wasserman schultz joins me to take up the challenge. amateur night at the apollo. president obama thrills the audience by copying al green. and he's no longer in the race, but the comedian stephen colbert is trying to drum up votes anyway, sort of. you've got to see this. i'm wolf blitzer in "the situation room." it's the final push in the south carolina. the candidates have tried to squeeze in every minute of campaigning into this, the last day before the primary. as mitt romney tries to hold onto a lead, newt gingrich is using what could have been a very damaging spotlight on his personal life. he's trying to turn it around to his advantage. let's go live to joe johns, he's in south carolina. he has the very latest. joe? >> reporter: wolf, newt gingrich just wrapping up an appearance in orangeburg, south carolina. a hue high-energy crowd essentially ending what had been a very tumultuous race for south carolina. the picture of the day was gingrich's wife calista well positioned in front of the cameras reading her children's book to kids. it was a jarring contrast with given rich's ex-wife marianne, whose interview with abc news roiled the last days of campaigning with her assertion that he watched an open marriage between himself, marianne and calis calista. >> he always called me at night, always ended with "i love you" while she was there listening. >> john king got the reaction of the night when he asked the former speaker about his ex-wife's allegations. >> i think the destructive vision nature of much of the news media makes it harder to govern this country makes it harder to -- and i am appalled you would begin a presidential debate on a topic like that. every person in here knows personal pain. every person in here has had someone close to them go through painful things. to take an ex-wife and make it two days before the primary a significant question in a presidential campaign is as close to despicable as anything i can imagine. the former speaker has gotten a long way blasting the media, though this will surely go down as one of the his most memorable moments. the gingrich method attacked the premise and questioner showed indig nance and finished strong. >> newt gingrich won that presidential debate and maybe the south carolina primary by turning john king's question on its head, going after the vicious negative news media, deflecting attention from his own admitted personal past misconduct, and making the press, which is not very popular in republican circles in a state like south carolina, the issue. >> reporter: the allegation only added to an otherwise disjointed final day of campaigning before the south carolina primary. the former speaker had to cancel one appearance at a southern republican leadership conference event in this huge empty space in the college of charleston because of lack of attendance, though he was heard telling a man on a hospital tour that he could feel the momentum of the race. the former speaker again just wrapping up an event in orangeburg, south carolina. he's been unusually tight-lipped here on the last day, as if he said everything he needed to say last night in the debate. wolf, back to you. >> joe, thank you. coming out of his win in new mexico, there was some talk that -- becoming unstoppable with a victory in south carolina, but now on the eve of the primary his own advisers say the race is, quote, real tight and a key strategist said he could even lose south carolina. romney himself speaking carefully about his chances. listen to this. >> well, we have a long process ahead of us, 1150 delegates to get. i sure would like to win south carolina, but i know that if those polls were right, regardless of who gets the final number, we're both going to get a lot of delegates. i want as many as i can get. i want the most delegates coming out of south carolina, but i don't know what the numbers will be. i'm pretty confident, cautiously optimistic. romney says the race still looks neck and neck, but he calls that a pretty good spot to be in. sometimes the best defense is to attack. we told you houses newt gingrich went on the defensive last night, lashing out when asked about an embarrassing allegation. here's the entire unedited exchange with the moderator cnn's john king. >> as you know, your ex-wife gave an interview to abc news and another enter view with "the washington post," and this story has gone viral on the internet. in it she says you came to her in 1999 at a time, and she says you asked her to enter into an open marriage. would you like to take some time to respond to that? >> no, but i will. [ cheers and applause ] >> i think -- i think the destructive, vicious negative nature of much of the news media makes it harder to govern this country, harder to attract decent people to run for public office, and i am appalled you would begin a presidential debate on a topic like that. [ cheers and applause ] >> let me finish. every person in here knows personal pain. every person in here has had someone close to them go through painful things. to take an ex-wife and make it two days before the primary a significant question in a presidential campaign is as close to despicable as anything i can imagine. my two daughters -- my two daughters wrote the head of abc and made the point that it was wrong, that they should pull it, and i am frankly astounded that cnn would take trash like that and use it to open a presidential debate. >> as you noted, mr. speaker, this story did not come from our network. as you always know it's a subject of conversation on the campaign. i get your point. >> john, it was repeated by your network. you chose to start the debate with it. don't try to blame anyone else. you and your staff chose to start the debate with it. now, let me be quite clear. let me be quite clear. the story is false, every personal friend i have who knew us in that period says the story was false. we offered several of them to abc to prove it was false. they weren't interested, because they would like to attack any republican, they're attacking the governor, they're attacking me, i'm sure thee get around to senator santorum and congressman paul. i'm tired of the elite madia protecting barack obama by attacking -- >> they certainly had the crowd there. john is here with me in "the situation room." i can't tell you how many people have said to me last night and today, what was john thinking as he was being berated like that? >> it's a tough spot to be in, and i understand the former speaker's role. he was a politician playing to that audience. he said we brought this into the race. i would make the point his ex-wife brought this into the race. wolf, this was not an easy decision. we wrestled with this. number one, the timing was curious, why did she come fright right before the primary. the speaker has a history. you know he's doing this to you, to chris wallace, to the nbc team. he doesn't like the question, he tunnels it into an attack in the media. and the crowds in the debate this year, that applause, it's a good political moment. in the end, we wrestled with all this and came down to the simple thing, our jobs as reporters is to ask the about the news, we decided -- i decided that we were going to do it, and we decided don't be cute or hide it as any other part of the discussion, just ask the speaker, you know, you have to take your lumps. i stand by the decision. i had my job to do. he's a politician. he had his jobs to do. >> you did have exchange after the debate, you spoke to him privately. >> he came up during the first break, and said it's a great debate, and i laugh and i thought it was despicable, and he said, you know how it works, and after the debate they both came, and we revisited the back and forth. he didn't appreciate the question. i completely understand that. he did what he thought he needed to do in the room there. if you listen to what he said, again we bringing it forward, his ex-wife came forward. do any of is like wandering through these stories. we don't. it was the story of the day. we made the decision. i completely understand and respect anyone who disagrees, saying it doesn't belong in a debate. we wrestled in it. >> and very embarrassing story in the end, but he managed to turn it into a potential political gain for him only a couple days before the primary, potentially. >> there is no question that it's a time proven, he's done it in the debate season a red meat republican line, attack the media, it's a liberal media elite. he woven applause in that room even from people who are not gingrich supporters. a lot of people thinks this moment -- i wasn't trying to help him or hurt him. we'll watch -- i had some breakfast with voters this morning, one was a gingrich supporter, she said she's processed all this, the character questions, and she believes he's the best candidate. two our undecided voters said they were wrestling with this, and in the he answered in the end, he called his ex-wife a liar. earlier in the day he did not answer that question. and two undecided voters i talked to this morning said -- were you surprised the other candidates ran away from the story? >> senator santorum touched on it briefly. no, given the reaction in the room, the candidates -- and we've seen this in these debates. the debates have been remarkable to give candidates time to breathe. with the audience playing off the audience is becoming part of the cycle, part of the politics. >> john king moderating an excellent debate last night. >> thank you. the republican candidates are hammering president obama and newt gingrich is talking about his, quote, level of radicalism. we'll talk about that more with the chairman of the commit aye, the congresswoman debbie wasserman schultz is standing by. plus a cyberattack on the justice department. experts believe it was retaliation for a dot-com crackdown. can you enjoy vegetables with sauce and still reach your weight loss goals? you can with green giant frozen vegetables. over twenty delicious varieties have sixty calories or less per serving and are now weight watchers-endorsed. try green giant frozen vegetables with sauce. a hugely popular website shut down. it's a major case highlight in the growing debate of copyright pyrery. cnn's brian todd has the details. >> reporter: this is about the u.s. government essentially declaring wart on copyrighted material. at a swampg mansion in auckland, new zealand, a vintage cadillac, other high-end vehicles are hauled away. the man living there arrested, police say, after bar kaying himself and being found next to a shotgun. he kim schmitz. police say this about kim.com. >> arrested on warrants related to breach of copyright offenses in the united states, money laundering, and racketeering. >> reporter: it's one of the u.s. government's biggest antipiracy crackdowns ever. officials say he ran the megaupload, a favorite of pop stars who sing its praises if a promotional video. official afc it was a popular hub no illegal downloading. a man identified by the tech website cnet as an attorney for megaupload said the government's case is wrong on the merits. experts say part of the operation is legitimate. people can send non-copyrighted material to be shared with others, but officials say that it allowed people to send links to copyrighted movies lie the new requests twilight" films. officials say megaupload duplicated those links. u.s. officials say that meant people at megaupload not only knew they had pirated material but helped to distribute it. federal officials have shut down the website, but when they did that, hack-tivists temporarily knocked the justice department's website off-line. >> i think we will see this. it's an example of the did you gettal wars that exist all over the world with a whole variety of topics, not just copyrighted material. >> reporter: this operation comes as the battle in congress intensifies over new legislation that would require internet providers in the u.s. to block sites that offer pirated material. time warner, the parent company of cnn, is among the industry supporters of those bills. internet companies like google oppose them. there's been speculation that this operation to take down megaupload is timed to coincide with this battle. department of justice officials tell us this has nothing to do with the legislation, that this investigation has been going on for nearly two years, wolf. brian, do federal official know how much money these people made from allegedly trafficking this pirated material? >> they say it was a heck of a lot. they generated more than $175 million in criminal proceeds. officials in the u.s. and elsewhere seized about $50 million of assets. interestingly enough they are three people they were looking for who are still out there, still at large. >> uncharted territory in certain degrees. thank you, brian. congresswoman debbie wasserman schultz is standing by. are the attacks crossing a line? i know we're going to hit it hard from president obama, but we're going to stuff it down his throat. helped us build it. ♪ now i'm a geologist at chevron, and i get to help science teachers. it has four servo motors and a wireless microcontroller. over the last three years we've put nearly 100 million dollars into american education. that's thousands of kids learning to love science. ♪ isn't that cool? and that's pretty cool. ♪ i want to fix up old houses. ♪ [ woman ] when i grow up, i want to take him on his first flight. i want to run a marathon. i'm going to own my own restaurant. when i grow up, i'm going to start a band. 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[ female announcer ] discover what's next in your life. get this free travel bag when you join at aarp.org/jointoday. lisa is monitoring the top stories. what's going on? >> wolf, new data shows an overall gain in home sales in 2011, thanks to a strong end of the year spike. the national association of realtors reports that the sales pace in december hit 4.6 million homes. that is the smallest since early 2005. this amazing video was shot yesterday. a fast-moving brush fire is causing mass evacuations near reno, nevada. at least 10,000 people are trying to dodge a fire stretching more than 3,000 acres. nevada's governor is declaring a state of emergency to free up resources. no deaths are reported. listen up. if you're a kia driver, the car company is recalling more than 140,000 vehicles due to faulty air bags. the defective models are the 2006 through 2008 opt mas and 2007-2008 rondos -- the ntsb says the driver's side airbag may not properly deploy. the recall is expected to begin in march, wolf. thank you, lisa. mitt romney dares her to defend president obama. she will join me to take up that challenge. and president obama singing likal green. you need to see it, you need to hear it. what he did at the legendary apolla theater in harlem. plus a wacky campaign rally. including herman cain and stephen colbert. you won't believe what they're up to right now. without missing a beat. fly without putting your life on pause. be yourself nonstop. american airlines. this just coming into "the situation room." let me update our viewer. it involves syria. the united states has maintained diplomatic relations with syria over these troubled months. more than 5,000 have been killed protesting. but we're learning the obama administration is considering closing the united states embassy in damascus over security concerns the embassy only has a handful of staff working for the ambassador, who recently returned to damascus. most of the embassy staff evacuated earlier in the year. the diplomatic team was further reduced last week. once again, the u.s. considering closing its embassy in damascus. our own arwa damon is on the ground, we'll speak to her. she's been doing some amazing coverage, but this is a significant development. the candidates are lashing out as obama and daring democrats to defend him. joining us a member of congress herself, debby wagger man shultz thanks for coming in. >> thank you, wolf. >> i want you toly on what the front-runner said about you earlier today. listen to this. this morning on fog she was talking about how great things are, what a wonderful job the president has done. i hope she keeps that message up there, keeps on talking about a a great job he's doing. i hope she keeps talking about that, because if we're talking about his record, he's going to lose. >> madam chairwoman, go ahead and respond. >> we must be getting under his skin a bit if he feels the need to bring up the chair of the national committee and the things i say, whether it's against him and his terrible record or in support of president obama's remarkable record. bringing us from bleeding 750,000 jobs a month, now going forward three years later, we've had 22 straight months of job growth in the private sector. last month 200,000 jobs were created in the private sector. since 1997, we've had more jobs created in manufacturing than since 1997. he he can absolutely count on me touting his record, and beginning to get this economy turned around, compared to the desire and the focus of mitt romney, which is to drag us back to the policies that got us into this economic mess in the first place, someone who wants to stand up for people who are already doing well so they can do even better and to heck with working families. i don't know if you had a chance to watch the debate last night, but it was heated among the candidates, but it they really went after president obama. i want you to responsible. listen to this. >> the president of the united states can't cut one penny out of the social well fair system and wants to cut a trillion out of our military and hit our veterans, and that's disgusting. >> i know we're going to hit it hard for president obama, but we're going to stuff it down the throat and point out it's capitalism and freedom that makes america strong. the level of radicalism in his second term will be truly frightening. >> so let me ask you this question -- is this kind of rhetoric against a sitting president just politics, business as usual, or is it over the top? >> the rhetoric that the candidates running for president on the other side of the aisle used last night was stunning. it was stunning in its outrageousness, and stunning in the goal that they have to say or do anything, what was most stunning was mitt romney playing business hi own set of rules. when john king asked him if he would release 12 years of tax returns, because his father said when he ran for president, releasing just one year could indicate an anomaly, he had so much conviction in his answer, he said maybe. he has a pattern of a total lack of commitment. there's a contrast between any of the candidates and president obama, and we'll continue to point out he's been fighting to make sure we can balance the cuts we know we need to make to reduce the deficit, at the same time making sure that everyone in america pays their fair share, that we have a tax rate that makes sense and we make sure that people like mitt romney's secretary don't pay a higher tax rate than he does. there are millions of middle-class families as we learned tuesday millions of american families pay taxes at a higher rate that romney does. that's unacceptable. >> long-term capital gains, that's what the rate is, the law of the land. >> that's right, there sure isn't, but what's unfortunate and unacceptable is he refuses to come clean, won't release his tax returns, isn't even committing that once he releases any that he'll release multiple years. no one begrudges anyone's accomplishments or sense. what we do begrudge is a candidate like mitt romney, who believes it's only people already doing well that deserve a tax