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President Obama Receives Report on Airline Security Failures; Taliban Claims Credit for CIA Attack

Aired December 31, 2009 - 16:00   ET

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


SUZANNE MALVEAUX, CNN ANCHOR: Happening now, breaking news: Terror investigators report to the president on the failed airline bomb attack. This hour, the early evidence of what went wrong and what the feds are going to do to make it right.

And the Taliban are now claiming credit for new American deaths in Afghanistan. The target was a crucial CIA post described as a hub of activity.

And a toast to the year in politics, from the White House beer summit to anti-Obama tea parties.

Wolf Blitzer is off today. I'm Suzanne Malveaux. And you are in THE SITUATION ROOM.

Well, the future of airline security in this country and the lives of millions of passengers are in President Obama's hands right now. He's receiving preliminary reports from his national security team on the failed airline terror attack.

Mr. Obama set today as the deadline for getting an early read on failures in the system that he's called unacceptable.

Our Ed Henry is with the president in Hawaii. He has fresh information from his sources.

Ed, what have we learned today about what the president has been told and briefed about the problems?

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Well, Suzanne, I just got out of a briefing with a couple of senior administration officials who are laying out what is coming into the president, two quick points that the president is really zeroing in on, number one, watch lists.

These officials are suggesting there's going to be a major overhaul of how the government deals with terror watch lists and watches potential terrorists, that, basically, there was not enough cross-referencing within the intelligence community, not enough connecting the dots, and, secondly, intel collection, that, basically, the CIA had some good information, these senior officials are saying.

But it is clear to the president that they were not sharing info with each other, just as we saw before 9/11. And in the blunt words of one senior official -- quote -- "A failure to share that information will not be tolerated by this president." So, you can see those are two big issues they are zeroing in on -- Suzanne.

MALVEAUX: Thanks, Ed.

We're going to go right back to you in a moment, but I want to bring in our homeland security correspondent, Jeanne Meserve, who has also has some latest fresh details about what we're learning -- Jeanne.

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: That's right, Suzanne.

Homeland Security Secretary Janet Napolitano just announced that she's dispatching two top deputies to meet with airport and other officials around the world to discuss how to improve security. It could result in a ministerial meeting later in January.

Also, DHS is telling its component agencies to beef up airport security this busy holiday weekend. Let me emphasize this is out of an abundance out of caution, not because there is any new intelligence. You will be seeing more canine teams. You may not be able to see them, but there will be more federal air marshals in the sky.

In addition, the State Department is telling embassies around the world, when you send a cable about a suspicious individual, include information on whether they have a visa, this because cables back about Umar Farouk Abdulmutallab did not mention the very significant fact that the 23-year-old had a valid multiple-entry visa to enter the United States.

His father's visit to the United States Embassy in Nigeria expressing concerns about his son's radicalization and the belief that he was in Yemen, a crucial piece of information that the intelligence community failed to connect with communications picked up between August and October which included a partial name, Umar Farouk.

Extremists in Yemen discussed operations and someone they called the Nigerian. Those two puzzle parts put together might have prevented the events of Christmas Day, but there was even more, a British decision to deny him a visa, his purchase of a ticket with cash, the fact that he didn't check luggage, vague warnings about holiday attacks.

Experts say the failure to integrate these important pieces of information reflect failures that may require more than a quick assessment.

(BEGIN VIDEO CLIP)

FRANCES FRAGOS TOWNSEND, CNN NATIONAL SECURITY CONTRIBUTOR: Someone needs to take a longer-term look. Where the president says there have been systemic failures, it's going to be difficult in this short a period of time to identify all of the systemic failures and fixes.

And, so, he needs someone to take an independent look at that for him. It should be someone who has got no stake in the -- no skin in the game, as they say, who has not been involved in the process. (END VIDEO CLIP)

MESERVE: There could be an upside to this disturbing series of events. Some experts say, for years, attention and interest in terror issues has been waning. This could refocus attention, knock down political roadblocks, and produce needed improvements and investments -- Suzanne.

MALVEAUX: And, Jeanne, obviously, changing the culture, getting people to share information is something that is going to take a long time to do. But it looks like at least some of the changes in the State Department with visas and things like that could happen immediately, as well some of those security things you are talking about in the airport; is that -- is that right?

MESERVE: Yes.

I think, very definitely, they want to show that we get it, we are making changes. That's why these reviews were done. That's why they came in so quickly. And I think you can expect a number of actions unfolding very quickly.

MALVEAUX: OK, Jeanne, thank you. We are going to get back to you momentarily.

I want to bring back Ed Henry as well in Hawaii.

Ed, you were talking a little bit about the president getting that briefing today. But what is -- what's next on his plate? How is he following up with what -- the kind of information that he has gotten today?

HENRY: Very important point, we are told the president has not gotten all of the preliminary findings. He is going to get more tonight, even here on New Year's Eve. And then he is going to study it over the weekend, basically. As soon as he gets back to Washington, on Tuesday morning, he's going to be calling in all of these key intelligence chiefs, from the CIA, director of national intelligence, the attorney general, all kinds of key officials.

In the White House Situation Room, we're told, they are going to have a secure meeting They're go over all of the preliminary findings and most importantly figure out how to move forward, undoubtedly a chance maybe for the president to call some of these officials on the carpet.

But what White House officials are stressing is, the president is focused a lot more on, instead of just blaming, figuring out how do you fix all this stuff and move forward, so that the American people are more secure, Suzanne.

MALVEAUX: Ed, any sense of whether or not we're going to see the president again making any kind of statements before Tuesday?

HENRY: We have gotten pretty strong indications that he's not going to at least come out today, New Year's Eve. He's right now in fact watching "Avatar," the 3-D version, I should point out, with his family right now here in Honolulu.

They are trying to get a little down time on New Year's Eve. But, again, the president, in his statement today, said that, later tonight and throughout the weekend, he will be working on -- on various aspects of reviewing these findings.

We are getting no guidance suggesting he is coming out again this weekend, but, as we saw earlier this week, even when we were not expecting it, if there is a development in this, he is making clear he is ready to come out at any time, talk to the American people, try to reassure them a little bit, but also give them an update on what's really going on behind the scenes. There's very, very important governmental deliberations that are taking place, Suzanne.

MALVEAUX: All right. Ed, that's a good plan. I'm going to see "Avatar" tonight as well.

(LAUGHTER)

MALVEAUX: So, hopefully, he will take a little bit of a break.

HENRY: Enjoy it.

MALVEAUX: And if there's any news, I'm sure we will get back to you.

Thanks, Ed.

Well, now we want to follow up on a security scale -- scare in Somalia, rather. We told you yesterday about a man arrested at the Mogadishu Airport last month who was carrying suspicious chemicals and a syringe.

Well, the details seem very similar to the Christmas terror incident. But Somali authorities are now telling us that these chemicals the man was carrying could not have caused an explosion, as they had previously reported. Now, the man still was charged with trying to sneak a suspicious substance on a plane. He was later released after a court determined that there wasn't any conclusive evidence against him.

New details are emerging about one of the deadliest attacks in history on the CIA. The Associated Press is reporting that the chief of the CIA post in Afghanistan was among those killed in yesterday's suicide bombing. And the Taliban, they have claimed responsibility for this.

Our CNN's Atia Abawi has the latest from Kabul.

Atia, what do we know?

(BEGIN VIDEOTAPE)

ATIA ABAWI, CNN CORRESPONDENT: Suzanne, Wednesday's attack on an American base in eastern Afghanistan has left seven Americans dead, all employees of the CIA, the Central Intelligence Agency, as well as wounding six other Americans. This happened when a suicide bomber was able to get on to Forward Operating Base Chapman in Khost Province. He made his way into the gymnasium, where he then detonated his suicide vest, killing those Americans. The question that remains is just how he was able to get on to base and we are still waiting to hear from officials on just that.

But the Taliban claiming responsibility for the attack, stating that it was actually an Afghan national army soldier, a soldier that they were able to convince to switch allegiances. The Taliban also say that the U.S. and the coalition forces should be expecting more and more attacks in this manner.

Just a day earlier, an Afghan soldier in western Afghanistan was able to shoot and kill a U.S. soldier, as well as wound two Italian soldiers. The big issue here is when it comes the Afghan national security forces. There's a big push to increase the numbers, a big push from President Obama, President Hamid Karzai of Afghanistan and all the NATO-led coalition countries.

And I was just out with these ANA recruiters just a couple of weeks ago, and I have to say that it looked more to be about quantity, rather than quality. And, right now, it seems that the Taliban are taking advantage of the fact of the rush to increase these security forces -- Suzanne.

(END VIDEOTAPE)

MALVEAUX: Thank you, Atia. It's a tragic story.

President Obama says that the Central Intelligence Agency is being tested as never before since the 9/11 attacks. In a letter to CIA employees, President Obama remembered these seven CIA employees killed in Afghanistan as coming from a long line of patriots. And he hailed them as having worked in the shadows to stop terrorist plots and to save lives.

A Pennsylvania man thought he would never see his sons again. They had been missing for over a decade or so. Then one of them Googled him.

Also today, scandal cost Tiger Woods one of his biggest sponsors. We're going to have an update on the golfing great's narrowing empire.

And it's the compromise that made a Senate health care reform bill possible. Now the top prosecutors in more than a dozen states say that it is unconstitutional.

(COMMERCIAL BREAK)

MALVEAUX: New questions are being raised about gun control after Finland's third shooting massacre in about two years. Police say a man shot and killed his girlfriend at home. Then he went to a shopping mall, where he opened fire, killing four more people. He then returned home and killed himself. Police identified the shooter as a 43-year-old ethnic Albanian immigrant from Kosovo who had been living in Finland for several years. In Finland's other recent mass shootings, an 18-year-old student went on a rampage at his high school in late 2007. He killed seven classmates and his principal, before taking his own life. The teenager had posted videos online warning of the attack in advance.

In September of last year, a 22-year-old college student killed 10 people, then himself. After the 2008 attacks, stricter rules for handguns were introduced in Finland.

Well, now a remarkable story out of Washington State. A father who thought he might never see his missing children again has learned that they have been found after 11 years.

Joining me now is CNN's Sandra Endo.

Sandra, tell us how this all came about, because this is a very unique story, when viewers take a listen to how this happened.

SANDRA ENDO, CNN CORRESPONDENT: Exactly, Suzanne. It's very incredible.

Bill Connington last saw his two sons, now ages 15 and 16, back in 1998, when they disappeared, along with their mother. Connington and his wife, Jill Haugen, were divorced, and she had them for the weekend. And this is the last photo taken before the kids went missing.

Connington told us on the phone today he thought he would never see them again, but didn't give up hope. This week, Connington, who lives in Spokane, Washington, got a phone call from authorities out in Central Pennsylvania, saying they have his boys.

(BEGIN VIDEO CLIP)

BILL CONNINGTON, FATHER: I was listening to a voice message when -- it was a detective. And that's when I turned white as a ghost when I was told. I know I was shaking. It took me a little bit. My girlfriend calmed me down.

(END VIDEO CLIP)

ENDO: Now, police took his ex-wife into custody on Tuesday. And Haugen says she and her kids are victims of abuse.

(BEGIN VIDEO CLIP)

JILL HAUGEN, MOTHER: I'm a domestic violence survivor. So are my two children. They are sexual abuse survivors.

(END VIDEO CLIP)

ENDO: But police right now say they cannot substantiate her claims.

And, over the last 11 years, the two teens have been living with their mother, most recently in Milton, Pennsylvania. She was going by aliases and changing the kids' names. All the while, there was a warrant out for her arrest back in Spokane for first-degree custodial interference.

Haugen caught the attention of police in Milton this past weekend after a couple of calls about domestic disputes between her and her kids. Child protective services then stepped in and took the boys into foster care.

And it was actually a social worker, Suzanne, who cracked this case. Our affiliate KXLY says one of the boys gave the caseworker his real name. She Googled it, and figured out he was a missing child -- Suzanne.

MALVEAUX: And do we know where the boys are now?

ENDO: The boys are actually still in foster care. And Bill Connington tells us he hasn't spoken to them yet, but he certainly hopes to get them back home to him soon.

MALVEAUX: OK. Thank you so much.

Well, a group of state attorneys general is throwing down the gauntlet over a provision in the health Senate care bill giving Nebraska special treatment on Medicaid. They are threatening legal action over what they are calling the Nebraska compromise.

Joining me now to explain this, our CNN congressional correspondent, Brianna Keilar.

And, obviously, there are some upset folks here, because they don't think this is fair. Explain to me whether or not this really is legal.

BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: Well, this has become a political battle. And it is really hard to tell at this point, but one of the big parts of the health care reform plan is an expansion of Medicaid to cover more poor Americans. And, ultimately, states will have to share in the costs for that, except for Nebraska, which you can see right here in the Senate bill is singled out.

This provision says the federal government will pick up the entire tab for this one state. Why is that? Well, it has to do with Nebraska Senator Ben Nelson. He's that conservative Democrat who gave Democratic leaders their crucial 60th vote after stricter abortion language and some of these sweeteners were added to the bill.

But now you have state attorneys general -- they are from 13 states -- they are all Republicans -- and they are saying not so fast. They have actually sent a letter to Senate Leader Harry Reid, this letter here, and House Speaker Nancy Pelosi, saying, you know, we believe this is unconstitutional, and we are going to sue if this special treatment for Nebraska ends up in the bill.

A spokesman for Senator Reid blasted this move. He says, Republicans are protecting insurance companies and this just an attempt to distract from that.

But what you are seeing here is a political battle. Health care reform is going to be a big issue in the midterm elections, and both sides here, Suzanne, really sharpening their knives.

MALVEAUX: So, what does this mean for Senator Nelson and 2012, when he's up for reelection? How big of a political liability could this be?

KEILAR: Well, this is going to be a very big issue for him, Suzanne. And he is on the defensive right now, trying to explain himself to Nebraska voters.

Check out this ad. This ran last night during the Holiday Bowl, Senator Nelson being able to take advantage of the fact that the University of Nebraska was playing this year. Here's part of it.

(BEGIN VIDEO CLIP, NEBRASKA DEMOCRATIC PARTY AD)

SEN. BEN NELSON (D), NEBRASKA: With all the distortions about health care reform, I want you to hear directly from me. Some oppose any change. Others want a government takeover. But I listened to you and took a commonsense approach to improve the bill.

(END VIDEO CLIP)

KEILAR: This is an ad that was paid for by the Nebraska Democratic Party.

And what you have is, while many liberals are mad at Ben Nelson for pulling this Senate health care bill farther to the right, the fact is, he's also infuriated many Republicans. And he could be very vulnerable, Suzanne, in 2012, when he's up for reelection.

MALVEAUX: It's a political hot potato, that health care reform bill.

KEILAR: It is.

MALVEAUX: A lot of people, I think, are going to pay for it. So...

KEILAR: Certainly, that's the expectation, the conventional wisdom, certainly.

MALVEAUX: All right, thank you, Brianna.

Well, no holiday from terror for President Obama. He's set to review the initial reports on the failed airline bomb attack. We are going to follow that breaking news this hour.

And Tiger Woods pays another price for scandal.

(COMMERCIAL BREAK)

MALVEAUX: Brianna Keilar doing double duty now, reporting the other top stories coming in to THE SITUATION ROOM right now.

Hey, Brianna. What are you following?

KEILAR: Well, Suzanne, an Afghan military official says two French journalists and an Afghan translator have been kidnapped. The officials says the three were on their way from Kabul Province to Kapisa Province. A statement from the French Foreign Ministry indicates there was more than one Afghan with the journalists. The French defense minister says no group has claimed responsibility at this point.

AT&T is ending its business relationship with Tiger Woods. The telecom giant hasn't used the golfer's image extensively, but its logo has appeared on his golf bag. Woods signed a multiyear deal with AT&T in February, but the terms were not disclosed. This is actually the second major sponsor to drop Woods since his November car crash and his subsequent admission of marital infidelity.

The last surviving great grandchild of pharmaceutical magnate Eli Lilly has died. Ruth Lilly was a philanthropist who gave away much of her inherited fortune. Court documents in 2002 showed that she willed almost $500 million to charities and arts groups. A female -- or -- pardon me -- a family spokesman said that she died in Indianapolis yesterday. She was 94 years old.

Britain's Prince Charles says his wife, Camilla, has become a grandmother for a third and also a fourth time. That's right. The duchess of Cornwall's daughter gave birth to twin boys yesterday, their names, Louis and Gus. And Camilla already has two granddaughters, so a growing family there, Suzanne.

MALVEAUX: Congratulations to all of them.

Thank you, Brianna.

Well, hundreds of suspected terrorists are held at Guantanamo Bay, and some are released, but the question is, then what? Released does not always mean rehabilitation. There is a troubling report about would- be terrorists who work their way out of the system and then right back on to the battlefield.

And a resurgence of al Qaeda, rebellion to the north, and a flagging economy -- Yemen is awash in crises. We are going to take a closer look at the newest hot spot in the battle against terrorism.

(COMMERCIAL BREAK)

MALVEAUX: You're in THE SITUATION ROOM.

Happening now: looking for the roots of radicalism. What influenced the Christmas bombing suspect? The search for answers takes us to a university in London.

And some of your favorite TV shows could suddenly vanish. Well, that's what's at stake in the fight between FOX and Time Warner Cable.

Wolf Blitzer is off today. I'm Suzanne Malveaux. And you are in THE SITUATION ROOM. More on our breaking news: Right now, President Obama is preparing to study preliminary reports on the failed Christmas Day terror attack. Now, he says he's going to review the information tonight, over the next couple of days.

And, over the past few days, we have gotten a lot of new information about the suspect in that failed airline bomb attack.

Now, CNN correspondents have been putting together the pieces of this puzzle and a timeline of his travels.

Here's CNN's John Roberts.

(BEGIN VIDEOTAPE)

JOHN ROBERTS, CNN CORRESPONDENT: Finally, a detailed picture of what happened before the attempted Christmas terror attack is coming together.

The timeline starts in London. From 2005 to 2008, Umar Farouk Abdulmutallab was enrolled at University College London.

Last June, still in London, he applies for a U.S. tourist visa. That visa is granted. And in August, he's believed to have traveled to Texas for two weeks.

Early this year, a stop in Dubai, where he again attends college.

Finally in May, he lands on the radar. He applies for a visa to visit England but is denied because the school on his application was not government-approved. At this point, England puts him on its watch list.

Now, from August to early December, Abdulmutallab is in Yemen, allegedly prepping for his attack.

In November, he finally shows up on the U.S. radar when his father, a former bank executive, visits the embassy, the U.S. embassy in Nigeria, talks to someone from the CIA and says he's worried about his son's extremist views. He also follows up with several telephone calls. After the first visit, the embassy sends out a visa viper cable to the State Department. The information also ends up at CIA headquarters and the National Counterterrorism Center which decides not to put Abdulmutallab on the selectee or no-fly list, but puts him on a much broader list.

On December the 16th, Abdulmutallab buys his ticket with cash for nearly $3,000. December 24, he boards a KLM flight to Amsterdam carrying just a shoulder bag. Then on Christmas Day, he connects in Amsterdam to Northwest Flight 253 to Detroit, and shortly before noon, on the final approach to Detroit, allegedly tries to detonate explosives hidden in his underwear.

(END VIDEOTAPE)

MALVEAUX: That's John Roberts breaking it all down for us. Officials in Yemen say that they have arrested one of al Qaeda's most dangerous members. The government there has been cracking down on terrorists since the Christmas bombing attempt on the U.S. airliner. And the suspected bomber is believed to have trained in Yemen.

Our CNN's Mohammed Jamjoom looks at Yemen's influence in this volatile region.

(BEGIN VIDEOTAPE)

MOHAMMED JAMJOOM, CNN CORRESPONDENT (voice-over): It is the poorest country in Arabia, a country of impenetrable mountains and wide expanses of desert, strong clan and tribal loyalties.

The government's influence is weak beyond the main cities. Its oil revenues have fallen sharply, and it's running out of water. Unemployment is high, and very nearly half of Yemenis are age 14 or under. But Yemen matters because of where it is. It has a near- 1,000-mile border with oil-rich Saudi Arabia, much of it unmarked, some of it disputed.

IAN BREMMER, PRESIDENT, EURASIA GROUP: Twenty-five million folks sandwiched in a very small piece of territory next to almost 30 million in Saudi Arabia, with all -- lots of territory, lots of resources.

JAMJOOM: Yemen's coastline looks out on one of the world's major shipping lanes, from the Suez Canal to the Indian Ocean. Across the Red Sea, less than 100 away in places, lies the anarchy of Somalia, already a stronghold of al Qaeda affiliates.

And it's in this strategically located country that the government is fighting not one battle, but three.

PROF. FAWAZ GERGES, LONDON SCHOOL OF ECONOMICS: Yemen is a failing state. It's not yet a failed state. You have a collapsed economy. You have multiple political ideological and tribal fault lines that are pushing the country into all-out war.

JAMJOOM: Besides a resurgent al Qaeda, there is a long-running Shiite rebellion in the north and a separatist movement in the south.

MUSTAFA ALANI, GULF RESEARCH CENTER: So all these problems coming together at one time, undermining the government's ability to deal with the situation.

JAMJOOM: Yemen's al Qaeda problem first came to light when the USS Cole was attacked in Aden Harbor in October, 200, killing 17 U.S. sailors. Since then, it appears to have gotten worse. More and more extremists have crossed from Saudi Arabia, forming al Qaeda in the Arabia Peninsula and easily obtaining training and weapons.

It was a Saudi citizen who had fled to Yemen that tried to assassinate Saudi Arabia's deputy interior minister this year, the closest al Qaeda has ever come to carrying out one of its stated goals, to kill members of the Saudi royal family. For so long below anyone's radar, as attention focused on Pakistan and Afghanistan, Yemen is now front and center in the battle against al Qaeda.

Mohammed Jamjoom, CNN, Dubai.

(END VIDEOTAPE)

MALVEAUX: Well, President Obama began 2009 making history. It's been an up-and-down since then. Ahead, the highlights and the low points of this year in politics. And a desperate plea from one of America's best-known pastors.

(COMMERCIAL BREAK)

MALVEAUX: It is New Year's Eve. And you know what that means. Besides the champagne, the funny hats, it's time to look back on the past 364 days or so. And for those of us who follow politics, it has been an amazing, historic year full of surprises, as well as some scandals.

Here is our CNN Senior Political Correspondent Candy Crowley.

(BEGIN VIDEOTAPE)

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT (voice-over): It was the moment of 2009, literally changing the face of the American president presidency.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I, Barack Hussein Obama, do solemnly swear...

CROWLEY: The new president, Barack Obama, began with a 75 percent approval rating, considerable capital that he spent to create more history.

OBAMA: We have begun the essential work of keeping the American dream alive in our time.

CROWLEY: It was one for the books, a massive $787 billion stimulus plan to fuel a failed economy, a huge victory for the neophyte president and the flash point for an emerging political voice.

UNIDENTIFIED FEMALE: President Obama, can you hear us now?

CROWLEY: The tea party people were out in force on tax day. An umbrella group of furious fiscal conservatives, they protested big- government spending, and, by August, Big Brother overreach -- the tea party at town halls.

(SHOUTING)

UNIDENTIFIED MALE: Wait a minute.

CROWLEY: They were as effective as they were loud. The right left for dead at the side of the 2008 campaign trail, stirred, sometimes a bit too vocally.

REP. JOE WILSON (R), SOUTH CAROLINA: You lie! (BOOING)

CROWLEY: It was that kind of year, bare-knuckles politics, nation- defining moments.

SONIA SOTOMAYOR, SUPREME COURT JUSTICE: I am an ordinary person who has been blessed with extraordinary opportunities and experiences.

CROWLEY: The president wrote more history with the nomination of the Supreme Court's first Latina justice. And he saluted history after the death of Senator Ted Kennedy, a political tour de force, one of the most accomplished lawmakers of the 20th century.

SEN. EDWARD KENNEDY (D), MASSACHUSETTS: The work goes on. The cause endures. The hope still lives. And the dream shall never die.

CROWLEY: Beyond history, there were the politics of the moment. The president made nice at a beer summit with a Harvard professor and the Cambridge cop. And he won a Nobel Peace Prize even he didn't think he had earned.

It wasn't always about the president.

SARAH PALIN (R), FORMER ALASKA GOVERNOR: Only dead fish go with the flow.

CROWLEY: Who could quit their job as colorfully as Sarah Palin, who left the governor's office in Alaska 18 months short of her first term?

PALIN: Thank you so much for being here.

CROWLEY: She promptly wrote a bestseller, slammed McCain aides for bungling the 2008 campaign, and laughed all the way to the bank.

Not laughing...

GOV. MARK SANFORD (R), SOUTH CAROLINA: I won't begin at any particular spot.

CROWLEY: ... two family value conservative Republicans, South Carolina Governor Mark Sanford and Nevada Senator John Ensign. They looked like presidential material in January and toast by September. Cherchez la femme.

SEN. JOHN ENSIGN (R), NEVADA: Last year, I had an affair. I violated the vows of my marriage.

SANFORD: I have been unfaithful to my wife.

CROWLEY: Despite diminished numbers and some boys behaving badly, it turns out the Republican Party did not die this year. The GOP won governor's seats in Virginia and New Jersey.

And the president, who enjoyed in February the approval of three out of four Americans, had dropped by more than 20 points in December. So, ring out the old, ring in the new, and strap yourself in. 2010 is an election year.

(END VIDEOTAPE)

MALVEAUX: Joining us now, Candy Crowley.

It was an excellent piece. It really does take you back to the whole year, everything that happened from start to finish.

What do you think was the most memorable story, moment for you covering politics?

CROWLEY: You know, Suzanne, when we cover things, sometimes it's hard to remember the next day what you covered the day before...

MALVEAUX: Absolutely.

CROWLEY: ... because they happen so rapidly and you really do forget. But there are some things that just -- you know that you will remember until the day you die. And for me it was Grant Park on election night.

It was just -- Merriman Smith, UPI, once said a long, long time ago reporting at the White House is like a front row seat to history. It was, you know, truly a front row seat to history. So that was amazing, knowing that this will be a chapter and I was there. You don't get that privilege a lot.

MALVEAUX: Sure.

One of the things that I remembered very clearly was really just the first couple of days of his presidency. They didn't know how to work the phones. They didn't know how to work the computers. They were very confused.

But the president got out there and signed this flurry of executive orders regarding Gitmo, closing Guantanamo Bay, banning torture, women's rights, all of that. It was just really kind of amazing, the ambition. And I guess we'll see how much of that really translates into what gets done.

But what do you think this is going to look like next year? When you look at the Democrats 2010, how does Obama play into that?

CROWLEY: That's what's so fun about politics, we don't really know. If the economy gets better, if people believe the economy has gotten better -- and that generally will take a dip in the jobless rate -- it can't be 10 percent come Election Day next year. So the president certainly is always going to be an asset to the core of the party.

As you know, he has taken the left and somewhat just alienated them on a couple of decisions. He has got to bring them back because those are the people he has got to get to the polls. He has been able to do that before. That will help. MALVEAUX: What do you think in terms of all these things that he has been trying to get done, that we are actually going to see something next year that's really going to be concrete?

CROWLEY: Well, we'll get health care, some semblance of health care early on, January, early February. Now they're talking about maybe March.

I think what's going to be interesting is financial regulation. I think they are going to have a much watered-down version. And I doubt they will get cap and trade, the idea of bringing down carbon emissions at some of the places around the country. I think that's a tough call.

MALVEAUX: OK. Well, they've set the bar very high, so we'll see how they do next year. Clearly, there's a lot on his plate.

CROWLEY: They set it high this year, too.

MALVEAUX: Yes.

CROWLEY: It's the kind of president he wants to be. So we'll see.

MALVEAUX: OK. Candy, thank you so much. It was an excellent piece.

(NEWSBREAK)

MALVEAUX: Well, ,Rush Limbaugh was hospitalized in Hawaii. We'll have the latest on the popular conservative talk show host's condition.

(COMMERCIAL BREAK)

MALVEAUX: The Queen's Medical Center in Honolulu says that Rush Limbaugh is resting comfortably after being admitted for chest pains. In a statement, the hospital says the popular talk show host is in good spirits and appreciates the well-wishes of his fans and supporters.

But joining me for today's "Strategy Session" are Republican strategists Leslie Sanchez and CNN's political contributor, Hilary Rosen, managing partner for The Brunswick Group.

Thank you so much for joining us here in THE SITUATION ROOM. Happy New Year to both of you.

LESLIE SANCHEZ, REPUBLICAN STRATEGIST: Happy New Year.

MALVEAUX: Hi.

HILARY ROSEN, CNN POLITICAL CONTRIBUTOR: Happy New Year.

MALVEAUX: Obviously, we wish Rush Limbaugh the best of health. I want to go to something that our own CNN contributor, James Carville, had said about Rush Limbaugh. This was back in February.

He was describing the role that Limbaugh plays in the Republican Party. Take a listen.

(BEGIN VIDEO CLIP)

JAMES CARVILLE, CNN POLITICAL CONTRIBUTOR: They've submitted to him in the Congress. They quake at mighty Rush. And he's the one that's setting the Republican agenda. I don't care what Michael Steele says. He can go do anything he wants.

(END VIDEO CLIP)

MALVEAUX: Leslie, I want to start off with you because there has been a lot of discussion of his role this past year. He has been very actively involved in the political discussions, as well as we have heard from the RNC head, Michael Steele.

What kind of role do you think Rush Limbaugh is going to play in 2010?

SANCHEZ: Well, similar to the role that he played in the early '90s, especially during the Clinton administration. He was definitely a strong conservative voice. He rallied strong ideas and he gave people a sounding board to get engaged in local elections.

I think you're going to see the same kind of thing. It focuses attention on a solution, the counter-solution to a lot of the Democratic rhetoric. And don't forget, it was the Democratic operatives that were making him the straw man to punch out.

He influences voters, he gets them to the polls. But in terms of lining Republican strategy and policy, that's not the case.

MALVEAUX: What does he do, Hilary, for the Democratic Party?

ROSEN: Well, I think for us, he's the leader of the Republicans. Let's not forget, Rush Limbaugh was most famous this past year, as soon as the president was inaugurated, for saying that he hoped President Obama would fail.

Now, the country was in a financial crisis. Unemployment is going to an all-time high. And Rush Limbaugh wants the president to fail?

I just don't think Americans can take this guy seriously. I wish him well. I hope his health is better. But, you know, I'm really completely uninterested.

SANCHEZ: I think so much of that was misconstrued in terms of thinking that this was a voice speaking for the top of the Republican Party. Let's be very clear. There were Democratic operatives that made the decision to make Rush Limbaugh the head, the voice, because they knew that he was somebody that carried a lot of weight, and to marginalize him.

ROSEN: That's ridiculous.

SANCHEZ: To marginalize him.

(CROSSTALK) ROSEN: Republicans featured him at their political events.

SANCHEZ: We have a lot of Republican conservative voices within our tent. I think the big issue is he mobilizes folks through his radio program and gets them energized about races.

ROSEN: Rush Limbaugh, this year, has been, you know, the author of the "party of no." And that's what the Republicans have basically done all year, which is no.

While the Democrats are delivering on health care for all Americans, while they've extended unemployment insurance, while they are working on making this country energy secure, investing in education, Rush Limbaugh is leading the Republican Party to just say no. It's not what Americans want, and I actually think he's lost all of his credibility based on that.

SANCHEZ: Well, I would just say this -- I think it would be nice in that talking point if it were true. But the reality is that Republicans have tried to work with Democrats, come up with solutions that will work on everything from jobs efforts to...

(CROSSTALK)

SANCHEZ: And Rush Limbaugh is not part of those...

MALVEAUX: I want to turn the corner, if I may. But do either one of you find it funny that you've got the president, Rush Limbaugh and Speaker Pelosi all in Hawaii at the same time right now? It's pretty amazing, huh? All on vacation.

You think they might bump into each other?

ROSEN: When we think of what Nancy Pelosi has delivered for the country this year versus Rush Limbaugh, I hope she stays away from the hospital.

MALVEAUX: All right.

Well, let's turn the corner on popularity here.

This is the latest poll, CNN poll, Opinion Research Corporation poll. Favorability numbers here. Take a look here.

The most popular, most favorable opinion, that is Michelle Obama, the first lady, at 68 percent, followed by Hillary Clinton at 64 percent, Barack Obama at 58 percent, and Secretary Robert Gates at 52 percent.

Does it surprise you that we see the first lady taking the lead on this? It's been kind of an extraordinary turnaround when you consider covering her for the campaign, how negative some people's views were of her.

ROSEN: Well, you know -- and Leslie wrote a great book on women and politics that -- and I agree with her summary that often the standard is different. Look, Michelle Obama is the first lady, is supposed to be non- controversial. She is a standard-bearer for all Americans. She's focused on her family, she's focused on tradition, and she's focused on, you know, national service, helping military families. She's going to start focusing on health and wellness. You know, those are issues that everybody can agree on, so it's appropriate that she has that level of popularity.

I will contrast that to the president, who even though he has made some tough decisions and not made everybody happy, he isn't trying to win the popularity contest. He is still ending this year at a pretty high approval rating, and I think that's pretty much a testament to the leadership the people are looking for.

MALVEAUX: Leslie?

SANCHEZ: Quickly, Hilary, thank you for the plug for the book, and who is quoted in the book. I want to disclose that, very much so.

I appreciate the fact that the one wildcard here I do want to get to is Secretary of State Hillary Clinton, somebody who's been very impressive, been lauded by both Republicans and Democrats. She has come off more hawkish, she sounds very pro-American. She has shown herself to be an incredibly strong leader.

That's an impressive one that I think many of us should be looking to. And exactly what Hilary says. First ladies tend to be very popular by virtue of being who they are.

MALVEAUX: All right. Leslie, Hillary, thank you so much. Happy New Year to both of you.

SANCHEZ: Happy New Year.

ROSEN: Happy New Year. Thank you.

MALVEAUX: Well, he did hard time at Guantanamo Bay and a so-called terror rehab program after that. But did he head right back into the fold of al Qaeda anyway? It's another possible link to the attempted airline bombing.

Also ahead, a former congressman known for wild hair and even wilder remarks talks about his future after prison.

(COMMERCIAL BREAK)

MALVEAUX: We are getting word of a new statement from North Korea.

I want to bring in our foreign affairs correspondent, Jill Dougherty, with the details.

Obviously, the Obama administration has been trying to engage North Korea. What have we heard from that regime today?

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: Well, the statement comes up, basically, let's put an end to the hostile relationship between North Korea and the United States.

Now, we just contacted the State Department. They don't have any response at this point. But I think that it would be safe to say that they would say happy new year to you, too. Now do what you're supposed to do. And do what you're supposed to do means that you are supposed to end your nuclear program.

Things have been getting better. The North did meet with the special representative from the United States, went there, Stephen Bosworth, just about a month ago.

Things seemed to go quite well. But what the United States and the community, the six-party talks, as it's called, want them do is end the nuclear program. So that's the overriding thing.

And don't forget, we have another American now in North Korea, the religious believer who walked into North Korea. Remember the journalists who were there a while ago?

MALVEAUX: Right. OK.

Jill, thank you very much. We know that, obviously, the Obama administration is going to look at this with some suspicion because of the history of Kim Jong-il.

On the trail of the failed airline terror attack, that story, we are following leads to Guantanamo Bay and a so-called rehab program in Saudi Arabia.

And later, new details on Tiger Woods' meeting with police officers less than a week after the car crash that turned his world upside down.

(COMMERCIAL BREAK)

MALVEAUX: The president's plan to move terror suspects out of the prison camp at Guantanamo Bay is even more complicated right now. And some are arguing that it really is just too dangerous in the wake of that failed airline terror attack. There are a lot of questions about what happens to detainees once they are released and whether they end up going right back into the business of terror.

Our own Brian Todd, he's digging into that for us.

And Brian, we know, talking with senior administration officials, maybe they are going to have to slow down sending these -- releasing these detainees and sending them back to Yemen.

What do you know?

BRIAN TODD, CNN CORRESPONDENT: Well, Suzanne, U.S. officials say at least one man who was released from Guantanamo is being investigated for possible links to this airline plot. Not clear at the moment whether he was directly linked to the incident, but this is not only drawing attention to the release of prisoners from Guantanamo, but also to their treatment at another place where many of them go afterward.

(BEGIN VIDEOTAPE)

TODD (voice-over): Said Ali Shari, he did hard time at Guantanamo Bay. Released in 2007, he's now being looked at for possible links to the failed bombing attempt aboard Northwest Flight 253. That's according to U.S. officials who caution, Shari may not be linked directly to the Christmas Day incident. But he has touted himself as a leader of al Qaeda in the Arabian Peninsula, which has claimed responsibility for the airline attempt.

He's also been through the Mohammed bin Nayef Center for counseling and care. Named after Saudi Arabia's interior minister, it's a rehab center near Riyadh for captured militants who the Saudi government tries to turn around.

KEN BALLEN, TERROR FREE TOMORROW: They give them a full presentation in Islam. They give them art therapy. They give them psychological counseling. They give them money afterwards.

They help them find a wife. They help them find a job.

TODD: Ken Ballen of the research group Terror Free Tomorrow has spent weeks at the center and interviewed several inmates, including some who he says knew Said Ali Shari. To critics who say giving accused terrorists art therapy is a joke, Ballen and other experts respond...

GERGES: I would argue that on the whole, it has been relatively effective, relatively effective vis-a-vis the politically radicalized activist, if not vis-a-vis the hard-core former al Qaeda members.

TODD: It's those hard-core militants, experts say, who expose the weakness of this rehab program. It can't turn everyone, and apparently didn't turn Said Ali Shari.

(on camera): Did he con his way through the program?

BALLEN: He absolutely conned his way through the program. Here you see this is the religion class where people -- where the sheikh here is teaching them how to be better Muslims and what's a good understanding of Islam.

He sat through a classroom just like this and told them that he reformed himself. He told the American authorities that bin Laden was a trader to Islam.

All the while, he was conning everybody. He told others he remained steadfast for al Qaeda, and as soon as he got out he would join the jihad again against the United States.

(END VIDEOTAPE)

TODD: Said Ali Shari, according to Ballen and other experts, represents about 10 percent of the more than 100 former Guantanamo detainees who have gone through that rehab program and are believed to have returned to the battlefield. Now, that compares to overall recidivism figures for Guantanamo detainees released by the Pentagon this year. That report said about 14 percent of all detainees released from Guantanamo are believed to have engaged in terrorism activity afterwards -- Suzanne.

MALVEAUX: And, Brian, do we know if there are other countries that have similar rehabilitation programs?

TODD: Yemen, we know, has one. Experts tell us it's not nearly as comprehensive as the Saudi program. We're also told that Indonesia and Libya make individual efforts to -- to rehabilitate individual militants and they've had some success with that. As a matter of fact, Moammar Gadhafi's son is heavily involved in those -- in those efforts.

MALVEAUX: OK. Brian Todd.

Thank you so much, Brian.