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Russia Accuses U.S. of Spying; White House Under Fire; Russia Says It Caught an American Spy; World Oil Prices Heading Down

Aired May 14, 2013 - 16:00   ET


JAKE TAPPER, CNN ANCHOR: Allegations of snooping and spying. Russia claims covert ops by a State Department official, and right here at home spying on the free press by the Obama administration.

I'm Jake Tapper and this is THE LEAD.

The politics lead. Verbal gymnastics from the Obama administration today. The White House and the Justice Department turn on the full spin cycle in the middle of a scandal pileup.

The world lead. At first, it read like "James Bond," but the more we hear, the more it sounds like "Austin Powers." The Russians say they have caught an American spy and, hey, they have got the wigs to prove it.

And the pop lead. She is one of the most beautiful actresses in the world. The camera has always loved every inch of her, but Angelina Jolie today revealed that she's forever altered her famous body to head off a deadly disease.

The politics lead, a brutal, brutal day for the Obama administration. White House Press Secretary Jay Carney and U.S. Attorney General Eric Holder both tangled with the press this afternoon, and it was rough. After Benghazi, the IRS scandal, and now reports that the Justice Department covertly seized reporters' phone records, both had a lot of explaining to do. Carney got hammered.


QUESTION: President Obama is being compared to President Nixon. How does he feel about that?

QUESTION: In every instance, either the president or you have placed the burden of responsibility someplace else.

QUESTION: Can you say categorically that nobody at the White House and nobody on the president's political team had any knowledge or was involved in any way in the targeting of Tea Party groups by the IRS?

QUESTION: He's prosecuted, in this administration, more people for leaks than every other president put together.


TAPPER: Ah, I miss that.

And in the middle of all that, Carney says the White House had no idea about this.


JAY CARNEY, WHITE HOUSE PRESS SECRETARY: Other than press reports, we have no knowledge of any attempt by the Justice Department to seek phone records of the Associated Press.

We are not involved at the White House in any decisions made in connection with ongoing criminal investigations, as those matters are handled appropriately by the Justice Department independently.


TAPPER: By the Justice Department. So that ball was in Eric Holder's court. He was holding a simultaneous press conference.

It was supposed to be about Medicare fraud, but no one really seemed to care and when it was question time, the reporters wanted to know about Benghazi, the IRS, and especially those phone records. Holder says he recused himself from the decision to spy on the records of the Associated Press because the FBI also interviewed him about classified leaks.

Don't you wish you could recuse yourself from responsibilities of your job? Anyway, his deputy attorney general, James Cole, made the call to subpoena those records and the reason for it seems to be that the government cannot control its own leaks.


ERIC HOLDER, U.S. ATTORNEY GENERAL: And I have to say that this is among, if not the most serious, it is within the top two or three most serious leaks That I have ever seen. It put the American people at risk, and that is not hyperbole.


TAPPER: The AP has implied that this was all about a story it ran last year about a CIA operation that foiled an al Qaeda plot to blow up a plane.

Regarding the IRS, Holder says that he is launching a separate investigation after an IRS official admitted that the agency unfairly targeted conservative groups.

For a president who says "let me be clear" in every speech, there are questions about how much clarity we're getting. Remember when he said this just three months ago?


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: This is the most transparent administration in history, and I can document how that is the case.


TAPPER: You have to wonder just how transparent this administration is about being transparent.

CNN's political team has been covering these stories on every front today. Chief White House correspondent Jessica Yellin was at Carney's briefing. Our own Joe Johns was at the press conference Eric Holder gave. And chief congressional correspondent Dana Bash is on Capitol Hill, where Republicans are practically salivating over all of this.

Jessica, let me begin with you.

How bad was today for the White House, do you think?

JESSICA YELLIN, CNN CHIEF WHITE HOUSE CORRESPONDENT: Well, first, Jake, if they're not transparent enough, I don't know why we didn't think of it. We should just subpoena their phone records.

TAPPER: Right.

YELLIN: Look, there is a confluence of issues here that puts the White House on the defensive.

How these latest controversies impact the president really depends on how the next week plays out. That's because so far the White House has been all talk on the AP and the IRS controversies, but no action. And the White House is implying that will change as soon as the IRS comes out with an audit of its own wrongdoing.

Now, we expect that audit to come very soon, and if the president's actions, if the consequences of the president's outrage are severe and swift, that could help contain the problem and steady the ship here at the White House.

The truth is, we don't see any foreseeable end to the controversies regarding the DOJ's investigation of these leaks or Benghazi, so they will just have to manage that. But it's really the IRS story that hits home for most Americans, so the White House will want to work hard -- will be working hard, I should say, to try to really address the response to the IRS. We're going to see how they deal with it, Jake, in the next few days.

TAPPER: Joe, you were at the Justice Department today. There were times today when Attorney General Holder seemed to be staggering under the questioning. What was it like in the room?

JOE JOHNS, CNN CRIME AND JUSTICE CORRESPONDENT: Well, you know, I have watched Holder a lot on Capitol Hill, and he has taken a lot of tough questions and been able to deflect them.

I haven't seen him really take this many tough questions from the media, so that was very different. And I think the thing that I walked away from that news conference with today was that this administration has pretty much been able to dance over the entire first term, and now this sort of day of reckoning appears to be on the horizon, just a variety of issues that really started all the way back in May of 2012, a whole year ago, and now all of this sort of breaks out into the public sphere, this concern about sources and methods being compromised in this investigation involving the airplane plot that was thwarted and then the AP records.

So this is all a bit of a dance that this administration now has to do, Jake.

TAPPER: Dana, we don't expect the loyal opposition to have a consistent response. I have certainly heard Republicans criticize the president for the leaks. Now they're criticizing the president for an aggressive investigation into the leaks. But what was the response by Republicans on Capitol Hill?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: You know, they couldn't get to a microphone fast enough today.

You saw, you know, every Tuesday, Republicans and Democrats in the Senate have their lunches. And sometimes it's just the Republican leader and maybe a couple of his lieutenants. The Republicans who wanted to come, they could barely even fit behind the lectern because they wanted to come one after the other and they almost sort of ran out of adjectives to describe how much this is an overreach.

They really directly pinned it on the president and the administration, saying it was an abuse of power. And when I say it, I'm talking about everything. They lumped it together, of course, from the IRS to these AP searches by the DOJ and, of course, Benghazi, which they certainly are not forgetting about.

One thing that I thought was really interesting, Jake, is that before Mitch McConnell, the Republican leader, took questions, he said this to reporters.


SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: As you continue to file your stories on this subject, ask yourself before you write, how would I be writing this story if this were a Republican administration?


BASH: And I can tell you, Jake, that just in the hallways here, reporters are running around talking to senators and to House members, and one question that is coming up is, imagine if Dick Cheney did this.

TAPPER: All right. Dana Bash, Joe Johns, and Jessica Yellin, thank you so much.

As White House Press Secretary Jay Carney heard multiple times in today's briefing, this administration has been aggressive in pursuing leaks. That's putting it lightly. My next guest has been looking at that issue for his latest documentary. It's called "War on Whistleblowers." And it takes a critical look at the Obama administration's role in pursuing those who decide to go public with sensitive information. This impacts not only the whistle-blowers, but the journalists covering the story.


UNIDENTIFIED FEMALE: The impact of this administration's aggressiveness in the national security arena has had an extraordinary chilling effect. The number of people who have indicated to us they wish they could talk, but they can't because they are so afraid of what could happen to them, is a terrible thing for our democracy.


TAPPER: We're joined now by the producer and the director of the film, Robert Greenwald. He's also the president and founder of Brave New Foundation.

Robert, thanks so much for being here.

What's your reaction to the Justice Department obtaining phone records of Associated Press journalists? Were you surprised?

ROBERT GREENWALD, PRESIDENT AND FOUNDER, BRAVE NEW FOUNDATION: Well, I was angry, initially, and, unfortunately, the last year of research we have done on "War on Whistleblowers," this is a systemic, continuing problem.

It's not a one-off and it's not an accident, sadly. It has been policy by the White House, by the administration, and it's an effort to silence and scare whistleblowers and to get the press to be quiet and do what it wants them to do. The national security state doesn't want anything getting out.

TAPPER: Now, Attorney General Holder argued that this was a very serious leak. It put the American people in harm's way. What would your response to that be?

GREENWALD: Well, my response would be that this is unfortunately what the administration continues to do.

It tells us a little bit, and it says, but we can't let you know anymore. It's the same thing with drones, Jake. They will say, well, we have hurt, we have killed bad guys, but there's no evidence or no proof.

The AP is saying, this is a year-old story about a foiled plot. Now, how that coincides with what Holder is saying is something we need to know and we should know. But they keep falling behind and using secrecy when it suits them.

And, also, let's be clear. There is a very substantive difference between whistle-blowers and leakers. And leaking is for self-serving purposes. Whistle-blowers are people who come forward in an effort to tell the truth and have no personal gain whatsoever, as we saw in our film with example after example.

TAPPER: Robert, lastly, before I let you go, explain to viewers why they should care. To a lot of them, they might think, look, the government is trying to protect us. Reporters just want good stories. They're not motivated by anything other than their own self-interest themselves. Why should viewers care about this issue?

GREENWALD: Well, I think people should care for a couple of reasons.

One is , there is a great line, democracy is not a spectator sport. So, people should care because they need to get involved. You should care because whistle-blowing and the secrecy of the military's industrial complex affects us and affects our real ability to be a democracy.

And then there is a very practical reason, again, that we show in the film, which is, how are our dollars being spent? It's whistle- blowers who come forward and saying, money is being misused. It's not making us safer. It's being wasted or there's fraud. We know the institutions and the large corporations that are spending these dollars are not going to come forth and give us this information willingly, so, again, the whistle-blowers are heroes who we should be celebrating.

TAPPER: All right. Robert Greenwald. And the documentary is "War on Whistleblowers." Thank you so much.

Coming up, James Bond had a license to kill, impeccably tailored suits, cool cars, fantastically complex gadgets. This guy had a blond wig that looked like it came from Courtney Love after a bender. We will tell you about the man the Russians say is an American spy.

Plus, it's an oil boom, but the sudden surplus is not coming from the Middle East. It's coming from right here in the U.S. -- that and more when THE LEAD continues.


TAPPER: Welcome back to THE LEAD.

Now, it's time for "The World Lead".

Red handed. The Russians say they caught an American spy and they're kicking him out of their country. Ryan Fogle, if that is his real name, works as a diplomat at the U.S. embassy in Moscow. At least that's his day job, according to the Russians.

The FSB, Russia successor to the KGB, believes he is actually a CIA agent. The Russians say they arrested him while he was trying to recruit a Russian official.

Check out the blonde wig. Stealthy.

Russian TV cameras were there when Fogle was hauled away. He was brought in for questioning and later turned over to the U.S. embassy, but Russia has ordered him out of the country.

Our Phil Black has more.


PHIL BLACK, CNN INTERNATIONAL CORRESPONDENT (voice-over): This was the moment. Russia's FSB, its federal security service, says it caught an American spy on the streets of Moscow. Helpfully, the Russians released photos and video showing off their catch.

That is not a happy face. The Russians say the man in the unconvincing blonde wig is Ryan Fogle. His official job is third secretary in the political unit of the U.S. embassy. The FSB says he works for the CIA and it caught him wigged up, in the act of trying to recruit a member of Russia's own special services.

He is accused of carrying this spy kit, along with pocket knives, flashlight, and compass that includes another wig, sunglasses, a big pile of cash, and a letter which the FSB says contains instructions to the person Fogle was trying to recruit. Russian state media says the letter offered $100,000 to talk and a million dollars a year for long- term cooperation.

This alleged case of bungled espionage could extend much further than just one embarrassed spy. Russia claims the CIA has made several recent attempts to turn Russian agents and the FSB was tracking them.

(on camera): Officials at the Russian foreign ministry behind me describe this as provocative, in the spirit of the Cold War. They say it raises serious questions about America's intentions. The U.S. ambassador has been summoned there to explain. (voice-over): Russia and the U.S. recently promised to work more closely together on counterterrorism and Syria. Secretary of State John Kerry was in Moscow only last week. Ryan Fogle has been ordered to leave Russia. How the two countries continue to respond to the dramatic outing of an alleged spy will determine if recent progress continues.


TAPPER: And Phil Black joins me live from Moscow.

Phil, what's the U.S. embassy saying about this?

BLACK: Jake, silence. No comment whatsoever.

Now, Ryan Fogle is being expelled from the country. The key question is how will the United States respond? Will there be a tit- for-tat expulsion of a Russian diplomat? And as for the Russians, while they say or claim that they have been watching the CIA trying to recruit their people for sometime now, they haven't explained why they eventually, finally, decided to go public with this -- Jake.

TAPPER: And, Phil, is this business as usual for how the CIA operates in Russia? Have we just broken the diplomacy reset button? BLACK: Well, both sides admit there is a certain degree of tolerance for the espionage that goes on in both countries. So, officials for them do. But it usually takes place beneath the surface. It is rare that it would be bubbled up like and bubbled up so publicly.

What really makes this so unusual is that the Russians haven't just blown this guy's cover. They have gone out of their way to do it in such a very public way, Jake.

TAPPER: Phil Black in Moscow, thank you so much.

Joining me now is Peter Brookes. He's a former CIA officer and deputy assistant secretary of defense. He's now a senior fellow at the Heritage Foundation.

Thanks for joining us. I appreciate it.

Russia is alleging this is a CIA spy. Judging from the evidence that we've seen, the wigs, the sunglasses, do you believe them?

PETER BROOKES, THE HERITAGE FOUNDATION: I don't know. I mean, I'm not sure this is the case. There could be some theater here, too. The Russians like to play this up when they get a spy.

Remember, Putin, former KGB officer, is president of the country. There are tensions in the relationship over a whole host of things.

So if they did get somebody involved in espionage, they may want to deter, you know, further espionage as well as Russians from participating in espionage. There may be some theater involved here.

TAPPER: The other part that seems like theater because it just can't be that a CIA official would be this stupid is that some Russian outlets like "Russia Today" are reporting on the English translation of a letter they obtained from Mr. Fogle, it includes telling a potential double agent to go to an Internet cafe, create a Gmail account, don't use your personal information. And it's written down. It seems like this is the kind of thing, this kind of letter would never be written.

What's your take as a former CIA officer?

BROOKES: I agree. If it's true, it's certainly not our best moment if this is a true case. Right? You wouldn't want that on your agent. You would not be caught with that in your pocket even if the police stopped you and they find it. It could have been put together by the Russians to try to make this more dramatic than it perhaps might be otherwise.

TAPPER: And I want to read the statement from the Russian foreign ministry about this. The U.S. might be silent, but the Russians sure aren't.

BROOKES: Right. TAPPER: "While the presidents of our countries reaffirm the readiness to expand bilateral cooperation, including the cooperation of intelligence agencies and fighting international terrorism, such provocative actions in the spirit of the Cold War does not contribute to building mutual trust."

What's interesting is that they would allude to all of the difficulties that the U.S. and Russia had --


TAPPER: -- in the Boston marathon terrorist attacks and the fact the U.S. has been faulting Russia for not being as forthcoming. And now they're making it seem as though the U.S., we're the ones that have the Cold War mentality.

BROOKES: Yes. They're playing the victim here, the height of hypocrisy. In fact, one of the most aggressive intelligence services here in Washington in the United States is the Russians probably, you know, along with the Chinese. So, this is a joke in that respect.

Now, the thing here I would say is that I would hope that if there was an intelligence operation, that perhaps we're going at that information that the Russians didn't give us that could have prevented Boston. That might be what is going on here.

We may have been overly aggressive to try to get at people who could tell us about that because my view is, there is no such thing as a friendly intelligence service. They don't tell you everything. But there is information the United States needs to know overseas for our national security.

TAPPER: And, lastly, give us the long view here. How much does this incident today hurt long-term U.S./Russia relations?

BROOKES: I think it's a blip. You know, there could be a tit- for-tat, an additional officer getting kicked out. It's not going to be like Robert Hanssen in 2001 where we kicked out 50, or 1986 with Ronald Reagan where they kicked out 80 Russian intelligence officers.

But my expectation is that this was a deterrence, this was a signal, and will probably go away rather quickly.

TAPPER: Did you ever wear one of those wigs?

BROOKES: Not a good look. I don't recommend it, Jake.

TAPPER: I would recommend against it. It might look good on you. It might look good on you.

Peter Brookes, thanks so much.

BROOKES: Thanks for having me.

TAPPER: #tag You're It. Send your best code names for this failed CIA recruitment of a Russian spy. Kremlin gremlin? Send your code names to @TheLeadCNN. Use #spieslikeus.

And coming up, they'll be off to work but it's no vacation. We have the latest on furloughs for Defense Department workers.

And in sports, they're spending just shy of a billion dollars, that's billion with a "B" on this new Vikings Stadium. But will it bring the fans?

That and more when THE LEAD continues.


TAPPER: Welcome back to THE LEAD. I'm Jake Tapper.

Today's "Money Lead": lower oil prices. You heard me right. Lower oil prices.

Oil futures are trading at $95 a barrel and trending down. The reason why might surprise you, too. Increased oil production from, ready for this? The United States.

The International Energy Agency sees a supply shock coming, thanks to new technology like fracking which is turning North Dakota into an oil state, and technology allowing access to Canada's oil sands. The agency predicts North American production will outpace demand from developing countries like China at least for a while.

Also on the money beat, some Defense Department employees will not have to take as many unpaid days off as we were first told by the Obama administration. The Pentagon originally predicted this year's forced budget cuts would mean civilian workers being furloughed for 22 days without pay. Later, the number was lowered to 14. Today, Defense Secretary Chuck Hagel lowered it again to only 11.

Here's something we just came across involving a clothing chain you'll find in malls across the country. Wet Seal has agreed to pay more than $7 million to settle a race discrimination lawsuit. The suit was filed by African-American employees who claim they were denied equal pay and promotions because of their race. Corporate managers were accused of openly talking about the need for more workers who were white and had blue eyes.

Wet Seal released a statement calling the settlement a, quote, "no fault resolution".

Ah, the second-term scandal. It's like a fine wine. Arrogance and over reach aged to perfection, because from Watergate to Iran Contra to Monica Lewinsky, things have a way of going sour once a president gets to round two of his tenure.

We'll ask our political panel about it. Ron Brownstein, second- term stumbles. Are they inevitable? Do they have to happen?

RON BROWNSTEIN, CNN SR. POLITICAL ANALYST: Pretty much, Jake. The first president to run a second term and wondered why he bothered was George Washington. So, it's been going on a while. TAPPER: I don't think you've been reporting that long.

BROWNSTEIN: Not quite.

TAPPER: I might be mistaken.

We'll be right back with more of THE LEAD.