIFIED MALE: And they're not compromising, so we kind of have a different political environment today, and that makes taxes, along with a lot of other things, harder to do.

(END VIDEOTAPE)

SNOW: And (INAUDIBLE) how uneven tax payments are, this report finds about a quarter of the companies surveyed paid a rate of more than 30 percent. And the tax rate is 35. But roughly the same amount of companies paid less than 10 percent.

BLITZER: But the notion that GE didn't pay any corporate federal income tax for the past three years, even though maybe over the past 10 years they did pay a lot, but over the past three years, was that confirmed, that they paid zero in federal income tax, despite all these domestic profits over the past three years?

SNOW: That's what this report is saying, is that GE is on that list, among many other companies, of paying zero federal income tax, as you said, even though it had about $10 billion in U.S. profits over that same three-year period.

BLITZER: All right. This is going to generate a lot of commotion out there, I'm sure.

Thank you very much, Mary, for that.

The Senate here in Washington, meanwhile, rejected two proposals today that would have put money toward rebuilding roads and bridges. President Obama gave a major speech yesterday over at the Key Bridge here in Washington to push this part of his jobs bill. It would have approved about $50 billion for infrastructure projects. Republicans were opposed to it because it relied on a surtax on people earning more than $1 million a year.

Prosecutors making their closing argument that Michael Jackson's doctor caused the pop star's death.

And new violence in Syria a day after the government promised to stop its crackdown on peaceful protesters.

(COMMERCIAL BREAK)

BLITZER: All right. There are new developments now unfolding, as we fully expected, in the sexual harassment allegations against the Republican presidential front-runner, Herman Cain.

Let's bring in Ken Vogel. He's a reporter with Politico. Politico broke this story Sunday night, and has been breaking new details almost every single day this week.

What's the latest information, Ken, that you're getting? Because I was just reading it, but I want you to share it with our viewers here in the United States and around the world.

KEN VOGEL, REPORTER, POLITICO: Well, what we're reporting, Wolf, is that there were high-level discussions during a late 1990s NRA, National Restaurant Association, board meeting that -- where a woman who was an NRA employee had complained that Herman Cain had made a sexually suggestive invitation to her, invited her up to his hotel room, that immediately afterwards, there were discussions where this woman brought this complaint to at least two board members of the National Restaurant Association, and that, subsequently, the National Restaurant Association's general counsel, a guy who is still at the association by the name of Peter Kilgore, were made aware of this, and that Kilgore (ph) and another board member looked into these complaints.

This, in some ways, contradicts what Herman Cain has said, both that he never invited a woman to his hotel room, a female employee of the National Restaurant Association, and also that he wasn't aware of any allegations other than the one that we reported and confirmed resulted in a settlement in our story on Sunday.

BLITZER: The notion that there's another inconsistency here between what he's been saying publicly Monday and Tuesday, and what you're now getting, elaborate a little bit on the inconsistency that we're getting with this new developments.

VOGEL: Well, first of all, he said -- he insisted that he never invited an employee, a female employee of the National Restaurant Association, to his hotel room at any work-related events or otherwise. We're hearing from multiple sources that that is not the case, that, in fact, he did invite this woman, who we have confirmed her identity, to his hotel room during a National Restaurant Association meeting in the late 1990s. Additionally, he said he was unaware of any allegations made by -- of sexual harassment -- made by any National Restaurant Association employee other than this one particular individual who we reported on Sunday. The woman who we are writing about today is a different woman who brought allegations to high-ranking members of the National Restaurant Association. It's certainly possible that he never found out about these allegations, but considering that we have now confirmed that this woman who brought this allegation got a settlement and left the National Restaurant Association soon after she brought these allegations, it seems likely that folks, including him, at the National Restaurant Association were aware of these allegations.

BLITZER: How much was her settlement?

VOGEL: Her settlement, we understand, was in the range of $30,000, which was one year's salary. She was at the time roughly 30 years old. She worked in the Government Affairs Department of the National Restaurant Association.

She now no longer is in the Washington area. We've confirmed her identity, and she is not talking to us. We are withholding her name to protect her privacy, but we are certain that this is the woman.

BLITZER: And the other woman got, what, $45,000 in a settlement? Is that right?

VOGEL: That's correct. Yes, we reported today that this other woman got $45,000 in a settlement. "The New York Times" has also reported that there's another woman who got $35,000 in a settlement.

We're not sure if they're referring to the same woman as we are here, but it certainly seems that there is a fact pattern that is building, and we're going to continue to pursue this.

BLITZER: Ken Vogel of Politico.

Thanks very much. We'll check back with you tomorrow.

VOGEL: My pleasure, Wolf.

BLITZER: Thank you.

For our North American viewers, John King's exclusive interview with Republican presidential contender Rick Perry, that's coming up right at the top of the hour.

Also, Jack Cafferty is asking: Are general strikes that shut down cities the way for Occupy Wall Street to get its point across?

We'll be right back.

(COMMERCIAL BREAK)

BLITZER: Let's check back with Jack for "The Cafferty File" -- Jack.

CAFFERTY: The question this hour: Are general strikes that shut down cities the way for Occupy Wall Street to get its point across?

Bonnie in New Jersey writes, "In a general sense, of course not. What ended up happening in Oakland was people just like them were prevented from getting to their jobs. But, Jack, people out here are angry, very angry."

"Look at your own column yesterday about Congress getting richer. Oakland is one of our poorer cities, and violence is never the way to go. But I have some understanding for them in this incident."

Bill on Facebook writes, "No, no violence, no vandalism. Otherwise, history teaches us that large, peaceful protests do change American policy."

Gary writes, "It's not to get a point across, but to get some relief from the same old do-nothing government and private sector. I would be all for a nationwide total strike, every worker walk out. Maybe then these politicians and fat cats will get the message."

"It ain't that hard. The solutions are there."

Rick says, "Is the point being stupid? All these protests are accomplishing is a waste of public money on police and city administrations, and damage to both public and private property. Nothing else is being accomplishes. The labor unions behind the violence need to be held accountable for the damage to property, and the cities ought to sue to collect the money."

Mark in Boulder City, Nevada, writes, "If these people really wanted to make a point about the abuse from corporate America, they ought to be marching on Capitol Hill, where the people responsible for the social unrest work. Corporate America's lobbying in Washington is approved by Congress. Congress is responsible for these problems."

And P. writes, "It's the only way to get the point across, and you haven't seen anything yet."

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: Jack, thank you.

Amazing video of a police car crashing into a plane in Brazil. Look at this. It was all part of a dramatic smuggling bust caught on tape.

A police agent slammed his car into the alleged smuggler's plane. The agent knew just how to tap the plane's wing without injuring himself.

The suspects already landed. They attempted to take off again, but they failed. Five people were arrested. Police confiscated notebooks and electronic surveillance equipment.

And two workers trapped on the steeple of a New Jersey church for hours have just been rescued safely. They were repairing the steeple tower when their lift broke.

Happy they're OK.

It's putting a whole new face on health scares. Jeanne Moos coming up next.

(COMMERCIAL BREAK)

BLITZER: It's the stunning image putting a whole new face on one man's health scare.

Here's CNN's Jeanne Moos.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): Forget finding a face amid the clouds, or citing the Virgin Mary on a grilled cheese. Instead, we're grilling this Canadian neurologist about what he saw on an ultrasound image of a testicular tumor.

DR. NAJI TOUMA, QUEEN'S UNIVERSITY: Oh, my God, something like that, this is freaky.

MOOS: It sure ain't a happy face.

The doctors from Queen's University who first noticed it called it "The Face of Testicular Pain" in an article published by the medical journal "Urology." They describe " -- his mouth agape as if the face seen on the ultrasound scan itself was also experiencing severe epi -- epi --

TOUMA: Epididymo-orchitis.

MOOS: Come again?

TOUMA: Epididymo-orchitis.

MOOS: Inflation of the testes.

UNIDENTIFIED MALE: Ouch.

MOOS: As the unhappy face on the tumor ultrasound went viral, one commenter gave it a name.

(on camera): So where is "Timmy the Testicular Tumor" now, now that he's become a celebrity?

TOUMA: The tumor is in a bucket in the pathology lab, probably.

MOOS (voice-over): No wonder he's not smiling.

UNIDENTIFIED MALE: Get your hands of my testicle!

MOOS: Actually, the 49-year-old patient whose testicle was removed doesn't even know that his tumor had a face on it. But whose face? Maybe the alien from "Spaceballs," minus the teeth.

UNIDENTIFIED MALE: It kind of looks like a Muppet a little bit.

MOOS: Or could it be "Mini-Me?"

Not to him.

UNIDENTIFIED MALE: It looked like Humpty Dumpy. That is amazing. That's fantastic.

UNIDENTIFIED MALE: "The Scream," that famous painting.

UNIDENTIFIED MALE: Charlie Brown.

UNIDENTIFIED MALE: Maybe Rush Limbaugh. I don't know.

MOOS: No!

We can't really put a name to the face, but we can put a name to the doctor who examined the tumor. We kid you not --

TOUMA: Last name is Touma.

MOOS: Or, as Arnold Schwarzenegger would say --

ARNOLD SCHWARZENEGGER, ACTOR, "KINDERGARTEN COP": It's not a tumor!

MOOS: Oh, yes, it was. But it turned out to be benign, something to celebrate.

UNIDENTIFIED MALE (singing): Hello my baby, hello my honey, hello my ragtime gal

MOOS: Jeanne Moos, CNN --

UNIDENTIFIED MALE (singing): Baby my heart's on fire

MOOS: -- New York.

(END VIDEOTAPE)

BLITZER: Leave it to Jeanne Moos, as we say every day here in THE SITUATION ROOM.

Thanks very much for watching.

I'm Wolf Blitzer, in THE SITUATION ROOM.

The news continues next on CNN.