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CNN NEWSROOM

Does Iran Have a U.S. Drone?; 123 People Killed in Syria Today; Political Parties at Odds Over Fiscal Cliff Negotiations; Gov. Jack Markell and Gov. Mary Fallin Live; Fox News, Elect Petraeus

Aired December 4, 2012 - 11:00   ET

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


ASHLEIGH BANFIELD, ANCHOR, "CNN NEWSROOM: Thanks so much, Carol.

It is 11:00 on the East Coast; it's 8:00 on the West Coast and it looks like a drone. Iran says it's a drone. It may well be a drone, but the United States Navy says it's not one of our drones.

Iran's Revolutionary Guard says it has captured one of our prized pieces of intelligence, something called a ScanEagle. It's a real thing.

Iran says it was brought down by anti-aircraft squads in Iranian air space. There's no visible damage in these pictures that aired today on Iranian TV.

And, again, the U.S. Navy, which patrols the Persian Gulf constantly, says all of its drones are currently accounted for. It also says its drones stay in international air space.

Joining me now with his insights and expertise is Jim Walsh whose an international security analyst at MIT.

Jim, first and foremost, look, it may very well be someone else's drone. I'll get to that in a moment.

But when we say we only patrol in international air space, do we really only patrol in international air space?

JIM WALSH, INTERNATIONAL SECURITY ANALYST, MIT: Well, the first thing to know about that, Ashleigh, is that international air space is highly contested. Different countries draw the maps in different ways.

And, so, you can be in a spot in the air where one country claims it's in international air space and another country claims it's in their national air space.

So, it's sort of a fudge word, and we've had this before. This is not the first time we've had this dispute.

We've had drone incidents now with Iran on this makes the third different occasion and, in every case, there are claims by both sides and it's rather tough to resolve. BANFIELD: And just about every aspect of this is classified, so how much faith should I put in this claim by our navy that we've got all our drones, it's not ours?

WALSH: Yeah, you know, that seems like a pretty narrow claim, right? It's not the U.S. government saying we have no drones. It's the navy.

So, all that means is that the navy wasn't involved, potentially. There are other countries that have U.S. drones. There are other agencies within the U.S. government that use drones.

So I think that's a fairly narrow denial, and, listen, I don't buy a lot of what I hear and read on Iranian -- in the Iranian state media. Some of it's pretty crazy stuff.

On the other hand, it's perfectly plausible that this has happened. As I said, it's happened at least twice before. In October, Iran tried to shoot down a drone. They captured a CIA drone about a year ago.

One of the lessons here, one of the things that viewers should conclude from this is Iran is the most watched country in the world. The U.S. has satellite intelligence, drone intelligence, human intelligence.

Israel, Saudi Arabia, Russia, everyone watches Iran and that's an important conclusion to keep in mind.

BANFIELD: So, Jim, if it isn't, in fact, our drone and our story is the truth, it's clearly a mystery to us, as well. Who else might be flying drones out there?

WALSH: Pretty much everyone at this point is flying drones. You know there are -- remember, Iran has a lot of countries that don't like it in the region, the Gulf countries, Saudi Arabia and others.

Then there are -- Israel obviously has drones and, in fact, you may have noticed that in previous reporting over the last several months Iran is starting to fly drones into Israel and certainly Israel probably flies drones into Iran.

So, there are multiple countries with multiple interests who are all watching Iran. It could be any one of them, but my guess is that, yes, there is a drone. It was captured. The source of it we won't know, but the bottom line is that Iran is being watched by all the major players in the region.

BANFIELD: And just one quick question before I want to switch gears with you about the drone and that is that you mentioned it was about a year ago that Iran captured a drone.

By our estimation, it's a year today, if you can believe it, a year ago exactly today that they captured that other drone of ours and there was much ado about the kind of technology that Iran was getting its hands on. And I recall the president asking they politely if Mahmoud Ahmadinejad would actually sent it back. I think he sent a toy version of it back as a joke.

And, so, aside from the comedy, what about the technology? If this is someone else's drone, if it has any of our components, how dangerous is this to us in terms of their intelligence and what they can gather about us?

WALSH: Yeah, I think you put your finger on an absolutely critical question.

I mean, to me this story means two things. One is Iran is being watched. It's going to be hard for it to get away with anything because it's being watched.

But number two, the separate issue of drones. You know, it's great when the U.S. can keep a monopoly on drones, when we are the only ones who have drones and no one else has them, but that world is changing.

You know, other countries have drones. Now, Iran has drones that it has flown into Israel. Other countries will develop them. We will soon enter a world in which we no longer have this monopoly and we're going to have to start to deal with these problems.

I think we have to think long-term about drones because do we really want a world in which every country good and bad has drones and is flying missions all over each other's air space?

I think that could get pretty messy pretty quick. So, there's some longer term fundamental questions about the evolution of drone technology and how that's going to be managed this little story points to and we're going to keep -- this kind of story is going to continue as we go forward.

BANFIELD: All right, well, I want to switch gears into Syria and maybe drones will make its way into our conversation at this point because this grave concern that Syria has now been -- well, the intelligence suggests that it's been mixing some of the chemical weapons and that they may be moving some of them, as well, and that this has really kicked our government into high gear about sending over dire warnings to Bashar al-Assad about any move to use chemical weapons on his people as a red line for this country.

First of all, what is happening with our intelligence gathering machine now that we have that one bit of information that at least we know in terms of keeping an even closer watch on what's happening?

WALSH: Well, my guess is that's the number one intel focus right now for the U.S. government, is not so much the battle between rebels and Assad but the fate of those chemical weapons.

I think this story that they're starting to mix weapons, potentially put sarin gas in artillery shells or in bombs to be dropped aerially is the big story. It's bigger than the Iran story. It's bigger than any other story I have heard this week. It's deeply troubling, and it raises two sets of questions. One is, will the regime in its death throes with its back against the wall resort to the use of chemical weapons. It's not the first time we've seen that in the Middle East. Saddam used it. Nasr of Egypt used it in the 1960s, but this is a big deal.

And, secondly, and this is for U.S. policy, the U.S. laid down a red line. It said do not move those chemical weapons agents. Certainly, do not use them. And having drawn that red line, if Assad starts to move in that direction, well, what are we going to do?

You know, are we going to intervene militarily? We've sort of put the U.S. credibility on the line here by drawing a red line and, if they violate that red line, what exactly are we going to do? That remains unclear to me.

BANFIELD: And I don't suggest for a moment you're going to have the exact answer to this, but I've got to ask it with your background.

What kind of a troop level force would we need? What kind of troops would we need given the fact that a lot of these installations could be in amongst people and we could be finding ourselves right back smack in the middle of the same thing that we faced in Iraq?

WALSH: Exactly. This is the set of bad choices that U.S. military planners face now.

A lot of it, Ashleigh, depends on what the objective is. If your objective is to destroy the chemical munitions, then perhaps you could go in and bomb them or otherwise sabotage them.

If your goal is to go in and secure them and remove them so that they don't fall into the hands of others and that requires boots on the ground, then that's going to require all sorts of logistical planning and a pretty major effort, in part because, remember, military planners have to plan for the worst case.

So, even if you send a small group of people in, they have to have backup and a way out. There's all sorts of things that have to be planned for and, so, as you plan for those contingencies, the number of troops required increases and increases.

So, I think that's a really nasty problem for U.S. military planners, to go and somehow destroy or otherwise remove chemical weapons in the middle of a civil war against a country that has a military that is going to fight back. It's not ...

BANFIELD: Well, it's great ...

WALSH: ... a happy thing.

BANFIELD: It's great I have you today because there's so much news that's happening in this region and here is yet another front and that is to the north of Syria, Turkey.

There has been a lot of conflagration along that border and, at this point, NATO is expected to make some moves to approve Patriot missile batteries along that border.

What do you know about what's going to happen and the implications?

WALSH: Well, we don't know what's going to happen and a lot of this depends on how Syria and others react in the region.

It's important for folks to remember that we have a treaty alliance with Turkey. They are a member of NATO. It's just not Europe and Canada, but Turkey is a long-standing member of NATO.

And Turkey-Syrian relations have gone down over time. You can also imagine a situation where Syrian leader -- the Assad government makes a decision to purposely pick a fight with either -- on the sort of Lebanon-side or the Turkey-side in order to widen the conflict.

I mean, I don't know why they would do that, but maybe they came up with a theory that says that gives them a better shot at survival. You know, maybe there's an intervention that sort of freezes the Syrian regime in its current point.

But, you know, dying regimes that have their back against the wall in which they have high confidence that, if they lose, they will all be killed, those are unpredictable and dangerous regimes.

So, I think all options are possible here. I don't mean options on the table, but I mean there are a lot of different scenarios here that could go badly. I'm not trying -- you know, I'm not a hyper. I think there's way too much hyping.

But I do think that this is a dangerous situation. It's more dangerous than the Iranian situation right now, what's happening in Syria, a civil war that involves chemical weapons, more dangerous than anything on there right now.

BANFIELD: Not good to hear either way.

Jim Walsh, thank you for touching on all three of those top news stories for us. Do appreciate your insight this afternoon. Thanks.

And we should add to the story, as well, that the NATO secretary- general says that the defensive missiles could actually be in place on the Turkish-Syrian border in just weeks, believe it or not.

And, in the meantime, the news out of Syria from the opposition, at least 123 people -- that's 123 more people -- have been killed across Syria so far just today. We're only midday. Apparently, 30 of them children in a refugee camp.

(COMMERCIAL BREAK)

BANFIELD: Now to Washington where all they want for Christmas is a deal to avoid the cliff.

Last week, it was the Democrats who came forward with a proposal, but it was a non-starter for the Republicans, too many tax increases. So, now the Republicans have sent over a deal and still no meeting of the minds. You guessed it, not enough tax increases. Here we go again.

The deal does, however, offer up $600 billion in savings from both Medicare reform and other spending cuts and it also suggests raising $800 billion in revenue through tax reform instead of increases, but it just will not budge on raising those taxes on the wealthiest 2 percent of Americans and that is why Democrats aren't budging.

(BEGIN VIDEO CLIP)

SENATOR HARRY REID (D), MAJORITY LEADER: We're glad to finally see Republicans joining in the negotiating process instead of watching from the sidelines, but while their proposal may be serious, it's also a non-starter.

They know any agreement that raises taxes on the middle class in order to protect unnecessary giveaways to the top 2 percent is doomed from the start. It won't pass.

Democrats won't agree to it, President Obama wouldn't sign such a bill and the American people won't support it.

(END VIDEO CLIP)

BANFIELD: So let's bring in Dan Lothian because he's at the White House where the president is just about now meeting with a group of state governors. We'll get to that in just a moment.

But first, is there anything else in the Republicans' proposal that's getting under the skin of the Democrats?

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: Well, you know, there are obviously a lot of things in that proposal that Democrats aren't necessarily embracing, but it really boils down to the, you know, tax breaks for upper-income Americans.

I know we're starting to sound like a broken record here, but this is something that the president has been talking about even out on the campaign trail and the White House believes that, you know, the president was re-elected on that message, so the majority of Americans agreed with him/

And, so, this is really a nonstarter for Democrats and for the president. They believe that the only way to really pull in revenue here is to go after wealthy Americans. The majority of Americans won't be impacted. He wants those Bush-era tax cuts extended for middle-class Americans, but believes that those upper-income Americans need to pay more.

Republicans, though. are resisting because they believe that what you're doing here is penalizing the very people who are the job creators, the ones who are sitting on the sidelines and won't invest and, if they have their taxes go up, they'll be impacted, won't be able to put more money into the economy, won't be able to help turn the economy around.

So that really is sort of the big sticking point. The White House refusing to budge from it at this point. We'll see where it goes in the next coming days.

BANFIELD: OK, Dan, topic two, and that is that the president is meeting with those leaders of the National Governors Association. I have the lineup here and you'll have to correct me if I get any of these pronunciations wrong.

A lot of people haven't heard of some of those folks.

LOTHIAN: That's right. I haven't either.

BANFIELD: So, I don't feel so bad then because, yeah, Jack Markell of Delaware, Mark Dayton of Minnesota, Mike Beebe of Arkansas -- I think I got that one right.

On the Republican side, it's Gary Herbert of Utah, Mary Fallin of Oklahoma and Wisconsin's governor, Scott Walker who I think a lot of people are familiar with.

So, the question is, why are they there, what do they want and why what do they want to say?

LOTHIAN: Well, you know, they're here for two reasons. The president inviting them here because he wants to sort of make his case to them about what he believes are the right solutions for preventing the fiscal cliff and then, in turn, hopefully, that they will go up on Capitol Hill.

Of course, some of them will be meeting with House Speaker John Boehner and Senate Majority Leader Harry Reid. So the hope is they will put pressure on their lawmakers from their states to get a deal done.

But also this is a chance for these governors to talk about the fact that what happens here with this fiscal cliff will have some real consequences, that we're not just talking about sort of these ambiguous numbers, but it will impact them and why does it impact them? Because according to a Pew report, a third of the revenue of states comes from federal grants and so states like ...

BANFIELD: Hey, Dan, you're not going to believe this. Just as you're speaking live, I'm only going to interrupt you for the governors themselves. They just walked out. Let's listen in.

(BEGIN LIVE FEED)

GOVERNOR JACK MARKELL (D), MARYLAND: ... Governor Beebe of Arkansas. We are three Democrats and three Republicans.

We just had what I would say was a very good meeting with the president. We came in part to make sure that the voices and the issues that we face as governors in the states are heard and are considered as part of the discussions going on here in Washington. The president was very open to that, said that we would continue to have a seat at the table.

We talked about some of the issues that we often focus on as governors. One of those being opportunities for flexibility in terms of some of the programs that we partner with the federal government. He was very open to that, as well.

Also recognizing, I believe it was Governor Walker who brought up there's an impact here not just on the fiscal issues, but also on the issues in terms of how the discussions here will actually impact the economies back home, as well, and the president picked up on that and said he would be interested in our ideas not just to the fiscal issues, but also the pro-growth issue.

So, we've got a number of follow-ups. The vice president will be really the point person for us going forward, but very much an invitation for us to stay involved.

And I believe that as I said, as three Democrats and three Republicans, we all agreed we were going to come here today to focus on what we have in common, which frankly is a lot, and I think we all recognize that there's an impact on our states certainly by what happens here and we just want to make sure we as a National Governors Association and individual Democrats and Republicans, we are working together.

So, with that, I'm going to turn it over to Governor Fallin and then we'll be happy to take questions from you.

GOVERNOR MARY FALLIN (R), OKLAHOMA: Thank you. I'm Mary Fallin from Oklahoma and we are very grateful for the opportunity to come and visit with the president on behalf of the National Governors Association and certainly appreciate the vice president and his time and Secretary Geithner's briefing upon the economy and some of the discussions going on here at Capitol Hill.

This is a very serious time for our nation, a very serious time for our individual states, especially as we are recovering from the 2008 economic downturn that our nation took and certainly the impact that it had upon our states.

We know that there are still many states in our states that are budgeting shortfalls. There are some states that have experienced growth in their economies and are recovering and we know that we're still dealing with states that have lower unemployment rates and some have higher unemployment rates.

And, so, we want to be a part of the solution to the problems facing our nation to be able to offer some of the innovative ways that we have been able to address some of the concerns that have faced our own state budgets and certainly we understand that the discussions being held about federal cuts, whether it's taxes or tax reform, whether it is spending here on Capitol Hill or whether it's sequestration, that that will have a huge impact upon our individual state budgets. And, as governors, we are preparing our state budgets which I think most of us will introduce in January and February as we begin our legislative sessions and so we have decisions we have to make and, so, we are hoping that as not only the president but as the U.S. Congress, the House and the Senate, finalize and hopefully will be able to come to conclusion at the end of this month that we will be included to give our advice, our opinion upon the effects upon public policy and how it will affect our budgets.

We also have some ideas on how we can save money, how we can be able to create more efficiencies in government and spending with some of the different demonstrations that we've done in our various states and we plan on getting back to the president, the vice president, with some of our suggestions and ideas. We appreciate their time today.

MARKELL: So, with that, why don't we take questions. I think what you will see, we're not sort of saying it should ...

(END LIVE FEED)

BANFIELD: All right, some very critical comments that you just heard from this bipartisan committee of six representing the governors association, not only Jack Markell, but Mary Fallin of Oklahoma suggesting that the federal cuts in the sequestration could have a remarkable effect on state budgets which, of course, they're all working on right now.

I want to bring back Dan Lothian who's live at the White House. That is exactly what I was expecting to hear right off the top.

Look, when you talk about spending cuts, we depend on a lot of federal money in order to operate out here in these states. That's got to be a huge concern for these governors, Dan.

LOTHIAN: That's right and the timing of that was perfect because that's where I was headed.

You know, you look at a state like Virginia where they have a lot of defense contractors and, according to that Pew study, they would be impacted, could see their economic activity fall by $10 billion, as many as 120,000 jobs lost.

Even a small state like South Dakota, for example, which gets 10 percent of its revenue from federal grants, they would be impacted, as well. You could see education impacted, for example, in South Dakota.

So, these governors are very concerned about what these numbers could mean for them if lawmakers here in Washington do not get a deal done. It's very real. You could see everything from defense to education impacted if a deal isn't done.

BANFIELD: All right, Dan Lothian, thank you.

I like that Governor Fallin mentioned they have ideas to save money and create efficiencies. Perhaps it's the governors to the rescue in this fiscal cliff crisis. Dan Lothian, thanks so much for that.

We are back right after this break.

(COMMERCIAL BREAK)

BANFIELD: So, this next story will leave you either shocked that politics are done this way or really not the least bit surprised. It involves former CIA director David Petraeus, who has certainly had his share of trouble it's lately, but also the chairman of Fox News channel, Roger Ailes.

There is no question that Petraeus was a hero of the Afghan war, so it may not come as any surprise that, according to "The Washington Post," he was approached to run for president.

But it's how he was approached and who approached him that may have crossed a line. A Fox News analyst named Kathleen McFarland was on a trip to Afghanistan when a proposal she made to the general was caught on tape.

She told General Petraeus that Fox News chief Roger Ailes would do whatever he could to get Petraeus elected. She even started out by asking a very strange question coming from a news organization.

(BEGIN AUDIO CLIP)

KATHLEEN MCFARLAND, FOX NEWS: He loves you and everybody at Fox loves you, so what I'm supposed to say directly from him to you, through me, is, first of all, is there anything Fox is doing, right or wrong, that you want to tell us to do differently?

(END AUDIO CLIP)

BANFIELD: Is there anything you want to tell us to do differently? This is a surrogate for a national news organization asking a potential presidential candidate and someone who is in the middle of prosecuting a war if the news organization can do something differently.

That person goes on to ask if General Petraeus would consider the run for president and then suggests that the chief of News Corporation, Rupert Murdoch -- and don't forget News Corporation owns Fox News, that that chief of News Corporation would bankroll his run for president.

Howard Kurtz joins me live now from Washington via Skype. He's the anchor of "Reliable Sources" here on CNN.

This is pretty overwhelming stuff, I have to say. To just read it, my first inclination was to say, come on, that can't be true. What was your first reaction?

HOWARD KURTZ, CNN'S "RELIABLE SOURCES": There goes Roger again because I reported last year, Ashleigh, that Roger Ails had dinner with most of the prospective presidential candidates, including Mitt Romney, and he gave him some advice about loosening up on the air.

So, even though he runs a major news channel, Roger Ailes has a background, as you know, in Republican politics, he can't resist dabbling in the political game.

BANFIELD: But to suggest a news organization might need some guidance on how to tailor what it's doing on the air according to the people they cover?

KURTZ: Well, I don't know whether K. T. McFarland in that part of the taped conversation of this, scooped by Bob Woodward, was carrying a message from Ailes or not.

Petraeus, interestingly enough, said Fox seemed to turn against the war in Afghanistan after it became Obama's war, in other words when it was no longer a war being prosecuted by George W. Bush.

More interesting to me is the notion that Ailes supposedly, according to K. T. McFarland on this tape trying to entice Petraeus into the presidential race, saying you should quit unless Obama offers you to be the chairman of the joint chiefs of staff. You should quit.

You should run. I might leave fox and run your campaign. I don't think he would actually do that, but the idea that Rupert Murdoch might bankroll a Petraeus candidacy not that farfetched when you consider that Murdoch has given on a couple occasion seven-figure sums to the Republican Party.

BANFIELD: And, Howie, in the interest of complete fairness, "The Washington Post" reached out to Roger Ailes for his response to this and I want to read for you what he told "The Washington Post," according to the paper.

He said this and I am going to read his words. "It was more of a joke," he says, "a wiseass way that I have. I thought the Republican field in the primaries needed to be shaken up and that Petraeus might be a good candidate.

"It sounds like she, meaning K. T. McFarland, thought she was on a secret mission in the Reagan administration. She was way out of line. It's someone's fantasy to make me a kingmaker. It is not my job."

But it is your job to talk about it, Howie Kurtz, and I assume that on "Reliable Sources," Sunday morning at 11:00 a.m. Eastern, this will be one of your topics, right?

KURTZ: Yeah because that was a non-denial denial. I want to talk more about that and if people want to check us out Sunday morning that will be one of our topics indeed.

BANFIELD: And I will be one of your viewers. Howie Kurtz, thanks so much. Appreciate it.

(COMMERCIAL BREAK)