Return to Transcripts main page

THE SITUATION ROOM

House Censures Charlie Rangel; Sarah Palin Off-Script

Aired December 2, 2010 - 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: Let's get the quick reaction from our Republican strategist Mary Matalin -- Mary.

MARY MATALIN, CNN POLITICAL CONTRIBUTOR: Well, it is hard to make a case that lawmakers should not be subjected to the same laws they make.

But I don't care what party it is. He is a human being. I'm just not a proponent of that public humiliation. He deserved it. He broke the law, but I think people in public service -- they need to find another way to deal with their ethical issues than. I don't -- I just -- I just don't like the public humiliation thing.

I don't care if it is a Republican or a Democrat or who it is. It is just -- it's "Lord of the Flies."

BLITZER: Mary Matalin and Donna Brazile, guys, thanks. Thanks very, very much.

(CROSSTALK)

BLITZER: And you are in THE SITUATION ROOM.

Happening now, it is like something out of a James Bond movie -- the Web site that's leaking U.S. secrets by the thousands now reportedly moving into a new high-tech mountain cave. We will take you inside.

Also, Sarah Palin's tightly controlled book tour goes off-script, and gives our reporter a chance to ask her the questions she didn't necessarily want to answer on this day.

And he is about to take over one of the most high-profile positions on television, getting ready to step into Larry King's suspenders. Piers Morgan making his CNN debut right here in THE SITUATION ROOM this hour.

We want to welcome our viewers in the United States and around the world, breaking news, political headlines and Jeanne Moos all straight ahead.

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

It is the whistle-blowing Web site that has rocked the U.S. government by leaking huge numbers of classified documents. We are talking about WikiLeaks.org. And now the arrest of the founder, Julian Assange, might be getting closer.

British police have asked Sweden for more information on Assange, who is wanted by the U.S. and believed to be hiding out in England somewhere. Assange is also wanted in Sweden on sex crimes allegations, which he calls a smear campaign.

WikiLeaks has already released hundreds of thousands of classified U.S. documents and there is tremendous concern about other secrets it might possess that have yet to be released.

(BEGIN VIDEOTAPE)

BLITZER: Joining us now here in THE SITUATION ROOM, Congressman Pete Hoekstra, Republican of Michigan. He's the ranking member of the House Intelligence Committee.

How do you stop WikiLeaks right now from releasing more information?

REP. PETE HOEKSTRA (R), MICHIGAN: I think it is next to impossible. I don't think there is a way to stop WikiLeaks, "The Guardian," "Der Spiegel," "The New York Times" from making anything more public.

BLITZER: So, if they are still sitting on tens of thousands of documents, there's no way the U.S. government can go in there, through some cyber-activity, and just stop the servers or anything else?

HOEKSTRA: I think we have got probably some great cyber-people, but from what we can tell, WikiLeaks has been pretty good at how they're protecting the data that they have, that if there is a cyber- attack, this stuff will be released somewhere else. It will get out.

BLITZER: You wrote a letter -- and we have a copy here -- to the secretary of state, Hillary Clinton, and the director of national intelligence, James Clapper, saying you want to know what is going on, and you are not getting access to information that "The New York Times" or Al-Jazeera or others have.

HOEKSTRA: Or 500,000 people in the military have.

Yes, we'd like to know what is in these documents. What is coming down the pike. What vulnerabilities are there? What security issues may arise?

BLITZER: Why won't they share this information?

HOEKSTRA: Because it's...

BLITZER: You're the ranking member of the Intelligence Committee.

HOEKSTRA: They are saying they won't share it because this is executive privilege. These are documents that are part of the discourse within the executive branch, so they will not provide it to us at this point. We are introducing a resolution on the floor of the House today demanding that the president make these documents available to us. If "The New York Times" and "Der Spiegel" has them, if WikiLeaks have them, why can't we see them?

BLITZER: Because it says here that only the secretary of state, Hillary Clinton, can give you access to this information.

Have you called her? Have you asked her?

HOEKSTRA: We have asked. I have not talked to her personally.

BLITZER: Maybe that would be a good idea.

HOEKSTRA: Maybe that would be a great idea, yes.

BLITZER: Because she might be sensitive, as a former legislator herself.

HOEKSTRA: Right. And I think -- and the thing on this is, Wolf, this is not a partisan issue. This is bipartisan.

I think the Democrats on the committee also want to know what is in these documents.

BLITZER: Are you as shocked as I am that only 60 percent of the Defense Department computers right now, according to the Defense Department have upgraded the software that would allow them to know that someone is downloading tens of thousands of copies of some sensitive information?

HOEKSTRA: I was shocked yesterday when we got briefed in the committee, both in terms of the sloppiness with which the original system was put together, the SIPRNet, where WikiLeaks got these documents from.

I was chocked in terms of the lack of response to date to fix this. And as you go -- you get to the next point, where you are at, is you are also then shocked, saying -- about all of the vulnerabilities throughout the Department of Defense, probably throughout the government, that are not protected.

BLITZER: So you are convinced this could still be going on. If there is another young private 1st class someplace who wants to download a lot of stuff, that is still possible?

HOEKSTRA: I think that is very, very possible.

I also think that when you provide 500,000 access points into a data system, I bet that there's 500,001 and 500,002 access points, one of which is the Russians and one of which is the Chinese.

BLITZER: But you want the left hand of the U.S. government to know what the right hand of the U.S. government knows, so that the FBI and the CIA, they can share information? That came out of 9/11. HOEKSTRA: Yes. But we are not arguing about the margins, where should the line precisely be drawn. We are talking about a huge database dump. Why would a private 1st class in Baghdad have to have access to the conversations that Petraeus has with the president of Yemen? That is absolutely crazy. They didn't do the basics.

BLITZER: So, what should the U.S. government be doing right now?

HOEKSTRA: They should put a full-court press on this, clean up the systems that they have in place.

Cyber is where the next war is going to take place, cyber-war. The Russians, the Chinese, the Israelis, there are a lot of people that are good at this. This says that the United States needs to get in high-gear to be able to compete and protect itself in this area.

BLITZER: Should anyone lose his or her job as a result of this leak?

HOEKSTRA: I think that there's probably a multitude of people who should.

BLITZER: Like who?

HOEKSTRA: The people who -- the person in State Department that said, we are going to give the database to the Defense Department, without ever asking or demanding to know who was going to have access to the database, the person within the Department of Defense that said, we are getting all this information. We're going to look at it,-- we're not going to look at it. We're just going to put it all out there, and then probably the person that Private 1st Class Manning worked for who said, sure, it is OK to go in there with your thumb drive and play Lady Gaga music.

BLITZER: This is the allegation against him.

HOEKSTRA: That is the allegation against him, yes.

BLITZER: But this has been going on, presumably, the sharing of information between the State Department and the Pentagon, long before the Obama administration took office.

HOEKSTRA: It's not a partisan issue. This system was created during the Bush administration. It affects both administrations.

You know, the infrastructure, the bureaucracy was sloppy when it was put together. And you are right. It goes back four, five years.

BLITZER: Peter King, the congressman from New York who is a member -- the ranking member of the House Homeland Security Committee -- he will next be the chairman of that committee -- he told me this week he believes WikiLeaks should be designated a foreign terrorist organization and the U.S. government should deal with it appropriately.

HOEKSTRA: As mad as I am with WikiLeaks, I don't think our legal framework allows us to designate them as a terrorist organization.

We ought to take care of what we can take care of. That's building better structures, building better systems, prosecuting those people that went into our systems. I don't think that our legal structure allows us to go after WikiLeaks. It doesn't allow us to go after "The New York Times."

And I'm not sure we should have the opportunity to go after "The New York Times." WikiLeaks may be kind of a quasi-organization. There's no transparency. We don't know who funds them. We don't know what their agenda is. WikiLeaks is kind of this gray area we don't know what to do with.

BLITZER: Congressman Hoekstra, thanks for coming in.

HOEKSTRA: Great. Thank you.

(END VIDEOTAPE)

BLITZER: We are going to have much more on Julian Assange and WikiLeaks, the entire issue, up later.

But there is some other important news we are following right now here in THE SITUATION ROOM, including a sharply polarized House that voted just a little while ago to extend Bush era tax cuts for families making less than $250,000 a year.

Ahead of the vote, the Republican leader in the House, John Boehner, he will become the next speaker, he slammed the Democrats. The man expected to be the next speaker did not mince any words.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER (R-OH), HOUSE MINORITY LEADER: Trying to catch my breath, so I don't refer to this -- this maneuver going on today as -- as chicken crap, all right?

(LAUGHTER)

BOEHNER: But this is nonsense.

(LAUGHTER)

BOEHNER: All right? We're -- the election was one month ago. We're 23 months from the next election. And the political games have already started, trying to set up the next election.

We have an honest conversation at the White House about the challenges that we face to get out of here and to take care of what the American people expect of us. And -- and to roll out this vote today, it really is just -- it's -- it's what you think I was going to say anyway.

(END VIDEO CLIP)

BLITZER: Let's bring in our senior congressional correspondent, Dana Bash. She has been watching it unfold all day up on Capitol Hill.

It passes the House, but I assume, Dana, it is not going anywhere else?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: It is not. This was a largely symbolic vote in the House.

House Democrats wanted to get on the record, Wolf, with their views and priorities, that this is the way to go on tax cuts. It is what President Obama campaigned on. It has virtually no chance of passing in the Senate.

Having said that, despite that, I am also told that Senate Democrats are likely to move forward on a similar vote for the same reason, just to get on record, either tomorrow or possibly Saturday. They might have actually a series of votes on issues like this having to do with Democratic priorities on tax cuts, extending those for $250,000 or less.

BLITZER: What are you hearing about a compromise that may or may not be in the works?

BASH: Wolf, I am told by several Democratic and Republican sources that they are getting close to a compromise that would extend all Bush era tax cuts for all income brackets for -- temporarily, probably for about two years.

What I am told is that what Democrats are trying to do is to get some things in return for this. What I am also told, and I think this is very interesting, by multiple Democratic sources, Wolf, is that the Democrats here on Capitol Hill are concerned that the president and the White House will not push hard enough for those.

One source actually said that they are worried that the president is going to cave on trying to get their priorities for them. Now, what are we talking about here?

Democrats have a long list, a wish list, if you will, of Republican concessions they want in exchange for agreeing to temporarily extend all tax cuts, things like unemployment benefits, making work pay tax credits, college tuition tax credits, things like that.

But, again, Democrats here I talk to here say that they are very, very worried that the president is not going to push hard enough for that. There really is -- I get a sense that there is a growing mistrust of the president and of the White House among congressional Democrats, starting on this issue -- Wolf.

BLITZER: All right, we will see what happens. These are critical, critical days.

Dana, thank you.

WikiLeaks moving its operation into a bunker inside a mountain. We are going to tell you what we know. We are going inside. And prison inmates stealing tens of millions of your tax dollars from behind bars. We are going to show you how they are doing it.

And Piers Morgan, he is making a debut on CNN this hour. We will talk about his upcoming show on CNN, what is it like to step into Larry King's suspenders.

(COMMERCIAL BREAK)

BLITZER: Let's get some more on the WikiLeaks.org Web site. It has released hundreds of thousands of classified U.S. documents. We are now learning that it may be operating from a very unlikely location -- get this -- a cave inside a Swedish mountain.

CNN's Brian Todd is here in THE SITUATION ROOM working the story for us.

What do we know, Brian?

BRIAN TODD, CNN CORRESPONDENT: Wolf, WikiLeaks founder Julian Assange may like this place because it plays into the image of the James Bond villain, or he may like it for purely practical reasons.

Either way, just like another fictional character, once his Web site found itself in so much trouble, it decided to go back to the Batcave. Or is it the Wikicave?

(BEGIN VIDEOTAPE)

TODD (voice-over): WikiLeaks has certainly made some military powers angry and from the looks of this place, you would think the Web site is bracing for a full-scale attack and not the Internet kind.

Welcome to White Mountain, a fortified data center in a Cold War era bunker near Stockholm, Sweden. This is the place which at one time hosted at least some of WikiLeaks' computer servers. And now that Amazon has dumped WikiLeaks from its servers, WikiLeaks has reportedly moved some of its files back here.

DEAN NELSON, CHAIRMAN, DATA CENTER PULSE: James Bond, watch out.

TODD: That is Dean Nelson, chairman and co-founder of a group called Data Center Pulse, an association of data center owners and operators.

(on camera): Dean Nelson was granted access to White Mountain last year and took a video tour. I have got him on Skype right now.

Dean, what do you think the benefit was for WikiLeaks to move its operations, its servers back into that bunker, if in fact it has done that?

NELSON: It is actually 30 meters under solid bedrock, and it has got a one-foot-thick solid bomb door. So, it's a pretty secure facility. That's probably one of the primary reasons. TODD (voice-over): The host for WikiLeaks' servers in this place is a company called Bahnhof. It opened White Mountain as a data center in 2008 and it hosts servers for other Web sites as well.

As he showed Nelson around, Jon Karlung, CEO Bahnhof, made no secret of his inspiration for this layout.

JON KARLUNG, CEO, BAHNHOF: These are science fiction, James Bond stuff (INAUDIBLE) from science fiction films.

TODD: Move over, Dr. No. This place boasts a futuristic room for its servers with dozens of electronic cabinets, a floating glass conference room above it, for backup power, two diesel engines from German submarines.

Experts say this kind of security does not prevent hackers from stealing data or protect Web sites from the kinds of denial of service attacks that have plagued WikiLeaks.

But Nelson says more and more Web sites are relying on places like bunkers, even and container ships, to store their servers.

NELSON: It is an innovative way to solve a data center problem, because as you get more computers and more data on the Internet, the density or basically the heat that is generated from those computers, you can use things like underground cooling to get rid of that heat.

(END VIDEOTAPE)

TODD: So, why would Jon Karlung, the CEO of Bahnhof, take WikiLeaks back in?

Well, in interviews, he's said he is a strong supporter of free speech under any circumstances and says he has resisted attempts by the Swedish government to allow them to monitor content from the Web sites he hosts -- Wolf.

BLITZER: But there could be a lot of political pressure on this company, just as there was on Amazon.

TODD: That is right. A spokeswoman for the Senate Homeland Security Committee told me that it is not out of the question that they're going to bring political pressure to bear on Bahnhof to kick WikiLeaks out, just as they did with Amazon.

Now, the committee chairman, we are told, Joe Lieberman, loves free speech just as much as anybody, but in his view lives have been put at risk here; they should kick WikiLeaks out, Bahnhof should.

Now, how much influence they are going to have over a company in Sweden, it's probably limited, but they are going to try.

BLITZER: We will see what happens. All right, Brian, thanks very much.

Sarah Palin's unscripted moment today. Her carefully orchestrated book tour takes a detour. You are going to find out if Sarah Palin answers what everyone wants to know: Is she running for president of the United States.

And a gruesome crime scene shocks police at a haunted hotel, but there is a surprising twist. We will explain right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

REP. CHARLES RANGEL (D), NEW YORK: But as I said two years ago, I have not and never and there's not any evidence that I did anything to enrich myself, that I have done anything corrupt or done anything to sell my office or to sell the Congress, anything that involved intent to deceive or to avoid my taxes or any disclosures.

(END VIDEO CLIP)

BLITZER: Charlie Rangel, the Democratic congressman from New York who has just been censured formally by his colleagues, by his fellow members of the House of Representatives.

Candy Crowley is here, our chief political correspondent, the host of "STATE OF THE UNION," which airs Sunday mornings.

A very sad day for a lot of folks who like Charlie Rangel, including a lot of Republicans over the years, had a good relationship with him. But overwhelmingly they voted to censure him. And you saw Nancy Pelosi, the speaker, have to read that resolution. It must have been very painful for her.

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: It was. And you could hear it and you could see it, as the speaker, who is close to Charlie Rangel, as you know, had to read that.

But you know what? This was a Democratic Party that came into power in the House saying, we are going to run the most ethically clean House ever, because part of what happened in '06 was that so many Republicans they felt were tainted by scandal.

So they almost had -- they had to do this at some level. Charlie Rangel was hoping until the end that it wouldn't be censure, that they would move it down. Peter King, who defended Charlie Rangel at least insofar as the punishment is concerned, said, if expulsion is the death penalty, then censure is life.

And I thought that really did tell you the seriousness of this and how sad it really is for a congressman who has served Harlem for decades, a decorated war hero from Korea. And this -- he obviously knows that in your first graph of whatever history writes about you, it is going to say that he was censured by the House.

BLITZER: Yes. There was an amendment earlier to reprimand him, which is not as serious a punishment as censure, but that amendment failed. And then overwhelmingly they voted to censure Charlie Rangel for these ethics violations, and then he was forced to stand there in the well as the Speaker, Nancy Pelosi, his longtime friend, had to read that resolution.

(CROSSTALK)

CROWLEY: Right.

And then he said pretty much what you saw in that clip, which was, listen, I just want the record to show I didn't do anything illegal. I never tried to help myself and do anything that would enrich me.

And that has been kind of his line all along, but he could not evade this. This was just -- it was -- there was too much there, too many charges there for Rangel, as blunt as he is by a lot of the people in the House and a lot of people in Washington, they just could not stand for it, having come into office promising a clean House.

BLITZER: The only silver lining, I suppose, for him is the other punishment would have been expulsion from the House of Representatives. And obviously that did not happen.

CROWLEY: And he was just reelected by folks who knew clearly what was charged against him, so he is still the congressman from New York.

BLITZER: Candy Crowley, our former congressional correspondent.

You spent a lot of time on the Hill.

CROWLEY: I did.

(LAUGHTER)

BLITZER: And you got to know Charlie Rangel quite well, as all of us did.

(CROSSTALK)

CROWLEY: Yes.

BLITZER: Thanks very much, Candy. We will see you Sunday morning 9:00 a.m. Eastern.

CROWLEY: OK.

BLITZER: Brand-new CNN host Piers Morgan is about to make his debut on this network. We are talking to him right here in THE SITUATION ROOM. He is not holding back on everything from the royal wedding to losing soccer's biggest prize to Russia and Qatar.

Plus, prisoners stealing your tax dollars -- yes, the shocking tale of crime from behind bars.

And a Sarah Palin moment to remember.

(BEGIN VIDEO CLIP)

QUESTION: Any chance you are closer to an announcement on running for president?

SARAH PALIN (R), FORMER ALASKA GOVERNOR: Am I doing interviews?

UNIDENTIFIED FEMALE: No, you're not.

(CROSSTALK)

PALIN: I thought I would get to talk to some nice people.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BLITZER: In January, Piers Morgan takes over Larry King's prime- time spot right here on CNN.

Straight ahead, he will be joining us for his first interview on CNN. He will be here in THE SITUATION ROOM, but, first, some background on CNN's newest host.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): He knows talent when he sees it -- well, usually.

PIERS MORGAN, CNN HOST: What are you going to sing tonight?

SUSAN BOYLE, SINGER: I'm going to sing "I Dreamed a Dream" from "Les Miserables."

(MUSIC)

(CHEERING AND APPLAUSE)

BLITZER: Morgan is known best in the U.S. as one of the judges who misjudged Susan Boyle before she opened up her mouth on "Britain's Got Talent."

He has also been on "America's Got Talent." He dresses for success.

MORGAN: Come back here.

(LAUGHTER)

BLITZER: Morgan was not afraid to look a little silly in his quest to win "The Celebrity Apprentice" in 2008.

DONALD TRUMP, CHAIRMAN & CEO, TRUMP HOTELS & CASINO RESORTS: Tonight, Piers, you are the celebrity apprentice.

(CHEERING AND APPLAUSE) BLITZER: He knows how to make news, with a long career in journalism in Britain, as a reporter, columnist, and editor at a variety of newspapers, where he won awards and sometimes stirred controversy.

He can bring on tears, as a veteran TV interviewer, encouraging public figures to spill surprising details and emotions. He famously got British Prime Minister Gordon Brown to open up about the death of his 10-day-old daughter.

(END VIDEOTAPE)

BLITZER: And Piers is joining us now to make his CNN debut.

Piers, welcome to CNN. Thanks very much for joining us.

MORGAN: Well, thank you, Wolf. Just to clarify, I don't think I looked silly. I was King Arthur in that.

BLITZER: You looked impressive. You looked royal, I must say.

MORGAN: Nothing silly about King Arthur.

BLITZER: Nothing silly at all. And I expect you'll be wearing that outfit sometimes on your new show, right?

MORGAN: Only if you come do the Doogie.

BLITZER: The Dougie. It's the Dougie

MORGAN: The Dougie, is it? I thought it was Doogie. Dougie, all right.

BLITZER: No. The Dougie, the Dougie. All right. Let's talk -- let's talk about the news first, because you're primarily a journalist and a highly respected one, as that. What do you make of Julian Assange and this whole WikiLeaks uproar that has developed over these months?

MORGAN: Well, I think for any journalist, it's a fascinating story, because I've been in -- in the newspaper game all -- most of my life. And I'm sort of torn, because part of me wants to think that this guy is putting out there information that ought to be made public, that he is bringing big countries and companies and corporations to account, and journalists at their heart believe in accountability.

Where I think that there is a difficulty is in the nature of the material he's putting out there, and the first tranche we saw last month where you had material about Iraq and Afghanistan I thought was really important, and there was an obvious clear public interest.

It's dangerous territory if they put too much of this gossipy material out there, because if the only intention then is to embarrass the relationship between diplomats in various countries, I don't think that really justifies what they're doing. So I think that they are a bit scattered yet (ph). And you know, to half the people out there, he's a -- he's a kind of cyberspace freedom fighter. To the other half, he's a cyberspace terrorist.

BLITZER: So if you were still editing a major newspaper, would you do as editor what "The New York Times," "Der Spiegel," "The Guardian" have done and cooperate with WikiLeaks, or not?

MORGAN: Well, yes, but only in the ways that they've been doing it, which is they've been very judicious in what they have selected to actually publish. And that's what you have to do. They are being, in my view, quite responsible whereas I think WikiLeaks putting everything out there ought to be more judicious in their editing.

You know, in the end, I believe in freedom of speech, and I think it's hypocritical of journalists, really, to queue up and say that this guy is doing something heinous. He's putting out the information, which is in, to a certain degree, the public domain anyway. I just think it's dangerous when it's too gossipy, because then it's not really, I don't think, important enough to justify what they're doing.

BLITZER: Let's talk about the royal wedding that's coming up at the end of April. I know that you're looking forward it to like all of us are.

Kate Middleton, the bride to be, is she ready for what is about to happen to her?

MORGAN: I think she is. I think in that interview she gave with Prince William was quite remarkable for the confidence and poise that she showed. I mean, I knew Princess Diana very well, and she was very, very young when she had to go through this. She was about six or seven years younger than Kate.

And I think Kate has learned from what happened to Diana, and I think Britain as a country has learned that you've got to be careful with how you treat these very young women when you suddenly propel them into the stratosphere of being a royal superstar. And make no mistake about it: these two now, William and Kate are probably the biggest celebrities on the planet, and their wedding will be the biggest celebrity event of the year.

So it's huge pressure, but I like the way she handled it. I think she's a very engaging, smart cookie, as we would say back home. And I think that William has chosen his bride carefully and diligently. He's not rushed into this. And I think his mom would be pretty proud of him actually.

BLITZER: I totally agree. I wish both of them only, only happiness as they go forward. It's not going to be easy for either of them, but let's hope that they -- they have only, only success and happiness.

A quick point on FIFA and this decision today not to give the United Kingdom or the United States the World Cup championship games in 2018 and 2022 but to Russia and to Qatar instead. I know I was deeply disappointed. I assume you were, as well.

MORGAN: Well, look, I mean, England and America both lost out. I think we all feel pretty miffed about it.

I think, as an English football fan, we are entitled to feel more aggrieved than you guys, because we invented this game. And we could not have put a bigger bid together than we did, and by common consent, our bid is probably the strongest.

You can't help but think that actually the scrutiny that the British media have been putting on FIFA, which is the authority that governs international football, in exposing quite serious corruption has probably, I'm afraid, cost us our chances of hosting the World Cup.

And that, again, is an interesting situation where the BBC, a very respected news organization, ran a panorama special, current affairs show special, exposing this corruption three days ago. And they are arguing may have tipped the balance against us.

But I would defend the BBC's right to do what they did, you know. If FIFA is corrupt, then it should be exposed. And I think that this situation today is going to rumble on for a very long time, because the English football fans will not take this quietly, I can tell you that.

BLITZER: I know, as someone who was in South Africa for the World Cup at the end of June, I know there was a lot of suspicions about FIFA to begin with, and those suspicions will only be intensified about corrupt -- corruptness.

MORGAN: The only good thing -- the only good thing, Wolf, is that we're actually playing so badly at the moment, that it might be a blessing in disguise.

BLITZER: But by 2018, you don't know how well you're going to be.

MORGAN: No, it's not looking good even at the grass roots level, so it may be just the kick up the backside we need, to be honest.

BLITZER: Maybe it's a blessing in disguise -- who knows? -- for the United Kingdom.

All right. Let's talk about your new show. Filling Larry King's suspenders. Piers, as you know, that's not going to be easy. I've seen a lot of the promos, the promotion for your new show, and at one point you say you want the show to be, quote, "a little dangerous."

MORGAN: Yes.

BLITZER: Tell me why. What does that mean?

MORGAN: Well, look, following Larry is a bit like following Frank Sinatra at the Sands in Vegas. I mean, you know, I'm not going to win this one. He is the great legendary television interviewer. But I can do things my way.

And by dangerous, I kind of mean that I like the interviews to be theatrical. I like it to be a theater where two protagonists come in, and we have fun. And it's probing and it's challenging, a little bit edgy perhaps and occasionally dangerous, where no one is quite sure what's going to happen next. That to me is what a great interview is all about. Some of Larry's most memorable moments, I would say, encompassed extreme danger.

For instance, when Marlon Brando kissed him live on air, that's dangerous.

BLITZER: It's dangerous, indeed. For 25 years, Larry King did obviously a fabulous job. I'm going to go out to L.A. and celebrate his final show on December 16, and we wish only, only the best.

MORGAN: Absolutely. He's one of my all-time heroes. I had lunch with Sir David Frost last week, of "Frost/Nixon" fame. And we were both talking about how brilliant Larry has been over the years. I mean, really unparalleled in terms of the breadth of the guests that he's had and the way that he's done what he does. I mean, it's the ultimate interview format where Larry just let them talk and got amazing stuff out of them. And he's one of my personal heroes.

BLITZER: Mine, too. And I just want to point out, he's going to do four specials a year on CNN...

MORGAN: Yes.

BLITZER: ... for many years to come, so we'll celebrate with Larry, as well.

MORGAN: Definitely.

BLITZER: Piers, we hope you'll be a frequent visitor here in THE SITUATION ROOM. Can we get that commitment from you right now?

MORGAN: Wolf, I am yours whenever you want me, but I do want to see this -- this Dougie.

BLITZER: You're not going to judge it. You're not going to buzz it. Enough people have already judged it, so...

MORGAN: Well, for what it's worth, I...

(CROSSTALK)

BLITZER: I can tell you, Piers, right now, I have no talent.

MORGAN: I don't agree with you. I've actually seen a lot worse than that on "America's Got Talent." I thought you showed promise, Wolf. Don't give it up. You're through to the next round.

BLITZER: Thank you. Thanks very much. Good luck with the new show. We're looking forward to it. Thanks very much. Piers Morgan, he's going to start in January right here on CNN. Do you know where your tax dollars are going? Look at this, a massive scam unfolding from behind prison bars, but can the IRS do anything at all about it?

And Sarah Palin, will she or won't she run for president? CNN catches -- catches up with the reality star and the author in an unguarded moment.

(COMMERCIAL BREAK)

BLITZER: They're already behind bars, convicted of crimes, but now thousands of inmates may be stealing millions and millions of all of our hard-earned tax dollars.

CNN's Mary Snow has this report.

(BEGIN VIDEOTAPE)

MARY SNOW, CNN CORRESPONDENT (voice-over): For tens of thousands of inmates, filing phony tax returns is proving to be an easy way to collect money. The treasury inspector general for tax administration finds in 2009 nearly 49,000 inmates filed false claims for $130 million, and Uncle Sam paid out $112 million of it.

J. RUSSELL GEORGE, TREASURY INSPECTOR GENERAL: It's because the IRS did not make a concerted effort to screen the tax returns received from prisoners. The IRS has the ability to identify tax returns that come from people who are incarcerated, and they just made a decision not to pursue this.

SNOW: Jay Russell George calls it troubling, since he testified about the problem five years ago, and he says that the problem has gotten worse.

Florida, Georgia, and California had the highest cases of fraudulent claims by prisoners, and some were well documented. This year, CNN's John Zarrella reported on a tax fraud scheme discovered four years ago in Monroe County, Florida, where inmates filed for more than $1 million in tax refunds involving half the jail population.

CAPT. PENNY PHELPS, MONROE COUNTY DETENTION CENTER: But what they would do is go to other inmates and suggest to an inmate, "I can get you $4,500 in a tax return. It will cost you $500."

SNOW: And that was a scheme uncovered in 2006. So with red flags raised, why hasn't the IRS been able to stop checks going out for faulty claims from prisoners? We put that question to a spokesman for the IRS.

FRANK KEITH, IRS SPOKESMAN: On the surface, the return that we get has no indication that, in fact, the person is in prison, and so we have to rely on information that we get voluntarily from state and federal prison officials. And this is a constantly changing population in the prisons, and so it's very difficult for us to have timely, accurate, up-to-date information on the prison population. SNOW: IRS spokesman Frank Keith says the IRS is working with prison officials to improve its data to screen returns. And he says, with $300 billion being paid out in refunds, there will always be people trying to game the system.

(END VIDEOTAPE)

SNOW: And today's report from the treasury inspector general for tax inspection does credit the IRS with making progress in stopping fraudulent refunds from being paid. It cites a 50 percent increase in detection from the previous year, but says obviously, it needs to do more -- Wolf.

BLITZER: All right, Mary. Thanks very much for that report.

Sarah Palin wasn't planning on taking reporters' questions, but her book tour went off script a little bit. CNN's Jim Acosta got in some good questions.

(BEGIN VIDEO CLIP)

JIM ACOSTA, CNN CORRESPONDENT: Any comment on what Governor Romney said last night on "The Tonight Show."

SARAH PALIN, FORMER GOVERNOR OF ALASKA: What did Governor Romney say?

ACOSTA: He said that he can't imagine he would quit as governor of Massachusetts. Just curious what you thought.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BLITZER: Sarah Palin is now back in Iowa, just over 13 months before the state's closely-watched caucuses. She is there promoting her new book and generally not talking to reporters about a possible presidential run, but CNN's Jim Acosta managed to ask her about that and more, only because her tightly-controlled appearances went a little bit off of -- off script. Jim is joining us now live.

Jim, what happened?

ACOSTA: Well, Wolf, as you mentioned, this was a tightly- controlled event. People were lining up outside this Wal-Mart here in Spirit Lake, Iowa, as early as 3 a.m. in the morning, if you can believe that. They winded their way through the Wal-Mart in a pretty long line to get a chance to greet the former governor.

And they brought the media in three by three, if you can believe this, and led us into a room where Sarah Palin was signing those books. And they had the music playing very loudly in there, presumably to discourage us from asking questions, and then at the end of our time with the governor, observing her during this book signing, we decided to ask her the question that's often asked of presidential contenders in Iowa: when are you going to make your announcement on running for president?

(BEGIN VIDEOTAPE)

ACOSTA: Governor -- Governor Palin, any time -- any chance you're closer to an announcement on running for president?

PALIN: Am I being interviewed?

UNIDENTIFIED FEMALE: No, you're not.

PALIN: Can't I talk to the nice people? What do you think? Where is the good enthusiasm?

ACOSTA: Well, we're nice, too.

PALIN: Not always. But maybe you are.

ACOSTA: Are you any closer?

PALIN: No, not any closer yet. No.

ACOSTA: Any comment on what Governor Romney said last night on "The Tonight Show?"

UNIDENTIFIED FEMALE: No, no.

PALIN: What did he say?

ACOSTA: He said that he can't imagine he would quit as governor of Massachusetts. I'm just curious what you thought.

PALIN: He probably had some different conditions.

(END VIDEOTAPE)

ACOSTA: And at the very end of that clip there, which we didn't see. She asked us if we had turned off the music, and we responded that we had not.

But as you -- as you know, Wolf, and as you mentioned, the Iowa caucuses are well over a year from now, so she has plenty of time to make this decision. The caucus is set for February 6. But we talked to the local mayor here in Spirit Lake, and apparently, this book signing is having a positive effect. He was telling us earlier today, Wolf, that he's thinking about endorsing her, should she jump in and announce that she's running for president.

BLITZER: Who stuck his or her hand in front of that camera lenses at the end of that little clip?

TODD: That was one of her handlers, and at that moment we were asked to leave. We were all given ten minutes to go in there and observe the governor, and that was roughly at end of the ten minutes, but asking them a question, obviously, did not go over well with her handlers at that point. They asked us to leave the event. We were allowed to stay in the store but just not inside the event where she was signing those books.

BLITZER: Yes, they should not put their hands in front of a camera lens like that.

How is this whole attitude that she has? I've covered a lot of campaigns in Iowa over the years. I know the Iowa press, they like to be able to go out and ask potential presidential candidates questions. They're not used to all of these restrictions. How is this -- how is this going over where you are in Iowa right now?

ACOSTA: Well, Wolf, Sarah Palin is running a very unconventional campaign in Iowa, if you want to call it a campaign. This book- signing tour obviously is strategic, because she's got two stops going through this state.

But last week at her other book signing down in Des Moines, she was asked a couple of questions in an impromptu fashion from some local reporters. She took time to answer those questions, but really in the same fashion that she did here today, sort of a yes or no. You know, very short, abrupt responses.

But you know, if you ask folks in Iowa, they'd really like to see their candidates in the flesh and put them through the paces. And it's going to be interesting to watch Sarah Palin over these coming months to see whether or not she'll evolve to the way they like to do things here in Iowa.

BLITZER: Yes, because Iowa is, you know, they're first in the nation as far as a political contest is concerned.

TODD: That's right.

BLITZER: And the straw poll, the Republican presidential straw poll IS GOING TO happen in only a few months, in August. And most of the candidates, I assume, will be there for that. So they're going to have to make some quick decisions.

In the meantime she's selling lots and lots of books, making millions of dollars within a matter of a few weeks alone.

All right. Thanks very much for that, Jim Acosta.

A camera implanted inside a man's head for the sake of art. Stand by.

(COMMERCIAL BREAK)

BLITZER: Another major drug recall. Fredricka Whitfield is monitoring that and the other top stories in THE SITUATION ROOM right now.

Fred, what's going on?

FREDRICKA WHITFIELD, CNN ANCHOR: Hello, again, Wolf.

Hello everyone. Johnson & Johnson is recalling 12 million bottles of Mylanta due to alcohol that's not listed on the label. The drug maker says it's unlikely that any of these products cause alcohol absorption. In the past couple years, they've always recalled units of adult Tylenol, Motrin and Benadryl, due to a bad smell.

And a new study reveals an unusual effect of mercury pollution on wildlife. It can make male birds gay. Researchers discovered male wetlands birds in Florida partnered with other male birds more often when exposed to mercury. The study doesn't give a definitive reason why the chemical would change a bird's sexual orientation, but mercury is known to disrupt hormones and depress testosterone levels.

And talk about a Hollywood ending. A fireman responding to a hotel blaze near Pittsburgh made a shocking discovery: a room splattered with blood, liquor bottles, and even a piece of scalp. Detectives put in eight hours of overtime before realizing the whole thing was a 2-year-old horror movie set.

The George Washington Hotel, which has a reputation for being haunted, appeared in a scene of the film "New Terminal Hotel."

I don't remember that one, Wolf. Do you?

BLITZER: I missed that one, but I'm sure a lot of people saw it. Thanks very much.

Here's something. I want you to stand by and watch this. Ever wish you had eyes in the back of your head? A New York photography professor has a "Most Unusual" 360-degree view.

(COMMERCIAL BREAK)

BLITZER: A camera in a person's head? Here's CNN's Jeanne Moos.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): Heads up. We know that police are experimenting with wearing head cams.

UNIDENTIFIED FEMALE: (UNINTELLIGIBLE)

MOOS: We know researchers have resorted to critter cams on everything from armadillos to pigs. But would you be happier than a pig in mud having a camera attached to your head?

(on camera) Can I touch it?

WAFAA BILAL, PHOTOGRAPHY PROFESSOR, NEW YORK UNIVERSITY: Yes.

MOOS: This is what the camera gets fastened to.

(voice-over) New York University photography professor Wafaa Bilal had a titanium plate implanted a week or so ago. He put the procedure to music. It was done by someone who normally does body piercings. And yes... BILAL: It did hurt a lot.

MOOS: They used a local anesthetic. A small surveillance camera connects to the base magnetically. Because his head was still sore, Bilal only wanted to wear the camera for a moment to demonstrate.

BILAL: Now you have to take it off.

MOOS (on camera): OK. Oh, am I hurting you?

(voice-over) Bilal is one of 23 artists whose work will be featured at the brand-new Arab Museum of Modern Art in Qatar.

BILAL: One image every minute for an entire year.

MOOS: The images will be transmitted via a laptop and streamed live at the museum.

(on camera) So you'll have this wire coming down.

(voice-over) But why in the back of the head?

(on camera) OK. Go ahead and cue the "eyes in the back of your head" jokes. This is an actual helmet worn by a CNN cameraman in war zones.

(voice-over) Bilal is an Iraqi who fled Saddam Hussein, so artistically...

BILAL: What I'm interested, I'm interested in the things I leave behind.

MOOS: He realizes he'll get lots of mundane shots.

(on camera) You're going to get a lot of nothing.

BILAL: A lot of nothing.

MOOS (voice-over): Hey, who are you calling nothing? His head cam will be taking shots in the dark while sleeping.

(on camera) Having sex, that kind of thing, you would have it on.

BILAL: It's on.

MOOS: Taking a shower?

BILAL: It's on.

MOOS (voice-over): It's waterproof.

To protect the privacy of his students while on NYU property...

(on camera) You're just going to put a lens cap on your head?

BILAL: Exactly. MOOS (voice-over): Wait until the airport screeners get a load of him.

(on camera) We could literally plug into you and send out a live shot?

BILAL: Absolutely.

MOOS (voice-over): His project is called "The Third Eye," but as we learned when the planet of planet Space Ball got beamed in with his head on backwards, it's not always great to have eyes in the back of your head.

MEL BROOKS, DIRECTOR/ACTOR: Why didn't someone tell me my ass was so big?

MOOS: Jeanne Moos, CNN...

(on camera) It's like a bald spot, only not.

(voice-over) ... New York.

(END VIDEOTAPE)

BLITZER: That's it for me. I'm Wolf Blitzer in THE SITUATION ROOM.

"JOHN KING USA" starts right now.