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THE SITUATION ROOM

Dennis Rodman in Legal Trouble?; Olympic Terror Threats; Former Virginia Governor Arraigned

Aired January 24, 2014 - 18:00   ET

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


WOLF BLITZER, CNN ANCHOR: What was the target of this suicide attack?

And arraignment -- Virginia's former governor and his wife plead not guilty to 14 federal charges. Did he throw her under the bus by refusing a plea-bargain?

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

Islamist separatists are invoking the name of Osama bin Laden in a new threat against the Olympic Games in Sochi Russia, just two weeks away. Security concerns are mounting each day. And now U.S. athletes are being warned to watch what they wear.

We have team coverage. Our CNN Pentagon correspondent, Barbara Starr, is standing by with new information about how the United States would respond to a terror attack.

But, first, CNN's senior international correspondent Nick Paton Walsh is in Sochi with the very latest.

NICK PATON WALSH, CNN SENIOR INTERNATIONAL CORRESPONDENT: Wolf, we know the State Department has warned Americans to be careful if they come here as tourists for the Games.

We know some American athletes are worried about their nearest and dearest coming here to watch them compete. But we learned today the State Department has in fact been warning U.S. athletes to be careful not to look too American if they venture out from this ring of steel where the Games will be held.

(BEGIN VIDEOTAPE)

WALSH (voice-over): Less than two weeks to go and the threats keep coming. A jihadist forum Friday quoted bin Laden, implying someone might fly planes into a city on edge.

And this militant video first reported by CNN Friday prominent in the media added to the daily drip of worry. It compares Putin to Hitler and says locals could only breathe on Moscow's orders, fear felt here, of all places, in Ralph Lauren's striking new look for team USA in Sochi's Winter Games.

American athletes warned by the State Department they'd be safer not wearing these uniforms when they venture out of the ring of steel set up to protect them.

MARIE HARF, SPOKESWOMAN, STATE DEPARTMENT: The U.S. Olympic Committee, I think, had discussed with its athletes as part of how to sort of stay safe and things to look out for as part of the Games this issue about just being careful about where you wear U.S. logos or things like that. This isn't unique to Russia, to be clear.

WALSH: Remarkable that athletes should hide being American, especially as State's tourist warning for Sochi says Americans aren't specifically targets.

The worries mount, but the countdown doesn't stop, even if the heavy snow up in the hills makes you feel like it might, hurried workers and a lot left to do here.

(on camera): Here is Gorki Plaza, one of the many buildings being readied in a hurry, they hope, for the tourists who will start, supposed to be arriving here in their thousands here shortly. But here inside one of the buildings, you see the scale of the job still ahead for people trying to work here.

This building far from ready. I'm just asking when it will be ready.

Everything, he says, will be gone and this will be ready by tomorrow lunchtime.

(voice-over): Now under two weeks to go and still a feeling of anxiety, rather than anticipation.

(END VIDEOTAPE)

WALSH: The Kremlin is doing all it can to try and lighten the atmosphere. Today, a man called Platon Lebedev, a business partner of a key Putin critic, billionaire Mikhail Khodorkovsky, he left jail early, part of a spate of amnesties that the Kremlin's been pushing through recently to try and look softer on its political opponents.

But security is the real issue. No matter what they do to secure this part of the Olympic Village, the real concern is all across all of volatile Southern Russia, something is probably going to slip through in the weeks ahead -- Wolf.

BLITZER: Could be a nightmare. Let's hope it isn't, Nick Paton Walsh reporting from Sochi.

Let's go the Pentagon right now.

Our correspondent Barbara Starr is standing by.

What are you hearing about plans to rescue U.S. citizens if necessary, Barbara?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Wolf, today, Defense Secretary Chuck Hagel for the first time publicly acknowledged that they are working on that kind of plan, that kind of -- they have had that kind of discussion with the Russians. Have a listen to what he had to say.

(BEGIN VIDEO CLIP)

CHUCK HAGEL, U.S. DEFENSE SECRETARY: We have had conversations with the Russian government on protection of our citizens, of course. If we need to extract our citizens, we will have appropriate arrangements with the Russians to do that.

(END VIDEO CLIP)

STARR: Appropriate arrangements to evacuate Americans if it comes to that, Hagel talking about -- about that. The possibility, of course, exists, to use commercial aircraft, but also military assets -- Wolf.

BLITZER: Any more specifics on what those arrangements, other arrangements they're talking about?

STARR: Absolutely. The State Department is looking at what kind of commercial aircraft they might have contracts with on standby if needed for the Pentagon, for the military. Two warships will go into the Black Sea in the coming days.

One of them, the Mount Whitney, is a major command-and-control ship. It would run any operation for the military if, if it came to that. They are also looking at having military transport aircraft on standby. Look, they hope it doesn't come to this. If it does, what they're emphasizing is the State Department would run it. The Pentagon would only step in if asked -- Wolf.

BLITZER: I know you're talking to a lot of sources, intelligence, military security. What are the likely terror targets that they anticipate potentially -- we hope it doesn't happen -- could be out there?

STARR: Yes. What is the real discussion behind the scenes? Look, no one knows. Everybody hopes the Games will be safe.

But the general thinking is that the Russians, the hope is that ring of steel is going to work and there will not be a major attack to the extent, heaven forbid, that it would shut the Games down. The anticipation, I think, it's safe to say, more realistically, sadly, maybe an attack against a so-called soft target outside the ring of steel, transportation, rail, restaurants, hotels, that kind of thing, that terrorists might find that much easier to get to, prosecute an attack against that kind of target, and they can hope to escape.

The hope, the hope is that the Russians have made the Olympic venues so secure, so tough to get into that the terrorists won't be able to get there. But, look, nobody knows what's really going to happen, Wolf.

BLITZER: And, Barbara, what's so depressing is that these athletes who have worked so hard to go to these Winter Olympic Games, they're being told, you know what, probably is a good idea to not necessarily wear those American outfits with the American flags, the hats, those uniforms, if you will.

Obviously, if you're going to be out competing in the competition, you wear the uniform, but if you're outside of the venue, just dress casually, without advertising you're an American, because you could be a target. That is so depressing, that these young people can't even go there and show off their pride of being Americans.

STARR: Well, you know, it even goes a step beyond that. We learned today that inside the Olympic venues, as the athletes go to each and every one of their events, they will be accompanied by State Department security officials. They will take them to the venues, and as one official said, we will keep our eye on them at all times.

Security for the U.S. athletes will be very strong at these Games, Wolf. U.S. officials are trying to do everything they can, even as they say the Russians are in charge, the U.S. making several moves to try and ensure security for American athletes and indeed for all the Americans traveling to Russia.

BLITZER: Yes, their families and their friends and all the spectators, all the fans who are going there. They're telling them don't advertise you're an American. It could be dangerous.

Thanks very much, Barbara Starr at the Pentagon.

Still ahead, caught on camera, a massive car bomb shattering a critical building, plunging a capital deeper into crisis. We're going live to Cairo.

Plus, how could gifts land Dennis Rodman in legal trouble? Did the former NBA star violate U.S. sanctions?

But, first, here's Chris Cuomo with Impact Your World.

(BEGIN VIDEOTAPE)

CHRIS CUOMO, CNN CORRESPONDENT (voice-over): Meet 13-year-old McClain Hermes, an avid reader and fierce competitive swimmer. But behind that smile lies a deeper story. McClain is legally blind. Her vision began to fail when she was 8, and doctors say in a few years she won't be able to see at all.

But this seventh grader from Georgia doesn't want your sympathy.

MCCLAIN HERMES, 13 YEARS OLD: Can you hand me that black and white shoe?

CUOMO: She wants your old shoes. In 2009, her father showed her an article about footwear soles being recycled.

MATT HERMES, FATHER: They were giving people a $5 discount or something on a new pair of shoes if they turned in shoes.

M. HERMES: And so we decided, instead of recycling them, we'd collect them and give them to people that needed them.

CUOMO: Shoes for the Souls was born. They say around 10,000 pairs of shoes have been collected over the past four years.

M. HERMES: You got this.

CUOMO: Today, McClain is making a special delivery to an Atlanta homeless shelter. McClain challenges all teens to make a difference.

M. HERMES: If you have a dream and you think it's unrealistic, just keep on doing it because you will get there.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

BLITZER: At least four people were killed, more than 50 injured, in a series of explosions in Cairo, including one massive car bomb targeting a key symbol of authority.

CNN's Reza Sayah is in Cairo for us.

(BEGIN VIDEOTAPE)

REZA SAYAH, CNN CORRESPONDENT: Wolf, just an awful day here in Cairo. What happened here today could be a game changer in this political crisis simply because of the fact that Cairo has not seen this many bomb attacks in one day in recent memory, all of this happening before the big anniversary of the 2011 revolution.

(voice-over): A powerful car bomb targeting the eight-story police headquarters, one of at least four blasts that rocked parts of central Cairo on Friday, plunging Egypt deeper into crisis and uncertainty.

UNIDENTIFIED MALE: It's really bad. I can't tell you anything.

SAYAH (on camera): Are you worried about Egypt? Are you worried about your country?

UNIDENTIFIED MALE: Exactly.

SAYAH (voice-over): Surveillance video appears to show the bomb exploding directly in front of the building.

(on camera): Also damage and destruction across the street. This is a museum of Islamic art. Again, much of the facade of this structure has been destroyed. And then you see this, hundreds of people who have come on to the scene, many of them stunned, many of them angry.

(voice-over): Throughout the day, three smaller bombs targeting police exploded elsewhere in Cairo. The seemingly coordinated attacks come one day before the anniversary of Egypt's 2011 revolution.

The uprising brought Egypt its first democratically elected government in 2012, led by Islamist President Mohammed Morsi. But accusations against Morsi and his Muslim Brotherhood movement came hard and fast. Morsi and the Brotherhood were hijacking the revolution and silencing Egypt's liberal voice, critics said. Millions protested against Morsi and called for his ouster.

Egypt's powerful military also stepped in by replacing Morsi and his Islamist-led government with transitional leaders and labeling the Muslim Brotherhood a terrorist organization. Since then, Morsi and Brotherhood backers have held street protests, the government responding with brutal crackdowns. More than 1,000 anti-government protesters have been killed, rights groups say, thousands more arrested, including journalists and secular activists, who fear a return to autocracy.

Authorities insist Egypt is on a path to democracy. But Friday's bomb attack signaled a political crisis that's intensifying and a post-revolution Egypt that's still struggling to deliver the promises of freedom and democracy.

(on camera): The big question now, who carried out these attacks? Over the past several months, a militant group based in the Sinai has carried out similar attacks, but at this point no one has claimed responsibility, but for many angry Egyptians, it doesn't matter. They're already blaming the Muslim Brotherhood.

For their part, the Brotherhood has condemned the attacks. Now all eyes on tomorrow, the anniversary of the revolution. If today is any indication of what's coming tomorrow, it could be a rough day, Wolf.

(END VIDEOTAPE)

BLITZER: Reza Sayah in Cairo for us. All those hopes of the Arab spring three years ago fading, fading, not only in Egypt, but in Libya, certainly in Syria, Lebanon, all of the region, much of it right now, I should say, in chaos.

His visit to North Korea is over, but the controversy lives on for former NBA star Dennis Rodman. The latest issue, gifts the former NBA star gave the North Korean leader, Kim Jong-un.

Brian Todd is looking into this part of the story for us.

What's going on now with Dennis Rodman?

BRIAN TODD, CNN CORRESPONDENT: Wolf, Rodman cannot shake the falloff from that visit to North Korea. We're told that he gave North Korea's leader, Kim Jong-un, some luxury items that were way out of bounds.

And the U.S. government, which didn't exactly hide its displeasure with this whole thing, may now be investigating.

(BEGIN VIDEOTAPE)

TODD (voice-over): Dennis Rodman's North Korea trip could be giving him a legal hangover even after he apologized for this rant on CNN.

DENNIS RODMAN, FORMER PROFESSIONAL BASKETBALL PLAYER: I don't give a rat's (EXPLETIVE DELETED) what the hell you think.

TODD: He's since checked into an alcohol rehab center. Now add possible sanctions-busting to list of activities Rodman may have engaged in during that visit.

What could he have done wrong? Check out the bottles Rodman displayed for North Korean leader Kim Jong-un. A closeup shows custom-made images of Rodman and Kim on them. They look very similar to Rodman's own brand of alcohol, Bad Ass Vodka.

Former U.S. diplomat Dennis Halpin says he has information from diplomatic sources that Rodman brought other gifts to Kim as well.

DENNIS HALPIN, U.S.-KOREA INSTITUTE: I was told that there was Irish Jameson Whiskey. There was European crystal. There was an English Mulberry handbag for Mrs. Kim Jong-un. And there was a fur coat for her, Italian suit for him, and then some other female clothing.

TODD: In total, worth more than $10,000, Halpin says. According to The Daily Beast, the Treasury Department is consulting with the State Department to see whether Rodman violated U.S. and U.N. sanctions against North Korea by allegedly giving Kim those gifts.

RODMAN: I love my friend. This is my friend.

TODD: A Treasury Department spokesperson says that agency can't comment on possible investigations. CNN has checked into the matter at the State Department, but found no indication they're looking into it.

The sanctions were imposed because of North Korea's nuclear buildup. Under American law, what can't you give to a North Korean leader?

MARCUS NOLAND, INSTITUTE FOR INTERNATIONAL ECONOMICS: You're not supposed to bring jewelry, liquor, sports cars, yachts, fur coats, expensive watches.

TODD: If Rodman's being investigated and if he's found to have broken the law by giving Kim those luxury goods:

NOLAND: He could be in significant trouble. The law provides for both criminal prison time and fines. I think the fines run up to twice the amount of the items.

(END VIDEOTAPE)

TODD: And Rodman could be in trouble with another U.S. government agency. The Commerce Department tells us under its rules you have to have a license to export just about any American goods to North Korea. Did Rodman have a license to give Kim that Bad Ass Vodka? Does he have any comment on any of this? Not yet. Rodman's agent hasn't returned our calls or e-mail -- Wolf.

BLITZER: And he's supposedly in rehab right now himself. TODD: He is, that's right.

BLITZER: Not easy to get in touch with him.

The irony of all of this is that Kim Jong-un could have gotten a lot of these luxury gifts on his own, without necessarily Dennis Rodman bringing them to him.

TODD: Didn't need Rodman's help to get them. Yes, Marcus Noland, the analyst we spoke to for the piece, says a lot of those luxury items now flow through China, even the ones that are banned to getting to the North Koreans. And the North Korean elite, of course, through China know how to get their hands on that stuff.

So, some of the alcohol and some of the other items, that's getting to them anyway.

BLITZER: Yes. Well, we will see what happens on the front.

Thanks very, very much, Brian Todd reporting.

Just ahead: Only weeks ago, they were Virginia's first couple. Now they're facing more than a dozen federal charges. Why did the former Governor Bob McDonnell refuse a plea bargain that could have spared his wife?

(COMMERCIAL BREAK)

BLITZER: Just days out of office and into a federal courtroom.

Virginia's ex-governor and his wife have now been arraigned on more than a dozen charges, including fraud, false statements and obstruction. And now we're learning new details about a plea deal he rejected.

Our senior Washington correspondent, Joe Johns, is joining us now. He's got more.

So, what's the latest with Bob McDonnell, Joe?

JOE JOHNS, CNN CRIME AND JUSTICE CORRESPONDENT: Wolf, it's the latest step for the McDonnells in a long legal battle that started well before he left office. They're now preparing for a trial that could have been avoided, but only if the former governor had been willing to plead guilty in federal court.

(BEGIN VIDEOTAPE)

JOHNS (voice-over): Bob and Maureen McDonnell walked into the courthouse holding hands and prayed with a priest in the hallway. It may be too late for divine intervention.

A source familiar with the criminal case said the former governor had been given an opportunity to spare his wife from federal charges, but refused to take a plea deal, a move that now forces her into court with him. JEFF SCHAPIRO, "THE RICHMOND TIMES-DISPATCH": There have been several points in this process, even before an indictment was returned, that it appeared the governor was throwing his wife and his family under the bus.

JOHNS: Former prosecutor Holly Hughes said plead or we will charge your spouse is a chess game that gets played with high-profile defendants, because the conviction the government wants is from the guy who held high office.

HOLLY HUGHES, DEFENSE ATTORNEY: You want to go after the politician, because the politician is elected by the people. That is a position of public trust. And so, if the public can't trust him to do the right thing in his business dealings, then how are they going to trust him to look out for their best interests?

JOHNS: Both McDonnells pleaded guilty and were allowed to remain free pending trial. The former governor has repeatedly asserted that he did not break the law, and the 14-count indictment suggests serious wrongdoing on the part of Maureen McDonnell. In 43 pages, her name appears roughly 125 times, in an e-mail asking for help because the family was broke, asking for dresses for her daughter's wedding.

The indictment says tens of thousands of dollars in checks were made payable to Maureen McDonnell. She's even accused of obstruction of justice for promoting a lie about returning designer goods to this man, Jonnie Williams, former CEO of a dietary supplement company who is said to have showered the couple with as much as $140,000 in loans and gifts in exchange for helping promote the company's products.

(END VIDEOTAPE)

JOHNS: Sources have said the former governor's lawyers tried to convince government prosecutors that they would not be able to prove their case at trial even if it came to that. Mr. McDonnell has said he was not even aware of some of his wife's alleged dealings. Our calls to lawyers for the couple were not returned today -- Wolf.

BLITZER: But, quickly, this is not a slam dunk for the prosecution, is it?

JOHNS: Not by my means. It could be a very close case.

And that's why his lawyers were telling the prosecutors it would be tough to make this in court.

BLITZER: Joe Johns reporting for us, thanks very much.

We want to say goodbye to our colleague and good friend Jill Dougherty. She's leaving CNN after 30 years of helping us cover the world. Jill has been a CNN White House correspondent, a Moscow bureau chief. She calls that job, by the way, the job of a lifetime.

In fact, she's leaving us to work full-time on Russian affairs at Harvard University. She's fluent, by the way, in Russian. Most recently, Jill was CNN's foreign affairs correspondent. In fact, look at how the State Department actually went out of their way to honor her today.

(BEGIN VIDEO CLIP)

HARF: We just want to say from the secretary, from all of us that we will miss you. We will miss your tenacious reporting. We will miss your presence in the bullpen and in the briefing room, and, above all, I think, your grace and friendship.

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: Oh, thank you very much.

(APPLAUSE)

(END VIDEO CLIP)

BLITZER: There she is, Jill Dougherty. We're going to miss her. She was a great, great colleague of all of ours, after 30 years.

I spent four years working very closely with her during the first term of the Bill Clinton presidency. I was the White House correspondent. She was a White House correspondent. We got to know each other very well.

She always, always did an excellent job for us. And I can only anticipate the fabulous job she will do at Kennedy School at Harvard University, working with students and others. She's going to be focusing her attention on the Russian media. And I assume we will learn a whole lot more thanks to Jill.

Jill, good luck to you. We will miss you.

That's it for me. Thanks very much for watching. I'm Wolf Blitzer in THE SITUATION ROOM.