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New HIV Drug Approved; Campaign Rhetoric Heating Up

Aired July 16, 2012 - 18:00   ET



To hear Republicans tell it, President Obama is public enemy number one for big business.


MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: And it is the most anti-investment, anti-business, anti-jobs series of policies in modern American history.

SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: This is certainly the most anti-business administration since the Carter years.


BLITZER: So if President Obama is so anti-business, as Republicans claim, why has the stock market done so well since he took office? And the converse question is this. If President Bush was so pro-business, why did the markets collapse during his final year in office?

Let's take a closer look at the numbers right now. During the Bush administration, the Dow Jones industrials closed at an all-time high of 14164 back in 2007. But it started to collapse big-time during President Bush's final year in office, when the great recession really hit.

On the day President Obama was inaugurated in 2009, the Dow Jones closed at 7949, a loss of more than 6,000 points since that 2007 high. It kept dropping during Obama's first year in office, hitting a low of 6459. The market had lost half its value in only two years.

But since then, it's seen a dramatic increase, hitting a post- recession high of 13338 just two months ago. It's gone back somewhat, closing today above 12727.

Yes, the unemployment and underemployment numbers here in the United States are way too high. But right now, big business is sitting on lots and lots of cash. They're making record profits, despite what the Republicans say about the president's business policies.

So I ask this question. Should President Obama receive credit for the market gains and President Bush be blamed for the collapse? I recently had this exchange with Republican Party Chairman Reince Priebus.


REINCE PRIEBUS, REPUBLICAN NATIONAL COMMITTEE CHAIRMAN: I think that Barack Obama's made everything worse. And I think things could be a whole lot better.

BLITZER: The Dow Jones was a lot worse than it is now.

PRIEBUS: The Dow Jones is one indicator. But I don't think that too many people out there that are experts on the economy...


BLITZER: A lot of people have retirement plans that are in a lot better shape today than they were four years ago.

PRIEBUS: The Dow Jones is one indicator. But I don't believe that most people, if they're looking at where we are on the jobs, the debt, deficit, housing, the promises that he made as far as health care is concerned, things aren't better today.


BLITZER: All right. So as you heard if you were listening closer, he didn't really answer why Wall Street has done so well during the Obama administration. He says that's only one indicator. He's right on that.

But you know what? I'm going to keep asking that question.

Let's check in with CNN's Kate Bolduan. She's got of a lot of other important news happening here in THE SITUATION ROOM.

KATE BOLDUAN, CNN CORRESPONDENT: I got to tell you, Wolf, I love to get your take on the news of the day. Today, pretty rough on Governor Romney and Republicans for their anti-business charge. But, last week, you were pretty hard on President Obama as well and his absence from the NAACP Convention, so much so that you even had Rush Limbaugh, a conservative talk show host, talking about it.


BLITZER: As you know, I thought the president should have gone to the NAACP Convention. I thought Mitt Romney did the absolute right thing by going to that meeting.

BOLDUAN: Well, I'm looking forward to hearing your take tomorrow.

BLITZER: Thank you.

BOLDUAN: Thank you.


BLITZER: Meanwhile, important other news, a groundbreaking step toward -- forward in the fight against HIV/AIDS.

For the first time, the FDA has now approved a drug to lower the risk of HIV infection in healthy but high-risk people. It's a once daily pill trued Truvada. Studies show it could lower the risk of HIV infection by 42 percent in gay men and by 75 percent in heterosexual couples with one infected partner.

The drug already is being used to treat people already infected with HIV.

We're joined now by the pioneering AIDS researcher Dr. Anthony Fauci, the director of the National Institute of Health specifically on allergy and infectious diseases.

Dr. Fauci, thanks so much for coming in.

Truvada, it's been on the market for some time. But now for the first time it's been approved as what is being called a prevention drug. How significant is this?

DR. ANTHONY FAUCI, DIRECTOR, NATIONAL INSTITUTE OF ALLERGY AND INFECTIOUS DISEASES: It's significant because this is the first time we have an approved drug by the FDA for the prevention of HIV infection.

We have approximately 30 drugs that have been approved for the treatment of HIV infection, but this adds now to that comprehensive toolkit, as we call it, of multiple different ways to prevent HIV infection.

It isn't supposed to be primary for everyone. You mentioned correctly for people at high risk, such as men who have sex with men or people who are in a couple relationship where one is infected and the other isn't, it's not meant as a substitution for other types of prevention, but it is a very important milestone. It is the first time an anti-HIV drug has been approved by the FDA for prevention, as opposed to just treatment.

BLITZER: As you know, some people are concerned, Dr. Fauci that it could be an excuse to now engage in unprotected sex. Is that a real concern for you?

FAUCI: It is always a concern. But there really is a lot of effort when you talk about what is being done in making people aware of the things that they need to do and the emphasis on the part of the drug company, on the part of the FDA and the CDC about this not being a substitute, that you still need to utilize and implement the other prevention measures.

Importantly, you need to make sure that you're not infected when you start on the drug, because this is not a drug for treatment. Even though it's used in treatment, it isn't the full component of treatment. So people need to make sure that they go get tested and make sure they're negative before they start on that. And, again, it's not for everyone. It's for people in the high-risk categories.

BLITZER: Is there any proof, Dr. Fauci, that this drug could cut HIV transmission rates?

FAUCI: Well, there's no doubt about it because if you look at the data from the clinical studies that you mentioned, Wolf, in the men who have sex with men, it's decreed by 42 percent, effective, and then in fact if you look at people who actually really did take the drug, it's higher than 42 percent. That's all comers.

Some people do not take their drug regularly. And in the heterosexual study, it's as high as over 70 percent. So there's no doubt from the clinical studies that, if implemented, if people adhere to the regimen of one pill a day, that it will significantly decrease the acquisition of infection on the part of the person who is taking the drug.

BLITZER: Will this drug be covered by let's say health insurance or Medicare or Medicaid for that matter?

FAUCI: Well, I'm not quite sure. I can't make that statement right now. It was just approved. That would be up to the appropriate agencies to make that decision.

BLITZER: Big picture, and give us the really big picture, because you have been a pioneer in this area for so many, so many years. What does this mean in the overall fight against HIV and AIDS?

FAUCI: What it really means, Wolf, is that we have another scientifically, evidence-based mechanism of prevention of infection. If you look at the different ways to prevent infection, there's a whole constellation of them. We refer to it as combination prevention.

This is a very important addition to that comprehensive prevention toolkit that we have.

BLITZER: Dr. Fauci, as usual, thanks so much for coming in and explaining what's going on, a significant development in the battle against HIV/AIDS.

FAUCI: Thank you.

BLITZER: We're also learning about misconduct over at the Department of the Treasury here in Washington. And guess what? It involves prostitutes, as well as inappropriate gifts. Stand by.

Also, President Obama won't apologize to Mitt Romney after a campaign aide suggests the Republican presidential candidate potentially could have committed a felony.

And a video from a Madonna concert has some French officials threatening to sue.

(COMMERCIAL BREAK) BLITZER: Meanwhile, new revelations about misconduct within the Obama administration. Treasury Department employees have been cited for soliciting prostitutes, accepting gifts from corporate executives and other unethical, possibly criminal behavior.

We're getting a rare look at the results of an internal government investigation from documents posted online.

Let's bring in Lisa Sylvester, who has been going through all of the documents.

Lisa, what are you finding out?

LISA SYLVESTER, CNN CORRESPONDENT: Wolf, people want to believe that their government is hard at work for them, not having government employees playing golf with companies they're supposed to be overseeing and certainly not soliciting prostitutes and using a government credit card to pay for the hotels.

But both are recent examples investigated by the Treasury Department's inspector general.


SYLVESTER (voice-over): In August of 2010, a Treasury Department employee accessed the Web site Craigslist to arrange sexual encounters with prostitutes.

He used a government-issued computer to set up the tryst and later used his government-issued travel credit card to purchase hotel rooms. That employee worked at the Department's Office of Thrift Supervision. After being confronted with the allegations, he retired. The 80-plus pages were released by the Treasury Department's Office of Inspector General after a Freedom of Information request by a government watchdog group,

Among the other allegations, one employee allegedly provided information on government contracts to her husband's business. Another, a national bank examiner in the Office of the Comptroller of the Currency, accepted golf fees and meals from the very bank he was reviewing.

MICHAEL SMALLBERG, PROJECT ON GOVERNMENT OVERSIGHT: It raises deeper questions about a cultural problem within the agency when folks wonder why the regulators didn't do a better job of stopping the problems that led to the financial crisis or they're wondering why OCC didn't spot the huge trading loss at J.P. Morgan earlier this year. I think part of the issue is that the examiners were just to close to the folks they were supposed to be examining.

SYLVESTER: There are 11 reports of investigations conducted in the last three years by the Inspector General's Office. Six of them were substantiated.

A Treasury spokesman says the cases involve only a handful of individuals in a department with more than 100,000 employees, saying -- quote -- "Treasury has a strong ethics policy that we expect all of our employees to follow, and the overwhelming majority of them do. As with any large organization, issues of misconduct occasionally arise. When that happens at Treasury, we act promptly and decisively to address them."

Melanie Sloan with the Citizens for Responsibility and Ethics in Washington says, while embarrassing, the documents show the I.G.'s office took immediate action.

MELANIE SLOAN, EXECUTIVE DIRECTOR, CITIZENS FOR RESPONSIBILITY AND ETHICS IN WASHINGTON: There are going to be people who break the rules and do terrible things. There are always bad apples. And the big question is what does Treasury do about it? Did they handle it as they should? Did they aggressively target this kind of unethical conduct? And in this case, at least, it seems they did.


SYLVESTER: Now, most of the incidents were brought to the inspector general's attention from bureau management. And in some instances like the prostitution, that case was referred to authorities, and in the golfing incident, the matter was referred for possible administrative action -- Wolf.

BLITZER: She makes a good point, that woman you had, that there's always going to be bad apples, but the key is what the government does when that happens.

SYLVESTER: Yes. And in this case it's clear they did step in. In many ways, you can see it's a paper trail of exactly what steps the Inspector General's Office did, and they certainly stepped in immediately and took action when it was appropriate, Wolf.

BLITZER: Lisa, thanks for that report.

Good report from Lisa, Kate.

BOLDUAN: Yes, inspector general often a thankless job, but do such important work, as we see.




BLITZER: Hillary Clinton tells CNN what she really thinks about Mitt Romney using her name in an ad attacking President Obama. Stand by for that.

And at 55 after the hour, a massive and destructive mudslide, and it's all caught on video.


BLITZER: Happening now: We're fact-checking the Romney campaign's claim that President Obama is rewarding donors at the expense of the middle class.

Britain is deploying troops to fill embarrassing security gaps at the London Olympics.

And L.A. Lakers fans find a bizarre way to welcome the team's newest player.

I'm Wolf Blitzer. And you're in THE SITUATION ROOM.

After a few days playing defense, Mitt Romney is on the attack right now. He's accusing President Obama of what's being called crony capitalism. Romney is slamming the president, saying that people who give the campaign lots of money get government business. Listen.


MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: There's no question but that when billions upon billions of dollars are given by the Obama administration to the businesses of campaign contributors, that's a real problem, particularly at a time when the middle class is really suffering in this country.


BOLDUAN: So we fact-checked the money behind one company, Fisker Automotive. And here's what we found.

John Doerr is a big Democratic fund-raiser who was appointed to the White House Council on Jobs. His private company invested in the Fisker, which gets money from the Energy Department, but the company first got involved in the government loan program during the Bush administration. Doerr is just one of many investors. The company says it has never solicited or accepted any political favors -- Wolf.

BLITZER: All right, so let's a little bit dig deeper on this sensitive issue.

Joining us now, two guests, the former Republican Congressman Tom Davis of Virginia. He's now president of the Republican Main Street Partnership. Also joining us, Neera Tanden, she is president of the Center for American Progress, a former senior adviser to the president, President Obama, on health care.

What do you make about this latest Republican charge that some of the president's top donors have benefited from government money in effect that has been doled out to them?

NEERA TANDEN, CENTER FOR AMERICAN PROGRESS: You know, when you're on a campaign and you're getting attacked, you want to counterattack. So, I understand their need.

But what's odd, what I find odd about the decision to attack on this is, it makes Romney more vulnerable, because the reason why we even know about John Doerr or anyone else is because the president has released his bundlers. And the issue with Mitt Romney is, he hasn't released his bundlers. He's had a very secretive campaign. Information that George Bush released on taxes or bundlers, he's not releasing now as a presidential candidate. I think it's a very odd choice for him.

BLITZER: Bundlers, as all of us know, but I don't know if all of our viewers know, those are the fat cats, if you will, who go out there and raise a lot of money, campaign money from big contributors and bundle it all together and give it to a campaign.


BOLDUAN: What's your take on this latest push? Do you think that it's going to work, or is he doing what he's been -- is Governor Romney doing what he's been criticizing the Obama campaign of doing, going negative?

TOM DAVIS (R), FORMER U.S. CONGRESSMAN: Well, if you're not on offense, you're on defense.

You have Solyndra, you have a whole slew of companies that have had heavy Democratic contributors, some of whom have had contact with the White House and have gotten contracts, nothing that is precedent- setting about that, but I think you're on offense. And I think it's a decent shot.

BOLDUAN: Do you think it will do enough to change the narrative which has not moved off the Bain attacks and the financial disclosure attacks that are coming?

DAVIS: I think this narrative is the summer doldrums at this point. I don't think this race will engage until after the conventions. It's attack and counterattack until then.

The real issue is going to be, where is unemployment in September and where is it in October?

BLITZER: Do you agree?

TANDEN: No, I would say that I think the real challenge for Mitt Romney, just like the challenge for Democrats in 2004, was, you do get defined.

And what's been surprising to me actually as a person who has worked on campaigns -- and you know campaigns very well -- that it's surprising to me that he wasn't better prepared for this. He saw this coming for not just a year or two years -- 12 years, 16 years, this has been a source of attack.

The fact that Mitt Romney has not done the basic issue of releasing his tax returns makes people concerned that there's something there. And he needs to answer that.

BLITZER: Well, he has released one year. He will release this year, so two years, which is what McCain and a few other presidential candidates did. (CROSSTALK)

DAVIS: It's more than what the law requires. I think we need..


BLITZER: I want you to listen to this.

TANDEN: We are hiding behind the law.


BLITZER: This is a very powerful ad that the Romney campaign used. I'm going to play it because we have gotten reaction from Hillary Clinton today in a CNN interview. Listen to this.


NARRATOR: Barack Obama's attacks against Mitt Romney, they're just not true. "The Washington Post" says on just about every level, this ad is misleading, unfair and untrue.

But that's Barack Obama. He also attacked Hillary Clinton with vicious lies.

SEN. HILLARY RODHAM CLINTON (D), NEW YORK: He continues to spend millions of dollars perpetuating falsehoods.

NARRATOR: Mitt Romney has a plan to get America working. Barack Obama, worst job record since the Depression.

CLINTON: So, shame on you, Barack Obama.


BLITZER: And Hillary Clinton was asked by our own foreign affairs reporter, Elise Labott, to react to her being used in this Romney ad. Here's what she said.


CLINTON: I think it's a waste of money. I mean, everybody knows I ran against President Obama in 2008. That's hardly news. Everybody knows we ran a hard-fought campaign, and he won. And I have been honored to serve as his secretary of state, working with him to advance America's interests, values and security.


BLITZER: Do you think that's a waste of money, that ad?

TOM DAVIS, FORMER U.S. REPRESENTATIVE: Not at all. Look, when you're talking him on Bain and it's lies or you think it's exaggerations, you want to get back on the attack. So I think it gets them off the scent. Look, this race is going to boil down to where the economy is, though, in September and October. And you can see Obama and his team want to talk about anything but that at this point, and they're trying to shift it to rich versus poor, to Bain Capital and these kind of issues.

I think it's useful in defining Romney from their perspective, but at the end of the day, I think this race shifts right after the nominations in September, and we're going to see a different kind of race.

BOLDUAN: Well, here, I mean, the congressman said he thinks it's all going to turn on the economy and the unemployment rate. But as we know, and you well know, how high Hillary Clinton really polls, often higher than President Obama himself. So doesn't this potentially hurt the president in his campaign, to remind voters of that really brutal battle that they had in '08?

NEERA TANDEN, PRESIDENT, CENTER FOR AMERICAN PROGRESS: You know, as you know, I worked on that campaign and I was working for Hillary when she made those comments. The fact is that Hillary Clinton and Barack Obama agree on 99.999 percent of issues. And everybody knows, every single American knows, that she works with Barack Obama to advance America's interests.

BLITZER: She said in that, in 2008, and I remember covering it, too, "Shame on you, Barack Obama," the direct -- that was a direct quote. So "shame on you, Barack Obama." Well, the Romney folks are using that. That's a pretty powerful ad.

TANDEN: Yes, I actually -- I disagree. I think the fact is that people know that she stands with President Obama on -- you know, she works in the cabinet but also on economic issues. Hillary's been a fighter for the middle class for decades. She stands with President Obama on those issues. Their disagreements were significant but they pale -- pale in comparison to the differences between both Clintons and Mitt Romney as well as Barack Obama.

BLITZER: You know politics is a full-contact sport. Romney is a tough guy. The way he used some of his attack ads to go after Newt Gingrich or Rick Santorum, or Rick -- he brutalized those guys.

DAVIS: I bet you the Obama camp will be using those comments in their ads. That's the way the game is played. But for right now, you're moving from defense to offense. And that's something he's got to do so he doesn't get ill-defined going into the convention.

TANDEN: Sometimes offense doesn't work. And I have to say, these counterattacks on Solyndra when Romney himself isn't releasing his donors, it reminds people that he's being secretive. And I think that's why they're not going to be effective.

DAVIS: This race is being run between the 40-yard lines. There's not a lot of Americans that are movable at this point, and a lot of Americans are not paying attention. You don't want to use -- use this time period to get so ill-defined you can't come back. That's what happened to Bob Dole.

TANDEN: And John Kerry.


BLITZER: Just remember the swift-boating of John Kerry in 2000.

TANDEN: Exactly.

BLITZER: You may have still been in high school at the time.

TANDEN: Junior high.

BLITZER: Mitt Romney and Barack Obama are not singing one another's praises right now. Dueling musical ads -- has the -- we're going to play those ads for you, and then we'll discuss. Stand by for that.

And has the British government dropped the ball when it comes to Olympic security? Stay with us. You're in THE SITUATION ROOM.


BOLDUAN: You asked this guy about his favorite Olympic sport. He is going to answer. Stay with us.


BLITZER: Let's get back to our political panel. The former Virginia congressman, the Republican Tom Davis, is now president of the Republican Main Street Partnership. Also Neera Tanden, she's president of the Center for American Progress, a former senior adviser to President Obama on health care.

I love these two new commercials because they got both presidential candidates -- I don't know if this has happened before -- both candidates singing. There's an attack ad from the Romney campaign. An attack ad from the Obama campaign. Let's play both of them, and then we will all discuss.


MITT ROMNEY (R), PRESIDENTIAL CANDIDATE (singing): Oh, beautiful for spacious skies...

GRAPHIC: In business, Mitt Romney's firms shipped jobs to Mexico.

ROMNEY (singing): ... for amber waves of grain...

GRAPHIC: And China.

ROMNEY (singing): ... for purple mountains' majesty...

GRAPHIC: As governor, Romney outsourced jobs to India.

ROMNEY (singing): ... above the fruited plains.

GRAPHIC: Right now, there are 23 million Americans struggling for work. Unemployment is stuck at 8.2 percent. Americans need help.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES (singing): I am so in love with you.


BLITZER: You get the point. Both -- he's got a good -- I think on the "American Idol" scale...


BLITZER: ... the president's got a better voice than Romney, but what do you think about these two dueling singing ads?

TANDEN: You know, I think that what's actually odd about it is that I don't actually understand the connection between the president's singing and the actual substance of the ad.

BLITZER: He's so in love with you, and then it's showing all of his big fat-cat contributors...


BLITZER: ... who have been receiving benefits from him since he took office.

TANDEN: I mean, I know the song, but it just doesn't, like, make that big a connection. Whereas the Romney ad I understood.

I mean, these are -- I think it's a little bit much to be mocking so much on both levels at this point. But I would say that at least the Romney ad, you can sort of -- I mean, the ad attacking Mitt Romney, you know, it seemed to be me to be a kind of hard hitting, effective ad. Because it really is about betraying that central commitment to the United States when you ship jobs overseas.

BLITZER: Objective analysis from a Democrat. What about you?

DAVIS: I'm so in love with you, he was singing it to a fund- raiser. You don't see that there.

Look, they're both -- this reminds me of the Mike Pappas ads "twinkle, twinkle, Kenneth Starr," where the tag line was "Out of tune, out of touch."

This is again a race to the bottom pretty quick in this presidential race as we delve into trivia on both sides sooner than usual.

BLITZER: But they're cute.

DAVIS: They are cute. They're entertaining. You could make a CD of these ads and the singing, and I think, make it a hit. TANDEN: And the president has a ring tone, actually. And it was very popular.

BLITZER: He did a great job with that.

TANDEN: I don't know if it will work. Maybe it will help the president.

BOLDUAN: That Al Green thing was really popular.

DAVIS: Michelle Obama when asked about the -- Romney (ph), said it was beautiful when she heard him singing that. So that was a brief bipartisan moment in this whole campaign.

BOLDUAN: The point of the Romney ad attacking the president is about the donors, but also this overarching issue of kind of this outsourcing -- outsourcing argument. Do you think this goes to the same thing you said: it's kind of the summer doldrums? It's -- they're attacking on that, and people will get back to the economy when it matters.

DAVIS: (UNINTELLIGIBLE) foreign companies. It wasn't spent domestically. Both parties can have a field day with outsourcing, taking a look at the policies and what has transpired.

What we're missing is a serious debate about what causes it, what we do to create jobs in America. And with unemployment at 8 percent, the real test is on the administration to show they have a plan, because it hasn't worked the last 3 1/2 years.

TANDEN: As you know, the president has been advocating for a long time about stopping tax subsidies for outsourcing, as Republicans in Congress have stopped that. So it's really easy to say, "Shame on both your houses" or "a pox on both your houses," but that's not really the case. The case is the president has a strong policy position on spending, offshoring, outsourcing and the Republican Party has been standing in the way.

DAVIS: It's a policy position that doesn't work. You have almost $4 trillion sitting on the sidelines, maybe a trillion and a half, overseas you could bring back. That would be the biggest stimulus we could have without paying a taxpayer dollar, but it doesn't fit the political nerve of the Democratic Party.

TANDEN: It's easy to say. It doesn't work. Let's try it.

DAVIS: We tried it for three years.

BLITZER: We'll discuss it. We'll try it again soon. Thanks so many to both of you for coming in here.

Kate has a check at what's going on at the Pentagon, and I don't understand. What was going on?

BOLDUAN: Lots of things going on right now. Two more Air Force pilots had oxygen problems, rather, flying the F-22 Raptor, one of America's most advanced fighter planes, but those emergencies, or reportedly those two most recent cases, are considered regular mechanical issues. But not related to the mysterious loss of oxygen on other flights listed as, quote unquote, "cause unknown."

And for any of you already wary of airport security checkpoints, this may hit quite a nerve. The Department of Homeland Security is reportedly working on a new laser-based scanner that can detect everything from traces of drugs to even what you ate for breakfast. This caught the eye -- our eye on the popular tech Web site Gizmodo, which reports the scanner can be fired from over 160 feet away so you won't even know it's happening.

And this election has had its share of name calling, finger pointing, and drama. If we needed to remind you of more, I guess it's no wonder Jerry Springer is getting involved. The talk-show host and former Cincinnati mayor says he met the president -- with President Obama for about an hour before a town hall today. Springer calls Obama smart and confident and says he supports the president's re- election bid. Just another celebrity.

BLITZER: Was that like an interview or just a little meeting?

BOLDUAN: All I know is that he was at the town hall, and he had time to speak with the president.

BLITZER: That's pretty cool.

BOLDUAN: "Jerry Springer, how you doing?"

BLITZER: We'll check in with Jerry to see what he has to say.

BOLDUAN: I didn't even know he was around anymore.

BLITZER: All right. The British government is pushing back hard as questions, serious questions swirl about Olympic security, whether there will be enough guards who actually speak English on hand to keep the games safe. You're going to want to see this story.

Also, a massive mud slide, as it happened.


BLITZER: Olympic athletes have been pouring into London's Heathrow Airport today, arriving for the summer games that begin a week from Friday.

As anticipation builds for the Olympics, the British government is deploying troops to fill a rather embarrassing gap in security. A private security contractor admitted last week that it wouldn't have enough staff in place by the opening ceremonies.

CNN's senior international correspondent, Dan Rivers, has more from London.

(BEGIN VIDEOTAPE) DAN RIVERS, CNN CORRESPONDENT (voice-over): Just a day after the jubilation of winning the Olympics in 2005, Britain was reminded of the ever-present terrorist threat, the 7/7 bombings underlying that security at the games would be a paramount concern.

Britain's military on the sea, air and land were always going to play a major part in the securing the games. But it was decided early on that a private firm would also be employed to guard the many Olympic sites. Security firm G4S won the contract to initially supply 2,000 guards in December 2010.

In the following September, a confidential report to the Home Office flagged potential problems with Olympic security and the need for more guards. Three months later, G4S was asked to ramp up the number of guards it was providing from 2,000 to 10,000. Last Wednesday, British Home Secretary Theresa May, was told G4S wouldn't be able to supply the extra guards, due to a problem with its computer systems: 3,500 extra soldiers were then mobilized to bridge the gap.

THERESA MAY, BRITISH HOME SECRETARY: It is not a shambles. What this is a situation where the government has done what is absolutely right for government to do.

RIVERS: Some of the soldiers are already arriving at the Olympic stadium in East London, a reassuring image and police will also help to bridge the gap, but it's not enough to stop the share price of G4S being hammered, down more than 10 percent since the story broke last week.

UNIDENTIFIED MALE: Clearly in this instance, the company hasn't done a great job. I feel very embarrassed about it. I'm very sorry about it. And we've got to put it right. And we are going to deliver a safe and secure games.

RIVERS: British Home Secretary Theresa May was called to Parliament to answer urgent questions about Olympic security, reassuring politicians everything was in hand.

MAY: G4S have failed to deliver their contractual obligations, but we have the finest military personnel in the world.

RIVERS: The original estimate of 2,000 guards was based on the plan used at the 2002 Commonwealth Games in Manchester.

(on camera) But that figure has been described as a finger-in- the-air estimate by a senior civil servant at the Home Office. In hindsight, it seems woefully naive. It's left soldiers with ruined summer holidays. It's left the government red-faced, and it's left G4S with a potential $77 million loss on a contract that should have been one of their most prestigious.

Dan Rivers, CNN, London.


BLITZER: And that's not the only possible problem for G4S. The British Home Office tells CNN the contractor could not even guarantee whether their guards had the right training.

G4S did not immediately respond to our request for a comment on that specific accusation.

This is pretty embarrassing stuff, Kate. For all the folks who are organizing security at the Olympic Games.

BOLDUAN: And I mean, not like we need to remind everyone: we're only two weeks out from the opening -- opening ceremonies.


BOLDUAN: Less than two weeks out now.

So -- all right, so another Olympic story, a very different one. It is now your turn to ask Wolf a question. We got this question on Twitter, Wolf. This comes from Al Harris, asking, "What Olympic event are you most looking forward to?"

BLITZER: Well, first of all, I love all the events.


BLITZER: Track and field, everything gymnastics. But...

BOLDUAN: But -- yes.

BLITZER: ... I really -- you know, look ,I love basketball. And the Dream Team. You know what? There are some great international basketball players. Some of those teams are pretty good. I think there will be some good games. You know where I'm going tonight right after this show?

BOLDUAN: Tell me.

BLITZER: I'm going to the Verizon Center in Washington, D.C. Because the USA Dream Team is playing Brazil. Those guys are NBA players.

BOLDUAN: So here's the question...

BLITZER: I'm hoping it will be a good game.

BOLDUAN: How many...

BLITZER: I'm rooting for the U.S.

BOLDUAN: Really? Shocker. How many points will the U.S. win by?

BLITZER: A lot. But you know, let's see how they do. Let's see if, you know, Kobe and LeBron, everybody, they really show up to play or if they just sort of go through an exhibition game.

You know, the president, by the way -- that would be President Obama -- and the vice president, they're going, as well... BOLDUAN: Wow.

BLITZER: ... to the game tonight. So it will be a good crowd in Washington.

BOLDUAN: Very good crowd.

BLITZER: Love basketball. Love baseball. Love football. Love hockey. Love all the sports.

BOLDUAN: All right. Well, of course, as I would like to remind all of you, you didn't hear him say that I was going to get a ticket to come with him.


BOLDUAN: But compare this Dream Team to previous Dream Teams. Because you are the basketball fan.

BLITZER: Well, let's see how they -- let's see if they -- we've got some great players now.


BLITZER: But the olden days, you know. Michael, and -- we've had some pretty good Dream Teams.


BLITZER: So let's see -- let's see how these guys do.

BOLDUAN: The only knowledge I have of the basketball team...

BLITZER: I want to see if...

BOLDUAN: ... is that Blake Griffin already has injured himself.

BLITZER: He's injured himself. Apparently, he's not going to be able to play.

BOLDUAN: That's the extent of my knowledge.

BLITZER: They're missing a really big tall guy -- to play.

BOLDUAN: They're looking for you. They're looking for you, Wolf.

BLITZER: Not a chance. I'm just a fan. Like basketball.

BLITZER: Well, keep asking your questions. You ask us every way you want to ask us: Twitter, Facebook. You can see them all listed there on the screen. Keep asking your questions. Ask away.

BLITZER: Speaking of basketball, what else is coming up?

BOLDUAN: A lot is coming up. We have the L.A. -- L.A. Laker fans raise a glass and make a pass to the team's newest player. You won't want to try this one at home.


BOLDUAN: A mud slide barrels through the woods with a camera rolling. Stand by to see it for yourself. It's really unbelievable video.


BOLDUAN: Two separate mudslides caused destruction in Canada in recent days, and one of them was caught on camera by a news team. You can see a wall of mud just barreling through the woods in British Columbia, tearing down -- look at that, just tearing down trees in its path.

Unfortunately, four people are believed dead in this massive slide, triggered not surprisingly by heavy rains and melting snow.

It's always amazing what Mother Nature can do.

BLITZER: Really.

BOLDUAN: Absolutely terrifying, though.

BLITZER: And so sad, indeed.

BOLDUAN: If you say that coming, oh, my goodness.

BLITZER: All right. On a very, very different note right now -- and it's very different, I must say, indeed, the Los Angeles Lakers have a new point guard, and it's probably safe to say that a few of the team's fans have raised a glass in his honor. But not like this.

CNN's Jeanne Moos has the story.


JEANNE MOOS, CNN CORRESPONDENT (voice-over): Just because it's called the passing lane doesn't mean someone should pass you a beer. That's just what an SUV full of Los Angeles Lakers fans did when they spotted the Lakers' newest star, Steve Nash, in a taxi on Freeway 110.

Now, the guy shooting this is none other than point guard Steve Nash himself. And when they finally completed the handoff, Nash just swung the camera around and added a comment.

STEVE NASH, L.A. LAKERS POINT GUARD: The guys (ph) have been pretty good so far.

MOOS: Nash later tweeted out the video, saying, "Thanks for the warm welcome."

We're hoping the can of Keystone Light was cold.

The rowdy fans opened their own Twitter account, calling themselves "L.A. Beer Bros," and they posted video of the view from their SUV and the celebration following the handoff.


MOOS: The L.A. Beer Bros tweeted that they were "On the way to the Dodgers game, guy in back says, 'That's Steve Nash.' Slowed down to check. Sure enough!"

(on camera) One guy posted to YouTube that the video would be a great commercial. Keystone Light, good enough to make Steve Nash open his window.

(voice-over) But the makers of Keystone Light seemed to distance themselves, telling CNN, "We had nothing to do with this video." Some online distanced themselves from Keystone Light, not exactly a premium beer. "Nash should have realized it was a Keystone and thrown it back," posted one.

Of course, there could have been more razzle-dazzle...

UNIDENTIFIED MALE: Hey, pass me a beer.

MOOS: ... like the two guys who made an entertaining video catapulting a beer, kicking a beer, skateboarding a beer, and bouncing one.

But merely passing a beer between cars, whizzing along the freeway, is already unsafe and illegal, though so far there have been no charges.

(on camera) We haven't seen a product handoff like this since Grey Poupon.

UNIDENTIFIED MALE: Pardon me. Would you have any Grey Poupon?


MOOS: These two would have pouponed their pants if they did this at say, 60 miles an hour.

Jeanne Moos, CNN, New York.


BOLDUAN: I can't -- I mean...

BLITZER: Here's what impressed me. Steve Nash is taking a cab. You know? He should have a driver pick him up.

BOLDUAN: You want to talk about Steve Nash after what Jeanne just said about Grey Poupon?

BLITZER: He's one of my heroes, Steve Nash.

BOLDUAN: Well, and now you should tell him to not do that. Do not try this at home.

BLITZER: I've met Steve Nash. He's a very, very nice guy.

BOLDUAN: And we hope -- we wish him well on the basketball court.

BLITZER: Not that well.

All right. Remember, you can always follow what's going on in THE SITUATION ROOM. I'm on Twitter, @WolfBlitzer. Kate is on Twitter, @KateBolduan. Thanks for joining us. "ERIN BURNETT OUTFRONT" starts right now.