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THE SITUATION ROOM
Partisan Political Moves; A Plan B Without Spending Cuts?; Twists & Turns of Debt Ceiling Battle Continue; Lawmakers Summon Murdoch Over Scandal; Interview With Arab American Institute President James Zogby; Could President Obama Be Breaking the Law Amidst Efforts to Win Reelection?; 'Strategy Session'
Aired July 12, 2011 - 17:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
WOLF BLITZER, HOST: Thanks very much, Brooke.
Happening now: Your Social Security checks are at risk, as officials here in Washington try once again to strike a deal to raise the nation's debt limit. This hour, the latest on the talks and President Obama's very ominous warning.
Plus, the Afghan president's powerful half brother, shot dead, in his own home. Many people are now asking how can Afghan security forces protect the country if they can't protect him.
Media mogul Rupert Murdoch is summoned to face lawmakers who are enraged right now by the phone hacking scandal tainting his empire British authorities now are investigating whether hackers had help from police.
I'm Wolf Blitzer. You're in THE SITUATION ROOM.
High stakes bargaining over America's debt under way right now behind closed doors over at the White House. President Obama went into the fourth round of talks in recent days, upping the ante. He's suggesting that failure to reach a deal by the August 2 deadline could immediately cost many Americans who rely on a government check to get by.
Let's go to our White House Correspondent Brianna Keilar, she is working the story for us.
They're meeting inside the West Wing as we speak, Brianna. What's the latest?
BRIANNA KEILAR, CNN WHITE HOUSE CORRESPONDENT: As we speak, Wolf, this is really the first time we've heard the president specifically illustrate consequences that will make many Americans ears perk up. This as this meeting continues.
We should tell you, no cameras allowed today for a photo opportunity as President Obama talks with the top eight Democrats and Republicans in the House and Senate is an impasse over tax increases continues.
(BEGIN VIDEOTAPE) KEILAR (voice-over): As an impasse over tax increases continues, President Obama illustrated a nightmare scenario where Social Security payments stop going out if the U.S. fails to raise the debt ceiling by August 2.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I cannot guarantee that those checks go out on August 3 if we haven't resolved this issue, because there may simply not be the money in the coffers to do it.
KEILAR: After the president's interview with CBS News, White House Press Secretary Jay Carney said the repercussions could be even more widespread.
JAY CARNEY, WHITE HOUSE PRESS SECRETARY: That would then entail a kind of Sophie's choice situation where you have to decide what bills you can pay. And the fact is that whether it's Social Security checks or veteran benefits, or disability benefits, it's pretty clear the affect will be significant.
KEILAR: Republicans call these comments scare tactics and are increasing their rhetoric against the White House. Senate Republican Leader Mitch McConnell delivered this sharp barb on the Senate floor, just hours before meeting with the president.
SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: After years of discussions and months of negotiations, I have little question that as long as this president is in the Oval Office, a real solution is probably unattainable.
KEILAR: The Speaker John Boehner pushed back on President Obama's calls for Republicans to make tough choices along with Democrats, insisting it's the White House that is failing to budge.
REP. JOHN BOEHNER (R-OH), HOUSE SPEAKER: House Republicans have a plan. We passed our budget back in the spring, outlined our priorities. This debt limit increase is his problem. And I think it's time for him to lead by putting his plan on the table. Something the Congress can pass.
KEILAR: Carney called the comments unfortunate, saying a failure to raise the debt ceiling is everyone's problem.
CARNEY: If we were to default on our obligations, who suffers? Democrats, Republicans, or Americans? Americans suffer. The American economy suffers. The global economy suffers.
KEILAR: Now, Wolf, this meeting continues inside the White House. We'll be waiting for the end of it so that we can find out some of the things discussed.
We do know from the Senate Republican Leader Mitch McConnell, he was going to present a fall back plan that would essentially change how the debt ceiling is raised, allowing the president to do so in the course of three increments, going into the next election; in a way that would practically allow the Congress to pass a debt ceiling increase without a majority of votes.
Response from Capitol Hill has been muted. The White House has not immediate panned nor supported it. But, Wolf, as you know the president said he would veto a short-term solution.
BLITZER: Do we know, Brianna, what kind of spending cuts the McConnell alternative plan might entail?
KEILAR: According to our reporting, it would not include any spending cut, Wolf, which is kind of the curious thing about this. And so Senate Republicans saying this is, really, when it comes down to it, they're trying to make the debt ceiling is increased. But as you can imagine without spending cuts, this is not something that would appease Tea Party voters for sure. And so its future in the House of Representatives is certainly questionable to say the least.
BLITZER: All right, Brianna, they started that meeting about an hour and 15 minutes, or so ago. We have our cameras and our microphones outside the West Wing of the White House. You can see the microphones right there. If any of them come, if any of the Republicans or the Democrats or White House officials come to the microphones to brief us on what happened in today's critical meeting, we'll, of course, have live coverage here in THE SITUATION ROOM. We're watching closely the doors over at the West Wing of the White House.
Meanwhile, there's a killing in Afghanistan that the top U.S. commander is now calling unfathomable. The half brother of President Hamid Karzai gunned down in his own home. Ahmed Wali Karzai was an influential figure inside Afghanistan and a very controversial one who had deep connections with the United States.
Let's bring in our Pentagon Correspondent Chris Lawrence. He has the very latest for us.
Lots at stake here as well, Chris. What do we know?
CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: Wolf, Afghans who have been complaining about corruption in the Afghan government probably will shed no tears at the death of Ahmed Wali Karzai.
But on the other hand, he really helped President Hamid Karzai exert some power down in the south, in Kandahar, where the president probably would not have been able to exert that power. So his loss weakens Karzai at a time as the negotiations with the Taliban move forward. And it also may have very big repercussions for the U.S. effort in the south.
LAWRENCE (voice-over): People called President Hamid Karzai's brother a corrupt gangster. But the CIA's former head of counterterrorism says the U.S. may miss him. ROBERT GRENIER, FMR. CIA COUNTERTERRORISM OFFICIAL: It's quite likely that what follows Ahmed Wali Karzai is going to be something that will not work to our interest.
LAWRENCE: An Afghan official says Ahmed Wali Karzai was gunned down in his own home, shot in the head and chest by his own guard. The Taliban took credit, but it's not clear if the shooter was really working for them.
JAY CARNEY, WHITE HOUSE PRESS SECRETARY: The United States condemns in the strongest possible terms the murder of president Karzai's half brother in Kandahar.
LAWRENCE: Ahmed Wali was a conduit between tribal leaders, drug dealers, the Americans, and even the Taliban. WikiLeaks released an American diplomatic cable in which a U.S. official said, quote, "While we must deal with Ahmed Wali Karzai, he's widely understood to be corrupt and a narcotics trafficker."
The State Department and U.S. military were trying to build trust in the Afghan government. They frequently criticized Ahmed Wali, but the CIA worked with him.
GRENIER: I think often parts of the U.S. government were working at cross purposes where Ahmed Wali was concerned.
LAWRENCE: But as the U.S. lowered its expectations for Afghanistan, that criticism subsided. And Bob Grenier says Karzai did the one thing at the end of the day is most important to the United States.
GRENIER: We can call him a warlord. He's our kind of warlord. He is somebody who in an area that he controls is not about to allow international terrorists, or even the Taliban to operate with impunity.
LAWRENCE: And a Defense official says it's too early to tell what the fallout is going to be in Kandahar where Ahmed Wali Karzai had power. But he acknowledged it could lead to an increase in violence as other players try to jockey to fill that power vacuum. That could affect U.S. troops as they start to draw down, and try to keep the peace there in Southern Afghanistan, Wolf.
BLITZER: Chris Lawrence with the latest on that. Thanks very much.
I want to show our viewers the live picture from Rancho Mirage, in California. You see the casket now arriving, the casket carrying the body of the late First Lady of the United States Betty Ford. She's being brought inside; the body now, for this memorial service. This funeral service where guests have convened, including the former President of the United States Bill Clinton, the Secretary of State Hillary Clinton, the First Lady of the United States Michelle Obama. Unfortunately, Bill Clinton was supposed to be there, but there's been a problem with his flight. So he hasn't made it. But the first lady is there and the former first lady, Hillary Clinton among other dignitaries who arrived in Rancho Mirage to see the casket being brought in. We're going to show you parts of this memorial service over the next two hours. So stand by for that.
Meanwhile, there's other news we're following including a war of words now heating up between Syria and the United States. After protesters attacked the American embassy in Damascus. The Secretary of State Hillary Clinton declaring yesterday that the Syrian President Bashir Al Assad has lost legitimacy.
Our own Arwa Damon has been reporting from inside Syria. She has been in Damascus. She is now back in Beirut.
Arwa, update our viewers. Because the Syrians, the regime over there is responding angrily to what the Secretary of State Hillary Clinton said.
ARWA DAMON, CNN INTERNATIONAL CORRESPONDENT: They most certainly are, Wolf. And we heard from a presidential adviser Bouthaina Shaaban who did sound fairly apologetic about the attack on the U.S. embassy. But she was incredibly harsh in her criticism, responding to Hillary Clinton's statement that the Syrian president lost legitimacy.
(BEGIN VIDEO CLIP)
BOUTHAINA SHAABAN, PRESIDENTIAL SPOKESWOMAN, SYRIA: I would like to say to the secretary of State, it's not herself who gives legitimacy to President Bashir Al Assad, it is the people of Syria. And I think they should give up this imperial attitude of saying who's legitimate and who's not legitimate. It is now the role of the people to decide who's legitimate in their country. And I think it's the obligation of the largest democracy in the world to support the peaceful transition to democracy in Syria.
(END VIDEO CLIP)
DAMON: She also said when it came to the blatant support of the United States for the opposition, again citing the ambassador's controversial trip to Huma last week, that was an indication the U.S. was intent on meddling in Syria's internal affairs, that the U.S. wanted to try to destabilize the Assad regime.
She said that by going to Huma, the ambassador, and the United States, and the West were making it clear that they were, by siding with those who were saying no to dialogue, were in effect saying yes to violence, Wolf.
BLITZER: Did she promise that the Syrian government, the Syrian security forces would live up to its international treaty obligations and protect the United States embassy in Damascus from these thugs?
DAMON: She clearly said that Syria understood what its international obligations were. She said the Syrian security forces responded immediately, that a number of individuals were arrested, that others were being held accountable. That this, of course, is being disputed by the U.S. that say that the Syrian forces were very slow in responding, with one official at the U.S. embassy telling us that he believed it was unquestionable that the Syrian government was behind this demonstration that then led to the assault on the embassy.
BLITZER: Arwa Damon in Beirut for us, Arwa, thank you.
Questions about a possible police cover-up and corruption in the phone hacking scandal that's exploding in Rupert Murdoch's media empire.
Plus, just days before Casey Anthony walks free, police defend their failed attempt to get her convicted of murdering her daughter. Stay with us. You're in THE SITUATION ROOM/
BLITZER: Let's go right to Jack Cafferty for "The Cafferty File" -- Jack.
JACK CAFFERTY, CNN CONTRIBUTOR: Wolf, as the fallout intensifies over the hacking scandal that brought down the British tabloid "News of the World," the CEO of the parent company, News Corp, that would be Rupert Murdoch and his son James and former "News of the World" editor Rebekah Brooks have all been asked to testify before parliament next week. It ought to be interesting.
As the scandal grows, chances are the Murdoch's troubles won't be contained to that side of the Atlantic. News Corp could face probes here in the United States for possibly violating bribery laws.
The U.S. watchdog group Citizens for Responsibility and Ethics in Washington is calling on Congress to look in to whether "News of the World" journalists engaged in illegal news gathering practices here in the United States as well. Earlier this week, the U.K. paper "The Daily Mirror" recorded claims by a New York City police officer that "News of the World" offered him money to get into voicemails and phone records of 9/11 victims and their families. That's pretty sick.
Where does it end? The Rupert Murdoch media empire under the News Corp umbrella goes far beyond tabloid newspapers in the United Kingdom. Here in the States, Murdoch owns FOX News, "The Wall Street Journal," and "The New York Post," among other things.
You have to wonder what other illegal or unethical practices journalists working for other Murdoch outlets might be engaging in.
On Sunday's "FOX News Watch" program over there on the F-word network, a show debuted each week to media criticism, the panel didn't discuss the British scandal on the air. Instead, they talked about things like the Casey Anthony trial and the ongoing sexual assault case against the former IMF head Dominique Strauss-Kahn.
However, on the FOX News website in its regular "behind the break" segment, which is essentially video the shot during the commercial breaks, the panel talks chats about, quote, "the subject we're not talking about today," unquote. And at one point, the hosts are jokingly daring each other to bring up the topic. Not surprisingly, nobody did.
Here's the question: in light of alleged crimes in England, should the U.S. government investigate Rupert Murdoch's companies in the United States? Go to CNN.com/CaffertyFile, post a comment on my blog.
Well, if we have a tip of the iceberg here or not, Wolf, but it might bear looking into.
BLITZER: Well, I checked today in "The New York Post." There was -- I didn't see any -- virtually no coverage of the phone hacking scandal in England. Although "The Wall Street Journal," they did lead the second section of their newspaper with extensive coverage of it, so, you know, "New York Post" not so much, "Wall Street Journal," considerably more.
CAFFERTY: I think "The Wall Street Journal" has a little more editorial freedom in the Murdoch empire than "The Post" does. "The Post" is, kind of, the U.S. answer to those British tabloids and very much follows the company line. But I think "The Journal" has a little more latitude.
BLITZER: All right. I'm interested to hear what our viewers think and we'll find out soon enough. Jack, thank you -- Jack Cafferty with the "Cafferty File."
British lawmakers aren't waiting to hear testimony from Rupert Murdoch. They're aggressively investigating the phone hacking scandal that's tainting his media empire. Today's focus, possible police corruption and cooperation.
Here's CNN's senior national correspondent Dan Rivers.
DAN RIVERS, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice-over): The multi-faceted phone-hacking scandal is suddenly focused on current and former police officers at London Scotland Yard. Called before politicians to answer accusations of systemic corruption incompetence and collusion with "News International," their answers were telling.
UNIDENTIFIED MALE: Let's be clear, there's corrupt people in the metropolitan police. We know that, as a matter of fact. There always will be.
RIVERS: So, who did take bribes?
Among those questioned, former senior police officer Andy Hayman, who now writes for "News International," ironic given that he led a criticized investigation against the company for phone hacking in 2006.
UNIDENTIFIED FEMALE: Mr. Hayman, while a police officer, did you ever receive payment from any news organization?
ANDY HAYMAN, ASSISTANT COMMISSIONER, MET POLICE: Good God. Absolutely not. I can't believe you suggested that.
UNIDENTIFIED MALE: Lots of people did.
HAYMAN: Come on. I'm not letting you go over there that. Absolutely no way. I can say to you --
UNIDENTIFIED MALE: Mr. Hayman --
HAYMAN: No, come on. Mr. Chairman, that's not fair.
RIVERS: The policewoman leading the current investigation into "News International" phone-hacking says the reputation of the entire metropolitan police force is now on the line.
SUE AKERS, DEPT. ASST. COMMISSIONER, MET POLICE: I think it's everybody's analysis that confluence has been damaged. And I don't -- and I don't doubt if we don't get this right, it will continue to be damaged.
RIVERS: It came on a day of more sensational developments, with former Prime Minister Gordon Brown, speaking of his shock at suggestions his family's intensely personal data was hacked.
GORDON BROWN, FORMER BRITISH PRIME MINISTER: "The Sunday Times" appears to have got access my Building Society account, they got access to my legal files. There's some question mark about what happened to some other documentations, file, tax, and everything else. But I'm shocked, I'm genuinely shocked to find this happened because of their links with criminals.
RIVERS: It is a stinging accusation for News Corporation's Rupert Murdoch and his chief executive, Rebekah Brooks. They insist they knew nothing of nefarious activities at "News International." Already, though, their government support is crumbling. Prime Minister David Cameron performing a spectacular U-turn, suddenly agreeing with the opposition that News Corp's controversial takeover of satellite broadcaster, BSkyB, should be blocked.
(on camera): And on top of that, Rupert Murdoch, together with his son James, and deputy Rebekah Brooks, have been all been called to appear before another powerful parliamentary committee. If they turn up, what they say could be sensational.
Dan Rivers, CNN, London.
BLITZER: Investigators in the Casey Anthony murder trial are now speaking out only days after her acquittal. Is there anything they could have done differently to change the outcome of the case?
Plus, Republican presidential candidate Ron Paul making a dramatic announcement about his own future in Congress. We'll have details, that's coming up.
BLITZER: Longtime congressman and Republican presidential candidate Ron Paul announcing he won't seek re-election next year in the House.
CNN's Deborah Feyerick is monitoring that and some of other top stories in THE SITUATION ROOM right now.
What's going on, Deb?
DEBORAH FEYERICK, CNN CORRESPONDENT: Well, Wolf, the Texas representative who's held his seat on Capitol Hill for almost 24 years says he now wants to focus his efforts on winning the presidency. He's adding that today's announcement will give candidates thinking of succeeding him more time to prepare. Paul is currently making his third bid for the White House.
And the detectives who built the case alleging Casey Anthony murdered her young daughter are defending their evidence, but urging the public to respect the jury's acquittal verdict.
(BEGIN VIDEO CLIP)
SGT. JOHN ALLEN, ORANGE COUNTY, FLORIDA, SHERIFF'S OFFICE: With regard to what we do differently, in every cases, especially in case with these many witnesses and this much evidence, you can always look back and improve on what you've done. I don't know that anybody up here could think of anything that we could have done differently that might have affected the outcome.
(END VIDEO CLIP)
FEYERICK: Anthony was convicted on four misdemeanor counts of lying to investigators and was given the maximum sentence of four years in prison. But due to credit for time served, she's scheduled to be released this Sunday.
And the embattled WikiLeaks chief Julian Assange is asking an appeals court to block a ruling that he'd be extradited to Sweden from Britain on sexual misconduct allegations. Assange is wanted there for questioning in a case unrelated to his Web site's controversial publication of top secret diplomatic documents, thousands of which came from the United States. He denies the sexual misconduct allegations -- Wolf.
BLITZER: All right, Deb, thank you.
We've got a brand-new and rather surprising poll that's just coming out. It shows that President Obama is less popular than President Bush in some parts of the Arab world. Stand by. We'll tell you what's going on.
And we have details on the controversy surrounding a counseling service run by Republican presidential candidate Michele Bachmann and her husband.
BLITZER: A volatile mix in the Arab world right now -- pro- democracy uprisings, long-time leaders toppled or in peril, wars in Iraq and Afghanistan winding down somewhat, and, of course, the death of Osama bin Laden. Against that backdrop, a rather surprising new poll of attitudes in the Arab world toward the United States. One headline, favorable ratings for President Obama and the United States have plunged even lower in some cases than they were at the end of the Bush administration in most of the Arab countries surveyed.
Joining us now is the president of the Arab American Institute, James Zogby. He's the author of "Arab Voices: What They Are Saying to Us and Why It Matters."
Jim, thanks very much for coming in.
JAMES ZOGBY, PRESIDENT, ARAB AMERICAN INSTITUTE: Thanks, Wolf. Thanks for doing this.
BLITZER: It's pretty shocking. I looked at this entire report, and it's very detailed. The favorability rating of the United States in much of the Arab world is lower now than it was -- under President Obama than it was during the Bush administration. Why?
ZOGBY: Right. And that's because it spiked so high after President Obama was elected. And after the Cairo speech, it went even higher, but the expectations have not able to be met, and therefore there has been this deflation and a sense of let-down disappointment across the region.
Actually, the only country where attitudes are a little bit better are in Saudi Arabia, which I think is interesting by itself. But in all the other countries, there were a sense of people were hopeful, but they've been let down.
BLITZER: Because you would think that the president, he has really gone out of his way. He went to Cairo, gave a speech to the Arab world, gave a speech to the Islamic world. In Turkey, as you remember. It's Barack Hussein Obama. He's tried to revitalized the Arab-Israeli peace process, and yet his favorability numbers have plummeted.
ZOGBY: But as the president himself noted in the speech in Cairo, a speech alone wouldn't do it.
Look, he did not get handed a magic wand when he got elected. He got handed the shovel that his predecessor had been using to dig a deep hole, and holes all over the region. And getting out of those holes has been very difficult. And Congress hasn't been helpful.
Look, he tried to lay down -- the president tried to lay down a marker with Netanyahu on the '67 borders. Congress invites him, Netanyahu, to appear --
BLITZER: So are people in the Arab world blaming him for all of that?
ZOGBY: They're not blaming the president. Actually, they're disappointed in America. They're let down in America. They feel that maybe no president can make a difference. That's another finding we get, is that maybe no president can make a difference.
BLITZER: But what about what the United States has done for Arabs?
ZOGBY: Tried to do.
BLITZER: Let's say in Libya, for example, trying to help --
ZOGBY: He gets -- the president gets high points in Saudi Arabia for Libya, but across the region, it is a minuscule issue of importance.
BLITZER: The U.S. led the effort to get a no-fly zone in Libya to protect those Libyans.
ZOGBY: But when you look at rank order priorities, Palestine is number one. And the president knows that. U.S. interference, Iraq is a huge one. And the president knows that. Getting out of Iraq is critical.
Libya was way down. It was single digits in terms of, how important is this issue to you? And so the fact is --
BLITZER: What about what the U.S. did in Egypt, for example, and getting rid of Mubarak?
ZOGBY: They don't see that the U.S. did anything. They see Tahrir Square as doing it. It was their revolution, they did it. But now what they need are jobs and economic opportunity, and they're not getting those.
And so the president was right in his speech at the State Department. We've got things to do. But things aren't being done.
We're not investing in the region. We're not helping to create jobs. We're not turning this Arab Spring into something that can blossom with new opportunities for people. And so there's a letdown.
BLITZER: I think one of the shocking things that I found in this report, and I'm sure you did -- maybe not as shocked as I -- Iran, which is a traditional adversary, a rival of the Arabs -- Iran being a Persian country, not an Arab country -- has a higher favorability rating in much of the Arab world than the United States of America.
ZOGBY: That is true, but Iran is viewed as a menace and a threat in several countries. And we're coming out with the second half of this poll in two weeks, and it is shocking, actually, how Iran is viewed as a threat in Iraq, in Lebanon, in the Palestinian issue, and in the Gulf region itself. They're viewed as meddling across the region and a problem. But the U.S. is still the big bully on the block in the eyes of many people. BLITZER: And the other thing that was shocking to me is the killing of Bin Laden hurt the U.S. image in the Arab world. It didn't help the U.S. image in the Arab world. Why is that?
ZOGBY: It's like if a neighbor has been messing around with your wife, and comes over and trims your bushes and takes your garbage out. It's not going to help the situation.
The big issue for the Arabs is not Bin Laden. The big issue for the Arabs is Palestine. And that issue we've not solved. In fact, we've enabled the Israelis to commit acts of bad behavior, and that is something that has taken a real toll on America's standing.
The president made some promises on Cairo of things he was going to try to do. They didn't get done and people feel let down.
BLITZER: People can go to your Web site at the Arab American Institute Foundation and see the whole poll. It's fascinating, these numbers. Thanks very much for coming in.
ZOGBY: Thanks, Wolf.
BLITZER: We'll talk to you in a few weeks when part two comes out.
ZOGBY: Thank you.
BLITZER: Jim Zogby, thank you.
A new Republican investigation may be in the works. At issue, is President Obama aggressively using the White House for political gain.
And we're learning more about an elaborate ruse used by the CIA when it was trying to move in for the killing of Osama bin Laden.
BLITZER: New questions on Capitol Hill over whether President Obama could be breaking the law amidst some efforts to try to win reelection next year.
Let's bring in our own Brian Todd. He's got the details of what's going on.
What is going on?
BRIAN TODD, CNN CORRESPONDENT: Well, Wolf, a very ambitious Republican congressman, head of a congressional watchdog committee, is going after the president over this, saying he may have broken federal laws. What Darrell Issa wants to know is, is this the selling of the Lincoln Bedroom all over again?
TODD (voice-over): A probe which could make the president long for these days of intense partisan talks over the debt ceiling. Darrell Issa, Republican chair of a key watchdog committee in Congress, says the administration may have broken laws on campaign fund-raising. And he's fired off a letter to President Obama's lawyer demanding documents.
REP. DARRELL ISSA (R), CALIFORNIA: We expect to get answers from the president. We expect him to be honest and forthcoming. We'd like to close this matter.
TODD: In his letter, Issa cites various media reports and says, "President Obama appears to be aggressively using the White House itself and federal employees within the executive office of the president to solicit donations."
In Issa's crosshairs, a meeting at the White House in March of top American business leaders. They were all campaign donors, and the meeting was organized by the Democratic National Committee. The White House has defended that.
JAY CARNEY, WHITE HOUSE PRESS SECRETARY: Having a DNC or RNC- sponsored event is extremely common for presidents of both parties going back many administrations.
TODD: But crucially important is what was discussed at the meeting. The White House says the only thing talked about was economic policy. If that's the case, experts tell us, the meeting would not have violated federal law. But if they discussed fund- raising, it would have.
Issa is not convinced the White House is being forthcoming.
ISSA: You're talking with your contributors. What are you talking about if not your reelection?
TODD (on camera): But the White House says fund-raising was not discussed at that meeting.
ISSA: Saying that you didn't talk about it begs the question. The Democratic National Committee did not need to be present and should not have been present if this was an official activity.
TODD (voice-over): Still, several lawyers, campaign finance experts, and analysts on both sides of the aisle say that on its face, that meeting did not violate the law, even if having the DNC involved didn't look great.
JOHN AVLON, CNN CONTRIBUTOR: If the president is inviting CEOs over to discuss the American economy, no, the invitation shouldn't have come from the DNC, but that's far from a serious offense.
TODD: But Congressman Issa is not stopping there. He's also demanding records on the production of this video.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: You can join me for dinner. We're setting another place at the table for Joe Biden.
(END VIDEO CLIP)
TODD: The president there appealing to donors to sign up for a contest. The prize, a dinner with him and Joe Biden. Issa says that because that video was shot inside the White House, it may have violated campaign fund-raising laws -- Wolf.
BLITZER: But it depends on where inside the White House that video was shot.
TODD: The Byzantine rules of campaign finance. The White House says this was filmed inside the White House private residence. Experts say, if that's the case, then no laws were broken. This is all stuff that Darrell Issa is going to be looking at in his investigation.
BLITZER: Yes. I remember covering the Clinton White House and other White Houses. These questions come up all the time when an incumbent president is seeking reelection.
TODD: Very nuanced material, right.
BLITZER: Yes. Well, that's what we like, nuance.
BLITZER: Thank you, Brian.
Republican presidential candidate Mitt Romney's jobs record under fire right now on the Republican campaign trail. Why one key challenger now says the facts speak for themselves.
Plus, much more on the shocking assassination of the Afghan president's half-brother. What will it mean for the United States' mission in the region? Stand by for details.
BLITZER: Let's get right to our "Strategy Session."
Joining us, two CNN political contributors, the Democratic strategist, Paul Begala (sic), and the Republican strategist, Alex Castellanos.
Guys, thanks very much for coming in.
Alex Castellanos. Did I say Paul Begala? I meant Alex Castellanos.
ALEX CASTELLANOS, CNN CONTRIBUTOR: I'll pretend I'm Paul.
BLITZER: James Carville, Alex Castellanos -- thanks, guys, very much for coming in. Take two. All right. Let's talk a little bit about what's going on in the Republican presidential race that's going on right now, Huntsman versus Romney.
Alex, let me start with you. Jon Huntsman is really going after Mitt Romney. Two former governors. Huntsman, the former governor of Utah; Romney, the former governor of Massachusetts.
Listen to Huntsman talk about Romney's record as governor of Massachusetts.
(BEGIN VIDEO CLIP)
JON HUNTSMAN (R), PRESIDENTIAL CANDIDATE: Forty-seventh is 47th. First is first. So, just let the facts speak for themselves.
(END VIDEO CLIP)
BLITZER: All right. So he says when he was governor of Utah, Utah was number one in creating jobs. Massachusetts was 47th in creating jobs.
I know you worked for Romney four years ago. Your son now works for Huntsman. You're neutral in this Republican contest right now. But how angry, how bitter is this going to get between Romney and Huntsman?
CASTELLANOS: Well, I think it's going to be tough on the Republican side. You know?
I think Republican candidates rightly feel that anybody who runs against Barack Obama could end up as the next president of the United States. And what we're seeing are the playoffs right now, Wolf.
There's the conservative Tea Party contest. Michele Bachmann is winning that. If she wins Iowa, then the party is going to go to New Hampshire, the next contest a few weeks later, and they're going to look for the anti-Bachmann.
They fear she's a little too conservative, so, hey, maybe we need a more establishment Republican who can be the anti-Bachmann who can get Independent votes in a general election. Who's that? That's what you see Huntsman and Romney fighting over now.
You know, the establishment primary is not going to be run on social issues. It will be won on economic issues, jobs. And that's why whoever owns that and wins that battle could be the Republican nominee.
BLITZER: It's fascinating, because at the same time we see Romney and Huntsman going after each other, Huntsman especially going after Romney, arguably the front-runner right now, we see this little battle between these two Minnesota candidates as well, Michele Bachmann and Tim Pawlenty.
James, you like seeing this kind of fight among Republicans.
JAMES CARVILLE, CNN CONTRIBUTOR: Well, you know, it can't be avoided. To be fair, Republicans -- I remember when then-Senator Clinton and Senator Obama, they had a little tiff back in 2008.
Look, the nomination for president of a major political party is worth something. And people get into it.
Anybody who's been involved in presidential politics, the intensity in these primaries is worse than intensity in a general election, in many cases. I talked to people about the Reagan-Ford '76 election. And, you know, churches split up over that. I mean, it was very intense.
And it's going to get this way. But Romney does have a problem, as I understand it, with his job creation record in Massachusetts, and also at Bain Capital.
Kennedy really beat him bad -- I think it was in '94 -- by getting people who were fired by Bain Capital. And I'm sure that they've got a good campaign and they're aware with that, and they'll deal with it. But certainly going to do that.
And it looks like Sarah Palin may get in, and she'll get in this fight, too.
CASTELLANOS: And Wolf, it's a little bit like Thanksgiving dinner at home. You know, the family -- debates can be contentious. But at the end of the day, everybody pulls together for Christmas. Everybody gets together, and usually they're united by the opposition to the other party.
BLITZER: Well, you know, James raises a good point. His wife, Mary Matalin, was on the show yesterday, and she suggested that she's increasingly coming around to the conclusion that Sarah Palin will, in fact, run for the nomination.
Alex, do you think she will?
CASTELLANOS: No, I don't see that, Wolf. I think Sarah Palin is running now, but in the person of Michele Bachmann, who has filled that space.
Sarah Palin has become really so, I think in some ways, out of the picture as a political candidate, it's almost like she had become the vice president. Nobody thinks of her that much anymore. She's figured out what I think all of us can see, that her place is not at the top of a ticket, but she can still be very powerful and effective for principles she genuinely cares about and a country she's very concerned about.
BLITZER: Do you agree with Mary or do you agree with Alex, James?
CARVILLE: You know, I'm going to agree with my wife.
CASTELLANOS: Smart man, James.
CARVILLE: Do I know? No, but just the tea leaves sort of seem to me to indicate that she may be getting in. And I think for the kind of very reason that Alex said. One of the reasons is she wants to get in the middle of this squabble.
This is a big stage here. And people don't want to miss out on it.
BLITZER: If she does run, Alex --
CARVILLE: But if I'm wrong, I'll be the first --
BLITZER: I know.
If she does run -- and none of us knows right now as she knows -- and her daughter Bristol says that her mom has made up her mind. We don't know what that decision is. But if she runs, does she automatically in Iowa emerge as a front-runner?
CASTELLANOS: She emerges as a front-runner, but Michele Bachmann is not to be underestimated in Iowa. That's her home. She was born there.
She has got a very powerful ground game there and a message that resonates. I think what that would do is, it would split that conservative vote in Iowa between Bachmann and Palin, and all of a sudden, it might make Iowa a state that a Romney or a huntsman or a Pawlenty could win.
BLITZER: Well, right now Romney is doing well in Iowa. Huntsman is nowhere in the polls, in the last polls that we've seen over the past few days.
But increasingly, James, Michele Bachmann, she's atop those Iowa polls today and yesterday.
CARVILLE: Yes. No. And look, she's had a good run here. You know, it's going to be interesting.
You know, Huntsman, the one thing is, no one has ever won the Republican nomination without winning either Iowa or New Hampshire. And so there's a lot of theories about how people cannot do that.
If Huntsman doesn't run in Iowa, it's going to be hard to see him doing very well in New Hampshire, because somebody is going to get a lot of publicity for running. And if you run an unexpected close second, that helps you a good deal.
I mean, once these primaries start, or the caucuses start, that's where the coverage is. That's where Wolf Blitzer is going to be. That's what people are going to see. And that happens every cycle, and people tend to forget that.
BLITZER: James, Alex, we'll leave it on that note, but we'll spend a lot of time talking about this in the weeks and months to come.
James Carville and Alex Castellanos.
Guys, thanks very much.
That meeting, by the way, at the White House has just wrapped up, the meeting the president had with the Democratic and Republican leadership. We're standing by.
You're looking at microphones there outside the West Wing of the White House. If they come to the microphones and tell us what happened, we'll immediately go there live.
Republicans, as many of you know, have come up with complicated Plan B to try to raise the debt limit and prevent the U.S. from defaulting. Will President Obama buy it?
And polygamists featured in a reality TV show are now doing battle against the state of Utah to try to protect their multiple marriages.
BLITZER: Jack's back with "The Cafferty File" -- Jack.
CAFFERTY: The question this hour, Wolf, is: In light of alleged crimes in England, should the United States government investigate Rupert Murdoch's companies and properties here in the United States?
Ken in Washington writes, "It's hard to believe the kind of grievous criminal activities Murdoch's minions engaged in over so long a period of time could possibly be limited to Britain. He has the reputation of being a hands-on manager. So one has to believe that he knew what was going on. If he's amoral enough to conduct business in such a despicable manner, then they must have done the same thing here in the United States."
David in Tampa Florida, "Yes, Jack, not what they print, so much as how they obtain their information."
R.S. in Detroit, "Every inch of Rupert Murdoch's criminal empire needs investigating. This is a powerful organization with its tentacles in everything, further corroding our political system."
Janice in Arkansas, "Yes, they should start with Fox News. I don't believe it was a coincidence that their Web site was hacked a few days ago with the report of President Obama's death."
Chika in South Africa, "Jack, between you and me and millions of others, we will want nothing more than a thorough investigation of Murdoch's so-called media empire. The question should have been, do you think the American government has the courage to investigate Rupert Murdoch and his companies? That guy Murdoch acts as if he's untouchable."
Anne writes, "The Murdoch empire is corrupt. It always has been. He and his cronies don't even bother trying to hide it anymore. Case in point: Fox News."
"If the public doesn't demand some clarification through a government investigation, then we're all complicit in allowing one man's delusions of power to erode our society. News Corp has done so much damage already, we owe it to ourselves to prevent them from doing any more harm."
And Dennis in Florida says, "It sounds like a very good idea. I'm sure some of the middle manager types who received raises and promotions for promoting those activities in the U.K. shared their methodology with their U.S. counterparts. That's called corporate culture, and as usual, it stinks."
If you want to read more on this, go to my blog, CNN.com/CaffertyFile -- Wolf.
BLITZER: All right, Jack. Thank you.
A bitter new court battle for the stars of a popular reality television show are fighting for what they consider their right to live as polygamists.
Let's turn to CNN's Casey Wian. He's joining us. He's got the details.
What's going on here, Casey?
CASEY WIAN, CNN CORRESPONDENT: Well, Wolf, it's a fascinating case where a reality TV show just may help set a legal precedent.
Well-known Washington, D.C., attorney Jonathan Turley, at this hour, is on his way to Utah on behalf of his clients, the Brown family of the TLC reality show "Sister Wives." He plans to file a challenge tomorrow to Utah's law criminalizing bigamy.
Now, Kody Brown and his four wives have been living an openly polygamist lifestyle in front of television cameras since last year. Utah and the Mormon Church outlawed polygamy 120 years ago as a condition of statehood, but some fundamentalists still practice it.
Utah authorities opened an investigation into the Browns' lifestyle last year. And reportedly, they are considering criminal charges, perhaps very soon.
Their attorney says in a statement, "We believe that this case represents the strongest factual and legal basis for a challenge to the criminalization of polygamy ever filed in the federal courts. We are not demanding the recognition of polygamist marriage, we are only challenging the right of the state to prosecute people for their private relations."
Now, Kody Brown has said all along he knew he was taking a risk by going on TV with his legal wife and his three so-called "sister wives." Utah's attorney general, for his part, says that the state has defended its law against polygamy several times in state Supreme Court. It's going to be interesting to see what happens now that it's going to federal court -- Wolf.
BLITZER: And very quickly, Casey, on what legal basis is Turley planning to make the challenge?
WIAN: Basically on the theory that Americans have the right to be left alone by their government and that any intrusion on their religious practices is an invasion of privacy -- Wolf.
BLITZER: All right, Casey. Thanks very much.
Casey Wian reporting.