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THE SITUATION ROOM

The Downfall Of A Decorated General; Shocking Scandal Engulfs Second U.S. General; Interview with Jane Harman; Shadow of Petraeus Scandal Grows; Who is Jill Kelley?; Preparing to Exhume Arafat Remains

Aired November 13, 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: And you're in THE SITUATION ROOM.

Happening now, a second distinguished military general now ensnared in a growing scandal that reads like a soap opera. Just ahead, what we've just learned about why he might have been involved. Stand by.

Plus, the woman who may have started it all with a complaint about threatening e-mails -- just who is Jill Kelley?

We're live out -- outside her home. We're digging for more information.

And a CIA director seemingly brought down over an affair between two consenting adults.

So what prompted the FBI to get involved in the first place?

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

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

The top U.S. commander in Afghanistan now the second powerful military force to surface in a scandal that's already taken down the former CIA director, David Petraeus.

General John Allen is being investigated by the Pentagon for allegedly sending inappropriate messages to Jill Kelley. She's the woman behind the FBI investigation that uncovered the Petraeus affair with his biographer, Paula Broadwell.

CNN's Joe Johns has just learned from a source familiar with Kelley's version of events that there was no sexual relationship with General Allen and that their communications were not of a sexual nature.

And our correspondent, Nick Paton Walsh, is joining us from Beirut right now -- Nick, you spent a lot of time in Afghanistan. You got to know General Allen.

What have you heard over the past 24 hours, let's say, about this relationship, if, in fact, there was a relationship, with this woman, Jill Kelley, in Tampa?

NICK PATON WALSH, CNN CORRESPONDENT: Well, I've spoken to a senior official close to General John Allen. And that man is absolutely explicit that there was no affair, there was nothing of a sexual nature between them or a romantic nature between them. In fact, this source goes on to say that General John Allen and Jill Kelley have actually even been alone together, that, in fact, John Allen refers to most sexual activity with -- with his wife in his company, and refers to Jill Kelley as, in many ways, a bored socialite. She knew many of the senior commanders at CENTCOM because of their role there as an honorary ambassador, working in a social capacity, working in programs to look after veterans when they return to the United States.

Absolutely clear that, yes, well, e-mails were sent by her to both General John Allen's business and personal account, but they were almost entirely of an innocuous nature, not even really flirtatious language, my source goes on to say. Perhaps at some point, General John Allen may have said, "Thanks, sweetheart," but he says, look, he's from Virginia. That's often how people there colloquially will refer to somebody else.

And she may have once said, look, you know, you looked great on television last night.

But it wasn't as though there was a -- a flirtatious exchange between the two.

Absolutely clear, this source says, that there's nothing of a sexual nature here.

Well, why are we in this situation, Wolf?

Why are the FBI paying such close attention?

This source says that General John Allen received an e -- an e-mail from this anonymous account allegedly run by Paula Broadwell, warning her about Jill -- warning him about Jill Kelley.

Now he, of course, knowing Jill Kelley, wrote to her to say, look, I've received this e-mail talking badly about you, even threatening you, in some ways. You should know about it.

Now, we don't know what happened then. It may be that that's when she first contacted an FBI agent. That's not entirely clear.

But that seems to be the source of the FBI's interest in these e-mail exchanges.

Now, we talk about 20,000 to 30,000 documents. My source says that's far much an exaggeration. Of course, he says General John Allen does reply almost religiously to every e-mail he's sent. And that could be why there's such a volume of traffic here.

But above all, he's clear it's pre -- innocuous in its content. There's not flirtatious language. That's really what's given you, I think, a -- a rare glimpse of the other side of the fence here. We haven't heard from General John Allen, but that's a -- and a senior official close to him.

BLITZER: But the news that you're reporting, Nick, is that General Allen received an anonymous e-mail, but later discovered to be from Paula Broadwell, warning him, stay away from this other woman, Jill Kelley.

Is that -- is that what I heard you say?

PATON WALSH: That's correct. That's correct. And that, of course, is when he notified Jill Kelley. And that's, perhaps, where this involvement of the FBI began. I'm speculating purely there. But that appears to be how the FBI got brought into this and how General John Allen got dragged into the situation which led to the resignation of General David Petraeus from the CIA.

BLITZER: Now, you know General Allen from your coverage of the war in Afghanistan.

Give us a little sense of -- of who this general is.

PATON WALSH: A man greatly respected by many of those who work around him. From my dealings with him, it's interesting. The man is supposed to be a salesman, a P.R. master in many ways, selling you an -- a war that on many different fronts, is failing, having many different difficulties.

But when you talked to him, it was a -- you were aware he had an acute understanding of the problems. He wasn't really glossing over the issues. He didn't know what needed to be changed there.

But in many ways, a man facing a very difficult task. The major decisions about pace of troop withdrawal, what to be done on the ground, decided for him by Washington and he simply the implementer, trying to draw down a messy, decade long war.

But he was also a man who did inspire great loyalty amongst those around him. I remember one aide I spoke to who said that, you know, he'd done many tours in Afghanistan. He didn't really want to go to -- many tours in Iraq. He didn't really want to go to Afghanistan, but he would serve if General John Allen asked him to.

That call came through. And he explained that kind of loyalty came from one anecdote. He and General Allen were sat at Iraq at a dining facility. A round came near that building, shook it. And a young soldier dived underneath the table for cover.

Well, John Allen stayed calmly in his seat, lent down and said, "Son, you're not going to win the war from down there."

And that's really just a -- a small taste, I think, of what one person explained to me was the reason why they were inspired by him and I'm sure why, when this news broke this morning, it surprised an awful lot of people with close knowledge of John Allen -- Wolf.

BLITZER: Nick Paton Walsh, thanks for the good reporting.

We really appreciate it.

And joining us now to talk a little bit more about what's going on, the former Democratic congresswoman from California, Jane Harman.

She's now director, president and CEO of the Woodrow Wilson Center here in Washington.

Thanks very much, Jane, for coming in.

JANE HARMAN (D), FORMER CALIFORNIA CONGRESSWOMAN: Thank you, Wolf.

BLITZER: Let's talk a little bit about what's going on, because you were a member of the House Intelligence Committee for a long time. I interviewed Dianne Feinstein, the chair of the Senate Intelligence Committee. She's not very happy that she learned about all of this from news media inquiries.

Listen to what she told me.

(BEGIN VIDEO CLIP)

SEN. DIANNE FEINSTEIN (D), CALIFORNIA: It's rather shocking to find out, candidly, that we weren't briefed and that we find out from the press, in the way in which we did, with no heads-up, with no opportunity to ask questions or put together any information.

(END VIDEO CLIP)

BLITZER: Are you surprised, as shocked as I was, that the chair of the Senate Intelligence Committee learns that General Petraeus is being investigated when reporters start calling up her office?

HARMAN: Yes. There's a lot we don't know about the process here. But let's start with something I think you said earlier, Wolf, which is that private, consensual sexual affairs should be off limits. I don't see that Congress needs to know about those. I don't see that they need to take up this much time on the media, frankly, when it -- there are important things going on around the world.

But nonetheless...

BLITZER: He resigned, though...

HARMAN: -- the process here...

BLITZER: -- did he resigned...

HARMAN: -- the process here is...

BLITZER: -- (INAUDIBLE).

HARMAN: -- is confusing. Yes. Once he resigned, absolutely, the facts need to be known. But...

BLITZER: Because it's not every day a CIA director resigns...

HARMAN: You bet.

BLITZER: -- in the midst of -- of a sexual scandal.

HARMAN: All right. But rolling back the tape here, best as we can tell, this started as a -- an investigation into cyber stalking, alleged cyber stalking by Paula Broadwell. And through that investigation by the FBI, which I assume was handled according to FBI rules -- cyber stalking is a potential crime...

BLITZER: Right.

HARMAN: -- the -- the -- the connection to Petraeus was discovered.

At that point, if the FBI is investing -- investigating criminal activity, informing other people could blow their investigation. So I don't know, at that point, whether there was any obligation to disclose.

And I think their position is there was not an obligation to (INAUDIBLE) anyone...

BLITZER: But there was this FBI agent in Tampa who alerted this Republican Congressman...

HARMAN: That -- that's right.

BLITZER: -- at the end of October, from Washington State...

HARMAN: And why...

BLITZER: -- who in told -- who, in turn, told Eric Cantor...

HARMAN: That's right.

BLITZER: -- who went to the Justice Department, the FBI, and then all of a sudden this thing exploded.

HARMAN: Well, a -- again, I don't know exactly what happened, who went -- who informed the FBI or asked whether there was a...

BLITZER: Did this...

HARMAN: -- reason for Congress...

BLITZER: -- based on what you know...

HARMAN: -- to know. So, no.

BLITZER: -- and you were a long time member of the Homeland Security Committee, the House Intelligence Committee, did this FBI agent, by blowing the whistle and whatever he did to this Republican Congressman from Washington State, Dave Reichert, did he do anything wrong?

HARMAN: That's what we have to find out. I think Dianne Feinstein is right to be miffed. I think that she and Saxby Chambliss should and will hold closed door hearings and get all the facts. We don't know what the facts are. That's one part of the FBI's story that we don't understand.

The second part is, why were they briefing Jim Clapper on Election Day?

That may have just been a coincidence. Jim Clapper, the director of National Intelligence.

Again, when did this investigation of a potential cyber crime become something else?

And if there were no national security implications, what -- what were they doing telling Clapper and then Clapper volunteered to Petraeus that he should have stepped aside.

BLITZER: It's -- it's pretty shocking to me, too -- and she said this, Dianne Feinstein, that she only learned that David Petraeus, as the CIA director, went to Benghazi, went to Libya, she only learned it from Bob Woodward of "The Washington Post."

HARMAN: Well, that seems strange, although I don't know why -- what his obligation is to share his travel plans with her, unless she was asking for his travel plans. I think she may have been asking and not receiving the information.

I -- I don't know that. But -- but they -- they do work in -- in separate branches of government and -- and her job as an overseer is an important job. I had the equi -- well, I was the ranking member. She's the chairman. But I was the ranking member on the House side for a long time and demanded to be briefed by the administration.

But a couple of other points, full disclosure. They...

BLITZER: Now -- now you're a member of the External Advisory Board of the CIA and you've worked closely with General Petraeus...

HARMAN: Just going there.

BLITZER: -- over the years?

HARMAN: Yes. I've worked closely with him. I met him through my professional duties. And we have a long professional and now a -- a social relationship. Dave and Holly Petraeus...

BLITZER: And you know his wife, Holly...

HARMAN: -- are my friends.

BLITZER: Have you...

HARMAN: And...

BLITZER: -- spoken to them since this all...

HARMAN: I have a -- yes. I have spoken to him. I have very high regard for her. I hope we will all give them some personal space to deal with what is obviously a -- a very difficult moment in their family.

I also hope that Congress will exercise its appropriate responsibilities as the legislative branch, Article One of our "Constitution," to get all of the information.

Um, but I'm -- I'm guessing, when we are finally through this whole thing, that there may be less than meets the eye.

BLITZER: So should he...

HARMAN: David...

BLITZER: -- have resigned?

HARMAN: Well, that's his call. He was advised to resign, so I (INAUDIBLE)...

BLITZER: Is that appropriate for...

HARMAN: A...

BLITZER: -- General Clapper, the head of -- and the -- the -- the director of National Intelligence, to tell him to resign?

HARMAN: I think -- I think you have to ask Clapper that. But I think we need full infor -- much more full information than at least I have to decide that. I just want to say, though, while we're talking about this, hard-working outstanding people, at the CIA and at DOD, talking about the General Allen issue, are hard at work keeping our country safe. And the message needs to go out to them, that the government stands behind them, that to the extent there are any transitions here, they will be orderly. There are very, very solid, serious, appropriate successors to David, Petraeus, being considered by the White House.

BLITZER: As soon as he resigned on Friday, your name came up immediately, as potentially CIA director. There's never been a woman who's been the head of the CIA.

Is that something you would be interested in?

HARMAN: I have a terrific job as a (INAUDIBLE)...

BLITZER: I know you do.

But is that something...

HARMAN: I served in Congress...

BLITZER: -- you...

HARMAN: -- for 17 years...

BLITZER: -- would you be interested in being CIA...

HARMAN: A... BLITZER: -- director?

HARMAN: It's flattering to be considered. My prediction is that one of the inside people, either Mike Morrell, who's the...

BLITZER: Who's the acting director.

HARMAN: -- who's the acting director and is excellent, or John Brennan, who is also rumored to be at least under consideration, would -- will probably be asked. And either of them would do an excellent, excellent job. And there needs to be stability.

And one final point about David Petraeus' performance as CIA director. That's something I really know about. I know about his...

BLITZER: Fourteen months, he was director of the CIA.

HARMAN: -- his performance as -- as director of ISAF in Afghanistan and before that as CENTCOM commander. This is an enormously talented man. He brought a different style to the CIA than did, Leon Panetta.

But he was hard at work bringing an -- an enormous strategic sense to understanding the dangerous parts of the world. And the CIA is a big, positive contributor to our intelligence community, which operates a lot better since we, reformed it in 2004 and created a joint command across 16 agencies.

And the CIA is indispensable in -- in the effort to prevent a -- terror attacks on our country.

BLITZER: You once said -- and I'm quoting you now -- you once said, "I live and breathe security 24-7."

If they come around and ask you to be the director of the CIA...

HARMAN: I live and breathe...

BLITZER: -- you'll have that opportunity...

HARMAN: -- security issues and...

BLITZER: -- to live and breathe security...

HARMAN: -- I will...

BLITZER: -- 24-7.

HARMAN: -- live and breathe them at the Wilson Center and as a member of the External Board if -- if Dave Petraeus' successor keeps me on. And I -- I really think this is a -- a -- a critical time for our country and we need to talk about organizing the opposition in Syria, which, if it happens, will be a great contribution of Secretary of State Hillary Clinton.

BLITZER: We'll have plenty of opportunities to talk about Syria and other issues down the road, as well. Jane Harman, thanks very much for coming in.

HARMAN: Thank you, Wolf.

BLITZER: Did the FBI end up investigating something that amounted to nothing? Up next: why some are now suggesting Gen. David Petraeus's downfall wasn't deserved.

Also, affairs, sex crimes, embezzlement -- we're taking a look at a string of recent scandals that have been plaguing the U.S. military's highest ranks.

(COMMERCIAL BREAK)

BLITZER: So, where do Republicans go from here a week after the party stinging defeat? Jack Cafferty is following that in the "Cafferty File" -- Jack.

JACK CAFFERTY, CNN CONTRIBUTOR: Wolf, to say that the GOP needs to do some soul searching in the aftermath of the 2012 election might be putting it mildly. While Mitt Romney failed to connect with the majority of American voters, the Republicans' problem is a whole lot bigger than Mitt Romney.

As one long time Republican leader told "Politico," the GOP needs to realize it's too old, too White, to male, maybe even want to add too rich to that. This Republican says the party has got to figure out how to catch up with the demographics of a changing U.S. before it's too late. It's well known, Romney lost big among key voting blocks like Latinos, women, and young voters in the battleground states that ultimately decided the election.

That might be because as conservative CNN contributor, David Frum, put it, the Republican message is no longer relevant to middle class America. Frum told MSNBC it's not just that Romney lost, but in the last six presidential elections, the GOP has lost the popular vote in five of them. Frum says that over a generation, a once majority party has become a non-majority party.

Republican positions on issues like women's rights and immigration are big factors in the decline, and it doesn't help when you have Republican Congressional candidates like this moron, Todd Akin, making completely ignorant comments about rape. If Republicans want to start winning elections instead of losing them, they're going to have to make some changes so that they don't continue to look like they're stuck in the 1950s.

Here's the question. What does the Republican Party have to do to become more relevant? Go to CNN.com/CaffertyFile, post a comment on my blog or go to our post on the SITUATION ROOM's Facebook page. Time for a GOP makeover, Wolf.

BLITZER: Lot of people are saying that, including a lot of Republicans. Jack, thanks very much.

Growing questions about whether the downfall of General David Petraeus was justified as we learn more about the investigation from the FBI that uncovered his affair. Let's bring in Brian Todd. He's working this part of the story for us. You're getting new information, Brian.

BRIAN TODD, CNN CORRESPONDENT: Wolf, we are. And you know, when you look at it overall, the scandal spread from a case of one-on-one harassment to top levels of government with two prominent officials involved. It's now leading to some serious questions about why it was pursued so thoroughly, and whether it should have been.

(BEGIN VIDEOTAPE)

TODD (voice-over): The affair was between two consenting adults. So far, no criminal wrongdoing has been found. No breach of national security. Paula Broadwell's e-mails to Jill Kelley were angry, jealous in tone, according to sources, but did not threaten violence. But now, a CIA director has been brought down and a top general is being investigated and many are asking, did something amounting to maybe nothing spark an FBI investigation?

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: A lot of people don't understand and are shocked to believe that if they send something on the internet to somebody that the other person doesn't like, that they may get their e-mails investigated.

TODD: Questions are now being raised about the motives of an FBI agent involved. The agent, the first person Jill Kelley approached about Broadwell's e-mails had previously sent photos of himself shirtless to Kelley. That's according to a U.S. official who said that agent was never part of the case.

Still, "The New York Times" reports the agent did, quote, "nosed around the case" until his superiors told him to stay away.

TOM FUENTES, FORMER ASSISTANT FBI DIRECTOR: Obviously, the fact that he keeps asking about it indicates to the other agents that he shouldn't be asking this, it's none of his business really to know what another squad is doing.

TODD: How unusual is that kind of behavior inside the bureau?

FUENTES: It would depend how --

TODD: How frowned upon is it?

FUENTES: Well, normally, most agents would understand that it's inappropriate.

TODD: CNN contributor, Tom Fuentes, a former FBI assistant director, says that agent's conduct likely would not have affected the probe. So, what would have pushed the investigation this far? Experts say possibly other content of Paula Broadwell's e-mails to Kelley. A source with knowledge of the e-mails tells CNN they detail the comings and goings of Kelley and some generals.

Among those believe to be referenced in the e-mails was David Petraeus. Parts of Petraeus' schedule were not public. Former justice department cyber crime prosecutor, Marc Zwillinger, says that would raise two concerns for the FBI.

MARC ZWILLINGER, FORMER JUSTICE DEPT. CYBERCRIME PROSECUTOR: One would be the concern that the person has access to more than that, to classified information, information that person shouldn't be seeing or be looking at. The second would be a security concern.

(END VIDEOTAPE)

TODD (on-camera): That security concern Zwillinger says would be the possible targeting of Petraeus or top generals who could have been mentioned in those e-mails from Broadwell. If she puts that information about the schedules into e-mails to Kelley, and somehow, that gets circulated further, the generals could be at personal risk.

Zwillinger says that's clearly grounds for the FBI to pursue it further. FBI officials have not commented on this. A U.S. official says it was proper to investigate the case based on the concern over the harassing e-mails, Wolf.

BLITZER: Does the FBI routinely investigate these harassing e-mails?

TODD: Marc Zwillinger says the FBI is now devoting more and more resources these days to harassing -- to, excuse me, to investigating cyber harassment cases, to investigating cyber stalking cases. He says they don't so much go after these one-on-one cases that are less -- that little less threatening, more mildly threatening, which this appears to be.

He says, clearly, there's something more here, and he believes is that information about the comings and goings of the generals that's in those e-mails that Paula Broadwell sent, that, in his mind, sparked the investigation to go further, and he said it was grounds to do that.

BLITZER: Brian, thanks very much.

So, if a top general has an affair, is it also a crime under military law? The answer might be yes. Is it time for a refresher course from the top down? Stay with us. Lots of more news happening right here in the SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Lisa Sylvester is monitoring some of the other top stories in the SITUATION ROOM right now. Lisa, the governor of Alabama making a pretty significant statement as far as health care coverage in his state is concerned.

LISA SYLVESTER, CNN CORRESPONDENT: Yes. That's right, Wolf. Robert Bentley says the state will opt out of the state insurance exchange under the Affordable Health Care Act commonly called Obamacare. The governor also says Alabama will not expand state meDicaid programs because, quote, "The state simply can't afford it." States have until this Friday to announce if they will participate in an exchange program. And Democratic congressman, Jesse Jackson Jr., is out of the Mayo Clinic where he was being treated for bipolar depression despite being embroiled in a federal and House Ethics Committee investigations for misuse of campaign funds. The Illinois representative won re-election last week. He's been on leave of absence from Congress since June.

And internet anti-virus creator, John McAfee, says he's innocent of murder and is now on the run from authorities in Central America. McAfee is wanted in Belize for questioning after his neighbor, a U.S. citizen, was found shot to death last weekend. McAfee left his namesake internet security firm in 1994.

And Massachusetts police say an ER doctor driving drunk and on pills caused this unbelievable crash. It wasn't even 9:00 in the morning when police say the woman behind the wheel hit a delivery truck in a parking lot, ran into a fence twice, sheered a post in two, and then went airborne, crashing into street traffic.

One person was transported to the hospital with injuries, and the driver, she was arrested at the scene. Police say she failed two sobriety tests, and prosecutors say this doctor is actually prescribing drugs to herself. So, lucky that we didn't have more injuries when you take a look at that incredible video, Wolf.

BLITZER: Nine o'clock in the morning?

SYLVESTER: Nine o'clock -- it wasn't even quite nine o'clock in the morning when that happened, Wolf.

BLITZER: Thank you.

A top U.S. general comes under fire not for an affair or inappropriate e-mail, but rather his wife's shopping sprees. The military scandal problem, that's next.

(COMMERCIAL BREAK)

BLITZER: The Senate Intelligence Committee has just wrapped up closed door meetings on what to do next as far as General Petraeus is concerned, what to do next as far as the Benghazi investigation is concerned.

Our senior congressional correspondent Dana Bash has been speaking with some of the members and Dana is joining us right now.

What are you learning?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Well, Senator Dianne Feinstein, chairman of the Intelligence Committee, told you earlier in the show, Wolf, that she wants former Director David Petraeus to come and talk to the Intelligence Committee about what he knows about what happened in Benghazi, and there was a meeting just behind me of all the members of the Intelligence Committee, and Feinstein came out and told me that they all did decide that that is appropriate, that it is appropriate for Petraeus to come and talk to them. We heard from the White House earlier today that they believe that what the current or the acting director of the CIA knows about Benghazi is good enough, and that they don't necessarily need to hear from Petraeus. But clearly on a bipartisan level the senators here disagree. In fact Feinstein told me that she believes that there is a big stone left unturned if they don't talk to Petraeus.

Now when is that going to happen? Earlier today she told me that she was hoping it would happen as early as Friday. But just now she said that they just have to wait in order to talk to him first about when he can come, but they are hoping it's going to be very soon. And so that is the news here.

One other thing that is interesting, you know, that there's been a lot of anger here on Capitol Hill that members of the Intelligence Committee, at least what they call the big four, the chair and ranking members of the House and Senate Intelligence Committee, that weren't briefed at all about this investigation of David Petraeus as it was going on.

Saxby Chambliss, top Republican, just told our Ted Barrett that they are going to get a briefing from the number two at the FBI about why that didn't happen. And we expect something similar on the House side as well tomorrow.

BLITZER: Yes. They take their oversight responsibilities very seriously.

Dana, thanks very, very much for that.

Just days after General David Petraeus stepped down as the CIA director, the investigation that uncovered his affair certainly put a cloud over another four-star general, John Allen. Petraeus and Allen, two top military men, caught in a drama fresh out of a soap opera.

Let's go right to our Pentagon correspondent, Chris Lawrence.

Chris, is this kind of thing an isolated problem? Is there a widespread issue growing in the military? What's going on?

CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: Well, it's a great question, Wolf, because you don't hire a flag officer to kick down doors and shoot bad guys. They're given the highest pay and the best perks for their judgment, and for a growing number of them, that judgment has been flawed.

(BEGIN VIDEOTAPE)

LAWRENCE (voice-over): They are the elite few, the generals and admirals who rose to the highest ranks of the military.

GEN. DAVID PETRAEUS, FORMER CIA DIRECTOR: I will do my utmost to serve.

LAWRENCE: But the shine is off the stars, and it goes beyond retired General David Petraeus. GEN. KIP WARD, FORMER HEAD, AFRICA COMMAND: I could think of no better role, no more noble task.

LAWRENCE: The Defense secretary just demoted four-star General Kip Ward and ordered him to repay the government over $80,000. Investigators found he used his rank to shuttle his wife on shopping sprees, enjoyed a lavish beach front trip, and once accepted a Defense contractor's gift of going back stage to meet Denzel Washington.

DENZEL WASHINGTON, ACTOR: We're going to roll it.

UNIDENTIFIED MALE: What do you mean, roll it?

WASHINGTON: OK? We got to do something to stop this dive. Here we go.

LAWRENCE: Brigadier General Jeffrey St. Claire is now being court- martialed for sodomy and other sex crimes at Fort Bragg. The military says when subordinates called him out on his attitude towards women, he allegedly said, quote, "I'm a general, I'll do whatever the bleep I want."

It makes General Stan McChrystal's comments about his bosses pale in comparison. Words in "Rolling Stone" that cost him his job in 2010.

GEN. JAMES "SPIDER MARKS (RET.), U.S. ARMY: The problem is that there's a cascade of these right now.

LAWRENCE: Retired General Spider Mark says as an officer moves through the ranks, there are mechanisms in place that reinforce the military's values, but at the top, a lot of those checks and balances have fallen by the wayside, isolating the flag officer.

MARKS: It's a thing called hubris. I mean at some point you think the rules just simply don't apply to you.

LAWRENCE: Military experts say that sense of entitlement sets a dangerous precedent for younger troops.

RYAN KELTY, WASHINGTON COLLEGE SOCIOLOGY PROFESSOR: If we have a military that doesn't have a firm basis in understanding how important moral, ethical behavior and decision-making are to their daily actions and in terms of leadership, then that's -- that kind of puts everything in question.

MARKS: These are truly aberrations.

LAWRENCE: Despite the lapses of judgment, Spider Marks believes military culture is still sound.

MARKS: Look at the hundreds, the thousands of very senior officers at multiple levels who have served with incredible dignity.

(END VIDEOTAPE) LAWRENCE: Yes, without a doubt, that is true. There are 1.4 million troops, but flag officers? Fewer than 950. So generals and admirals make up the tiniest of tiny fractions of the military. So when you see five, six, seven showing bad judgment, that's actually a larger percentage than you might initially think -- Wolf.

BLITZER: Chris Lawrence, thanks very much.

Let's dig a little bit deeper with our national security contributor Fran Townsend, the former Bush homeland security adviser, she's also a member of the CIA's external advisory committee.

What are these military leaders doing wrong here? What's going on from your vantage point, Fran?

FRANCES FRAGOS TOWNSEND, CNN NATIONAL SECURITY CONTRIBUTOR: Well, Wolf, I think we do have to make real distinctions between an officer facing charges of sodomy and whether it's flirtatious e-mails or extramarital affairs, I am not excusing that bad behavior, but as you would appreciate, there are serious qualitative differences here.

Look, I think Chris is right to say what -- I think the military needs to do is step back for a moment and look at the kinds of sort of problems in terms of judgment calls that some of these officers have faced, whether it's sexual improprieties or it's financial improprieties or crimes, that is violations of the code of military justice.

And you have to ask yourself, you know, if there's a policy in corporate America that's important, you have to get retrained on it every year. Lawyers have to take every two years here in New York state, they have to take professional responsibility courses, spend hours being retrained.

And frankly, if I was General Marty Dempsey, the chairman of the Joint Chiefs, right now, I am sort of surprised he hasn't stepped out about this. Part of that is because these cases -- some of these cases are under review right now, but you have to say to yourself we need to then reinforce military ethics and our code of conduct if we want it to be taken serious at the highest levels, we need to make sure they're touching that code of conduct and being spoken to about it on a regular, if not annual basis.

And I suspect that you will see the chairman and vice chairman of the Joint Chiefs speak to the combatant commanders, speak to the service chiefs, about how to reinforce that among -- from the most senior officers in the United States military straight on down through the ranks.

BLITZER: So what should the role of the commander in chief, the president of the United States, be?

TOWNSEND: Well, I think he's -- look, every year the president has a conference where he pulls together all of the combatant commanders and all of these most senior military leaders and I'm quite sure, Wolf, when they sit down, there's -- usually there's a dinner, and then they spend half a day together at least.

I expect on the agenda this year will -- the president, the commander in chief, will be talking about the importance of the military code of conduct and their ethical behavior.

BLITZER: Do you think the worst of this Petraeus scandal is now known or is there more that's still going to be coming out?

TOWNSEND: You know, Wolf, the thing that's -- I would have -- gosh knows I hope and wish it would be over. I think the piece about the Petraeus-Broadwell affair is done. I think we should wait to make too much out of the John Allen, there may be inappropriate or flirtatious e-mails.

We've heard again and again that people are saying there was not an affair there, but I think the thing that we don't understand is the fact is the FBI has said that there is not going to be criminal charges against Broadwell or Petraeus, except they conducted, you know, a six-hour search and brought out reams of documents.

There's a reason for that, and we don't know what that is. We don't really understand the full import of Jill Kelley and her many relationships. I think we have to assume it's not just with Dave Petraeus and John Allen. She had access to all sorts of senior military leaders in Tampa, which was CentCom and the Special Operations Command, and I suspect that they're looking at whether or not she was just sort of a bored socialite as General Allen's spokesperson suggested or whether she was being sort of directed by a foreign intelligence service.

BLITZER: Which is a serious allegation obviously.

TOWNSEND: Absolutely.

BLITZER: One final question, and quickly if you could give me a good answer, this FBI agent who supposedly leaked all this to that Republican congressman from Washington state to Congressman Dave Reichert, did he do anything wrong? Did he violate FBI rules? Did he violate any criminal laws, if you will, out there?

TOWNSEND: You know, Wolf, there's a process inside the FBI for him to raise those concerns. We don't know whether or not he did that, but if he did -- if he failed to raise it internally and simply went directly, he may have violated certainly internal policy of the FBI, and it remains to be seen whether or not there's a legal problem there.

BLITZER: Fran Townsend, thanks very much.

TOWNSEND: Thanks, Wolf.

BLITZER: We'll have more on this story. She's the woman behind the FBI investigation that brought down General David Petraeus. But who exactly is Jill Kelley?

Up next, we'll have a live report from right outside her home in Tampa.

(COMMERCIAL BREAK)

BLITZER: This is new video we're just getting in of Jill Kelley leaving her home in Tampa. She's the woman whose complaints about threatening e-mails may have brought the wheels of this scandal to light.

CNN's Ed Lavandera standing out -- right outside her home. He's got a closer look at who this woman is.

Ed, what are you learning?

ED LAVANDERA, CNN CORRESPONDENT: Well, Wolf, it is really a confusing picture at this point. But we're doing the best we can to kind of sift through all the various pieces we've been able to put together about Jill Kelley, the woman who has become very much front and center at the scandal surrounding General Petraeus.

But we do know that Jill Kelley has lived here in Tampa for awhile. She's married to a prominent doctor here in the area. As one Defense Department official described her, a not so -- in a not-so flattering kind of way, they described her as a bored, rich socialite, but she had become heavily involved here with military causes and hosting events.

She also had been volunteering in the last six months, we're told, with a group called the National Council for International Visitors. This is a group that works with the State Department. Obviously with all the dignitaries and high level officials that come through the military bases here in the Tampa area, they had hosted events here at their home that you see behind me.

But for her part, Jill Kelley isn't saying anything at all, simply that her and her husband have been friends with General Petraeus for the last five years and they're asking people to respect their privacy at this point -- Wolf.

BLITZER: There's an interesting nugget here also, Ed. It seems like both Generals Allen and Petraeus actually reached out to help a legal case regarding Jill Kelley's twin sister, Natalie. What do you know about this?

LAVANDERA: Yes. This is interesting. I think it points to the types of relationships that Jill Kelley and her husband developed here, not just service relationships but obviously very intimate or close bonds with some of these people. They felt good enough to go to these two generals. And it was Jill Kelley's sister we understand going through a custody battle with her ex-husband and that the two generals wrote letters on Jill Kelley's sister's behalf, describing her as a wonderful mother and trying to renegotiate or reframe some of the custody issues that were going on in that particular situation.

But it is interesting that these two generals would essentially go to bat for Jill Kelley's sister in this custody battle.

BLITZER: We're also hearing, Ed, from some members of Jill Kelley's family today. What's going on here?

LAVANDERA: Well, you know, Jill Kelley, as we mentioned, isn't saying anything. She's hired a prominent D.C. attorney to help her out, as well as a prominent D.C. public relations firm to help her out through all this. But her brother did speak out. Of course a lot of the things that had been said about her in the last couple of days, unflattering, especially her connections to General John Allen, the commanding officer in Afghanistan, as well.

But her brother came out and spoke to one of the CNN affiliate in Pennsylvania essentially saying that anything describing her as anything other than a good mother is simply wrong.

BLITZER: The --

(BEGIN VIDEO CLIP)

DAVID KHAWAN, JILL KELLEY'S BROTHER: If you know my sister the way I do, she is number one, a mother. She has three little kids. She is, number two, a wife, OK? So after that, everything else is just a side attraction basically, it's peripheral. So she's very dedicated to her husband and to her kids. So something like this is really pretty much a fluke, you know. So for anybody to paint her other than that is completely wrong, just completely wrong.

(END VIDEO CLIP)

LAVANDERA: And, Wolf, we're -- as we mentioned, we're here outside of Jill Kelley's home. As amazing as it might seem, she seems to be kind of going on with everything in her life. We just saw her just moments before we went on the air here, showing up with her children here at their home and just simply walked inside with all of the cameras looking at her, trying to get some sort of comment from her -- Wolf?

BLITZER: Interesting stuff. The prominent D.C. attorney who's representing her, Abby Lowell, is that right?

LAVANDERA: Yes. That is correct.

BLITZER: Yes. Abby Lowell is well known to many of us here. She represents some high profile cases over the years. Thank you.

The home of the Petraeus mistress Paula Broadwell was searched by the FBI for hours. Just ahead in our next hour, we're getting new information about what FBI agents have found.

(COMMERCIAL BREAK)

BLITZER: Jack's back with the "Cafferty File." Jack?

JACK CAFFERTY, CNN CONTRIBUTOR: Question this hour, Wolf, is what does the Republican Party have to do to become more relevant? May not be as dire as we make it out to be. Mitt Romney did get, what, over 50 million votes. But still.

Lee in Wyoming writes, "The party of no is too narrow. It's going to -- it will go the way of the dinosaurs if it can't accept change in our very diverse country. The Tea Party is holding the Republican Party to hard-headed, no-promise ideas."

Bob in Florida writes, "Honestly, Jack, I don't think the Republicans have to change anything. Over the next four years, we'll see Obamacare fully implemented, gas over five bucks a gallon, over $20 trillion in debt, GDP growth under 2 percent, one out of every four in poverty and still no jobs. Republicans will run around with their "don't blame me, I voted for Romney" bumper stickers, saying "I told you so." Elections really do have consequences."

Debi writes, "I've been a lifelong Republican, but the party left me. They have moved so far to the right, I can't support them. The Republican Party is only concerned with the 1 percent and they're upset that all the big moneybags couldn't buy this election. The Republican Party failed its people and they wonder why the people won't support them."

Paul writes, "The last 60 years have been enormous change in the United States, in culture, race, and gender relationships. If the Republicans want to become a more relevant elephant, they'll have to wake up to the fact that it's not 1952 anymore."

Jerry on Facebook wrote this, "Do what the Democrats did after the disastrous 1980s, have a more moderate party platform. The Republican platform is frightening."

Frank in Los Angeles writes, "The problem with the Republican Party is that they can't purchase relevance off the shelf or at high-end stores. Thus, they're reaching out to women and minorities as just plain tokenism. It's going to take years to wash away the bad taste left in the nation's mouth by Republicans like Alan West, Todd Akin, Richard Mourdock, and Dick Cheney."

If you want to read more about this, go at the blog, CNN.com/caffertyfile, or through our post on THE SITUATION ROOM's Facebook page -- Wolf.

BLITZER: Jack, thank you.

He died back in 2004, but questions still linger over what exactly happened to Yasser Arafat. Details on what investigators are doing right now to answer that question. Was he poisoned?

(COMMERCIAL BREAK)

BLITZER: Delicate work is now underway in the West Bank to exhume the body of Yasser Arafat. French authorities have launched a murder investigation into his death after finding a radioactive substance on some of his personal things.

CNN's senior international correspondent Sara Sidner is in Ramallah.

(BEGIN VIDEOTAPE)

SARA SIDNER, CNN SENIOR INTERNATIONAL CORRESPONDENT: Security forces are keeping us as far away as possible from the Palestinian presidential compound, where the body of deceased PLO leader Yasser Arafat has been laid to rest. Now you can see below and behind me a huge blue tarpaulin that is surrounding his mausoleum. What we're hearing from a source is the glass that usually surrounds that mausoleum has now been taken down and workers are working on removing the marble tombstone.

This is all happening because the family of Yasser Arafat believes he was murdered after polonium 210, the highly radioactive element, was found on some of his belongings, according to a Swiss lab. Now his body is supposed to be exhumed this month and there is a lot of work to be done. A source says that the exhumation could take at least two weeks and probably more because some of the work will be done by hand.

When the work of removing the dirt in his grave is done, we're expecting to see scientists from France, Switzerland, and Russia here to watch that process and to take tests. This is all happening just as everyone commemorates the advisory, the eight-year anniversary of Arafat's death. His family very upset and there has always been suspicion that Arafat was murdered when he died in a French hospital in 2004.

Sara Sidner, CNN, Ramallah.

(END VIDEOTAPE)