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U.S. Congressman in Syria; President Obama vs. Sarah Palin in Iowa; Notorious Mobster Appears in Court; Attack Underway at Afghan Hotel; Riots Erupt in Financial Crisis

Aired June 28, 2011 - 17:00   ET


WOLF BLITZER, HOST: Brooke, thanks very much.

Happening now, the big question we're following -- a suicide bomb attack in Afghanistan at a luxury hotel. The Taliban opening fire against Afghan security forces, that it will have to fill the void when U.S. troops leave. Stand by for new details just coming in on the shootout. It's still going on.

Plus, massive protests against tax hikes and budget cuts exploding in violence. The Greek capital of Athens under a cloud of tear gas and public anger before a vote aimed at preventing a financial meltdown. The danger to the United States economy very real right now, based on what's happening in Greece.

And the 2012 campaign heating up in Iowa, with visits by President Obama and Sarah Palin.

Are either of them being honest about the politics behind their trip?

I'm Wolf Blitzer.


ANNOUNCER: This is CNN breaking news.

BLITZER: All right, let's get right to the breaking news right now -- the attack on a luxury hotel right in the heart of Afghanistan, in the capital of Kabul. It's a chilling reminder of the dangers as U.S. troops prepare to start drawing down.

That hotel was scheduled to hose a new -- host a news conference tomorrow on the military transition.

On the phone right now for us, a Western journalist on the scene in Afghanistan. We're not saying her name for safety considerations.

Tell us what You can from your vantage point. Tell our viewers the latest information, please.

UNIDENTIFIED FEMALE: Right. Right now, I'm seeing a number of ISAF or NATO SUVs enter the grounds of the hotel. It looks like there are about half a dozen.

About 15 minutes ago, a number of Afghan National Army armored personnel carriers arrived on the scene. And the Afghan soldiers stormed the compound.

Now I'm at the base of the hotel, at the -- there's a small hill from the entrance of the hotel that goes down to the road. That's where I am.

So I can't actually see what type of battle is happening. I can hear small arms fire. I can see the tracers from the RPGs. But right now, things seem to be a little bit more calm. I haven't heard gunfire in about 10 to 15 minutes.

BLITZER: Are there U.S. military personnel, specifically, that have arrived at the scene to back up the Afghan security forces?

I know you say there are ISAF, international security forces, there.

Do you know if they're from other countries outside of the United States and NATO or from the United States?

UNIDENTIFIED FEMALE: Right. At the moment, I'm not entirely sure. About an hour to an hour-and-a-half ago, there were three U.S. soldiers that I did see distinctly who entered the compound to assist.

I'm not sure what role they were playing. The ISAF SUVs that I just saw enter, I was unable to tell from which country the troops were.

BLITZER: How long ago did this attack -- this suicide attack by these Taliban fighters, how long ago did it actually start?

UNIDENTIFIED FEMALE: From what I understand, it started between 9:30 and 10:00 at night, which is, in fact, extremely rare for the Taliban, how normally attack during the daylight hours or right before dawn. So this is one of the first times that I know of that they've staged a nighttime attack, particularly in the capital.

BLITZER: So this is, what, about three or four hours later into this -- into this standoff?

It still continues unresolved, is that what I'm hearing?

UNIDENTIFIED FEMALE: Yes, definitely. The last gunshots I heard were about 10 minutes ago. So that would -- that would signify retail, yes, it's been going on for three or four hours now.

BLITZER: All right. Hold on a moment, because our own Reza Sayah is joining us now.

He's in Islamabad.

You're getting some additional information -- Reza, what are you learning?

REZA SAYAH, CNN CORRESPONDENT: Well, all indications are that this was a commando-style attack on the Intercontinental Hotel in Kabul, Wolf. This is the type of attack that we've seen a lot of recently, not just in Afghanistan, but in this entire region. We saw it in Mumbai in 2008 here and 2009, militants attacking the army headquarters. It's the style of attack, where instead of a suicide attack, it's deadly but brief. You have very well-trained militants engaging in security forces. It's a type of attack designed to last long, to attract a lot of attention and create fear and terror. And it's a type of attack that's designed to create the impression that militants are in control, they're in the position of power.

We have learned that the Taliban have, indeed, claimed responsibility for this attack in Kabul. The Taliban spokesperson, Zabiullah Mujahid, saying several suicide attackers launched this attack about 10:00 p.m. Kabul time. That's roughly four hours ago. It's not clear how many suicide attackers were involved in this attack.

We should note that today and tomorrow, scheduled in Kabul, a set of meetings between U.S. officials, Afghan officials, Pakistani officials, with the subject a transition of power from international security forces to Afghan security forces in Kabul. We understand Pakistani Foreign Secretary Salman Bashir also there. We understand U.S. special envoy to Pakistan and Afghanistan, Marc Grossman, and a Taliban spokesperson telling CNN that, indeed, the Taliban was aware that these meetings were taking place, Wolf.

So, clearly, a well planned, well-coordinated attack by the Taliban, sending a message to the West, to Afghan officials, U.S. officials, that, indeed, they are in control and still capable of launching attacks targeting very sensitive locations in Kabul.

BLITZER: All right. Just to clarify, Marc Grossman, the special U.S. envoy, he took over for the late Richard Holbrooke when he passed away.

Are you saying that Ambassador Grossman is now in Islamabad or Kabul or on the way to Kabul?

SAYAH: We understand that Marc Grossman is in Kabul and he's part of these talks about the transition of power from international forces to Afghan forces that's going to start in July with a drawdown of U.S. troops and is going to take place within the next two-and-a-half years. The talks started today between Afghan, U.S. and Pakistani officials. They were scheduled to resume tomorrow.

It's not clear -- we haven't verified where they were taking place tomorrow. But a series of talks did take place in Kabul today.

BLITZER: All right. I'm going to have you stand by. We'll check and see how he's doing. Ambassador Grossman, Marc Grossman, in Kabul right now for these talks.

I want to bring in CNN's Tom Foreman.

He's at the data wall for us -- set the scene for us, where this hotel is, Tom, and what's going on.


Let's take a look at this, Wolf. If we fly into this hotel here in Afghanistan, you'll get a sense of the lay of the land here. You can see a big part of Kabul all spread out here, the main government centers up in here.

The hotel is up in this area, sort of set apart from most things -- a lot of open turf around it in general.

What do we know about this hotel?

We know that it is a three star hotel, 200 rooms. So a lot of people there at 10:00 at night. You can imagine how many people in a -- in a somewhat troubled area like Kabul would be hunkered down in their rooms for the night, calling it a night in the dark.

It opened in 1969. It was the nation's first international luxury hotel. It's worth noting that even though it has the name Intercontinental, it's no longer connected by business to the Intercontinental chain that so many of us might visit in other places.

We can't tell a whole lot right now about the actual attack. But you can see it sort of on a raised knoll here. We can also talk about who's nearby, even though not allowed close.

This is Kabul University, not terribly far away from there.

The big question, of course, Wolf, will be is where the attack came from, how many people were involved, and, again, who was in the hotel at the time.

We do know this, though. If they're trying to get in to deal with the folks who are there, these are the main roads that come around it. Not a whole lot of access from those. You either have to come overland with an assault or from down here on this road. And just as importantly, this is how far it is from the government center, which is about two miles away, Wolf.

So many different security issues and questions. Probably the best news is that it's a bit removed from other areas. The worst news being it's a big hotel with a lot of people in it that time of night -- Wolf.

BLITZER: Tom, thanks very much.

I want to bring in our own senior international correspondent, Nic Roberts.

And he's in Yemen right now -- but I know, Nic, you've been to the Intercontinental Hotel in Kabul on several occasions. Usually these hotels are well protected, with barricades, security.

But tell us your experiences at the Intercontinental in Kabul.

NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Security has been tight there for several years, Wolf. There's, indeed, a road that rises up from the main highway that passes close to the hotel. It is on a ridge overlooking the city on one side and the back of this, the other side. That 100 meter road has a checkpoint (INAUDIBLE). There's another much tougher checkpoint toward the top of that road, that 100 meter stretch of road. When you get to the top there, then you enter a ball port (ph) area of the hotel. It's a small sort of circle round -- round a little fountain. And cars pull up in the front of the hotel and there's another security checkpoint to get into it through in the front -- into the front of the has the latest.

But we don't know (INAUDIBLE) that that the Taliban went in. If they were able to get in with suicide bombers through security checkpoints, that would be very surprising.

It is -- because the ground close to the hotel is quite open, it is possible to come up the (INAUDIBLE) close to the has the latest and even in through the service entrance, which is below the hotel, below the ground floor level at the back. Five levels to his hotel. The ground floor, a long hall, the reception, the restaurants off of there, a book shop area before they sit down in the entrance hall and then the five floors above there, a long hall with rooms on either side.

According to the Taliban spokesman, the gunmen there going for -- looking for Westerners. This is a tactic we have seen the Taliban use. Last year, attacking in Kunduz, in the north of the country, a -- a being -- that was being used by an aid organization (INAUDIBLE) again suicide bombers that breached the walls and go in with gunmen, in 2009, attacking a U.N. guest house in Kabul. Five were killed.

The same tactics in 2008, attacking the Serena Hotel, the biggest and most luxurious hotel in Kabul. Again, the same tactics, using suicide bombers to (INAUDIBLE) into the hotel through the tough perimeter security and then sending gunmen inside, again, killing Westerners, because they were targeting them. They found them there in the gymnasium. And it appears that the -- that the same things that are being used in the Intercon. And perhaps most startling of all, this is the second largest coordinated suicide bombing by the Taliban in the capital in the past couple of weeks. And, of course, rings of security around the city as well, that are supposed to prevent this sort of (INAUDIBLE) -- Wolf.

BLITZER: Nic, thanks very much.

We're going to stand by.

We're going to check in with you, with Reza, with all of our correspondents. We're getting new images coming in from Kabul. We'll share that with our viewers. Let's not forget, only a few days ago, the president of the United States, President Obama, expressed hope that there could be what he described as reconciliation talks with all the different groups in Afghanistan, including the Taliban. He specifically said the Taliban. Today the Taliban claiming credit for this assault on this Intercontinental Hotel in Kabul.

We'll have much more on this story coming in.

It's the breaking news we're following. But I want to get right away to a volatile threat to the financial stability of the United States, indeed, of the world.

DIANA MAGNAY, CNN CORRESPONDENT: As you can see, there is quite a lot of fighting now going on between protesters. And we're being forced out of the way because it's really kicking up around that corner. A fire burning in the building.

BLITZER: That was CNN's Diana Magnay in Athens.

She's caught up in the chaos on the streets there. Thousands of riot police confronting thousands of protesters today. It's still going on, hours before the Greek parliament set to vote on tough tax hikes and spending cuts.

Greece is teetering on the brink of economic collapse and taking desperate measures to try to get a bailout.

If this domino falls, experts warn other Europeans could be sucked into the financial crisis and that could help plunge the United States into a second recession.

Let's go to Athens.

CNN's Richard Richard Quest is standing by live with more.

I take it the demonstrations, even as we speak, Richard, Republican and, are continuing. Republican

RICHARD QUEST, HOST, "QUEST MEANS BUSINESS": Oh, absolutely. The people on the streets, they're much fewer, but the hard core are now out here going full throttle. And every now and again, they will charge the police. And the police will return fire with stun grenades. If we're here long enough, we'll hear it. And then tear gas will waft across the square.

And that's been what it's like for the past couple of hours. It is ugly. It is nasty. I wouldn't say it's exceptionally violent by any statch -- stretch, but certainly the stench of tear gas now hangs over this particular part of Athens.

And what's interesting, Wolf, is that just go two or three blocks in either direction and suddenly it's back to normal life for most people.

BLITZER: It's ugly. And those street areas in Athens where you are right now, and it has been all day, Richard, explain to our viewers here in the United States if -- and it's still a huge if -- if the Greek economic situation were to completely collapse, I understand the enormous affect it would have on the economic -- on the rest of Europe.

But why would it, potentially, cause so much economic distress in the United States?

QUEST: Indirectly, that's how the cause would happen. It is classically, the ripple effects that would take place if Greece were to default, if there was a crisis, sudden contagion. That's the word to keep in your mind, contagion. It wouldn't be long before people will be questioning, the stability of Ireland, of Portugal, and then maybe Italy or Spain.

Now, once you get into those hundreds of billions of dollars, suddenly, the risk to the U.S. markets who has the debt, who has the credit default swaps, it's a ripple effect. On its own, this is a nasty small fight about a small European country. But if it gets any wider, then it drags in the Euro Zone. The Euro Zone is the largest in the world in terms of population. And before long, the U.S. is enmeshed as well.

WOLF BLITZER, CNN ANCHOR: All right, Richard, we'll stay on top of this together with you -- Richard Quest in Athens for us. Richard, be careful over there.

Syria meanwhile makes a new move to appear more open while it's criticized for its crackdown on anti-government protests. We're going to tell you what CNN and a member of the United States Congress are finding out on the ground in Damascus right now. We're going to Damascus.

And is President Obama trying to reclaim some of his Iowa mojo? We're looking at his visit and how Sarah Palin is stealing some -- some -- of his thunder.


BLITZER: A new denial today by the Syrian government that it's attacking peaceful protesters. A top adviser to the President Bashar al-Assad insisting to CNN that security forces only are targeting what she called armed groups.

Witnesses tell a different story of a brutal crackdown that's killed more than 1,100 civilians.

CNN is the only U.S. television network live inside Syria right now.

Our own Hala Gorani caught up, by the way, with a prominent American and a fact-finding mission there. That would be Democratic congressman, anti-war advocate, Dennis Kucinich of Ohio.


HALA GORANI, CNN CORRESPONDENT: Do you think there's a point at which he will reach that point of no return? I know you're open to the idea of discussions.

REP. DENNIS KUCINICH (D), OHIO: I really think that's up to the Syrian people. It's not up to the U.S., not up to France. It's up to the people here.

GORANI: I've seen -- I've read some criticism in the last 24 hours of your visit here from the U.S. press, in other words, saying you sort of legitimized this government. How do you respond to that criticism with this visit?

KUCINICH: I met with the opposition. I heard what they had to say. I met with the government. I heard what they had to say.

I think it's really important that people were involved in making policy hear from both sides.

GORANI: Were you able to meet with any of the demonstrators, any of the activists on the streets? Is that --

KUCINICH: I met with people who are actively involved in the opposition. People who have helped to organized the opposition. The comments that I made came from them.


BLITZER: And let's go live to CNN's Hala Gorani. She's in Damascus for us.

Hala, he met with President Bashar al-Assad, is that right?

GORANI: He did. They met for three hours yesterday. There was also a delegation of Syrians and Americans in Damascus who met with the president.

It was interesting, though, I ran into Dennis Kucinich yesterday when his visit here hadn't been publicized. So, you can imagine how surprising it was just to run into him and his wife Elizabeth. I asked for an interview and he said he would be available the next day. And then he held a press conference in the lobby of a Damascus hotel. And there, he described his meeting with President Assad. He talked about the violence in the country, that that was his biggest concern.

And what I found surprising as well is that he talked about the violence coming from security forces, potentially, that investigations need to be conducted to determine that. But also investigations need to look into the possibility of a third party. And that was surprising because it is pretty much a narrative of the Syrian government that potentially armed gangs are responsible for some of this violence.

But this is something that he said, an investigation would have to determine, Wolf.

BLITZER: Hold on for a moment, Hala. I want to bring into this conversation, Professor Fouad Ajami of the Johns Hopkins University School of Advanced International Studies here in Washington.

Fouad, I want you and Hala to assess what's going on. But what do you think of this new -- what I would call a charm offensive by the regime in Damascus, inviting Hala Gorani and inviting other journalists to come in, including Arwa Damon from CNN now having this long meeting with the congressman, Dennis Kucinich.

What do you make of this, Fouad? PROF. FOUAD AJAMI, JOHNS HOPKINS UNIVERSITY: Well, first of all, Dennis Kucinich shouldn't be there. And Dennis Kucinich, in my opinion, is a scandal. This is the Jesse Jackson. Remember Jesse Jackson used to go on these missions. I think this is not very helpful.

Kucinich doesn't know anything about the situation in Syria. He's being used by the Syrian regime and used in a very cynical way. I think for the Syrian regime, you have brother Maher, the ruler's brother, for repression, and then you have Bouthaina Shaaban, the professor of English literature for the P.R.

The P.R. offensive is on, and I think I'm worried to be honest with you, Wolf, because I think you're now beginning to hear from both Washington and Paris, such things as, well, this is helpful that Syria is opening up. It's helpful that Bashar has allowed 200 people to meet in a Damascus hotel.

So, I think we have to be on guard against this effort by the Syrian regime.

BLITZER: I want to bring Hala into this conversation.

Hala, I wonder if you have a question you want to ask Fouad.

GORANI: Yes. What I think is interesting, Fouad, is that this is a charm offensive. It's definitely an attempt to control the message. But you have here opponents of the regime who are willing, you have Louay Hussein, you have Michel Kilo, these are prominent opponents who spent years in jail. And they're saying they're at least willing to try to work within the framework of this authoritarian regime.

And my question is, do you think that they're being naive?

AJAMI: Well, I think that's a tough one. One wouldn't want to second-guess people like this, and you are on the scene. You have always been my guide to whether it's Egypt or whether it's Libya. So, I won't -- I mean, I think we have to be on guard against second- guessing people who have been involved in this uneven struggle, if you will, with the Syrian tyranny.

But there is a split, there's no doubt. A split between the internal opposition that's in Syria under the rule of this regime, and the external opposition which has called into question the wisdom of dealing with Bashar and the regime of Bashar al-Assad.

And I think this is the hope of Bashar, is to play for time and hope for the split between an internal position willing to bargain and external opposition that's somehow committed to the idea that this regime has to be brought down.

BLITZER: In fairness, Congressman Kucinich, Fouad, you know, he is a United States congressman. He's very active in the peace movement. If he feels he can go over there, have a meeting with the leader, the president of Syria, Bashar al-Assad, speak to him for a few hours, something the United States ambassador in Damascus obviously can't do, and maybe talk some sense into Bashar al-Assad, wouldn't that be helpful?

AJAMI: Well, to be honest, Wolf, I don't think Dennis Kucinich can talk any sense into Bashar al-Assad. And I think Bashar al-Assad himself and the people around him will make use of Dennis Kucinich. They will not explain to the Syrian people or to the Syrian opposition that Dennis Kucinich is a marginal member of Congress, with all due respect.

Sometimes I tended to think that foreign policy is too serious to be left to members of Congress. It sounds anti-democratic in spirit. You can't send amateur congressmen coming in and looking around for a day or two for a few hours and then coming and pronouncing on very complicated matters.

BLITZER: Hala, did you -- when you spoke to Dennis Kucinich, did he say he was coming from Washington with a message from anyone in the U.S. government, from the Obama administration? Or was he -- did he say he was just there on his own?

GORANI: No, he said he was there on his own, with a small delegation that included his wife. I saw a few other people around him. He said he did not speak for the Obama administration. That this was essentially a fact-finding mission, that he hadn't written his report yet.

But what I found interesting is that he said he met with members of the opposition, but here in Syria, members of the opposition often times, those who haven't been vetted by the government or authorized to gather in the way that the opposition members that gathered in the Damascus hotel did, don't come forward. They still are very much afraid for their own safety. We are contacted for instance by opponents and activists who say they want to talk but they're too afraid.

So, in two days, there's really no way Dennis Kucinich would have been able to meet genuinely with every member of the opposition in Syria.

BLITZER: Well, the good news is Hala Gorani is there, Arwa Damon is there for us, excellent journalists, they will do some eyewitness reporting.

Fouad, as usual, thanks very much from coming in.

AJAMI: Thank you.

BLITZER: Unfortunately, the story is obviously not going away. We'll continue our coverage.

I want to get back, though, to the breaking news out of Afghanistan right now. Just ahead, the very latest on the deadly suicide bombings at the Intercontinental Hotel in Kabul.

Plus, political rivals, are they -- President Obama and Sarah Palin, they are both in Iowa on this same day. Is that just a coincidence? We're digging deeper.


ANNOUNCER: This is CNN breaking news.

BLITZER: We're getting some first images coming in from Kabul right now. Fighters -- Taliban fighters, I should say, armed with bombs and small arms attacked Kabul's Intercontinental Hotel where they fought Tuesday with Afghan security forces, as well as members of NATO forces in Afghanistan as well.

You see some of the first images coming in. Tracer fire from atop the roof of the Intercontinental Hotel in Kabul. Among the attacker, we're told, several suicide bombers, Taliban bombers were responsible for the 10:00 p.m. attack local time on the hotel, according to a Taliban spokeman. The hotel, as you can imagine, popular with international guests, including Americans who visit Kabul.

Initial reports indicate that multiple suicide bombers, mostly wearing explosive vests, carried out the attack. A U.S. military official told CNN there were no indications that U.S. military diplomatic personnel were at the hotel at the time.

We have just been told that the president of the United States, President Obama has been briefed -- he's in Iowa -- been briefed by his national security aide, who's traveling with the president. Much more on the breaking news coming up from Kabul, a very disturbing story we're following right now.

Other news though we're following right now, including some political news. You may have heard the saying that no politician goes to Iowa by accident. The White House insists President Obama went there today on an official visit, not a political one. But campaign watchers are having a field day, especially since Sarah Palin will be in Iowa tonight. New fuel for speculation she potentially could jump into the Republican presidential race.

I'm joined now by our brand new chief White House correspondent, Jessica Yellin.

Jessica, set the scene for us. The president is in Iowa, Sarah Palin is in Iowa. A lot of Republican candidates either have been, are, or are about to go to Iowa.

What's going on here?

JESSICA YELLIN, CNN CHIEF WHITE HOUSE CORRESPONDENT: Well, look, we're about to enter a very big campaign season. And is there really any such thing as a non-political visit when a politician goes to Iowa?

This is the first in the nation voting state of caucuses. And whenever a politician goes there, they are courting voters in one way or another.

This was the president's springboard to the nomination. When he upset expectations and won there, it gave him the energy to defeat then- Senator Hillary Clinton last time around. This is the first time he's been there this year, but the fifth time since his inauguration. He went and toured an Alcoa factory. This is a success story.

They had laid off factory workers before -- during the recession and have rehired them now. His campaign team and the White House say no, no, no, this was not about politics, this was about talking to workers. But, you know, you've got to assume a little bit differently. This was what the president said today.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I know you have been seeing a lot of politicians around lately. Something tells me that you may see a few more before February is over. But Iowa, you and I, we go a long way back. And those of you who are coming over from the Illinois side, we go even longer back.

So we've got some history together. And together, we're going to make some more history for years to come.


YELLIN: So, look, it's relevant here, because, Wolf, not only is this an important state in general, but this is a state the president has to win if he wants to win reelection. He won it not just in the nominating contest, but in the general last time around.

It's expected to be a battleground state. They have an unusually low unemployment rate right now, just 6 percent, lower than the rest of the nation. So that could give him a leg up, but he's got to really court those voters.

BLITZER: He made the point -- this is in Bettendorf. He was on the border between Iowa and Illinois. He carried Iowa four years ago in the 2008 general election by a nice little margin, but he needs to carry Iowa once again. So this time, he could spill over into the Illinois market as well since he's right on the border.

Sarah Palin, she's in Iowa tonight.

YELLIN: Coincidence.

BLITZER: Yes. What's going on from her vantage point?

YELLIN: Well, you know, she isn't saying if she's running for president or not, but her daughter Bristol has said that her mother made the decision, she just isn't telling. So it's a big cliffhanger. Everybody's waiting.

She's there for the premier of a documentary about Sarah Palin called "The Undefeated." It's going to be playing only in South Carolina and New Hampshire and Iowa.

BLITZER: And tonight in Iowa. YELLIN: In Iowa, just by coincidence -- early voting states. A new "Des Moines Register" poll has Sarah Palin's favorability at 58 percent. That's a great number for her, but her unfavorable rating is at 37 percent, pretty high.

So, you know, it cuts both ways for Sarah Palin. If she gets in, obviously tons of media attention will go her way, but her negatives are something she would really have to fight to keep down.

BLITZER: Want to congratulate you. Today is a big day.

YELLIN: Thank you.

BLITZER: You were named our chief White House correspondent. Congratulations.

I try to take a little personal credit, because the high point of your journalistic career, 2008, November, when the president of the United States -- you were in Chicago, I was in New York at the CNN election. I believe you were beamed in.

YELLIN: Oh, you've got it. We were there together.

BLITZER: There it is. You were the first journalist ever beamed in by a hologram into our headquarters. There you were. You were in Chicago. Very cool.

YELLIN: I look forward to doing this job for you, Wolf.

BLITZER: All downhill ever since then.


YELLIN: No, we're going to do a lot of exciting things together in the times to come.

BLITZER: We're looking forward to having you as our chief White House correspondent. Congratulations and good luck.

YELLIN: Thank you.

BLITZER: Stand by for more on the breaking news. We're following the suicide attack under way at a hotel in Afghanistan.

Plus, Iran is launching a new reason to worry about its nuclear ambitions. We'll tell you what we know.

And a close call aboard the International Space Station.

Lots of news happening today, right here, in THE SITUATION ROOM.


BLITZER: The government has just issued an update on possible terror attacks just ahead of the upcoming summer holiday season.

Lisa Sylvester is monitoring that and some of the other top stories here in THE SITUATION ROOM.

What's going on, Lisa?

SYLVESTER: Hi there, Wolf.

Well, the FBI and the Department of Homeland Security are urging local law enforcement to remain vigilant, but say there is no specific evidence an attack is being planned. The intelligence bulletin notes as recently as last year, al Qaeda was interested in striking U.S. targets on symbolic dates like July 4th. It also warns the death of Osama bin Laden could prompt lone assailants to attack at those time.

And a near miss for crew members on the International Space Station who were forced to climb into Soyuz capsules to avoid mysterious debris tumbling towards the spacecraft. NASA issued the shelter in place order when the unknown object was spotted, then sounded an all- clear about 40 minutes later. The nature of the debris is still being investigated -- Wolf.

BLITZER: That can be pretty scary up there.

SYLVESTER: Yes, especially given some of the size of that space junk out there.


SYLVESTER: But they're fine now.

BLITZER: Hate that space junk. Thanks, Lisa.

Many members of Congress insist they want to cut costs, big time. So why are some of them spending taxpayer money, your money, to lease some pretty posh vehicles?

We're investigating.

And new surprises in the case against accused mob boss and former fugitive James "Whitey" Bulger. We'll update you.


BLITZER: The notorious mobster James "Whitey" Bulger was back in court today. There were some surprises.

Let's go to Boston. CNN's Deborah Feyerick is working the story for us.

What happened, Deb?

DEBORAH FEYERICK, CNN CORRESPONDENT: Well, Wolf, Whitey Bulger was a lot more subdued in court today. There were no wisecracks about wanting his $800,000 back. That's money that was seized when the FBI raided his apartment.

Two things happened today. One of them, prosecutors moved to drop the original indictment. That's the one that Whitey Bulger was tipped of to, the one that caused him to flee from Boston. Instead, they want to try him on later, more serious charges. Those charges including murder.

White Bulger's temporary attorney accused prosecutors of forum shopping. That is, trying to get a more favorable judge to hear this case.

Also today, Bulger's lawyer asked the judge to tell prosecutors to stop leaks by federal law enforcement agents, saying that Bulger would be hard pressed to get a fair trial, that prosecutors are going to answer that. Some of the information that appeared before it showed up in court papers include information that Whitey Bulger was traveling to Las Vegas, where he was gambling, and also that he went to Tijuana, Mexico, via San Diego in order to pick up medication.

As for a lawyer, well, still don't know about that. A decision has to be made as to whether he'll get a court-appointed lawyer or whether he will have to foot the bill himself. Right now, two prominent Boston lawyers were in the courtroom, but they didn't say what their intentions are -- Wolf.

BLITZER: I know you're working on a special documentary that will air in July here on CNN, but you had a chance to speak, I take it, with the FBI agent who first put Whitey Bulger on the FBI's most wanted list?

FEYERICK: That's right. And what's so interesting is, this was a special agent in charge of the Boston office. He came in after Bulger had already disappeared. He was the one who was trying to clean up the office, especially because there were so many charge of corruption.

When I asked him what he thinks is going to happen, he thinks that perhaps Whitey Bulger could plead. He says that the reason he thinks this is because maybe Bulger's one soft spot is his family, his brother. He may not want to drag the Bulger name through the mud any more than it's already been dragged.

Also, Whitey Bulger, don't forget, Wolf, could have information that could certainly shed even more light on the FBI and how involved they were with the Irish Mafia back in 1970, 1980, 1990 -- Wolf.

BLITZER: Deb, thanks very much.

Deb Feyerick, reporting for us from Boston.

Riding on the taxpayers' dime. Just ahead, why some members of Congress are driving some high-priced luxury cars at your expense.

Plus, a Nebraska nuclear plant in crisis mode. We're going to take you inside the desperate efforts to keep rising floodwaters away.


BLITZER: Let's get right to our "Strategy Session."

Joining us, our CNN political contributor, the Democratic strategist, Hilary Rosen. Also joining us, Republican strategist John Feehery. He's president of Quinn Gillespie Communications.

Guys, thanks very much for coming in.

Michele Bachmann was on CNN's "AMERICAN MORNING" this morning, and she was asked about some of the misstatements, false statements she's made over the past several weeks and months.

I want you to listen to her response.


REP. MICHELE BACHMANN (R), PRESIDENTIAL CANDIDATE: You know, I think that people just need to know what a person's background is. And I'm introducing myself now to the American people so that they can know that I have a strong academic, scholarly background.


BLITZER: She's been highlighting that background over the course of the last several days, obviously, given the fact that she's announced she's running for the Republican nomination.

Hilary, she is doing remarkably well. She's right up there in Iowa with Mitt Romney. She surpassed a lot of these other candidates. She's resonating with a lot of people.

You have to acknowledge that.

HILARY ROSEN, CNN POLITICAL CONTRIBUTOR: I do acknowledge it, and it makes perfect sense. Iowa's always been a state in the primary, for the Republican primary, where they're attacked to kind of the most conservative candidates. Michele Bachmann has proven her ability to kind of give the far right of the party the read meat.

You know, let's repeal health care, let's repeal the EPA, let's have no taxes. I mean, she gives them exactly what they want to hear.

The question is how far she goes past there. And, you know, it's odd that in the same conversation where she talks about her graduate degrees, she doesn't even seem to know when slavery was a abolished in the United States. She just makes mistake after mistake when she talks too much.

BLITZER: Well, in fairness, all politicians make stupid mistakes from time to time.

Don't they, John?

JOHN FEEHERY, REPUBLICAN STRATEGIST: They certainly do, Wolf. And I do think that she is a very serious candidate. If I'm Tim Pawlenty, I'm wondering where she came from, because she's really knocking him right out of the rankings. She does have a tax degree. She did go to William and Mary. So she's plenty smart, and she understands where the right wing is coming from. She speaks to them very loudly and they love it.

And all politicians do make mistakes. Barack Obama has made tons of mistakes in his -- he made a mistake last week. George W. Bush made all kinds of mistakes. So, there's all kind of gaffe-prone presidential candidates out there.

The big question is, can she be credible to enough voters where she goes beyond Iowa? And that's an open question.

BLITZER: Is she held to a different standard, Hilary, because she is a woman?

ROSEN: Well, I guess the answer is obviously yes. I don't think Chris Wallace would have asked a man if he was a flake. But what -- and I think that the fact that she is constantly compared to Sarah Palin, as opposed to other men in the race, clearly would demonstrate that.

But I think that the issue for her is she is has been such a high- flying rhetorical politician for so long, in part because she wasn't really in a position of power to actually execute. She was really just more trying to create a movement. And now I think going forward, it's not that she is not smart, it's not that she's not well-educated. It's does she have the discipline to rein in her rhetoric and mean what she says, know what she's talking about?

BLITZER: Well, I will point out she has got a great staff, including Ed Rollins, who was Ronald Reagan's political director, worked for Mike Huckabee four years ago, was part of our CNN political team.

ROSEN: Our former colleague at CNN. She has good taste in political people.

BLITZER: She's got a great pollster. And you can see since she brought in some of these highly-trained Republican strategists, she has been much more disciplined, much more focused.

John, I assume you will agree

FEEHERY: She has been. There's no question.

I would say though that she has got this long history of saying extraordinarily incendiary things. And the problem with running for president is you can't really run away from things you said in the past that became famous. And that's kind of how she became famous, is being the bombshell person, letting bombshells all over the place on cable news.

Really, to be president, I think you need to build a reputation as a workhorse and not just a show horse. And I think right now she's seen more of a show horse, and I think that's going to catch up to her.

BLITZER: Well, we'll see what happens. All right guys. We'll leave it there. Thanks very much, Hilary and John.

We're going to get back to the breaking news we are following in Afghanistan. Just ahead, the very latest on the deadly attack under way right now at the Intercontinental Hotel in Kabul. The president, President Obama, has been briefed on the situation. We're going to hear from an eyewitness who's on the scene.

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


BLITZER: Just a note, a programming note. Tomorrow and Thursday, I will be in Chicago. Tomorrow, I'll be interview at City Hall in Chicago the new mayor, Rahm Emanuel. Thursday, I'll be at the Clinton Global Initiative in Chicago to interview the former president, Bill Clinton. It's the first tie the CGI, the Clinton Global Initiative, will be dealing with domestic economic issues here in the United States.

Tomorrow, Rahm Emanuel in Chicago. Thursday, Bill Clinton.

All of that coming in THE SITUATION ROOM. We'll be broadcasting from Chicago tomorrow and Thursday.

Meanwhile, a lot of sparring in Congress over ways to reduce the nation's debt. But are members willing to walk the walk and give up their posh cars? It turns out taxpayers, you and me, all of us, we're footing the bill for some lawmakers' wheels.

Let's bring back Lisa Sylvester. She's been investigating this story for us.

What's going on here, Lisa?

SYLVESTER: Wolf, well, each member of Congress is given an office allowance. Now, this is taxpayer money that allows them to purchase anything from computers to paper clips to bottled water for the office. But House lawmakers are also allowed to lease cars at taxpayer expense, and many of them take full advantage of this congressional perk.


SYLVESTER (voice-over): Lexus, Cadillac a Toyota Highlander. Who wouldn't want a nice vehicle to drive?

Dozens of lawmakers have leased vehicles paid for by you, the taxpayer, according to official House records. It's all perfectly legal.

House rules allow a member of Congress to lease a vehicle for official business. But there isn't any real limit on how much they can spend on a vehicle. So spend they do. Taxpayers for Common Sense has investigated the issue. STEVE ELLIS, TAXPAYERS FOR COMMON SENSE: We had one lawmaker who had a BMW. Another one had a Cadillac DeVille. We had one lawmaker who actually had a van that had been converted to run on vegetable oil it. So it really runs the gambit as far as what people were leasing.

SYLVESTER: Representative Eddie Bernice Johnson paid $17,522.63 at the very end of last year to lease a Lexus for her congressional term. Keep in mind this is a lease for two years. That's not even to buy the car.

We called her office looking for answers

(on camera): Was there any justification for having a $17,522 lease?

(voice-over): Her staff gave us a statement saying, "The lease of the vehicle in question was on the list of low greenhouse gas vehicles issued by the EPA and approved by the U.S. House of Representatives. Leasing a car made sense because it is more cost-effective than reimbursing expenses for private cars."

Jock Friedly with LegiStorm says there is no way leasing a high-end vehicle like a Lexus is cheaper than reimbursing for personal mileage.

JOCK FRIEDLY, LEGISTORM: It would really take 75,000 or maybe 100,000 miles to actually make the difference a year. And there's no way you can drive that much. So, unless she is driving across country all day long --

SYLVESTER: But it's not just Democrats. Republicans are also on the list of those riding on the taxpayers' dime. Representative Tom Price has repeatedly said spending is out of control, even penning this op- ed urging to stop the spending binge. Yet, Price spent $23,733.85 --

REP. TOM PRICE (R), GEORGIA: All you have to do is look at the picture.

SYLVESTER: -- to lease a Toyota Highlander hybrid for two years at taxpayer expense on the last day of his last year from his congressional spending account. Any money left in the congressional allowance reverts back to the treasury.

FRIEDLY: Yes, it's use it or lose it. So, if he doesn't spend that money, it's going to disappear on the 3rd of January.

SYLVESTER: Our CNN producer went to Price's district office in Marietta, Georgia, but his office had no comment.

With the talk of cutting the debt, watchdog groups say it's time to look again at lawmakers and their leases.

ELLIS: I think it's something that needs to be looked into as we look at all kind of congressional perks. And as their constituents around the country are having to tight their belts, lawmakers are going to have to look at that as well.

(END VIDEOTAPE) SYLVESTER: This is a perk for House members. The Senate doesn't have anything like this, according to tax watchdog groups. It used to be this information was only kept in paper form in Washington, DC. But it is now available online for anyone to read, although the electronic records are not as detailed as the paper documents used to be.


BLITZER: Good report. Thanks very much, Lisa.