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THE SITUATION ROOM

Nancy Pelosi Announces Major Decision; Interview With Pennsylvania Governor Ed Rendell; Olbermann Suspended for Contributions to Dems; Malloy Wins Governorship of Connecticut

Aired November 5, 2010 - 18:00   ET

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


CASEY WIAN, CNN CORRESPONDENT: All three defendants have pleaded not guilty to three counts of providing material support to terrorists, one count of conspiracy to kill in a foreign country, and one count of money-laundering.

(END VIDEOTAPE)

WIAN: The defendants could face life in prison if they are convicted. They will be back here in court next week for a hearing on whether they will be let out on bail. Federal prosecutors oppose that, saying they are a danger to the community and a potential flight risk -- Wolf.

WOLF BLITZER, CNN ANCHOR: Casey Wian, thank you.

You're in THE SITUATION ROOM.

Happening now: The question swirling through Washington since Election is finally answered. What will the outgoing speaker, Nancy Pelosi, do now that the Democrats have lost their House majority? We now know.

And the MSNBC anchorman Keith Olbermann yanked off the air indefinitely without pay. We have details of what he did that prompted a swift network response.

And an offshoot of al Qaeda now says it is behind not only those cargo plane bombs, but also a deadly cargo plane crash.

We want to welcome our viewers in the United States and around the world, breaking news and political headlines all straight ahead.

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

It is the tweet today that rocked Washington, ending days of speculation about the future of the outgoing Speaker Nancy Pelosi in the wake of the Republican takeover of the House of Representatives in this week's election. In just the past few hours, she announced on Twitter she will run for the minority leadership post in the next Congress.

Pelosi writes -- and I'm quoting now -- "Driven by the urgency of protecting health care reform, Wall Street reform, and Social Security and Medicare, I am running for Democratic leader." The announcement comes despite a small but growing number of Democrats who say they will not -- repeat -- not support Nancy Pelosi as their minority leader. A senior administration official tells CNN Pelosi informed the White House of her decision, but did not consult the president or his senior staff.

The best political team on television is standing by with insight right now. Gloria Borger, Dana Bash, and Candy Crowley, they are all here.

Gloria, Nancy Pelosi has, what, a 26 percent approval rating right now in our most recent CNN/Opinion Research Corporation poll -- 26 give her a favorable rating, 53 unfavorable, 21 percent unsure. It is surprising to a lot of Democrats that she did not simply gracefully step aside.

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Sure. By the way, Wolf, I love that she tweeted it. It is a little Sarah Palin kind of thing, tweeting what you are going to do.

Look, this is an inside game. It is not an outside game. And in talking to Democrats -- by the way, there are many more liberals in the Democratic Caucus right now who think like Nancy Pelosi than conservatives, because the conservatives and moderates were defeated -- who say, look, we are not going to let the Republicans tell us who is going to be our leader.

And there are some Democrats I spoke with who said actually since she is a liberal, she has more credibility with the liberals. And if we ever have to cut deals, who better to do it than Nancy Pelosi, because they will be more actually likely to fire her -- I mean, to follow her. Sorry.

(CROSSTALK)

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: People I have talked to her who are close to her say that she told them she seriously considered stepping. Who wouldn't, right, in her position.

BLITZER: I mean, it was such a vote of no confidence in her leadership by the folks out there, what, 60, and 61, maybe, a net loss for the Democrats.

(CROSSTALK)

BASH: And her leadership and the White House and the president's leadership. And that's what I think some of her supporters were saying. Excuse me. She was pushing an agenda that also was started at the White House.

But, look, she spent two-and-a-half days working the phones, Wolf. She worked them morning to night talking to members of her caucus. And I am told that she came away saying, look, I'm a fighter and I'm not ready to give up. I want to stay. I want to keep going.

But it is not going over well with those conservative Democrats, who say, did you not get the message? And I don't think that you are the person to lead us, especially with where we lost seats, in the heartland.

(CROSSTALK)

BLITZER: The White House, Candy, put out this statement.

"The White House does not comment or get involved in leadership elections. But as the president has said before, he appreciates the work of the speaker and the entire House Democratic leadership team, who have been great partners in moving the country forward. He looks forward to working with them in the years to come."

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Listen, it is not really any of his business.

I mean, this is the House. They jealously guard their rights to elect their own leadership. Nancy Pelosi, everybody we have talked to and I am sure you all have talked to says she has the votes. She would not have done this if she didn't have the votes.

(CROSSTALK)

BASH: Easily.

CROWLEY: She's not going to go down to defeat. She is not going to be the person that the Republicans are going to go after in two years. It is going to be President Obama.

So maybe there will be some commercials about Nancy Pelosi, but the fact of the matter is this will be the president's game in two years. And they feel as though they need protection, not from John Boehner, but from President Obama, because they are a little afraid he is going to sell them down the river.

BLITZER: Let's expand this conversation.

Joining us right now from Pennsylvania, the governor of Pennsylvania, the always blunt, the always candid Ed Rendell, who has got strong views on this, a former chairman of the Democratic Party as well.

Did she do the right thing or the wrong thing by deciding to stay on as the minority leader?

GOV. ED RENDELL (D), PENNSYLVANIA: Well, first of all, I think Dana, Gloria and Candy said it all and said it correctly.

Nancy is a fighter. I think, on the inside baseball, getting the votes, moving the agenda, she did a great job. She did a great job. I believe, in 20 years, Wolf -- and I know this -- I will probably get death threats for saying this, but I believe that the health reform bill will be looked upon by Americans similarly to the way Social Security and Medicare is looked on by Americans.

And it would not have happened without Nancy Pelosi's leadership. That is number one. Number two, as your panel pointed out, as you pointed out, she has got a bad perception across the board in the nation. But if that is damaging, the damage was done.

As Candy said, she is not going to be on the ballot. It is all going to be about the presidential candidates two years from now. And I think the point -- and I was trying to listen hard, but I think Gloria made it -- the point that, if there are going to be deals that have to be struck and the compromises that have to be reached, as the leader, she will have more ability to go to the liberals and say, look, this is the best we can do. We have got to keep the agenda moving forward.

So I think it is the right thing for her do. And I actually think it is the right thing for the Democratic Caucus. Again, this is not -- it's no longer outside game. It won't be an outside game two years from now, because it will all be about the president and the president's opponent.

BLITZER: Well, look what happened in your state of Pennsylvania, Governor -- and you know this better than anyone -- a Republican governor, a Republican senator, a net loss of five House seats. Republicans took over in five seats that were held by Democrats.

How much responsibility -- I know the president deserves some responsibility for that. He, himself, acknowledges it. But how much does she deserve?

RENDELL: Well, if you look at the exit polls, she wasn't a big issue at all.

First of all, I mean, the one thing that we all forget, James Carville should be reminding all of us, it is the economy, stupid. The main reason we got shellacked was because the economy is bad. Whenever the economy is this bad, the people in power lose.

I mean, look at Michael Bloomberg at the beginning of the recession, a great mayor, spent $65 million against an opponent who spent $2 million, and got 51 percent of the vote. People punish the people in power. That is number one.

Number two, the polls showed it was more dissatisfaction with the president and his agenda, although I think that is based on a misinformation and misconception. And, three, Nancy was I think the third reason that we lost. And, again, there is no longer outside baseball.

BLITZER: All right.

Governor, hold on. Candy has a question.

CROWLEY: Governor, just on the last part that you said, that, based on misinformation, this is a theme we are also hearing from the White House.

So you think that the people who went to the polls and so enormously voted in this, you know, tidal wave, at least in the House and certainly in the governorships, voted for Republicans, that those votes and that this election was based on misinformation, that it was a missed message, not anything about the policies that President Obama has put forth?

RENDELL: No. Let me clarify that.

One, we did a lot and we did a lot of it fast. And that's always a little jarring to people. So, yes, there is some responsibility. But I think that the president made the right assessment. If he was going to get 31 million Americans who don't have health insurance, a national disgrace, if he was going to get them covered, he had to act now.

But misinformation -- any one of the four of you answer this question. And if we stopped 1,000 people in Philadelphia, Washington, Chicago, and New York who made less than $250,000 and who have jobs and said, did you get a tax cut from the Obama stimulus plan, how many of them would say yes? My guess is 50 out of 1,000.

Every single one of them did, either $800 if they are married or $400 if they're single. But it came out of payroll deduction. And it was too small for a lot of people to notice. If we asked people were there tax cuts in the stimulus, was 40 percent of the stimulus made up of tax cuts, nobody would know. But that is the truth.

BORGER: Governor, do you think the president's response to this election has been a bit tepid, talking about the message, as opposed to policy?

RENDELL: Well, look, I think what the president tried to do and what he did a little more effectively today is not so much postmortem -- and you can postmortem it to death -- but look forward.

And, today, I don't know if you all -- of course you heard him. It is your business, right?

BORGER: We heard.

(LAUGHTER)

RENDELL: I thought he delivered a very good and concise road map for how we make progress in creating jobs and creating the environment to create jobs. And that is what I think he should do.

(CROSSTALK)

BORGER: But he didn't say: I heard you. I may have gone overboard.

RENDELL: I think he did.

(CROSSTALK)

BORGER: He didn't pull a Bill Clinton here.

RENDELL: Well, no, to some extent, but I think he acknowledged that we did a lot of things, that we did them fast, and it may have created an unsettling atmosphere.

I think he did some of that stuff. And there's no question he did. But, if you are the president, look at all the things that they did that they simply haven't gotten credit for, credit card reform, student loan reform, financial reform, all good things that the public likes, but he did not seem to get any credit for them.

BASH: Governor, it's Dana Bash.

I just want to ask you about something that your home state congressman Jason Altmire, who is one of the survivors in that state, told me today. This is again about Speaker Pelosi.

He said, "I just don't get the sense that Speaker Pelosi understands what happened Tuesday." He said: "We, the Democrats, lost Middle America. We got crushed."

And he is very concerned that the party is not being led by the kind of people who can get it back. What do you think?

RENDELL: Well, I have a lot of respect for Jason. And he is a friend of mine, but I'm not so sure we got crushed in Middle America.

Pat Quinn got reelected governor of Illinois by a small margin. The senatorial candidate in Illinois lost by just this much. Joe Sestak lost by a point. I mean, you can go through it. Ted Strickland, with all the bad economy, lost by two points.

I don't think we got wiped out. I know we got wiped out in congressional elections. But I'm not sure that it was as devastating as everybody says. And, again, if you look at the polls, Nancy Pelosi was more of an election issue that the Republicans raised than an issue that people actually voted on.

People are smarter than all of us. They vote on real stuff. And they voted on the economy in large part and some dissatisfaction with the president's agenda, but dissatisfaction that I think was bred by misinformation, a very good misinformation campaign.

BLITZER: But you say that, Governor, misinformation. The president was doing Oval Office addresses, national news conferences, prime-time news conferences, addresses before joint meetings, joint sessions of the House and the Senate. He gave more one-on-one interviews during his first two years than I think any of his predecessors.

He was very visible. He was speaking all the time.

RENDELL: After the horse had escaped the barn.

Stimulus and health care, the two big things, the two big negatives, we didn't use the president on either one of those until after the spin had already developed and was locked in concrete. And once something is locked in people's mind in concrete, it is very hard to get it back. You can try all you want, but it is very hard to get it back. (CROSSTALK)

BLITZER: Who do you blame?

RENDELL: I don't think that we had a good strategy for communicating.

BLITZER: So who do you blame?

RENDELL: I don't think we used the best communicator.

Well, I don't know the inner workings of the White House, Wolf. You tell me.

BLITZER: Well, the buck stops with the president, right?

RENDELL: Well, sure. I mean, look, the president should have followed his instincts.

I would have addressed the country the night that stimulus passed. And I would have laid it out piece by piece. Every one of component part, I would have laid it out and said here is what this is going to do. Here is why it is stimulative. By the way, folks, you are getting a tax cut. And $375 billion of the $870 billion is tax cuts, which the Republicans say they are in favor of, wouldn't vote for it, but say they were in favor of it. Break it down.

On health care, I would have early on said, these are the things that are important to me, all the insurance reforms, so important, getting people covered who are not covered, making sure you can't be dropped from coverage, all of those things. I would have been out of the chute with those things.

The problem is I think the president let the Congress develop these things by themselves. And as that process was developing, they got spun terribly out of control. And the president didn't weigh in until too late, in my judgment. And I think we have learned. I think we have learned.

BLITZER: All right, Governor, I think you are being still a bit diplomatic, but you are the governor of Pennsylvania and you're the former party chairman.

RENDELL: No, no, no. Look, I'm not running for anything. I'm not running for anything.

(CROSSTALK)

BLITZER: I know you're not.

(CROSSTALK)

BORGER: How about White House chief of staff? That is what I was going to say.

BLITZER: You want to come to Washington and work for the president?

RENDELL: If the president was crazy enough to offer me chief of staff, I probably couldn't say no. But I'm not the person to be chief of staff.

I have said Colin Powell has got the stature to bring everybody together. He should be the chief of staff.

BASH: But they need new blood, though.

BLITZER: Yes.

Well, I suspect they...

(CROSSTALK)

RENDELL: Well, no, they need someone that...

BLITZER: We will be -- finish your thought. Finish your thought, Governor.

RENDELL: No, no. I think -- look, I think -- and you have heard me say this before, Wolf -- this is a real serious time for the country.

When the deficit commission makes its report, we have got to get real. Everybody has got to tell the truth to the American people. We have got to take whatever danger there is. Whatever risk, we have got to take it, Republicans and Democrats together, and tell people the truth, what the country needs to stay competitive and to deal with the deficit.

Those are the things we have got to do soon. And we need someone of stature to lead that. And I think the president obviously leads. But a chief of staff like Colin Powell would be awesome.

BLITZER: Well, you know what? I suspect we will be seeing you in Washington.

RENDELL: Not me.

BLITZER: We will see you in Washington, Governor, we have no doubt. Thanks very much for joining us.

RENDELL: Not me.

BLITZER: All right, Ed Rendell, he is the outgoing governor of Pennsylvania.

A mysterious and deadly cargo plane crash, did it foreshadow last week's package bomb plot? There are new developments in the case, including now a claim of responsibility.

And private donations led to a very public punishment for the MSNBC anchorman Keith Olbermann. And he boarded his flight as an elderly white man, but disembarked as a young Asian man. We have exclusive details of what authorities are now calling an unbelievable in-flight transformation.

(COMMERCIAL BREAK)

BLITZER: An ominous message to the U.S. from al Qaeda's Yemen wing. Al Qaeda in the Arabian Peninsula now claiming responsibility for the foiled plot to send explosive-laden printer cartridges on those cargo planes bound for the United States. But that's not it.

They are also claiming responsibility for other developments as well.

Let's go to our homeland security correspondent, Jeanne Meserve, who has got details.

Jeanne, what is going on?

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Wolf, on jihadist Web sites, a statement purportedly from al Qaeda in the Arabian Peninsula claims responsibility not just for the toner cartridge bombs found last week, but also for the crash of a UPS cargo plane back on September 3, though U.S. officials say they have not established a link.

That flight was en route from Dubai to Cologne, Germany, when the crew reported smoke in the cockpit, declared an emergency, and turned around. The plane crashed in Dubai. Two crew members were killed.

In its statement, AQAP claims it waited to claim responsibility until it came time to hit again. And the group asked why the crash didn't get more media coverage at the time -- quote -- "Was it because the enemy wasn't able to detect the reason behind the crash, or is it because the Obama administration wanted to hide the event, so that does not show their security failure, especially since the operation took place right before the U.S. midterm elections?"

After the bombs were found last week, investigators did go back and take another look at the crash because it involved a cargo plane and because it took place in Dubai, where one of the bombs was found. A U.S. counterterrorism official says -- quote -- "We cannot confirm at this point their claims about the early September incident."

And another U.S. official says nothing thus far has indicated there was a bomb or any nexus to terrorism. Though officials have told us there were packages from Yemen on the plane, they were not near where the fire started, Wolf.

BLITZER: Why would al Qaeda in the Arabian Peninsula wait so long to claim responsibility for that September 3 crash of that FedEx plane -- the UPS -- excuse me, the UPS plane in Dubai?

MESERVE: Well, Wolf, we don't know. It's possible that they could have wanted, as they indicated, to use the same technique a second time, so they didn't want to give it away, or perhaps they are just making the claim now, even if it's not true, to inflate their own importance.

AQAP says in the statement that they will strike again on civilian aircraft, as well as cargo planes. I will tell you, Wolf, nobody doubts that that is their goal -- back to you.

BLITZER: All right, Jeanne, thanks very much.

Jeanne Meserve is our homeland security correspondent.

Off the air. MSNBC's Keith Olbermann is yanked from prime time indefinitely and without pay.

And a master of disguise? Not quite. We are going to tell you what gave this quick-changing traveler away.

(COMMERCIAL BREAK)

(NEWS BREAK)

BLITZER: He is the top star on MSNBC, their top news anchor. And, as of tonight, he is off of the air indefinitely. We will tell you what happened to Keith Olbermann. Stand by.

Also, is it his messages or his policies? Is President Obama still not getting it? What is going on, on that front?

And a CNN exclusive: a bizarre in-flight change -- a passenger turning from a elderly white man into a young Asian.

(COMMERCIAL BREAK)

BLITZER: MSNBC anchorman Keith Olbermann makes no secret at all of his politics, but now some newly revealed political donations, financial contributions, he made have gotten him suspended from his own network.

CNN's Mary Snow is looking into this story for us.

Mary, what happened?

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, MSNBC cited its ethics policy in suspending Keith Olbermann indefinitely without pay. Now the network's next move is being closely watched.

(BEGIN VIDEOTAPE)

SNOW (voice-over): He has become a star power at MSNBC for voicing his liberal opinions, but Keith Olbermann is now sidelined for financially supporting three Democratic candidates.

Records show he contributed $2,400 each to Kentucky Senate candidate Jack Conway and two members of Congress from Arizona, Gabrielle Giffords and Raul Grijalva.

Congressman Grijalva was a guest on Olbermann's show October 28, the same day Olbermann donated to his campaign. (BEGIN VIDEO CLIP, "COUNTDOWN WITH KEITH OLBERMANN")

KEITH OLBERMANN, HOST, "COUNTDOWN WITH KEITH OLBERMANN": Congressman, good to talk to you again.

REP. RAUL GRIJALVA (D), ARIZONA: Good to talk to you, my friend.

(END VIDEO CLIP)

SNOW: Politico broke the story. Olbermann told them in a statement: "I did not privately or publicly encourage anyone else to donate to these campaigns, nor to any others in this election or any previous ones, nor have I previously donated to any political campaign at any level."

MSNBC, like many news organizations, including CNN, enforces ethics policies that, among other things, prevent employees from making contributions considered a conflict of interests.

And in a statement, the president of MSNBC said, "I became aware of Keith's political contributions late last night. Mindful of NBC news policy and standards, I have suspended him indefinitely without pay."

While Olbermann's support of Democrats won't shock anyone, it was Olbermann who's been a vocal critic of FOX and its parent company, News Corp, for donating $1 million to the Republican Governors Association. News Corp defended the contribution, saying it believes in what it called "RGA's pro-business agenda." Here's Olbermann on October 7.

KEITH OLBERMANN, SUSPENDED MSNBC ANCHOR: Congressman Clyburn, is there a legislative response to the idea that there's a national cable news outlet that goes beyond having a point of view and actually starts to shill for partisan causes and actually starts to donate to partisan groups of one party?

SNOW: The question is where is the line drawn when FOX and MSNBC have clear political leanings? Media critic Howie Kurtz is the host of CNN's "RELIABLE SOURCES."

HOWARD KURTZ, HOST, "RELIABLE SOURCES": At FOX News, you already have contributors like Karl Rove and Dick Morris and sometimes Sean Hannity actually going out and raising money for the Republican Party. That's a lot worse than what Keith Olbermann did, but I think that either networks are going to have to tighten up on this stuff, or just tear up the rule book and say people can do whatever they want, which I think would be a serious mistake.

(END VIDEOTAPE)

SNOW: And Wolf, we did tried to get reaction from Keith Olbermann through MSNBC, but we haven't gotten response. There are, though, plenty of people speaking out on this, including Senator Bernie Sanders, an independent, from Vermont. He says it's outrageous, in his words, that Olbermann would be suspended for exercising his constitutional right to contribute to a candidate of his choice -- Wolf.

BLITZER: Mary, thank you.

Let's get some more on this story. We're joined by our own Howard Kurtz. He's the host of "RELIABLE SOURCES," the Washington bureau chief for the Daily Beast; also the "New York Times" media reporter Brian Stelter.

Guys, thanks very much for coming in. Howie, why is this such a big deal? Everybody knows precisely where Keith Olbermann stands on all of these political issues.

KURTZ: Because, Wolf, there's a line that you do not cross when you are a journalist or acting on a journalistic network, and one of those lines is don't give money to politicians, especially not politicians that you're in the process of interviewing. Senator Sanders is wrong. When you become a journalist, even a commentator, you give up your constitutional rights to do things like give money, because you want viewers to think that you are fair. Whatever your opinions, whatever your sympathies, giving money is in a whole different class.

BLITZER: But the parent companies of all these news organizations, they give a lot of money. The News Corporation from FOX. Time Warner, our parent company here at CNN, they give money to politicians. G.E., that -- which owns NBC, and they give a lot of money to politicians. What's the difference?

KURTZ: Those are business executives. They're not making editorial decisions. They're not involved in newsroom judgments. And so I'm not crazy when media companies do this. I'm not crazy about it, but at the same time, they are acting in their own business interests. When you are standing in front of a camera like we're doing right now, Wolf, you are in a different capacity. And in my view, Olbermann should have known it would this. And he also should have known this would come out in the federal election record. You give up the right to give money to politicians.

BLITZER: Brian, I know you've been doing some excellent reporting on this. What are you hearing? He says that the leadership at MSNBC, that he's only suspended without pay. Is he going to come back to MSNBC?

BRIAN STELTER, "NEW YORK TIMES": Well, we are waiting all afternoon for Keith to comment. He's -- he's prolific on Twitter, and he hasn't even posted anything on Twitter this afternoon. We've been e-mailing him all day, asking him to weigh in here.

And I think right now he's probably trying to figure out what to say and what to do next. Will he stay at MSNBC, or will he go?

People at NBC say this is very simple for them. They want to distinguish themselves from FOX News. They look at FOX and they think, "We're not like FOX," and they want to express that. You know, Sean Hannity, who's a prime-time host on FOX News, has given thousands of dollars to Republicans, and FOX has defended that. And so by suspending Keith Olbermann, MSNBC is trying to say, "We're not like FOX."

BLITZER: There's a history, though, of tensions at MSNBC between Keith Olbermann and the executive leadership.

STELTER: There is. There is.

BLITZER: Talk a little bit about that.

STELTER: Well, he's known to be a very volatile employee, both at MSNBC and at prior jobs he's had, including a job at FOX Sports which happened to be owned by the same company that owns FOX News.

He tends to be someone who acts like a manager behind the scenes, even though he doesn't have a managerial role. And I think one of the real reasons why this is controversial today is that Keith Olbermann anchored the election night coverage on Tuesday. On FOX News, they had news anchors anchoring election-night coverage, but on MSNBC, it was all liberal commentators. It just goes to show how we're in this strange new world of cable news. One person today called it a petrie dish of ethics where we're still learning what the ethics are.

BLITZER: Howie, if it would have been someone else at MSNBC who did this, would they simply have been suspended right away or immediately fired? Because he is their top star.

KURTZ: He is their top star. He is the most highly-rated program, Wolf. And he's in the midst of a four-year, $40 million contract.

But, you know, look, MSNBC maybe they would have punished somebody more harshly. We don't know the length of the suspension. Phil Griffin, the president of MSNBC, did the right thing. He could have given him a slap on the wrist. Instead, he yanked him off the air. And I think that that said something.

I don't think we ought to overstate the speculation that Olbermann might walk. Yes, he is known to be volatile at times. He bristles at any management pressure. But he's in a very good spot at that network. He's the leading liberal champion. It's become a liberal network. No bones about that, as Brian pointed out. All liberals on election night. I would be surprised if he's not back on the air eventually.

BLITZER: Howie's going to have a lot more on this story, I venture to say. Sunday morning on "RELIABLE SOURCES," 11 a.m. Eastern?

KURTZ: Guarantee it.

BLITZER: Is that correct?

KURTZ: That is correct, Wolf.

BLITZER: Brian, thanks very much.

STELTER: Thank you. BLITZER: Thanks for your good reporting, as well.

Voters made it clear on Tuesday they're not happy with the White House, but it doesn't always sound like President Obama gets the message.

And an unbelievable case of concealment, but it's what he forgot to hide that gave him away.

(COMMERCIAL BREAK)

ANNOUNCER: This is CNN breaking news.

BLITZER: Official in Connecticut, they've elected a governor of Connecticut. The Democrat wins; the Republican loses.

The secretary of state of Connecticut has just announced that Dan Malloy, the Democratic candidate has received 566,498 votes, the Republican Tom Foley with 560,861 votes. A margin of difference of 5,637 votes. There will be no recount.

Malloy wins, a Democratic pick-up in gubernatorial contests. First time in a long time there's been a Democratic governor in Connecticut. I just wanted to bring you up to speed on that.

With historic gains for Republicans, though, in this week's election, it's clear that voters were sending a message. What's not clear, is if the message made it all the way to the Oval Office. We asked Brian Todd to take a closer look, and he's here with his report -- Brian.

BRIAN TODD, CNN CORRESPONDENT: Wolf, the president and other Democrats spent a lot of time since Tuesday talking message, saying they got hammered simply because they didn't sell their accomplishments. The feedback from voters suggests otherwise.

(BEGIN VIDEOTAPE)

TODD: An upbeat jobs report doesn't steer the president from a broader perspective.

BARACK OBAMA, PRESIDENT OF THE UNITED STATS: The unemployment rate is still unacceptably high, and we've got a lot of work to do.

TODD: But there are still questions about whether President Obama has gotten the message from voters this week about the substance of his agenda. In an interview with CBS's "60 Minutes," he was asked about the feeling even among his supporters that he's lost his ability to lead.

OBAMA: We were so busy and so focused on getting a bunch of stuff done that we stopped paying attention to the fact that leadership isn't just legislation; that it's a matter of persuading people.

TODD (on camera): All right. He was prompted with a question of whether he sold his successes well enough and messaging, but he does say that it's a matter of persuasion, not necessarily hinting that it's a policy that might have gotten him in trouble here.

And yet, here's our poll, the exit poll that says 52 percent say it is his policies that are hurting the country. Is he tone deaf?

GLENN THRUSH, WHITE HOUSE CORRESPONDENT, POLITICO: I think in this instance, yes. I mean, people aren't angry, necessarily, about the way that he's been selling his message. They're angry that, for a year and a half, he spent his -- a lot of his political capital pursuing this health-care reform instead of focusing exclusively on the economy.

TODD (voice-over): Glenn Thrush, White House correspondent for Politico, does say the health-care overhaul is too sweeping for the president to turn around on it now. And it's not like he can go back on the stimulus plan.

But analysts say the president and his aides have to realize voters have sent a clear message about policies, not persuasion. In front of the White House, I asked a former Bush spokesman how tough it is to get that perspective.

(on camera) Is it just too easy to get insulated in that building from what people are really thinking about your policies?

TAYLOR GRIFFIN, FORMER WHITE HOUSE SPOKESMAN: When you're the president of the United States, you're the most powerful person on the planet Earth. When people meet you, they're in awe. The presidency is designed to be that way. And so the president, you have to make extra effort to be able to seek out people who disagree with you.

TODD: Analysts say the midterm results have presented that opportunity...

(END VIDEOTAPE)

TODD: Analysts say the midterm results did present that opportunity for the president, and to his credit, he's acknowledged that in his news conference this week, saying no one party will be able to dictate where we go from here. And that he's told John Boehner and Mitch McConnell he is eager to meet with them, Wolf.

BLITZER: I know you're getting, not surprisingly, some pushback from White House officials that the president is tone deaf.

TODD: Just a little pushback. Bill Burton, the -- one of the press secretaries there, told me that the president made some of these policy decisions knowing that they weren't going to be politically popular, but he did them anyway. He had to stand up the economy, and he did that knowing it was going to get some tough feedback. And they reiterated again they look forward to working with Republicans. That seems to be a message that they're not tone deaf on this week. They know they've got to work with Boehner and McConnell.

BLITZER: Glad you're talking to Bill Burton, my fellow Buffalonian.

TODD: There you go.

BLITZER: Good guy from Buffalo. Thanks very much for that.

A bizarre in-flight transformation from this -- look at this -- to this. These two men are actually the same person. Now at the center of what authorities are calling an unbelievable case. We have exclusive details.

(COMMERCIAL BREAK)

BLITZER: Now a CNN exclusive, passengers on an international flight were dumbstruck when an elderly white man suddenly transformed into a young Asian male. But that's just the beginning of this bizarre case of disguised identity. Amber Lyon of CNN's special investigations unit is joining us now from the CNN center.

How did this man, Amber, change his appearance and why?

AMBER LYON, CNN CORRESPONDENT: Well, Wolf, he actually took off a mask that he was wearing. Now imagine that you're sitting on a plane and this guy is next to you on the plane, OK, Wolf? He's an elderly-looking man.

So then he gets up. He heads to the bathroom, and then he comes back as this guy, a much younger man. You probably would be thinking, you know, rubbing your eyes thinking you didn't get enough sleep last night or that this guy might do something crazy.

Well, this actually happened last Friday on an Air Canada flight from Hong Kong to Vancouver. CNN investigative producer Scott Amos (ph) obtained a confidential intelligence alert from a person who had access to this sensitive information here.

Now, the internal report issued by the Canada Border Services Agency calls this incident, quote, "an unbelievable case of concealment. The passenger in question was observed at the beginning of the flight as an elderly Caucasian male who appeared to have young- looking hands. During the flight, the subject attended the washroom and emerged as an Asian male that appeared to be in his early 20s."

The alert says the man boarded this plane using a pass from a U.S. citizen. No identities here have been revealed as to who that was.

Now Canadian law enforcement officers escorted this man off the plane in Vancouver, according to this alert, as well. And the document states that the man's luggage also contained a disguise kit, a silicone head and mask, a brown leather cap, glasses, and a thin, brown cardigan sweater.

The man tried on this disguise for authorities and did admit, Wolf, that he got on the plane with the mask and took it off during the flight, and then left as his usual self, which was -- which was a much younger man, Wolf. BLITZER: Really an amazing story, Amber. What was his motive?

LYON: Well, that's something we're trying to figure out as well here. But authorities just are keeping their lips sealed here. They're not saying anything. But the Canadian Border Services Agency does tell us that this man tried to enter Canada under, quote, "false pretense."

He's now in custody as we speak. He's awaiting an immigration hearing. Also, an Air Canada spokesman tells us the man had to undergo multiple identity checks before he left Hong Kong International Airport. Big question tonight here, Wolf, is did he make it through security with this -- this disguise on or did he put it on right before boarding the plane? And we're continuing to dig on this story to try to find out.

BLITZER: You'll stay in touch with us and update us when you get more, right?

LYON: Yes, we will. Definitely.

BLITZER: All right, Amber. Thanks very much. What a story, an amazing story, indeed.

As the U.S. financial system teetered on financial disaster, what was going through his mind? We're talking about the former president, George W. Bush, writing candidly now in his memoir. We're going to tell you. We've obtained a copy of the book. We're going to tell you what he said.

(COMMERCIAL BREAK)

BLITZER: Former President George W. Bush says he was caught off- guard by the financial crisis that erupted at the end of his presidency. CNN has now obtained his memoir, entitled "Decision Points."

He writes this in the book: "Economic growth reports were positive. Unemployment was 4.9 percent. Exports had reached record highs, and inflation was under control. I was hopeful we could dodge a recession. I was wrong. The foundation was weakening, and the house of cards was about to come tumbling down."

He goes on to write this. He says, "I was surprised by the sudden crisis. My focus had been kitchen-table economic issues like jobs and inflation. I assumed any major credit troubles would have been flagged by the regulators and ratings agencies." He obviously assumed wrong.

Nancy Pelosi, she's vowing to run for minority leader of the House of Representatives, even though some Democrats want her to resign, to step aside. That's coming up at the top of the hour.

And the Space Shuttle Discovery should be in orbit by now, but it's not. Why is it still on the launch pad?

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BLITZER: The crew certainly has the right stuff, but the final voyage of the Space Shuttle Discovery has been postponed for the fourth time this week. CNN's John Zarrella is following the developments for us.

John, this is like a roller coaster for these astronauts.

JOHN ZARRELLA, CNN CORRESPONDENT: Well, it sure is, Wolf. Another leak, this time a hydrogen leak forcing NASA to postpone the launch until around the 30th at the earliest, the 30th of November. And you know, this will be the last flight of the Shuttle Discovery.

But it wasn't that long ago, just a few months ago, when this was supposed -- supposed to be the last shuttle flight, period. I interviewed the crew back when they thought no one else would ever fly a shuttle again.

(BEGIN VIDEOTAPE)

ZARRELLA (voice-over): This was supposed to be history: the perfect photo-op, John Young and Bob Crippen, commander and pilot of the first space shuttle flight, posing for pictures 30 years later with the last crew of the last shuttle.

UNIDENTIFIED MALE: Ready, one two.

ZARRELLA: Not that every shuttle crew isn't hand picked or special, but this crew, these six have been singled out for the upcoming Discovery flight. Alvin Drew was in Russia when he got the word his boss in Houston wanted to talk.

ALVIN DREW, NASA ASTRONAUT: Went over the long list, long and sundry list of things I could be in trouble for, and I was not going to admit to.

ZARRELLA: Nicole Stot and Michael Barratt were 250 miles up on the space station when they were asked. Tim Kopra was just back from a station mission. Pilot Eric Bow had just landed a T-38 training aircraft.

Commander Steve Lindsay told NASA senior management he was happy where he was.

STEVE LINDSAY, COMMANDER: We had a lot of conversations about it, and they convinced me that, you know, this was what they wanted me to do, and this was the right thing to do. And so eventually I -- you know, I said OK, I would.

ZARRELLA: Lindsay was head of the astronaut office at the time. He had to give up his day job to fly Discovery. All this was months ago. Stot, knowing how things change, downplayed their role.

NICOLE STOT, ASTRONAUT: I don't think there's -- I don't think there's any of us that are latched onto the fact that we got assigned to this because it's -- because it's the final shuttle flight. ZARRELLA: Certainly prophetic words. A funny thing happened on the way to the launch pad: a major payload glitch on the Endeavor flight pushed that mission all the way to next February. And now NASA may add another flight after that.

I caught up with Lindsay recently. Disappointed?

LINDSAY: This flight is not about us. It's not about me. It's about this program. It's about the people. You know, we're flying on the shoulders of thousands of people over the years.

ZARRELLA: That will be the singular message from the remaining crews. They may have the spotlight but shouldn't be the focus.

DREW: The things this program has done are worth celebrating.

ZARRELLA: Lindsay's crew will have the distinction of flying Discovery for its last time in space, bringing the shuttle program one flight closer to wheels stop for the last time.

(END VIDEOTAPE)

ZARRELLA: You know, Wolf, and Discovery, when it does come home, it's headed your way. Supposed to be retired to the Smithsonian -- Wolf.

BLITZER: Wow. All right. Thanks very much. John Zarrella, our man covering these. And we wish these astronauts only -- only the best. And I think it's fair to say they certainly have the right stuff.

I'll see you back here tomorrow, 6 p.m. Eastern, THE SITUATION ROOM, over the weekend. Until then, thanks very much for watching. I'm Wolf Blitzer in THE SITUATION ROOM.

"JOHN KING USA" starts right now.