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Petraeus Affair Time Line Sparks Concern; Inside FBI Petraeus Probe; Pres. Obama's Plan for Avoiding Fiscal Cliff

Aired November 12, 2012 - 17:00   ET

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


WOLF BLITZER, HOST: You're in THE SITUATION ROOM.

Happening now, new questions emerging about the time line of an affair that brought down a decorated CIA chief.

Just how long was it going on?

Was national security ever at serious risk?

Plus, new insights in the lives of General David Petraeus and Paula Broadwell from someone who've known -- who has known both of them personally for years and has communicated with them since the scandal broke, our own David Gergen.

And Paula Broadwell in her own words -- what she says about her relationship with the man she spent a year with on the front lines in Afghanistan.

We want to welcome our viewers in the United States and around the world.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

An extramarital affair rocking Washington, fuelling a growing demand for answers. Lawmakers on both sides of the aisle want to know just long the relationship between General David Petraeus and Paula Broadwell went on, whether any classified information was shared during that time.

Let's bring in our intelligence correspondent, Suzanne Kelly.

She's been working the story.

She's got the latest information for us -- Suzanne, what else are you learning?

SUZANNE KELLY, CNN CORRESPONDENT: Right, Wolf. Well, Petraeus has been talking with friends, who have been offering him their support throughout the weekend and today in all of this, one of them telling me today that the general is disappointed in himself, that this is a man who has never failed at anything and he realizes now just how badly he's failed his family by having the affair and that he realized he put the president, also, in a tough spot, and that he regrets having done that, as well.

Obviously, there are a lot of questions about his judgment and about just what may have been put at risk.

(BEGIN VIDEOTAPE)

KELLY (voice-over): This is one reason why an affair between General David Petraeus and his biographer, Paula Broadwell, is raising questions about whether the relationship put national security at risk.

(BEGIN VIDEO CLIP FROM YOUTUBE/UNIVERSITY OF DENVER)

PAULA BROADWELL: Now, I don't know if a lot of you heard this, but the CIA (INAUDIBLE) actually had taken a couple of Libyan militia members prisoner. And -- and they think that the attack on the consulate was an effort to try to get these prisoners back. So that -- it's still being vetted.

KELLY: The sharing of unvetted material about Benghazi -- a serious claim that the CIA was holding prisoners and that was one of the reasons for the attack, a claim that a senior intelligence officer adamantly denies ever happened.

But when someone outside the chain of command has unfettered access to the man at the top, it gives whatever they say added credibility. "The New York Times" reported classified information was found on Broadwell's computer.

SEN. DIANNE FEINSTEIN (D), CALIFORNIA: I do not know how she got that information. We should find out. I don't know why. It's a rather confused situation.

KELLY: A U.S. official told CNN there were no issues with Broadwell's access and noted she did have security clearance. A source also tells CNN the FBI investigation that led to the discovery of the affair uncovered no evidence that national security was ever put at risk.

That's not surprising, says a former general who knows Petraeus.

GEN. JAMES "SPIDER" MARKS, U.S. ARMY (RET.): There's -- there's absolutely almost zero percent chance that national security was compromised or was at risk.

(END VIDEO CLIP)

KELLY: But it does raise questions about what's allowed. According to a senior intelligence official, having an affair does not itself constitute a security violation, unless it's someone from another country and not reported. And there are no rules that keep government personnel holding high security clearances from having private e-mail accounts.

A U.S. official said Petraeus used such an account to exchange personal e-mails with Broadwell. Meanwhile, friends of David Petraeus out in force Monday.

(BEGIN VIDEO CLIP, COURTESY KDKA)

MICHAEL HAYDEN, FORMER CIA DIRECTOR: It's a -- it's a tragedy. It's a tragedy for the nation. It's a tragedy for the agency and, clearly, a tragedy for the Petraeus family.

(END VIDEO CLIP)

KELLY: General Petraeus spent the weekend talking with friends who have offered their support. And they've told CNN that the affair began after Petraeus took the director position about a year ago, and that it ended about four months ago.

Petraeus has insisted to them that he had an affair with just one woman.

(END VIDEO TAPE)

KELLY: Now, Petraeus and Broadwell were seen together as recently as a month ago at a Washington dinner. And friends of Petraeus say he's now hunkered down with his family, Wolf, and that he's well aware of the pain that he's caused them in all of this.

BLITZER: As far as we know, has the FBI investigation ended?

And what about the CIA?

Has -- has their own internal investigation ended?

Where do the investigations stand right now? KELLY: Right. Well, we do know that from the FBI investigation from an official -- a U.S. government official, that they did not find any wrongdoing in terms of any national security breaches or anything like that. So that, combined with the fact that it's not illegal, actually, to have an affair, pretty much means that there's not much more to dig.

BLITZER: Well, I suspect there probably will be more to dig, given the nature of this story.

KELLY: It could get to that point.

BLITZER: We'll see what happens.

All right, Suzanne, thanks very much.

Let's dig ourselves a little bit deeper right now and see how this FBI investigation that exposed the Petraeus affair is unfolding.

CNN contributor and former FBI assistant director, Tom Fuentes, is joining us now.

Tom, thanks very much.

TOM FUENTES, FORMER FBI ASSISTANT DIRECTOR: Hi, Wolf.

BLITZER: Walk us through, because you spent your career in the FBI. This woman is Jill Kelley down in Tampa. She's getting some e- mails from a mysterious source that seemed to be making threatening suggestions, talking about General Petraeus. She tells an FBI agent in Tampa what's going on.

Walk us through what happens.

FUENTES: OK, Wolf. She does not mention Petraeus and she doesn't know about his involvement in...

BLITZER: They don't know who...

FUENTES: -- in it.

BLITZER: -- (INAUDIBLE) e-mail.

FUENTES: All she knows is she's receiving more than just harassing messages, but threatening messages. She happens to tell an FBI agent that she knows about what she's receiving. That agent then reports that within the Tampa office of the FBI, to the cyber squad. Sending threatening e-mails is a violation of federal law and the FBI has jurisdiction.

So the Tampa division cyber squad begins an investigation, which starts with who is sending the threatening messages.

Now, they're anonymous messages that are coming in, so they have to subpoena the records from the ser -- Internet service provider. They have to find out who is the owner of that account.

Is that the person that's actually sending them or somebody using their computer or hacking into it?

So that starts that part of the investigation.

BLITZER: So they may find out there are these, you know, Gmail accounts...

FUENTES: Right.

BLITZER: -- from this mysterious woman, this mysterious man. They do a lot of work and they discover it's Paula Broadwell and the director of the CIA, General David Petraeus.

FUENTES: Right.

BLITZER: Now, you're in...

FUENTES: At first, they -- they discover it's Paula Broadwell.

BLITZER: Right. But then they find...

FUENTES: And...

BLITZER: -- out...

FUENTES: -- they have to determine who else has she had (INAUDIBLE).

BLITZER: Then they find out he's involved and they're -- they've got some direct e-mail correspondence between the two of them.

FUENTES: Right.

BLITZER: What goes on at the FBI when they see, all of a sudden, the -- the director of the CIA is involved somehow?

FUENTES: Well, before they even get to that point, they see that there's numerous messages between someone whose name is not used in the messages. So they're looking at, is there somebody else with her that -- that she's making threats with, or on behalf of, or is there another victim that's receiving threats, as well, that hasn't reported it yet?

So that's where they get the sub -- they subpoena the records for those Internet accounts. And that's where they identify CIA Director Petraeus, that he's the one.

Now, the question is, is he sending the messages?

Is somebody using his computer?

Has his -- has his account been hacked into?

Because these are public e-mail addresses. They're not part of the government's classified system, which would be in his office, as well. So these are completely separate.

BLITZER: These are personal.

FUENTES: Right.

BLITZER: Let me read to you what "The Wall Street Journal" writes in an editorial today entitled, "The Petraeus Probe." I'll read this paragraph that jumped out at me.

FUENTES: OK.

BLITZER: "It's hardly reassuring that the CIA chief was communicating with Ms. Broadwell via a Gmail account. Our operating assumption is that every Gmail account can be ransacked by hackers from China and elsewhere, no matter Google's best efforts at security."

Google runs Gmail. "For America's chief spook to leave himself vulnerable in this way is an astonishing lack of judgment for such a disciplined and experienced man."

FUENTES: OK, well, the question there is...

BLITZER: Does -- does "The Wall Street Journal" have a point when they say that Petraeus, by using this personal Gmail account, sending explicit e-mails to Paula and back and forth, that it left him potentially vulnerable to blackmail or whatever on national security?

FUENTES: Well, that potentially could. But the question during the event -- the FBI investigation is whether or not classified material was actually exchanged in those messages or there's an indication that she has gotten access to classified material through the relationship with him.

So that's what's looked at in this thing.

Now, in terms of the FBI investigation, as they go forward, they eventually interview her. They interview Director Petraeus and they determine immediately -- they both admit, yes, we were having this affair, but it was personal. It was not related to giving up classified information. And, of course, she's not a foreign national or an identified spy from another country.

So in that sense, as the investigation goes forward, they realize that there's borderline criminal activity. The U.S. attorney's office, the Department of Justice, determines that they're probably not going to prosecute her for the threats. He's done no wrong in terms of criminal activity and they can find no evidence of an actual security breach of classified material going out.

BLITZER: Now, "The Washington Post" has reported and we have now confirmed -- and I'll be specific. A U.S. official confirming to CNN that Petraeus told Broadwell, Paula Broadwell, the woman with whom he was having an affair, to stop sending harassing e-mails to Jill Kelley, this other woman in Tampa, that -- who was known to the Petraeus family.

So what does that say to you, if he is now telling -- we have confirmed he's telling Paula Broadwell, don't send any more threatening e-mails to this woman?

FUENTES: Well, I'd be curious about the source of that information in terms of did he really know that she was receiving it?

And if she's telling a friend who's an FBI agent in Tampa, how is it getting to Petraeus that -- that she -- from her, that she's receiving these messages?

And if it related to him, why wouldn't she tell him first, in the very beginning of this thing, and say this is occurring and I'm the victim of it and -- and you're involved?

So I think that -- I just don't know the details of that...

BLITZER: Yes.

FUENTES: -- and haven't heard the that that's a...

BLITZER: The story is really only developing now.

FUENTES: Right. BLITZER: Do you believe the FBI investigation is over with?

FUENTES: Well, it was winding down. I mean that...

BLITZER: But is it over with?

FUENTES: Well, you know, if there's new allegations that come forward now, they -- they reserve the -- the right to continue it or look into new allegations.

BLITZER: Why didn't the FBI immediately tell the president of the United States, there is an investigation -- FUENTES: Well, it's not...

BLITZER: -- and it involves the CIA director?

FUENTES: It's not their position. They have very strict protocols on the notification options. Notification process up through the Department of Justice. And in this case, the director of the FBI, Robert Mueller, would make the determination at what point notifications go up, either through the chain of command to the White House, as well as notification to the appropriate leaders on the Hill.

Normally in a case like this, the FBI is extremely cautious about not notifying people unless they start to find that, hey, there is evidence of Director Petraeus being involved in some criminal activity, or there is evidence of a security breach. Then those notifications are made.

But while it's in the investigative stage, they don't. And one of the key reasons is just what you're seeing here. Once those notifications are made, it normally leaks out. The media is camped out on everybody's front lawn. And if the FBI needs to go and do follow-up interviews with the players, it just gets to a point where they usually hunker and -- and don't want to talk about it anymore. And it just makes the investigation all the more difficult.

So the longer they can do this on a very quiet, discrete, covert basis, the easier it is for the investigation and you're preserving the integrity of the investigation.

BLITZER: Tom Fuentes, formerly of the FBI.

Thanks, Tom.

You're going to be with us later, as well.

FUENTES: Yes.

BLITZER: Thanks very much.

FUENTES: Thank you, Wolf.

BLITZER: She's the woman you haven't heard much about in the wake of this scandal. Holly Petraeus is anything but a wife living in her husband's shadow. Just ahead, you're going to find out why she's a military force all her own.

Plus, a battle behind-the-scenes brewing between the White House and Capitol Hill that could take a toll, potentially, on your paycheck.

(COMMERCIAL BREAK)

BLITZER: One of the most pressing issues right now for the president of the United States, how to avoid what's called the fiscal cliff. The president is planning a series of meetings with outside groups before sitting down with members of Congress. I'm joined by our chief White House correspondent, Jessica Yellin. Jessica, what's the strategy here?

JESSICA YELLIN, CNN CHIEF WHITE HOUSE CORRESPONDENT (voice-over): Hey, Wolf. Well, you know, the president said he felt that one of the problems in his first term was he got stuck in, basically, a headlock with Congress. And he clearly doesn't want to start there in a second term.

So, in the next two days, he's meeting with labor leaders, progressive groups, business and opinion leaders, essentially, to get Democrats on the same page and shore up his own base before talking to Congress.

Now, afterwards, you can expect them to send out selling the message, pressuring members of Congress to pass whatever comes up the negotiations. Also, Wolf, to press the president on their own agenda for the fiscal cliff.

BLITZER: The Democrats, as you know, Jessica, they are certainly not all on the same page, are they?

YELLIN: No, they're not. And you know, we focus on how this is a struggle between the White House and Republicans. It's also a struggle within the Democratic Party. Some Democrats, they say, taxes should go up for families making $250,000 and more like the president. But some say that hits too many middle class families, especially urban and suburban areas.

They want the line to be higher, $500,000 or a million dollars and more. Those are the people who should see their taxes go up and then close deductions for those people, too. So, there will be challenges within the Democratic Party to get everyone together as well as within the Republican Party and some of those labor leaders meeting with the president also want to make sure he doesn't touch Social Security, Wolf.

BLITZER: The president repeatedly says he wants taxes to go up for people who make $250,000 a year or more. So, is that negotiable?

YELLIN: That's big question. You know, that is the official position of the White House. Last week, the president repeated that people making 250,000 and up must pay more was his phrase. He didn't say what rate they must pay. But the question is, will the president move of that? You know, he has made clear, the president has, that he learned lessons from negotiating in his first term.

And one theory is, he could be playing tough with this line and maybe it will be move. He does have a forcing mechanism this time around. Taxes automatically go up if Washington does nothing. So, he has extra motivation on his side to force a deal, maybe that number could change.

BLITZER: Because if Congress does nothing between now and the end of the year, taxes go up on everyone, not just on the wealthy, middle class families. Everyone will see a hike in their taxes starting January 1st.

YELLIN: It gives him more leverage.

BLITZER: Yes. All right. Thanks very much, Jessica, for that.

Let's dig a little bit deeper right now into these crucial negotiations. Our CNN contributor, former Bush speechwriter, David Frum, is joining us. He's the author of a brand-new e-book entitled "Why Romney lost?"

Listen to Grover Norquist. As you know, he's a powerful guy here in Washington, got a whole bunch of Republicans out there to sign a pledge that they would never raise tax rates, taxes. Listen to what he said this morning on CNN.

(BEGIN VIDEO CLIP)

GROVER NORQUIST, FOUNDER AND PRESIDENT, AMERICANS FOR TAX REFORM: There's a compromise to be made. Maybe we don't get as much in spending restraint as the Republicans want, but raising taxes on, you know, a little bit doesn't solve the problem of the massive spending problem that we have.

(END VIDEO CLIP)

BLITZER: So, is there an opening here? Am I hearing an opening from some of these Republicans, these conservatives in terms of raising tax rates as the president is demanding? You heard Bill Kristol what did he say (ph). What do you think?

DAVID FRUM, CNN CONTRIBUTOR: Well, first, I have a feeling of unreality about this whole debate. Eighty percent of Americans pay more in payroll taxes than in income taxes. We have a payroll tax holiday right now that saves those people, saves all of us who earn income two points of payroll tax on the income people earn up to $110,000 worth of income. Now, that holiday expires at the end of this year.

And Washington completely accepts that as a fact. Nobody is perturbed, nobody cares. All of the focus is on the prospect of an increase in income tax rates for people who earn a great deal more. And it's a sign of how separated the debate in Washington can be from the debate in the country, that the payroll tax is not a big deal, and the prospects of these income tax rate increases are such a big deal.

BLITZER: People are going to feel a pinch with an increase in the payroll taxes.

FRUM: Some economists think that that one expiry alone could be a shock of a half or three-quarters of a point to GDP. And if that's right, in an economy growing at two percent, that shock is bigger news than this whole discussion --

BLITZER: OK. Here's what you wrote on the "Newsweek" and "Daily Beast" website today, "If social conservatives can shift their way from the urge to ban and condemn and instead think about how to support and encourage, they can be a rich source of inspiration for the larger conservative world and the Republican Party in the years ahead as conservatives and Republicans face the challenge. How can the party regain its historical role as the champion of the American middle class?"

So, you're giving some serious advice to these social conservatives.

FRUM: Yes. One of the things that I've been very disturbed and maybe this point of other payroll tax strive (ph) at home is that the conversation we've been having in the Republican Party has been to say we were not wrong about the Ryan Plan. We were not wrong about the 20 percent tax cut.

We were not wrong about our very ambitious plans to pivot before this recession is over to deficit reduction. The only thing we were wrong on was the immigration issue. And that is a very easy way to think if you're economically comfortable. But all of those other issues I think and I argue in why Romney lost are much more important to what happened to Republicans and not just in 2012 but in 2008 and in elections before that.

And one -- I mean, there's a lot about social conservatism to be unhappy about. It can be culturally reactionary. The impulse to ban everything that people don't like is a retrograde one, but at least, they are the part of the party that connects the party to the aspirations of the middle class, which it could otherwise drift away from.

BLITZER: We got to go now, but we're going to continue the conversation on what you call the conservative entertainment complex down the road. Stand by. We're going to continue that conversation as well. Fascinating material from David Frum. Thank you, David.

So, how well are General Petraeus and Paula Broadwell handling all the public scrutiny? Up next, I'll ask a close personal friend of both of them, our own David Gergen. Stay with us. You're in the SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: The Boy Scouts of America lose another major corporate donor. Lisa's back. She's monitoring this and other top stories in the SITUATION ROOM right now. Lisa, what happened?

LISA SYLVESTER, CNN CORRESPONDENT: Wolf, UPS says it will stop funding the Boy Scouts until gay scouts and leaders are welcome in the organization. UPS follows Intel in pulling its financial support. Both companies have given hundreds of thousands of dollars to the scouts. A group called Scouts for Equality launched a petition to UPS and says it was signed by more than 80,000 Americans.

And more fallout at the British Broadcasting Corporation over its handling of sex abuse claims. BBC News director, Helen Boaden, and deputy news director, Steve Mitchell, have both stepped aside pending a review into allegations against late TV presenter, Jimmy Savile. This follows the weekend resignation of the BBC director general at one of the world's oldest and most-respected media organizations.

And Lance Armstrong has quit the board of his Live Strong Foundation, just the latest in the cycling legend's dramatic downfall from doping allegations that resulted in his loss of seven Tour de France titles. Armstrong says he resigned from the organization that he founded for cancer survivors to spare the organization from the negative effects of the scandal.

And, I don't think anyone is surprise at all, Wolf, by that resignation.

BLITZER: No. I'm sure it was in the works. Thanks very much, Lisa, for that.

So, did General David Petraeus' relationship with the news media play a role in how the scandal has been covered? That's next.

(COMMERCIAL BREAK)

BLITZER: She's the woman you may not know much about with the spotlight on her husband and the infidelity that brought down a sterling career of military and national security leadership. But Holly Petraeus is a military force all her own. And you might be surprised to learn she's been making a huge difference in the lives of families across the country for years.

Lisa's back. She's working this part of the story for us. She's joining us. Lisa, tell us a little bit about Holly Petraeus.

SYLVESTER: Wolf, to put it into perspective, Wolf, when David Petraeus was commander of the 101st airborne division at Ft. Campbell, Kentucky, his wife, Holly, made it a point of greeting the troops returning from Afghanistan no matter what time of day or night it was. She is well-known in military circles in her own right as an advocate for military families.

(BEGIN VIDEOTAPE)

SYLVESTER (voice-over): Holly Petraeus isn't a military wife sitting in the shadows of her husband, the general. She has carved out her own mission, helping others.

UNIDENTIFIED FEMALE: All you have to do is this. So, take the pledge. Start saving today. SYLVESTER: Encouraging service members to save, pay down debt, and keep their homes out of foreclosure. She currently serves as the director of the Consumer Financial Protection Bureau's Office of Service Members Affairs. But now Holly Petraeus' own family is in the midst of a public crisis after her husband resigned as CIA director, admitting to an affair.

UNIDENTIFIED MALE: She's not exactly pleased right now. In a conversation with David Petraeus this weekend, he said that furious would be an understatement.

SYLVESTER: The couple has been married for 38 years and have two grown children. They met on a blind date. She was a student at Dickinson College. Her father was a general. The superintendent of the U.S. Military Academy at West Point, where David Petraeus attended at the time. She comes from a family of military officers going back several generations.

She said she was drawn to his intelligence and described their quick courtship in this 2011 interview with her alma mater.

H. PETRAEUS: We met on a football weekend in October of our respective senior years and did some running back and forth, you know, during the succeeding months and actually married a month after graduation.

SYLVESTER: The family moved 24 times during the course of their marriage. As he was retiring from the army in 2011, David Petraeus credited his wife for being the force that held the family together during all of those moves.

GEN. DAVID PETRAEUS, FORMER CIA DIRECTOR: She is, as has been noted, an army daughter, an army wife and now an army mother. But she is also much more. She has been Mrs. Dad for the bulk of the past decade while I was deployed.

SYLVESTER: But Petraeus had lengthy tours of duty in Afghanistan and Iraq leaving behind Holly Petraeus. She turned her attention to protecting military families from home foreclosures and financial scams. First as director of the Better Business Bureau's military line, then later with the newly formed Federal Consumer Agency.

H. PETRAEUS: I realize some of what you're going through.

SYLVESTER: She spoke of the couple's own financial errors when they were young. Their first notable purchase after marriage, a red sports car.

H. PETRAEUS: We spent a significant amount of money not only in buying it but repairing it because it broke down all the time.

SYLVESTER: Her life has been devoted to taking care of others, her husband, her family and the military community.

(END VIDEOTAPE) SYLVESTER: And then in a 2009 interview with a Tampa Bay newspaper, she asked which adjectives described her best and she said self-sufficient and reliable. And we also have some reporting from our CNN correspondent, Barbara Starr -- our Pentagon correspondent -- in which she talked to his former Petraeus' spokesman, his spokesman when he was in Iraq and the question was raised, so how is holly doing, and the line was furious would be an understatement.

BLITZER: Probably mad. All right. Thanks very much, Lisa, for that report.

Let's continue the conversation right now. Joining us, our senior political analyst, David Gergen. He's known both General Petraeus and Paula Broadwell personally for several year, has communicated with both of them electronically since the scandal broke.

Also joining us, Howard Kurtz, he's the host of CNN's "RELIABLE SOURCES," also the Washington bureau chief for "Newsweek" and "The Daily Beast."

Guys, thanks very much. First of all, David Gergen, let me go to you. You've communicated with General Petraeus, with Paula Broadwell. What are they saying? How are they doing? What are they -- what do they have to relate?

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: Well, the communication had been private, Wolf, and I had sent them notes of support when this news first broke because I have known both of them for a long time. As you point out, I know him far better than I know Paula, but I just think the world of him. He's been, you know, one of the finest leaders of his generation, a warrior scholar, has done great service for this country. And I was just -- this is so painful for him and for his family as well as I'm sure for the Broadwell family.

And, you know, basically as has been reported elsewhere, I think he felt he had to leave. He felt he'd done something dishonorable and the honorable thing to do last week was to resign.

BLITZER: Do you have any clue the two of them were engaged in an affair?

GERGEN: No, none. And I did -- I did know about the book, and I followed the progress on the book as she was doing -- or collecting information for it. And I knew they were involved in many, many conversations. But I saw it entirely as -- it was her thesis, her Ph.D. thesis. She was a student at the Kennedy School where I'm privileged to teach. And I first got to know her then. And I knew she was pursuing a book. I was supportive of the research. I thought it was -- it had some real value because she was studying him as a leader and that's a subject, as you know, I take an interest in.

And -- so I look forward to the book. And I think she's going to do a good job with it but I have no idea. And I really don't know anything about what happened in terms of the personal relationship. BLITZER: Howie, you wrote a very strong piece on CNN.com today about the media's relationship with General Petraeus. The media had a very favorable image of General Petraeus, as you well know.

How is that image affecting the coverage since we learned of this scandal on Friday?

HOWARD KURTZ, HOST, CNN'S RELIABLE SOURCES: Wolf, David Petraeus has had a distinguished career but he's been portrayed by some media organizations as practically walking on water and that is no accident. Petraeus, veteran military reporters have told me, that he called them to talk off the record on background. He cultivated those relationships. That's part of how he got the favorable publicity.

And so when this scandal exploded and he left the CIA, there's no question there was a more sympathetic tone by many journalists and news organizations feeling that this was a tragedy for a man that they admired, that they viewed positively. Whereas the average public figure or politician who gets called philandering gets a far more caustic treatment.

BLITZER: Because he's by no means the only Washington figure that cultivated -- tried to cultivate a good working relationship with influential members of the news media.

KURTZ: But Petraeus is a good politician. He was very good at it. Now he didn't cultivate quite as close a relationship as he did with Paula Broadwell, let me hasten to add. And I'm not saying reporters were in the tank for him. But I do think there's a lot of sympathy, a lot of admiration for David Petraeus. And you saw this when the Benghazi attack happened. And here was Petraeus, the CIA was under fire, David Petraeus did not come out and speak publicly.

There was no stories written about why is Petraeus -- MIA, should he address the shortcomings in diplomatic security, and again, when the sex scandal exploded, and even now, the story may turn, but right now I think he is getting softer treatment from journalists because he has a relationship with many of them, a luxury not afforded many other politicians who don't have those kind of ties with the press.

BLITZER: Well, given the timing of this, David Gergen, the Benghazi investigation on September 11th, four Americans including the U.S. ambassador to Libya were killed at the U.S. consulate in Benghazi, he was supposed to testify this week. What are the political implications, the fallout, if you will, from this scandal?

GERGEN: Well, I think that you're going to have continual ripples on Capitol Hill, not only about Benghazi, but about the FBI, about how this investigation was conducted, why it got started, why they weren't told earlier, and that sort of thing. So this story has -- has got legs, as you well know. I do think that there are legitimate concerns about Benghazi, and it would be -- it's important -- I believe the committees on the hill ought to call General Petraeus to testify and let him clear the air on these issues, because I -- you know, he wants -- it's in everybody's interests to separate out, if they are separate, and I think they are, the personal relationship from Benghazi.

And I want to just go back to Howie Kurtz. I think Howie is absolutely right that he has had very good relationships with the press and I do think that's affected the coverage. But I think it's also important -- I don't think he manipulated the press. I think a lot of reporters, my own experience with him was, and I think a lot of reporters saw this, he had an unusual relationship with a lot of his troops.

I've had any number of students, Wolf, who have been under his command, and they idolize him. He's the -- he's the figure they have looked up to over the years, because he epitomized what seemed to be best about military leadership. And that's why there's such sadness today and getting past the shock. But I think a lot of reporters picked up on that. I certainly picked up.

And I went out to Ft. Leavenworth at his request to give a talk and spend an evening with him and tour the campus, spend a couple of days with him. And all the majors out there who were in school at the command and general staff school they just had such a high regard for him.

BLITZER: You know, we're just getting in some remarks, the secretary of defense, Leon Panetta, himself a former director of the CIA, was speaking to reporters, and he told -- and this is his first reaction to the whole scandal about General Petraeus. He says, first, obviously, it was a very sad situation to have a distinguished career like that end in this manner and my heart obviously goes out to him and his family, but I think he took the right step and I think it's important when you're director of the CIA with all the challenges that face you in that position that personal integrity comes first and foremost.

He says he doesn't know what the future will have there, but he does believe that they have to take a closer look at the coordination, the briefing of the House and Senate intelligence committees in these kinds of investigations.

Do you want to make a final point?

KURTZ: A little distancing going on by the Obama administration. And just very briefly, Wolf. While General Petraeus has gotten that sympathetic treatment we talked about, a woman who is not getting a very favorable treatment from the press, who's also had a distinguished career, and that's Paula Broadwell.

BLITZER: Yes. She is a West Point grad, U.S. military officer, Ph.D. candidate at Harvard.

All right, guys, we've got to continue this conversation. Obviously it's not going away. David Gergen will be back, Howie will be back. Thank you.

For the first time in almost 40 years, an exchange of fire between the Israelis and the Syrians up on the Golan Heights. Is it just the beginning of a dangerous escalation? Stand by. (COMMERCIAL BREAK)

BLITZER: Israeli forces have fired into Syria after a Syrian mortar shell landed near a military post in the Israeli controlled Golan Heights. It's the first exchange of fire between Israel and Syria in nearly 40 years.

Sara Sidner is joining us now from Jerusalem.

Sara, what's going on, this back and forth between the Israelis and the Syrians along the Golan Heights?

SARA SIDNER, CNN INTERNATIONAL CORRESPONDENT: Well, it's interesting. This is actually the fifth time that the war in Syria has spilled over into the Golan Heights. The first time just a little more than a week ago where tanks were inside the demilitarized zone pointing back towards Syria and firing into Syria. Those were Syrian government tanks. Then there were bullets that came over and several sets of mortars that came over.

The last two, in the last two days, have seen a response that we have not seen before from Israel. Israel fired into Syria two warning shots. One on Sunday and one on Monday, because mortars had come over into the Golan Heights, one of them very close to a military post. But in speaking with the government here and in speaking with the leaders of Israel, they say that as they're watching this happen, they do not believe that Syria is actually trying to attack Israel, but that simply the war is spilling over, which is why you're seeing a more muted response from Israel.

Now I talked to Israeli President Shimon Peres about this escalation. All of these things coming over into the Golan Heights and here's what he had to say about it.

(BEGIN VIDEO CLIP)

SIDNER: Every other day now we're hearing different things are falling into the Golan Heights and coming in between in the demilitarized zone. What will Israel do if this war becomes part of the problem in Israel, starts to spill over more and more and affect the people?

SHIMON PERES, ISRAELI PRESIDENT: I'll be the one to step in. And I think they must understand their own limitations as well. But if it would happen, we shall defend ourselves. That I can say. I don't want to exaggerate and to make great declarations and bellicose interest, no, we are not interested. Syria has enough problems of their own and it doesn't gain us any pleasure. But if they're in danger of life, we shall defend ourselves.

(END VIDEO CLIP)

SIDNER: So you heard there a very diplomatic response saying that they're going to take a very measured stance when it comes to Syria because they really do believe that the war in Syria is out of control there, but that Israel is not the target at this point -- Wolf.

BLITZER: So some tensions along the north, along the Golan Heights with Syria, but there are other tensions in the south, along the Gaza frontier, between the Israelis and the Palestinians in Gaza. Hamas specifically. What's the latest there, Sara?

SIDNER: Much more dire tensions, if you will. There have been more than 100 rockets that have come over from Gaza into Israel. People have been injured. There has been damage to homes and a lot of fear in Israel, as you might imagine.

Also in Gaza, Gaza facing 30 people who were injured over the weekend, six people killed, four of them civilians. This back and forth all started, Wolf, on Thursday with the death of a 13-year-old Palestinian boy who was hit by a bullet. Witnesses said that bullet came from an Israeli soldier's jeep.

However, Israel's looking into the matter, investigating, saying that they at this point in time don't believe they were responsible for the shooting of that child. But since then it has been just a tit for tat. Tons and tons of rockets coming over. Israel very concerned about the escalation they're seeing in Gaza.

We're just now hearing that there may be signs of a truce between Gaza and Israel, but this has really been quite a violent past couple of days. Another escalation when it comes to Gaza. What's going to happen next, no one knows. But again, Israel is saying that they will return fire if they are fired upon. Gaza saying the exact same thing -- Wolf.

BLITZER: Sara Sidner in Jerusalem for us. Sara, thanks very much.

This quick footnote, an Israeli national security delegation has just wrapped up talks with the president's national security adviser, Tom Donilon, over at the White House. Syria, very high on the agenda, also Iran.

Coming up, Paula Broadwell in her own words. Up next, you're going to hear what she has to say. What she has said about her relationship with General David Petraeus.

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BLITZER: Long before the Petraeus scandal surfaced last Friday his mistress Paula Broadwell appeared on CNN to talk about her new book about the retired U.S. army general, and she talked about her relationship with him.

(BEGIN VIDEO CLIP)

PAULA BROADWELL, CO-AUTHOR, "ALL IN": This project started as a dissertation about three years ago and I was working with General Petraeus virtually doing interviews via e-mail and occasionally running with him and interviewing. And when he was selected by the president to replace General McChrystal in the summer of 2010 I decided the time was right to turn it into a book and so I got a visa, I went to Afghanistan.

I actually went on a few trips and embedded both with the troopers in the field but also at headquarters, and at some point I think he realized I was thinking this research very seriously, I was sharing hardship with the troops and risk and so forth. And decided to open up a little bit more access. But we had a relationship before I went there as far as this dissertation was concerned so it just took it to another level.

BROOKE BALDWIN, CNN ANCHOR: All right. I want to ask you about something very specifically. You write in your book that Petraeus almost resigned, Paula, almost resigned in Afghanistan over President Obama's withdrawal timetable. Is friction the right word here? I mean why so much friction between these two men?

BROADWELL: Well, there was a misunderstanding in the headline, Brooke. Actually he was urged to quit after the decision was made by the president to draw down the troops on a certain time line. Several of his mentors and friends sent him e-mails or consulted with him and said this is egregious. The fast drawdown puts our troops and our mission at risk. We risk losing everything that we've.

Petraeus didn't feel it was that egregious so he felt that what the president had decided was implementable, and in fact, he turned right around, went home and got on a video teleconference and spoke to the chippers in Afghanistan and said we will execute. So there was -- there was friction I think in that he had made recommendations. The president asked him for another recommendation. He went back to his troops in Afghanistan, some senior leaders, a very small group, actually, and came back with another recommendation that he felt was viable so there was tension, but I think if anything, it was healthy tension.

The National Security Council and the president's national security team should debate these issues. There's a lot at stake. But there are wider issues for consideration because the war in Afghanistan. The economy. You know, many other factors came into the president's decision making. So one thing we really show in the book is the arc of their relationship over time.

In 2009, I would say it was the military versus the White House. That was the perception in (INAUDIBLE), in some open sources but the military leaders didn't feel like they were boxing in the president and I think what the president have learned and the administration has learned is that really we're all in on a broader scale, listen.

This is book about strategic leadership. It's also a war chronicle. It's Petraeus' intellectual history but what I wanted to show and what the interest it's generating is in executive leadership. Leadership on the line, leading through crisis, I think Petraeus gives us a great model for that. I'm not a spokesperson for him. And if, you know, showing a role model to other people in the world or other readers is a repugnant thing, I'm sorry. But I think the values that he have hold and tries to instill in his organizations are valuable and worth pointing out.

(END VIDEO CLIP)

BLITZER: Paula Broadwell, by the way, spent a year with General Petraeus in Afghanistan interviewing him for that book.

Much more on that story coming up at the top of the hour. Meanwhile, thousands of people in a New York City neighborhood are beginning their third week without power in the wake of the superstorm disaster. We have details of conditions being described as deplorable.

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BLITZER: Get this. More than 73,000 customers still without power in the wake of superstorm Sandy.

CNN's Victor Blackwell reports from one of the hardest hit communities on Long Island.

VICTOR BLACKWELL, CNN CORRESPONDENT: Wolf, the people in this community are (INAUDIBLE) Rockaway are beginning their third week without power after superstorm Sandy. The people here in this building, the Ocean Village community, building three, have no power, some of them no running water, no phone service and no heat.

They do have gas, though, and that's how they're heating their homes. They're opening the ovens and letting the heat out that way.

I went up to the 14th floor and spoke with an elderly woman who has just a half bottle of insulin. She has diabetes and she doesn't know when she's going to get the refill. We spoke with a woman living in the building and she said that the conditions are just deplorable.

(BEGIN VIDEO CLIP)

STACY LAWRENCE, RESIDENT: The smell is horrendous. The staircase is dark. It's just scary. Every day I think I'm coming down the steps, I might see a dead body somewhere. It's -- it's horrendous.

(END VIDEO CLIP)

BLACKWELL: When we went inside the building, the hallways are absolutely dark. If you don't have a flashlight, then you'll probably walk in to a wall because there's no light inside. There's the smell of garbage in the hallways because some people can't get to the incinerator air. They're either afraid to walk down the dark hallways or they're just physically unable to.

We know that this is going to be another cold night for the people who live here. Fortunately, some people in this community have power back. One of them is Dee Arrington and she said the nights without power were difficult.

DEE ARRINGTON, SANDY SURVIVOR: Me and daughter have to sleep with our coat on and socks and ten covers on top of us. With the cat.

BLACKWELL: With the cat.

ARRINGTON: With the cat.

BLACKWELL: Now when you're with your daughter, what do you tell her? I told her we're going to be all right.

(END VIDEO CLIP)

BLACKWELL: Again, Dee Arrington (ph) has people power, but the people here at Ocean Village are waiting for the power.

They're waiting for someone actually to hook up the generators in the parking lot. They have been here since Saturday night. And we spoke with the P.R. company that represents management here. They tell us that work will begin tonight to hook up those generators and they hope to have power restored tonight -- Wolf.

BLITZER: Victor Blackwell, thank you.