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The Situation Room

Will Government Shut Down?; Iowa Race Tightening; Corzine "Stunned" By Missing Money; Gassed And Detained In Bahrain; Romney Targets Gingrich; Cain Wants To Be Defense Chief; Arizona's Sheriff Arpaio Under Fire; Sources: Crashed Drone Spying On Iran Nukes

Aired December 15, 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: new strategies at play in Iowa and new poll numbers showing the Republican race still very much in play.

Also, a partial shutdown of the federal government now just 32 hours away. Can Congress break the gridlock?

Plus, "The New York Times" columnist Nicholas Kristof gassed and detained in Bahrain. He's joining us this hour to talk about a Democratic uprising that's unfolding right now.

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

All right, let's begin with the latest in the political fight that is under way in Iowa right now, dramatic, huge developments unfolding right now in Iowa. It looks like a three-man race, at least if you believe some of these most recent polls unfolding, Newt Gingrich, Mitt Romney and Ron Paul all basically within a margin of error. They're all doing exceptionally well right now.

We're watching all this unfold. Our Jim Acosta is standing by. He's on the scene for us. Gloria Borger, our chief political analyst, is joining us right now.

Gloria, Newt Gingrich, he's tried to project the positive image that he is above the fray, if you will, but is he making a mistake by not more forcefully responding to all these attacks coming from Mitt Romney, Ron Paul and these other Republican presidential candidates?

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: You know, Wolf, actually, I think he's able to have it all ways by doing this.

It's a smart strategy because, don't forget, Gingrich came into politics and was known as the bombastic speaker of the House when he was the one in charge of those House Republicans and won Republican control of the House by waging a relentlessly negative campaign against Democrats.

So now, he's able to play against type. And that really works for him. Don't forget, you have got lots of other Republicans in the field who are attacking Romney. And, by the way, Newt Gingrich has also said if I'm attacked on the issues, I will respond. He's able to do that in debates. There will be a debate this evening. He will be able to defend himself there. Yet, when he goes up on the air in Iowa, he can give the voters a Christmas card and say look at all these terrible things these people are saying about me. I want to wish you a merry Christmas and that could work for him.

BLITZER: How enthusiastic are the voters, if you believe the polls out there right now, about Newt Gingrich and Mitt Romney, for that matter?

BORGER: Well, overall, if you look at the polls, Republican enthusiasm for their candidate has really been dampened throughout this process.

And the problem that Romney and Gingrich share is that only about a third of their supporters are very enthusiastic about voting for them. And both Romney and Gingrich have problems of their own. Take a look at this problem for Romney from this new "Wall Street Journal"/NBC poll.

They asked Republican primary voters about who they view as a conservative. You see there, Gingrich 57 percent, Romney 29 percent. It's not good to be viewed as someone who's not conservative when you're talking about Republican base voters in primaries.

But Gingrich has another problem, again from the NBC/"Wall Street Journal" poll. And this is something they asked of all registered voters in a general election matchup. You see that Gingrich is 11 points behind Barack Obama, so he is clearly viewed as less electable, Wolf, and that's a problem for him because, in those same polls, Romney is neck and neck with the president.

BLITZER: And a lot of Republicans, understandably, they want someone that they're more confident could beat President Obama in his reelection campaign.

BORGER: Right.

BLITZER: Last week, when I interviewed Texas Governor Rick Perry, he said he was going to make a major push during these final three weeks, a big bus tour. He's going all out right now and he's got several million dollars to play.

(CROSSTALK)

BORGER: He doesn't have a lot of time for a comeback, Wolf, so what he's trying to do is come back in Iowa. These debates have not been good for him. As you point out, he's on this two-week bus tour and what he's trying to do is portray himself as the real conservative in this race. He's trying to appeal to those evangelical voters in Iowa. Take a listen to one of his new campaign ads in Iowa.

(BEGIN VIDEO CLIP)

NARRATOR: Newt Gingrich supported increasing the federal debt ceiling $1 trillion and billions in new earmarks. Mitt Romney raised business taxes 20 percent in Massachusetts. Gingrich and Romney, insiders. Rick Perry's plans to create jobs and overhaul Washington with a part-time Congress make him the outside political insiders fear most.

(END VIDEO CLIP)

BORGER: So, he is on that bus tour that's going around the state and he has seen his numbers increase. He is spending this -- millions of dollars in the state of Iowa. He's still in fourth place, Wolf, at about 13 percent, but don't forget, a month ago, he was 5 percent. So that's a petty big increase.

BLITZER: We will see how he does in these remaining 2.5 weeks. Gloria, thanks very much.

And as all of our viewers know, negative ads are so entrenched in modern presidential campaigns, that a candidate can make headlines simply by avoiding those negative ads. That's the case at least for now in Iowa where front-runners Newt Gingrich and Mitt Romney are trying to forego the kind of mudslinging in their ads at least that they were engaged in over the past couple of days.

Gingrich so far goes as -- he's quoted as saying this is an experiment as far as he's concerned.

Jim Acosta is on the campaign trail for us in Iowa right now.

Jim, looks like both Gingrich and Romney trying to stay positive in their ads, not necessarily in all their public comments.

JIM ACOSTA, CNN CORRESPONDENT: That's right, Wolf.

We're about five hours away from this latest Republican debate, perhaps the last one before the Iowa caucuses where we will see all of the candidates on stage. And one of the big questions for the debate tonight is will Newt Gingrich stay positive and will the other candidates continue to attack Newt Gingrich?

Earlier today at an event here in Iowa, Newt Gingrich consistently said he is going to stay positive and he is going to resist negative attacks. And consider this one moment that happened at this event just a few hours ago here in Iowa where a woman came up to him and encouraged Gingrich to stay positive, don't go on the attack because that's what she likes. And Gingrich responded that that is what he's going to do. Take a listen.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Thank you for keeping your campaign...

(CROSSTALK)

NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: I got a little tempted for a day.

UNIDENTIFIED FEMALE: Don't let them drag you in.

(END VIDEO CLIP)

ACOSTA: Now, Gingrich came out with an ad today saying it's the other candidates who are focused on negative attacks right now. He's going to be focused on positive solutions. That was essentially a slight aimed at Mitt Romney who yesterday told "The New York Times" that Newt Gingrich is zany.

Romney by the way has come out with his own positive ad today essentially saying that the budget deficit and tackling the budget deficit is a moral responsibility. So, Wolf, you were saying just a few moments ago that the candidates in their ads are trying to stay positive, but consider this.

This mailer that was just posted online on "The Des Moines Register," they picked this up. This is a mailer that is going into mailboxes across the state of Iowa. It is from the Romney campaign and it is attacking Newt Gingrich. At the top, it says, "With allies like this, who needs the left?" And it shows again that infamous ad of Newt Gingrich and Nancy Pelosi sitting on the couch together talking about climate change. It's not all positive out here in Iowa.

BLITZER: No. Mitt Romney, in his interviews, is really going after Newt Gingrich. Remember Monday, he had that interview with Politico, with FOX, Tuesday with "The Washington Post," Wednesday with "The New York Times." He's hammering and hammering and for the most part, Newt Gingrich is turning the other cheek. He's not responding.

But it seems to be making a difference, a lot of those paid advertisements, all the slamming that Newt Gingrich is taking. He's on the receiving end, by and large. It looks like his earlier lead in Iowa is beginning to diminish.

ACOSTA: That's right. People can say all they want that they don't like negative attacks, they don't like attack ads, but by and large, Wolf, as we know, they do sometimes work.

Consider a Gallup daily tracking poll that just came out today and it shows Newt Gingrich's support really cratering on a national level. This is not a state poll. This is a national poll showing Gingrich at 29 percent, Romney at 24 percent nationally among Republicans, Ron Paul at 10 percent.

But consider where Newt Gingrich was in this same tracking poll 10 days ago. He was at 37 percent, 15 points ahead of Mitt Romney at that point, who had 22 percent in this daily tracking poll 10 days ago. That is a sign right there that what the Gingrich campaign likes to say on its Twitter account, Newtmentum, #Newtmentum, it appears to be fading at this point.

BLITZER: Yes. That's a national poll and we see similar decline for Gingrich in Iowa and New Hampshire and some of these other states as well, so he's losing maybe a point a day. I'm sure his strategists are very worried about it. And his strategist number one is himself, Newt Gingrich. He knows a lot about this kind of stuff. All right, Jim, thanks very much. A lot more coming up on the race in Iowa, the presidential contest, but there's really important news unfolding right now here in Washington. The clock is ticking toward a possible government shutdown. Lawmakers have until midnight tomorrow to agree on continued funding. If they don't, some 600,000 federal government workers will be furloughed. They will be out of a job starting Saturday, no pay, more than half of them at the U.S. Defense Department.

Our congressional correspondent Kate Bolduan is following all the wrangling on Capitol Hill.

Kate, after you broke the story last night in THE SITUATION ROOM about the Democrats' concession on a separate piece of legislation, is there any progress on any of these fronts that you're seeing today?

KATE BOLDUAN, CNN CORRESPONDENT: I will tell you, Wolf, there has been a marked shift in tone today, congressional leaders appearing much more upbeat, dare I say even optimistic on the prospects that they will be able to avoid a government shutdown by reaching agreement on approving a massive government funding bill, as well as finding common ground to extend the payroll tax cut. Just listen here.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: I think everyone just needs to step back and take a deep breath. I think there's an easy way to untangle all of this.

SEN. HARRY REID (D-NV), MAJORITY LEADER: We hope that we can come up with something that would get us out of here at a reasonable time in the next few days.

SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: We're confident and optimistic we will be able to revolve both on a bipartisan basis.

(END VIDEO CLIP)

BOLDUAN: Well, while we just show you that bit of maybe optimism, if you will, I will want to give a heavy dose of caution here. While we are told that both sides, the two sides are finally talking, they have not reached agreement today yet on how to extend the payroll tax cut.

At the same time, the government will run out of money tomorrow night if Congress does not sign off on a spending bill and we are told that there are still outstanding issues to deal with on both fronts -- Wolf.

BLITZER: On the spending cutoff, the spending bill, the government shutdown, they could pass what's called a continuing resolution again. They have done that so many times. That would at least keep the government open without having a big formal spending bill. Is there talk of that?

BOLDUAN: There is talk of that, but I'll tell you both sides seem very much still focused on trying to bridge the gap on this big spending bill that they have been negotiating for months.

One hangup here that I would want to note is that while they are negotiating and the key negotiators say they are very close to reaching agreement, House Republicans are still threatening and they're taking steps to move ahead and kind of possibly go it alone, vote on their own spending measure, spending bill, send it over to the Senate.

And if the Senate -- then be able to lay blame on Senate Democrats if they don't pass the same bill and then the government would shut down. On the payroll tax, Wolf, there are separate issues that they're dealing with. As we had discussed last night, Democrats came forward with this concession on dropping the millionaire surtax, but Republicans, including House Speaker John Boehner and other top Republicans today, they're dismissing that concession by Democrats saying that it's not a real concession at all.

As they say, the Democrats didn't have the votes to pass it in the first place. And, at the same time, Wolf, Republicans are insisting that that controversial provision having to do with the Keystone oil pipeline, they're insisting that that still be part of any final deal to extend the payroll tax cut. So there clearly are some issues that they still need to iron out. We know that they're talking, but behind closed doors.

(CROSSTALK)

BLITZER: I have the memorandum that was sent out yesterday to federal workers. They're called the nonessential friend workers.

BOLDUAN: Exactly.

BLITZER: Get ready, starting Saturday, you may not have a job.

Let's see if they do or they don't. Kate, thanks very much. If anything happens, come right back to us.

He's given up on the Oval Office, but there's another office Herman Cain has his eye on. You're going to find out which job he would like in the next Republican administration.

Plus, the CIA secretly spying on suspected Iranian uranium sites without telling the Pentagon first? What is going on?

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

(COMMERCIAL BREAK)

BLITZER: Jack Cafferty is here with "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: Wolf, fewer Americans are getting married than ever before. A new Pew survey shows barely half of the adults in this country, 51 percent, are married. That's a 5 percent drop from just the year before and down a rather staggering bunch from 72 percent in 1960 -- 72 percent in 1960, 51 percent now.

Marriage rate has gone down among all age groups, but most dramatically, among young Americans. Twenty percent of those younger than 30 are now married, compared with almost 60 percent back in 1960. The survey shows Americans are getting married at older ages than ever before. For women, the average age of the first marriage, 26.5 years. For men, 28.7.

Researchers say it's unclear if people are simply delaying marriage or abandoning it. They point to similar trends of putting off marriage in other developed countries, especially in Europe. And experts say the drop, sharp one, in marriages from 2009 to 2010 may be, quote, "not related to the -- may not be related to the sour economy." They point out marriage has been on the decline for the last 50 years. Also, this drop in marriages reflects an increase in other kinds of living arrangements -- couples living together without getting married and single parenting.

Some suggest that there's been a huge cultural shift when it comes to getting married. For example, around 40 percent of people say marriage is becoming obsolete. And as one sociologist told "The Washington Post," in the 1950s, if you weren't married, people thought you were mentally ill. Marriage was mandatory then. Now, it is culturally optional.

So, here's the question: Do you think marriage is becoming obsolete?

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

BLITZER: Interesting to hear what our viewers think, Jack. Thank you.

So, how could he be in the dark about his company losing more than a billion, not million, $1 billion? That's the bottom line question put forth to the former MF Global CEO Jon Corzine. Also, former governor and he's a former senator from New Jersey, Corzine has been testifying before a Senate hearing investigating this huge loss.

Lisa Sylvester has been digging into the story from day one.

What happened today?

LISA SYLVESTER, CNN CORRESPONDENT: Well, Wolf, we know that money was taken out of customer accounts. We know the money is now missing and lawmakers expressed skepticism that Jon Corzine, who was very involved in the day-to-day operations of the company, knew nothing about the account transfers.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Jon Corzine wore many hats at MF Global. He was the CEO. He was chairman of the board. And a bit unusual, he was also one of the principle traders.

But Corzine insists that he did not know that hundreds of millions of dollars in segregated customer funds were being transferred out. Among the transactions the former New Jersey governor was questioned about was $175 million loan advance with customer money to MF Global's U.K. office in the final days of the company. Corzine said he had no knowledge of that transfer.

JON CORZINE, FORMER CHMN./CEO, MF GLOBAL: I did not in any way know about the use of customer funds on any loan or transfer.

REP. RANDY NEUGEBAUER (R), TEXAS: Your lack of recollection is somewhat puzzling to a lot of us because you had to know that things were not going well and that these positions were unraveling, and that, all of a sudden, you all of a sudden just find out that there's money missing from customer's accounts.

SYLVESTER: Regulators with the Commodity Futures Trading Commission and SEC are trying find out what happened to some 38,000 customer accounts, $1.2 billion is missing. The CFTC says it has traced the money out of the accounts and is now following the trail to where it ended up. According to testimony from the Chicago Mercantile Exchange, or CME, some of the money may be in European accounts.

John Roe is with the Commodity Customer Coalition working to return the money to MF Global's former customers.

JOHN ROE, COMMODITY CUSTOMER COALITION: We do know this: they transferred money out of segregation, CME has testified to that. We think it was transferred to foreign entities. And right now, we're just determining which method that it gets clawed back to MFGI.

SYLVESTER: Keeping customer funds segregated or separate from company money has been thought to be a bedrock of the financial industry. But in fact, under the rules MF Global was operating under, there are conditions where a company can take cash out of customer accounts if it can provide collateral equal to the amount.

Congressman Michael Capuano says there is a major flaw with the system.

REP. MICHAEL CAPUANO (D), MASSACHUSETTS: Who else is doing this and how much is at stake? Because if it happened to you and you did nothing wrong, then it could happen to anyone tomorrow and maybe up until this point. They're not doing anything wrong and that this is the problem.

(END VIDEOTAPE)

SYLVESTER: The CFTC just this month changed the rules to try to close this loophole that adds more restrictions on companies using customer funds. Among other things, it will bar the investment of customer money in risky or in sovereign debt, but those rule changes do not take affect, Wolf, until next year.

BLITZER: Lots still to learn about this. Meanwhile, what, $1.2 billion missing.

SYLVESTER: One-point-two billion dollars is what they're looking. And that's the big question. And there are so many people impacted and these are, you know, every day people on Main Street -- farmers, families. And it's -- it hurts. I mean, it really does.

BLITZER: It does hurt. Just to hear about it. Thanks very much.

Nancy Pelosi and Newt Gingrich together again in a new e-mail from Mitt Romney's campaign. We're going to talk about that and more in our strategy session.

Also, a controversial Arizona sheriff now accused by the Justice Department here in Washington of systemically discriminating against Latinos.

(COMMERCIAL BREAK)

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

Lisa, we're learning that Americans who have those big, big, corner offices, they're doing OK.

SYLVESTER: They are doing quite well, Wolf.

After a brief lean period where the economy caused executives to take lower pay packages, the nation's CEOs are raking in 36.5 percent more than last year. A survey finds that the most lucrative industry for CEO pay, with health care. That includes three of the nine top paid executives.

And drinking moonshine has killed 133 people and sickened hundreds more, according to health officials in the Indian state of West Bengal. The death toll could rise as many of those hospitalized are in critical conditions. Authorities raided liquor vendors and arrested four suspects accused of serving the illegal cheap liquor to mostly poor villagers.

And the 79-year-old former French President Jacques Chirac was found guilty today on corruption charges and given a two-year suspended sentence, accused of embezzling and misusing funds while mayor of Paris. Chirac has denied any wrongdoing. He has not said whether he will appeal.

And Howard Stern, he is going to be bringing his unique take on entertainment to "America's Got Talent." Yes, it's true. Today, the radio shock jock was officially announced as a new judge on the show. Piers Morgan, who left the program last month, tweeted today that Stern will be outrageous, hilarious, dangerous and brilliant.

BLITZER: So, Howard Stern is replacing Piers Morgan on that show, is that right?

SYLVESTER: I think Howard Stern is going to have to clean up his language, maybe just a little bit, for "America's Got Talent." Just a hunch.

BLITZER: If it's live, they'll have a delay, I'm sure.

Thanks very much for that.

A "New York Times" columnist caught up in a democratic uprising gassed and detained by police. It's all caught on video. Nick Kristof, he's here to talk about what's happening in the Middle East right now.

Plus, what Herman Cain said that left Barbara Walters shocked. Details of the new job he would like.

(COMMERCIAL BREAK)

BLITZER: Bahrain never quite made the kind of Arab Spring headlines that countries like Egypt and Libya did. But the democratic uprising in the island nation is still very much alive.

"The New York Times" columnist Nicholas Kristof has been covering the protests in Bahrain, earlier in Egypt, he found himself caught up in the violence on a visit in recent days.

(BEGIN VIDEOTAPE)

NICHOLAS KRISTOF, NEW YORK TIMES (voice-over): This is Nicholas Kristof and I'm back in Bahrain. I was last year, 10 months ago, when this family-run dictatorship opened fire on its own people. It's an American ally, but it crushed the hopes of an Arab Spring here, more decisively than any other country.

But today, a continued protest movement still gurgles along irrepressively. Nearly every night, teens and young adults protest in their villages. It's as ritualized as homework.

(on camera): That will land with riot police. Some may get hurt. So, what does it achieve?

(voice-over): When the police arrive, protesters in the front raise their hands to show they're unarmed, but a young man in the back hurls a rock.

That's a common act that hugely undermines their cause. Tear gas, rubber bullets, sound bombs. That's the voice of Adam Ellic, a "New York Times" video journalist traveling with me.

UNIDENTIFIED MALE: Broke this part of my camera.

UNIDENTIFIED MALE: They dragged him into a police car. Now, if that's what riot police do to a foreign journalist, you can only imagine what they do when they catch a local kid. The police then detained me as well.

(END VIDEOTAPE)

WOLF BLITZER, CNN ANCHOR: And Nick Kristof is joining us from New York. Pick up the story. It's a dramatic story you can read on "The New York Times" web site. Nick, what happened when you were arrested briefly? You were caught up in the tear gas.

KRISTOF: I must say that the police, they stuffed me into a police car. A different one that Adam was, but they treated me very professionally, very courteously and I feel a little awkward about the fuss over me because Bahrainis are being brutally beaten up.

I talked to a distinguished surgeon who was facing a 15-year prison term for his work for democracy. His ribs are broken, he endured attempted rape. It's part of the torture.

So you know, it's really just for us journalists, normally, we're treated to fine dinners by Bahrain foreign ministry officials. This time, got a little detention.

BLITZER: How about your videographer, Adam? How's he doing?

KRISTOF: He's OK. They treated -- initially, he got roughed up and they did break the camera, but he was very composed and kept shooting and the camera was still functional. So we're both OK.

BLITZER: The argument from pro Bahraini government type is that Iran is instigating this because the Shiite majority in Bahrain. They want the Shiites to take over from the Sunni minority. Did you see evidence of that?

KRISTOF: I think there's no evidence of that whatsoever. And I've heard these things since early this year and I must say I've become increasingly skeptical.

As people affiliated with the royal family and with the government began to accuse me of taking money from Iran and when they started saying that, I became pretty cynical about their allegations about either Bahrainis as well.

BLITZER: Did you see any evidence of what you heard in your reporting that there was going to be a change in the regime anytime soon?

KRISTOF: Well, the Bahrain government acknowledges pretty forthrightly that it made mistakes. That it was too brutal in its handling and they say they're going to turn a new leaf.

There are some signs of moderation. They approved a new report that is pretty blunt about mistakes in the past. They're going to prosecutors and I think there's a little bit going on, but seems to me there is more public relations so far.

BLITZER: Because the U.S. allies in Saudi Arabia, most of the other Gulf countries, they're with the Bahraini king right now. Is that your sense?

KRISTOF: Yes, the U.S. is clearly pushing Bahrain to calm down and stop being so repressive. We should do more. On the other hand, I think Saudi Arabia's pushing Bahrain to take an even harder line and we'll see how that plays out.

BLITZER: Quick question I need you because I read all your pieces while you were in Egypt in recent days as well. Apparently, correct me if I'm wrong, you're not as concerned about the Muslim Brotherhood, Iislamists in effect taking over Egypt, as a lot of outsiders are.

KRISTOF: Yes, I think a lot of Americans are kind of freaking out about the success of Muslim Brotherhood and look, there are reasons to be concerned, but you go out and talk to members of the Muslim Brotherhood and people who voted for them and what they want is not some kind of hard line Iranian regime.

Rather, it's that there's going to be less corruption under the brotherhood. That there is going to be a little more economic growth and they may well be wrong, but there is no aspiration, no broad aspiration in Egypt for the kind of hard line regime that I think a lot of Americans are terrified of.

BLITZER: Strong column "The New York Times." All your pieces are strong and you've got a huge feature in television news one of these days if you want to branch out. The video you did was pretty powerful. Good stuff.

KRISTOF: Thank you.

BLITZER: Go to the "New York Times" web site if you want to see all eight minutes or it, very important. Thank you.

With the Iowa caucuses closing in, the gloves are coming off. Mitt Romney is on an attack against his chief rival, Newt Gingrich. Will it pay off?

That's coming up in our "Strategy Session" and remember that drone that crashed in Iran, the U.S. drone? CNN now has new details about the secret mission it was on. Stay with us.

(COMMERCIAL BREAK)

BLITZER: All right, let's get back to the race for the White House. Joining us now in our "Strategy Session," two CNN political contributors, the Democratic strategist, Hilary Rosen and the the Republican strategist, Mary Matalin.

Mary, I don't know if you've seen these e-mails that Mitt Romney's campaign has been circulating these e-mails. Really going after Newt Gingrich showing pictures of him on that bench with Nancy Pelosi. That could be pretty biting in a Republican contest. Is this a good idea or bad idea on the part of Mitt Romney?

MARY MATALIN, CNN POLITICAL CONTRIBUTOR: They've obviously concluded it's their only strategies to knock him down with three weeks to go in Iowa.

I think it's not a bad idea, but I think what is not good is when the candidate himself calls Newt zany and talks about his bill at Tiffany's.

Romney's strength is to be a not particularly uncivil person, so when he grovels around like that, it's not helpful, but all's fair in love and war and the spots aren't fair. They're not untrue.

BLITZER: Is it a smart strategy to really start hammering? He's been hammering every single day almost. At one point "The New York Times" interview suggesting that Newt Gingrich is zany.

HILARY ROSEN, CNN POLITICAL CONTRIBUTOR: Well, it looks like the big beneficiary of Romney and Newt going at each other is going to be Ron Paul in Iowa. We've seen that before in races where the two frontrunners end up canceling each other out.

I think that Mitt Romney's not going to be so successful in this with newt, particularly in states where real conservatives are dominating because what he's trying to do is essentially define Newt to the constituency that knows him best.

And you know, those are the constituents that no one has fostered and stayed in touch with even as he left Congress, and so, I think Romney ends up being better off trying to convince people that he actually is steady and not the flip-flopper that he is.

And not -- and could be a leader for the times, I think he's got bigger problems for himself and he ought to be figuring out how to make up in New Hampshire what he's likely lost in Iowa.

BLITZER: But, Mary, if you see what these Republicans conservatives are saying about Newt Gingrich, you saw the editorial and national review. You don't need Democrats and liberals to be blasting him. The Republicans are doing a pretty good job.

MATALIN: It's not a best strategy for Romney. It's not his best strategy. Hillary's exactly right. Conservatives have already discounted these issues about Newt. It might help Romney paying Gingrich down in New Hampshire, it's not going to make a difference in Iowa and Newt is not Romney's problem.

BLITZER: I think it is, Mary. I think it is making a difference. I think Newt Gingrich's numbers support in the face of all the TV ads, whether from -- Romney is making a difference, Newt Gingrich is sporting Iowa is going down.

He's not only being hammered by Mitt Romney, but he's being hammered by Santorum. He's being hammered by Rick Perry, by Michele Bachmann. All of this is having an impact.

MATALIN: That's right. You said is it a smart strategy or I thought you did. Is it a smart strategy for Romney. I say because of what you said everyone else is hitting him including fellow conservatives.

Romney should go back to where he was, which is above the fray. Now, he's just jumped into it and he doesn't need to do that when all the other dirty work is being done for him.

BLITZER: Negative advertising, Hilary, whether you're a Democrat or Republican, they rail against it, but they do it because it works.

ROSEN: Well, it does work, but that doesn't mean you're always the beneficiary of it. That's the point Mary and I are making, which is that Romney can jump on the bandwagon attacking Newt, but that doesn't mean he becomes the beneficiary of voter dissatisfaction. They end up potentially looking elsewhere.

In Iowa, it may be Ron Paul. In New Hampshire, it may be Jon Huntsman. I think the conservative elite are trying to anoint in many ways and I find that as dangerous a challenge for Romney as Newt might be in New Hampshire.

BLITZER: Herman Cain's not longer in the race for the Republican presidential nomination, but he did have an interview with Barbara Walters and I'm going to play this little clip, Mary. I want you to react.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: What kind of cabinet position might you like if it were possible?

HERMAN CAIN (R), FORMER PRESIDENTIAL CANDIDATE: We were speaking totally, totally hypothetical, right? Department of Defense.

UNIDENTIFIED FEMALE: What?

CAIN: Yes.

UNIDENTIFIED FEMALE: Not treasury? You're the 9-9-9

UNIDENTIFIED FEMALE: Why department of defense?

CAIN: Because if I could influence rebuilding our military the way it should be, that would be a task I would consider undertaking.

(END VIDEO CLIP)

BLITZER: I haven't seen Barbara Walters as stunned by anything in a long time, but what do you think about that? Herman Cain -- secretary of defense, Mary.

MATALIN: Herman Cain is a good, earnest man and he needs to stop fooling with the cynical smart set because they just play by different rules.

They're going to keep toying with him. It's -- you know, he just gave an earnest answer. I'd like to be Dorothy Parker. Working in this world, you can't give an earnest, honest answer.

ROSEN: You know, Mary is so much closer to Dorothy Parker than Herman Cain will ever be the secretary of defense. There's no doubt about that.

But the problem with -- I think Herman Cain is he now doesn't know who he is. He's sort of lost his moment. The fact that he's Barbara Walter's ten most fascinating people of the year in my view really is most indicative of how somebody can rise and fall.

So quickly in you know, politics and in this day and age and that's why he's interesting. Not because he's actually interesting, because he's not.

BLITZER: Guys, thanks very much. Hilary, Mary, always a pleasure having you in THE SITUATION ROOM.

Accusations today against the controversial sheriff in Arizona. Why the Justice Department charges his department with discrimination that systematic and unlawful.

And Mitt Romney deploys a secret campaign weapon, his wife. Can she convince voters that a solid marriage equals a better president?

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BLITZER: The Justice Department is accusing the well known and controversial sheriff of Arizona's Maricopa County with going way too far. That issue with federal officials called systematic discrimination against Latinos.

CNN's Casey Wian is following all these developments for us. Casey, what's the latest?

CASEY WIAN, CNN CORRESPONDENT: Well, Wolf, it's a blistering investigative report released by the Justice Department today accusing the Maricopa County Arizona Sheriff's Department of and its leader of a widespread pattern of civil rights violations.

Among them, the unlawful detention and arrest of Latinos, unlawful retaliation against critics of the department's practices and discrimination against Spanish speaking jail inmates.

The Justice Department says its investigation began in 2008 under the Bush administration, but has been delayed because of a lack of cooperation by the sheriff's department.

Now under Arpaio, Maricopa County deputies have launched aggressive efforts to arrest and deport illegal immigrants, but according to the Justice Department's expert on racial profiling, those practices went way beyond that.

(BEGIN VIDEO CLIP)

THOMAS PEREZ, ASSISTANT ATTORNEY GENERAL, CIVIL RIGHTS DIVISION: Our expert found that Latino drivers are four to nine times more likely to be stopped than similarly situated non-Latino drivers. This expert concluded that in this case, the conduct he observed involved the most egregious racial profiling in the United States that he had ever personally observed in the course of his work, observed in litigation or reviewed in professional literature.

(END VIDEO CLIP)

WIAN: The department also identified what it called other areas of concern including the use of excessive force against Latinos, lack of adequate police protection in Latino neighborhoods and the failure to investigate sexual assaults.

Now we reached out to Arpaio's office for comment, they have not responded. However, he is expected to hold a news conference this evening. We should point out, Wolf, that these allegations by the Justice Department are all civil in nature.

A separate criminal investigation is underway, which officials would not discuss. They want to hold talks with him to settle these issues out of court they say. We'll have to see if he's willing to cooperate -- Wolf.

BLITZER: Casey, the charge, failure to investigate sexual assaults, what are they referring to?

WIAN: They're referring to cases, hundreds of cases dating back before 2007 where allegedly sexual assaults were reported to the sheriff's department and did not adequately investigate them. They say they're going to be looking into cases after 2007 as well.

BLITZER: Were there Latinos involved in these cases or just overall?

WIAN: They did not specify who was involved. The presumption of course because there's a high Latino population in Maricopa County, absolutely there were, but we don't know if they were Latino specific or related to just the entire population at large, Wolf.

BLITZER: Casey, we'll stay on top of the story. Thanks very much.

Jack's back right now with the "Cafferty File" -- Jack.

CAFFERTY: The question this hour, do you think marriage has become obsolete. A survey indicates that the number of people getting married in this country has declined rather precipitously over the last several years.

Kim in Kansas, "With the divorce rate well above 50 percent, draconian child support laws, dropping incomes and the vaporized middle class, no wonder marriage only works when doctors, lawyers and hedge fund managers marry each other. I highly recommend no one get married until both partners have earned their first million dollars. That way they'll money left over for the divorce lawyer."

Carol writes weddings have become the focus. It's not about the marriage. It's all about the party, dresses, gifts. Babies have become accessories after the fact."

John writes, "Women today are more empowered than women of 20 years ago. Today, they have better status, purchasing and are the highest percentage of new homeowners. Marriage isn't what it used to be. Now, we have same-sex marriage, domestic partnerships and the single life looking more appealing than ever before. Girls are taught younger and younger. It's acceptable to be freer."

JK in Minnesota writes, "Speaking as one who has never married, I pretty much married my career. When I graduated from college, there wasn't room for a social life while I was trying to carve out a career as woman in the business world.

When I finally did have room for a spouse, I realized I had become set in my ways and enjoy my freedom too much to consider marriage. Of course now, I'd have to consider a prenuptial agreement in order to protect my assets."

Tom writes from Florida, after 22 years of marriage, once was enough for me. I just couldn't handle her problems. I'm going on 60 and the last ten years have been the happiest of my life. Why would I want to get married again and screw that up?

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

BLITZER: Thanks, Jack.

CNN has new information about the American drone that crashed in Iran. Sources revealing exactly what it was doing when it went down and it's not what the Pentagon first said.

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BLITZER: Major new development in the crash of the U.S. drone in Iran last week. Let's go straight to our Pentagon correspondent, Chris Lawrence. Chris, what are you finding out about this drone crash?

CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: Wolf, U.S. military officials are now confirming to CNN that the drone was on a CIA surveillance mission spying on suspected nuclear sites inside Iran.

(BEGIN VIDEOTAPE)

LAWRENCE (voice-over): U.S. officials now admit an American stealth drone was spying on Iran. It's an about face from when it crashed when officials claimed it was only flying on the Afghanistan side of the border. Strictly looking for insurgents. Not spying. Even then, we heard doubts.

COL. CEDRIC LEIGHTON (RETIRED), U.S. AIR FORCE: I could have been deliberately used in Iran and it's very likely in fact that it was a reconnaissance platform of choice to do precisely that. To take a look at Iran's nuclear weapons system.

LAWRENCE: U.S. military officials now confirm "The Sentinel" was flying a surveillance mission of suspected nuclear site. They say the U.S. military didn't know what the drone was doing because it was being run by the CIA. The Afghan government wasn't informed either and Afghan President Hamid Karzai wants his nation kept out of the Iran-U.S. rift.

PRESIDENT HAMID KARZAI, AFGHANISTAN: And that Afghanistan's sovereignty and -- is not used one against the other.

LAWRENCE: But the U.S. defense secretary suggested the flights will not stop.

LEON PANETTA, DEFENSE SECRETARY: Part in parcel of our effort to defend this country and to defend our country involves important intelligence operations, which we will continue to pursue.

LAWRENCE: The "Christian Science Monitor" spoke with an Iranian engineer who claims Iran hacked the U.S. drone and guided it down intact.

SCOTT PETERSON, CHRISTIAN SCIENCE MONITOR: They can basically spoof the drone into thinks it was landing where it was supposed to be, but in fact landing where the hackers, the spoofers wanted it to land.

LAWRENCE: U.S. officials claim it was a technical problem. One former intelligence official said the sentinel is impossible to see. And dismissed Iran's claims, but aviation experts say there's evidence Iran may have the capability to jam the drone's GPS link.

PETER SINGER, BROOKINGS INSTITUTION: It's design is not to shoot down an enemy in the old way. It's more to learn what the enemy's doing and maybe react and shoot down the enemy in a very 21st Century way.

(END VIDEOTAPE)

LAWRENCE: So, how much intelligence will Iran get out of their prize? By all account, "The Sentinel" is one of America's most sophisticated drones, but several aviation experts tell us it is not the most advanced stealth technology. And they say there are new systems coming online in the next year or two that will quickly make this outdated.

BLITZER: Chris Lawrence, thank you.