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The Situation Room

State of the Scandal

Aired January 14, 2014 - 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: a SITUATION ROOM special report: "State of the Scandal."

Governor and presidential prospect Chris Christie facing the people of New Jersey and the nation. He says mistakes were made, but he fails to address critical questions about the bridge closing controversy.

We're digging into the political mystery. Who was the actual target of the apparent plot by top Christie aides to tie up traffic and get revenge?

And Bridgegate's toll. With Christie's popularity and his administration under fire, can the Republican's White House hopes survive?

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

Governor Chris Christie knew he couldn't ignore the political scandal that is exploding in his face when he began his state of the state address just a few hours ago. But the New Jersey Republican didn't spend much time talking about the bridge closing controversy or breaking any new ground.

The future of his administration and his would-be presidential campaign may now hinge on a series, a series of investigations.

Our Brian Todd has been looking into what is going on, Chris Christie's speech, what is the latest on the scandal.

What are you learning?

BRIAN TODD, CNN CORRESPONDENT: Mystery surrounding the scandals still, Wolf. Mysteries have to do with some theories being talked about, theories as to why those lanes on the G.W. Bridge were really closed down.

The scenarios are out there because there are still so many unanswered questions about who was targeted and why.

(BEGIN VIDEOTAPE)

TODD (voice-over): We still don't know the real reason why those lanes were closed on the G.W. Bridge, but Governor Chris Christie is trying to move beyond the scandal. GOV. CHRIS CHRISTIE (R), NEW JERSEY: Without a doubt, we will cooperate with all appropriate inquiries to ensure that this breach of trust does not happen again.

TODD: As two investigations and a federal inquiry ramp up, three theories have emerged as why the lanes were closed. The most prominent theory? That it was political retribution from Christie's office toward Fort Lee, New Jersey, Mayor Mark Sokolich for not endorsing Christie in his reelection bid. The problem, as the mayor told Wolf Blitzer?

MARK SOKOLICH (D), MAYOR OF FORT LEE, NEW JERSEY: I don't recall a specific request to endorse.

TODD: Another theory involves this woman, Democratic State Senate Majority Leader Loretta Weinberg. Fort Lee is in her district. Weinberg and the Democrats had been in a bitter political fight with Christie over their blocking of his state Supreme Court nominees.

On August 12 of last year, Christie angrily pulled one of his nominee to spare her the ordeal of being challenged.

CHRISTIE: I was not going to let her loose to the animals.

TODD: It was the very next day that Christie's deputy chief of staff, Bridget Anne Kelly, allegedly fired off her now infamous e-mail to a Port Authority official -- quote -- "Time for traffic problems in Fort Lee."

I pressed Senator Weinberg. Does she believe the lane closures could have been retaliation towards her?

LORETTA WEINBERG (D), NEW JERSEY STATE SENATOR: I can't tell you definitively that I believe anything. I can tell you definitively that I would almost believe everything. But until we really know the truth, do I think he could have been -- that the governor has wished to retaliate against me from time to time? Absolutely. I have seen it in person.

TODD (on camera): Then there is the follow the money theory. On these parcels of land in Fort Lee, right near the access lanes that were blocked on the G.W. Bridge, a billion-dollar retail and apartment project called Hudson Lights is being developed.

Any problem with those access lanes to the bridge could hurt that development.

(voice-over): An article in the liberal-leaning Talking Points Memo asks whether the lanes might have been closed to jeopardize the Hudson Lights development.

The problem with that theory?

MATTHEW HALE, SETON HALL UNIVERSITY: A Republican governor, someone who has been talking about development and growing in New Jersey, I think it is a pretty big risk to do -- any county, city or town in New Jersey to risk an enormous development project.

(END VIDEOTAPE)

TODD: Did the developers of that project have any dispute with Governor Christie? We called and e-mailed the company, Tucker Development, but haven't heard back. We asked Governor Christie's office to respond to all these theories.

A spokesman e-mailed us, saying -- quote -- "We're not commenting on every wild-eyed conspiracy theory that is originating on left-wing blogs" -- Wolf.

BLITZER: Brian, thanks very much.

Let's dig a little bit deeper right now. We are joined by the majority leader of the New Jersey state assembly, Lou Greenwald. Mr. Greenwald, thanks very much for coming in.

LOUIS GREENWALD (D), NEW JERSEY ASSEMBLY MAJORITY LEADER: Thank you for having me.

BLITZER: I know you are one of the top Democrats who launched this special committee to investigate this entire bridge scandal. What do you think of these theories? Which resonates the most for you?

GREENWALD: You know, Wolf, to be honest with you, it could be any of the above. I think the better question is which doesn't belong and why? And that's probably Bridget Kelly because those who have worked with her, those who know her know she wouldn't have had the authority to make a decision like that on her own to do that bridge closure and the lane closures.

BLITZER: So are you suggesting someone told her to do that?

GREENWALD: Just from our experience, she used to be a legislative liaison to our body and report back to the executive branch before she was deputy chief of staff. She is someone who, quite honestly, is very credible, very decent person. Made a horrible mistake here, absolute abuse of power.

But I would be shocked and I think everyone we have talked to would be shocked if she made this decision independently. It leaves the question who did do it? What we know clearly is there was an abuse of power. What we don't know and what the investigation is about is how deeply rooted was that abuse of power, how deep did it go, and who was at the core of it.

BLITZER: Do you have indication whether or not she will agree to answer questions, testify or take the fifth as one of the others implicated in all of this has done?

GREENWALD: We have no indication of how she will conduct herself. We are interviewing outside counsel. We will be hopefully making a decision tomorrow that has the expertise to handle an investigation like this. Obviously as many people reported, New Jersey has a legislature of 120 people. We do not have an overwhelming budget. This is something very unique and different, and although incredibly talented staffed, I believe we need to supplement our staff.

When we subpoena certain people, the method by which we go about it, the order we go about it is something that I think we heading up the committee and our chairman want to make sure we are doing a very methodical and systematic approach with advice from counsel.

BLITZER: You will subpoena her? Can I assume that?

GREENWALD: Wolf, I have used this phrase. I don't know if it's the best phrase, but I think she would be low hanging fruit. I think clearly Bridget Kelly and Mr. Stepien as people that were named in the e-mails, would be people that we would subpoena. They are people that we have already identified. When that happens, how it happens and really the final call, I would leave under our advice and counsel of the attorneys we are about to hire.

BLITZER: Now, the person who took the fifth, David Wildstein, former port authority official, he is obviously at the center of this, as well. He is the one who received that e-mail from Bridget Kelly. Here is what the governor, Chris Christie, said about Wildstein on Thursday at that nearly two-hour news conference.

(BEGIN VIDEO CLIP)

GOV. CHRIS CHRISTIE (R), NEW JERSEY: I have had no contact with David Wildstein in a long time. A long time, well above the election. You know, I could probably count on one hand the number of conversations I have had with David since he worked at the port authority.

(END VIDEO CLIP)

BLITZER: He was appointed by the governor to the port authority. Now "The Wall Street Journal" has published this picture. This picture took place in September. There is the governor, and right next to him is Wildstein. What do you make of this?

GREENWALD: Wolf, I had a chance to see that picture earlier today. And again, this is one of the areas --and the governor knows this better than anybody as a former U.S. attorney -- people are going to parse his words very closely. What is the definition of I haven't talked to him in a long time? Is it six or seven weeks before the election?

I can tell you the governor rose to national prominence because of the culture and style the he created. The question is whether or not that culture back fired on him. He is a political animal. He has been incredibly, wildly, politically successful.

And I can't imagine someone less than six, seven weeks out from their election in the most populated county in the state with the traffic jams being reported on national news for three, four days, the governor would not on September 11 when he stood with Mr. Wildstein ask him what the hell is going on here. And I can't imagine he wouldn't have seen it on the news. I can't imagine that he wouldn't inquire to the people at the port authority or to his department of transportation commissioner. Someone, someone -- someone got that call.

BLITZER: One final question: what did you think of his remarks today in his state of the state address?

GREENWALD: He is under enormous pressure. I thought he was much more subdued today than the governor who kind of comes in charging the mountain compared to what we have seen from previous state of the states address. I don't know if he is trying to change the style because of the crisis that is going on. I don't know if he is trying to change the style because he recognizes, hopefully so, that some of the culture created this.

I think he can be who he is. I think he can be tough, I think he can be passionate, I think he can be emotional. I think it's when it crosses over to some of the bullying tactics that we have seen, that is the problem.

You know, Wolf, the thing that amazes me even today, he continues to apologize for the actions of his staff and the betrayal that came upon him. The real apology, I think, needs to be to the people of Fort Lee and the residents of the state of New Jersey. People aren't looking for an apology because he was betrayed. They are looking for an apology because of the abuse of power at the people he employed.

BLITZER: Lou Greenwald is the majority leader of the New Jersey state assembly. Thanks very much for joining us.

GREENWALD: Thank you. Thanks for having me.

BLITZER: Still ahead, we will have more on Governor Christie's speech today, his attempts at damage control of the bridge scandal.

The 2016 presidential race could be decided in part by what is happening in New Jersey right now.

(COMMERCIAL BREAK)

BLITZER: We are back with our special report now on the scandal that is dogging a possible presidential front-runner, New Jersey Governor Chris Christie.

When he gave his state of the state address today, the stakes were higher than certainly he might have imagined before the scandal broke.

Our colleague the CNN colleague anchor Jake Tapper is in Trenton, New Jersey, with more on what is going on.

It is pretty amazing, when you think about it, Jake.

JAKE TAPPER, CNN CHIEF WASHINGTON CORRESPONDENT: Wolf, as you know, one of the arguments that Chris Christie has been making when he tries to pitch himself as a presidential candidate for the Republican Party is that he is somebody who can win over Democratic voters, traditionally Democratic voters.

And he showed that last November with an overwhelming reelection victory, winning over women voters, Latino voters. He likes to think of himself of somebody who can build bridges, but, unfortunately for him, bridges now have a whole different meaning.

(BEGIN VIDEOTAPE)

TAPPER (voice-over): Governor Chris Christie seemed regretful.

CHRISTIE: And the last week has certainly tested this administration. Mistakes were clearly made.

TAPPER: The New Jersey Republican took responsibility for the bridge scandal currently dogging his administration and he promised:

CHRISTIE: Without a doubt, we will cooperate with all appropriate inquiries to ensure that this breach of trust does not happen again.

TAPPER: Not in the room today, Bridget Anne Kelly, the deputy chief of staff to Christie, whom he fired on Thursday after allegations she pushed to close lanes on the George Washington Bridge as an act of political retribution against a Democratic mayor in New Jersey who would not endorse Christie for reelection last year.

Kelly has yet to speak publicly about the scandal.

CHRISTIE: But I also want to assure the people of New Jersey today that what has occurred does not define us or our state.

TAPPER: If not for the scandal headlines, today we would have likely been focusing on Christie as a man with an eye on a potential 2016 presidential bid, a Republican governor of a blue state talking about reducing taxes, the ongoing recovery from superstorm Sandy, and helping New Jersey's education system.

CHRISTIE: It is time to lengthen both the school day the school year in New Jersey.

TAPPER: While Christie today urged legislators to put politics aside and work in a bipartisan way, New Jersey Democrats were less inclined.

STEVE SWEENEY (D), NEW JERSEY STATE SENATOR: This is, again, an opportunity to promise people everything and deliver nothing and not providing the funding to go along with it.

TAPPER: Many Christie supporters seem to have been uncharacteristically quiet during the last week or so. But today they came to his defense following the speech.

JON BRAMNICK (R), NEW JERSEY STATE ASSEMBLY MINORITY LEADER: I trust this governor's word. When he said he doesn't know, this is a former U.S. attorney who indicted over 100 politicians. The last guy who is going to lie to the cameras, in my judgment, is Christopher Christie. That's the last possible guy.

TAPPER: Next week, as Christie is sworn into his second term as governor, the question will be whether his future political ambitions will be defined by investigations into the scandal. (END VIDEOTAPE)

TAPPER: And, Wolf, the next step for Democrats here is tomorrow they will announce the counsel, the lawyers doing the work of the investigating committee. And on Thursday, the members of that special investigating committee will be named as well -- Wolf.

BLITZER: Jake Tapper joining us from Trenton, thanks very much, Jake.

Let's quickly discuss a little bit with our political commentator Ryan Lizza of "The New Yorker" magazine. He's also in Trenton. And our chief political analyst, Gloria Borger, she is here in Washington with me.

What is the political climate there like, Ryan, right now in New Jersey?

RYAN LIZZA, CNN CONTRIBUTOR: Well, it is interesting. There has been this amazing reversal here.

For years, Chris Christie has dominated the state politically. Today was supposed to be the day where he was at the height of the power, reelected by 60 percent, giving his state of the state and dominating the legislature for another term.

And instead you have this group of frankly backbench Democrats who fielded a sort of no-name or relatively no-name candidate last year and who have been sort of beaten by -- divided and beaten by Chris Christie for years. Suddenly they are attracting the attention of, frankly, the international media and milking the story for all it is worth.

It is kind of an amazing -- for a local political level, it is an amazing reversal.

BLITZER: It certainly is.

Gloria, how does he manage, Chris Christie, to reestablish the confidence, trust of the folks there?

BORGER: Well, he started it a little bit today by taking responsibility for this. I would add that he said mistakes were made, not that he made the mistakes.

He says he is going to cooperate. He has spoken in absolutes about this, that he had nothing to do with this. So as this story continues to unravel, that had better be the case, because he has made it very clear that he says he has had nothing to do with it.

I think now, though, Wolf, that a line of argument against Chris Christie has been established with the public, that he is petty, that his administration was vengeful. If he wants to reverse that narrative, he does have to get something done in a bipartisan way and he has to get this story over with.

And it doesn't look like it is going to end anytime soon. So, I don't think it is easy. And, as Ryan points out, those Democrats who have been so ready to pounce on him now believe they have an opening and they are going right through it.

BLITZER: Ryan, he did try today, as you know, to release some substantive proposals, extending the school year and extending class time, stuff like that, housing-related issues. Can he do some substantive stuff like that that will deflect from this problem?

LIZZA: I think that what some of the legislators here today told me is that there will be two tracks.

There will be a track along which Democrats and Republicans will work with Christie on some of these substantive issues. At the same time, both chambers here in Trenton are running parallel investigations. There is an I.G. investigation being run out of Washington over the separate issue of the Sandy aid. There is an I.G. investigation being run at the Port Authority over the bridge issues.

And the U.S. attorney's office is looking into the bridge issue. So, even as he may work with legislators here and his agenda won't be completely at a standstill, think of how many simultaneous investigations he is going to be dealing with for the rest of the year. And there is no sense that these things are going to be wrapped up quickly.

BLITZER: He did get, Gloria, a nice little standing ovation, at least from a lot of the Republicans there, when he spoke nearly two minutes at the beginning of his speech today on the scandal.

BORGER: Well, he said the work for the people of the state of New Jersey will not be delayed.

And I think the use of the word delayed was on purpose. And I think that is why he got that kind of a standing ovation, because I think even Democrats kind of had to applaud that. Look, he has got a real uphill battle here to get cooperation with the Democrats in his own state. And, also, there are Republicans out there gunning for him, Wolf, particularly those like Senator Rand Paul, who is probably going to run against him in a presidential race.

They are looking for anything to attack Chris Christie with right now. And the bipartisanship which was the key to his appeal is clearly falling apart.

BLITZER: Gloria Borger, Ryan Lizza, guys, thanks very much.

Just ahead, we have some new information about the other investigation that Chris Christie may be worrying about right now involving the superstorm Sandy relief fund. CNN Investigations is staying on this story.

(COMMERCIAL BREAK)

BLITZER: While the Governor Chris Christie struggles to put the so- called Bridgegate behind him, he's also facing a federal investigation into the use of funds for superstorm Sandy relief, specifically an ad campaign to promote New Jersey tourism that featured Christie and his family during his Reagan for reelection.

Chris Frates of CNN Investigations first reported the story here yesterday. He's got some new information.

What are you learning, Chris?

CHRIS FRATES, CNN CORRESPONDENT: Well, Wolf, we first told you yesterday that federal investigators will audit the state's $25 million tourism marketing campaign that was paid for with Sandy recovery money.

Part of the controversy is because the winning bid was $2 million more than the next lowest bid. The other part is because the tourism ads featured Chris Christie and his family while he was running for governor.

Today, I spoke with president of Sigma Group, the company that had the cheapest bid, that one that didn't get the contract. She told me the evaluation committee suggested putting Chris Christie in those TV commercials.

(BEGIN VIDEO CLIP)

SHANNON MORRIS, SIGMA GROUP: None of the creative that we submitted included the governor, nor did the bid that was proposed by the winning firm. Neither of the -- none of the concepts featured the governor.

But given how high-profile he is and he is a beloved figure in the state, it wasn't surprising that they asked us if we would be open to him being featured. Our response was very neutral.

(END VIDEO CLIP)

FRATES: Now, Christie's critics were very vocal when the ads came out that it gave him an unfair advantage in the gubernatorial race, though many say he was the face of Sandy recovery, so it made perfect sense.

BLITZER: Now, you -- at least they say the committee came up with this idea of putting Christie and his family in the ads. You are learning more, though, about the makeup of this committee.

FRATES: Well, that's right, Wolf.

We are learning that the committee tasked with choosing the firm to handle the marketing campaign, that it includes a key Christie ally. In fact, the committee members all work for the Christie administration. And perhaps most controversial of all of those people is someone named Michele Brown.

She's the CEO of the state's Economic Development Authority. She's one of the six voting members on that evaluation committee and she has a long history with Chris Christie. When Christie was U.S. attorney, Brown was a prosecutor under him. She resigned after revelations that Christie had given her a $46,000 loan in 2007, and he hadn't reported that he had given it to her. Now, we reached out to Brown's office, but we haven't heard back yet, Wolf.

BLITZER: How did she manage to get back working with Christie after all of that?

FRATES: Well, after she resigned, she went into private law practice.

But, in 2012, Christie named her to her current post as head of the Economic Development Authority. The other five people on the evaluation committee are also tied to Christie's administration. For example, one is the chief of staff to Christie's lieutenant governor and there are representatives from the community affairs and treasury departments, all of which ultimately answer to Christie, Wolf.

BLITZER: So, basically, right now, just to wrap it up, there is an audit under way to see if this was appropriate, using Chris Christie and his family in this ad, taxpayer money was involved, and that we should know when? When we will get a result if it was appropriate or inappropriate?

FRATES: Well, of course, the HUD inspector general who is overseeing this...

BLITZER: The Housing and Urban Development.

FRATES: Housing and Urban Development -- inspector general's office, which is separate from HUD, they're running an independent investigation. They won't talk about timing here.

But Congressman Frank Pallone, who we talked to, said he expects it will be a couple of months, but there will be a public report that will be officially released once that investigation is over.

BLITZER: Congressman Pallone is a Democrat from New Jersey. He's someone who has been pushing this inquiry right now.

FRATES: That's right, Wolf.

BLITZER: Chris Frates doing excellent reporting for us, Chris, thanks very much.

FRATES: Thank you.

BLITZER: Remember, you can always follow what is going on here in THE SITUATION ROOM on Twitter. Tweet me @WolfBlitzer. Tweet the show @SITROOM.

That's it for me. Thanks very much for watching.