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JOHN KING, USA

Republicans Debate; Alleged Plot to Kill Saudi Ambassador Foiled; Interview With North Carolina Congresswoman Sue Myrick; Interview With Mississippi Governor Haley Barbour; Interview With Mayor Thomas Menino; Interview with Debbie Wasserman Schultz

Aired October 11, 2011 - 18:00   ET

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


JOHN KING, CNN ANCHOR: Good evening, everyone.

We're tracking important breaking news on several fronts tonight.

In presidential politics, it is Rick Perry's moment of truth. The Texas governor can't afford another shaky debate, especially with fresh new evidence tonight of Mitt Romney's mounting momentum.

Plus, the nation's mayor stage an emergency strategy session this evening after another confrontation between occupy movement protesters and police.

(BEGIN VIDEO CLIP)

THOMAS MENINO (D), MAYOR OF BOSTON: We checked the films last night. We didn't see any brutality. Nobody got hurt in the demonstration last night.

(END VIDEO CLIP)

KING: Also tonight, this defining question, can Democrats and Republicans set gridlock aside, just once, and help millions of Americans who can't find jobs? Sadly, the answer at this moment is no.

Look here, live pictures of the United States Senate where a key vote on a major Democratic jobs plan is just moments away. Stay with us for that live coverage.

But we begin with breaking news that sounds more like a far- fetched spy novel or a Hollywood script. A brazen plot to assassinate Saudi Arabia's ambassador to the United States at a crowded Washington restaurant frequented by members of Congress. Behind this plot, agents bankrolled by Iran's nefarious secret police force who tried to hire hit men from Mexican drug cartels. Sounds unbelievable, right?

Well, tonight the Middle East is on edge, the Obama administration is slapping fresh sanctions on Iran and the prime minister suspect being held without bail after initial court hearing in New York. The attorney general and the FBI director among those on hand as the charges were detailed here in Washington.

(BEGIN VIDEO CLIP)

ERIC HOLDER, U.S. ATTORNEY GENERAL: This conspiracy was conceived, was sponsored, and was directed from Iran, and constitutes a flagrant violation of U.S. and international law, including a convention that explicitly protects diplomats from being harmed.

ROBERT MUELLER, FBI DIRECTOR: These individuals had no regard for their intended victim, no regard for innocent citizens who might have been hurt or killed in this attempted assassination. They had no regard for the rule of law.

PREET BHARARA, U.S. ATTORNEY: When the confidential source noted that there could be 100 or 150 people in a fictional restaurant where the requested bombing would take place, including possibly members of the United States Congress, the lead defendant, acting on behalf of a component of the government of Iran, said no problem and no big deal.

(END VIDEO CLIP)

KING: A lot of moving parts, important unanswered questions, as we continue to get information on the breaking story.

Let's break down the allegations and the global implications with my CNN international colleague Hala Gorani, Congresswoman Sue Myrick, a member of the House Intelligence Committee, and in New York CNN national contributor Fran Townsend, who knows the Saudi family quite well from her day as President Bush's homeland security adviser.

Congresswoman, I want to start with you.

In terms of the intelligence briefings you're receiving what do you know that has not been put part of the public domain, including this question? There was talk of a broader plot, maybe bombings of the Saudi Embassy, bombings of the Israeli Embassy. How active are the Iranians if this is to believed in plotting terrorism here in the United States?

REP. SUE MYRICK (R), NORTH CAROLINA: Well, John, I think we have to take it so seriously, and the thing that concerns me is, I have been talking about this for a long time, what the Iranians are doing in the Western Hemisphere, in South America, Mexico and relationships with the drug cartels, and this really does confirm that.

We can't continue to allow Iran to do what they're doing, which is ignoring us. The sanctions haven't worked. We have got to do something different.

KING: What is something different? Your colleague on the Senate side Saxby Chambliss, who is on the Intelligence Committee, put out a statement tonight where he said: "I urge the administration to hold the Iranian regime accountable in a direct and meaningful way."

What does that mean? Does that mean if sanctions aren't working, do you have to consider military action?

MYRICK: I don't -- I'm not talking military action, but I'm talking about the fact that there's financial ties that they can use. There are also things that they can do relative to the nuclear program because they're going right ahead with the nuclear program.

But it's a bigger picture here than just this one attack. And kudos to our law enforcement. But this is another example of a person who has dual passports.

KING: A bigger threat, the congresswoman says, Fran Townsend.

Adel Al-Jubeir is only the Saudi ambassador to the United States. I have known him for 20 years going back to the first Persian Gulf war. He's now a very trusted foreign policy adviser to King Abdullah. Explain why, why Adel Al-Jubeir? What were the Iranians looking to prove here?

FRANCES TOWNSEND, CNN NATIONAL SECURITY CONTRIBUTOR: There's no question that he was not merely an ambassador, which would have been important enough, and certainly sufficient for the crime, but his relationship is one that goes back decades, John.

And before he was the ambassador, he was the national security adviser to the -- the foreign policy adviser to the king and before that, when the king was the crown prince. He travels on almost every foreign trip with the king, he acts often as the king's translator, which means as you know he's not only sort of polishing the king's prose to a foreign leader but he's also managing the message back to the king.

He's got tremendous, tremendous influence. And that's not lost. He's been outspoken on the tension between the Saudi and the Iranian regimes and Iranian misdeeds. He's a very much more than just an individual. He's a strategic target because of his close relationship with the Saudi king.

KING: Hala, we're having this conversation about a potential terrorist plot. And it is unbelievable. If you brought this script to Hollywood, they'd send you packing. Mexican drug cartels hired by the Iranians to kill a Saudi ambassador in the United States.

Obviously there's a lot of questions here in the United States. How will this play out in the region? We know there are traditional tensions between the Saudis and the Iranians and recently we have seen them play out in Bahrain. The Iranians were not happy when Saudi went in there. Recently King Abdullah has essentially slapped the Syrian president, Bashar al-Assad, saying stop criticizing your own people. Where is this headed?

HALA GORANI, CNN CORRESPONDENT: Well, that's a good question but it doesn't seem to be headed to a good place. Because these sectarian tensions in Middle East that had lessened in 2007 when we saw this visit by President Mahmoud Ahmadinejad to Riyadh, have now ratcheted right back up again.

You mentioned Bahrain. I could mention eastern Saudi Arabia where there's a sizable Shiite minority. Two million Shiites live in the eastern part of Saudi Arabia. Saudi Arabia has said that it will crack down fiercely on these protests by the Shiite minority.

It does not want this to be a problem in this oil-rich country. There's also Lebanon. There's Hezbollah. Hezbollah has sided with the Bahraini protesters, but for instance has sided with the Syrian regime. It's very difficult not to see this through a sectarian prism -- John.

KING: So, Iran says it's a fabrication, they say this is the United States making this up. I know Iran does not have a great credibility, level of credibility, shall we say, but the question is, obviously you have the law enforcement case, you have the one suspect who has been arrested. The second suspect, as you read through this complaint, and again it's like a movie script, the second suspect said to be in Iran somewhere.

What can the Obama administration do? What can the world do as it briefs us, the administration briefs other countries and says here's the evidence? What can you do?

MYRICK: This is very brazen, I mean, for them to plan an attack on our soil. Think about it. That hasn't happened before. And we need to work together with the other world leaders. China and Russia need to get involved in this. They have stayed out of it pretty much relative to even the sanctions. It needs to be a discussion...

(CROSSTALK)

KING: Do you have any confidence China and Russia will now get involved in some effort against Iran?

MYRICK: Well, I don't know. I will be honest with you, because it's been very frustrating. They choose to stay separate.

KING: Fran Townsend, when you look at the complaint and see the allegations and brazen is the word the congresswoman used, I used a similar word at top of the program, what does it tell you about Iran's intentions to project itself? We often talk about big terrorist attacks. This is essentially hired guns projecting yourself in a very nefarious way. What does it tell you how Iran views its potential to project force?

TOWNSEND: Oh, John, let's remember, Iran was behind the attack at Khobar Towers killing U.S. servicemen in Saudi Arabia. So this is not new for them, right?

The use of terrorism is a tool of their foreign policy. It's very interesting when you read the complaint, while Iran may be calling U.S. allegations a provocation, let's remember the individual they do have in custody not only confessed. He acknowledges that he transferred almost $100,000 in furtherance of this plot, that his handlers he believed to be in the Quds Force.

It's clear from the Attorney General Eric Holder's statements that the U.S. government has confirmed that. And Treasury has named at least two Quds Force members at very top for sanctions related to this plot. This is more than a mere provocation. There are real facts and real details that the U.S. government has confirmed in furtherance of this plot and has pled in the allegations, and now has confirmed by the individual they have in custody.

KING: The individual they have in custody is Manssor Arbabsiar. He has a home in Texas. And we have a picture of him right there. You see him there. He's in custody. Gholam Shakuri is the second defendant, who is still at large. There are other alleged co- conspirators.

Hala, you know the region very well. You know how the Iranian power structure works. You have the mullahs and the ayatollahs and you have President Ahmadinejad and you have the Quds, this what I call the special police, the Revolutionary Guard. Can they freelance?

Can the Revolutionary Guard, id the regime says we had nothing to do with this and if you show us any evidence, well, somebody was freelancing, is that possible in that society?

GORANI: I don't think so, but everything is possible.

And I think at this stage in Iran, Ahmadinejad is finding himself fragile and rather isolated with very difficult relationships with other leadership entities inside the country. So, in that respect, the struggle and the competition for leadership and influence might potentially lead one entity to operate independently from another, although it would be hard to believe that at this level of complexity if indeed this alleged plot is proven to be true, that it that the Quds forces did operate independently.

KING: Help me from an intelligence standpoint. When the Justice Department comes up -- and I assume there will be other intelligence assets coming up as well -- to brief on how they put all this together, if they were trying this, what are your questions about what else?

MYRICK: Well, again, we can't talk about what we talk about in Intelligence, but I will just simply say this also puts emphasis back on our border security problem. We have got to deal with that seriously, and we have not.

KING: Congresswoman.

Hala is going to stay with us.

Congresswoman, appreciate your time.

Fran will be with us as well.

We're going to continue our coverage of this breaking news story, including the reaction from the State Department.

It's also a big night in presidential politics, a Republican debate set to take place a little bit later. A huge night, huge night for Texas Governor Rick Perry.

But back to our breaking news, an alleged plot to assassinate Saudi Arabia's ambassador to the United States right here in Washington, D.C. We will continue that coverage in just a moment.

(COMMERCIAL BREAK)

KING: Continuing with our dramatic breaking news story.

An alleged plot, the Iranian government, high in the Iranian government, trying to assassinate Saudi Arabia's ambassador to the United States allegedly at a restaurant here in Washington, a restaurant said to be frequented, a fictional restaurant laid out in this complaint, the Iranian government saying go ahead with the plot, despite being told the restaurant could be frequented by members of Congress and dozens of others.

Let's continue the conversation now.

Now joining us, former State Department official Nicholas Burns, who now teaches at Harvard. Still with us, CNN national security contributor Fran Townsend, and CNN International's Hala Gorani.

Nic, I want to bring you into the conversation first, former NATO ambassador, former undersecretary of state. I want you listen to here the current secretary of state, Hillary Clinton, who was very careful saying very little but making clear the United States now will look to retaliate.

(BEGIN VIDEO CLIP)

HILLARY RODHAM CLINTON, U.S. SECRETARY OF STATE: We will be consulting with our friends and partners around the world about how we can send a very strong message that this kind of action, which violates international norms, must be ended, and other areas where we can cooperate more closely in order to send a strong message to Iran.

(END VIDEO CLIP)

KING: She took no questions, and that was essentially the bulk of the statement.

The United States has been frustrated in the past over Iran's nuclear program, over other rogue actions by Iran. What can the United States and what can others do now?

NICHOLAS BURNS, FORMER UNDERSECRETARY OF STATE FOR POLITICAL AFFAIRS: Well, John, you're got two things happening today.

You have an instantaneous political crisis between one of our closest allies in the Middle East, Saudi Arabia, between Iran and Saudi Arabia, and between the United States and Iran. I think the administration will do a number of things. First, we're hearing that the administration will consider specific sanctions against the Quds Force members who may have been involved in this but more importantly, I think there will an attempt now made to link this to the nuclear issue.

As we have been watching the Arab revolutions take place, Iran has been going forward with its nuclear program making progress. It's going to be very important we use this to try to isolate Iran internationally, to go back to the United Nations for sanctions. Iran's credibility will be tarnished with most of the rest of the world, and it will give the United States a leg up on the Iranians in the Security Council.

We're also, I think, going to try to reinforce the longstanding effort to try to build up the conventional defenses of our Gulf friends to contain Iran and contain any attempt by Iran to use its military power against the Arab world or against Israel.

It's going to be difficult to handle this because this is an extraordinary development. The plot to murder the ambassador of Saudi Arabia in the American capital, I don't think we have seen this before. I think the administration's going to have to very carefully consider when we escalate further from there.

KING: And, Fran, as Nic makes that point, when you go through this complaint, and it is stunning, they talk about the $100,000 payment that was transferred from a non-Iranian bank into a bank in New York, a down payment, if you will, a plan to spend another $5 million to continue this plot laid out in this document, a lot of it alleged to involve Iranians talking to Mexican drug cartels.

You just heard the congresswoman on the Intelligence Committee saying she has complained forever that the drug cartels are for hire, essentially. Have administrations, current and past, perhaps taken that threat too lightly?

TOWNSEND: Well, I will tell you, John, especially as it related, let's put the current plot aside for a moment -- as related to al Qaeda, there was some concern that al Qaeda would try to use the illegal immigration flow into the United States through our southwest border to infiltrate folks into the United States.

It wasn't what we found. Of course, as we were looking at that issue, it's not that it didn't remain a threat, but what did happen was, al Qaeda sort of shifted their focus, not that they gave up on that, but they shifted their focus to radicalizing Americans inside the United States.

The illegal immigration flow has always been a vulnerability, and I think she quite rightly points out that, when you look at this complaint, you realize that instead of al Qaeda we now see the Quds Force in Iran that really acts as an arm of either the supreme leader or the president, Ahmadinejad, using that vulnerability to see if they can't execute their own foreign policy plot to assassinate the Saudi ambassador.

KING: Nic Burns, why do it in the United States of America? There are some who would say that is stupid because of the point you just made. It would give the United States leverage to go back to the United Nations. Why not -- some of the other plots have been conducted overseas. Is there some reason to do it here, would Iran gain politically from having the Saudi ambassador killed in this country or was the calculation perhaps that this is a place where they thought they could pull it off? BURNS: John, this is a very radical group of people. I think the major story, in looking at the government of Iran over the last two years or so, is the increased radicalization of the government.

Ahmadinejad, believe it or not, and he's an odious individual, is not part of the radical element in that government. The Quds Force, the Revolutionary Guards are. They are increasingly powerful. But they're isolated. Most of them have never traveled much around the world. And obviously, they have taken on, I think, more than they're going to be able to digest.

In linking the United States and Saudi Arabia, provoking an instantaneous crisis, it may be now that Iran becomes the most important, most difficult foreign policy challenge on our agenda for President Obama and his administration and certainly for the Republican candidates who will be debating at Dartmouth College tonight. These charges are about the most serious charges you can think of.

KING: Hala, I want you to join the consideration.

As we do so, Nic makes an important point about the power structure. And we have talked about it. Let's so our viewers, so they can understand. You see the ayatollah, you see President Ahmadinejad, then you see the Revolutionary Guard, and the Quds Force is a subsidiary of that.

As the United States tries to figure out what next in this environment it also happens at a time of just dramatic change, minute by minute change in this region. You have revolution in Egypt, you have revolution in Tunisia, you have the questions in Syria, we're watching a transition Libya. How does something like this thrown into the middle of all of this -- boom.

GORANI: That's a great point. That's what I was going to talk about next. And that is, as long as you have moving parts that are moving so dramatically quickly in the region as result of the uprisings, as a result as well of Saudi Arabia's involvement in countries such as Bahrain, as long as you have these moving parts, you will have more conflict and you will have more battle for influence and proxy battles.

You see it in Syria, in Lebanon. You have seen it over the last few decades. When all that settles down is when you end up seeing a few more maybe superficial efforts to sort of pay state visits to the other country. But for now, this is a very rapidly moving situation where both countries that are both big powers in the region are vying for influence and control.

KING: Hala Gorani, Nic Burns, Fran Townsend, we will stay on top of this breaking story throughout the night. Thank you for helping us at the top.

Next, tonight's breaking political news, just hours before they share the same stage in tonight's debate, Mitt Romney calls on Rick Perry to repudiate a pastor's comments about Mormonism. (COMMERCIAL BREAK)

KING: Breaking political news as well as we continue to track the alleged plot to assassinate Saudi Arabia's ambassador.

This is the United States Senate. We're looking at live pictures. They're about to move now to a vote on a Democratic jobs bill, as the Senate Democrats' version of the president's jobs bill, it is not expected to pass tonight, but a key vote, a key test of the Senate Democratic leadership just moments away. We will continue to track that.

Also breaking news tonight in presidential politics. Eight Republicans facing off in New Hampshire and by far the most debate pressure is on the Texas governor, Rick Perry. His standing in the polls slid significantly after a couple of shaky debate performances. And one result was an increase in support for rival Mitt Romney.

First it was major fund-raisers heading Romney's way. Tonight the former Massachusetts governor added to his team a man grassroots Republicans wish was up on that debate stage, New Jersey Governor Chris Christie.

And as he endorsed Romney, Christie put more pressure on the Texas governor, criticizing a Southern Baptist minister who last Friday coupled his endorsement of Perry with an attack on Romney's Mormon faith.

(BEGIN VIDEO CLIP)

GOV. CHRIS CHRISTIE (R), NEW JERSEY: Any campaign that associates itself with that type of conduct is beneath the office of president of the United States, in my view.

(END VIDEO CLIP)

KING: Should Perry repudiate the past, and can he survive another weak debate performance?

Mississippi Governor Haley Barbour joins us tonight from his home state.

Governor, on the question of the pastor, the Southern Baptist pastor says Mormonism is a cult. He introduced Rick Perry. The Perry campaign said they didn't pick him, but they did have two weeks' notice he was going to do that. Is it incumbent on the governor himself to say, no, I'm sorry, Pastor, I repudiate your remarks, you should apologize to Governor Romney?

GOV. HALEY BARBOUR (R), MISSISSIPPI: Well, first of all, John, the preacher didn't say that while he was inducing Perry. He just introduced Perry and then subsequently, in some sort of news availability, Perry was not present, the preacher makes this remark.

Perry said he disagreed with that when he heard about the remark later. You know, I can understand being critical if in the introduction of Governor Perry somebody said something that was inappropriate. Maybe you should expect Governor Perry to say I disagree with that or that isn't the way I feel about it, but this wasn't even said in Perry's presence.

So, you know, crazy as I am about Chris Christie and good of friends as he and I are, I disagree with the idea that just because somebody who is for you at some other time says something that is disagreeable, that you have to go out and flog him behind the barn.

The fact of the matter is, Perry said he didn't agree with that. And that ought to be the end of it.

KING: You think that ought to be the end of it. Let me see if you agree with this, that the Texas governor cannot afford to have another debate performance in which people afterwards say he didn't seem to have the energy to get through the full 90 minutes or he didn't seem to have a good answer on this question or that or he got lost in answering some questions. How much pressure on Rick Perry tonight?

BARBOUR: Well, there's no question that his debate performances have been portrayed -- and I didn't see any of the debates -- they may be accurately portrayed -- as not being good.

And it's certainly in the polling you have seen him go down some. One of the things we have got to get away from is the idea that what happened in the last seven days can be extrapolated to tell us what's going to happen in the next seven weeks. That's just not the way politics works.

Things change. I expect that will be the case here. In politics, things are never as good as they seem, things are never as bad as they seem. Perry will certainly be helped more than anybody by a good performance and he probably would be hurt more than anybody by a bad performance.

KING: I agree with your take, that sometimes we try to decide whoever won the battle today is in the big picture when these things do take time.

But we have been through a lot of rodeos together and you know a lot about campaigns. You're not just the governor of Mississippi. You're a former chairman of the party. You were political director in Ronald Reagan's White House.

Discipline. It takes discipline to run a successful presidential campaign from the candidate all the way down through the staff. How would you feel if you had a couple of shaky debate performances and in the newspapers people working for you or close to you say things like this?

"'We had a tired puppy,' said one Republican friend who talked to Mr. Perry after his three back-to-back debates. 'He had been pushed really hard.'"

Then the governor's own son told ABC he wasn't an event in New Hampshire last night because he's resting up.

Would you like it if your own family and aides close to you were saying the reason his debates weren't so good is because he's not getting enough sleep?

BARBOUR: John, you reminded me when you talk about discipline being one of the premium characteristics of a candidate for president who is successful, that is true.

Another that is equally true is patience. Good candidates, particularly candidates that can go the distance, are patient. They don't feel like they have to win every debate. They don't think they have to win every straw poll. And, so, again, I just wouldn't over- read these kinds of things.

But patience and discipline, discipline perhaps as much as any other characteristic, are absolutely essential, if you're going to go the distance, win the nomination, get elected president.

KING: The Louisiana governor, Bobby Jindal, went with Governor Perry. The New Jersey governor, Chris Christie, goes with Governor Romney. It seems a little regional action going on here.

Is the Mississippi governor, Haley Barbour, going to be for the Texan?

BARBOUR: I don't intend to endorse anybody.

I didn't endorse anybody in 2008. And I don't plan to endorse anybody this time. What I do plan to do is dedicate all my energy to making sure whoever wins our nomination wins the general election. My focus is on Barack Obama.

This election needs to be a referendum on the president, his policies and results of the policies. The American people repudiated those policies in the 2010 midterm election. And if the election in 2012 is again about Obama's policies and the results, then we will have a new Republican president, whichever one of these good folks wins the nomination.

KING: You say whichever one of these good folks. You've had a bit of what I call -- I call it the anti-Romney flavor of the month in the sense that Romney's been the presumed front-runner, or at least the early head start guy from the beginning.

And we have watched in the polls, and you had Donald Trump came along at one point, then Congresswoman Bachmann took that roll over. Then Governor Christie, who everyone was saying he has to run. Governor Perry, we couldn't put in that graphic, as well. When he first got in, he jumped up in the polls, and now it is Herman Cain, a guy who was the CEO of Godfather's Pizza but has never held political office.

To what do you attribute, Governor Barbour, Mr. Cain's quick rise? BARBOUR: Two things that are very important here. One is Republicans want to nominate the candidate who has the best chance to beat Barack Obama.

KING: Can a guy who's never held political office -- if your argument is going to be "We like President Obama, too, but we told you he wasn't ready and look at the last four years," can you make that argument with Herman Cain, who's never held political office?

BARBOUR: Well, you know, his slogan could be, "I'm more ready than Obama was."

But probably you've got to go back to this. Somebody is going to go the distance in this primary contest, and it may be somebody that has never been elected to public office. I have never been elected to public office before I was governor. Chris Christie had never been elected to public office before he was governor of New Jersey. There are a lot of people in public lives who I think are doing pretty well; they've never been elected to public office.

Is it harder? Of course it's harder. It's a lot harder for somebody that's never been elected. But why is it -- why are there so many people being test driven here? A, Republicans want to win. They want to nominate their best chance. And they are trying to learn about each one of these candidates. It's a little bit like Cinderella's slipper here is being passed around, because Republican want to get the very best candidate because they want to win in November.

KING: Governor Haley Barbour of Mississippi. Appreciate your insights tonight and the Cinderella slipper line. We could always use a good -- always like to end the interview on a good line like that. We'll keep in touch as this plays out in the weeks and weeks and weeks and perhaps months ahead. Thanks again, Governor.

Still to come here, mayors from coast to coast hold an emergency conference call to discuss the protests spreading across the country.

But next, new information on an alleged plot to assassinate the Saudi ambassador to the United States. Iran responds to the allegations it tried to hire the hit man.

(COMMERCIAL BREAK)

KING: Live pictures there on the floor of the United States Senate, the scene of one of many breaking news stories tonight here in Washington. The Senate is about to vote on a Democrat -- the vote is under way now, on a Democratic jobs plan, more than $400 million. The president's plan, except Senate Democrats changed the way it is paid for. A millionaire surtax in that plan.

We do know this: heading into it, the Senate Democrats did not believe they would get the 60 votes necessary to continue. If the vote fails, where does the jobs debate go next? We'll get back to in a moment. International news, U.S. agents disrupted an Iranian plot to assassinate Saudi Arabia's ambassador to the United States, possibly by setting off a bomb at a restaurant here in Washington. Officials say two suspects, both Iranian, one also a U.S. citizen, were recruited and bankrolled by Iran's Islamic Revolutionary Guard. Tried to hire hit men -- get this -- from a Mexican drug cartel.

The plot unraveled when one of the suspects met with a confidential informant who posed as a drug cartel associate.

This obviously has attention of the president of the United States and across first we're going to go to Islamabad to get reaction, though, from Reza Sayah. And let's listen, first, a spokesman for the Iranian president says never happened; it's all a fabrication. Let's listen.

(BEGIN VIDEO CLIP)

ALI AKBAR JAVANFEKR, SPOKESMAN FOR IRANIAN PRESIDENT (through translator): I think the U.S. government is busy fabricating a new scenario, and history's shown that both the U.S. government and the CIA have a lot of experience in fabricating these scenarios. And this is just the latest one.

I think their goal is to reach the American public. They want to take the public's mind off the serious domestic problems they're facing these days, and scare them with fabricated problems outside the country.

(END VIDEO CLIP)

KING: They say this is a fabrication. Reza, are they saying anything else, especially responding to the specific complaint that details what the United States government says is pretty decent proof?

REZA SAYAH, CNN CORRESPONDENT: No, basically they're denying it almost mockingly, saying that it's a children's story. Those are the exact words of the spokesperson for Iranian President Mahmoud Ahmadinejad.

But one thing that I think is getting lost in all the excitement and the drama is that no U.S. official has come out and explicitly said that the highest echelons of the Iranian government is involved.

If you take a look back at the press conference held by Attorney General Eric Holder, in response to one question by a reporter, who asked, did the upper reaches of the Iranian government know about this and bless it, he directly says, "We are not making that charge at this point."

Even so, we've had some analysts, some U.S. lawmakers who've come out and said that they are linked to -- this plot was linked to the highest echelons of the government. So some mixed messages.

But it's so important to remind everyone that these are simply allegations, and these are two countries that have long been involved in an information war, many allegations they've made against one another, they've either not been true or not as serious as originally thought, John.

KING: Very important perspective from Reza Sayah.

Let's now go over to our chief White House correspondent, Jessica Yellin. And Jessica, the administration says it has a slam dunk case. I also understand the president of the United States tonight getting directly involved himself.

JESSICA YELLIN, CNN CORRESPONDENT: That's right. The president has spoken with the Saudi ambassador, Adel al-Jubeir, and connected with him directly. He has also convened his national security team, which he did this morning, thanked them.

And as you've reported John, he was first briefed on this all the way back in June. Now, we do know that the White House itself is not confirming in any way that they believe that this has gone all the way up to the highest reaches of the Iranian government.

And one of -- you know, the reason so many people are speculating that is because it would seem that if this -- it would seem impossible to many people that this sort of action would happen without the knowledge of many at the highest levels of the government.

And there is obviously the political consideration that, if you were to make the link between this action and the government of Iran, then you -- what next steps would follow? Wouldn't certain elements in this country start beating the war drum?

So there's all sorts of political implications of even discussing that here. So no one here touching that issue. But for now President Obama simply, we're told by his press secretary, one of the press secretaries, that he's very grateful, obviously, to the law enforcement for solving this before anything happened, John.

KING: Chief White House correspondent, Jessica Yellin, on top of the breaking news from that end. Jessica, thank you.

"ERIN BURNETT OUTFRONT" coming at the top of the hour, just a few minutes away. Erin's here with a preview. Hey, there.

ERIN BURNETT, CNN ANCHOR: All right. Well, hey, there, John. We're going to keep covering this story. One senior administration official telling me it was international murder for hire. The terms we've been hearing all day, pretty amazing. We're going to be talking to Peter King, obviously the chairman of the homeland security committee. Robert Menendez is going to be with us, on the Senate Intelligence Committee. Tom Kean, chairman of the 9/11 Commission. All going to join us talk about who knew what, when, how high up this went and also the spy novel angle of this. We're talking to best- selling author Alex Berenson about that, all that coming up on "OUTFRONT."

In the meantime, John, back to you.

KING: Erin, we'll see you in just a few minutes. Thanks.

Next, here we're watching that vote on the floor of the United States Senate. A critical vote on the Democratic jobs plan. We'll see how that one goes.

Also, what do the Occupy Wall Street protesters want? And why did the nation's mayors today decide they needed an emergency conference call to plot strategy? That's next.

(COMMERCIAL BREAK)

KING: In New York this afternoon, the Occupy Wall Street protesters spilled out of the financial district. The marchers targeted the posh homes of the city's Upper East Side, carrying signs and chanting slogans against corporate greed and social inequality.

While today's demonstration in New York was larger than usual, a protest last night in Boston more violent than usual. Police and demonstrators scuffled, resulting in 129 arrests, mostly for what a city spokesman calls, quote, "unlawful assembly and trespassing." Some of those arrests -- check this out -- right in front of the TV cameras.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: You are unlawfully assembled. I command you in the name of the Commonwealth of the Massachusetts, to immediately and peacefully disperse.

UNIDENTIFIED MALE: We are veterans of the United States of America! We are veterans of the United States of America!

UNIDENTIFIED MALE: Shame, shame, shame.

UNIDENTIFIED MALE: Shame, shame, shame.

UNIDENTIFIED MALE: Shame, shame, shame.

UNIDENTIFIED FEMALE: The world is watching. The whole world is watching.

UNIDENTIFIED FEMALE: The world is watching. The whole world is watching.

UNIDENTIFIED FEMALE: The world is watching. The whole world is watching.

(END VIDEO CLIP)

KING: That unruly scene last night, a topic of a conversation just a short time ago with the Boston mayor, Thomas Menino.

(BEGIN VIDEOTAPE)

KING: Mayor Menino, thank you for your time. Let me start with a very basic question: what do you think these protesters want?

THOMAS MENINO, BOSTON MAYOR: I think they want somebody to listen to the message. There's a loud message out there. My question, who is listening to their message? I mean, they talk about corporate greed, inequality, talk about foreclosure, a lot of issues that middle America thinks about every day, but they're out there in about 100 cities in America.

Who is listening to the message? I mean, mayors listen. But is Washington listening? I question is Washington listening to the message that's being given out throughout America.

KING: There was an incident last night. The police did have to get involved. Here's the statement from Occupy Boston: "This reprehensible attack by the Boston Police Department against a movement that enjoys the broad support of the American people represents a sad and disturbing shift away from dialogue and toward violent repression."

Is your city, Mr. Mayor, are you practicing violent repression?

MENINO: No, we're not practicing violent repression at all. We gave them a designated area. We told them where they could stay, and they violated that agreement we had. They went down further on the Greenway. We said we cannot have them go further down the Greenway for a lot of different reasons. And they said, "We're going to do whatever we want to do."

And that's unfortunate, because the group that I've been working with, my police department over the last week and a half, has really had a spirit of cooperation, spirit of dialogue. And all of a sudden, in the last 24 hours we want to confront the Boston police, we want to have sit-ins. That's unfortunate, because you know most of those folks I relate to. I've talked with several of them on the foreclosure issue. And we are continuing to have that dialogue.

And, you know, we -- what happened last night is because they weren't working with us on this. And you know, we had to do what we had to do to make sure that we protected public safety issues in our city.

KING: And so where do you see this going, in the sense that when we had Tea Party demonstrations across the country, they were generally one-day rallies, but they turned out to be a very potent force at the polls, at least in 2010. We'll see what happens in 2012.

Do you see this as a comparable, some sort of a Tea Party of the left? Or is this more demonstrations but not a political movement?

MENINO: I think this is a movement of middle class America being so frustrated that nobody's listening to their concerns, and that's what this is all about. I think it's born out of middle class America, the frustration of no real ability of financial aid for schools, the issue of, you know, when people get fires from the national corporations. They get $5 million and $6 million severance pay. I mean, those are what they're getting frustrated. And when people can't get a job, they see these severance pays of $5 and $6 million, they get very frustrated. And that's what this movement's come under, real frustration of working people in America. We've got to understand that they're the backbone of our country. We have to get behind them, and somebody has to listen to them. Mayors do, but I think other folks in government also have to listen to their frustrations.

KING: Some of them are accusing you of leading a city that has a police department that they say use unnecessary force, and yet here you are complimenting their goals. When you say other people, does that include the president of the United States? Should he be more full-throated in his embrace of their goals?

MENINO: I think -- I think the Congress has to be more embracing their goals. I mean, our congressional delegation stands by us on a lot of these issues. But look at the country, how divided it is, Democrat and Republican. This is not a Democrat/Republican issue. This is a people's issue. It's a middle-class issue. And you know, the issue of my police department and brutality, we checked the films last night. We didn't see any brutality.

Nobody got hurt in the demonstration last night. Yes, we did arrest a few, because they would not move, but that's public safety issue. And that's my responsibility.

I have to make sure the city works not for some of the people, but for all our people. And we have to bring into focus some of those issues that will make the city work, and when people say, "We don't care what you want, Police Commissioner. We'll do whatever we want," that's in violation of our agreement. We have to enforce the rules and regulations of that area.

KING: Mr. Mayor, thanks for your time tonight.

MENINO: Thanks, John.

(END VIDEOTAPE)

KING: The United States Senate breaking news. A key vote under way in a Democratic jobs bill. That's one breaking news story tonight.

There's also a big Republican debate, presidential debate up in New Hampshire. Politics and jobs when we come back. Our guests include the chairwoman of the Democratic National Committee, Congresswoman Debbie Wasserman Schultz.

(COMMERCIAL BREAK)

KING: Important breaking news right there. The United States Senate voting on President Obama's jobs bill. The vote isn't over yet. But we've already counted 47 votes against any Republican filibusters. So there's no way the Democrats will get to 60 votes. They need to move forward on that legislation. With us now to discuss that and more, Florida Congresswoman Debbie Wasserman Schultz. She's the chairwoman of the Democratic National Committee. She's in New Hampshire tonight where there's a feisty Republican debate about to begin.

Republican strategist Kevin Madden is with us here. He worked with Mitt Romney back in the 2008 campaign.

Also here, our chief political analyst, Gloria Borger.

KING: Madam Chairwoman, I want to go to you first. Leader Reid would not bring the president's plan as the president wrote it up for an immediate vote. He wanted to change how it's paid for, so they came up with this millionaire surtax. And now he is losing. He will not have the votes to go forward.

A, isn't that an embarrassment for the Democratic Party? That you can't get your own bill through the Democratic Senate or at last get all the Democrats to vote for it. At least one has voted against it. As we move on, are you now ready to say, let's sit down with the House Republicans, break it into pieces if necessary, but get something done?

DEBBIE WASSERMAN SCHULTZ, CHAIRWOMAN, DEMOCRATIC NATIONAL COMMITTEE: Well, I think that this is embarrassing and sad for the Republican Party, because they continue to focus on helping only the wealthiest, most fortunate Americans and corporate America. They've got a leader in the Senate, Mitch McConnell, who is singularly focused on only one job, Barack Obama's, which he said proudly at the outset of this Congress and now won't even embrace an American jobs act proposed by President Obama that puts construction workers back to work building bridges and roads, keeps teachers and firefighters and police officers on the job, gives a payroll tax cut, of all things, to small business owners and middle class folks.

Which part of this bill do the Republicans not embrace? They're shockingly out of touch. And I think they should be ashamed of themselves.

KING: Let's ask Mr. Madden, the Republican in the room here. If you look at public opinion polling, there was another one in "The Washington Post" just this morning.

The public sees overwhelmingly. It means a lot to Republicans, too. They are OK with raising taxes on Americans who make $250,000 or more. This Democratic proposal in the Senate would only go after millionaires. Why is it such a bad idea?

KEVIN MADDEN, REPUBLICAN STRATEGIST: I think when you ask the question whether or not you think we should be raising taxes in a slowed-down economy, the answer is not the same as you would if you're just talking...

KING: Those tax increases are -- 2013 in this bill. They don't take effect right away. They're kicked down. MADDEN: But that is -- that's particularly important to those Americans. And not only -- not only those Americans who don't believe that we should be raising taxes in this particular economic climate.

But also, the president of the United States himself made that argument. So I think that's the argument that many of the people are looking at. And I think that's the reason that Congresswoman Wasserman Schultz and the president and Harry Reid. I think that's why they have a credibility problem right now with the American public.

KING: I think everybody has a credibility problem with the American public right now. I think Democrats and Republicans and probably the news media have a credibility problem with the American public right now, because 25 million Americans are either unemployed or underemployed. And Washington just keeps debating different proposals that have zero chance of passing.

Gloria, after this, all right, we're making a political marker.

GLORIA BORGER, CNN POLITICAL ANALYST: Right.

KING: After this, will they sit down and say, "What can we pass?"

BORGER: Yes. Precisely because of the reason you just gave, which is that they see the pulse, too. They see a 14 percent approval rating for Congress. So I think what you're going to see is a bunch of smaller measures, like trade agreements, tax credits for hiring veterans. Maybe some kind of a highway bill, increased access to capital for small business.

So you're going to see components of this.

What you're not going to see are the tax increases you were talking about and maybe -- or the extension of the payroll tax cut holiday, which a lot of people wanted extended.

KING: And this will debated, Congresswoman and Madam Chairwoman. You have dual titles. This will be debated in this Republican debate tonight. It's supposed to be largely about the economy. We'll see how it plays out.

You're at the DNC. You guys have a very funny and sometimes effective public relations campaign and a Web site that says Which -- WhichMitt.com, accusing Governor Romney of all these flip-flops.

You don't do as much about Governor Perry. Is it safe to say that on this day the Democratic National Committee, meaning the Obama White House, worries more about running against Governor Romney than it does about running against Governor Perry?

SCHULTZ: Well, nailing Mitt Romney down is like nailing down JELL-O. And I know Kevin probably shared that same frustration that Republican voters seem to be sharing right now, which is why he seems to be topped out around 26 percent, when he advised Mitt Romney four years ago.

But, you know, at the end of the day, it really doesn't matter which of these nine candidates for president on the Republican side is the nominee. Because they all support cutting Social Security, slashing Medicare, ending the Medicare as we know it, turning it into a voucher program.

You won't hear any proposals to create jobs tonight or help the middle class. You will only hear proposals to return us to the policies that got us into the financial crisis in the first place, that focus exclusively on benefiting the wealthiest, most fortunate Americans.

And, you know, at the end of the day, I think it's baffling for middle-class folks why Republicans wouldn't come to the table like President Obama has repeatedly asked them to, and sit down and work together to get this economy jump-started again. The American Jobs Act would give the economy that shot in the arm.

And, you know, Gloria, I think, is right. We will hopefully try to -- to move forward on some components of the jobs proposal that President Obama has put forward. But you won't see anything from Republicans that actually puts people back to work. And it's going to be, you know, shockingly frustrating for the next 13 months, because they're willing to let the economy stagnate just to get at one job, Barack Obama's, rather than focusing on American jobs.

KING: I'm going to, unfortunately, lose my job if I don't end the conversation here. So we'll have Kevin back to address the JELL-O comment on another night. Gloria Borger, as well. Congresswoman, enjoy the debate. We'll check in for your perspective tomorrow.

That's all for us tonight. "ERIN BURNETT OUTFRONT" starts right now.