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THE SITUATION ROOM

President Obama Addresses IRS Scandal; Interview With California Congressman Darrell Issa; White House Releases Benghazi E- mails; Head of IRS Resigns; Jodi Arias Faces Possible Death Penalty; Detainees Throwing Feces at Gitmo Guards; Accused Spy's Story Revealed

Aired May 15, 2013 - 17:59   ET

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


WOLF BLITZER, CNN ANCHOR: It's now the top of the hour, the president momentarily will be going into the East Room of the White House. We're watching what's going on here in THE SITUATION ROOM.

I'm Wolf Blitzer in Washington. We want to welcome our viewers in the United States and around the world.

Even as we await the president, by the way, we just got word that the jury in Phoenix in the Jodi Arias trial, they have reached a verdict on phase two, whether or not she should live or die, whether she should be eligible for the death penalty or not. They have to determine if, when she killed her ex -- her ex-lover, it was done in an unusually cruel way, or not.

If they determine it was done in an unusually cruel way, she will be eligible for the death penalty. But then there will be a third phase of this trial, which will determine the sentence, whether she spends the rest of her life in jail or whether she is eligible for the death sentence.

We don't know when they're actually going to announce the verdict. We will continue to monitor what's happening in Phoenix, go there once we know what's going on.

But, once again, the Arias verdict has been reached. We will let you know when we know what's going on.

In the meantime, we're awaiting the president of the United States. He will be walking into the East Room of the White House, and making a major statement on the IRS investigation. He will be telling us what he thinks needs to be done to move on. Clearly, major, major blunders were made by IRS officials in targeting conservative groups for specific attention.

Dana Bash has been getting some information from her sources up on Capitol Hill.

And what you have been telling us, Dana, is that we will hear from the president what has cryptically been described as IRS changes that will be in the works. DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: That's right. That is all my Democratic source would say to me, IRS changes. And that could mean a lot of different things.

I can tell you that just bumping into some senior senators on the way from where I was to here, to talk to you at the camera, they are wondering whether or not those changes mean personnel changes at the top, and saying that they wouldn't be surprised, but they also are very clear that they had not been briefed on that.

Everybody is sort of waiting with bated breath to see exactly what the president does announce, because this is certainly something, as Joe was just saying, that is bipartisan, that is stoking bipartisan outrage, but it is also putting a lot of fear, political fear in the hearts of Democrats here on Capitol Hill, because they just want these issues to be, at least the temperature to be taken down a little bit.

And they hope that what the president does today will do that, so that they can get on with some of their very important agenda items that are not going to easy in the first place, namely immigration reform.

BLITZER: Let's go over to the White House.

Jessica Yellin, our chief White House correspondent, is standing by.

Jessica, this is obviously not an easy decision for the president to go ahead and make a statement like this.

JESSICA YELLIN, CNN CHIEF WHITE HOUSE CORRESPONDENT: That's right, Wolf.

And I know the president's going to make a very brief statement, only five minutes. And it's already running a little bit late. Very briefly, leads me to believe that he will have something to announce of some substance. And I'm waiting to bring it to you. Hopefully, I will have that very soon.

I also want to tell you the Speaker of the House John Boehner's spokesman is out with a statement on those Benghazi e-mails. And the speaker has been quite outraged over the e-mails. And his spokesman says that the e-mails only confirm what the speaker's been saying all along, and that the release of these in no way alleviates the Republicans' concerns that the talking points were changed to make them -- changed for political reasons.

And it's says, "The seemingly political nature of the State Department's concerns raises questions about the motivations behind these changes, and who at the State Department was seeking them." He says the release of the e-mails is long overdue. And he says that they hope that there is more cooperation to come.

Bottom line, this is not the end of a war, but just more skirmishing, Wolf. It looks like the Benghazi issue, it certainly isn't over with this release, and Speaker Boehner's concerns are not alleviated, but only heightened by what they have read in the documents they have seen today, Wolf.

BLITZER: And, Jessica, I take it even though you and other reporters are in the East Room, the president will just make a statement. I anticipate he's not going to be answering questions, but I could be wrong, obviously.

YELLIN: No, definitely no questions, and, again, just a very brief statement, five minutes, in and out. And we can try to shout them, but I'm confident he won't be answering them, Wolf.

BLITZER: Well, sometimes, if you shout, they stop, and earlier presidents used to do this, although this president...

YELLIN: Not so much.

BLITZER: ... I know is very disciplined when it comes to doing that.

YELLIN: Yes.

BLITZER: Occasionally, he will come back and answer a reporter's question, if he likes the question. So, maybe come up with something he might like.

All right, Jessica Yellin is over at the White House. Dana Bash is up on Capitol Hill. Jake Tapper is here with us, Gloria Borger, Joe Johns.

Jake, the president's got a major challenge, three potential scandals unfolding at the same time. In all the years I have been in Washington covering several presidents, there usually is one scandal that can absorb an enormous amount of time, whether you go back to the Nixon administration and Watergate. We saw what happened, the end result there, or Iran-Contra during the Reagan administration, Whitewater, Monica Lewinsky during the Bill Clinton administration, the Valerie Plame leak during the George W. Bush...

JAKE TAPPER, CNN CHIEF WASHINGTON CORRESPONDENT: It's like the greatest hits album there.

BLITZER: Those were a lot of investigations. They start off relatively modestly. You don't know, though, once there are criminal investigations under way by the FBI, where they wound up.

The Valerie Plame leak operation, Scooter Libby, the chief of staff to the vice president of the United States, was convicted of lying to FBI officials. Once there's an FBI inquiry, you don't know where these things wind up.

TAPPER: No, it's true. I will say, if I can put on my analyst hat for a second...

BLITZER: Please.

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Go ahead. TAPPER: ... I don't think that the scandal, controversy, whatever you want to call it, about the Department of Justice subpoenaing, legally subpoenaing the records, phone records, very broadly, of the Associated Press reporters is something that the American people are going to care about. I just -- I don't think that they do.

I think that it's the -- administrations, this one, and previous administrations and before that can say it's national security, we need to do this for national security. And, ultimately, I don't think the public cares about whether or not we, in the media, have unfettered, to use Jay Carney's word, freedom of press. I just don't think that that is an issue that has traction.

I obviously personally feel like it should, but I don't just think it does.

BORGER: But only insofar as it plays into the Republican narrative.

(CROSSTALK)

TAPPER: The Republicans were complaining about the leaks. The Republicans were complaining about the leaks.

(CROSSTALK)

TAPPER: How come your administration leaks so much?

BORGER: OK.

TAPPER: Then Holder appoints a U.S. attorney to investigate the leaks.

BORGER: Right.

TAPPER: He's aggressively investigating the leaks. Now I understand that there doesn't have to be consistency, but...

(CROSSTALK)

BORGER: Well, right.

(CROSSTALK)

BLITZER: All right, hold on for a minute, guys.

While we await the president, there's been a verdict in phase two of the Jodi Arias trial. The judge is speaking.

UNIDENTIFIED FEMALE: So say you one and all?

JURY: Yes.

UNIDENTIFIED FEMALE: Ladies and gentlemen, the clerk will ask each of you a question. Please answer yes or no. Juror number one, is this your true verdict?

UNIDENTIFIED FEMALE: Yes.

UNIDENTIFIED FEMALE: Juror number two, is this your true verdict?

UNIDENTIFIED MALE: Yes.

UNIDENTIFIED FEMALE: Juror number three, is this your true verdict?

UNIDENTIFIED FEMALE: Yes.

UNIDENTIFIED FEMALE: Juror number four, is this your true verdict?

UNIDENTIFIED MALE: Yes.

UNIDENTIFIED FEMALE: Juror number six, is this your true verdict?

UNIDENTIFIED FEMALE: Yes.

UNIDENTIFIED FEMALE: Juror number seven, is this your true verdict?

UNIDENTIFIED MALE: Yes.

UNIDENTIFIED FEMALE: Juror number nine, is this your true verdict?

UNIDENTIFIED MALE: Yes.

UNIDENTIFIED FEMALE: Juror number 12, is this your true verdict?

UNIDENTIFIED MALE: Yes.

UNIDENTIFIED FEMALE: Juror number 13, is this your true verdict?

UNIDENTIFIED MALE: Yes.

UNIDENTIFIED FEMALE: Juror number 14, is this your true verdict?

UNIDENTIFIED MALE: Yes.

UNIDENTIFIED FEMALE: Juror number 16, is this your true verdict?

UNIDENTIFIED FEMALE: Yes.

UNIDENTIFIED FEMALE: Juror number 18, is this your true verdict?

UNIDENTIFIED MALE: Yes.

UNIDENTIFIED FEMALE: Ladies and gentlemen, we are going to recess for today. Please be back tomorrow morning at 10:30. Between now and then, continue to follow the... BLITZER: All right, there you have it. The jury has decided that Jodi Arias was guilty of extreme cruelty in killing her ex, her late boyfriend, extreme cruelty, and now that sets the stage for the third part of this trial, whether or not the jury decides she will get the death penalty or not.

She is now eligible for the death penalty, because the jury has concluded that she killed Travis Alexander, her ex -- her late lover, with extreme cruelty. So the death penalty is now going to be determined by this jury. And within the next few days, they will begin this third and final phase of the trial, which will determine whether she spends the rest of her life in jail, or whether she is eventually executed for killing her late boyfriend.

We will continue to monitor that.

But let's get back to the news here in Washington right now, the president of the United States getting ready to be in the East Room. He was supposed to speak almost 10 minutes or so ago. He's clearly running a little bit late. We will hear from the president on the IRS scandal that has been brewing.

Why did officials at the Internal Revenue Service target conservative organizations for special treatment when they applied, when they applied for tax-exempt status? We will see what happens on that front when the president shows up in the East Room of the White House.

Jessica Yellin is over at the White House. Dana Bash is monitoring what's happening on Capitol Hill. We will get reaction, by the way, after the president's remarks from Darrell Issa, a key Republican congressman who's been closely following all of these investigations, as we know.

As we await the president, he's running a little bit late, let me bring Jeffrey Toobin into this, get his quick reaction to the jury deciding that extreme cruelty was proven in the way that Jodi Arias killed her late lover. And she will now be eligible, Jeff, for the death sentence.

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: Well, she's two-thirds of the way to a death sentence.

The first stage, of course, was the guilt phase. She was found guilty of first-degree murder. Arizona has a very unusual penalty phase, this two-part penalty phase. The first part is now over. As you have been saying, the jury has found extreme cruelty.

Now is a more complicated and a more difficult challenge for the prosecution, and a chance for the defense to really put on a case, because here is where the prosecution will talk about the aggravating factors, what made this crime so terrible, and the defense will have a chance to talk about the mitigating factors, why there are reasons that the jury should show some level of mercy on Jodi Arias.

From the very beginning of this case, she has had what's called a mitigation specialist, a team that is looking at the issue of mitigation that will present the case for mercy. That's what's going to come now. But this is it.

This is the last decision the jury has to make. And things have not been going well for her so far.

BLITZER: This third and final phase, Jeff, how long do we expect it to continue, how many days?

TOOBIN: You know, I don't know. It will certainly be longer than this cruelty phase. There was only one witness in that. It was just the medical examiner, who talked about the horrible wounds that Travis Alexander had. This will be much more extensive. I don't know how long.

And this case has already gone on for months. I anticipate this could be a while, because the mitigation could be quite a few number of witnesses.

BLITZER: And as we await the president in the East Room, Ted Rowlands is out in Phoenix. He's been covering this trial for us.

Ted, I don't think there was ever any doubt, at least in my mind; 27 knife stabs, slitting his throat from ear to ear, a gunshot, that sounds like extreme cruelty to me. So it clearly was never in any doubt how this jury would decide this phase two of the trial.

TED ROWLANDS, CNN CORRESPONDENT: Yes, it only took an hour-and- a-half for them to render this verdict at this stage of the trial.

They have been told to go home for the evening and then they will be back, as Jeff said, for this last phase, which will be the most difficult phase likely for them to decide the fate of another human being. We are expecting that portion of the phase -- of the trial to last about a week.

And it will start tomorrow morning. Typically, court is dark on Fridays. We haven't heard final word on that. But clearly it will spill into next week.

This jury of eight men and four women have this one more crucial decision to make, which they will start making tomorrow.

BLITZER: All right. We will stay in close touch with you, Ted Rowlands on the scene.

He will cover this third and final phase. She was convicted of first-degree murder. Now the jury says she's eligible for the death penalty in the third and final phase, Ted saying it could last for about a week. They will determine whether or not she gets the death penalty, or whether she gets life in prison. We will have much more on this story coming up throughout the night here on CNN.

But, once again, the big story here in Washington, indeed, in the nation, the president of the United States speaking out momentarily on the IRS investigation into why the IRS targeted certain conservative groups for special treatment when they applied for tax-exempt status, treatment they did not apply to liberal groups or other political organizations. It's causing a huge uproar here in Washington.

Jake Tapper is watching what's going on, Gloria Borger, Joe Johns.

Jake, set the scene for views who may just be tuning in right now what -- if the Associated Press scandal is not really going to generate a lot of commotion, as you suggest earlier, or the Benghazi thing may go away, the IRS investigation, the American public can relate to that.

TAPPER: Look, I think all three of them are legitimate controversies, all three of them.

I just think that the IRS scandal is something that Americans can understand. They pay taxes. They -- it's a fear of big government that a lot of Americans have. Even liberals have a fear of big government.

BLITZER: Over the years, there's a history of liberal organizations, African-American organizations being specifically targeted.

(CROSSTALK)

TAPPER: Absolutely. Nixon abused the IRS. This is not unique to this administration, an IRS team unfairly targeting individuals because of their political beliefs.

It's horrific. And it's something that you can find no -- look, you can find somebody on Capitol Hill who believes anything. But I have not heard one...

BORGER: And we do.

TAPPER: And we do. But it is very tough.

I have not heard of one person defending what the IRS is accused of doing, not one. And...

BORGER: And it speaks to the role of government and trust in government. This is a president who has asked government to do a lot, with his health care reform plan.

TAPPER: Absolutely. And that is where this is going next.

BORGER: And now he's asking, OK, government's going to secure the borders on immigration. Why should people trust the government to do that, when they see what happens at the IRS?

And so this has been a consistent problem for President Obama throughout his tenure, which he himself has said publicly, is that he kind of underestimated how people really felt about their government, particularly when he was asking them to buy into health care reform, which, by the way, half of the American public is still skeptical of that.

JOE JOHNS, CNN CRIME AND JUSTICE CORRESPONDENT: And the other thing that is important to say, despite all the Sturm und Drang over this, a lot of people are saying, you may never see any real substantive charges coming out of this IRS issue, unless there was some kind of command influence, very high, that suggested that this needed to go forward, perhaps false statements against a couple officials, and perhaps some type of a civil rights violation.

But many of these things are very hard to do, so at the end of the day, you may just have regulatory issues and somebody either getting fired or a slap on the hand.

TAPPER: Let's remember, though, that the individuals being targeted are politically active individuals.

BORGER: Right.

TAPPER: And as soon as this started happening, they started complaining to sympathetic members of Congress, and Republicans in Congress had been asking about this for literally four years.

And the IRS has been telling them, it is not happening, it is not the case. And then all of a sudden the IRS said, it was happening, and it's inappropriate.

BORGER: Right. And the perverse result of all of this is that these tax-exempt organizations, on both sides, will not now be investigated, perhaps the way they should be, because they do practice politics, even when they say they don't.

BLITZER: All right.

Hold on for a moment, because as we await the president, he's running a little bit late right now, Darrell Issa, the Congressman from California, is joining us live from Capitol Hill right now. He's the chairman of the House Oversight and Government Reform committee.

What do you want to hear from the president on this IRS investigation, Congressman?

REP. DARRELL ISSA (R), CALIFORNIA: Well, we expect to hear from the president that he's going to aggressively hold people responsible. And that's good. But the I.G.'s report made it very clear that the institution does not have the controls for the I.G. even to guarantee that it is not much broader than we now know. In other words, he doesn't know there weren't other scandals like this within the IRS because the internal controls were not good enough. I think that's the beginning of where Congress is going to want more action.

BLITZER: Do you believe crimes were committed?

ISSA: Well, certainly I think the American people believe in that old axiom that the power to tax is the power to destroy. And people had an intent to destroy, or to affect the outcome of an election by holding back groups that might have been advocates for smaller government, for constitutional behavior and the like. So, it certainly had a disruptive process. In this case, as you've been saying, it's conservatives. But in the past, it's also been other groups. African-American groups, civil rights groups, a number of others.

So, I think what we have to do is fix the IRS once and for all. I look forward to the president getting ahead of part of this story. But let's remember, the actions the IRS, in this case, conspicuously benefited the president.

BLITZER: Because in the inspector general's report, among other things, they concluded this: "All of these officials stated that the criteria were not influenced by any individual or organization outside the IRS." Do you buy that?

ISSA: Well, I certainly think it's possible that the IRS, individuals, for political reasons, made decisions to distort the process. But I also know that a huge number of members of Congress on both the House and Senate side, including the finance committee chairman, wrote letters saying, investigate the Tea Party. So you kind of have the worst of both worlds. You have members of Congress saying investigate the Tea Parties, you have individuals saying they did it, but those letters made no difference. The president benefiting made no difference.

Again, Wolf, the important thing from the I.G., the takeaway that our committee, Oversight committee will be doing in addition to Ways and Means, is making sure the controls are put in, sort of like the Enron scandal and the WorldCom scandal. If public companies can't be trusted when they put something out, it affects the market. If the government can't be trusted when they take your taxes, we need to make sure it will be.

BLITZER: Congressman, the president is about to speak. If you can stand by and listen to the president with us, we'll continue this conversation on the other side. He's going to speak in a few seconds.

You, Jessica, you're over at the White House. You're getting some information?

YELLIN: Hi, Wolf.

I can tell you from a Democratic source that when the president comes out here, he is going to announce that he has asked that -- that the president is going to announce Treasury Secretary Lew has asked for the acting director of the IRS' resignation, and has accepted it.

So, the acting director of the IRS will -- the president will announce the acting director of the IRS has resigned. That will be the accountability the president has demanded. We will see if that is enough to quell these controversy we have all been so focused on at the IRS -- Wolf.

BLITZER: All right, the president is going to walk out to the podium right now. We will hear what the president has to say. He's speaking on this IRS investigation. You got the headline there from our Jessica Yellin. She's over at the White House. As soon as the president's done, we will get reaction from Congressman Darrell Issa.

Here's the president.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Good afternoon, everybody.

I just finished speaking with Secretary Lew and senior officials at the Treasury Department to discuss the investigation into IRS personnel who improperly screened conservative groups applying for tax-exempt status. And I look forward to taking some questions at tomorrow's press conference, but today I wanted to make sure to get out to all of you some information about what we're doing about this, and where we go from here.

I have reviewed the Treasury Department watchdog's report, and the misconduct that it uncovered is inexcusable. It's inexcusable, and Americans have a right to be angry about it, and I am angry about it. I will not tolerate this kind of behavior in any agency, but especially in the IRS, given the power that it has, and the reach that it has in all of our lives.

And, as I said earlier, it should not matter what political stripe you're from. The fact of the matter is, is that the IRS has to operate with absolute integrity. The government generally has to conduct itself in a way that is true to the public trust. That's especially true for the IRS.

So here's what we're going to do. First, we're going to hold the responsible parties accountable.

Yesterday, I directed Secretary Lew to follow up on the I.G. audit to see how this happened and who was responsible and to make sure that we understand all the facts. Today, Secretary Lew took the first step by requesting and accepting the resignation of the acting commissioner of the IRS, because, given the controversy surrounding this audit, it's important to institute new leadership that can help restore confidence going forward.

Second, we're going to put in place new safeguards to make sure this kind of behavior cannot happen again. And I have directed Secretary Lew to ensure the IRS begins implementing the I.G.'s recommendations right away.

Third, we will work with Congress as it performs its oversight role. And our administration has to make sure that we are working hand in hand with Congress to get this thing fixed. Congress, Democrats and Republicans, owe it to the American people to treat that authority with the responsibility it deserves and in a way that doesn't smack of politics or partisan agendas, because I think one thing that you have seen is across the board everybody believes what happened in -- as reported in the I.G.'s report is an outrage.

The good news is, it's fixable, and it's in everyone's best interest to work together to fix it.

I will do everything in my power to make sure nothing like this happens again by holding the responsible parties accountable, by putting in place new checks and safeguards, and, going forward, by making sure that the law is applied as it should be, in a fair and impartial way.

And we're going to have to make sure that the laws are clear, so that we can have confidence that they are enforced in a fair and impartial way and that there's not too much a ambiguity surrounding these laws.

So, that's what I expect. That's what the American people deserve. And that's what we're going to do.

Thank you very much.

BLITZER: A brief statement, three or four minutes by the president of the United States, making it clear he is deeply, deeply concerned about what happened at the IRS, announcing that the acting commissioner has resigned.

They have asked for his resignation. They have accepted his resignation, also saying there will be new safeguards to make sure that this never, ever happens again. And he also promised to work with Congress to do the best that they possibly can to fix the problem, to see what happened, to learn from the mistakes, and then move on.

Let's get Dana Bash up on Capitol Hill.

How is this likely to play up there, Dana?

BASH: Well, you know, it's going to be mixed, because it certainly won't satisfy either Democrats or Republicans in general.

But it certainly is a good first step when it comes to accountability. But let me just give you a little bit of context about who Steven Miller is, and why he was in the hot seat, perhaps, more than anybody right now, because he is the acting commissioner of the IRS.

He, we now know, was told about this targeting last year, May 3 of 2012. He did not tell Congress about it. He had various kinds of communications and letters and meetings and so forth, and he didn't -- he neglected to tell Congress. He didn't disclose it. Never mind that. He didn't just voluntarily call and say, you know what? I just found this out.

So, that's why consider the fact that he is the current head. He was the person who was going to absolutely get raked over the coals. He was supposed to testify day after tomorrow, on Friday, before the House Ways and Means Committee. Clearly, don't expect that to happen now.

But we will see when we hear back from the House Ways and Means office about that. But that's why this is so important. The other thing to keep in mind is that the IRS is generally kind of a protected place on purpose. There are few political appointees, only two. He is one of them. So this was a quick and easy change for the president to make. Other changes with civil service are a lot more difficult.

BLITZER: Dana, stand by.

Let's get some quick reaction from Congressman Darrell Issa. He's joining us now live from Capitol Hill.

He listened to what the president had to say over at the White House. He's the chairman of the House Oversight and Government Reform Committee.

Did he satisfy you, did he satisfy your demands, Congressman?

ISSA: Well, Wolf, the president set exactly the right tone. I think that immediate relieving of an acting commissioner who had -- made false statements and misled Congress is an extremely good first step.

One thing I can assure you that he asked for that he's going to get, both the Ways and Means committee and my committee with my ranking committee member, Elijah Cummings, have vowed to do bipartisan work. We've started off that way, we're going to stay that way. The IRS is definitely an issue in which what happens wrong today could happen wrong tomorrow to a different group of Americans.

So, I think the president will find very willing partners on Capitol Hill. I think in this case, we very much take him at his word that he wants to be open and transparent in fixing the system and putting new controls in place.

BLITZER: Do you think more people need to be fired over there at the IRS?

ISSA: Well, I think the I.G. made it clear that there were additional people beyond obviously the obvious one, somebody who made false statements. We're going to -- the Ways and Means and our committee are going to be getting interviews and public testimony to get further on that.

But as you said, many of them are civil service. They can be hard to fire, although you can relieve them from doing things with this level of trust. But again, the I.G. report made it clear that the system did not have the safeguards the American people expressed -- expect, and that will be part of what the administration and Congress as a legislative body will have to do, is create that comfort level that this will never happen again.

BLITZER: So you're accepting the president's challenge to work in a bipartisan way, to make sure that this never happens again. So he says he's going to do whatever is necessary. Are you ready to do the same thing?

ISSA: Oh, absolutely. And I think that's where you saw not one, but two committees call on a bipartisan basis for this. Elijah Cummings and I will disagree on many things, as you can imagine. But this is one where my ranking member came to me almost immediately. We discussed how to go forward. Remember, it was our committee that set the I.G. in motion in June of last year. And he's equally interested in us getting it right.

BLITZER: Let me quickly get your reaction to the other news of the day. The White House releasing 100 pages of documents on the e- mails that resulted in those talking points on the Benghazi attack, the attack that killed four Americans, including the U.S. ambassador to Libya, explaining how Susan Rice eventually wound up saying in effect what she did say in those five Sunday talk shows a few days after the September 11 attack. I assume you welcome the release of these documents?

ISSA: We do welcome them. Although releasing them to the press before releasing them to the Congress, would seem to be pretty inappropriate. And of course, there are many other documents that they're still not releasing. The idea that they selectively say they have deliberate process protection as they did in Fast and Furious, and they still are in these documents, is an area we need to come to grips with the administration. When the American people are lied to, realizing that their work product should be open for criticism and review.

BLITZER: You know, as you know, these e-mails show it was pretty complex, the back-and-forth between the CIA, the White House, the State Department, the Pentagon.

Let me read a couple of quotes, this from page 59, a draft note to the CIA director:"We've tried to work the draft talking points but have run into major problems. The White House cleared quickly, but State has major concerns. The Bureau cleared with a few comments, but asked that Justice be brought in. It is evidence that will not happen tonight. And Ben Rhodes," who is the official at the NSC, the National Security Council, "has asked that this issue be reviewed tomorrow morning."

Then on page 94, a little bit later, an e-mail to the U.S. ambassador to the United Nations, Susan Rice. "The first draft apparently seemed unsuitable because they seemed to encourage the reader to infer incorrectly that the CIA had warned about a specific attack on our embassy. Morell" -- Mike Morell, the deputy CIA director -- "noted that these points were not good, and he had taken a heavy editing hand to them."

So, when you hear these, when you see these e-mails, when you see what was going on, does it satisfy you that all of this back-and-forth was sort of routine, done in good faith, or was there something sinister there?

ISSA: We're not accusing anyone of anything sinister. We certainly want to digest these pages, but recognize that these are selected pages. We need to have full access to the deliberative process of the e-mails. And I think that's one of the areas we clearly want to have. But remember, Wolf, this is a situation in which the two men on the ground, the now deceased ambassador, Ambassador Stevens, who said to his deputy, Gregg, "We're under attack." And Greg Hicks who testified he knew this was a terrorist attack from the get-go. Certainly the president of Libya said so on, you know, national television. At the same time, Susan Rice was delivering false information.

When you look at this train, you still have to ask the question, is how did they go from the correct information to the incorrect information? And isn't 100 pages or more a pushback on the CIA effectively telling the CIA, "You've got to change your story"?

BLITZER: One final question, Congressman, before I let you go. The exchange you had with Eric Holder today, the attorney general of the United States, on a totally unrelated matter, the secretary -- the labor secretary nominee. It was an angry exchange. And he was furious at you. I'm going to play the exchange for our viewers, because I want you to respond to what he accused you of. It was pretty biting.

(BEGIN VIDEO CLIP)

ISSA: Mr. Cummings, my ranking member, joined in a letter requesting that we have the full contents pursuant to our subpoena of all 1,200. Will you make them available to the committee based on our bipartisan request?

ERIC HOLDER, ATTORNEY GENERAL OF THE UNITED STATES: I'll certainly look at the request. It's not something that I've personally been involved in. But I'll look at the request and try to be as responsive as we can. I'm sure there must have been a good reason why only the to and from parts were...

ISSA: Yes. You didn't want us to see the details. Mr. Attorney General...

HOLDER: No, no.

ISSA: See, knowing the to and from -- knowing the to and from...

HOLDER: I'm not going to stop talking now. You characterized something as something...

ISSA: Mr. Chairman, would you inform the witness as to the rules of this committee?

(CROSSTALK)

HOLDER: ... not appropriate and is too consistent with the way in which you conduct yourself as a member of Congress. It's unacceptable and it's shameful.

(END VIDEO CLIP)

BLITZER: Those are pretty blunt words, "unacceptable and shameful" the way you conduct yourself, Congressman, as a member of Congress. I want you to respond to what he said.

ISSA: You know, I have to keep doing my job, even if the attorney general objects.

Thomas Perez told us that there were no documents offline. In other words, no private e-mails. It went from zero to 1, to 2, to 34, now 35 responsive e-mails in which he e-mailed privately, including one that was a private e-mail to another private e-mail at HUD. These are violations of the Federal Records Act.

But more importantly, there were 1,200 e-mails that we simply want to look at. This is my ranking member and myself. We don't want copies of them. We want to be able to review them to make sure we're satisfied that there are no additional documents.

And in the case of the documents we're talking about, they're redacting, these are 35 e-mails, in violation of the law, that Thomas Perez had communications offline. We know that one of them is to the White House. One of them is to a HUD individual related to a quid pro quo that he conducted secretly in St. Paul, Minnesota.

Those -- this investigation is into the wrongdoing as we view it, at least not illegal, but wrongdoing by the proposed secretary, while he was supposed to be heading up Justice in the civil rights division, and areas in which he gave false testimony as to what he did or didn't do. It's a cover-up. We played a tape of his actually instructing somebody in the attorney general's office in Minnesota not to speak about things.

So these kinds of facts, and we've produced a fairly lengthy report that's on our Web site, as to Thomas Perez and his actions, these were very appropriate questions. I know the attorney general would have liked to have answered for five minutes, and my time would have been done. All I was trying to do is ask him questions to hope that he would release information that a very, very strong Democrat and I have both asked for.

BLITZER: Darrell Issa is the chairman of the House Oversight and Government Reform Committee. Mr. Chairman, thanks very much for coming in.

ISSA: Thank you.

BLITZER: Thanks for sticking around and listening to the president and getting your immediate reaction. We appreciate it very much.

ISSA: Of course.

BLITZER: And let's discuss what we just heard. Gloria Borger is here, Joe Johns is here.

Not every day, Joe -- you were up on the Hill -- when we hear the attorney general of the United States accuse a chairman of a powerful committee in the House of Representatives of behavior that is unacceptable and shameful. JOE JOHNS, CNN CORRESPONDENT: Yes. And this is a very complicated sort of case that Republicans have been pushing very hard, and it's a question about whether there was a tradeoff from the dropping of a lawsuit in exchange for keeping a case from going to the Supreme Court.

It's the kind of thing that can create fireworks on Capitol Hill. But very, very difficult to explain to the public and make sense.

BLITZER: This confirmation of Thomas Perez as the labor secretary could be in trouble right now.

GLORIA BORGER, CNN POLITICAL ANALYST: It could. And I think what we heard from Darrell Issa is that these issues are all going to continue.

He did allow that the president, as he put it, set the right tone in his statement on the IRS today. But one thing the president said is, we have to make sure the laws are clear, and we -- and we have to work together on making sure there's not ambiguity. And I think you may have disagreements among -- between Democrats and Republicans about just how to fix the IRS law, which may not be clear.

So I think what we can see on Benghazi, and on the IRS, these things are not going to end here. They are -- they're going to continue.

BLITZER: Indeed. Certainly continuing, especially given this poisonous atmosphere here in Washington right now.

Don't go too far away. We're going to continue our coverage of what the president had to say. All the breaking news.

We're also following some legal breaking news, a verdict in the Jodi Arias trial, the aggravation phase. She is now eligible for the death sentence.

Also, O.J. Simpson, we heard from him today. In years we haven't heard from him. He's testifying in court. He's explaining why he thinks he deserves a new trial on the armed robbery and kidnapping charges.

(COMMERCIAL BREAK)

BLITZER: Moments ago, you heard the breaking news from the president of the United States, the acting commissioner of the Internal Revenue Service, Steven Miller, was asked to resign. He has resigned. The president saying the treasury secretary, Jack Lew, made that request.

We now have reaction, a statement issued by Steve Miller: "This has been an incredibly difficult time for the IRS, given the events of the past few days. And there is a strong and immediate need to restore public trust in the nation's tax agency. I believe the service will benefit from having a new acting commissioner in place during this challenging period. "While I recognize that much work needs to be done to restore faith in the IRS, I don't want anyone to lose sight of the fact that the IRS is comprised of incredibly dedicated and hard-working public servants."

So that statement from Steve Miller, the acting -- Steven Miller, the acting commissioner of the IRS.

The president was very visibly upset in his statement in the East Room of the White House moments ago, saying that he will not tolerate the kind of behavior that was implemented over at the IRS. Much more on this story coming up.

Other breaking news. There's a lot of it happening. Just moments ago, a jury in Arizona found Jodi Arias guilty of extreme cruelty in the first-degree murder of her ex-boyfriend, meaning she could now face the death penalty.

Let's bring in our senior legal analyst, Jeffrey Toobin.

The extreme cruelty part, I suspect -- and I've been saying for days -- that was not a hard decision, a hard verdict in phase two of this trial. What will be much more difficult will be phase three, Jeffrey: whether or not the jury decides she deserves to die.

JEFFREY TOOBIN, CNN LEGAL ANALYST: Given the viciousness of this attack, I agree. This was not a difficult call for the jury. But the third step for the jury is a very simple question: does she deserve to die? That is likely to be much more complicated, and the jury will turn to that hearing starting tomorrow.

BLITZER: The other story we've been following today -- for years, it's been a long time since we heard from O.J. Simpson. As you know, he was convicted. He's now serving a 33-year sentence in prison for armed robbery, abduction, kidnapping, all sorts of charges.

Now he's suggesting that his lawyer at the time, Yale Galanter, was incompetent. He got bad legal advice. He's seeking a new trial. That's why he showed up at this hearing out in Las Vegas today, looking a lot heavier than he used to look years ago.

You wrote a book on the O.J. Simpson trial, Jeffrey, as we heard. I'm going to play a little clip -- a little clip of what -- of an exchange he had earlier today.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Do you think that you're acting legally...

O.J. SIMPSON, SERVING TIME FOR ARMED ROBBERY: Yes, I do.

UNIDENTIFIED FEMALE: And why is that?

SIMPSON: Well, it's my stuff. I -- I followed what I thought was the law. My lawyer told me, you can't break into a guy's room. I didn't break into anybody's room. I didn't beat up anybody. I didn't try to muscle the guys. I didn't.

And the guys acknowledged it was my stuff, even though they claimed they didn't steal it. I mean, we know now that the guy lied. That Mike had given it to him. I knew that Bruce Fromong knew that I would never sell these things. Bruce knew me. He knew I never sold personal items. And he knew that these items I never in a million years would have sold.

(END VIDEO CLIP)

BLITZER: How strong of a case do you think he has to reopen this trial, Jeff?

TOOBIN: Very weak. He's been convicted by a jury. His conviction has been affirmed by the Nevada Supreme Court.

He's now saying, "Well, they're all wrong. I was actually innocent." That is legally irrelevant at this point. The only issue is, did he receive ineffective assistance of counsel? He had a very well-respected lawyer. His claims are almost certain to fail.

BLITZER: Very quickly, though, his argument is that at one point -- and this may be good, may be bad; we don't know; we'll see what happens in this hearing -- that the prosecutors had offered a plea deal to Yale Galanter, his criminal defense attorney -- one year in prison -- and that O.J. wasn't even informed about this plea -- plea bargain agreement, that Galanter simply turned it down without consulting his client. Would that be enough to reopen this case?

TOOBIN: It's possible it might be. But remember, this is entirely on the basis of O.J. Simpson's words. There are -- there is no proof that any such offer was ever made. There is no proof that Galanter refused to tell him.

Why would Galanter not tell him about a plea offer? I mean, it doesn't make any sense, this claim.

But the hearing is just getting started. There will be more evidence, and perhaps his claim will look better. But I think, you know, since it's just O.J. Simpson's word, we need to take it with a grain of salt, to put it mildly.

BLITZER: And Jeffrey wrote a terrific book on the original O.J. Simpson trial. That was a long, long time ago. Jeffrey, thanks very much.

Up next, human waste thrown at U.S. guards. It's one of the truly shocking revelations from an exclusive CNN visit to the terrorist detention center in Guantanamo Bay in Cuba. You're looking at live pictures. This is a rare moment. We're live at Gitmo when we come back.

(COMMERCIAL BREAK)

BLITZER: Tension between detainees and guards reaching disturbing levels inside the U.S. camp at Guantanamo Bay in Cuba. A hunger strike has led to forced feedings of some of those detainees. Others are acting out their anger by throwing their own waste at guards.

Our Pentagon correspondent Chris Lawrence is at Guantanamo Bay right now. He got an exclusive look inside. We want to warn our viewers: some of what you're about to see and hear is very graphic indeed.

Chris, share with our viewers what you've learned.

CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: Well, Wolf, when we got down in some of the cell blocks, we couldn't help but notice that the guards are wearing splash guards. These are plastic masks that protect them from the feces and urine that's being thrown at them at times.

And tonight, you know, some of those guards, for the first time, right here on CNN, are going on camera to tell their side of the story.

(BEGIN VIDEOTAPE)

LAWRENCE (voice-over): CNN got exclusive access to camps 5 and 6, where most of the detainees are being held. We saw individual cells, media rooms with leg shackles bolted to the ground, and communal areas that used to be filled with detainees.

(on camera): Right now, the Camp 6 detainees are all being held in individual cells, like these.

(voice-over): Patrolling those cells, young guards, the age of college students. And for the first time we're seeing the faces of those who guard the detainees.

UNIDENTIFIED FEMALE: They use extremely vulgar language towards females, and I've had a lot of experience with that, unfortunately. Especially Caucasian females. They do not like us at all.

LAWRENCE: She's 21 years old, and down in the cellblock she's been called every name in the book.

UNIDENTIFIED FEMALE: The most common one is (EXPLETIVE DELETED), whore, slut. They'll say things like "I'll piss all over your face." They'll say, "Oh, you've had (EXPLETIVE DELETED) thrown on you. You've been disrespected. Nobody wants you. You're trash now."

LAWRENCE: The situation inside Guantanamo is dire. A hunger strike has gone from a half dozen detainees to more than 100. Of those, about 30 refuse to take the liquid nutritional drinks and have to be fed through a tube. But officials admit the clock is ticking on this option.

CAPT. ROBERT DURAND, JOINT TASK FORCE GITMO SPOKESMAN: If anybody's had a can of Ensure or Muscle Milk or whatever, it says right on it it's not designed to be a long-term sole source of nutrition. So there are long-term consequences of getting all your meals through a -- through a liquid supplement.

LAWRENCE: All of this tension is leading to more conflict, including so-called splashing, where detainees squirt guards with a mix of water, urine, and feces.

UNIDENTIFIED FEMALE: That is their biggest way to act out is throw feces at guards, and it's been happening -- happening consistently, actually, for the past month and a half. Every single day there's a splashing.

LAWRENCE (on camera): In fact, you can see the results of some of the splashing here on the ceiling, pieces of feces that are still stuck to the top of the ceiling.

(voice-over): One guard says she's been splashed several times.

UNIDENTIFIED FEMALE: And then you go to the hospital. They draw your blood. They'll let you know if that detainee has any diseases, and then you go right back to work.

(END VIDEOTAPE)

LAWRENCE: She told me that sometimes it's all she can do to just sort of bottle it up and just walk away. Now that guard worked at Ft. Leavenworth before coming here. But she says there is no comparison between that and the experience of being here at Guantanamo Bay, Wolf.

BLITZER: We know President Obama, of course, wants to shut it down and move those guys, the prisoners out of there to some other location. You see any evidence that anything along those lines is in the works?

LAWRENCE: Just the opposite, Wolf. In fact, the military is asking for nearly $200 million to do renovations here. In fact, build a replacement for one of the camps that's holding some of the high- value detainees, closing it down. It looks more like if you follow the money trail, expansion and staying just the way it is.

BLITZER: Chris Lawrence on the scene for us. A rare visit to Gitmo, the U.S. military facility in Cuba. We'll check in with you tomorrow. Excellent work, Chris. Thanks very, very much. Very disturbing report, indeed.

Coming up, we're also getting new information here into THE SITUATION ROOM about the U.S. diplomat Russia is accusing of spying. We're learning details of his background. Stand by.

(COMMERCIAL BREAK)

BLITZER: He's alleged cover was blown in a spectacular way, and if charges by Russian intelligence are true, Ryan Fogle's days as a spy are almost certainly over. The American diplomat assigned to the U.S. embassy in Moscow is accused of trying to recruit a Russian double agent.

CNN's Brian Todd has been looking into his background. He's here. What are you finding out?

BRIAN TODD, CNN CORRESPONDENT: Wolf, we're finding out actually that there was another case earlier this year, Russian operative says that the -- another CIA officer was expelled from Russia for attempting to recruit American Russian citizens earlier this year.

Meanwhile, we have learned new information on the background of the man at the center of this spy case.

(BEGIN VIDEOTAPE)

TODD (voice-over): Russian officials identify him as Ryan Fogle. They say he's a CIA spy who was trying to recruit a Russian operative to spy for the Americans. In a YouTube video released by Russia's RT Television, a Russian intelligence official is heard angrily chastising him.

UNIDENTIFIED MALE (through translator): You know perfectly well that recently the FSP (ph) is actively helping in the investigation of the bombing in Boston.

TODD: But the man videotaped by Russian officials wearing a ridiculous wig seems to have a background that's not so ridiculous.

According to officials at schools we contacted, officials who looked at these pictures of him, this is likely the same Ryan Fogle who grew up near St. Louis, went to Mary Institute and St. Louis Country Day School, a private institution that costs nearly $23,000 a year for the upper grades.

(on camera): Fogle graduated from Mary Institute in 2002 then, according to school officials, he went to Colgate University in upstate New York. There, by all accounts, he was a straight arrow and an achiever, a member of Phi Delta Theta, a fraternity that does not allow drinking in its houses. And he was selected for the Konosioni Senior Honor Society, a prestigious group with only 26 members.

(voice-over): Professor Fred Chernoff said Ryan Fogle was a student of his in a class on national security. He says Fogle's interest was in Middle East politics, and a class trip to meet diplomats stands out.

PROFESSOR FRED CHERNOFF, COLGATE UNIVERSITY: Ryan was especially strong in the way that he posed questions. He was prepared for the meetings that we had with diplomats.

TODD: Fogle graduated from Colgate in 2006 with a double major in political science and international relations.

But his apparently fast-track career may have hit a snag. Intelligence experts say, if he is in the CIA, he'll never be able to go back to Russia and likely won't work undercover again.

(END VIDEOTAPE)

TODD: We called and e-mailed a St. Louis area couple who we strongly believe are Ryan Fogle's parents to see if they would comment on the story. We did not hear back. The CIA has also not commented -- Wolf.

BLITZER: Yes. One of the big question marks is why the Russians decided to make this huge display on Russian TV about what normally they -- both countries, if there's an official from the embassy accused of espionage, they usually play it down.

TODD: They play it down, but they made a big display out of it yesterday. They say he was recruiting Russian officers to spy for the Americans. But by blowing his cover, you know, they may have lost that lead. They may not ever find that Russian mole.

And experts say they displayed Fogle to make some kind of political point, to embarrass the Americans. But we don't know specifically the reason that they did it. What was behind it? What was the point they were trying to make? We may never know that now -- Wolf.

BLITZER: Still no official reaction to the CIA or the State Department?

TODD: No. And there likely won't be.

BLITZER: NO. All right. Brian Todd, thanks very much for that report.

Remember, you can always follow the breaking news, what's going on here in THE SITUATION ROOM on Twitter. You can always tweet me, @WolfBlitzer. You can tweet the show, @CNN [SIC].

That's it for me. Thanks very much for watching. See you back here tomorrow. "ERIN BURNETT OUTFRONT" starts right now.