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Nuclear Iran; Herman Cain Responds to Sexual Harassment Allegations; Italian P.M. Berlusconi to Resign; Cain's First Accuser Identified; Reuters: Sarkozy Calls Netanyahu "A Liar"

Aired November 08, 2011 - 16:00   ET

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

WOLF BLITZER, CNN ANCHOR: Happening now: Herman Cain, he's getting ready to speak out about new and explicit allegations of sexual harassment. We're standing by for a news conference by the embattled Republican presidential candidate.

Also, a chilling new assessment of Iran's nuclear capabilities. An atomic weapon is now believed to be within its reach.

Plus, the embarrassing conversation between President Obama and the French president picked up by an open microphone -- what they said about the Israeli prime minister, Benjamin Netanyahu, when they thought no one was listening.

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

All eyes on Herman Cain right now. In one hour, the Republican presidential candidate will speak out about the latest allegations of sexual harassment dogging his campaign. He's scheduled a news conference that we will bring you live at the top of the next hour. It comes one day after a fourth woman accused Cain saying he groped her. We're also new details about one of the other Cain accusers, what she is saying as well.

CNN's Jim Acosta is following all of this for us.

What's the very latest, Jim?

JIM ACOSTA, CNN CORRESPONDENT: Wolf, Herman Cain's campaign is making the politically risky move of raising questions about Sharon Bialek, the woman who came forward yesterday to say the Republican contender harassed her.

In the meantime, the identity of one of the other women who says she was victimized by Cain has been revealed.

(BEGIN VIDEOTAPE)

ACOSTA (voice-over): With more revelations and the identities of other accusers coming out, Herman Cain insists he is innocent.

HERMAN CAIN (R), PRESIDENTIAL CANDIDATE: I have never acted inappropriately with anyone, period.

ACOSTA: Cain's comments come as another accuser has been identified. Her name is Karen Kraushaar, a longtime federal employee seen here working as a spokeswoman for immigration authorities in 2000 during the Elian Gonzalez case, and now at the Treasury Department. Kraushaar confirmed on National Public Radio she, too, accused Cain of sexual harassment when he led the National Restaurant Association in the '90s.

Her attorney, Joel Bennett, says his client was repeatedly harassed by Cain.

JOEL BENNETT, ATTORNEY FOR CAIN ACCUSER: There were multiple incidents over multiple days, but my client has decided not to specify the incidents, although she did so in writing to the National Restaurant Association in July of 1999.

ACOSTA: Kraushaar's identity was first revealed on online Web site The Daily, which showed her Facebook picture. NPR reports, Kraushaar is a registered Republican, but records at the Federal Election Commission show Kraushaar did give $250 to the Democratic National Committee in 2009. Ever since the allegations facing Cain first surfaced, she has tried to keep her name a secret and there may be a good reason why.

SHARON BIALEK, ACCUSES HERMAN CAIN OF SEXUAL HARASSMENT: Mr. Cain said, "You want a job, right?" I asked him to stop and he did.

ACOSTA: One day after Sharon Bialek told her explosive story accusing Cain of offering a job for sex, the Republican presidential candidate is firing back.

His campaign sent out this e-mail noting Bialek's record of financial problems. "The fact is that Ms. Bialek has had a long and troubled history," the e-mail reads, "from the courts to personal finances, which may explain why she has come forward 14 years after an alleged incident with Cain."

Bialek talked about her struggles on CNN's "AMERICAN MORNING."

BIALEK: Let me set the record straight on that. I have had bankruptcy, and it was after the death of my mother to help my father pay for medical bills and a custody battle. And, like millions of other people out there, you know, I'm struggling.

ACOSTA: Cain even poked fun at Bialek's hiring of celebrity attorney Gloria Allred on a late-night talk show.

JIMMY KIMMEL, HOST, "JIMMY KIMMEL LIVE": Do you think the other candidates will follow suit and hire women to charge them with sexual harassment?

(LAUGHTER)

CAIN: If they're smart, they will.

ACOSTA: In an interview with ABC News, Cain's main rival, Mitt Romney, said the issue is no laughing matter. MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Any time there's an accuser that comes forward with charges of this nature, you recognize this is a very serious matter and it should be taken seriously.

(END VIDEOTAPE)

ACOSTA: Cain says he's not going to allow these accusations to derail his campaign. The question for voters may boil down to, who do they trust, the women bringing these allegations forward or Herman Cain?

One prominent Republican, Wolf, Alaska Senator Lisa Murkowski, says if any of these stories are true, he should quit his campaign and get out of this race.

BLITZER: Actually, she said, if these stories, he should actually drop out of the race? Senator Murkowski went that far?

ACOSTA: That's right. That's right. She is probably the first female Republican, prominent female Republican to come forward and say this. And we are, you know, going to wait and see what happens next. Herman Cain is going to have this press conference in about 55 minutes from now. We expect him to say basically what he said earlier this afternoon, which is he is absolutely innocent of all of this.

BLITZER: We will see if he addresses some of the criticism, especially the criticism about appearing on a late-night talk show and joking about what is obviously a very important issue, sexual harassment.

Thanks very much for that.

In Jim's piece, we just saw the attorney Joel Bennett who represents one of the women who has accused Cain of sexual harassment. I want to let our viewers know that Mr. Bennett will be joining us live here in THE SITUATION ROOM in a few minutes. Stand by for that indeed.

Cain's latest accuser has a well-known advocate at her side who's certainly no stranger to controversy or TV cameras. We're talking about Gloria Allred. Listen to this.

(BEGIN VIDEO CLIP)

GLORIA ALLRED, ATTORNEY: She reached out to Mr. Cain for help in finding another job. Instead of receiving the help that she had hoped for, Mr. Cain instead decided to provide her with his idea of a stimulus package.

(END VIDEO CLIP)

BLITZER: CNN's Joe Johns is here with more on Gloria Allred.

She's certainly well-known. A lot of people say she's just a liberal Democrat, a celebrity lawyer. She's got a lot of history there defending women.

JOE JOHNS, CNN SENIOR CORRESPONDENT: That's just the start of it, Wolf.

She is just a towering figure on the American legal scene and not just because of her status as a celebrity lawyer. She is getting called a lot of names right now, but frankly, Gloria Allred is used to it.

(BEGIN VIDEOTAPE)

ALLRED: I'm attorney Gloria Allred and I'm here today with my client, Sharon Bialek.

JOHNS: Gloria Allred's 35-year career has touched the lives of countless women clients who are often remembered best by their connections to famous men accused of often horrible behavior, O.J. Simpson, Scott Peterson, Lawrence Taylor, Drew Peterson.

But it's the stories of the women that grab headlines. Ginger Lee, the former porn star who said she exchanged electronic messages with former Democratic New York Congressman Anthony Weiner. Joslyn James, the porn star and alleged mistress of Tiger Woods.

So many big-time clients that it's easy to forget Allred's serious contributions to the law.

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: She's a real lawyer. She's not just a celebrity chaser. I mean, she is someone who has litigated real cases, who still does real cases, and who seems to have an appetite and an attraction for women clients who have been done wrong by men.

JOHNS: Her record, especially in discrimination cases, is said to be very good, though hiring Allred doesn't assure all clients of winning. She lost a fight to lift a court-imposed gag order in a highly publicized San Francisco murder trial in 2006 and Allred represented a California woman whose defamation case was dismissed against Arnold Schwarzenegger, though the appearance of Allred is not always about litigation. It's also about disclosure and publicity.

ALLRED: It is time to hold politicians to a higher standard. We need to know the truth about those that are running for office.

JOHNS: And politics. She's been a big-time contributor to Democratic candidates for White House and Congress, though she says she's not politically motivated in her work.

ALLRED: Absolutely not, because the last big news conference I did in New York was against Congressman, Democratic Congressman Anthony Weiner. And my client said that he should resign, that he had sent her sexual messages and that was one of the reasons that she thought he should resign. I have also criticized President Clinton when he lied to the American public.

JOHNS: Other Republicans have come into Allred's sights, too, including Meg Whitman, the California candidate for governor in 2010. Allred's client was a former Whitman housekeeper who said she was an undocumented immigrant.

If there's any criticism of Allred, it is that's she's one of those public figures who seems like she is everywhere.

RICHARD HERMAN, DEFENSE ATTORNEY: Just overkill. It's overkill. And any time a client has retained Gloria Allred, you have got to stop, pause for a moment. What's the real motivation here? Where's the book deal? When are the press conferences coming? Is there a TV deal, a movie deal?

(END VIDEOTAPE)

JOHNS: A lot of questions have been asked about who is paying the legal bill for Sharon Bialek in this legal matter involving Herman Cain. Gloria Allred has said that this is a pro bono case for her, meaning that it is free of charge. There's also been some suggestion out there, Wolf, that just perhaps there was some type of a book deal in the works. She denies that. She says that is a red herring.

BLITZER: Gloria Allred denies that?

JOHNS: That's right.

BLITZER: OK. Thanks very much, Joe Johns reporting.

I want to remind our viewers, Joel Bennett, the attorney for another Cain accuser, he will be here live in THE SITUATION ROOM in a few minutes. We will talk about how his client is doing now that she has been identified. Also, we will much more on the sexual harassment allegations coming up in our "Strategy Session" later this hour, James Carville, Alex Castellanos. And we will hear from Herman Cain live at the top of the next hour. He's got a news conference in Phoenix. We will carry it live here in THE SITUATION ROOM.

Other important news we're following now right now, including Iran. It seems to be getting closer than ever toward building a nuclear weapon and in fact may be working on that right now. That's the disturbing conclusion of a detailed new report by the International Atomic Energy Agency.

Our foreign affairs correspondent, Jill Dougherty, is over at the State Department, where they have been going through this report, line by line.

Jill, you have been combing through it yourself. What's inside?

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: Well, I think you would have to say that it contains very specific details about things like high-speed detonators, experimentation with uranium and other materials and it also indicates that this work may still be continuing.

(BEGIN VIDEOTAPE)

DOUGHERTY (voice-over): Iran has mastered the critical steps necessary to design and construct a nuclear weapon. But Iran's leaders have not yet made the decision to build it. That's the key conclusion of a new report on Iran's nuclear program from the U.N.'s nuclear watchdog agency, the IAEA. The agency has serious concerns regarding the possible military dimensions to Iran's nuclear program, the report says.

Information indicates Iran has carried out activities relevant to the development of a nuclear explosive device. The report says it has new information on Iran's activities involving the military related to the development of a nuclear payload for a missile. Iran, the U.N. says, created computer models of nuclear explosions and how to trigger them.

And in spite of assertions by the United States that Iran stopped its program in 2003, the report says there are indications that Tehran continued a secret program to develop a nuclear device and that some of that work may still be ongoing.

A senior Obama administration official calls the report very comprehensive, credible, quite damning, and alarming. This report is a big deal, the official says.

But Iran's President Mahmoud Ahmadinejad called it a fabrication and charged the agency is taking orders from the United States.

Nuclear expert David Albright, a former U.N. weapons inspector, says Iran's program has gone underground, but it hasn't given up ambitions to go nuclear.

DAVID ALBRIGHT, PRESIDENT, INSTITUTE FOR SCIENCE & INTERNATIONAL SECURITY: They have to calculate that they will be caught when they make the decision to go nuclear and, therefore, they have to be able to do it rapidly before the international community can respond either with draconian sanctions or with military strikes.

(END VIDEOTAPE)

DOUGHERTY: And also, Wolf, this report makes no judgment about how far advanced Iran is in creating a nuclear weapon that could fit on the top of a missile.

In fact, one senior U.S. official who just briefed us a short time ago said there's still a lot of questions about that, but there are no questions about the fact that the United States is going to use this report to put more and more pressure on Iran. It's going to do it both alone and with its allies.

And, also, the U.S. is claiming that those sanctions it already has put in place are as this administration official put it slowing the Iranian economy to a halt. -- Wolf.

BLITZER: I guess the key question, Jill, is China and Russia, will they get on board in tightening the screws, tightening the sanctions against Iran?

(CROSSTALK)

DOUGHERTY: That's an excellent question and I think, Wolf, it's going to have to be based very technically on what that report shows, whether it convinces them or not. And this report, you would have to say, is more detailed, goes further than probably any other report that we have seen. BLITZER: Thank you at the State Department, thank you.

Meanwhile, a grim new picture of poverty here in the United States. Jack Cafferty is coming up with "The Cafferty File."

Also, we're standing by for Herman Cain's news conference. What will he say about the new sexual harassment allegations rocking his presidential campaign?

Plus, the attorney general of the United States, Eric Holder, under mounting pressure over the Fast and Furious gun tracking program. He's being drilled about the death of a U.S. Border Patrol officer.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Have you apologized to the family of Brian Terry?

ERIC HOLDER, U.S. ATTORNEY GENERAL: I have not apologized to them, but I certainly regret what happened.

UNIDENTIFIED MALE: Have you even talked to them?

HOLDER: I have not.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

WOLF BLITZER, CNN ANCHOR: Jack Cafferty is here with the "Cafferty File" -- Jack.

JACK CAFFERTY, CAFFERTY FILE: Wolf, poverty in the United States is even worse than we thought it was. There are almost 50 million people living in poverty in this country, 16 percent of all Americans. The Census Bureau adjusted the official 2010 poverty figures up from 46.2 million or about 15 percent of Americans. The new poverty rate takes into account higher costs of living.

Hispanic poverty is the highest group of any group, more than 28 percent. More than 25 percent of African-Americans live in poverty, 17 percent of Asians and 11 percent of whites. The biggest gap is between those who have private health insurance and those who don't.

Meanwhile, a report by the Brookings Institution shows more than 20 million Americans close to 7 percent of the population, live in extreme poverty. These are people who live at less than half the federal poverty line. In 2010, that meant an individual income of about $5,500 a year or less.

This used to be a place where people came to escape poverty. Remember?

There's more. According to "The Wall Street Journal," almost 15 percent of Americans are getting food stamps. That's an 8 percent increase in just the past year. And the number could keep climbing as families struggle under high unemployment still at 9 percent. The hardest hit states: Mississippi, New Mexico, Oregon, Tennessee and Louisiana. In all these states, about one in five residents gets food stamps.

Here's the question: where's the United States headed if 16 percent of Americans are living in poverty?

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

BLITZER: Jack, thank you.

Meanwhile, political drama in Rome where the Italian Prime Minister Silvio Berlusconi is now expected to resign under enormous pressure.

CNN's Becky Anderson is in the Italian capital for us.

Becky, this wasn't a huge surprise, was it? Or perhaps it was.

BECKY ANDERSON, CNN CORRESPONDENT: Well, Silvio Berlusconi didn't want it, but everybody else it seems did, even members of his own party. Today, he acknowledged that he lost his majority in parliament after a vote on the austerity measures that really need to be passed here in Italy. He lost out -- half of the MPs didn't work. He got 308 votes out of the 309 who voted. But it's a parliament of 630 lawmakers here.

But just when you think that you understand Italian politics, well, it all goes pear-shaped again. You know, we knew that he lost his majority, but he didn't resign immediately. He went to the president's residence and only after an hour or so then, and about an hour ago, here in Rome, it was announced by the president that Silvio Berlusconi will be stepping down. One of the most colorful characters in European politics is on his way out.

But, Wolf, it's not going to happen today, probably not tomorrow. It may not be for a month because what the president has said is that Silvio Berlusconi is absolutely determined that he will get the vote on these austerity measures passed in the upper chamber, as well as in the lower chamber as he got today. He needs and wants to be here, he says, until that happens. He wants to show Europe that he can get these austerity measures passed.

So, whether the international markets, where the other Europe politicians want to or not, Silvio Berlusconi is here to stay for the time being.

The betting tonight at least is that this vote in senate will come between the 18th of November and December the 1st. But as I say, we've got 61 governments in Italy since the Second World War. So, you can never tell what's happening in Italian politics. The betting, though, is around about the beginning of December, he'll go. And what will happen next is probably a snap election in January.

What the markets I think want at this stage given the mess that Italian bond yields are in at the moment, what the markets were looking for is a quick exit from Silvio Berlusconi and a coalition government. It's not I think what they're going to get tonight, though -- Wolf.

BLITZER: Yes. First, a new government, a new leader in Greece. Now, Italy. We'll see what's next.

Becky Anderson on the scene for us in Rome -- thank you.

The attorney for one of Herman Cain's accusers is standing by live. We'll discuss what's going on. The latest on the sexual harassment allegations when we come back.

(COMMERCIAL BREAK)

BLITZER: We're standing by about half an hour from now for a news conference by Republican presidential candidate Herman Cain. That's coming up right at the top of the hour.

He's in Phoenix. He's expected to speak out about the sexual harassment allegations that ramped up yesterday with a fourth woman accusing him, the first to be publicly identified.

And now, we've learned the identity of the first woman to accused Cain of harassment. Her name is Karen Kraushaar, and she's now the director of a communications agency over the bureau within the Department of the Treasury. She worked the National Restaurant Association with Herman Cain back in the late 1990s.

Her lawyer, Joel Bennett, is here on THE SITUATION ROOM, joining us.

Mr. Bennett, thanks very much for coming in.

JOEL BENNETT, ATTORNEY FOR CAIN ACCUSER: You're welcome.

BLITZER: All right. Karen Kraushaar, her name is now public, out on the web. We've seen pictures of her.

How has she reacted to the fact that now everyone's going to know who she is?

BENNETT: She's unhappy that her name has come out, but she realizes in today's day of instant communications, it's very difficult to stay private.

BLITZER: So, she was bracing for this?

BENNETT: Yes.

BLITZER: We've got some -- here's some pictures of her, some file video. She's been a spokeswoman for various U.S. government agencies. So, we see her there.

What is she going to do now that everyone knows or soon will know who she is, the accusations? Is she going to spell out specifically what Cain did?

BENNETT: She hasn't made a decision about giving out further details yet. But if she does, I will let everyone know.

BLITZER: Is she going to be watching, for example, Herman Cain's news conference in about an hour? Could that affect her based on what he says?

BENNETT: I spoke with her earlier today. She didn't indicate one way or the other whether she'd be watching the news conference. And so, after the news conference, I'm sure I'll be speaking with her later today or tomorrow to see if there's change in her position.

BLITZER: You know, the other, this fourth woman who came out yesterday with Gloria Allred, I assume she watched that. She was up to speed on all of that. Did that push her one way or another to go public?

BENNETT: It has not yet.

BLITZER: But what was her reaction? Did you have a chance to speak to her when she was watching that news conference yesterday?

BENNETT: First of all, I don't know that she was watching it live. I know she's aware of it, as everyone else is. And she hasn't indicated to me that has had any impact on her decision whether to reveal more publicly.

BLITZER: Because I want you to react at the most sensitive detail that this woman yesterday, Sharon Bialek, what she accused Herman Cain of doing back in the late 1990s was this. I'll play the clip of what she said at the news conference.

(BEGIN VIDEO CLIP)

SHARON BIALEK, CAIN ACCUSER: Instead of going into the offices, he suddenly reached over and he put his hand on my leg, under my skirt, and reached for my genitals. He also grabbed my head and brought it towards his crotch.

(END VIDEO CLIP)

BLITZER: You're a lawyer. That sounds more like sexual assault as opposed to harassment, but I'll leave that for others to judge. But does that sound similar, and you represented your client back in the late 1990s when she settled with the National Restaurant Association. Does that sound vaguely or directly similar to what she accused Herman Cain of doing then?

BENNETT: It is similar, not the same, but similar.

BLITZER: Can you tell us what she allegations in that complaint?

BENNETT: She decided when we prepared our public statement last week not to specify the individual incidents and she has kept to that position at this time.

BLITZER: But was it a groping? Without getting into the specifics, was it a physical move or was it just verbal? BENNETT: There was more than one incident over more than one day and it constituted a sexual harassment, where at this time we're not going to be more specific.

BLITZER: You don't want to say if it was a physical motion like this other or Sharon Bialek, what she is alleging.

BENNETT: My client has not authorized me to give any more detail at this time other than they were multiple incidents over multiple days and they constituted sexual harassment.

BLITZER: And there was no doubt in your mind at the time you represented her, what, this was back in 1999?

BENNETT: Yes.

BLITZER: When you went to the National Restaurant Association and made the complaint, walk us through what happened. Did they immediately say, we're going to fight this, then you start negotiating? Walk us through what happened, because she did get a financial settlement.

BENNETT: It's difficult to recall all the details 12 years later, but my recollection is that we filed a written complaint with the National Restaurant Association. They let us know -- let us know that they wanted to settle the matter and I dealt mainly with their outside counsel at the time and we worked out a written settlement agreement that included a monetary settlement and my client left their employ and went to work for the federal government.

BLITZER: Ws that $35,000 or $45,000?

BENNETT: My client has just decided to use the term monetary settlement and not indicate the amount.

BLITZER: What do you, Joel Bennett, want to hear from Herman Cain at the top of the hour?

BENNETT: I'd like to hear him say he knew about these allegations that were made in 1999 and respond to the allegations, because he has not.

BLITZER: He says he doesn't remember any of this. And he's flatly denying that he ever sexually harassed anyone.

BENNETT: Well, he has a convenient memory because in 1999, it seems very likely to me that the national restaurant association brought these claims to his attention. Because they claim they did an internal investigation and that he denied the claims. How can you deny claims without knowing what the claims were?

BLITZER: And as far as political motivation, your client or you or anything like that, let's say you, to those who say, people are just out to smear Herman Cain. BENNETT: My client had nothing to do with making this matter public. Someone made the matter public and then my client felt a need to respond to Mr. Cain's statements that he never sexually harassed anyone. And that these claims were fabrications.

BLITZER: And one final question before I let you go Mr. Bennett. If we hear Herman Cain continue to flatly deny any of these four women's allegations, saying they're not true, there's no substance, these women are lying, how do you think your client will react to that?

BENNETT: I --it's very difficult for me to predict how she reacts. She may continue the same position she's had thus far, in terms of what she's willing to disclose. She may change her mind. But I do not know.

BLITZER: We'll stay in close touch with you Mr. Bennett. Thanks very much for coming in.

BENNETT: Thank you.

BLITZER: Joel Bennett, is the attorney for Karen Kraushaar, one of the women who has accused-she accused Herman Cain some 11 years ago of sexual harassment. Thank you. We're standing by for Herman Cain's news conference at the top of the hour. What will he say about the latest sexual harassment allegations rocking his presidential campaign. You're looking at live picture from Phoenix. We'll have live coverage, here in the "Situation Room"

Also, an open microphone picks up a rather embarrassing conversation between President Obama and French president Nicolas Sarkozy. We'll have details. That's coming up.

(COMMERCIAL BREAK)

BLITZER: A grilling today for the Attorney General of the United States, Eric Holder on Capitol Hill. CNN's Brian Todd has been following the story from the very beginning. He's joining us live from Capitol Hill right now. Brian, what happened?

BRIAN TODD, CNN CORRESPONDENT: Wolf, Eric Holder took some serious heat over the death of a border patrol officer and on questions over what he knew about the Fast and Furious gun tracking program and when he knew it.

(BEGIN VIDEOTAPE)

TODD (voice over): More than 30 republicans in Congress are calling on him to resign. Over a program that allowed hundreds of AK 47s and other illegally bought guns to stream into Mexico.

ERIC HOLDER, U.S. ATTORNEY GENERAL: I do.

TODD: Attorney General Eric Holder now says this about operation Fast and Furious.

HOLDER: This should never have happened.

TODD: That doesn't spare Holder from intense grilling by Republicans who are furious over a February letter from Holder's aides at justice to GOP Senator, Chuck Grassley. That letter says ATF makes every effort to interdict weapons that have been purchased illegally and prevent their transportation to Mexico. IN fact ATF agents were allowing those weapons to be taken into Mexico as part of an operation to trace them.

UNIDENTIFIED MALE: Who will be held accountable for allowing a letter to congress with a statement that many in the justice department knew was false?

HOLDER: Well again, I have to dispute with due respect. The assertion that people in the Justice department knew it was false

TODD: Holder says he thought that letter was accurate at the time, but now regrets it was sent. But the most pointed exchange came over the murder of border patrol officer Brian Terry. Guns from operation Fast and Furious were found near the murder scene.

UNIDENTIFIED MALE: Have you apologized to the family of Brian Terry?

HOLDER: I have not apologized to them, but I certainly regret what happened.

UNIDENTIFIED MALE: Have you even talked to them?

HOLDER: I have not.

UNIDENTIFIED MALE: Would you like to apologize today for this program that went so wrong, that took the life of a United States law enforcement agent?

HOLDER: I certainly regret what happened to agent Brian Terry. I can only imagine the pain that his family has had to deal with, in particular, his mother. I am the father of three children myself. We are not programmed to bury our kids.

TODD: Holder said it would be a mistake to tie Terry's death directly to Fast and Furious. I caught up with Holder as he Left the hearing.

HOLDER: Thank you very much.

(END VIDEOTAPE)

TODD: I also caught up with Senator Cornyn after the hearing. He told me that Holder's answers on Brian Terry's family and on the program overall were not acceptable to him. Cornyn says he's not at the point yet of calling on Holder to resign. But he's heading in that direction. Wolf-

BLITZER: And Holder may come even under greater pressure from congress in the weeks ahead. Isn't that right?

TODD: That's right. Next month, Darrell Issa, the Republican on the house oversight and government reform committee. He's been one of the most brutal critics of Holder through this whole thing. He's going to be holding a hearing. And that hearing may just make what today-what Holder faced today seem very mild in comparison. He's really going to get a grilling before that Republican-led house committee next month.

BLIZTER: Brian Todd up on the hill watching this story. Thank you. Remember, we're standing by for Herman Cain's news conference. What will he say about the latest sexual harassment allegations threatening to derail his presidential campaign? You're looking at a live picture from Scottsdale outside of Phoenix. We'll go there once the Republican candidate shows up. Also, an open microphone reportedly capturing an embarrassing exchange between President Obama and the French President, Nicolas Sarkozy. You're going to hear what they both had to say about the Israeli Prime Minister, Benjamin Netanyahu.

(COMMERCIAL BREAK)

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

JACK CAFFERTY, CNN CONTRIBUTOR: Where is the United States headed if 16 percent of the population lives in poverty. Geoff in Hawaii writes, "Seems everything about the American Dream is broken. Jobs sent overseas, and new unemployment normal. And a political system so polarized nothing gets done. It's a scary thought that almost one in five Americans lives in poverty at a time when one party wants to eliminate the social safety net, and the other party has a backbone similar to a slinky. If we keep on it can only get worse. Debbie writes on Facebook, "We're going to be the new third world. And industrialized nations where almost everyone won't have adequate health care or Education. I could go on". Mike in Florida writes "America's going downhill fast. The rich are doing great while the rest of us struggle to get by. I wish our congress had to try to live on ten bucks an hour. If he can even find a job. And the Republicans don't care about us. I don't have much hope for our country unless we elect a better Congress. I'm 60 years old. And I'm ready to march on Washington." Renee writes, "That's almost 50 Million people who will say that they're not better off compared to their situation when Obama became president. From a purely political standpoint. That a big electoral force to reckon with. From a sociopolitical point of view, it's a destabilizing factor that could undermine the society as a whole and Democratic institutions in particular." John in Georgia writes "The 1930s seemed like a good place. Think of how great that would be. Food lines, large infrastructure projects, films that actually made you feel good. Fedoras and a dollar that could buy a meal for a family of five." Fay in Texas writes, we are headed in a direction that the 1 percent on top want the other 99 percent to go. If you want to read more on this, go to my blog, CNN.com/caffertyfile, or to our post on "The Situation Room"'s Facebook page.

BLIZTER: Jack, thanks very much. I want to bring in CNN contributor Maria Cardona. She's joining us on the phone right now. Maria, we're getting ready to hear from Republican presidential candidate Herman Cain. We got a live picture from Scottsdale. He's going to make a statement and have a news conference right at the top of the hour, speaking about all of these sexual harassment allegations that have been leveled against him. But I understand you know one of the women who's until now, wanted to remain anonymous, but her name did surface today.

We just spoke with her attorney, Joel Bennett. Tell us your relationship with this woman and what happened?

MARIA CARDONA, CNN CONTRIBUTOR: Hey, Wolf, thank you. So, she used to work for me when I worked for the government in the late '90s. She was one of my employees. And I have to tell you, when I found out that she was one of the accusers, my jaw dropped. Because as a former employer, in my opinion, this woman's credibility is beyond reproach. While she worked for me, she exhibited nothing but the utmost professionalism. She's the consummate team player. An incredibly hard worker. I put her on projects that were incredibly difficult to execute and she did them beautifully. I just have to say that I was in disbelief when I found out she was one of the accusers.

So, I think that Mr. Cain really needs to think long and hard about what he's going to say at 5:00 because clearly she's not the only one making these accusations.

And for him to come out and say as I believe he's going to, that they're all lies, I don't think that is going to cut it anymore.

WOLF BLITZER, CNN ANCHOR: Have you had a chance to speak with her? Her name is Karen Kraushaar -- is that how she pronounces it, Maria?

CARDONA: Yes, but that is correct. I have spoken to her, Wolf.

BLITZER: Over the past few days?

CARDONA: Yes, a number of times.

BLITZER: Can you share with us what she said to you?

CARDONA: Well, I think as everybody can understand -- who understands human nature. She is an incredibly difficult position. She is distraught, but she is handling it well because like I said before, she is the utmost professional.

She works in media relations so she understands how the game is played. Having said that, clearly, this is heart wrenching for her and what she doesn't want to continue to do is have to relive this as she has been doing.

And as she understands is going to be the case for the next couple of days. She is also concerned clearly for her safety. And I think that these are all issues that anybody has even gone through this or understands the way that these things can play out. I think they can understand that on a human level.

BLITZER: I know she works for the Department of the Treasury, communications specialist. I don't you to violate any confidences, but can you share any of the specifics? What she alleged Herman Cain did to her back in the late 1990s when she worked for him at the National Restaurant Association? CARDONA: Wolf, that is not a conversation that I have had with her on purpose. I didn't want her to have to relive that again with me. But what she did say was very similar to what Joel Bennett has said to you on the air, which is that the accusations and allegations and what happened to her, very similar to what we heard last night from Ms. Bialek. And that they happened repeatedly.

And one of the things that I would like to share with you is that when I hired her at INS, it was when she was coming directly from the National Restaurant Association and she was very clear with me now recently, back then, I had no idea what she was come coming from.

She has always been incredibly grateful to me for hiring her and recently, she has been able to disclose why. She basically told me that I had saved her from that monster.

BLITZER: Is that what she called Herman Cain?

CARDONA: Yes. And I think that's incredibly compelling.

BLITZER: All right, we'll see what Herman Cain has to say in about 12 minutes or so. We're standing by for his news conference. Maria, don't go too far away.

Maria Cardona is a CNN contributor, a Democratic strategist. We're going to be talking about what's going on in our strategy session. Also standing by, James Carville and Alex Castellanos. A lot more news right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Looking at live picture from Scottsdale, Arizona right outside Phoenix. Herman Cain, the Republican presidential frontrunner is expected to walk up to those microphones fairly soon, make a statement and answer reporters' questions on the latest sexual harassment allegations being levelled against him.

We'll have live coverage here in THE SITUATION ROOM. That's coming up in a few minutes. Meanwhile, an open microphone reportedly capturing an embarrassing exchange between President Obama and the French president, Nicolas Sarkozy, involving the Israeli Prime Minister Benjamin Netanyahu.

Our White House correspondent, Brianna Keilar is working the story for us. Brianna, tell our viewers what we know why this potentially is a big deal.

BRIANNA KEILAR, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, it backs up certainly what we already know. What this exchange tells us that President Obama and the Israeli Prime Minister Benjamin Netanyahu, they don't have a very good relationship.

But it's a big deal because it's an embarrassment at a time when the U.S. is facing so many challenges in the Middle East and Israel, of course, is its biggest ally. You have the stalled Mideast peace process. You have sweeping regime change in the region and of course, Iran becoming a growing nuclear threat.

(BEGIN VIDEOTAPE)

KEILAR (voice-over): An open mic during last week's G-20 Summit caught President Obama and French President Nicolas Sarkozy complaining about Israel's prime minister according to a report by Reuters.

I cannot bear Netanyahu, he's a liar, said Sarkozy. Obama according to a French interpreter who is translating his remarks replied, you're fed up with him, but I have to deal with him even more often than you.

The president didn't exactly come to the defense of Netanyahu, whom he most recently saw at the U.N. in September. It's not surprising, says Martin Indyk who served as U.S. ambassador to Israel during the Clinton and Bush administrations.

MARTIN INDYK, FORMER U.S. AMBASSADOR TO ISRAEL: Reveals the inner feelings of the president towards Prime Minister Netanyahu. I don't think it's any secret that these two leaders have not gotten on basically from their first meeting on.

KEILAR: An oval office encounter this past May further revealed the frosty relationship between the leaders.

BENJAMIN NETANYAHU, ISRAELI PRIME MINISTER: While Israel is prepared to make generous compromises for peace, it cannot go back to the 1967 lines.

KEILAR: Netanyahu is essentially lecturing a stern-faced President Obama. Today, White House Press Secretary Jay Carney in an off-camera briefing would not comment on the open mic gaffe.

He instead stressed the president's support of Israel, most recently in opposing a vote to give the Palestinian Authority membership in the U.N.'s cultural agency, UNESCO, a move France supported.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: America's commitment to Israel's security is unshakable.

KEILAR: It's an embarrassing incident as both the U.S. and Israel keep a close eye on regime changes in the Middle East and on the growing threat of a nuclear Iran. But says Indyk, it may have no real effect on U.S.-Israel relations.

INDYK: It's unlikely that these personality differences that have been highlighted by this mic that wasn't turned off, are going to infect the coordination on Iran.

If you like the subject is too serious to be affected by personalities. They agree on the nature of the threat and they also agree on the way to deal with it. That is by ratcheting up sanctions.

(END VIDEOTAPE)

KEILAR: Of course, this gaffe does give ammunition to some of the president's critics namely Republicans who have said he hasn't backed Israel enough, Wolf.

And already we've heard from the anti-defamation league, the pro- Israel advocacy group saying this was a disappointment and saying that this was un-presidential change, Wolf.

BLITZER: Brianna Keilar over at the White House. By the way, I write about this on our SITUATION ROOM blog today if you want to check that out as well.

Herman Cain is preparing to respond to sexual harassment allegations. We're standing by for his live news conference expected to begin in a few minutes.

(COMMERCIAL BREAK)

BLITZER: Here in THE SITUATION ROOM, happening now, the breaking news we're following. Herman Cain is about to fire back at his latest accuser and it's likely to get ugly.

We're standing by for his news conference on the sexual harassment allegations dogging his presidential campaign. Lots of news happening today. Breaking news, political headlines, Jeanne Moos all straight ahead. I'm Wolf Blitzer. You're in THE SITUATION ROOM.

We're waiting for Herman Cain to go before the cameras in Scottsdale, Arizona. Any moment now, we expect him to go on the attack. The Republican presidential candidate says there's not an ounce of truth to a Chicago woman's allegations about sexual misconduct.

And his presidential campaign has released a long list of lawsuits filed by Sharon Bialek to undermine her credibility. Yesterday, Bialek became the first Cain accuser to speak out publicly, but details still are emerging about some of the other women and the other allegations as we await Herman Cain.

We've got our reporters and our analysts standing by, including Gloria Borger, Donna Brazile, Erick Erickson, James Carville, Alex Castellanos, Donna Brazille is standing -- I said that.

But Gloria, let me start with you. It's taking right now even as we speak, a whole new dimension because another woman who made these allegations against him back in 1999 when he headed the National Restaurant Association. She now works in the Department of Treasury. She's about to go public if she hasn't yet.

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Yes, she is, Wolf. She is somebody who tried not to go public and who went public through her attorney, Joel Bennett, who you just had on the show. But now her name is known, Karen Kraushaar, and she does work at the Immigration Naturalization Service. She is a friend of one of our contributors, Maria Cardona, who hired her back in the 90s at the INS. And Wolf, Maria has just said to you and to me that this woman told her when she hired her, the INS, she saved her from this monster.

BLITZER: She called Herman Cain is monster.

BORGER: The monster she's referring to is Herman Cain.

So at a certain point, Wolf, you've got four women. You have now just knocked out one accuser or two accusers, and it gets to certain point where Herman Cain cannot now blanketly just deny all this. He has to answer specific charges from specific women. We had the woman yesterday. We have another one today who may go public with her story. And I'm wondering, I was told that Karen Kraushaar is considering getting together all of these women who have been reluctant to come forward and perhaps having a press conference with all of them together to tell their story.

BLITZER: And she has just given an interview to the "New York Times" that has just been posted. Let me share some of her quotes from the "New York Times" going against Herman Cain. "When you are being sexually harassed in the workplace," she says, "you are extremely vulnerable." You do whatever you can to quickly get yourself into a job some place safe, and that is what I thought I had achieved when I left." Karen Kraushaar, one of these women saying she decided now to go public with her allegations against the Republican candidate, Herman Cain. She will be the second of these four women who will go public.

In this interview with the "New York Times," she said she was upset her name had been leaked in the news media. She said she has now decided to speak out because her identity is known. This now, Gloria, will take on a whole new dimension. We're being told this news conference will start in two minutes.

BORGER: I think what's difficult, and one of her friends said to me what's difficult for her is she can't stomach the thought of telling the story publicly. No one wants to come out and relive something from 12 years ago that was very hurtful and very painful. And if you're going to be believed sometimes with these story, you have to tell them graphically, Wolf. And that's difficult.

BLITZER: Alex Castellanos, very quickly, what does he need to do right now?

ALEX CASTELLANOS, CNN CONTRIBUTOR: What he should have done a week ago, just get out the whole story. He can't put this behind him until he gets all the information out. Wolf, this goes right at the core of Herman Cain's brand. He's the guy who's supposed to be different from Washington where they think the rules don't apply to them. Where they say one thing and mean another. This goes at his very core. He's fighting for his candidacy here.

BLITZER: If he continues, James Carville, so simply deny, deny, deny, what will happen?

JAMES CARVILLE, DEMOCRATIC STRATEGIST: I don't know, look, he's doubling down. He's putting a stack in a middle of the table and his credibility on the line. I never thought he had a chance to be president. He certainly doesn't now. This thing is reaching some kind of tragedy or entertainment value. What it is, it's a full- fledged circus. And I suspect if we're led to believe he does, he will say it's going to -- it kind of, it's kind of weird. I'll say that. It's very weird.

BLITZER: Donna, what does he need to do?

DONNA BRAZILE, DEMOCRATIC STRATEGIST: His denials clearly don't add up. I think Mr. Cain should simply put on the table. Wolf, he had more than two weeks to prepare for this episode in his life. Character matters. But he simply cannot come out slamming these women, slamming the media, slamming others. He needs to own up to whatever happened. Put it on the table and say, this is what happened. And now, I want to move on.

BLITZER: He's going -- we're told he's going to open up with a statement and then answer reporter's questions. We'll bring it to all of our viewers live. That's coming up within a matter of seconds right now. Herman Cain the Republican presidential front-runner confronting these serious allegations from four women, two of whom have now gone public. Their identities are known. They're making specific statements. We'll see what else the second accuser Karen Crassaour has to say.

But here he is. He's going to be introduced.

(CAIN PRESS CONFERENCE SENT AS A SEPARATE DOCUMENT)