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The Situation Room

Trial of Nidal Hasan Begins; Amber Alert in California; Police Search for Kids of Murdered Woman; Brothers Strangled to Death by Snake; U.S. Government Suing Bank of America; Iran Trying New Path to Nuclear Bomb?

Aired August 06, 2013 - 18:00   ET

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

WOLF BLITZER, CNN ANCHOR: Happening now, the first criminal charges in the deadly attack on the U.S. diplomatic compound in Benghazi, Libya. One suspect has been walking around freely, but CNN managed to track him down.

Plus, the defendant in the Fort Hood massacre declaring that he is the shooter. So, why isn't he facing terrorism charges as his court- martial begins?

And the frantic search for two missing children in California. They may be in the clutches of a man suspected of murdering their mother.

We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer. You're in THE SITUATION ROOM.

It's been almost a year since the slaughter at the U.S. diplomatic compound in Benghazi, Libya. Since then, there's been a lot of political finger-pointing that followed. Now, now for the first time federal authorities are officially accusing someone for being responsible for that attack that killed the United States Ambassador Chris Stevens and three other Americans.

This is the story we broke first right here on CNN. We have now learned that criminal charges have been filed. They are under seal against several suspects, including the Libyan militia leader Ahmed Abu Khattala. He's been walking around freely in Libya while U.S. authorities were not able to catch up with him.

CNN's Arwa Damon did. Search spoke with him recently in Benghazi.

Arwa is joining us from Cairo right now.

Arwa, I want you to listen, first of all, to some of the report you filed on your interview.

(BEGIN VIDEOTAPE)

ARWA DAMON, CNN INTERNATIONAL CORRESPONDENT (voice-over): U.S. officials have often suggested that they would be interested in speaking to a man named Ahmed Abu Khattala about the events the night of the attack.

He's really not that difficult to find. (on camera): We met with Ahmed Abu Khattala in public, at the coffee shop of a well-known hotel here in Benghazi, for around two hours. He seemed to be confident, his demeanor most certainly not that of a man who believed that he was going to be detained or targeted any time soon. And he agreed to let us film audio, but not video, of our conversation.

(voice-over): Did anyone from the American or Libyan government get in touch with you?

AHMED ABU KHATTALA, SUSPECT (through translator): Never.

DAMON: Never?

KHATTALA: Never.

DAMON: No American official or Libyan official tried to contact you?

KHATTALA: Even the investigative team did not try to contact me.

DAMON: You're talking about the FBI team?

KHATTALA: Yes.

(END VIDEO TAPE)

BLITZER: And Arwa is joining us from Cairo right now.

So, Arwa, he's now been criminally charged -- it's under seal -- by the U.S. Justice Department. What was he like when you spent, what, an hour or two with him in Libya?

DAMON: Well, Wolf, first of all, he also said that he would, in fact, be willing to sit down with the Americans as long as it was a conversation similar to the one that we had had and not an interrogation.

He was fairly relaxed. He showed up with around half a dozen members of an Islamist unit, a militia that is effectively part of the Libyan security forces. The Libyan authorities, he said he has a fairly close relationship with a number of senior commanders amongst the Libyan security forces.

He was altering between being relaxed, at times, though, getting a bit aggravated with our questions, especially when we were pressing him on specific details about what happened the night of the attack. He most certainly does not deny being there, but he says that he arrived on scene after one of the Libyan commanders who was close by called him up and asked him for assistance, because apparently this Libyan commander's men were somehow caught up in that attack.

He says when he initially arrived there, he saw men carrying rocket- propelled grenades and various other weapons. But because of the intensity of the firefight, he actually wasn't initially able to enter the compound. BLITZER: He may be watching us right now, Arwa, on CNN International. You got to know him a little bit. If he hears -- if he's hearing right now that he is now criminally charged by the U.S. Justice Department with the killings in Benghazi of the U.S. ambassador and three other Americans, what is your sense?

How's he likely to react to that? Because for all practical purposes, there is no real Libyan government in Benghazi right now. There's a lot of just plain people on the loose, including a whole bunch of terrorists.

DAMON: Look, Wolf, it's an incredibly sensitive situation. And we actually flat-out asked him. We said there's allegations against you that you were perhaps involved in the attack, that you may have been the mastermind of the attack.

And he and two of the other militiamen who were with him burst out laughing. They found that concept to be absolutely ludicrous. It is highly unlikely that he would be willing to be brought in, be detained. That's not to say, though, that he would not necessarily be open to a conversation like he said that he was.

And, you know, Wolf, when you speak to some of the other analysts, people have been following these groups inside Libya very closely, they will tell you that Ahmed Abu Khattala, it's highly unlikely that he was in fact directly responsible for what took place that night. They believe the U.S. really needs to begin looking outside the box, beyond individuals whom they would perhaps deem to be the usual suspects, when it comes to really tracking down who was responsible.

One analyst who we spoke to said that he believed that this was an attack that was planned by al Qaeda in the Islamic Maghreb and that the vast majority of people who were in fact directly involved in it were now fighting in Syria.

BLITZER: Unfortunately, the U.S. government can't count on the host country, Libya in particular case, doing much to go ahead and arrest this guy or any of the other suspects who have now been criminally charged under seal.

Arwa Damon, thanks very much for that.

All of this is a subject of a CNN special investigation by CNN's Erin Burnett called "The Truth About Benghazi." It airs later tonight here on CNN.

Erin is joining us from New York.

Excellent work, Erin.

I know among others things you spoke to the mother of one of the Americans who was killed in Benghazi. What did she tell you?

ERIN BURNETT, CNN ANCHOR: You know, it was amazing, Wolf.

We had a chance to speak with the families. And for me, I remember that night. It was 7:00 Eastern when we first got news that an American had been killed in Benghazi. And we had just gone on the air. We had that breaking news. And at that moment, it's a disembodied thing. We have covered it day in and day out, as you have, for the past nearly a year.

But talking to those families, you realize how personal, how emotional and how crucial it is to get answers. Most of them were apolitical. You're going to hear them all speak tonight, but one of them, the mother information officer Sean Smith, Pat Smith, is angry and does feel it's political. And she blames someone very specifically. Here's Pat Smith.

(BEGIN VIDEO CLIP)

PAT SMITH, MOTHER OF SEAN SMITH: It's Hillary's legacy over there. If not, why -- I had told her personally nose to nose, please tell me what happened. And she promised me she would get back to me. She did not get back to me. She did not get back to anybody else in America. And she's hiding everything that she can.

(END VIDEO CLIP)

BURNETT: That was the anger and frustration that she feels. And you can understand that, Wolf.

But what amazed me from talking to the other family members who lost their children, who lost their siblings is just they just want answers. And they don't want this to be political. It seems obvious that we need more answers. It also seems obvious to them that this shouldn't be about the finger-pointing and blame game that's been going on in Washington.

And I just want to let all your viewers know, Wolf, of course people can go to our blog because these families have foundations, ways to try to help to make sure this doesn't happen again. I hope people will go to those foundation Web sites and learn more about the families.

BLITZER: You have spent a lot of time working this story, reporting on it. You have got a great team that you have put together for tonight's special. What's the biggest takeaway you take yourself from this documentary?

BURNETT: Wolf, one of the things that amazed me the most was on both ends, but the first end, could this have been prevented? The answer to that question is yes. We will talk to one of the men who briefed Chris Stevens on security. His takeaway, the Americans knew there were all these groups out there. Didn't know which group was which and didn't know what they were capable of and as a result completely mis-evaluated the risk.

So, yes, this could have been prevented. The British, the U.N., the Red Cross had all left Benghazi. No one in the American government or at any agency ever recommended that the Americans do so. That was one point that we take away. It didn't have to happen. And then on the other end, could we -- you're talking to Arwa about charges being filed now almost one year later. Where are you going to get the forensic evidence? You could charge someone. How will you actually take them to trial and put them in jail? Those are serious challenges. Will someone be brought to justice? This could have happened so much more quickly.

And among our conclusions is that the administration was focused foremost on reelection. It's a painful truth, but it appears to be the case. And the Republicans wanted to get the credit for caring about what really happened. But they really just wanted revenge on the administration as opposed to real answers about what really happened.

There's a lot of black eyes to go around, but this was something that could have been prevented and we could make sure doesn't happen again.

BLITZER: We're going to look for it to seeing your report later tonight. Erin, thanks very much.

And to our viewers out there, don't miss tonight's riveting documentary, "The Truth About Benghazi," an "ERIN BURNETT OUTFRONT" special investigation. It airs at 10:00 p.m. Eastern later tonight only here on CNN.

Up next, inside the court-martial of the Army psychiatrist charged in the Fort Hood massacre, his surprising statements as he defends himself.

And new details about the horrifying deaths of two boys attacked by a python on the loose.

(COMMERCIAL BREAK)

BLITZER: Court-martial proceedings have begun for the Army psychiatrist charged with killing 13 fellow soldiers in the 2009 Fort Hood, Texas, massacre.

Major Nidal Hasan is representing himself in his opening statement said -- and I'm quoting now -- "The evidence will clearly show that I am the shooter." Those are his words. "The evidence will clearly show that I am the shooter."

Let's discuss what's going on with attorney and military law expert Gene Fidell. He's a visiting lecturer at the Yale Law School, former president of the National Institute of Military Justice.

Gene, thanks very much for joining us.

A lot of us wonder, why didn't the military put federal terrorism charges against Major Hasan?

EUGENE FIDELL, FORMER PRESIDENT, NATIONAL INSTITUTE OF MILITARY JUSTICE: Well, there may be a technical reason for that, Wolf.

The Uniform Code of Military Justice permits courts-martial to try other crimes and offenses, but only if they're non-capital. And Dr. Hasan would have been subject to a capital charge under the federal -- the terrorist provisions of the federal criminal code. So I think that's the explanation for that.

But the real question, if I may, is why wasn't this case tried in federal court at all? In a way, it's a rerun of the issues that have emerged with respect to the Guantanamo Bay military commissions. Those cases too could have been tried in federal court.

BLITZER: Well, he's basically admitted to killing these people, 13 people, wounding, what, another 30 or 31 others. And they have got these charges. They're seeking the death penalty. Clearly, they're going after him.

I raise the whole issue of terrorism because since he wasn't accused of terrorism, even though he was screaming out "Allahu akbar" during the course of the killings, he says he was inspired by Anwar al-Awlaki on the Internet, even though he wasn't accused of terrorism, the victims and their families, they're not eligible to get any compensation from the federal government because he's just accused of murder and, as a result, terrorism doesn't come into play.

FIDELL: Well, it's a peculiarity of the Uniform Code of Military Justice that things like terrorism that we would call terrorism or things like war crimes don't get prosecuted under those titles.

They're simply prosecuted as, for example, murder. So there's a bind. Now, my understanding is that members of Congress are on the case as far as the question of benefits and eligibility for Purple Hearts and so forth. My assumption is that the Congress will fix that and probably do so pretty quickly.

BLITZER: Because it's surprising to me the military didn't do that initially.

The other surprising and pretty awful thing is he's still collecting his salary as a major in the United States military. He's already collected since the shooting spree about $300,000. And more will be collected until he's convicted. What's up with that?

FIDELL: Right. That's a great question.

And people really should be scratching their heads about it. The fact is that as a commissioned officer, Dr. Hasan is entitled to be paid his paid allowances just like any other G.I. He can't be treated as ineligible for paying allowances because he hasn't been convicted of anything yet.

However, I have to say -- and here's a curveball. I think this will raise a number of questions, so get ready. I think the president could have simply fired Dr. Hasan and that would have cut off his pay. The only problem with doing that would have been that then there wouldn't have been military jurisdiction and Dr. Hasan at that point could have been tried in federal district court for terrorism charges.

I gather there must have been a pushing and shoving contest between the Justice Department and the Pentagon and the Army, who was quite adamant, you have to assume, that this was a case that really should be tried in an Army court-martial. But the president did to my understanding have the power to simply fire Dr. Hasan, dismiss him as a commissioned officer.

(CROSSTALK)

BLITZER: All right, we will check that with the White House and make sure you have got the right information, because it is pretty shocking. He's getting $300,000, but the victims, the families who suffered, those who were killed, those who were injured, they're not getting any special compensation because of the peculiarity of the law.

Hold on for a minute, Gene, because Ed Lavandera, our correspondent who is at Fort Hood, Texas, right now, he's joining us on the phone.

Give us a little update, Ed, on what happened today.

ED LAVANDERA, CNN CORRESPONDENT: Well, Wolf, we had had planned to come to you live from the grounds here of Fort Hood just a few hundred yards away from the courthouse where the trial is going on.

But we were forced inside of a building by military officials here at Fort Hood because we are prohibited from seeing Major Hasan come and go from the courthouse. He is escorted out of the building and into a helicopter and flown to a nearby county jail, where he is being held throughout the course of these proceedings.

But we are not allowed to watch any of that. So every time Major Hasan comes and goes from Fort Hood, we are forced to go inside of a building and wait for the helicopters to either land or take off and have him escorted in the building.

But the testimony has wrapped up here at the first day. And Major Hasan very quickly from the get-go of this trial made it clear that this will not be a trial about whether or not he's guilty or innocent. He is waging his own war here at this point, Major Hasan saying that "I am the shooter," that the evidence will show that. But clearly Major Hasan wants to make a larger philosophical point about justifying why he killed 13 soldiers and wounded more than 30 others.

BLITZER: Ed Lavandera is going to be covering this trial for us.

We will stay in close touch with you. Ed, thanks.

Gene Fidell of the Yale Law School, thanks to you as well. Lots of other questions, we will continue to explore.

Up next, Americans evacuated because of a terror threat. Now new details of what the intelligence community is doing to track down the possible attackers.

And a huge scare for R&B singer Usher. His 5-year-old son stuck at the bottom of a pool. We have the dramatic 911 call.

(COMMERCIAL BREAK)

BLITZER: Americans evacuated, U.S. drone strikes reported, al Qaeda operatives on the move, it's all been happening in Yemen today, the country clearly at the center of a growing fear that a terror attack may be imminent.

Our Pentagon correspondent Barbara Starr is following all the new developments for us.

Barbara, what is the U.S. intelligence community doing to try to track down possible attackers?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Wolf, this is now a 24/7 hunt.

It begins, of course, working with Yemeni intelligence services and the Yemeni government to see what they know. They have already posted a list of the 25 most wanted al Qaeda members in their country. But behind the scenes, the CIA and the rest of the U.S. intelligence community is looking at a number of things, we now know, looking for clues.

Let me tick through some of them for you. Of course, they are increasing surveillance by drones and satellites overhead, looking for any possible unusual activity, any targets. If they find them, we are told they will go after them. They are also scouring those classified intercepts we have heard so much about, telephone and communication intercepts by the National Security Agency looking for any unusual communications patterns.

And they're even looking at Web sites and chat rooms used by jihad groups to see if there are any known members of al Qaeda in Yemen that may be posting messages about all of this. And even, Wolf, it's gotten to the point that we're told they're looking at financial transactions, family members of known jihad members, looking at any pattern of activity they can find -- Wolf.

BLITZER: What do we know, Barbara, about the American evacuees taken out of Yemen today?

STARR: Well, these were members of the U.S. Embassy, we are told, that were brought out by a U.S. military aircraft that then landed in Germany.

This was an effort to reduce the U.S. footprint even further. We're told no new intelligence about the threat, but a growing sense that they just want to reduce any U.S. footprint, the number of U.S. people in Yemen and, of course, the State Department telling American civilians, get out of Yemen. Get out now -- Wolf.

BLITZER: All right, Barbara, thanks very much.

Up next, the children are missing and the man suspected of killing their mother may have abducted them. We're following the manhunt in California.

And a scare for music superstar usher involving his son in a swimming pool. We have the 911 call.

(COMMERCIAL BREAK)

BLITZER: Happening now: a woman found dead in her burned-out home. Her friend is suspected of murder and her kids may be with him right now, a massive search under way.

Two young boys killed in their sleep by a giant python. How could it happen? Their uncle is now speaking out.

And Iran may have found a new and faster way to try to build a nuclear bomb. Israel's former defense minister tells me what he knows.

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

A massive search is going on in Southern California right now for two missing children. They may have been abducted by the man suspected of murdering their mother.

CNN's Paul Vercammen is joining us now from San Diego.

Paul, what are the police saying about the suspect?

PAUL VERCAMMEN, CNN CORRESPONDENT: Well, right now, Wolf, we can tell you that this is not just a California search. This is a nationwide search for James DiMaggio.

It has been expanded, with federal marshals and the FBI joining in. And it is a desperate search. In fact, San Diego County sheriff's detectives now releasing new photos of the suspect, DiMaggio, photos of him that show him clean-shaven and more recent.

They say this is important because they want him identified. They want him to either surrender himself or they're hoping someone else will spot him. As you pointed out, Wolf, this all started with a fire on Sunday night. And when firefighters responded, inside they found two bodies. That of 44-year-old Christina Anderson, said to be a close platonic friend of DiMaggio's, and they also found the remains of a child.

Now one law enforcement telling me that these remains are not inconsistent with those of an 8-year-old. They have not found, so far, the daughter. She is 16-year-old Hannah. She's said to be 5'7" tall, 115 pounds. And an Amber Alert here in California has been issued throughout the state.

But as we've said, now that this is a nationwide search, what they are looking for is the suspect's car, a blue Versa. And it has California plates.

The suspicion here, that DiMaggio murdered his close friend. It is said that he knew this family for a long time. The children since at least childhood. And they are looking throughout the area and throughout the west right now for James DiMaggio -- wolf.

BLITZER: And San Diego County Sheriff's Office has released this picture that we're showing our viewers right now.

This Amber Alert that was sent out overnight, how is that impacting the search?

VERCAMMEN: Well, it's impacting it dramatically, because so many people received it. And they want anyone in the state knowing that DiMaggio could have fled the area to make that phone call if they see this vehicle or they -- if they see that picture of him that you just showed, Wolf. So it's impacting it not only on a state level but also on a nationwide level.

BLITZER: Because it's been sent out to every -- almost everyone's cell phone, is that right?

VERCAMMEN: Exactly right. In fact, a lot of people were alarmed when they received it. But they're testing this. And, you know, many people did receive this. You know, be on the lookout for, and got this with the description of the blue Versa and the details of the license plate number.

BLITZER: All right. Let's hope they find this guy and find him quickly. Thanks very much, Paul Vercammen.

In Pennsylvania, meanwhile, arraignment for a man suspected of spraying a rural township board with gun fire, killing three people. Rockne Newell appeared by video and was charged with criminal homicide. He didn't enter a plea. Newell had been battling the Saylorsburg township officials for years over a derelict -- over a derelict property charge. Witnesses say he yelled "They stole my land" as he opened fire.

New details are coming out about the bizarre deaths of two young brothers in New Brunswick, Canada, strangled in their sleep by an escaped python, a snake we now know was being kept illegally.

Nick Moore is joining us from the scene right now in New Brunswick, Nick Moore of CTV.

Nick, what's the latest information you're picking up?

NICK MOORE, CTV CORRESPONDENT: Well, Wolf, people in this community continue to be in disbelief about what has happened here. The death of two young children would be difficult enough for anybody to comprehend, but the tragic and horrific way that police say these two brothers died is for many too much to handle.

(BEGIN VIDEOTAPE)

MOORE (voice-over): A new day in Campbellton only bringing more pain, disbelief and shock, now turning to grief. Four-year-old Noah Barthe his 6-year-old brother Connor were killed by a snake as they slept at a friend's house Sunday night.

The 15-foot, 5-meter African Rock Python was kept in the floor-to- ceiling enclosure in the apartment. At some point during the night the snake escaped through a ventilation duct in the enclosure, made its way through the ceiling over the living room where the boys were sleeping, and fell through.

When police arrived at the apartment early Monday morning, they found the two boys strangled. The python has since been destroyed. This type of snake illegal to have in New Brunswick.

UNIDENTIFIED MALE: Wouldn't ever expect something like this would happen around here, like I say, in Canada. Especially in New Brunswick or something like that, something like that would happen. But I don't know what to say. There's many weird things can happen, I guess, in the world. I don't know.

MOORE (on camera): Police have been securing the apartment and store ever since they made that terrible discovery early Monday morning. RCNP major crimes is now investigating.

(voice-over): Joanne Lagacy (ph) was inside the reptile shop with her adult daughter two weeks ago.

UNIDENTIFIED FEMALE: To me, kids shouldn't be in there. It should be people from 19 and over.

MOORE: The owner of the store, who also owns the apartment where the boys died, told CTV News he's had the snake for more than a decade and that it was rarely ever handled. The city now looking at changing their own bylaws when it comes to exotic animals.

UNIDENTIFIED MALE: I don't think you have the death of these two kids cannot go in vain.

MOORE: People who live in the area said they had trouble sleeping last night.

UNIDENTIFIED MALE: I didn't know even what was going on until I came outside and I spoke to a neighbor or someone who was just snooping around the tape lines. They told me. And that's when I got in shock. And I was scared; I was frightened. I didn't know what to do, you know. So I just came back home and I left for the night, because I didn't want to be near any of this.

MOORE: Along with grief, anger too. Many people refusing to go on camera but saying this store should never have been allowed to operate.

UNIDENTIFIED MALE: There's funerals to be organized here by the families. And I think that's where we're going to start really to see some -- some anger.

MOORE: A fund raiser is now being organized to help the mother of these two young boys with the cost of funerals.

UNIDENTIFIED MALE: She's got some good peoples and a good family that will certainly help her. The community is going to rally.

MOORE: A community still coming to terms with the unthinkable. The family now asking for privacy.

(END VIDEOTAPE)

MOORE: And Wolf, police say this continues to be a police investigation. And that charges are still possible here.

BLITZER: All right. We'll continue to watch with you, Nick Moore of CTV, reporting. Thank you.

Meanwhile, a bad scare for the singer Usher. His 5-year-old son was swimming when he got stuck in the pool drain. It happened at the music star's Atlanta home yesterday. Usher himself was not there. The boy's aunt frantically called 911.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE (via phone): My nephew was in the pool. And he -- he went. I couldn't get him. I couldn't -- I couldn't get him. I tried to get him. And they got him out now doing CPR on him. He's five years old.

UNIDENTIFIED FEMALE (via phone): OK. Stay with me.

UNIDENTIFIED FEMALE: Huh?

UNIDENTIFIED FEMALE: Is he breathing?

UNIDENTIFIED FEMALE: Is he breathing? Is he breathing?

UNIDENTIFIED MALE: He is.

UNIDENTIFIED FEMALE: He's breathing. Yes, ma'am.

(END VIDEO CLIP)

BLITZER: Two men who were installing sound equipment at the home were the ones who pulled Usher's son out of the pool. The boy was hospitalized overnight for observation. Usher's stepson died in a watercraft accident on a North Georgia lake last year.

Coming up, why the U.S. government is now suing Bank of America. Plus Eliot Spitzer's political rival. At least one of them has now been arrested. She also happens to be his former madam.

(COMMERCIAL BREAK)

BLITZER: Bank of America is now facing two lawsuits by the government alleging it defrauded investors in mortgage-backed securities, the kind at the center of the financial crisis back in 2008.

Let's bring in our crime and justice correspondent, Joe Johns working the story for us.

What's going on?

JOE JOHNS, CNN CRIME AND JUSTICE CORRESPONDENT: Well, Wolf, you've heard about banks that are too big to fail. Some may be too big to jail. It's also been suggested this lawsuit shows there are some that are just not too big to sue.

The Department of Justice announced today it's going after Bank of America with some of the biggest complaints about the financial crisis that nearly tanked the economy between 2007 and 2008.

DOJ says America's second largest bank lied about the riskiness of $850 million in shares of home loans that are sold to investors. DOJ says the bank made false statements about how carefully it checked out toxic loans.

Now remember, this is a civil suit, so no one is going to jail. But if Bank of America is found liable, it could hit -- get hit with millions of dollars in fines, based on the number of violations.

BLITZER: What does Bank of America have to say about this?

JOHNS: We have talked to them. They deny defrauding anybody. They say these were not subprime loans, which were the main focal point of the financial crisis. They say these were prime mortgages sold to sophisticated investors who had ample access to the underlying data.

And Lawrence Grayson at Bank of America told CNN, "We're not responsible for the housing market collapse that caused mortgage loans to collapse at unprecedented rates."

BLITZER: Has the Department of Justice here in Washington done this before?

JOHNS: They actually have. They've sued Credit Suisse. They've sued JPMorgan Chase in the past. Bank of America apparently knew this was coming, too. Just last week, it said in a quarterly filing that it expected to be sued by DOJ and, by the way, the Securities and Exchange Commission.

BLITZER: I guess this process is just beginning.

JOHNS: Absolutely.

BLITZER: Thanks very much for that report.

Up next, would Israel attack Iran's nuclear program without the United States' support or involvement? I'll ask the former Israeli defense minister, Ehud Barak, about that and Iran's progress toward building a nuclear bomb.

(COMMERCIAL BREAK)

BLITZER: Iran's new president said today he's ready for serious talks with the west about his country's nuclear program. But there are also reports Iran is trying a new method in its efforts to build a nuclear bomb, a huge concern for the United States and its allies, especially Israel.

(BEGIN VIDEOTAPE)

BLITZER: And joining us now, the former defense minister of Israel, Ehud Barak.

Minister, thanks very much for coming in. How close is Iran right now to developing a nuclear bomb through weapons-grade plutonium, as opposed to uranium?

EHUD BARAK, FORMER ISRAELI DEFENSE MINISTER: They plan to operate a heavy water and nuclear reactor to produce plutonium somewhere next year, later in 2014.

It doesn't mean that they will be immediately capable of producing weapons based on plutonium. They are much closer on the enrich uranium path to a nuclear weapon. Which probably, if they decide to do as fast as they can, it would end up about 18 months, what with they will try to hide what they -- what they are doing. It might take two years or a little bit more. But we don't know yet that the decision to build weapons has already been agreed upon or accepted by the leadership.

BLITZER: Is it true, as "The Wall Street Journal" was reporting this week, that it would be easier for Israel to destroy the plutonium reactor, as opposed to the uranium reactor?

BARAK: Yes. It's easier to destroy, not just to us -- to you, to anyone else. It's easier to destroy a plutonium reactor, because it's basically an installation, a very big one over the ground. And very -- extremely vulnerable. And as you know, at least one had been destroyed by us in Iraq 30 years ago. There are some rumors about another one.

BLITZER: There was a report on Israel radio quoting a high Israeli official expressing doubt the Obama administration would do anything significantly, militarily, to stop Iran from building a nuclear bomb if it came down to that. How do you stand on that?

BARAK: I hope -- when we talked about the need to prevent Iran from turning nuclear, that all options are on the table. We mean it. We expect, of course, the administration and all others who say it to mean it.

And now we had Hunil (ph) was elected as the president and independent of the nuclear issue. It's probably something positive.

But in regard to the nuclear issue, it might draw the attention. People might assume that he's apparently motivated in some alternatives. And the alternative or the option to talk to him might be -- should be exhausted before you turn to any physical steps against this nuclear military program. So people might be dragged and leadership might be dragged out of the real issue, which is to prevent Iran from turning nuclear.

BLITZER: He had a news conference today, the new president of Iran, Hassan Rouhani. And he sounded pretty reasonable. I'll play a little clip. It's translated. Listen to this.

(BEGIN VIDEO CLIP) HASSAN ROUHANI, PRESIDENT OF IRAN (through translator): We are for negotiations and interactions. We are prepared seriously and without wasting any time to enter negotiations with the other side which are serious and content-based and substantive.

(END VIDEO CLIP)

BLITZER: So what do you think? Is this new president of Iran more moderate than Ahmadinejad?

BARAK: He's less colorful than Ahmadinejad and talks more normally. But doesn't mean that he's less extreme; he's part of this extremist ayatollahs group.

And in a way, in regard to the nuclear program, they are all on the same page. They're trying to find the most effective way to defy and defeat the whole world.

So I think the real issue -- I cannot stand and say in the way of someone wants to talk to them or try to talk to them. But any contact with them, any negotiation with the new president should be under tight time line limits in a way that will make sure that the strategic clarity of the need to block Iran from turning nuclear will be kept in mind so that long before starting 2014, Iranians should know, probably behind closed doors. No need to embarrass them in public. They should know that either they are serious about putting an end to the nuclear military program or else.

BLITZER: Ehud Barak, the former defense minister of Israel; the former prime minister of Israel, as well. Thanks very much for joining us.

BARAK: Thank you, Wolf.

(END VIDEOTAPE)

BLITZER: The former defense minister, by the way, also told me he thinks that there should be what he described as a no-fly zone over Syria, given the humanitarian crisis that's going on as a result of the civil war there -- civil war there.

And he also told me he thinks the Obama administration should strengthen the relationship that currently has with the new interim leadership of Egypt.

And speaking of Egypt, Senator John McCain is in Cairo right now saying what the White House won't say, that the ouster of the country's first democratically-elected president, Mohammed Morsy, was a coup.

McCain and fellow Republican Senator Lindsey Graham, they are both in Cairo with President Obama's blessing, trying to break the political stalemate and end the violence that's rocked the country since Morsy was removed by the Egyptian military.

(BEGIN VIDEO CLIP) SEN. JOHN MCCAIN (R), ARIZONA: I remember walking through Tahrir Square just weeks after Mubarak had left power. We have said that we shared the democratic aspirations and criticisms of the Morsy government that led millions of Egyptians into the streets on June 30. We've also said that the circumstances of the former government, the president's removal, were a coup.

UNIDENTIFIED MALE: I ask you to give me a definition of political coup.

MCCAIN: I'm not here to go through the dictionary. If it walks like a duck and quacks like a duck, it's a duck.

(END VIDEO CLIP)

BLITZER: Referring to a coup.

By law, by the way, more than $1 billion in U.S. military aid to Egypt would have to be cut off if the U.S., if the president of the United States formally declares that Morsy's ouster was, in fact, a coup. So far the White House has not said that.

Another couple of stories we're watching here in THE SITUATION ROOM. Day one of jury deliberations has now ended in the trial of Boston mobster James "Whitey" Bulger. He's accused of 19 killings and 13 counts of extortion and money laundering.

Bulger was arrested in 2011 in Santa Monica, California, where he was living under an alias with his girlfriend after 16 years on the run.

Jurors deliberated for six hours today. They'll resume tomorrow morning.

And the former New York governor, Eliot Spitzer's, opponent, at least one of them, in the race for New York City comptroller has been arrested. She's also, by the way, his former madam. The FBI says Kristin Davis was caught selling prescription pills. She was a key player in the prostitution scandal that forced Spitzer to step down as governor back in 2008.

No hanky, no problem when you've got money to burn. And wipe. Jeanne Moos is next.

(COMMERCIAL BREAK)

BLITZER: Here's a look at this hour's iReport, "Hot Shots." Check them out.

In Colorado, a spectacular sunset follows a storm.

In Montana, it's a quiet day on the lake.

In Canada, a duck is pictured near a pond.

And in South Africa, food is prepared to feed the needy on a religious holiday. "Hot Shots," pictures coming in from our CNN iReporters around the world.

Maybe money can't buy happiness, but dryness is a different story. Here's CNN's Jeanne Moos.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): When you're wet or sweaty, this is how most folks mop up. But when you don't have a hanky handy, show me the money.

That's a 50 euro note this guy has deployed to take care of excess liquidity, the equivalent of around 66 bucks.

There he was in the background of an interview taking place at a horse race in Ireland.

(on camera): Talk about money needing laundered. Who wants this on their face? A 2002 study showed that 94 percent of bills tested contained pathogens.

(voice-over): Sort of reminds us of the time in "Zombieland"...

WOODY HARRELSON, ACTOR: I haven't cried like that since "Titanic."

MOOS: ... when Woody Harrelson uses cash to wipe away tears.

The guy who used a euro note to mop up rain drops could have left his cash in his pocket if he had supporters like Mitt Romney did.

MITT ROMNEY (R), FORMER PRESIDENTIAL CANDIDATE: Thank you, thank you. There you go.

MOOS: During the last presidential campaign, this restaurant owner came to Mitt's rescue, whether or not Mitt wanted rescued.

JOSEPH MELLUSO, OWNER, THE TIN FISH FRANCHISES: I can't let our next president look all sweaty like this in a photograph.

MOOS: The restaurant owner then tried to wipe off a piece of napkin that he'd left on Mitt's lower lip. But this time, Mitt kept a stiff upper lip and did it himself.

President George W. Bush had his own moment he'd probably prefer to be wiped from memory.

DAVID LETTERMAN, HOST, CBS'S "THE LATE SHOW WITH DAVID LETTERMAN: "Top Ten George W. Bush Videotaped Moments.

MOOS: During a commercial break on David Letterman's show, President Bush used the sweater of an unsuspecting show staffer to clean his eyeglasses.

And if that rubs you the wrong way, this may rub you the right way.

UNIDENTIFIED FEMALE: Oh, my God. Oh, my God.

MOOS: This deer kept rubbing his head on a teenager sitting on a beach in British Columbia as his mom shot the video. Experts say the deer is probably either trying to rub fur off the base of his antlers or leaving his scent that comes out of a gland on the deer's forehead. Some thought that's not all he's leaving.

UNIDENTIFIED MALE: Tick-infested deer rubbing against a young boy.

UNIDENTIFIED MALE: That was an upsetting piece of video.

MOOS: All this weird rubbing...

(on camera): Higher denominations are probably more hygienic.

MOOS (voice-over): ... is enough to make rub your eyes in disbelief.

UNIDENTIFIED FEMALE: Careful. It's not hurting, is it?

MOOS: Jeanne Moos, CNN...

UNIDENTIFIED FEMALE: Yes. That might hurt.

MOOS: ... New York.

(END VIDEOTAPE)

BLITZER: By the way, a Swiss study showed that a flu virus can actually survive as long as 17 days on a paper bill.

That's it for me. Thanks very much for watching. I'm wolf Blitzer in Washington.

"ERIN BURNETT OUTFRONT" starts right now.