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FBI Investigated Petraeus' Relationship With Biographer; King: Resignation Came As A Total Shock; 500,000 Still Without Power After Sandy; Tensions Rise In Queens After Sandy

Aired November 9, 2012 - 19:00   ET


ERIN BURNETT, CNN ANCHOR: I'm Erin Burnett. OUTFRONT tonight, we have breaking news, CIA shocker. David Petraeus out as director of the CIA. The four-star general and architect of the war in Iraq resigned after admitting he had an affair.

And right now, we have much about that story for you. Suzanne Kelly is our intelligence correspondent and has the latest. Suzanne, what you can tell us?

SUZANNE KELLY, CNN INTELLIGENCE CORRESPONDENT: Hi, Erin. Well, U.S. official confirms to CNN that the FBI investigated a tip that David Petraeus was involved in an extramarital affair with a woman, Paula Broadwell who is his biographer.

Now Broadwell has spent a year with Petraeus in Afghanistan interviewing him for the book that she co-wrote called "All In, The Education of General David Petraeus."

Now CNN has not been able to reach Broadwell for a comment and it's not clear whether she is the woman with whom Petraeus had admitted having an affair that, of course, led to his resignation as CIA director, as you mentioned.

The official though, did tell us that the FBI counterintelligence unit investigated the tip to see if there was a potential security risk whether Petraeus could possibly be blackmailed over this information.

The official said there is no suggestion that the FBI was investigating Petraeus for any possible wrong doing. The concern, of course, was that he could be in a vulnerable spot -- Erin.

BURNETT: And Suzanne, is there any information that you have in terms of this investigation that the FBI had and to compromise this as to whether this woman that you mentioned, Paula Broadwell.

And we'll talk a little bit more about her in a few moments, but that she would have accessed his information with his approval or unbeknownst to him?

KELLY: We don't -- what we know is that they had a very close relationship. As we mentioned, she does spend a year with him in Afghanistan. I know the two kept in touch. I've worked with Paula professionally as well. I've reached out to her several times today and haven't gotten a response, but we do know that they still continue to talk very frequently. So in terms of sharing e-mails and things like that, there's nothing that I can tell you on the record that is reportable.

BURNETT: All right, well, thank you very much, Suzanne. Suzanne is going to stay with us and just to let our viewers know, you know, Paula Broadwell, the woman about whom we are speaking has been a regular guest on this program. We reached out to her as well today.

Fred Kaplan joins me now from He is the author of a new book called "The Insurgent, David Petraeus and the Plot to Change the American Way of War."

And Fran Townsend, a member of the CIA External Advisory Board and a contributor for us. Fred, let me start with you. You were the first to write about this specific, the affair today and to mention Paula Broadwell. What can you tell us?

FRED KAPLAN, SLATE.COM: Well, I can tell you that I have this from multiple, highly reliable sources. You know, she wrote this book about him, which was more of a Valentine to him.

I mean, people -- you know, it had been rumored that something was going on between the two of them for some time. I never believed it. People I know who know General Petraeus better than I do never quite believed it.

But it really is quite a shock. I've always viewed him as a -- and everybody has, as very straight arrow officer.

BURNETT: Certainly I met and interviewed him, I had the same impression. I mean, he was a man who walked the walk and talked the talk. And Fran Townsend, what can you tell us? You also know him very well. Is this -- this specific affair, this really the reason that he is resigning?

FRANCES FRAGOS TOWNSEND, CNN NATIONAL SECURITY CONTRIBUTOR: Yes, I've heard nothing to suggest there's any other reason. I think it is in fact related to the allegations of the extramarital affair and look, I think when you look at the letter that he wrote in terms of his resignation to the president, he's taken personal responsibility.

He's held -- I think he's holding himself accountable. There is, of course, the question of timing, right? We've just had the election. Why now? How long has the investigation been going on?

Because of course, Erin, when the FBI opened the investigation, they would not have conducted this investigation on their own without notifying others in the administration.

Presumably, the director of National Intelligence, Jim Clapper, and then Jim Clapper would have notified a handful, maybe one or two others in the White House. BURNETT: Fred, you've -- you've written a book here that's about to come out on General Petraeus. You have spoken to him. You know his feelings on this. A lot of people out there try to say is this really the reason? You know this man's view of morals and moral fiber and how ardently -- what he felt about that.

KAPLAN: Well, it's very interesting. One time when I was interviewing him, we were talking about a couple of fellow officers who had been drummed out of the service in part because of infidelities.

And one of them was a friend. He spoke about them with this tone of contempt. That they had engaged in this dishonorable behavior. A previous guest told you that, you know, General Petraeus has been doing just fine.

I don't think he'll be doing very fine at all. I think that he's deeply embarrassed. He didn't have to resign if he was a civilian CIA director. He's -- you know, there's this phrase in the military that a general retires only when they go to bed at night.

He still feels very deeply the military code. It's kind of a strange thing to be calling him a moral character in this context, but I think he resigned because he feels that he has violated a code.

BURNETT: And Suzanne, let me ask you because I know you've been speaking to many of your sources within the CIA. How shocked are they at this?

KELLY: Stunned. I mean, there's no better word for it, Erin. You know, something like this was just not seen at all on the radar. I mean, of course, there are whispers and things. Paula when she wrote the book had incredible access to him.

So if that flushes out to actually be true, you know, people were whispering about that, but just the fact that she's a woman and she has access when she writes a book about a man in Washington is not reason enough to think there was more than that.

And given his reputation, his moral character, how many respect him at such a high level here in Washington and even as director in the CIA, you know, there were sometimes personality clashes.

Sources that told me between him and the number two in charge who the president has asked to step up in that number one role. But never anything that really ever compromised his moral character. More sort of his mind set in the way he felt things should be done, so people were stunned by this -- Erin.

BURNETT: And Fred, given the timing of it, given that this is coming just a week before he was supposed to testify about the Benghazi situation, which apparently he now isn't, but we have some news on that coming up in a few moments. What was his relationship with President Obama?

KAPLAN: I'm told that a -- you know a couple of years ago when he was still commander in Afghanistan that there was tension with members in the White House staff.

We thought that when they were reviewing the options for whether to put in more troops, they thought that Petraeus and other generals were trying to box the president in.

I've been told in the last couple of years especially since he became CIA director that relations are very good with the president, very trusting. I was told that General Petraeus submitted this letter of resignation yesterday.

And that Obama agonized over this for the last 24 hours, did not want to sign it, did not want to accept it. But that Petraeus urged him --

BURNETT: And Fran, I know that won't come as a surprise to you, but what about the security concerns? If we're hearing this came to light as a result of an FBI investigation into possible compromise of General Petraeus' computer, what might she have had access to?

TOWNSEND: You know, Erin, the investigation was considered a counterintelligence investigation. What that tells you is the concern that -- either he would have given her voluntarily access inappropriately to either classified information or national security information, I find that hard to believe.

She did have incredible access, but they would have -- the FBI would have been looking to assure themselves one that she didn't have inappropriate access to national security information and two, that she was an American who was acting on her own, voluntarily and was not sort of a conduit for a foreign intelligence surface.

Everybody we've talked to nobody believes that this was what they call a honey trap. That is a woman controlled by a Foreign Service. This was what it was. It was an extramarital affair for which he has paid a real serious price.

BURNETT: Certainly a serious price and Suzanne, does that also jive with what you're hearing from your sources in the CIA as to whether there was anything more to this investigation?

TOWNSEND: No, I think that pretty much sums it up. You know, what Fred, had mentioned about this being -- the real concern with the FBI there, you know, has anything been compromised?

Number one, they're going to look at whether he was voluntarily sharing information he shouldn't have been sharing and number two, they are going to look at whether or not the e-mail changes and text changes and what not to see if maybe she was accessing it somehow on her own if that's in fact what happened.

So I think that, you know, when you have those two things, that's the FBI's real role in this. In terms of the CIA themselves, they wouldn't have taken an investigatory look into this. They wouldn't have had anything to do with the investigation. So I think they're going to have to deal with the shock of it all. KAPLAN: You know, Paula Broadwell introduced herself to David Petraeus. She was a West Point graduate. She was a paratrooper. You know, very attractive and in excellent physical condition. Petraeus has always been attracted to sort of intellectual officers.

She came to him. She was writing a dissertation about his leadership style, which then became a book. But, you know, they used to in Afghanistan, they would go on five-mile jogs together, but he goes out on file mile jogs with a lot of reporters who are capable, but it's a very strange and completely surprising.

BURNETT: It is and I'll simply leave it with this, that Paula Broadwell just published this week on the "Daily Beast," General David Petraeus rules for living.

And number five was we all make mistakes, the key is to recognize them and admit them, to learn from them, to take off the rear view mirrors, to drive on and avoid making them again.

OUTFRONT next, we have more on the resignation of CIA Director Petraeus. Congressman Peter King, the chair of the Homeland Security Committee OUTFRONT next with how Petraeus' departure could put the United States at risk.

Plus, after spending millions of dollars to elect Mitt Romney, has Karl Rove lost his touch? A look at all the money spent and wasted this election.

And it has been nearly two weeks since Sandy, so then why is it taking so long to get power back to thousands of people?


BURNETT: Our second story OUTFRONT, the sudden resignation of CIA Director David Petraeus came as a surprise to almost everyone in Washington. The four-star general has worked closely with Congress over the years.

Representative Peter King is the chairman of Homeland Security. He's OUTFRONT tonight. I spoke with him before the show and asked him when he learned about the resignation.


REPRESENTATIVE PETER KING (R), NEW YORK: Somebody made a call to me this morning saying they had heard general Petraeus had a meeting at the White House yesterday and he may be resigning.

And I think the feeling what that maybe if it were true that somehow it was tied to Benghazi or something involving Libya. I don't think anyone suspected anything involving what it turned out to be.

I mean, I've known General Petraeus for a number of years. I didn't know him well, but have had dinner with him. And certainly as CIA director, he works with us on the intelligence committee very closely. I met him when he was in Iraq and there are a lot of rumors, you hear about people in Washington. I never heard anything about General Petraeus at all, so this came as a total shock.

BURNETT: He's not going to be testifying on Benghazi next week as a result of this. The CIA has already said that. Does that bother you given all the questions there are about Benghazi, questions about the CIA's involvement as, of course, David Petraeus was running the CIA?

KING: Yes, really, David Petraeus testifying has nothing to do with whether or not he's still the CIA director and I don't see how the CIA can say he's not going to testify. Again, maybe there's going to be a shorter combination.

But I think his testimony is certainly valuable. It's certainly necessary. He was at the center of this and he has answers that only he has. So I don't see what one has to do with the other.

And so I would hope and expect that he's going to testify one way or the other. If it's not on Thursday, it would be very soon after that. I mean, he certainly should be -- he is an absolutely essential witness maybe more than anybody else.

BURNETT: So you're going to ask that he does come and testify regardless of his role?

KING: Yes, absolutely. It's absolutely necessary witness and again, his final decision is up to Mike Rodgers, chairman of our committee, but I feel strongly that one way or the other, General Petraeus should testify, if not on Thursday, but as soon as possible thereafter.

BURNETT: And what about our -- the CIA itself? I mean, we look at General Petraeus' background. I mean, this is a man who has been lauded by Democrats, Republicans, responsible for victories in Iraq, responsible for the surge. This is a man admired by so many in both parties and around world. How big of a hole does his departure leave? I mean, some people will say it is a tragedy that a man of his caliber is leaving because of a personal indiscretion.

KING: Yes, it really is. I mean, the country's going to lose. Obviously, this hurts General Petraeus, but it even hurts the country more. He's a man of extraordinary talent, extraordinary dedication, extraordinarily hardworking.

He would give us briefings. He would never turn to his aides for the assistance. He was there. He knew it inside out. He was a 24/7 person with a really -- you know, the old expression, think outside the box. That was David Petraeus.

Now, the country is going to lose from this and I'm sure there's always somebody who can take his place, but I don't see anybody on the horizon who would have the same level of intellect, dedication, experience and contacts all over the world. I mean, when an issue would arise, General Petraeus, Director Petraeus, he was flying there. He was meeting with people in countries all over the world setting up relationships, making things happen.

And really only somebody with his experience, both in the military and diplomatic circles can make that happen. This is a real loss to the country, a real loss for the CIA.

BURNETT: Is our country less safe?

KING: Well, you know, going to lose the best man for the job, but again America's adaptable. Put it this way, we -- anytime you lose David Petraeus, the country is not as safe as it could be.

BURNETT: All right, well, thank you very much, Chairman King. Appreciate your time as always.

KING: Erin, thank you.


BURNETT: And OUTFRONT next, why are half a million people still without power tonight nearly two weeks after that superstorm?

Plus, President Obama and House Speaker John Boehner are both drawing lines in the sand over how to avert the fiscal cliff. That combination of spending cuts and tax increases set to hit all of us. Will there be common ground?


BURNETT: Our third story OUTFRONT, nearly two weeks after superstorm Sandy devastated parts of the northeast, there is desperation and anger.


GOVERNOR CHRIS CHRISTIE (R), NEW JERSEY: This is our Katrina. And I expect the people of this state to be treated with the same level of compassion and generosity that the citizens of Louisiana and Mississippi and Alabama were treated in the aftermath of Hurricane Katrina.


BURNETT: Michael Graham told me out on Staten Island last week as well. More than half a million households are still without power across New Jersey and New York, 40,000 homes on the Rockaway Peninsulas in Queens as temperatures dip into the 30s and tempers flare.

CNN's Deb Feyerick is there. And Deb, how angry are people?

DEBORAH FEYERICK, CNN CORRESPONDENT: You know, people are so frustrated and they are so angry. It's been only almost 12 days since the storm hit. You're not too far from JFK.

Behind me, you maybe you'll see a flood light. That flood light is basically illuminating a section, a corner that's normally lit by five different street lamps that I can count.

But the power in buildings it's off that means that there's no heat. Boilers can't work. There are no washer dryers. There's no way to charge a cell phone. There's no way to use a computer to kind of access any sort of outside help.

So they really feel that they're just being cut off here and they cannot understand why the Long Island Power Authority, which is a state-owned company, simply can't get the lights on.

We spoke earlier to couple of people at a rally and they were so frustrated. Take a listen.


UNIDENTIFIED FEMALE: Restore the power to our community now! Now! We're done!


FEYERICK: You know, and you just, you can see that level really, they just don't know what to do. They open for example -- the city opened up a center where you can go and get additional sort of food stamp benefits and welfare benefits, money.

People say that's great, except the stores are closed so you can't even use those cards to get additional food. A registered nurse tells us he feels they were left on their own, left to survive and they don't know how they can do it because it is so cold and lot of them can't even figure out who is supposed to be helping them.

All they know is that the people who say they're supposed to be helping them, right now, they haven't arrived -- Erin.

BURNETT: And Deb, I know that, you know, representative of Greg Meeks who represents that district was on this show. Half the people in his district live under the poverty line.

These are poor people that don't have access to some of the benefits others have. Do you have any sense when you talk about power of when it might come back for them or is this still who knows?

FEYERICK: Well, now, they're talking about Tuesday. Now they're saying that the earliest is going to be turned on is Tuesday and Erin, you make a really good point. And that is there is a huge socio- economic component to this storm.

You know, the people who have some money, they're able to evacuate, call their insurance companies, but those who don't, those below poverty or at poverty, for them, it is so difficult. The man whose home we went into today, everything was ruined. And I said what about insurance? He says, no, I can't even afford insurance and he is a registered nurse. So these are hard working people. They can't even get to their jobs, Erin, because the train, this is really the farthest most point.

Well, the train's not going to be running here for a very long time. We've heard reports of months, if not up to a year before that train out here in the Rockaways is even in fact online.

BURNETT: All right, Deb Feyerick, thank you very much. Makes you think, you wonder about the role of government, everyone, this is when you need them. You need them when people who have nothing need something and need help.

OUTFRONT next, more on tonight's breaking news, the sudden resignation of CIA Director David Petraeus.

Plus, President Obama and Speaker Boehner square off over the fiscal cliff, but someone has to give. Who will it be?


BURNETT: Welcome back to the second half of OUTFRONT. We start the second half of our show with stories we care about where we focus on our reporting from the front lines.

We told you last night about the Iranian jet that fired at an unmanned U.S. Air Force drone last week. Today, Iran responded to the Pentagon's claim. According to the semi-official state news agency, an Iranian general called the action decisive, saying Iran will use all of its capabilities to follow up on the case.

It was also announced today that Iran and the International Atomic Energy Agency will resume talks over the country's nuclear program in December.

The JetBlue pilot you may remember this story. He was locked out of a cockpit and tackled by passengers after acting erratically, saying things like, "We're going down", is going to be freed from custody. Clayton Osbon had the apparent meltdown in March. He was later found not guilty of interfering with the flight crew by reason of insanity. He was kept in custody for mental health treatment.

A judge ruled today that Osbon should be released under certain conditions. He must continue to receive treatment. He cannot obtain a pilot license and he cannot get on a plane without court permission.

Well, a Chinese web monitoring site said the Chinese government is blocking Google services. Now, Google's own transparency report which monitors the company's traffic around the world does show a bigger drop off than usual, but the company says there's nothing wrong on their end.

We spoke to a China expert Gordon Chang who thinks China is blocking the sites because the Chinese communist party's 18th national congress has begun. He says there's deep insecurity within the party and so they've taken unprecedented levels of security.

A West African foreign and defense ministers met to finally plans for international military intervention in northern Mali. AFP, a French news service, reports the economic community of West African states could commit 3,200 troops while other countries are willing to commit an additional 2,300. The goal is to have a plan ready for the leaders of so-called ECOWAS to approve when they meet this weekend, a plan is needed to get United Nations security support for military intervention.

It has been 463 days since the United States lost its top credit rating. What are we doing to get it back?

Well, the superstorm Sandy and the run-up to the election did not hurt shoppers' moods. Latest gauge of consumer sentiment hit its highest level since July of 2007, something to celebrate.

And now, our fourth story OUTFRONT: more on the breaking news story we're covering tonight. The surprising resignation of CIA Director David Petraeus, who stepped down after admitting to an extramarital affair.

A U.S. official confirms to CNN that the FBI investigated a tip that David Petraeus was involved in an affair with Paula Broadwell, who wrote a biography of the four-star general. Broadwell spent a year with Petraeus in Afghanistan, interviewing him for a book she co- wrote, "All In: The Education of General David Petraeus."

She has been a regular guest on this show, some of you may be familiar with her as a national security expert on the program. We have not been able to reach her for comment, although when we first heard about the story today, we reached out to her before we knew that she was potentially involved in it.

Let's take a look at the man at the center of the scandal, General David Petraeus. He has been praised by Democrats, by Republicans, and served both sides of the aisle, becoming central to the war efforts under both Presidents Barack Obama and George W. Bush. Petraeus retired as a four-star general. One of the most decorated war generals of our time, after a military career that spanned 37 years. He's credited with turning the war around in Iraq as commander of coalition forces there in 2007.

In 2008, he assumed command of the United States Central Command. In 2010, he went back into the field as commander of American and NATO forces in Afghanistan. There, he oversaw the troop surge that began to bring some stability to the country.

He became the 20th director of the Central Intelligence Agency on September 6th, 2011, confirmed unanimously by the Senate, 94-0.

Fred Kaplan of and author of the upcoming book to be released in January, "The Insurgents: David Petraeus and the Plot to Change the American Way of War", joins me, along with Eli Lake, senior national security correspondent at "Newsweek/Daily Beast."

Good to have both of you with us. We appreciate it.

And, Fred, just to emphasize, you have been reporting on this all day. You were among the first to say who was involved and exactly what happened here.

What is the latest that you can tell us?

FRED KAPLAN, SLATE.COM: Well, the latest I've been told that Paula Broadwell is the one with whom he was having an affair. I've also read, I don't have independent confirmation of this, that this was broken because the FBI was doing an investigation of her gaining access to some of his classified computer files. I don't know from whether from one when he was in the military or CIA, or his consent or what. That is still a mystery.

BURNETT: And it's still a mystery. And I can confirm here at CNN, we also don't know that, whether that was with his consent or not with his consent.

Eli, tell me what you think this means for David Petraeus, because, you know, we just heard from the chairman of the Homeland Security Committee and just laying out his career -- this is man who was lauded by a lot of people and probably is his own toughest critic.

Should he be resigning? As Fred reported, the president got his letter yesterday and spent 24 hours agonizing over it -- to use your word, Fred -- because he didn't want to accept it.

ELI LAKE, NEWSWEEK/DAILY BEAST: Well, I mean, I've been able to confirm that report as well. I can say though that the message that was sent to the House and Senate Intelligence Committees was that the view with the CIA, and some of the director, was that there was -- some of this information was going to come out and he wanted to get ahead of the story.

I think it's also important to note when you're talking about someone like David Petraeus, who embodies the best of the U.S. military tradition, adultery is really seen as a fireable offense and something that is of great shame. You know, General Cartwright, who was the best chairman of the Joint Chiefs of Staff, was not ultimately promoted, even though I think he was Obama's choice to be the chairman of the Joint Chiefs of Staff because of concerns about his extramarital affairs.

So this is not the first time an affair like this could have significant implications in a great officer's career.

BURNETT: Fred, what does this mean for his career?

KAPLAN: I think he's probably out of public service. Maybe more of his own choice, as Eli said and as I said earlier. I mean, even though he's a retired general, generals never really retire. They consider themselves to be subjective and are, in fact, legally subjective to the U.S. military court of justice. But he also considers this to be a code. I don't know. I think he very much -- you know, when I asked him about this some time ago, when he would retire, what would he want to do, he said he had no interest in going off to some corporate board and making a lot of money. Although, you know, that's clearly an option. He would want to stay and at least in public policy analysis. He regards himself as a policy intellectual, as well as a commander.

And, you know, there are plenty of public policy intellectuals who, you know, don't lead the cleanest of livelihood. So, maybe something is waiting for him out there.

BURNETT: Eli, you know, it's funny. I mean, I remember talking to him just his eyes lit up talking about precious metals, grain prices for Iraq. I mean, he was a man -- he was much more than a military mastermind, certainly when you talk about policy wonk, that seems to fit.

Eli, some people have said though there will be people who continue to say there's more to this than simply an extramarital affair where she add access to his computer. There's more to it. It could be linked to Benghazi, for example.

Peter King said earlier in the program, hey, that's what I thought it was. I don't think it is now.

What is your reporting saying?

LAKE: At this point, I don't have any indications in linked to Benghazi, though I find it interesting he will not be testifying even though he would be someone who would be of keen interest to those committees. I would say thought that an interesting side note on General Petraeus, is that in 2008, it looked like Petraeus had won and we were building a counterinsurgency military. And at least in that doctrine since, I think that the experience in Afghanistan has moved on and in some ways, the Petraeus vision is not going to be. It's going to be a Special Operations and drone military instead.

BURNETT: That's true. I guess that sure show when search goes away, but the benefits didn't stay.

KAPLAN: But the counterinsurgency strategy never really worked in Afghanistan because Afghanistan was incompatible with counter -- there's nothing that anybody could have done about that. And it is ironic that Petraeus, who always was into nation building and just going after the enemy, doesn't really work, that's basically what he's been doing as CIA director.

LAKE: That's right.

KAPLAN: Targeting and killing bad guys.

BURNETT: All right. Well, thank you very much.

Eli, one quick final question to you.

LAKE: Yes? BURNETT: Peter King said he wants him to testify any way. Do you think he'll be successful in that?

LAKE: I mean, that's going to really see how a lot of things play out, but I don't think the Republicans are in a position right now to sort of issue demands of that sort and given the election on Tuesday.

BURNETT: All right. Interesting timing, though, of course. The man who knew the most about Benghazi won't be able to testify about it. Thanks to both of you. I appreciate seeing you both.

And reading between the lines -- there's a lot to talk about today about the fiscal cliff, but you know what? Not much clarity.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I'm not going to ask students and seniors and middle class families to pay down the entire deficit while people like me making over $250,000 aren't asked to pay a dime more in taxes.

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: And by lowering rates and cleaning up the tax code, we know that we're going to get more economic growth. It will bring jobs back to America. It will bring more revenue.


BURNETT: So, we're still left asking and speculating what exactly is each side willing to give?

Jessica Yellin joins me now, chief White House correspondent.

Oh, they are back to their usual antics.

JESSICA YELLIN, CNN CHIEF WHITE HOUSE CORRESPONDENT: It sure seems that way, doesn't it, Erin? Right now, it looks like they are both in a feel good position where they say they are willing to compromise. But the one sticking point that seems to be the biggest hurdle for both sides is this question of: are they willing to raise rates?

The president has laid out a marker saying that he will not sign any bill that includes this extension of the Bush tax rates for $250,000 or more, and the House Republicans have said they are now willing to give up revenue, but not if it includes an increase in rates, and so therein lies the rub. That's the major negotiating hurdle. How will they cross that (INAUDIBLE)?

BURNETT: So, just say I came up with this idea, which so many have, I'll say it. That you close loopholes and that means people at the top, they end up paying more. So, they are paying more in taxes. Check for the president. Rich are paying more. Check for the Republicans. He didn't actually increase their tax rate. He'd just closed loopholes. Is that a deal that could be done or will the president not do that deal because he's been adamant about the Bush tax rates specifically?

YELLIN: Today, the White House said no, the president will not do that deal. I asked that question at the briefing and Jay Carney was very clear in saying that he campaigned -- the president campaigned on an increase in rates for the highest earners and that's where he's sticking.

Now, could that give between now and the end of negotiation? Who knows? But they were pretty emphatic on that point today, Erin.

BURNETT: All right. Well, that means this is going to be a long, nasty bruiser. Thanks to Jessica.

All right. Well, still to come, after Mitt Romney, Karl Rove may be the biggest loser from this election. He wasted millions. I mean, I think it might have been hundreds of millions of dollars in ads trying to get Romney elected. Has Rove lost his touch or not?

And a new movie about Abraham Lincoln hits theatres this weekend. What three things President Obama can learn from Abe.


BURNETT: All right. Let's check in with Anderson Cooper to see what's coming up on "A.C. 360" on this Friday night -- Anderson.


Yes. We're live in Staten Island with a lot on the aftermath of superstorm Sandy. We also got more of the breaking news ahead. The head of the CIA, the decorated general, David Petraeus, as you know, resigned after the FBI got a tip of an affair with his biographer. This woman, Paula Broadwell. We got details.

The implications of the nation's top spy calling it quits, ahead. I'm joined by CNN national security contributor, Fran Townsend, former CIA officer Bob Baer, and CNN intelligence correspondent Suzanne Kelly.

Also tonight, keeping them honest here in Staten Island. The question of why -- why the people here in Staten Island, across the bay, in Rockaway and Long Island, and all around, parts of New York and New Jersey area are still struggling to survive. It really has become a question of survival to some folks at this point. The conditions, the freezing cold conditions and destroyed property like you see behind me.

Also tonight, the politics as usual that threatened to drag this country back into recession. We'll play parts of the dueling events by the president and Speaker Boehner today in Washington. We'll talk about whether the country's leaders are willing to put D.C. dysfunction ahead of the compromise the country clearly voted for.

All ahead at the top of the hour, Erin.

COOPER: All right. Anderson, thank you, and we'll see you in just a few moments.

And now, our fifth story OUTFRONT: is Karl Rove losing his touch? He used to be Midas for the GOP. The man who spent years on top of the conservative political world, the man dubbed George W. Bush's brain, has a little fall from grace after his super PAC spent a colossal amount on the election and ended up with dismal results.

American Crossroads was the biggest loser among outside spending groups this year. They shelled out more than $170 million, 1.29 percent of that resulted in winning elections. The second biggest winner, a super PAC called Restore Our Future, which was solely dedicated to supporti9gn Mitt Romney obviously had a zero percent rate of return.

Now, a branch of Karl Rove's organization, called Crossroads GPS, you maybe familiar with that, did a bit better. Return of investment there, about 13.7 percent.

OUTFRONT tonight, political reporter Ken Vogel, who's been keeping track of all the super PAC spending. Ken, you've been crunching the numbers. Did they get anything for their money?

KEN VOGEL, POLITICO: Well, what they would argue and what I understand you have your guests in the next segment probably will argue, is that it would have been a lot worse had they not spend all that money. That what that money did was keep Mitt Romney at a level playing field with Barack Obama after the GOP primary, this long and protracted battle in which Romney had to spend all this money dispatching his Republican foes left him really exposed headed into the late spring and early summer months, and that this spending sort of gave him air cover to recoup his losses to raise money to be able to go toe to toe with Barack Obama.

That never really happened. He never really was able to compete on a level playing field, but what these groups say is that it would have been a whole lot worse had it not been for them.

BURNETT: And maybe it would have been worse if they all hadn't so much money spending it, you know, dumping all over each other, then you have to spend more trying to make up for all the dumping somebody took on you. I mean, Romney and his allies spent $1.2 billion, almost half of that from super PAC. The president and his allies spent $1 billion. I mean, this is a lot of money to say bad things about other people.

VOGEL: Yes. And what was interesting is one of the effects, unintended likely, that all this GOP fundraising and spending is that it really awakened the Democratic funding machine, the big money machine.


VOGEL: Let's not forget President Obama really made a key part of his political identity, this idea that he was opposed to outside money, really big money as a whole in politics. When they saw -- when the Democrats, when Barack Obama's allies all this money being raised on the right, they kicked their own fundraising machine into high gear and it wasn't just these small donors that they like to about. Rather, they were doing a ton of outreach to big donors, both for their campaign and for these super PACs.

So, what that did is create this arms race and it's not going to end any time soon.

BURNETT: You're absolutely right about that. When I look at Romney plus allies, $1.2 billion, these are your numbers, Obama plus allies, $1 billion -- neither one of those guys can say they have a problem with big money supporting their election.

All right, thanks so both -- thanks to you.

But let me bring in Charlie Spies, Ken referenced, my guest. He's a founder of Restore Our Future, the super PAC that supported Mitt Romney.

All right, take issue with it. I said zero percent return. Tell me why I'm wrong.

CHARLIE SPIES, FOUNDER, RESTORE OUT FUTURE SUPER PAC: First of all, this is a very close election. Imagine the headline in this story if 350,000 different votes in four states had been different. Then you'd be saying that Karl Rove's an evil genius, and that Republican big money had bought the election.

And so, the reality is President Obama's campaign President Romney's campaign by over $150 million on television ads. So, they were getting outspent and we helped keep it very close.

Look at some of the target states. Look at Ohio. Ohio, that was decided by 100,000 votes, and the Obama campaign outspent the Romney campaign by $30 million on advertisements.

You can go through the rest of the target states. You can look at Florida. That's a 40,000-vote margin, and again, the Obama campaign outspent the Romney campaign by $30 million.

Without us and the other outside groups, this would not have been a neck-and-neck election right through Election Day.

BURNETT: Well, let me ask you this, though. Foster Friess, another super PAC donor, people maybe familiar with him, he's given a lot of money in primaries, kept giving, said he doesn't want he's going to shift focus from television ads. He doesn't think it's going to work, going to go to grassroots organizing.

Do you think that will happen? Is that going to hurt you? I mean, isn't that what you really are doing, is spending money on TV ads?

SPIES: I think one of the reasons Obama did end up winning is that some of their tactics were very good. They had a very good ground game and they had very good targeting. And we as Republicans, where are we, going to have to try to figure out why that happened and try to match that. But that's probably a function of political parties, and I think super PACs and C4s are better at doing advertising.

BURNETT: OK, let me ask you about Karl Roves. What happens to him? I mean, evil genius, evil whatever you want to call him. You know, he got it wrong this time. He got it wrong in the Electoral College, and he got it wrong when he questioned Ohio.

What's going to happen to him? Isn't it going to make it more difficult for him to raise money? He's got the biggest super PAC out there. Or does he rise again?

SPIES: I think Karl is one of the biggest political minds around and he'll continue to do very well. When you said he did got it wrong, Gallup got it wrong, Rasmussen got it wrong, and they had Governor Romney winning right up through hurricane Sandy. So, some things happened in the end, the Obama campaign had a better turnout operation than the Republican side ended up having, that probably didn't show up in some of that polling that everyone was looking at.

BURNETT: So, Charlie, there have been reports, of course, that Mitt Romney was shell-shocked -- very difficult to say. I believe that's what CBS reported. Others said he didn't see this coming. He wasn't ready for it. You've known the man for seven years.

What's he going to do now?

SPIES: I think he can probably do whatever he wants to do other than be president for the next four years. I mean, he's one of the great business leaders, and I think he has a lot to say about the economy, and I hope he keeps speaking about it.

BURNETT: Have you talked to him?

SPIES: I haven't.

BURNETT: Not yet. Is he sort of just lying low and avoiding everyone right now, getting ready for his --

SPIES: I know he's met with campaign staff and he's focused on trying to find staff jobs, which is the right thing to do, and I admire that.


And what about you in terms of raising money? Any problems raising money? People saying, look, I gave you all this money and my guy didn't win and --

SPIES: I think everyone is disappointed because they thought our work was important, and this was something worth investing in, but I have not had a single donor reach out to me or our co-founders in the group and say that they were upset about how we spent the money. And I think the reason for that is because we constantly communicated with our donors and they knew what our strategy was, they knew how we were going to be spending money, what ads we were going to be running, and it was a very close election. And without our spending, we wouldn't have almost won all these states.

BURNETT: Right. Well, Charlie, thank you very much. Always good to see you. We appreciate your time.

Interesting takeaway from there, that it was $1.2 billion for Romney, $1 billion for the president. That's big money everywhere.

As President Obama gets set to begin his second term, though, there are a couple things he has to do. Abe's Abe, what other Abe is there? It's not really a common name these days.

Abe Lincoln's advice for the president, OUTFRONT next.


BURNETT: Critics are raving about the latest Steven Spielberg film "Lincoln" which opens in selected cities this weekend. But even as moviegoers coast to coast are expected to line up for tickets, some in Washington are wondering what one special fan of the 16th president fan might take away from the movie.

Tom Foreman reports, of course, from our nation's capital.


TOM FOREMAN, CNN CORRESPONDENT (voice-over): For some looking for inspiration in these troubled times, the new movie "Lincoln" may be just what the director ordered, by all accounts, a depth mix of personal and political wisdom.

UNIDENTIFIED MALE: It is a self evident truth that things which are equal to the same thing are equal to each other.

FOREMAN: At the White House, President Obama has long admired the 16th president. He took the oath on the same Bible Lincoln used, he stopped by the Lincoln Memorial, and he often reads about Lincoln, he's quite fond of quoting the "Rail Splitter".

OBAMA: I'm far more mindful of my own failings, knowing exactly what Lincoln meant when he said, I have been driven to my knees many times by the overwhelming conviction that I had no place else to go.

FOREMAN (on camera): So what lessons might Lincoln have for this president's second term? Considering his one of the most well- researched figures in American history, plenty.

(voice-over): At Illinois Wesleyan University, Robert Bray is one of the nation's Lincoln's top scholars. And he says Lincoln's first advice might be -- make your enemies into friends. Bray says Lincoln was able to keep his eyes on the prize, which means he was able to disassociate himself from personal attacks.

Second -- be firm but play nice. Lincoln could talk without anger, even to his political opponents.

And third -- take the long view. Bray said Lincoln firmly believes that if Americans put their heads together and put their will to it, they could be a shining example of equality for the whole world.

Of course, there is much more. The folks at Ford's Theatre where he was assassinated say more than 15,000 books have been written on Lincoln's life and lore, enough to build this 34-foot tower and allowing Abe to offer advice across the centuries. Honestly.

Tom Foreman, CNN, Washington.


BURNETT: Fifteen thousand books. Isn't that incredible? And yet we all still want to know more about him. And apparently in the movie you see a Lincoln that is far from perfect, of course, as we al know, no matter how heroic and amazing the real man must have been.

Thanks so much for watching.

"ANDERSON COOPER 360" starts now.