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The Situation Room

Komen Flips on Planned Parenthood Funds; Protest Over Soccer Riots Turns Violent; Iran Warns U.S. of War if Israel Attacks; Interview With Rep. Mike Rogers; Improved Jobs Numbers; Las Vegas: Ground Zero for Housing Crisis; Hackers Claim Top-Secret Intel Call Recorded

Aired February 03, 2012 - 17:00   ET

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

WOLF BLITZER, HOST, CNN'S THE SITUATION ROOM: And you're in THE SITUATION ROOM.

Happening now, a stunning about-face by America's leading breast cancer awareness group. It won't cut funds to Planned Parenthood after all. This hour, officials with Susan G. Komen for the Cure say they're sorry.

Plus, Iran's leaders warn the U.S. they will go to war if Israel bombs their nuclear sites. I'll ask the chairman of the House Intelligence Committee, Mike Rogers, what he knows about Israel's plans and the Obama administration's response.

And secret communications between Scotland Yard and the FBI -- yes, they are hacked.

How could these famous law enforcement nerve centers be so vulnerable?

We want to welcome our viewers in the United States and around the world.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

Here in the United States, a group dedicated to saving women's lives is now scrambling to save its reputation. Officials with Susan G. Komen for the Cure decided they couldn't afford the fallout from the decision to cut funds to Planned Parenthood.

Lisa Sylvester is looking into the group's dramatic reversal -- Lisa, what happened?

LISA SYLVESTER, CNN CORRESPONDENT: Wolf, well, you had corporate funders getting involved. Several Komen officials had resigned and it was a public relations nightmare for an organization that's been known for its good works in the fight against breast cancer.

So, in the end, we saw this stunning reversal. The Susan G. Komen Foundation saying it will continue to give money to Planned Parenthood after all. (BEGIN VIDEOTAPE)

SYLVESTER (voice-over): The Susan G. Komen board of directors and CEO began with saying sorry. "We want to apologize to the American public for recent decisions that cast doubt upon our commitment to our mission of saving lives. We have been distressed at the presumption that the changes made to our funding criteria were done for political reasons or to specifically penalize Planned Parenthood. They were not."

The Komen Foundation, best known for its pink ribbons and 5K walks, was under fire for changes to its grant policies that cut $600,000 in funding for Planned Parenthood. Komen originally said it was because Planned Parenthood was under investigation by a Congressional committee over whether it was using public dollars to fund abortions. Komen later changed the justification, arguing the cuts were because Planned Parenthood doesn't have its own mammogram equipment.

On Facebook and Twitter, Komen, whose founder has ties to the Republican Party, was roundly criticized. But Komen's board met Friday and decided to reverse course.

Planned Parenthood's president, Cecile Richard, praised Komen's decision.

(BEGIN AUDIO CLIP, COURTESY

CECILE RICHARD, PRESIDENT OF PLANNED PARENTHOOD: This kind of political bullying is -- I think folks are just saying enough. I do think this is a watershed moment where women and men, again, standing up and just saying we're not going to stand by while some groups politicize health care.

SYLVESTER: The pressure on Komen had been mounting. More than two dozen Democratic senators sent a letter to its CEO, Nancy Brinker. Among them, Senator Frank Lautenberg of New Jersey.

SEN. FRANK LAUTENBERG (D), NEW JERSEY: I want my granddaughters to grow up in a world where breast cancer is nothing more than a bad memory. But we're not going to achieve it if we allow the dream to be disturbed by others playing politics with women's health.

SYLVESTER: Even within Komen, there was strong condemnation and even a few resignations over pulling the funding.

Radiologist Kathy Plesser, who serves on one of Komen's medical advisory boards, was on the verge of quitting over the issue.

DR. KATHY PLESSER, M.D. RADIOLOGIST: I'm thrilled. And I know that I'm not speaking for other members of the board, but I -- but I believe strongly that -- that those of us in -- in the New York chapter are relieved. And we're -- we're, you know, we -- we believe that it was courageous of the national board to, you know, change a decision that they had said they would not reconsider. SYLVESTER: But not everyone is pleased with the decision. On Komen's Facebook page, while there's lots of people expressing support, others are dismayed saying, "You caved."

(END VIDEO TAPE)

SYLVESTER: Americans United for Life issued a statement. They are calling Komen's new decision "unfortunate" and saying that Komen gave into Planned Parenthood's, quote, "media savvy campaign."

Now, Planned Parenthood, though, clearly is coming out on top in this fight. It's had about $600,000 in funding from Komen on the line. But its president, Cecile Richard, said today they raised about $3 million this week from about 10,000 donors -- Wolf.

BLITZER: A major reversal.

All right, thanks very much for that report, Lisa.

Let's get to the danger and chaos in Egypt right now. Two American tourists kidnapped in the southern part of the Sinai Peninsula were, in fact, freed today. It's unclear whether the kidnappers' demands were met.

Abductions and daylight robberies are becoming increasingly common in Egypt.

Also today, violent new clashes in the Egyptian capital. Thousands of people were protesting the lack of security at a soccer match that led to a deadly riot.

CNN's senior international correspondent, Ben Wedeman, is joining us now from Cairo with the latest.

What is the latest -- Ben?

BEN WEDEMAN, CNN CORRESPONDENT: Yes, Wolf, well, right now behind me, it's midnight in Cairo. Tahrir Square is still full of people. And off of Tahrir Square, on roads leading to the interior ministry, there are still clashes. In fact, there was a fire at the Egyptian tax authority. However, we hear that that fire has now been put out.

But what started in Port Said with a fight on a football field in Cairo is much more than just sports.

(BEGIN VIDEOTAPE)

WEDEMAN: (voice-over): Tear gas -- thick, blinding, suffocating -- chokes a Cairo street, searing eyes, nose, throat and lungs. It's supposedly designed to control crowds. But it's not controlling this one.

"Rule by force doesn't work with us anymore," this man tells me. "And anyone who thinks like that is wrong. We're free and we will stay free." Their objective behind the police barrier and the gas is the hated interior ministry.

"It's a symbol," Abdullah Sayed (ph) says. "And it's (INAUDIBLE)."

Some here are soccer fans enraged over the deaths of more than 70 of their comrades in Port Said Wednesday evening. But they've been joined by others, who claim the police and Egypt's military rulers did nothing to prevent their deaths.

"I hate football," says Hosni Haboreen (ph), "but those innocent boys have made Egyptians sympathize with them because they're our children."

Since Thursday, hundreds have been wounded in Cairo. The area around Tahrir Square, the normally busy commercial zone, now racked by almost round the clock clashes.

(on camera): A year after the revolution, the culture of protest and clashes with the authorities has become deeply embedded in Egypt. And it appears that despite the fact there's an elected parliament, this is the way many Egyptians like to work out their politics.

(voice-over): For the protesters, the fundamental grievance seems to be that while Egypt has changed profoundly over the last year, the regime has not. Hosni Mubarak, the head, is gone, but the body and old attitudes remain in place.

UNIDENTIFIED MALE: the culture of the police, the army, we're not in a war. The army should not like be charged on us. We're not in a war. What's going on is like we're in a war.

WEDEMAN: A war pitting Egyptian against Egyptian.

(END VIDEO TAPE)

WEDEMAN: And you -- Wolf, it's ironic that actually January was a fairly peaceful month for Egypt. The stock market went up by more than 20 percent. People were beginning to get the feeling that life was going back to normal, but not anymore -- Wolf.

BLITZER: And, Ben, is it a fact that the Egyptian authorities are still refusing to permit those Americans, those pro-democracy workers, from leaving the country?

WEDEMAN: not only -- they're -- they're not allowed to leave the country at this point, several of them have taken up residence in the American embassy because they simply don't feel safe given the climate. And I'm not referring to the clashes, I'm referring to sort of the media tone that's being taken toward this question of the foreign NGOs and those Americans who can't leave the country at this point -- Wolf.

BLITZER: Including the son of the U.S. Transportation secretary Ray LaHood. All right, Ben, we'll stay in close touch with you.

Thank you.

Elsewhere in the region, Iran's leaders are threatening the United States and Israel with talk of war. The very angry response comes a day after we learned that the Defense secretary, Leon Panetta, believes Israel is likely to attack Iran's nuclear sites in April, may or June.

Let's bring in our Pentagon correspondent, Chris Lawrence.

He's got more information -- Chris.

CHRIS LAWRENCE, CNN CORRESPONDENT: Well, Wolf, Defense officials tell us that the U.S. is navigating a very fine line, on one hand, trying to convince Iran that military action is real, it's something to be feared, while at the same time, trying to convince Israel not to attack until tougher sanctions have time to work.

(BEGIN VIDEOTAPE)

LAWRENCE (voice-over): Thousands shouted their support for Iran's supreme leader Friday as he issued a direct threat to America.

AYATOLLAH ALI KHAMENEI, SUPREME LEADER OF IRAN (through translator): They say all options are on the table, including war. The war itself will be 10 times detrimental to the US.

LAWRENCE: On Friday, Defense Secretary Leon Panetta stood firm, saying again the U.S. is, quote, "Prepared to response if Iran doesn't abandon its nuclear program."

But Israel says time is running out.

EHUD BARAK, ISRAELI DEFENSE MINISTER (through translator): Dealing with a nuclear Iran would be more complicated, dangerous and expensive in blood and money than stopping it. Whoever says later may find that later is too late.

LAWRENCE: Even some former diplomats says Iran is full of hardliners who may not back down from sanctions.

JAMES RUBIN, FORMER ASSISTANT SECRETARY OF STATE: And so I am worried that the overall strategy of -- of ratcheting up the pressure in the hopes that Iran will -- will somehow say uncle is not based on a good reading of the Iranian government.

LAWRENCE: A senior Congressional official says the relationship with Israel right now is the strangest he's seen and he's convinced the Israelis aren't going to tell us if they strike Iran.

Former Defense secretary, Bob Gates, told CNN's John King the U.S. and Israel disagree on what happens after any attack on Iran's nuclear facilities.

(BEGIN VIDEO CLIP FROM "STATE OF THE UNION")

ROBERT GATES, FORMER DEFENSE SECRETARY: I think most American senior officials believe that the Iranians will, in fact, retaliate, and -- and not just narrowly, but, potentially, across the entire region.

LAWRENCE: The chairman of the Joint Chiefs just traveled to Tel Aviv, the latest high-ranking official to try and convince Israel to give sanctions more time. But a source says when the head of Mossad visited Washington this week, it was primarily to gauge what the U.S. would do if Israel struck Iran.

Just this month, Iran started enriching uranium to 20 percent at its facility at Qom. If they enrich enough of it, a U.S. official says it would cross the Israelis' red line because it's an easy jump from there to 90 percent weapons grade.

(END VIDEO TAPE)

LAWRENCE: And U.S. officials tell me they are taking Iran's threats very seriously. One told me Iran has been improving its options just for this moment, so that they would be able to raid oil tankers, to -- to mine some of the shipping lanes, to destabilize Iraq and to go after American embassies in soft targets around the world -- Wolf.

BLITZER: Chris Lawrence, thank you.

The chairman of the House Intelligence Committee, Mike Rogers, is standing by.

Is he bracing for Israel to attack Iran?

We'll dig deeper about the threat, what the U.S. might do. Stand by for the interview.

Also, will new jobs gains help President Obama keep his job?

Our own Ali Velshi, he's crunching the numbers.

(COMMERCIAL BREAK)

BLITZER: There's clearly a new urgency to the speculation that Israel might bomb Iran's nuclear sites. We're joined now by the chairman of the House Intelligence Committee, Representative Mike Rogers, Republican of Michigan.

Mr. Chairman, thanks very much for coming in. Let me be blunt and ask you the question so many millions of people around the Middle East, around the world are asking, do you agree with the Defense Secretary Leon Panetta that Israel likely will strike Iran's nuclear facilities as early as April, May, or June?

REP. MIKE ROGERS, (R) MICHIGAN: Wow, good to talk to you, Wolf. I will -- I'll say this, the very fact that we're having this level of discourse on it shows you clearly that that the pressure is building. Will they or won't they I think really depends on several things. One, will the sanctions that Congress passed just recently that are really having a bite on Iran's economy from the very bottom to the very top, will that be enough to slow down their nuclear program?

Clearly, they have said it's not. They're going to move a lot of their enrichment facilities to Qom, and recently, they're doing that. It's because it's a very hard target. And I think that equation of can they get it there, can they get enrichment up to that 20 percent, as I heard you say earlier, can they do that in time outlast the sanctions?

That's the question, and that's why all this pressure is building, and I think that's why you heard the defense secretary say, hey, this is getting really close, because Israel has to make the determination, and I think they have to do it by themselves, according to their calculation. This is their calculation, because they're just not sure what the United States would do.

Do they slow down this program by striking before it all settled into Qom where it makes it much more difficult to them to do anything?

BLITZER: Is it your understanding, Mr. Chairman, that the Obama administration, is trying to discourage Israel from launching a strike?

ROGERS: Well, I hope so. I certainly think this is a unilateral strike by Israel in Iran is really not good for, certainly, the United States. I would argue for that whole region. Even our Middle East allies would have a hard time supporting that. That starts to break down some funny things. It just gets kind of ugly in a hurry.

Many of us believe, I certainly believe, that Iran would have some form of retaliation to Israel, and we don't know if that includes the United States or not. But that whole equation, as I said, gets a little murky pretty quickly, and is really not the best course of action. The problem is, Israel is a little bit nervous about the administration. I mean, they had the 1967 border speech by the president.

That interjected a little uncertainty as to the level of support of Israel by the administration and other things. So, the Mossad director, as you talked about, who was here in town, I think it was all about trying to gauge, you know, where are we in the world? What are our relationships? And who can you count on, who can't you count on?

Any level of uncertainty between Israel and the United States, I argue, is not a good thing. I think they've crossed that threshold where they believe they'll have to do something by themselves. That's why I think you see this increased rhetoric here in town.

BLITZER: When he was in town, the head of the Mossad, the Israeli intelligence service, is it appropriate? Did you meet with him?

ROGERS: You know, he meets a lot of people. This is not something unusual that the chairman of the intelligence committee would meet with the Mossad director?

BLITZER: So, I take that as a yes, you did meet with him.

ROGERS: It wouldn't be unusual if the chairman of intelligence committee --

BLITZER: All right. We leave it at that.

ROGERS: Yes.

BLITZER: Do you think the secretary of defense, Leon Panetta, is talking openly about this too much?

ROGERS: Well, I'm still trying to understand the calculus of ratcheting up the rhetoric right now given that we were trying to have a dialogue with Israel to try to, at least, come to a place to allow these sanctions to work. And, as a big supporter of these sanctions early on, I did think that they could work.

At the same time, we do have to show some military strength in the region to let Iran know that we're absolutely serious that we will not let them get a nuclear weapon. So, I'm still trying to work my way through. Was this a calculated event or not? We haven't quite figured that out yet. At any rate, we're dealing with the rhetoric as it is.

Certainly, it allows Iran to kind of rally up around itself about this saber rattling, if you will, right in the middle of sanctions. I think a better way maybe to do this is to have a bigger military presence, naval presence there just as a show, of course (ph), as we have done around the rest of the world. Sometimes, that carrier off your coast is a great motivator to cooperate.

And I think maybe that would be a good way for the United States to show, hey, we're serious about. We don't want this. We're very serious about this. Please reconsider your nuclear ambitions and maybe we can work our way out of this without conflict.

BLITZER: Mr. Chairman, thanks very much for joining us. We'll continue this conversation.

ROGERS: Wolf, we're going to be talking about this a lot. I look forward to it.

BLITZER: I suspect we will. Appreciate it.

Notorious hackers say they've got one step farther, tapping the phone call between two of the world's most sophisticated law enforcement agencies. We're talking about the FBI and Scotland Yard. You're going to hear a part of that conversation.

Also, our CNN cameras are there for the desperate scramble to help dolphins washing ashore on Cape Cod. There's a mystery underway right now. We'll explain what's going on.

(COMMERCIAL BREAK) BLITZER: The Obama administration is considering the controversial release of several key Taliban detainees from Guantanamo Bay. Our Lisa Sylvester is monitoring that and some of the other top stories in the SITUATION ROOM right now. Lisa, what's going on?

SYLVESTERi, Wolf. Well, it's all part of a contentious White House effort exploring peace talks with the Taliban. Officials say discussions are very preliminary and the names of those being considered for transfer to Qatar have not been released. The proposal, though, is drawing harsh criticism from Republicans on Capitol Hill who say it's a dangerous move.

Powerful blizzard conditions are battering Colorado. Officials say Denver International Airport has canceled 600 flights, and 70 miles of interstate highway have been shut down. Parts of the state are expected to plow nearly two feet of snow before it is all over tomorrow. An avalanche watch is posted for the mountains.

And the road to the White House, well, it just got a little more crowded. Thanks to comedian, Roseanne Barr. She has announced she is running for president as a Green Party candidate.

A spokesman for the party says the star of the long-running 1980s and 1990s sitcom, Roseanne, is committed to ending the influence of corporate money. So, now, she is jumping in, Wolf. Roseanne Barr, the candidate.

BLITZER: All right. Thanks, Lisa.

Notorious hackers say they've gone one step farther, tapping a phone call between two of the world's most sophisticated law enforcement agencies.

Plus, our CNN cameras are there for the desperate scramble to help dolphins washing ashore on Cape Cod. The mystery behind this case. We'll have details.

(COMMERCIAL BREAK)

BLITZER: Shot in the arm (ph)for the United States economy and for President Obama's reelection campaign. Almost a quarter of a million jobs were added to the payrolls last month, a lot more than economists expected. And the unemployment rate dip once again to 8.3 percent.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: There's still far too many Americans who need a job or need job that pays better than the one they have now. But the economy is growing stronger. The recovery is speeding up. And we've got to do everything in our power to keep it going.

So, I want to send a clear message to congress. Do not slow down the recovery that we're on. Don't muck it up.

(APPLAUSE)

OBAMA: Keep it moving in the right direction.

(APPLAUSE)

(END VIDEO CLIP)

BLITZER: Our chief business correspondent, Ali Velshi, has more on the jobs numbers, the trends, and how it might affect the presidential election -- Ali.

ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Wolf, let's put this all into perspective. Put aside that jobless rate for a moment. It's not the most effective number to be looking at. What we are looking at is job creation. How many jobs are lost or gained in a month? We have seen job gains, net job gains, for 16 months in a row.

Let's go back, not that far, but let's go back to January of 2011, a year ago when you saw job growth all through the spring of 2011. Why did it slow down in the summer? Well, remember we had the debt debacle. We had the debt ceiling problems. We had the downgrade. We had discussions about a double-dip economy, and we had the beginnings of real serious problems in Europe.

So companies decided to put the brakes on hiring until they thought they figured out what was going on.

Once we got past that and people started feeling more secure about the economy, we saw hiring pick up late summer and into the fall. In fact, look at that -- October, November, December, January, steady gains every month to the point that we saw 243,000 new jobs created in January. That's a lot.

In fact, it was mostly in the private sector, very few government job losses. It's the way you want it, it was across the board.

Now, here's the rub. The Republicans have really been going at President Obama on the economy, and particularly on job growth. Let's take a look at that argument.

Since the day President Obama came into office, January of 2009, 4.6 million jobs have been lost in America. Remember, when he took over, we were losing about 700,000 jobs a month.

Now, all of those green bars I showed you, those job gains over the last 16 months, that's added up to 3.5 million total jobs gained -- 4.6 million lost, 3.5 million gained. That leaves us roughly -- and I've rounded here if you're doing the math at home -- to 1.2 million jobs that we still have to recover in order for President Obama to go into the election saying, I've recovered all the jobs that were lost under me.

In order for him to do that, he needs 130,000 jobs created per month between now and the beginning of November, so that's between now and October, because that's the number we'll get in November. It's entirely possible that will happen. We got 243,000 new jobs in January. So all he has to do is see 130,000 created every month between now and then. It's not clear that that will happen. There are things that could set us off -- more of a crisis in Europe, a slowdown in our economy here. But if it does happen, it is a reality that Republicans are going to have to face as they head closer and closer to the election -- Wolf.

BLITZER: Also included, Ali, in all the new numbers, good news about the unemployment rate for African-Americans, right?

VELSHI: Yes, this is interesting, Wolf, because the unemployment rate for African-Americans had been stubbornly high, almost double that of the national average. But it has dropped two percentage points. It's still high. It's 13.8 percent, compared to the national unemployment rate of 8.3 percent.

Economists are a little bit puzzled by this. The best explanation is that there was particularly mild weather in January which added construction jobs -- African-Americans are disproportionately represented in those construction jobs which were heavily lost during the recession, as you know.

Also, we added 50,000 manufacturing jobs in January, again an area where African-American workers are highly represented. So that's the best explanation we can come up with now.

We've been poring over the data, and unfortunately the data doesn't point to why there has been this substantial drop, but it's been stubbornly high, and this drop is quite statistically significant -- Wolf.

BLITZER: Ali, thank you.

Republican presidential candidate Newt Gingrich is reluctantly giving President Obama at least some credit for the improved jobs numbers. Listen to what the former Speaker told me a little while ago.

(BEGIN VIDEO CLIP)

NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: The truth is, if it gets better and better and better by between now and the election, he will get some credit. On the other hand, if this is a lull before it starts getting worse, his reelection will be in enormous trouble.

(END VIDEO CLIP)

BLITZER: Another presidential candidate, Mitt Romney, says the Obama administration's policies have prevented a full economic recovery.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: It's been a tough time, and I know the president didn't cause this downturn, this recession. But he didn't make it better, either. Today we have about 24 million Americans that are out of work or stopped looking for work or can only get part-time jobs and they need full-time work. (END VIDEO CLIP)

BLITZER: Let's bring in our chief political correspondent, Candy Crowley.

Candy, these positive numbers, as far as the jobs, the unemployment rate, it sort of puts a lot of pressure on the Republicans to deliver right now.

CANDY CROWLEY, CNN CHIEF POLITICAL CORRESPONDENT: Well, it does, and it's a tough spot for this reason. You heard Mitt Romney argue, well, you know, it could have been better, had we applied the right policies at first we would have done this faster. But there's this line somewhere -- and only voters can tell where it is -- where you look like you're rooting for the economy to stay bad for political purposes.

So it is very tough to find that spot. And so I think going forward, if indeed the economy continues to improve, not only will they have to figure out what other things they have in their arsenal, but they're going to have to figure out about how to talk about an improving economy.

BLITZER: Mitt Romney, who is the Republican presidential front- runner, he's being slammed for what he told Soledad O'Brien here on CNN earlier in the week, that he's not really concerned about the poor or the rich, the poor because there's a safety net, it needs some tweaking. He now says that was a misstatement, he's sorry he misspoke.

We went back and checked. On January 13th, he said it much more appropriately, not as awkwardly as he did on CNN. I'm going to play this clip and then we'll talk.

(BEGIN VIDEO CLIP)

ROMNEY: I'm concerned about our poor in this country. We have to make sure that the safety net for our poor is always strong and able to help those that can't help themselves.

I'm not terribly worried about the very wealthiest in our society. They're doing just fine.

I'm concerned about the vast middle class of our nation, the 90 percent of Americans, 95 percent of Americans who are having tough times.

(END VIDEO CLIP)

BLITZER: So the fact that he now acknowledges he misspoke on CNN, this is the way he really wanted to explain that -- much more appropriately, I should say -- does that mean this is over with, this whole sort of gaffe issue?

CROWLEY: No, I don't imagine so. I imagine you will still see it in the fall elections. You know, he says all the time politics ain't bean ball, and it's not. And you have to carefully put your words together.

He's no longer in a boardroom, he no longer has an hour-and-a-half meeting to explain what he means. He's got five minutes on national television to say exactly what he means. And the problem of course for Romney is that when he says things like that that fit into the rap against him, which is he's too rich to understand what the people are feeling, that's when it really hurts him.

BLITZER: A special "STATE OF THE UNION" Sunday morning, 9:00 a.m. Eastern, after Nevada but before the Tuesday caucuses.

CROWLEY: Yes.

BLITZER: We'll be watching. Thank you.

The economy is certainly a big deal in Nevada, which is holding caucuses on Saturday and has the worst foreclosure rates in the United States. Our own Dana Bash gives us a unique look at the suffering in Las Vegas.

(BEGIN VIDEOTAPE)

DANA BASH, CNN SR. CONGRESSIONAL CORRESPONDENT: Here in Nevada, it is ground zero for the housing crisis in this country. And look at the valley behind me. Two out of three homes are under water. In fact, Las Vegas, in particular, has the highest foreclosure rate of any city in this country. One out of 150 homes is in foreclosure.

PAUL BELL, NEVADA REAL ESTATE AGENT: Foreclosures are in every type of neighborhood, in all price ranges.

My name is Paul Bell, and I've been practicing real estate since 1990.

BASH: This all looks like new housing.

BELL: Yes.

BASH: This is the quintessential crux of the problem that you saw here in Las Vegas, right?

BELL: Yes.

BASH: And it's because people bought at the height of the market and then the economy busted?

BELL: Yes.

BASH: About how many of these houses do you think roughly --

BELL: At least 50 percent of this houses in this subdivision went into foreclosure.

BASH: Fifty percent?

BELL: Yes.

BASH: Half of these houses?

BELL: Yes.

BASH: There is some good news here. In 2011, it was a record- breaking year for sales of existing homes. But the bad news is the reason for that record is because these homes are being sold at bargain basement prices.

You see this pink sign here? This is classic, and it tells you everything you need to know about not only this house, but this area.

This house has been foreclosed. You can see the pool in this house has been emptied out, but it's still pretty nice. In fact, this house was originally $800,000. It's been foreclosed, so now it's on the market for half that, under $400,000.

KAREN TORRES, LAS VEGAS HOME RENTER: My name is Karen Torres, and I've been renting this hour for over a year. And we got a notice on the door saying it was going into foreclosure and now we're being evicted. The economy is so bad right now. And I'm doing everything I can to keep my head above water.

I'm at a loss. I don't even know what to do.

JOE SCOTT, REALTOR: My name is Joe Scott. I'm with RE/MAX Central here in Las Vegas. Investors are coming in and making their mark now. And over 50 percent of are sales are cash sales currently.

BASH: Fifty percent are cash sales?

SCOTT: Yes.

BASH: Wow. Do you see a silver lining, or is it still pretty tough out here?

SCOTT: It would be tough to see a silver lining in all of this, because a lot of people have been hurt and a lot of people have lost their homes. And it's sad to deal with that on a daily basis.

BASH: Here we are in Las Vegas doing a story on the housing crisis in Nevada, and we stumbled on somebody who is affected in the most significant way.

Chuck is homeless.

CHUCK, HOMELESS IN LAS VEGAS: It's a decision to make between some of the things that you like in life, like my lamb chops, or eating absolutely nothing and going around the food kitchens and getting food to supplement your nutritional needs in order to live in one of these roach-infested, crack-infested places. And I don't want that in my life.

Is it nice living out here on the rocks? Hell no. Come on.

(END VIDEOTAPE)

BLITZER: And you can see more of Dana's report tomorrow, 6:00 p.m. Eastern. That's when we kick off our live CNN coverage of the Nevada caucuses with a special edition of THE SITUATION ROOM.

Did the federal government plant a mole in Muslim mosques? Just ahead, a CNN exclusive with the alleged FBI informant now making shocking claims.

Plus, a top-secret call between the FBI and Scotland Yard goes public. We'll also explain why notorious hackers are claiming they were listening in.

(COMMERCIAL BREAK)

BLITZER: Alarming new evidence hackers may have hit the FBI and Scotland Yard after a top-secret conversation between the two intelligence forces turned up on a Web site belonging to the infamous hacking group known as Anonymous.

Let's bring in our own Brian Todd. He's been working the details.

A pretty shocking story, Brian.

BRIAN TODD, CNN CORRESPONDENT: It is, Wolf.

This group Anonymous and its affiliated groups of hackers, they have previously claimed to have disrupted the Web sites of the CIA, the U.S. Senate. Now they say they were able to listen in on an important call between those two agencies, the FBI and Scotland Yard, where operations against hackers were discussed.

(BEGIN VIDEOTAPE)

TODD (voice-over): A sensitive conference call between officials of two of the world's most sophisticated, accomplished law enforcement agencies. They're discussing their investigation into some notorious alleged hackers.

UNIDENTIFIED MALE: Ryan Cherry and James Davis due in court on the 27th.

TODD: And now we're told hackers were listening in. A loose group of hackers known as Anonymous has posted what it says is a recording from mid-January, a conference call between the FBI and New Scotland Yard. Anonymous claims to have surreptitiously taped the call.

Officials are heard discussing their probe into hackers. Some hackers' apparent real names are bleeped out, but their aliases are not.

UNIDENTIFIED MALE: We've set back the further arrests of Kayla and T- flow, that being (BLEEPED OUT) until we know what's happening.

TODD: The FBI and Scotland Yard concede a private conversation was released. Officials say the operations of those agencies have not been compromised, their computer systems were not hacked.

(on camera): But experts say the hackers likely got into the internal communication of these agencies somehow. They didn't hack into the actual call, but probably got hold of an internal e-mail sent to dozens of people telling them when the call was going to take place and the number to call. Then experts say the hackers just dialed in.

(voice-over): Gregg Housh is a former participant with Anonymous. He says he no longer takes part in its activities and never did anything illegal, but he does monitor Anonymous chat rooms and says there's a lot of chatter about this operation.

(on camera): What are people from Anonymous saying about this operation right now?

GREGG HOUSH, MONITORS "ANONYMOUS" CHATTER: Right now they're saying that it's just the beginning of many things to come. So we'll have to wait and see what else they might have gotten with the access they had to, as they said on Twitter, FBI communications.

TODD (voice-over): Anonymous and its subgroups have previously claimed to have disrupted U.S. government Web sites. As for hacking into them internally --

(on camera): Can they do it with intelligence agencies? I mean, is everything kind of fair game now?

JAMES LEWIS, CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES: Everything is fair game, but the high-end targets are probably still just out of reach for Anonymous. What they can tap into though is your home computer, your work computer.

(END VIDEOTAPE)

TODD: James Lewis says this signifies a cyberwar between law enforcement and hacker groups like Anonymous. The FBI seems ready to engage in that.

It issued a statement today saying, "The information was intended for law enforcement officers and was illegally obtained." The bureau says a criminal investigation is under way -- Wolf.

BLITZER: Anonymous is also now saying they're going to release sensitive information about the Iraq War?

TODD: That's right. Today, Anonymous announced it's going to release e-mails related to the 2005 deaths of 24 unarmed Iraqi civilians in the town of Haditha, that raid by U.S. forces there that got them into a lot of trouble.

Anonymous posted online today that it hacked into a law firm representing soldiers involved in that incident. We tried to reach members of that law firm. We have not heard back yet.

BLITZER: All right, Brian. Thank you.

Brian Todd, reporting.

Imagine having the government spy on you in your house of worship. Members of one mosque say that's what happened to them. Ahead, a CNN exclusive with a man who says he wore wires inside a mosque for years on behalf of the FBI.

(COMMERCIAL BREAK)

BLITZER: More than three dozen powerful Muslim activists groups are taking on the New York City Police Department today demanding that the commissioner, Ray Kelly, resign over a film they say teaches officers to suspect Muslims as terrorists.

Here's CNN's Deborah Feyerick with this CNN exclusive.

(BEGIN VIDEOTAPE)

DEBORAH FEYERICK, CNN CORRESPONDENT: Wolf, the NYPD is under fire from Muslim advocacy groups for a training video and leaked memo calling for more secret surveillance of local mosques. Well, it's something the FBI has been doing since 9/11.

And we have an exclusive interview with a man who says he went inside those mosques in the Midwest.

(BEGIN VIDEOTAPE)

FEYERICK (voice-over): Members of the Franklin Street Mosque in Des Moines, Iowa, say what happened here is deeply disturbing.

UNIDENTIFIED MALE: I think the FBI owes us an apology.

FEYERICK: Within the tight-knit mosque this man came to pray.

UNIDENTIFIED MALE: I may have seen him once or twice, but I haven't talked to him.

FEYERICK: But he was not who he claimed to be. In fact, he was not even Muslim.

UNIDENTIFIED MALE: To send an imposter in our community, it was more of a fishing expedition.

FEYERICK: Meet Arvinder Singh. He says the FBI recruited him as an informant in 2002 because he looked Middle Eastern.

(on camera): What was the name that the FBI gave you?

ARVINDER SINGH, SAYS FBI RECRUITED HIM AS INFORMANT: Rafiq Alawi (ph).

FEYERICK: So does this check look familiar to you?

SINGH: Yes.

FEYERICK (voice-over): Singh's attorney, Michael Said, claims the FBI set up a bank account with a fake name to help Singh spy on local mosques and report suspicious activity.

MICHAEL SAID, SINGH'S ATTORNEY: It was a bank account created by the FBI for the sole purpose of tracing where the money would go.

FEYERICK: The FBI tells CNN it does not confirm or deny the identities of any confidential informants.

(on camera): Did you ever go into a mosque wired?

SINGH: A couple of times.

FEYERICK: Did they give you specific names of people?

SINGH: They sometimes give me names. Sometimes they show me pictures.

FEYERICK (voice-over): Weysan Dun is the FBI's special agent in charge of Iowa and Nebraska.

WEYSAN DUN, SPECIAL AGENT IN CHARGE, FBI OMAHA DIVISION: Specifically, the only instances where we will send somebody into a place of worship is if there has been a credible allegation that that individual or a group of individuals is either engaged in or planning criminal activity, or engaged in or potentially planning terrorist activity.

FEYERICK: Without formal charges or official confirmation from the FBI, it's almost impossible to know if Singh (ph) helped disrupt any terror plots. Even Singh's lawyer says the FBI's strategy is alarming.

SAID: How would you feel if you went to church and everything you said you wouldn't know if the person next to you is recording it and that could be used against you?

FEYERICK: Singh, who says he spied on at least four mosques, feels what he did was patriotic. He believes he should be made a U.S. citizen, as allegedly promised by his FBI handlers, and not deported back to India over a green card violation. His American wife says he never would have spied on mosques knowing what they know now.

ALICE SINGH, ARVINDER SINGH'S WIFE: They promised him his citizenship every time they came to the house for seven years. And it is a lie.

FEYERICK: The FBI says it's prohibited from making those kinds of promises.

(on camera): Do you feel betrayed?

ARVINDER SINGH: I do. I did so much work for them, put my life at risk. And on the other hand, when somebody just betrays you it feels bad.

FEYERICK (voice-over): A similar betrayal Iowa Muslims are also trying to reconcile.

(END VIDEOTAPE)

FEYERICK: Singh spoke to us because he's fighting deportation and he wants to get his story out. He says he wants to stay in the country that recruited him to help fight the war on terror -- Wolf.

BLITZER: Deborah Feyerick, good story. An exclusive story, I should point out, as well. Thank you.

Other stories we're following, including a race against time to determine what's killing scores of dolphins washing up along the beaches of Cape Cod. Up next, CNN goes inside the desperate search for answers.

(COMMERCIAL BREAK)

BLITZER: A sad story out of Cape Cod. CNN cameras are there as dolphins wash ashore along the Massachusetts coastline.

Crews have found more than 100 dolphins beached in the past few weeks. Most of them have died. Scientists are frantically trying to figure out why.

CNN's Mary Snow is on the scene near Cape Cod -- Mary.

MARY SNOW, CNN CORRESPONDENT: Wolf, scientists are no closer to providing answers about why so many dolphins are washing up in such a short amount of time. In fact, scientists today went to Washington to brief some members of Congress about the situation here. This, as even more strandings happened today.

(voice-over): This is one of the latest casualties of a mystery baffling scientists along Cape Cod who can't explain why so many dolphins are washing up on shore. This is a pregnant dolphin. She's bruised, but otherwise OK.

C. T. HARRY, MARINE BIOLOGIST: And then there's two that are swimming that will strand.

SNOW: Marine biologist C.T. Harry is with the International Fund for Animal Welfare, a group responding with volunteers. They've helped in more than 100 strandings in the last three weeks. That's usually what this team sees in an entire year.

HARRY: They've just really made the response effort very difficult and just really left us confused about what's going on.

SNOW: Harry says the fact Cape Cod is shaped like a hook makes it a hotspot for trapping dolphins, and low tides can rapidly beach them. But it doesn't explain so many at one time. Weather and possible pollutants are being looked at.

And then there's the dolphins' social nature.

HARRY: They have a very tight-knit social structure. So, if one animal is ill, or a small group of animals get lost, then a larger group tend to follow that animal into basically an area where they're not supposed to be.

SNOW: More than 80 dolphins have died. Of the ones that survived, scientists test their health, screen blood and hearing. Generally, they are said to be in good health, giving no clues. But they are being followed with tracking devices once they're released back into the ocean.

Brian Sharp is keeping tabs on transmissions emitted by those devices.

(on camera): So far, though, you're encouraged by what you see?

BRIAN SHARP, STRANDING COORDINATOR: We're absolutely happy with what we're seeing. Animals in deep water, that's exactly what we want to see. And the fact that animals that were released several weeks ago are heading that direction, that's an excellent sign.

SNOW: Along with volunteers, well (ph) fleet harbor master Mike Flanagan does his part to help by trying to herd groups of dolphins away from the inlet with his boat.

(on camera): How frustrating is this for you not to be able to help them?

MIKE FLANAGAN, HARBOR MASTER: It's very frustrating. You know? You wish you could do more, but there's only so much you can do.

SNOW: If beached dolphins are found alive, they can survive for several hours on land. In that time, scientists race to collect information to try and solve this mystery before re-releasing them into deeper waters, hoping they won't return.

(END VIDEOTAPE)

SNOW: And there was a bit of good news today. That pregnant dolphin we showed you survived long enough that crews were able to re-release her back out into the ocean -- Wolf.

BLITZER: Mary Snow, thanks very much.

That's it for me. Thanks for watching.

I'm Wolf Blitzer in THE SITUATION ROOM.

The news continues next on CNN.