Transcripts For CNNW The Situation Room 20120716

i'm wolf blitzer. you're in "the situation room." first it's today's new round of attack in the presidential race campaign and the much winning battleground state of ohio this afternoon. president obama slammed the tax proposals, warninging they'll send thousands of u.s. jobs overs overs overseas. > the romney campaign is accusing them of another dishonest attack. why did the president level this new corporate tax attack on romney in ohio? >> reporter: well, wolf, the president is trying to draw sharp contrast between his campaign and romney's campaign, trying to suggest romney is looking out for the people at the the very top. specifically in ohio the people are making the argument that romney supports are eliminating tax. this will lead to job creations overseas. and that will come at the expense of jobs in ohio. >> we have not found any serious economic studies that the economic plan would actually create jobs until today. i've got to be honest. today we found out -- there's a new study out by nonpartisan economists that says romney's economic plan would create 800,000 jobs. there's only one problem. the jobs wouldn't be in america. >> now, wolf, if you listen carefully to what the president just said, he said this u report came from a nonpartisan economists. records show that economist, kimberly claussen has donated almost $500 to the president's campaign this campaign cycle and has given thousands of dollars to democrats and and democratic causes. so that calls into question what the president referred to as a nonpartisan report. and one other point, the same thing that the president is pointing attacking mitt romney and his own economic advise advisers. >> looks like sloppy staff work for the obama campaign. it doesn't appear the bain attack is going away at all. do they think this line of attack is sticking? >> they certainly do. they're not apologizing at all for coming down very hard on romney on bain capital. they think it is sticking in ohio and other battle ground states. some places that voters are starting to place very close attention to, romney's business experience. they're asking questions in light of the attacks. they believe it is working. it is a legitimate issue to bring up and ask questions about. and they'll continue doing it. romney is dead set against releasing more than twoears worth of returns, insisting he won't give democrats more material to quote. make a mountain out of and distort. what are you picking snup. >> mitt romney is sticking to his guns on his tax returns despite growing pressure to release more of his records. >> well, first of all we've complied with the law. >> what mitt romney made clear to cnn last friday is he will only make public his tax return. >> those are the two years that people are going to have. >> -- did not sit well with conservatives on the sunday show. >> he should release the tax returns tomorrow. it's crazy. take the hit for a day or two. >> the costs of not releasing the returns are clear. therefore he wants to calculate there are higher costs. >> standing firm, romney told fox there's some precedent on his side. >> john mccain ran for president and released two years of tax returns. john kerry ran for president. his wife who has hundreds of millions of dollars never released her tax returns. somehow this wasn't an issue. >> but the republican complaints are music to the ears for the obama campaign, which fired off this tv ad, featuring romney singing "america the beautiful" to some of his foreign investments. >> the romney campaign cued up the own music video. the president belting out a love song to companies that got energy loans in exchange for campaign contributions. romney camp maintains they left bain in february of 1999, despite federal documents showing he was still ceo in the years that followed. the obama campaign says bain was outsourcing jobs. >> he took a leave of absence and ended up not going back at all and retired retroactively as a result. >> romney could change the narrative by announcing his vice presidential running mate this week. his campai another vp said the hill met with romney's vetting team. then there's ohio's rob portman, attacking the parking light just before mr. obama's event in the same state. >> he's making a big election about small things. he's attacking mitt romney on a personal basis because he doesn't want to talk about his record. >> a top romney aid says no decision has been made. he says it could happen any time between now and the convection, but it will only happen after a decision has been made and no decision has been made. there's a lot of speculation out there on twitter. he reported he could maintain the vice presidential running mate this week. his campaign schedule over the next couple o dafs takes him into pennsylvania and ohio. he's running out of times before the overseas trip next week to make the decision. >> he has to do it before the olympic games. he's going to be gone next week and not going to do it then. >> that's right. he could reach a narrative by naming the vice presidential running mate this week and getting everything off of bain. the olympics could change the narrative also. it may be in his best interest to do it. wednesday he will be in toledo. he named sarah palin ohio, ohio, ohio. >> thank you for your time. >> thank you. let's look deeper into the romney campaign's latest accusations of political cronyism against the president. some specific examples of the romney campaign and what it's highlighting. what are you finding out. >> well, wolf, the romney campaign has tossed a new grenade on the grill. that web ad featuring president obama singing while ose ominous words appear. the implication is that obama donors are getting government contracts. while democrats and republican alike often reward top campaign backers with access and with jobs, the sharpest accessiccusas people who give barack obama money get government business. what's worse, they exclaim one of the companies used your tax dollars to ship jobs overseas. first of all they point to this fellow who a big democratic fund-raiser. there he is right there sitting next to the president. let's follow the trail, according to the romney people. they say that big donor there is appointed to a white house council on jobs. the private company invest in the electric car company called fiscar automote i. they are approved for a half billion dollar loan from the automotive industry. and fisker ends up having the first cars made in finland. >> what else have you found out when you dig for more details. >> well, what we find, wolf, is a totally different story. fisker tells us they got involved in a government loan program. it was back during the bush administration fisker raised about a billion dollars from investors. yeah, he's a wealthy guy. just one of the guys out there. furthermore, fisker, we asked, has your company ever been aware of any political favors. their answer, absolutely not. as for the fabulous looking cars that they're making and the jobs in finland, well both fisker and the department of energy confirmed the contract network was struck well kbfr the loan was granted and an audit found no max money went overseas but instead it went to fisker. in the end, although there is evidence with every president that, in fact, they do have time where they spend rewarding the donors of jobs and positions, that happened on both sides. that is flat out false. >> thank you very much. continue this kind of work for us. there's important medical news coming into "the situation room" right now that we'll tell you more about. first, government-approved medication to reduce the risk of the virus that causes aids. also, a pssible comeback for a former u.s. congressman who quit last year over a lewd photo scandal. anthony weiner, you see him there. plus, who pulled the plug on paul mccartney and bruce springsteen? d's life. purina one discovered that by 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silhouette briefs for charity to prove how great the fit is even under a fantastic dress. e best protection now looks, fits and feels just like underwear. we invite you to get a free sample and try one on too. let's get right to jack cafferty for the cafferty file. jack? >> wolf, mitt romney might have a shot that might work in his favor. speculation has been rampant for several days now that former secretary of state condoleezza rice might be on romney's short list for vice president. unlike sarah palin, who all but destroyed john mccain's chances, rice might be just what the doctor ordered for romney. she's smart. she has foreign policy credentials unquestioned. and she would certainly make the ration a lot more interesting than it is now. romney is getting his nose bloodied by the president who insists on pounding on bain capital and romney's tax returns. romney has been unable to make the race about the economy, which should make president obama unelectable. romney needs a spark. rice would immediately tap into african-americans and women, two areas where president obama all has substantial leads. whether or not she would agree to been o the ticket remains a question. she said in the past she's uninterested. anyway, you have to love the idea of condoleezza rice. she would have immediately energized the whole deal wchlt the start of the summer olympics fast approaching, the president and mitt romney are going to be hard pressed to get media coverage. condoleezza rice would help in that department, too. here's the question. how much would condoleezza rice help as vp for the romney campaign? wolf. >> all right, jack. thank you. meanwhile, an important medical breakthrough today in the fight against aids. the u.s. government has just approved the first medication to reduce people's risk of become infected with a virus that causes aids. elizabeth. this drug, is it already on the market? what's going on here? >> reporter: wolf, it's already on the market. it's just on the market now to treat people who already have hiv. the big news here is now people who don't have hiv, who are healthy right now can take it to prevent getting infected. so it's really meant for high ri groups like gay men. >> some groups lobbied against the new drug. why is that? >> it's because the drug does have some serious side effects. some people have bone thinning. some people develop kidney problems while they're on the drug. and so the concern for some is why tell a healthy person to take a drug that can hurt them, when, for example, in the case of gay men you can tell them to wear condoms and that would decrease their risk of getting hiv. >> how much does this the drug cost? >> you know, wolf. it is expensive. it's like $1200 a month. it will be interesting to see if insurance companies are going to pay that much for is not 100%. it decreases risk by 62%. and also you're giving it to healthy people to make sure they don't get infected. >> we'll have lot more on our 6:00 p.m. eastern hour. he will be joining us live in the 6:00 p.m. eastern hour. thank you. the secretary of state hillary clinton took some time out during her stop in israel today to talk with cnn during our 5:00 p.m. eastern hour we're going to ask her about the reception she received in egypt. there was a crowd there in alexandria throwing tomatoes and shoes at her motorcade. te interview with hillary clinton is coming up at the top of the next hour. coming up next, the u.s. navy opens fire on a boat in the persian gulf. thank you so much, i appreciate it, i'll be right back. they didn't take a dime. how much in fees does your bank take to watch your money ? if your bank takes more money than a stranger, you need an ally. ally bank. no nonsense. just people sense. you'll inevitably find yourself on a desolate highway in your jeep grand cherokee. and when you do, you'll be grateful for the adaptive cruise control that automatically adjusts your speed when approaching slower traffic. and for the blind spot monitoring that helps remind you that the highway might not be as desolate... ...as you thought. ♪ like in a special ops mission? you'd spot movement, gather intelligence with minimal collateral damage. but rather than neutralizing enemies in their sleep, you'd be targeting stocks to trade. well, that's what trade architect's heat maps do. they make you a trading assassin. trade architect. td ameritrade's empowering web-based trading platform. trade commission-free for 60 days, and we'll throw in up to $600 when you open an account. lisa sylvester i monitoring that development and other top stories in "the situation room" right now. what's the latest, lisa? >> hi, wolf. u.s. officials say it appears one person was killed and three others badly wounded when a u.s. fuel resupply ship fired on a small boat that came too close in the persian gulf. officials tell cnn tit shot at the smaller boat. they say the smaller boat failed to respond to repeated warnings from the navy ship before it fired several 50 caliber rounds. that incident is urnds investigation. and four days of searching. almost 1,000 volunteers, countless man hours and still no sign of two young cousins in iowa. officials are still looking, but they have suspended the effort to find 8-year-old elizabeth collins and 10-year-old lar ra cook. the girls were last seen on friday righting their bicycles. the chief says it's like they vanished. and no more msnbc.com. microsoft and msnbc are rebranding itself. msnbcnews.com. nn. it's all confusing when you consider the cable channel msnbc remains the name, even though microsoft ranks were there long ago. and how do you make 65,000 fans angry at a dream rock festival pairing bruce springsteen with paul mccartney. they were playing together for the finale of the three-hour show. springsteen was in the zone. and in the middle of twist and shout, oh, no. the power was cut. yes. the power was cut. london's local council said it was past curfew and they were sticking to it. i'm sure, wolf, those fan ls must have been pretty unhappy. >> they were just beginning to rock 'n' roll. that's sick. occasionally you have to break the rules a little bit especially if sir paul mccartney and springsteen are performing together. >> that's a concert i'm sure you would love to see, right? >> i would love to. maybe cue up the music for the viewers and pay a little bit of that if we have time. >> it's one of those great moments. look at that. to classics. ♪ >> all right. good for them. at least they got to be there. better than nothing. but it could have gone on. thanks, lisa. mitt romney wants an apology from the obama campaign after comments suggesting potentially he committed a felon in connection with his partnership from bain capital. is he likely to get an apology? i'll ask stephanie cutter. she's standing by live. and next, technology may be taking the risk out of potentially dangerous situations for soldiers and s.w.a.t. teams. we're 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>> go ahead and explain, stephanie. why did you bring up the whole issue of a felony? >> well, wolf, i'll repeat what i said the other day. either mitt romney was attesting to something that is true to the sec, that he was the ceo, chairman, president and sole owner of bain capital. or he's misrepresenting his time at bain capital to the american people. because both of those things that can't be true. if you're signing documents that aren't true, it's a a felony. we're not saying he's committing a crime. we're saying he's misrepresenting his time at bain to the american people. look at all the news that came out over the weekend, not from us, but indent news sources. that he was getting a salary at a time he was supposed to have a leave of absence. i don't know about you, but when i take a leave of absence from an organization, my paycheck is cut off. then all the sudden over the weekend this word retroactive comes up. that he retroactively retired from bain. so it took three years to figure out he retired. that's just not how the real world works. you know, he's used bain capital as his calling card in this presidential election. to be in the oval office and to fix the economy. it's amazing how quickly he's running away from it. you should stand up and say, i take responsibility. >> you're not suggesting he potentially may have committed a crime. no. absolutely not. i'm just saying that his explanation doesn't add up. that you were you were the chairman, ceo, sole owner of a company, as you're signing your own john hancock to the sec, or you had nothing to do with it. both those things can't be true. and day by day, there's more evidence he was actually involved in bain capital. if you're getting a salary you're pretty involved. >> he says he was working full time getting the winter olympic games in salt lake city off the ground. for all practical purposes he gave up day-to-day responsibilities he had at bain capital. he really had no direct role in any of those decisions after he left in february of 1999. >> yeah, i'm familiar with his talking points. but in what world, wolf, that if you're the chairman, ceo, president, sole owner of a company are you not responsible, even if you're not involved to the day-to-day management. and he was chairman of the board. did he attend board meetings, by conference call, call-in. he said he did go to massachusetts during that time to participate in board meetings and go . was it at bain? whether he was doing the day-to-day management of not. he was the head of the firm. he was the chairman, ceo, president, and as such, if you're responsible, stand up and take responsibility for the decisions being made. >> i want to be surprise on this. >> the use of the word felony in the initial statement, no regret? >> no, absolutely not. it's a fact. if you're signing federal documents knowing them to be false, it's a felon. anyone who works in the federal government knows that. anybody involved in the business world knows that. what we're actually suggesting is he was the head of the firm when he was telling the sec was true. and he's misrepresenting his record with bain to the american people. that's what we're saying here. zblf stephanie cutter joining us from chicago, appreciate it very much. >> thank you, wolf. the republican national convention is coming up in six week. here's a question. will sah palin be there? what about her star power? will it help energize's romney's push to the white house. and fiat's latest convenience innovation catching a lot of flak. there was an easi, less-expensive option than using a traditional lawyer? 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let's get right to our strategy session. the democratic strategist donna brae zil. analyst for rick santorum and michele bachmann. you heard my interview with stephanie cutter, the deputy campaign manager for the obama campaign. not backing away tr the use of the word felony in the conference call from last thursday. no need to apologize. it's mitt romney who needs to do explaining. >> it's unnecessary. it's wrong, it's untruthful. the bain attacks in the first place. we have democrat after democrat who says she's crossed the line. and to use a word like that is just unnecessary. it goes to show the obama campaign is desperate. they're trying to distract from the record on his economy and the fact he hasn't been able to create jobs. >> the use of the word is pretty explosive. you have to admit, felony, even indirectly the way she did it. but to even use the word felony talking about mitt romney. >> you know, wolf, i'm not going to cry for mitt romney. i saw him destroy republican after republican after republican. like newt gingrich and the vicious ads he ran. the ads against rick santorum. and he criticized the time at bain, he took the same offense he's taking at p t obama. the point is, when you falsify any federal document, yeah, the penalty is a felony. most of the time people plea bargain and this is washed away. i'm not taking it down. i don't think it should go there. i think mitt romney should ask bain to release minutes from 1999 to 2009 when he got his severance package. put it all on the table. i mean, what's there to hide? let's talk about it. >> that's the thing, donna. there has been several bain executives, even democrats, obama supporters who said he left -- romney left in 1999. he went onto run the olympics. he had no more managerial day-to-day decision making authority at bain at the time. but the obama campaign continues to throw these out there. >> there are bain executives, pleas from democrats, supporters of president obama, who agree with mitt romney that for all practical purposes, he was at the olympic games. he was gone. >> and others say he still maintained ties, especially to work out the severance bill. in 2002 in june when he had to prove residency in massachusetts, he had to claim time at bain in order to say, well, i was still here. that's why i'm qualified to run as governor. it was a bipartisan panel. >> here's the success of the obama campaign and the democrats' strategy. i've got to answer questions about bain and the tax returns. they have succeeded in the area so far. >> not if you look at the polls. the polling data is still neck in neck. we've had multiple fact checkers say all these are false and inaccurate and unfair. and this is piling on false administration. this is a true example of an obama -- >> the boston globe hasn't retracted their story. why should president obama or for that matter, the republicans at bain. mitt romney had over seven years to clean it up. and a respected conservative said yesterday, put it out there. what is there to hide? disinfect the whole thing so we can talk about something else. >> the point is whether we're talking about bain or the income tax returns, this is all just a distraction from the failed policies and this administration has not made things better. and this is going to be on the president's record. >> but would you like to see the manufacturing jobs? would you lee to see us go back. >> we're not going to debate this now. let me move on. a question question for sarah palin. what role do you think at the republican convention at the end of august, she should play prime time, major speaking role, in the background, what do you think? >> we're a long away from that. we're a long way from making the final decision. i think she should have a primary speaking spot. she's very engaging. she energized the base. she will certainly rally folks together. >> would you agree? >> you see me nodding my head. she brings passion. she's inspiring to tea party people. >> you sound like you want her to be his running mate. >> i would love that, wolf. i think she should get another opportunity to show america everything she has. she is someone who energizes a certain segment of the population. there's no reason she should not be prime time. it's still early. i agree with alice. they have plenty of time to choose from a host of talented people on the republican side. >> i suspect she'll have a prime time spot. >> it would be smart. >> wolf, it would make my day if she got a prime time slot. >> the secretary of state hillary clinton is in israel right now. the last stop of her latest overseas tour. and the next hour here in "the situation room" we're going to talk to her. we talk to her about the travels, what's going on. the less than welcoming welcome she received. and the attack ads against the president. good stuff coming up. you'll want to stick around. the top of the hour, the interview with hillary clinton from jerusalem coming up. and just ahead. he left office after an embarrassing sex scandal. now the democrat anthony weiner may be thinking of restarting his political career in a very big way. 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[ male announcer ] fiber one. jack cafferty is back with the cafferty file. jack? >> wolf, the question this hour is how much would condoleezza rice as vice president help the romney campaign? carl writes from michigan, it's a mixed bag. first it would be a rerun or it have gop ticket in 2008, except this time rice is the credible one and romney is the dig ding bat. second, the white racist republicans in the south having to choose which black person they'll vote for. one being a woman, no less. and third, is her pro choice and other social views. she has negatives that far outweigh the positives. the gop is still too sixthi ise and sexist and racist to consider the democrats. she would open the door to the democrats to vigorously attack the policies of the bush administration which she was an important part of. between the two of them, condoleezza is much more qualified to be president. cal writes i think it would hurt instead of help because of her being in george w. bush's cabinet. it wouldn't be as horrific as when mccain won palin. i think mccain lost that election because palin was on the ticket. and gary writes condoleezza rice would be a huge boost for the romney ticket. the woman smart, experienced and likable on top of the obvious democratic advantages. that being said, she knows better than to accept the job. if you want to read more on this subject, go to cnn.com/caffertyfile, or to our post on "the situation room's" face book page. >> jack, thank you. everybody remembers former democratic congressman anthony weiner. he resigned in disgrace because of a sex scandal. he may be thinking seriously of trying for a political comeback. >> today i'm announcing my resignation from congress. >> that is the last public image of anthony weiner as a congressman as he stepped down in disgrace. now he's reportedly considering a run for mayor in new york. before his doufl he was considered shoe in for the position. >> obviously someone got access to my account. that's bad. they sent a picture that makes fun of the name weiner. >> weiner later admitted he lied, apologized to his pregnant wife and resigned. there's a big question mark if he can make a comeback like other disgraced politicians. >> i did not have sexual relations with that woman. >> bill clinton recovered from his white house sex scandal, but never sought elected office again. neither did former new york governor eliot spitzer who resigned because of a prostitution scandal. his comeback came as a tv host on cnn, now on current tv. eric heads a crisis management firm and says there's no exact playbook for making a comeback. but he knows weiner's case is different from others. >> when you have the variables with weiner such as taking the photos himself. second it being kind of a fourth grade move, and third, having the poor judgment to put them on the internet, this is a very difficult bell to unring. >> former washington, d.c. mayor marion barry did regain office after a crack scandal where he spent time in prison. louisiana senator david bitter was reelected after dealing with a prostitution scandal m. for weiner the strongest sympathy in new york may come from his congressional district. >> with the baggage he's bringing into it, i think his career in politics is about over. >> it was creepy what he did, we all understand that. that's his personal choice. >> too much damage done for him. >> at least one expert isn't completely ruling out a political comeback. >> i don't think it's impossible for him to comeback. i think as napolean once said, engage the enemy and see what happens. >> now anthony weiner isn't commenting, but wolf, you know, whether or not he decides that he's going to test the political waters, he does have a war chest. before he resigned from congress he raised about $4.5 million for the 2014 mayoral race in new york city. >> you have to use it or effectively lose it. so there's a clock ticking on that. i take it he's been speaking. he's been more visible in public lately in new york. >> you know, right after the supreme court decision on health care, he did do one interview with wnyc, the public radio station here in new york. he was asked whether or not he was kind of putting his toes back in the waters. and he said at that time he was not. >> mary snow in new york for us watching the story. let us know if it changes. appreciate it. coming up in the 5:00 p.m. eastern hour. there's a reason why airlines will let pot belly pigs and other animals ride along with human passengers. and during the 6:00 p.m. eastern hour of "the situation room," now worries of the security team in london is simply not ready for the olympic days. and next, real crime fighting robots. they don't look like the kind we see in movies and comic books, but they're certainly designed to stop a terrorist. c250 sport . but hurry before this opportunity...disappears. the mercedes-benz summer event ends july 31st. the mercedes-benz summer event by what's getting 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[ male announcer ] the capital one cash rewards card. the card for people who want 50% more cash. ♪ what's in your wallet? ♪ what's in your...your... we take it on ours. this summer put your family in an exceptionally engineered mercedes-benz now for an exceptional price during the summer event. but hurry, this offer ends july 31st. i tell mike what i can spend. i do my best to make that work. we're driving safely. and sue saved money on brakes. now that's personal pricing. lisa is back monitoring the other top stories in "the situation room" right now. among the new charges of sexual abuse emerging against jerry sandusky. what's the latest, lisa? >> that's right, wolf. three more men have reportedly come forward saying they were abused by former penn state football coach jerry sandusky. reporting on her website, cnn contributor sarah gannon quotes police sources asaz iing the men told them they were victims of sandusky. they were the first to report it before the '90s. and debate is brewing over a new convenience that fiat offers a new crossover model that court curtail the trips to the coffee shop. it has lots of bells and whistles. including an espresso machine. the critics are mainly in the u.s. saying drivers don't need another distraction. this espresso machine only works when the car is stopped. author stephen covey has died today. he was 79 and his family blames the death on the residual effects of a bicycle accident he had last april. i know that book is hugely popular. the seven habits of highly effective people. i don't know if you've read it or not. >> i haven't. but i probably should. thank you. thanks for that, lisa. there may come a day when it koent be a person at all. here's intelligent correspondent lou san kelly. >> suspect was seen fleeing to the second level pardon me. >> the montgomery county s.w.a.t. team pulls into a bethesda, maryland, neighborhood. a man has barricaded himself inside a police house. but police have something you didn't anticipate. the suspect is inside. they try to establish contact. no luck. they try to use gas to smoke him out. that didn't work either. this robot is next. the s.w.a.t. team calls it the recon scout. >> we can see you! put the gun on the ground! >> not being certain the suspect is inside. we're going to clear it. we're going to use a robot to clear the space in front of us. >> hands up. walk to the door. it allows it to clear the areas that we would have been exposed to. >> the robot's able to go upstairs, downstairs and into corners makes it a live saving tool. >> we can run the recon scout very quickly ahead of us. it makes it a lot safer. making sure we're not coming across trip wires, whatever it may be. this time it's just a training exercise. that wasn't the case in september of 2010 when a gunman walked into the building with canisters strapped to his body. the french team used it this past march when an islamic extremist barricaded himself inside the apartment building. this robot helped police navigate the scene. the gunman eventually shot and killed. >> you have hundreds of departments using it. we have thousands deployed with the u.s. military. >> thousands? >> thousands. we have hundreds in different agencies, fbi, u.s. marshals, atfs, and then we have hundreds internationall internationally. >> and with infrared sensors and increased maneuverability, law enforcement officials say the $14,000 price tag makes it an easy addition to the team. and you're in "the situation room." happening now, the secretary of state hillary clinton one on one with cnn in jerusalem. he talk about her hostile welcome to egypt, her own words being used against president obama and a whole lot more coming up. also, a scandal inside the food and drug administration. the agency secretly reading e-mails by its own scientists. and a possible power struggle at the highest levels inside north korea. the country's army chief suddenly ousted. we want to welcome our viewers in the united states and around the world. i'm wolf blitzer. you're in "the situation room." she's in the final stresh of ra gruelling two-week mission that has taken her around the world. today secretary of state hillary clinton was in jerusalem where she spoke about diplomatic issues she's facing as well as presidential politics back home. our foreign affairs reporter is traveling with her. she conducted the one-on-one interview with the secretary of state. she is joining us now from jerusalem. give us the highlights. what did the secretary of state tell you? >> well, she's the first u.s. official to meet with the president, mohammed morsi. she received a very hostile reception. we were bombarded with water bottles thrown at her, shoes, which is very disrespectful in the arab world. there's a lot of concern about u.s. policy. we talked about that, iran, syria, and about mitt romney using her own words against her about president obama this during the 2008 campaign. >> madame secretary, thank you so much for joining us. let's start with your trip to egypt. it wasn't a very warm welcome by a lot of egyptians. there were very nasty protests. protesters throwing shoes. in your meetings with christian leaders, a lot of uncertainty about u.s. policy. they feel you're siding with the muslim brotherhood. >> well, elise, there's a lot of uncertainty and anxiety there now. they're doing something they've never done in 5,000 plus years of history. they've had elections. they've elected a president. they still don't have a government. they don't know what the platform is going to bchlt they' be. they're not sure of the legal standings of the institutions. there are concerns be many. i don't think that's unusual. but what i was looking for was a chance to hear directly from people, and i knew very well there would be a lot of hashes and conviction expressed, which i think demonstrates how invested the egyptians are in trying to mag sure their democratic transition turns out for the benefit of all the egyptians, men and women, muslim and christian, everybody. >> are you prepared to use u.s. influence like aid to make sure the military lets that transition happen? >> well, we've been talking with everybody in egypt about what we can do to try to help their economic situation, which is quite serious. but until there's a government in place, until there's a finance minister and a prime minister. >> people with whom we can talk specifics, we won't be able to know exactly what we can offer or with what we can expect, and then what kind of accountability to seek. >> let's talk about syria. a year ago in lithuania, you said time was running out for the assad regime. when we were in tokyo you said the sands were coming out of the hourglass. now 10,000 people are dead. what is the threshold these don't become empty words and there will be an intervention to get rid of president assad? >> we are trying to intervene. we're trying to intervene in a way that brings about an end to the violence and a transition to a democratic future. that doesn't require adding to the violence. further militarizing the conflict. i think everybody is very wary for good reason for that kind of intervention. certainly what we've tried to do to get nations that have been skeptical on board with us, most particularly the russians and chinese. what we have done to reassure and provide humanitarian assistance to the neighborhood countries absorbing the refugees. you know, elise, everybody is as outraged as i am for very good reason at what we see happening. it's horrific what we see happening. you have to look at all the consequences of any action that the outside could take. and there are many instances that i could point to where you could make things worse. you could add to the violence through some kind of military intervention, which is why you see the region itself, which is living with this terrible regime and what it's doing to its people, being especially careful. so, yeah, the time is running out. i can't put a definite hour and minute on it. the regime is not going to survive. i wish it would end sooner instead of later. >> you keep saying the russians are going to pay a price. what price is the u.s. prepared to make russia pay? >> well, our commitment is to try to get russia to cooperate with us. so we want the rest of the world to put pressure on russia in the security council so that they will support a chapter 7 resolution, where we can impose very hard sanctions on people and institutions that support the regime. that would be the best signal that we could send to assad. as long as he has iran in his corner, which he does, and as long as he has russia uncertain about whether or not to side against him in anymore dramatic way than it already has, he feelses like he can keep going. that's the message we want to reverse. >> i know you don't like to talk about politics right now. mitt romney is using you in a negative ad against president obama. using a clip of you talking in the campaign. how does that make you feel? >> well, you know, i am out of politics. and i haven't seen any of the ads that you're talking about. but i have to say, i think it's a waste of money. everybody knows i ran against president obama in 2008. that's hardly news. everybody knows we ran a hard fought campaign. and he won, and i've been honored to serve as his secretary of state working with him to advance america's intest values and securities. >> and wolf, as you know, plopz will be here just in a few weeks. so obviously we'll have being have a lot of criticism about the president's policy. particularly on iran. you know, a lot of the reasons is because of iran. there have been a steady stream of u.s. officials coming. you had the national adviser over the weekend this is all about the talks with iran not going very well. there's a lot of concern the israelis are going to bomb iran. so much so it's been dubbed the please don't bomb iran tour of 2002. the secretary said there has been unprecedented cooperation and consultations stepping up tw the israelis, but there's a lot of news in this neighborhood for her to discuss with the israelis, wolf. >> certainly true. elise, thanks so much. just interviewing the secretary of state for us in jerusalem. that ad is the romney campaign ad that uses a clip from hillary clinton back in 2008 where she is effectively accusing the then candidate for the democratic nomination, barack obama, of lying. she says shame on you, barack obama. that's being used by the romney campaign right now. you heard the secretary of state saying it's a waste of money. romney campaign officials think it's a pretty powerful ad that they're throwing against the obama campaign. much more on the political story coming up later. there's other news happening right now, including serious fighting in syria that has now spread directly to the capitol, and a former regime army colonel is warning, and i'm quoting now, the battle for damascus is coming. [ speaking foreign language ] >> gunfire could be heard in several neighborhoods of damascus as government forces clashed with opposition fighters and regime tanks have moved into some part of the syrian capitol. now the former syrian ambassador to iraq is speaking out after becoming one of the regime's highest ranking members to defect. cnn's ivan watson is the only western journalist to interview him. ivan is istanbul, and he's got details. >> reporter: wolf, i sat down for that two-hour, one-on-one interview with the most high ranking syrian official to publicly abandon his post and detect from the syrian regime. he was syria's man in baghdad for nearly four years. that is until a few days ago when the syrian ambassador to iraq suddenly announced his defection. what prompted you to say i've had it. i don't want to work the government anymore? >> i served the syrian regime for 34 years in many positions. after what happened during the holy resolution. all the killings, the massacres, the refugees, i don't see how anyone can remain silent. i decided to end my relationship with the regime. >> he is an insider who knows how the syrian government works. who is making the decisions in damascus right now? >> the regime in syria is the totalitarian regime and dictatorship. only one person gives the order. that person is the president. >> in his first interview with the u.s. news organization since his defection, they claim the syrian rebels are al qaeda terrorists. instead, he accused the assad regime of cooperating with al qaeda ever since the u.s. invasion of iraq in 2003. by paving a way for al qaeda militants to transit syria two attack targets in neighboring iraq. >> translator: bashar assad are directly responsible for killing thousands and thousands. he gave al qaeda everything it needed to train them and give them shelter. araid in 2008 against the syrian town. forest claims the american target was an al qaeda camp run by assad -- the brother-in-law of the syrian president. >> you saw with your own eyes that he was meeting this al qaeda and iraq operation? >> one hour after the raid, he was there at the location, a conversation took lace between me and him, and he was angry about the attack made against him. he is now under the protection of the dakari government. they tell cnn they don't trust the man who waited 16 months before joining the uprising. >> what message would you like to send to bashar al assad and your former colleagues in the syrian government right now? >> my former colleagues, i ask them to join the people and leave the corrupt regime. there is still time. you don't know history. the will of god and the will of the people. history will curse you for the crimes you committed in syria. a blunt warning from a man once one of the syrian regime's top enforcers. wolf, perhaps the most surprising thing to hear was that he was publicly endorsing a military intervention into syria to overthrow his old boss, bashar al assad, the syrian president. the reason being, he says nothing but force can drive out a man that he kno far too well. wolf? >> ivan watson reporting for us with that exclusive interview. thank you. vice presidential buzz here in the united states. we'll talk about all of the latest developments in the race for the white house with our senior political analyst, ron brownstein. and we're taking a closer look at the possible impact on the presidential election. and when pigs fly. so does controversy. we have the uproar over unusual service animals. can make a big. like how a little oil from here can be such a big thing in an old friend's life. purina one discovered that by blending enhanced botanical oils into our food, we can help brighten an old dog's mind so he's up to his old tricks. with this kind of thinking going into our food, imagine all the goodness that can come out of it. just one way we're making the world a better place... one pet at a time. vibrant maturity. from purina one smartblend. one pet at a time. according to ford, the works fuel saver package could terally pay for itself. jim twitchel is this true? yes it's true. how is this possible? proper tire inflation, by using proper grades of oil, your car runs more efficiently, saves gas. you could be doing this right now? yes i could, mike. i'm slowing you down? yes you are. my bad. the works fuel saver package. just $29.95 or less after rebate. only at your ford dealer. so, to sum up, you take care of that, you take care of these, you save a bunch of this. that works. see life in the best light. [music] transitions® lenses automatically filter just the right amount of light. so you see everything the way it's meant to be seen. experience life well lit, ask for transitions adaptive lenses. ♪ ♪ [ male announcer ] you've been years in the making. and there are many years ahead. join the millions of members who've chosen an aarp medicare supplement insurance plan insured by unitedhealthcare insurance company. go long. insured by unitedhealthcare insurance company. male spirit present.trong it's the priceline negotiator. >>what? >>sorry. he wants you to know about priceline's new express deals. it's a faster way to get a great hotel deal without bidding. pick one with a pool, a gym, a great guest rating. >>and save big. >>thanks negotiator. wherever you are. ya, no. he's over here. >>in the refrigerator? jab ka jack cafferty is here with the cafferty file. >> some democrats and republicans have a topic they can agree on. romney is under fire on both sides of the aisle for releasing two years of tax returns. they are trying to turn this into a major campaign issue, suggesting there's something in those returns that romney, who is worth more than $2 million dollars doesn't want americans to see. and it's not just democrats. robert bentley, bill crystal and former george w. bush aide matthew doud all say romney ought to release additional returns. some republicans think the sooner he make this is stuff public, the sooner the issue will go away. president obama has released more of his tax returns all posted on the campaign website. and george romney also released 12 years of tax returns when he ran for president back in 1968. for his part romney is holding firm. he told the network today that his rivals want to make a mountain out of the issue. romney says he'll release only two years of tax returns, which is what john mccain did in 2008. if the irs is okay with mitt romney's tax returns and if no laws have been broken, one could make the argument that it's nobody's business. he says this is a distraction from the real issues of the campaign, and that's the whole problem for mitt romney. the more the focus stays on his tax returns, his wealth. his offshore investments, the less people are focused on the economy. here's the question. does the public have the right to look at a candidate's tax returns. go to cnn.com/cafferty file and post a comment on my blog. at the moment they are driving it in the race and it's not about the economy. >> that's an effective strategy on the part of the campaign. they're keeping romney on the the offensive. good point. thank you. there's growing buzz about romney's potential pick for a vice presidential running mate. the top aide says no decision has been made, at least not yet. let's first of all talk about all the speculation that mitt romney, the vice presidential choice could happen. maybe as early as wednesday when he's in toledo, ohio. certainly they have to do it before the convention to give yourself another bounce in public opinion. it's one of those moments, as a challenger, where you can get the country to look at you. where you can send a message. romney has two broad pools of choices. do no harm choices focused on governing and the edgier choices that would do more to animate the base. look at tim pawlenty. people like paul ryan and bobby jindal and marco rubio in the other that is potentially more exciting, but also perhaps carrying more risk. >> let's talk about your first list, which you call the do no harm candidates. there is rob portman. he's a senator from ohio. former trade representative and budget messenger. they say romney, the presidential campaign says he's going to be in toledo on wednesday. that might be a place if he wanted to pick for it you can make that announcement before the games. tim pawlenty was runner up. two-term republican governor of minnesota. and john thune, the senator from south dakota. >> well, portman will make the most since. he can be an asset in governing. he has good relations in congress. he comes from a state critical for republicans. no republican has won the white house without winning ohio. the downside it's politically defensive pick. a republican nominee in a close race should be able to win ohio on his own. and if he can't, it's kind of a sign of weakness. but of those three, i think portman probably brings the most to the table. south dakota not electorally important. minnesota, unlikely to win even with the former governor. >> now, we have the second category of people that you suggest stir the debate. we'll put them back up there. paul ryan, the chairman of the budget committee from wisconsin. bobby jindal, the governor of louisiana. marco rubio, the freshman senator from florida. congress condoleezza rice -- you don't think she's seriously being considered? i think the others are being considered. yng she is. >> there's a history of nodding at candidates who you don't consider as a way of expressing respect for different segments of the electorate or as the party coalition. as one of the most prominent african nern women in the republican party, it makes since to talk about condoleezza rice, even if he's not serious. on this list, paul ryan and bobby jindal are the intriguing names. ryan is someone who would clearly excite the republican base, is incredibly articulate proponent for the republican small government message, but who is personally identified as the author and architect of this very polarizing house republican budge, whose centerpiece is to convert medicare from a current support or voucher system. so it would bring the ideological debate directly into the presidential race. but ryan would really personify it. jindal is someone who could excite a lot of republicans as well. but would have certain questions about whether he is experienced enough to step into his presidency. rubio, the same kind of thing. rubio is intriguing in many ways. earlier this year it seemed they were not considering him. but it seems like a long shot at this point. plus, he's said repeatedly he does not want that call. at least not in 2012. >> romney says rubio is being vetted. he's the only one he's named in public as a candidate being vetted. . that was under pressure because there was criticism he wouldn't pick someone who was a latino candidate. we'll probably have to await the end of the olympic games in a few weeks. two americans kidnapped in egypt now free. we'll have the latest on their condition and what led to their release. plus, is linsanity leaving the big apple? a global phenomenon may be packing his bags. homicide of young people in america has an impact on all of us. how can we save these young people's lives? as a police chief, i have an opportunity to affect what happens in a major city. if you want to make a difference, you have to have the right education. university of phoenix opened the door. my name is james craig, i am committed to making a difference, and i am a phoenix. visit phoenix.edu to find the program that's right for you. enroll now. lisa sylvester is monitoring other top stories in "the situation room" right now. what else is going on, lisa. hi, he tells cnn he's in good health, despite taking his diabetic medication since friday. the two were taken hostage along with their egyptian guide when gunmen boarded their tour bus. authorities did not give in the to alleged kidnapers' demands. and at least 28 people are dead, 4 missing and hundreds of others cut off by mudslides and downed trees in the wake of extraordinarily heavy rains battering parts of japan. authorities say the torrential downpours have damaged homes across the region and prompted the evacuation of thousands. more and more heavy rain could be on the way. and a basketball phenomenon who brought linsanity to new york city may soon be packing his bags. jeremy lin has signed a three-year, $25.1 million offer sheet with the houston rockets. they have until tomorrow night. the speculation is growing that they may let him walk, rather than spend what could amount to millions in extra tax payments to keep him. and where there's a beach, well, there are usually some surfers, but not many of these. two goats on a surfboard. wowing beach goers in southern california. according to our affiliate, the goat's owner loves to ride the waves. he thought he would like it too. they look a little bit like, what m a i doing here? thanks, lisa. thanks for that. a purge of voting rules that critics say reached the politics. also, the food and drug administration here in washington spying on its own scientists. according to ford, the works fuel saver package could terally pay for itself. jim twitchel is this true? yes it's true. how is this possible? proper tire inflation, by using proper grades of oil, your car runs more efficiently, saves gas. you could be doing this right now? yes i could, mike. i'm slowing you down? yes you are. my bad. the works fuel saver package. just $29.95 or less after rebate. only at your ford dealer. so, to sum up, you take care of that, you take care of these, you save a bunch of this. that works. brave knights! as you can clearly see from this attractive graph that our sales have increased by... sorry, my liege. honestly. our sales have increased by 20%. what is this mystical device i see before me? it's an ultrabook. he signed the purchase order. with an ultrabook, everything else seems old fashioned. introducing the ultra sleek, ultra responsive ultrabook. a whole new class of computers powered by intel. it's controversial and could have major implications for the november election. there are new developments in florida's drive to purge ineligible people from voter roles. john zarrella has details from florida. what's going on here, john? >> reporter: well, wolf, as you mentioned, florida certainly being watched very carefully by several other states that could be pivotal in the upcoming november election. they were watching to see if florida would win the right to go ahead and start removing people from voter roles, people who they say don't bebe belong. when florida yns go to the polls in november, state officials are determined to make sure no one is voting w shouldn't be. and after a lengthy fight to make that happen, florida is getting access to a critical security data base. back in tril, florida began what critics called a purge of voter roles, that those critics insisted were targeted at hispanics and minorities who would vote democratic. using driver license information the state identified a possible 2600 noncitizen voters. but it turned out the information wasn't reliable. all but about 100 were u.s. citizens a 1991 world war ii veteran got was questioned for his citizenship. >> i voted here for 50 years. >> after that florida officials focused their attention on getting a more reliable home and security data base. it lists those legally here on geen cards and visas, but not eligible to vote. granting, florida access has widespread implications. at least four other pivotal states are watching florida carefully. something florida's governor noted. >> hopefully it creates a path for other states with the same concern. mitch cesar things the whole thing smells. >> what i find odd is all the republican governors from all over the country who live thousands of miles apart seem to come up with a situation where they have come up with the same idea of a voter purge. >> but when a newly released mason dixon poll asked do you support or oppose the plan being implemented by governor scott and state election officials to purge the florida voter rolls of persons or non-u.s. citizens, 54% of registered voters polled said they support the plan. they say they will use the data base for cross checks as soon as the staff is trained. ultimately what will happen a list of names the state thinks shouldn't be on voter rules will go to 67 supervisors of election in florida's 67 counties and it will ultimately be their responsibility to go out and to identify these people and find out if in fact they are or they aren't u.s. citizens eligible to vote. wolf? >> thanks for the explanation, john zarrella in miami. a spy scandal is unfolding in the food and drug administration. a surveillance program has now been revealed. sandra endo has details. >> reporter: the food and drug administration spying on its own scientists, tapping into tens of thousands of employee e-mails. >> tfda didn't care, didn't care about the laws of confidentiality. didn't care about the constitution. didn't care about private say. they went hog wild. >> reporter: the lawyer says his clients were targeted because they were raising concerns about breast and colon cancer detection devices they say were unsafe. steve says the scientists were taking their concerns to the office of special counsel, the independent investigative arm of the federal government. a move protected under federal la law. >> the dea went into the channels unlawfully to find out who was blowing the whistle. what they were blowing the whistle on and to learn what the allegations were. >> they say they were enforcing the law to stop trade secrets from being leak thod the public. the fda says the agent is monitoring with limited to the government-owned computers of five individuals and only intended to identify the source of the unauthorized disclosures. but screen shots of e-mails taken by the spyware system it searched for key words including congress and osc, which stands for the office of special council. >> you see that one? now they're going to this the drive for congress. >> both the white house and osc issued memos underscoring that federal law protects workers who disclose wrongdoing from retaliation. in this case, four scientists were since fired after the surveillance began. senator chuck grassley's office was in contact with one of the sign tigss, and one of grassley's aide's e-mails came up. >> without a doubt it's sbip dags. there's a great deal of peer pressure to go along and get along. in a lot of agencies. >> it's not their institution. it belongs to the united states government. they're working for the people of the united states. >> the fda says at no time was it monitoring the e-mails of anyone in congress and wasn't trying to stop communication. but congressman chris van hollen whose staff e-mails were identified is calling for a full investigation by health and human services. and based on scientist complaints, the osc concluded there may be a public safety issue concerning the cancer detection devices and refer to the matter for further investigation. >> senator grassley was pretty angry over there. you could see that. sandra endo reporting. a stunning political shakeup inside the world's most isolated country. why it could be a sign of a major power struggle. to power our lives. while energy development comes with some risk, north america's natural gas producers are committed to safely and responsibly providing generations of cleaner-burning energy for our country, drilling thousands of feet below fresh water sources within self-contained well systems. and, using state-of-the-art monitoring technologies, rigorous practices help ensure our operations are safe and clean for our communities and the environment. we're america's natural gas. you see us, at the start of the day. on the company phone list that's a few names longer. you see us bank on busier highways. on once empty fields. everyday you see all the ways all of us at us bank are helping grow our economy. lending more so companies and communities can expand, grow stronger and get back to work. everyday you see all of us serving you, around the country, around the corner. us bank. who are these guys? oh, that's just my buds. bacon, donuts. -my taste buds. -[ taste buds ] waffles. how about we try this new kind of fiber one cereal? you think you're going to slip some fiber by us? rookie. okay. ♪ nutty clusters and almonds, ♪ ♪ almonds. ♪ fiber one is gonna make you smile. ♪ [ male announcer ] introducing new fiber one nutty clusters and almonds. with 43% daily value of fiber for you. crunchy nutty clusters and real almond slices for your taste buds. a surprise shakeup at the highest levels in north korea. it could be a sign of a power struggle inside the country. paula hancock is monitoring the story for us. >> this is a surprising development. it was considered to be a regime heavyweight. he was effectively the commander in chief of the military, seconding on to kim jung-un. he was also considered a very close confidant of kim jong. believed to be the man who helped him through the succession and helped him gain credibility and support within the military. at many of the public engagements. he walked and saw hem standing next to each other. they were often sharing a joke. it appeared the two men built up some kind of rapport. we did see him side by side when it came to the funeral procession of his father, the late kim jong-il. and now they say it's because of an illness. there are many different theorys as to what the exact reason could be. one said we could be seeing a power struggle. others are also saying that it could be kim jung un's uncle who is trying to influence and get rid of anyone he believes to be in his political way. un has also said it could be a way to use a scapegoat for the early errors with kim jong un most notably the failed rocket launch in april, followed by widespread international condemnation. one thing experts agree with is it's very unlikely he was dismisses because of illness. there are plenty of rules for people who fly. did you know there are also new updated rules for pigs who fly? 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[ slap! ] [ slap! slap! slap! ] [ male announcer ] your favorite foods fighting you? fight back fast with tums. calcium rich tums goes to work in seconds. nothing works faster. ♪ tum tum tum tum tums jack cafferty is back with the cafferty file. jack? >> question this hour, wolf, does the public have the the right to look at a candidate's tax return. tom in beverly hills. we should be focused on the economy. obama has made a class warfare the central theme of his campaign and romney's fortunes are on his target. he's attacked the rich and demonized them. whether rich or not, he's done everything illegally, and that's good enough for me. obama is using this as a distraction from his failed record on the economy. karl writes, absolutely. by allowing themselves to be in for public office, they deserve to give up all right for privacy. we need to know he has nothing to mid. while it does not ensure we're not electing a crook, at least it gives us a shot at a wise choice. l. writes no. the irs would investigation na looks suspicious anyway. jimmy writes, absolutely. and to know about extramarital relations and college transcripts and birth certificates and anything else that might transcripts and anyg else that might discredit the candidate, no holds barred. we all know the tax returns are simply a vehicle to continue the attacks on romney. i'm wondering how long obama's team can continue to create a story for the american people to define romney. it all smacks of a swift boat type approach, the very approach democrats heaped scorn upon when used against john kerry. i guess it's okay now when it benefits a floundering re-election campaign. stephanie writes i suppose we have that right. it doesn't matter to me what he does with his money or what percentage he pays in taxes. a smart guy would make a lot and pay few taxes. most likely a guy i'd like to have in charge. cnn.com/cafferty file or through our posts on the situation room's facebook page. >> a major scandal is gaining traction in the united states with a number of u.s. senators deeming a department of justice investigation. one of them the new jersey democrat robert menendez is a guest later tonight. erin has a little preview. this story is escalating and escalating. the ramifications are enormous. >> they are enormous. what's so amazing about this story is that basically, banks around the world, everybody, they have to just report the money, the rate at which they lend to each other for all sorts of loans based on their self-reporting. and obviously, sometimes they have incentives to overreport or underreport those rates. the central rate we're talking about is called libor that stands for london interbank offering rate. what it means is if you look at an adjustable rate mortgage that you have or credit card you have, those rates are usually tied to libor. if it goes up, so does your adjustable rate mortgage and credit card rate. same thing if it goes down. this scandal whether banks were manipulating the rate during the financial crisis during which time they would have been manipulating it lower because they were so worried investors would lose confidence in them could mean there were times maybe it had been manipulated higher. this rate at the center of all of our lives when you look at mortgages and credit cards. it could crush confidence in the system and if some banks were guilty of manipulating the rate, it could cost some are saying about $14 billion in fines for the banks. which may be well deserved but of course, that means even more uncertainty and perhaps less lending. so this is a situation that's just bad on all fronts but certainly in terms of consumer confidence in our banks. >> i'm going to look forward to your report later tonight. an important story that deserves significant attention. meanwhile, coming up in our next hour, a huge break through in the fight against hib. also an important story, there's a pill now that can significantly reduce the chances of contracting the virus in some cases by 75%. and up next, forget dogs. some people now have pigs. even horses as service animals as they're called. why you could see one on your next flight. package could literally pay for itself. jim twitchel is this true? 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there are plenty of rules for people who fly, but what you may not know is that there are also specific rules, i'm not making this up, when pigs can fly. the transportation department is updating its guidance on how airlines should accommodate people with disabilities and part of that manual includes instructions on what are called service animals like pigs. lisa is back. she's telling us what is going on. lisa, explain. >> okay, wolf. so you probably heard of seeing eye dogs but other animals are used by people with disabilities, too. there have been laws in mace actually since 1990 requiring airlines to carry them. well, now the department of transportation has updated what amounts to an instruction manual to help the airlines follow the law. that means, yes, sometimes pigs will fly. good boy. >> meet bakeo. >> the pig has the equivalent to the intelligence of a 3 to 4-year-old child. it can open doors, close doors. >> wendy ponzo is the president of the north american potbelly pig association and she is takening bako to be a service animal. >> i myself have an autistic child. and i know that bako and the pigs would help. and also, in nursing homes and stuff because they're just -- you just can't help but smile when you sue he them. >> reporter: and when bako shows up at the airport, the department of transportation's new technical manual helps the airline decide if he really is a service animal and if he can fly. using a pot bellied big as an example, it says "if you determine at that time potbellied pig is a service animal, you must permit the service animal to accompany the passenger to her seat provided the animal does not obstruct the aisle or does not present any safety issues and the animal is behaving appropriately. at the airport, some said bring on the animals but others had concerns. >> i don't understand how a pig could help a person get along in life. >> it was a service animal and it's licensed to be a service animal. any should be able to use them. >> reporter: it really doesn't matter what passengers think. according to the manual "you must not deny a passenger with a disability transportation on the basis that the service animal may offend or annoy persons traveling on the aircraft. it's not just pigs. a wide variety of animals can be used as service animals besides dogs. there are horses. yes, miniature horses like this one named cuddles that hopped a flight standing in the front of coach. but if you're like samuel l. jackson and worried about snakes on a plane -- >> i had it with snakes, they are banned in the cabin along with ferrets, row denies, spiters and other reptiles. this new manual, in fact, clarifies the law. it is now open for public comment. the bottom line is if one shows up with a service animal, even if it's a pig, unless it meets one of the legal exceptions airlines have to take it on board to no extras cost to the passenger. >> the words when pigs fly take on new meaning. lisa, thanks very much. happening now, the first bill to prevent hiv is approved by the food and drug administration. treasury department pest conduct exposed. including officials soliciting prostitutes. and olympic athletes land in london amid new concerns about security at the summer games. i'm wolf blitzer. i'm wolf blitzer. you're in "the situation room." -- captions by vitac -- www.vitac.com to hear republicans tell it, president obama is public enemy number one for big business. >> and it is the most anti-investment, anti-business, anti-jobs series of policies in modern american history. >> this is certainly the most anti-business administration since the carter years. >> so if president obama is so anti-business as republicans claim, why is the stock market done so well since he took office and the converse question is this. if president bush was so pro business, why did the markets collapse during his final year in office? let's look at the numbers right now. during the bush administration, dow jones industrials close the at an all-time high of 14,1648 back in 2007. but it started to collapse big-time during president bush's final year in office when the great recession really hit. on the day obama was inaugurated in 2009, the dow jones closed at 7,949, a loss of more than 6,000 points since that is 2007 high. it kept dropping during obama's first year in office, hitting a low of 6,459. it the market had lost half its value in only two years. but since then, it's seen a dramatic increase hitting a post recession high of 13,338 just two months ago. it's gone back somewhat closing today above 12,727. yes, the unemployment and underdiplomat numbers here in the united states are way too high. but right now, big business is sitting on lots and lots of cash. they're making record profits. despite what the republicans say about the president's business policies. so i ask this questi. should president obama receive credit for the market gains and president bush be blamed for the collapse? i recently had this exchange with republican party chairman reince priebus. >> i think that barack obama's made everything worse. i think things could be a whole lot better. >> the dow jones was a lot worse than it is now. >> the dow jones is one indicator. but i don't think that too many people out there that are experts on the economy. >> a lot of people have retirement plans that are in a lot better shape than four years ago. >> the dow jones is one indicator. i don't believe most people looking at where we are on the jobs, deficit, housing, the promises he made as far as health care is concerned, things aren't better today. >> all right. so as you heard if you're listening closer, he didn't really answer why wall street has done so well during the obama administration. he says that's only one indicator. he's right on that. i'm going to keep asking that question. let's check in with kate bolduan with a lot of other important news happening here. >> i love to get your take on the news of the day today. pretty rough on governor romney, republicans for their anti-business charge. but last week, you were pretty hard on president obama as well and his absence from the naacp convention. so much so rush limbaugh was talking about it. >> as you know, i thought the president should have gone to the convention. i thought mitt romney did the absolute right thing by going to that meeting. >> i'm looking forward to hearing your take tomorrow. >> thank you. >> so the headlines. u.s. navy ship fired at a small boat in the persian gulf today killing one person and wound three others. it was a white pleasure craft. opened fire with a .50 caliber machine gun. the sailors followed procedure the knave says and the incident is under investigation. a natural disaster of epic proportions. that's how illinois governor pat quinn is describing the drought that's parching his state and 25 others. it's the biggest drought in half a century. that means crops are threatened. there's not enough water for livestock and water lebs are dropping fast. some of those doc s yousee in mind aren't even touching the water anymore. that's a big story to follow. three new accusers have reportedly come forward accusing jerry sandusky of sex abuse. but these men are older. sources tell sarah ganim the men claimed they were abused by the former penn state football coach in the '70s or '80s an, much earlier than the victims in the criminal case. that could hurt the defense's argument that people don't suddenly become pedophiles later in life. don't hold your breath waiting for the price of lcd tvs to drop. here's the deal. some of the world's biggest technology mover allegedly conspired for years to drive up prices of the liquid crystal displays in tvs and monitors. those is gojets are about as cheap as they're goingo get anyway. consumers could get a refund check. i should say some of the manufacturers still again they did anything wrong and settled because they don't want a long drawn out legal battle. >> kate, thank you. important other news. a ground breaking step toward -- forward in the fight against hiv/aids. for the first time, the fda has approved a drug to lower the risk of hiv infection in healthy but high risk people. it's a once daily pill trued true vada. studies show it could lower the risk of hiv infection by 42% in gay men and by 75% in heterosexual couples with one infected partner. the drug is being used to treat people already infected with hiv. we're joined by the pioneering aides researcher dr. anthony fauci, the director of the national institute of health specifically on al engineering and infectious diseases. it's been on the market for some time. now for the first time for what's being called a prevention drug. how significant is this? >> it's significant because this is the first time we have an approved drug by the fda for the prevention of hiv infection. we have approximately 30 drugs that have been approved for the treatment of hiv infection, but this adds now to that that comprehensive tool kit as we call it of multiple different ways to prevent hiv infection. it isn't supposed to be primary for everyone. you mentioned people at high risk such as men who have sex with men or people in a couple relationship where one is infect the and the other isn't. it's not meant as a substitution for other types of prevention. it is an important milestone. it is the first time an anticipate hiv drug has been approved to are prevention as opposed to just treatment. >> some people are concerned, dr. fauci that it could be used to engage in unprotected sex. is that a concern for you. >> it is always a concern. there is a lot of effort when you talk about what is being done in making people aware of the things that they need to do. and the emphasis on the part of the drug company, on the part of the fda and cdc about this not being a substitute, that you still need to utilize and implement the other prevention measures. importantly, you need to make sure that you're not infected when you start on the drug because this is not a drug for treatment even though it's used in treatment, it isn't the full component of treatment. so people need to make sure that they go get tested and make sure they're negative before they start on that. again, it's not for everyone. it's for people in the high risk categories. >> is there any proof that this drug could cut hiv transmission rates? >> there's no doubt about it because if you look at the data from the studies that you mentioned, wolf, in the men who have sex with men, it's decreed by 42%. effective, and then in can the fa, if you look at people who actually really did take the drug, it's higher than 42%. that's all comers. some people do not take their drug regularly. and in the heterosexual study, it's as high as over 70%. so there's no doubt from the clinical study, if implemented, if people adhere to the regimen of one pill a day, that it will significant lit decrease the acquisition of infection on the part of the person taking the drug. >> will the drug be covered by health insurance or medicare or medicaid for that matter? >> i'm not sure. i can't make that statement right now. that would be up to the appropriate agencies to make that decision. >> big picture, and give us the really big picture because you've been a pioneer in this area for so many years. what does this mean in the overall fight against hiv and aids? >> what it really means, wolf, is that we have another scientifically evidence-based mechanism of prevention of infection. if you look at the different ways to prevent infection, there's a whole constellation to them. this is a very important addition to that comprehensive prevention tool kit that we have. >> dr. fauci, as usual, thanks so much for coming innen an explaining what's going on, a significant development in the battle against hiv/aids. >> thank you. we're also learning about misconduct over at the department of the treasury here in washington. and guess what, it involves prostitutes as well as inappropriate gifts. stand by. >> also, president obama won't apologize to mitt romney after a campaign aide suggests the republican presidential candidate potentially could have committed a felony. >> and a video from a madonna concert has some french officials threatening to sue. then, some said, we lost our edge. well today, there's a new new york state. one that's working to attract businesses and create jobs. a place where innovation meets determination... and businesses lead the world. the new new york works for business. find out how it can work for yours at thenewny.com. meanwhile, new revelations about misconduct within the obama administration. treasury department employees have been cited for soliciting prostitutes, accepting gifts from corporate executives and other unethical possibly criminal behavior. we're getting a rare look at the results of an internal government investigation from documents posted online. let's bring in lisa sylvester who has been going through the documents. >> people want to believe that their government is hard at work for them, not having government employees playing golf with companies they're supposed to be overseeing and certainly not soliciting prostitutes and using a government credit card to pay for the hotels. but both are recent examples investigated by the treasury department's inspector general. in august of 2010, a treasury department employee accessed the website craigslist to arrange sexual encounters with prostitutes. he used a government computer to set up the tryst and later used his government issued travel credit card to purchase hotel rooms. that employee worked at the department's office of thrift supervision. after confronted with the allegations he retired. the 80 plus pages were released by the treasury department's office of inspector general after a freedom of information request by a government watch dog group. government addict.org. among the other allegations, one employee allegedly provided information on government contracts to her husband's business. another, a national bank examiner in the office of the comptroller of the currency accepted golf fees and meals from the very bank he was reviewing. >> it raises deeper questions about a cultural problem within the agency when folks wonder why the regulators didn't do i abetter job of stopping the problems that led to the financial crisis or they're wondering why occ didn't spot the huge trading loss at jpmorgan earlier this year. i this i part of the issue is that the examiners were just too close to the folks they were supposed to be examining. >> there are 11 reports of investigations conducted in the last three years by the inspector general's office. six of them were substantiated. a spokesman says the cases involve only a handful of individuals in a department with more than 100,000 employees saying "treasury has a strong ethics policy that we expect all of our employees to follow, and the overwhelming majority of them do. as with any large organization, issues of misconduct occasi occasionally arise. when that happens at treasury, we act promptly and decisively to address them." melanie sloan with the citizens for responsibility and eth ethics in washington says while embarrassing, the downs show the ig's office took immediate action foo there are going to be people who break the rules and do terrible things. the big question is what does treasury do about it? did they aggressive target this kind of conduct. in this case, at least it seems they did. >> now, most of the incidents were brought to the inspector general's attention from bureau management. and in some instances like the prostitution, that case was referred to authorities and in the golfing incident, the matter was referred for possible administrative action. >> she makes a good point, that woman that there's always going to be bad apples but the key is what the government does when that happens. >> in case it's clear they did step in. it's a paper trail of exactly what steps the inspector general's office did and they took action when it was appropriate, wolf. >> thanks for that report. good report from lisa. >> inspector general are often a thankless job. let me get you caught up what is trending in the situation room right now. number four on our list, this is one of probably the best ways we've seen to recycle a can. make a boat out of it. or out of a bunch of them. it's all part of an annual aluminum can regatta in australia. number threen 0 our list, american olympic hurdler karen clement is fuming after his bus driver got lost on the way to the olympic village. he tweeted so we've been lost on the road for four hours. not a good first impression, london. stay with us. the top two trending stories coming up next. on't you use bengay zero degrees? 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[ male announcer ] for our families... our neighbors... and our communities... america's beverage companies have created a wide range of new choices. developing smaller portion sizes and more low- & no-calorie beverages... adding clear calorie labels so you know exactly what you're choosing... and in schools, replacing full-calorie soft drinks with lower-calorie options. with more choices and fewer calories, america's beverage companies are delivering. so wolf, i was asking on the break, have you ever built a boat out of beer cans? >> no. >> no? >> i know they have. >> but some people have. what's friending here in "the situation room," number four, wolf's favorite one, boats made of beer and soda cans set sail as part of an aaluminum can regatta in australia. >> number three, a bus carrying olympians get lost for four hours in in london prompt can kerron clement to tweet the following, athletes are sleepy, hungry and need to pee. can we get to the village please. number two, this video has france's national party threatening to sue. it shows a party leader with a swastika superimposed on her forehead. and number one trending this evening, some very good news for the south carolina woman infected with flesh-eating bacteria just after thee gave birth to twins. she will actually head home from the hospital very soon is, maybe as soon as tomorrow but she will have to continue physical therapy at home. she has undergone some 20 surgical procedures since diagnosed on may 11th. but no amputations. they caught it very early. >> thanks very much. >> hillary clinton tells cnn what she really thinks about mitt romney using her name in an ad attacking president obama. stand by for that. and at 55 after the hour, a massive and destructive mud slide. and it's all caught on video. because we only do hotels. wow. i like that. nice no. laugh... awe uch ooh, yeah hmm nice huh book it! oh boy call me... this summer, we're finding you the perfect place - plus giving you up to $100 at hotels.com do you have any idea where you're going ? wherever the wind takes me. this is so off course. nature can surprise you sometimes... next time, you drive. next time, signal your turn. ...that's why we got a subaru. love wherever the road takes you. gives you a 50% annual bonus. and who doesn't want 50% more cash? ugh, the baby. huh! and then the baby bear said, "i want 50% more cash in my bed!" phhht! 50% more cash is good ri... what's that. ♪ you can spell. 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[ chirp ] happening now, we're fact check the romney campaign's claim that president obama is rewarding donors at the expense of the middle class. britain is deploying troops to fill embarrassing security gaps at the london olympics. >> and l.a. lakers fans find a bizarre way to welcome the team's newest player. i'm wolf blitzer. and you're in "the situation room." after a few days playing at defense, mitt romney is on the attack right now. he's accusing president obama of what's being called crony capitalism slapping the president saying that people who give the campaign lots of money get government business. listen. >> there's no question but that when billions upon billions of dollars are given by the obama administration to the businesses of campaign contributors that's a real problem, particularly at a time when the middle class is really suffering in this country. >> so we fact checked the money behind one company fis car automotive. here's what we found. john duer was appointed to the white house council on jobs. his private company invested in the fis ker which gets money from the energy department, but the company first got involved in the government loan program during the bush administration. duer is just one of many investors. the company says it has never solicited or accepted any political favors. >> so let's dig deeper on this sensitive issue. joining us two guests, former republican congressman tom davis of virginia, now president of the republican main street partnership. also joining us nira tanden president of the center for american progress, former adviser to president obama on health care. what do you make about this latest republican charge that some of the president's top donors have benefited from government money in effect that has been doled out to them. >> you know, when you're on a campaign and getting attacked, you want to counterattack. i understand their need. but what's odd, what i find odd about the decision to attack on this is, it makes romney more vulnerable. the reason why we even know about john doer or anyone else is because the president released bundlers. romney hasn't released bundlers. he's had a very consecutive campaign, information that george bush released on taxes he's not releasing now as a candidate. i think it's a very odd choice for him. >> bundler all of us know. i don't know if viewers know. those are the fat cats, if you will, who raise a lot of campaign money from big contributors and bundle it all together and give it to a campaign. >> what's your take on this latest push? do you think that it's going to work or is he doing at he's been -- is governor romney doing what he's been criticizing the obama campaign of doing? >> if you're not on offense, you're on defense. you have solyndra, heavy democratic contributors some of whom have gotten contracts. nothing that is precedent setting about that. i think you're on offense. it's a decent shot. >> do you think it will do enough to change the narrative which has not moved off the bain attacks and the financial disclosure attacks coming? >> i think this is the summer doldrums at this point. i don't think this race will engage till after the convention. it's attack and counterattack. the real issue is where is unemployment in september and october. >> do you agree? >> no, i think the real challenge for mitt romney just like the challenge for democrats in 2004, was you do get defined. what's been surprising to me actually as a person who has worked on campaigns and you know campaigns very well, that it's surprising he wasn't better prepared for this. he saw this coming for not just a year or two years, 16 years this has been a source. the fact that mitt romney has not done the basic issue of releasing tax returns makes people concerned there's something there. he needs to answer that. >> he has released one year. so two years which is what mccain and a few other presidential candidates. >> it's more than what the law requires. >> i want you to listen. >> hiding behind the law. >> this is a very powerful ad that the romney campaign used. i'm going to play it because we've gotten reaction from hillary clinton today in a cnn interview. listen to this. >> barack obama's attacks against mitt romney, they're just not true. "the washington post" says on just about every level, this ad is misleading, unfair and untrue. but that's barack obama. he also attacked hillary clinton with vicious lies. >> he continues to spend millions of dollars perpetuating falsehoods. >> mitt romney has a plan to get america working. barack obama, worst job record since the depression. >> so shame on you, barack obama. >> and hillary clinton was asked by our own foreign affairs reporter elise labitt to react to her being used in this ad. shears what she said. >> i think it's a waste of money. everybody knows i ran against president obama in 2008. that's hardly news. everybody knows we ran a hard fought campaign. and he won. and i have been honored to serve as his secretary of state working with him to advance america's interests, values and security. >> do you think that's a waste of pone, that ad? >> not at all. look, when he you're talking him on bain and it's lies or you think it's exaggerations, you you want to get back on the attack. i think it gets them off the scent. look, this race boils down to where the economy is though in september and october. you can see obama and his team want to talk about anything but that at this point and trying to shift it to rich versus poor, to bain capital and these kind of issues. i think it's useful in defining the romney from their perspective, but at the end of the day, i think this race shifts right after the nominations in september and we're going to see a different kind of race. >> the congressman said he thinks it's all going to turn on the economy and the unemployment rate. you know how high hillary clinton pulls, often higher than president obama himself. doesn't this potentially hurt the president in his campaign to remind voters that really brutal battle they had in '08. >> as you know, i worked on that campaign and i was working for hillary whether he she made those comments. the packet is that hillary clinton and barack obama agree on 99.99% of issues and everybody knows, every single american knows she, would with barack obama to advance america's interest. >> she said in 2008, and i remember, shame on you, barack obama the direct -- that was a direct quote. so shame on you, barack obama. the romney folks are using that. that's a pretty powerful ad. >> i disagree. the fact is people know she stands with president obama. she, would in the cabinet but also on economic issues. hillary's been a fighter for the middle class for decades and stands with him on those issues. there are disagreements were significant but they pale in comparison to the differences between both clintons and mitt romney as well as barack obama. >> you know politics is full contact sport. romney is a tough guy. the way he used some of his attack ads to go after newt gingrich or rick santorum, he brutalized those guys. >> i bet you the obama camp will be using those comments in their ads. for right, you're moving from defense to offense. that's something he's got to do so he doesn't get ill defined going into the convention. >> sometimes offense doesn't work. these counterattacks on solyndra when romney himself isn't releasing his donors reminds people he's being secretive. >> this race is being run between the 40-yard lines. there's not a lot of americans movable at this point and a lot of americans not paying attention. you don't want to use this time period to get so ill defined you can't come back. that's what happened to dole. >> and. >> just remember the swift boating of john kerry in 2000. you may have still been in high school at the time. >> junior high. >> mitt romney and barack obama are not singing one another's praises right now. dueling musical ads -- we're going to play those ads for you and we'll discuss. stand by for that. as the british government dropped the ball when it comes to olympic security. stay with us. you're in "the situation room." ♪ ♪ [ male announcer ] its lightweight construction makes it nimble... ♪ its road gripping performance makes it a cadillac. introducing the all-new cadillac xts. available with advanced haldex all-wheel drive. 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[ chirp ] [ chirp ] [ male announcer ] upgrade to the new "done." with access to the fastest push-to-talk and three times the coverage. now when you buy one kyocera duracore rugged phone, for $49.99, you'll get four free. visit a sprint store, or call 855-878-4biz. [ chirp ] late get back to our political panel. the republican tom davis is now president of the republican main street partnership, also neera tanden, a former senior adviser to president obama on health care. i love these two new commercials because they got both presidential candidates, i don't know if this has happened before, both candidates singing. there's an attack ad from the romney campaign. an attack ad from the obama campaign. let's play both of them and then we will all discuss. ♪ oh beautiful for spacious skies ♪ ♪ for amber waves of grain ♪ for purple mountains majettety ♪ ♪ above the fruited plains ♪ i'm so in love with you >> you get the point. he's got a good -- i think on the "american idol" scale, the president's got a better voice than romney, but what do you think about these two dueling singing ads? >> you know, i think what's actually odd about it is that i don't actually understand the connection between the president's singing and the actual substance of the ad. >> i'm so in love with you and showing all of his big fat cat contributor who have been receiving benefits from him since he took office. >> i know the song, but it doesn't like make that big a connection. whereas the romney ad i understood. these i think it's a little bit much to be mocking so much on both levels at this point. but i would say that at least the romney ad you can sort of -- the add attacking mitt romney, you know, it seemed to be me to be a kind of hard hitting if effective ad. it's about betraying that central commitment to the united states when you ship jobs overseas. >> what about you? >> i'm so in love with you, he was singing it to a fund-raiser. you don't see that there. they're both -- this reminds me of the mike pappas ads where the tag line was out of tune, out of touch. this is again a race to the bottom pretty quick in this race as we debl into trivia bon both sides sooner than usual. >> they're cute. >> you could make a cd of these ads and the singing and make it a hit. >> and the president has a ring tone. it was very popular. that al green thing was really popular. i don't know if it will work. maybe it will help the president. >> michelle obama when asked about romney said it was beautiful when she heard him singing. that was a brief bipartisan moment in this bhoel campaign. >> the point of the romney ad attacking the president is about the donors but also this is overarching issue of outsourcing. do you think this goes to the thing you said, the summer doldrums and people will get back to the economy when it matters. >> both parties can have a field day with outsourcing, taking a look at the policies. what we're missing is a serious debate about what causes it, what we do to create jobs in america. with unemployment at 8%, the test is on the administration to show they have a plan because it hasn't worked the last 3 1/2 years. >> the president has been advocating for a long time about stopping tax subsidies for outsourcing as republicans is have stopped that. it's easy to say shame on both your houses but that's not really the case. the case is the president has a strong policy position been outsourcing and the republican party has been standsing in the way. >> it's a position that doesn't work. you have almost $4 trillion sitting on the sidelines. that would be the biggest stimulus we could have but it doesn't fit the political verve of the. >> we tried it for three years. >> we'll try it again soon. thanks so many to both of you coming in. kate has a check at what's going on at the pentagon and i don't understand. >> lots of things going on right now. two more air force pilots had oxygen problems flying the f-22 rapt raptor, but those emergencies are reportedly those twos most recent cases are considered regular mechanical issues. but not related to the mysterious loss of oxygen on other flights listed as, quote unquote, cause unknown. for any of you wary of security checkpoints, the department of homeland security is reportedly working on a new laser based scanner that can be detect what you eta for breakfast. gis mo doe reports the scanner can be fired from over 160 feet away so you won't know it's happening. this election has had its share of name calling and drama. if we needed to remind you of more, i guess it's no wonder jerry springerer is getting involved. he says he met with president obama for about an hour before a town hall today. springer calls obama smart and confident and says he supports the president's re-election bid. just another celebrity. >> was that like an interview or just a little meeting? >> all i know he was at the town hall and he had time to speak with the president. >> that's pretty cool. >> jerry springer, how you doing. >> we'll check in with jerry pop see what he has to say. >> i didn't know he was around anymore. the british government is pushing back hard as serious questions swirl about olympic security, whether there will be enough guards who actually speak english on hand to keep the games safe. you're going to want to see this story. also, a massive mud slide as it happened. to watch it for us.angers thank you so much, i appreciate it, i'll be right back. they didn't take a dime. how much in fees does your bank take to watch your money ? if your bank takes more money than a stranger, you need an ally. ally bank. no nonsense. just people sense. wolf will answer a viewer's question ahead and this one plays to his love of sports. stay with us. which one is it? ? . ♪ sometimes, we go for a ride in the park. maybe do a little sightseeing. or, get some fresh air. but this summer, we used our thank youpoints to just hang out with a few friends in london. [ male announcer ] the citi thankyou visa card. redeem the points you've earned to travel with no restrictions. rewarding you, every step of the way. olympic athletes have been pouring into london's heathrow airport arriving for the summer games that begin a week from friday. as anticipation builds, the british government is deploying troops to fill a rather embarrassing gap in security. a private security contractor admitted last week that it won't have enough staff in place by the opening ceremonies. cnn's senior international correspondent dan rivers has more from london. >> reporter: just a day after the jubilation of winning the olympics in 2005, britain was reminded of the ever present terrorist threat. the 77 bombings under line that security at the games would be a paramount concern. britain's military on the sea, air and land were always going to play a major part in the securing the games. but it was decided early on that a private firm would also be employed to guard the many olympic sites. security firm g 4 s won the contract to initially supply 2,000 guards in december, 2010. in the following september, a confidential report to the home office flagged potential problems with olympic security and the need for more guards. three months later, g4 ds was asked to ramp up the number of guards it was providing from 2,000 to 10,000. last wednesday, the british home sect was told they wouldn't be able to supply the extra guards due to a problem with its computer systems. 3,500 extra soldiers were then mobilized to bridge the gap. >> it is not a shambles. what this is a situation where the government has done what is absolutely right for government to do. >> reporter: some of the soldiers are already arriving at the olympic stadium in east london, a reassuring image and police linda stouffer help to bridge the gap but it's not enough to stop the share price of g 4 s being hammered, down more than 10% since the story broke last week. >> clearly in this instance, the company hasn't done a great job. i'm very sorry about it. and we've got to put it right. and we are going to deliver a safe and secure games. >> british moment sect teresa may was called to parliament to answer urgent questions about olympic security, reassuring politicians everything was in hand. >> g 4 s have failed to deliver their contractual obligations but we have the finest military personnel in the world. >> reporter: the original estimate of 2,000 guards was based on the plan used at the 2002 commonwealth games in manchester. but that figure has been described as a finger in the air estimate by a senior civil the r estimate by a civil servant. in hindsight, it seems woe fwfu naive. it's left the government red faced and left g4s with a potential $77 million loss on a contract that should have been one of their most prestigious. and that's not the only possible problem for g4s. the british home office tells cnn the contractor could not even guarantee whether their guards had the right training. they did not immediately respond to our request for a comment on that specific accusation. this is pretty embarrassing stuff. for all of the folks who are organizing security at the owe him tick ga olympic games. >> and we're only two weeks out. less. so another olympic story. we got this question on twitter. al harris asks what olympic event are you most looking forward to? >> well, first of all, i love all the events. track and field, everything gymnastics. but i really love basketball. and the dream team, you know what, there are great international basketball players. some of those teams are pretty good. i think there will be some good games. you know where i'm going tonight right after this show? >> tell me. >> i'm going to the verizon center in washington, d.c. because the usa dream team is playing brazil. i'm hoping it will be a good game. i'm rooting for the u.s. >> shocker. how many points where they win by? >> a lot. but let's see if the guys really show up to play or if they just go through an exhibition game. the president and vice president are going, as well, to the game. so it will be a good crowd in washington. love basketball. love baseball. love football. love hockey. love all the suppoports. >> you didn't hear him say that i was going to get a ticket to come with him. >> no. >> but compare this dream team to previous dream teams. >> let's see about -- we have some great players now, but michael, we've had some pretty good dream teams. so let's see how they do. >> has blake griffin injured himself? >> he won't be able to play. they're missing a really big tall guy. >> they're looking for you. >> i'm just a fan. >> well, keep asking your questions. you ask twitter, facebook. keep asking your questions. speaking of basketball, what else is coming up? >> a lot is coming up. we have the l.a. laker fans raise a glass and make a pass to the team's newest player. you won't want to try this one at home. [ barks ] ♪ [ upbeat ] [ barks ] beneful playful life is made with energy-packed wholesome grains... and real beef and egg. to help you put more play in your day. this is new york state. we built the first railway, the first trade route to the west, the greatest empires. then, some said, we lost our edge. well today, there's a new new york state. one that's working to attract businesses and create jobs. a place where innovation meets determination... and businesses lead the world. the new new york works for business. find out how it can work for yours at thenewny.com. a mud slide barrels through the woods with the camera rolling. stand by to see it for yourself. unbelievable video. i'm only in my 60's... i've got a nice long life ahead. big plans. so when i found out medicare doesn't pay all my medical expenses, i got a medicare supplement insurance plan. [ male announcer ] if you're eligible for medicare, you may know it only covers about 80% of your part b medical expenses. threst is up to you. call and find out about an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company. like all standardized medicare supplement plans, it could save you thousands in out-of-pocket costs. call now to request your free decision guide. i've been with my doctor for 12 yrs. now i know i'll be able to stick with him. you'll be able to visit any doctor or hospital that accepts medicare patients. plus, there are no networks, and you never need a referral. see why millions of people have already enrolled in the only medicare supplement insurance plans endorsed by aarp. don't wait. call now. two separate mudslides cause destruction in canada in recent days and one was caught on camera by a news team. you can see a wall of mud just barreling through the woods tearing down, look at that, just tearing down trees in its path. unfortunately, four people are believed dead in this massive slide triggered not surprisingly by heavy rains and melting snow. always amazing what mother nature can do. absolutely terrifying. >> and so sad, indeed. on a very different note, the los angeles lakers have a new point guard and it's probably safe to say that a few of the team's fans have raised a glass in h honor. but not like this. cnn's jeanne moos has the story. >> reporter: just because it's called the passing lane doesn't mean someone should pass you a beer. that's just what an suv full of los angeles lakers fans did when they spotted the lakers newest star, steve nash, in a taxi on freeway 110. the guy shooting this is none other than point guard steve nash himself. and when they finally completed the handoff, nash just swung the camera around and added a comment. >> been pretty good so far. >> reporter: nash later tweeted out the video saying thanks for the warm welcome. we're hoping the can of keystone light was cold. the rowdy fans opened their own twitter account calling themselves l.a. beer bro schl and posted video of the view from their suv and the celebration following the handoff. the wl a. beer bros tweet that had they were on the way to the dodgers game, guy in back says that's steve nash. slowed down to check. sure enough. one guy posted to youtube that the video would be a great commercial. keystone light, good if enough to make steve nash open his window. but the makers of keystone light seemed to distance themselves telling cnn we had nothing to do with this video. some online distanced themselves from keystone light. not exactly a premium beer. nash shall should have realized it was a keystone and thrown back, posted one. of course there could have been more razzle dazzle like the two guys who made an entertaining video catapulting a beer, kicking a beer, skateboarding a beer, and bouncing one. but nearly passing a beer between cars, whizzing along the tree way, is already unsafe and illegal. though so far there have been no charges. we haven't seen a product handoff like this since grey poupon. these two who have pouponed their pants if they did this at say, 60 miles an hour. jeanne moos, cnn, new york. steve nash is taking a

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