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Trump Pours Fuel on the Big Lie in Run-Up to 2024; FDA Asked to Authorize First Anti-COVID Pill; Biden Struggles to Unify Party, Salvage Agenda as Clock Ticks and Public Approval Fades; FBI Sting Nabs Navy Engineer & Wife Accused of Trying to Sell U.S. Nuclear Secrets; Bodycam Video Shows Police Dragging a Black Paraplegic Man from His Car By His Hair During A Traffic Stop. Aired 6-7p ET

Aired October 11, 2021 - 18:00   ET

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

[18:00:05]

WOLF BLITZER, CNN HOST: And an intriguing new spy saga, the feds are refusing a U.S. navy engineer and his wife of attempting to sell U.S. nuclear secrets, allegedly hiding classified information in, get this, a peanut butter sandwich.

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

We begin this hour with the ongoing threat to American democracy posed by former President Donald Trump as the January 6th investigation intensifies and Republicans set to stage for the next elections.

Our Senior Legal Affairs Correspondent Paula Reid is putting it all together for us. Paula, there are chilling new developments unfolding as we speak.

PAULA REID, CNN SENIOR LEGAL AFFAIRS CORRESPONDENT: Absolutely. Wolf, Republicans who once again rejected the big lie are now falling in line with Trump. Even the most senior Republican says it's now simply smart politics not to push back on Trump's un-American attack on our democracy. Just another sign that the party is no longer defined by policy but by loyalty for one man.

(BEGIN VIDEOTAPE)

REID (voice over): Tonight, growing signs of democracy in peril, nearly a year into the Biden administration, top Republicans doubling down on the big lie as they turn to the 2022 midterms. On Sunday, the number two House Republican, Steve Scalise, refused to acknowledge that President Joe Biden was legitimately elected.

REP. STEVE SCALISE (R-LA): If you look at a number of states, they didn't follow their state-passed laws that govern the election for president. That is what the United States Constitution says. They don't say that the states determine what the rules are. They say the state legislatures determine the rules.

CHRIS WALLACE, FOX NEWS HOST: But the state already certified. SCALISE: Right. But at the end of the day, are we going to follow what the Constitution says or not?

REID: Over the weekend, Republican Senator Chuck Grassley appeared alongside Trump at a rally in Iowa.

SEN. CHUCK GRASSLEY (R-IA): So if I didn't accept the endorsement of a person that's got 91 percent of the Republican voters in Iowa, I wouldn't be too smart. And I'm smart enough to accept that endorsement.

REID: Back in February, Grassley rejected the big lie in a statement saying the reality is he lost. He brought over 60 lawsuits and lost all but one of them. But this weekend, Grassley looked on as the former president continued to lie about the 2020 election.

DONALD TRUMP, FORMER U.S. PRESIDENT: First of all, he didn't get elected. Okay, forget that.

REID: Republican Representative Liz Cheney shot back at her fellow Republicans, tweeting, they have a duty to tell the American people that this is not true. Perpetuating the big lie is an attack on the core of our constitutional republic.

As Trump continues to undermine democracy, the House select committee wants answers.

REP. JAMIE RASKIN (D-MD): This is not a game of cat and mouse or hide and go seek. This is the United States Congress demanding their compliance with an investigation that goes right to the heart of American democracy and national security.

REID: Committee leaders say former Chief of Staff Mark Meadows and former Pentagon Official Kash Patel are engaging with the committee. CNN learned that former Trump Aide Dan Scavino was only just served with a subpoena on Friday after the committee had trouble finding him. It's unclear if he will cooperate.

But long time Trump Adviser Steve Bannon has said he intends to defy the subpoena. And investigators say they might ask the Justice Department to pursue criminal charges if Bannon does not appear for his interview, Thursday.

REP. ADAM SCHIFF (D-CA): We are prepared to go forward and urge the Justice Department to criminally prosecute anyone who does not do their lawful duty.

REID: Former President Trump can go to court to fight for executive privilege over some documents but Representative Adam Schiff says he expects the committee will get documents Trump did not object to very soon after the Biden administration gave the green light.

SCHIFF: We should, I think, get those documents soon because the sitting president has the primary say on executive privilege. But we also want to make sure that these witnesses come in and testify.

(END VIDEOTAPE)

REID (on camera): Bannon has cited executive privilege is the reason he cannot comply with the subpoena. He's not even in the executive branch at the time in question. So, for him, that argument is legally absurd. But the committee will likely wait until Friday after the deadline for his deposition is passed to pursue any criminal action if he indeed does not show up. Wolf?

BLITZER: This is heating up big time.

REID: It is.

BLITZER: Paula, thank you very, very much, Paula Reid reporting for us.

Let's bring in CNN's Special Correspondent Jamie Gangel, CNN Senior Political Analyst and former Presidential Adviser David Gergen and our Senior Legal Analyst, former U.S. Attorney, Preet Bharara.

You know, David, immediately after the deadly Capitol attack on January 6th, Senator Grassley said this, and I'm quoting now.

[18:05:01]

Everyone must take responsibility for the destructive actions yesterday, including the president. Did you ever think, David, you'd see Republicans, as experienced as Senator Grassley, for example, and Whip Scalise for that matter, standing by Trump as he spouts these new election lies?

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: No. I never dreamed that we would have a Trump, much less that we would have a Republican Party who held the whole country hostage and ran a Republican ticket that could bring us deeply into a constitutional crisis.

The real crisis that's coming right now, Wolf, is this nightmare, that Donald Trump does indeed run, as it appears increasingly likely, he wins the nomination, in the general election, he falls three or four points percentage points behind the Democratic nominee and 17 red states, they'll be putting into place mechanisms to strip those states of those votes and to substitute Republican votes. That will bring us into a constitutional crisis and could split the country in two.

BLITZER: That's what a lot of people are fearing now. And, Jamie, you heard Republican Congresswoman Liz Cheney condemn fellow Republicans for selling Americans what she calls the fraud, the big lie. How worried are Republicans behind the scenes, and I know, Jamie, you're doing a lot of reporting about this, a possible Trump 2024 run?

JAMIE GANGEL, CNN SPECIAL CORRESPONDENT: On a scale of one to ten, a 12-plus. As David just said, they think this is a nightmare scenario. I spoke to one very senior Republican strategist who said to me that this is a slow-motion tsunami, that democracy as we know it is over. The question obviously is, is there a way to stop it.

And when I talk to my Republicans sources, some think that absolutely Trump is running and that, you know, he could win. Some say the Republican Party will split. Others say that's not realistic. But the big concern that I hear over and over again, Wolf, is that this fact that democracy is in peril is real. They consider it a five alarm fire and they are really worried that too many Americans are in denial about how close to the edge we are.

BLITZER: Yes, it's a really, really enormous concern. Preet, I want you to watch, and our viewers to watch, what Bill Maher is predicting about the 2024 election. Watch this.

(BEGIN VIDEO CLIP)

BILL MAHER, HOST, REAL TIME WITH BILL MAHER: Some presidents spend their post-presidency building homes for the poor or raising money for charity or painting their toes. Trump has spent his figuring out how to pull off the coup he couldn't pull off last time.

Here's the easiest three predictions in the world. Trump will run in 2024. He will get the Republican nomination. And whatever happens on election night, the next day, he will announce that he won.

2024 comes, and Democrats treat it as a normal election year. They are living in a dream world, where their choice of candidate matters, their policies matter, the number of votes they get matters. None of it does. I won't even predict who the Democratic nominee will be because it doesn't matter. It could be Biden. It could be Harris. It could be Amy Klobuchar. It could be Timothee Chalamet. As long as they have a D by their name, they will be portrayed as the army of Satan. But even if they win, Trump won't accept it.

The ding dongs who sacked the Capitol last year, that was like when Al Qaeda tried to take down the World Trade Center the first time with a van. It was a joke. But the next time they came back with planes. I hope I scared the (BLEEP) out of you.

(END VIDEO CLIP)

BLITZER: Well, what about that, Preet? Did he?

PREET BHARARA, CNN SENIOR LEGAL ANALYST: Yes. I mean, it's not that Bill Maher is saying it. It's that I think every reasonable thinking person has to I think agree that those predictions are easy. The only question is does Donald Trump want to run for president again? Nothing constitutionally or legally precludes it.

It could have been legally and constitutionally precluded had he been convicted in the Senate in the impeachment trial and then barred from seeking office again. That did not happen. That didn't happen in part, as the other panelists have suggested, you have Republican after Republican who has sat by and abided by it.

So, if Donald Trump chooses to run, I don't see any circumstance in which he doesn't get the nomination and makes a declaration of victory no matter and is engaged in what Fiona Hill has been saying, was a dress rehearsal, understanding now the weaknesses in their coup attempt and shoring up those weaknesses by changing the laws in the states where the laws were not in their favor.

And I'll throw out another example or something that we should be worried about, not as likely as Donald Trump running for president in 2024, but there's nothing that legally precludes -- maybe people don't appreciate this.

[18:10:01]

There's nothing that legally precludes Donald Trump from becoming the speaker of the House in 2022 if Republicans take back the House. It sounds farfetched. It sounds outlandish. Does it really sound more outlandish than Donald Trump becoming president if you were thinking about it and talking about it back in 2014 or 2015?

And then think about what kind of circus you would have then and what other kinds of things would be put in place structurally, politically and otherwise for the return of Donald Trump in 2024. Yes, so everybody should be concerned. Not to curse on television, but I think Bill Maher is exactly correct.

BLITZER: Well, let me get David and Jamie to react to that. Jamie, let me go to you first.

GANGEL: I'm afraid that I don't even think it's outlandish. I think the only thing that may be prevents that is that he wants to run in 2024. My Republican sources are scared. They are furious at Mitch McConnell. They feel he could have stopped this. But what they say every single day is that every day that Donald Trump is out there doing these rallies, perpetuating the big lie, he is perpetuating a clear and present danger. And they are very worried about more violence, Wolf.

BLITZER: What do you think?

GERGEN: I think the next few, two or three years, are very important, Wolf. We were counting on Joe Biden to make this a much more competitive and that he would bring the Democrats along and could win an election and avoid this nonsense. But right down, he is down -- Biden is down 15 points in his approval rating by The Washington Post, if you go back last July and bring it up to September. That's a big drop. It's hard to get out of that when you get in. So, they're right on the edge.

But the other point, Wolf, and I'll try to be brief, is the country's opinions are changing. This University of Virginia survey that has just came out, a real blockbuster, and we need to pay more attention to it. Over 80 percent of Biden voters and 80 percent of Trump voters would like a strong man in the White House, and that leads you to authoritarianism. That's a big deal. 41 percent of Biden voters and 52 percent Democratic voters would approve of a split of a country into a red state country and a blue state country, unheard of.

BLITZER: Yes. It's really, really depressing when you think about it. All right, guys. Thank you very, very much. We'll stay on top of this, of course.

GERGEN: Thank you.

BLITZER: Just ahead, we're breaking down new data on COVID-19. Is the U.S. turning a corner in the pandemic? I'll speak live and I'll ask Dr. Anthony Fauci for his assessment of where we stand right now.

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

[18:15:00]

BLITZER: We're following some promising new developments in the coronavirus pandemic, including the possibility that an experimental pill may soon get emergency use authorization here in the U.S.

Joining us now, the president's chief medical adviser, Dr. Anthony Fauci, he's also the director of the National Institute and Infectious Diseases. Dr. Fauci, thank you so much for joining us.

As you know, hospitalization, deaths and cases, they are all declining in the U.S. right now. Is this finally the end of the delta surge in the U.S.? What do you think?

DR. ANTHONY FAUCI, DIRECTOR, NATIONAL INSTITUTE OF ALLERGY AND INFECTIOUS DISEASES: Well, I hope so, Wolf. It's certainly going in the right direction, as you mentioned correctly, that all of the parameters, cases, hospitalizations, and deaths are down. The critical challenge that we have now, we want to keep that slope of decline continuing to go down.

Now, we now -- as you know, we have about 68 million people in this country who are eligible to be vaccinated who are not yet vaccinated. The best way to assure that decline in cases, hospitalizations and death to continue is to continue to get a lot more people vaccinated. We need the overwhelming proportion of those unvaccinated people to get vaccinated and then we can be quite confident that if we can do that, you will not see a resurgence. This really depends upon us and our ability to rise to the occasion and get people vaccinated.

BLITZER: How do we do that?

FAUCI: Well, first of all, we've obviously been trying very hard. We're trying to get trusted messengers out there and get this away from being an ideological or political statement, get back into the realm of pure public health and try to convince people, but also mandates. I mean, we don't like to be telling people what they need to do with regard to vaccines but we know that mandates work. We've seen that they are working. They're working in schools, universities and colleges. They're working in corporations like airlines, with regard to their employees getting vaccinated.

So although you like people to do it on their own accord, sometimes mandates actually can help in that regard. As sensitive an issue as that is, it is really getting people more vaccinated.

BLITZER: Yes, it certainly it. As you know, Merck has just asked the FDA to authorize its new COVID treatment pill. This could be potentially very good news. But are you concerned that Americans are going to rely on this treatment as a substitute for vaccination?

Well, we've heard talk about that, Wolf. I hope we don't come to that because that would really, I think, be a misunderstanding about how important it is not to get infected. The data on that drug, molnupiravir, is promising. You know, it's a 50 percent diminution compared to placebo in hospitalizations and deaths. That's good news.

But the best way to get 100 percent chance of not getting hospitalized or dying is to not get infected in the first place.

[18:20:00]

That's better than any drug. So, although we're pleased and optimistic about this drug, which is now applying for emergency use authorization, it should not be a substitute for preventing infection in the first place, which is why we get vaccines.

BLITZER: And it's so simple. We got the shot and it's really easy.

Even if approved, it's going to be a while to see if it really, really works given the trial that's been going on so far. Let's talk a little bit about what else is going on because there's a lot of critical issues that we're discussing.

FDA advisers are meeting this week, as you know, to consider mixing and matching booster doses from the different vaccines. Should Americans be allowed, Dr. Fauci, to mix and match their booster?

FAUCI: Well, that's exactly what you said. The advisory committee to the FDA is going to look at that data this week, the next few days, the 14th and the 15th of October. And then the following week, that kind of regulatory decision will be handed over to the advisory committee on immunization practices for the CDC. And sometime in the first couple of days of November, we very likely will get a recommendation from the CDC.

So you're asking me, is it going to be approved? Well, let's wait and see after the data are examined. But you're quite right. In the next few days to a week, we're going to be hearing more about it because the companies are going to be presenting -- both Moderna and J&J are going to be presenting the data to the FDA for their advisory committee to look at.

BLITZER: Yes. We should be getting that information later this week.

Dr. Fauci, we're nearly nine months into the Biden administration and the FDA is still being led by an acting director. How does it make any sense that, in all of this, in the middle of this pandemic, the FDA doesn't have a permanent director in place? No one has even been nominated for that critically important position.

FAUCI: Well, I mean, obviously, whenever you have an agency of this importance, you want to have a permanent director. But the FDA is doing fine. I mean, the acting director, Dr. Janet Woodcock, is doing a very good job right now of leading the agency. And the agency is strong. They have professionals in there that have been there for a long period of time. So it isn't as if it's in trouble. The fact is we would like, obviously, as soon as we possibly can, to get a full-time, permanent director. But people should not look upon the FDA as in trouble. They're a very strong organization.

BLITZER: Dr. Fauci, as usual, thank you so much for joining us.

FAUCI: Good to be with you. Thank you for having me, Wolf.

BLITZER: Thank you, Dr. Fauci.

Coming up, President Biden's stalled agenda is weighing down his poll numbers right now. Could his fellow Democrats make a deal to get things moving? I'll ask a key member of the progressive caucus leadership in the House.

(COMMERCIAL BREAK)

[18:25:00]

BLITZER: Members of the House of Representatives are coming back to Washington tomorrow during what's supposed to be a break, to pass the temporary increase in the debt ceiling. While that will avert a national economic crisis at least for a few weeks, the president's domestic agenda is clearly stalled in Congress right now and the lack of action is taking a dramatic toll on the president's approval rating.

Let's go to our Chief White House Correspondent Kaitlan Collins. Kaitlan, does the White House see this right now as a make or break moment for the entire Biden domestic agenda?

KAITLAN COLLINS, CNN CHIEF WHITE HOUSE CORRESPONDENT: Wolf, I certainly think they realize it's a critical period for them, because you're right, the House is coming back tomorrow to vote on this. But what they're voting on when it comes to the nation's borrowing limit is just a temporary fix, really, and lawmakers are having the same disagreements they had last week over how to solve that issue. Only now, they have until December to continue having those arguments before they face them again and before they face those deadlines that they were facing last week.

But the difference, Wolf, is that in December, they are also going to be up against a deadline to fund the government. That's going to be another issue all while simultaneously trying to get the president's priorities passed through Congress. Those big parts of his domestic agenda, which are that $1 trillion hard infrastructure plan, the typical roads, bridges, tunnels and whatnot, but also the bigger package. That's the social spending package and climate change that deals with things like paid family leave, free community college.

That's the package that is still dividing Democrats, Wolf, and they can't come to an agreement over that that should look like. And that is going to be Congress' focus and the White House's focus over the next few weeks as they do have a deadline at this end of this month to get that other trillion dollar infrastructure plan passed.

And, Wolf, of course, this all comes at a time when the president could use a political boost because you were just looking at those poll numbers where if you look at the combination of all the major polls, the president's approval rating right now is at 45 percent. That is, of course, lower than when he entered office and had that initial burst of positivity. Some polls, and, Wolf, it's at 38 percent. And so, of course, this is an issue facing the White House, one that they are hoping to solve and one that they are hoping could be fixed by, of course, getting the president's domestic agenda passed through Congress.

BLITZER: Yes. If they want to see that number go up, that approval number, they've got to do something. They have to pass this serious domestic legislation. Not going to be easy but they think it's doable. Kaitlan, thank you very, very much.

Let's discus how doable it is with Democratic Representative Ro Khanna of California.

[18:30:00]

Congressman, thank you so much for joining us.

With the crisis over the debt ceiling delayed at least a few weeks, until early December, where do talks stand right now on the massive reconciliation package? We're talking about the $3.5 trillion reconciliation package, and for that matter, the $1.2 trillion infrastructure package?

REP. RO KHANNA (D-CA): Wolf, the talks are ongoing. All Democrats want to deliver on the working family's agenda. They want to give folks child care. They want to make sure Americans can have preschool education, that seniors can get dental care and hearing aids. But right now, there's a disagreement with two senators and there's an effort to persuade them and there has to be a compromise between Senator Sanders and Senator Manchin.

BLITZER: I know you're ready for a compromise. You previously told me, Congressman, you'd be actually open to shortening the number of years that the programs are funded to keep more in the bill, more of those proposals in the bill, let's say instead of ten-year funding, go down to five-year or even three-year funding. That would reduce the overall cost dramatically.

It sounds like a lot of House progressives are in lock step on this strategy, but where does the White House stand?

KHANNA: Well, I first mentioned, floated that on your show and it turns out a lot of colleagues agree. We can deliver for the American people, make sure that they're getting the benefits and childcare, making sure they're getting the benefits of dental and vision, but not do it for as many years and you dramatically lower the cost. That is one avenue that the White House is open to.

The important thing, Wolf, here is that the vast majority of the Democrats, progressives, liberals, moderates agree, it's really two senators that have to be convinced. And I know the president is trying to convince them.

BLITZER: If you can't convince those two senators about the big reconciliation package, do you think it's still doable to get the infrastructure, the $1.2 trillion traditional infrastructure package passed?

KHANNA: No, because there are important climate provisions that aren't in the infrastructure. That package was always designed to include climate that are in the second package. But I believe we'll get there with someone like Senator Manchin. He already is at 1.5 trillion. He needs to make sure that it helps West Virginia. We ought to say we'll do everything possible to make sure West Virginia is the biggest winner of the entire country out of this package, that the green jobs are going to be there. I think there is a way to get him to a win.

I know that Senator Manchin and Senator Sanders both respect President Biden. If anyone can do this, it's President Biden.

BLITZER: Voters are getting clearly frustrated, as you know, Congressman. It's showing in President Biden's approval rating. What's at stake if Democrats fail to deliver on infrastructure and reconciliation wind up with nothing?

KHANNA: Wolf, it's a big deal. We have to deliver. This is what we ran on. This is what we promised. We now have to deliver. But the COVID pandemic has been a big part of this. I mean, many people thought by now we'd be out of it. It's been a tough year-and-a-half.

So, as we see vaccinations increase, as we hopefully see the end of the year, the numbers come down, I think that also will be a big part of the president's numbers turning around.

BLITZER: Let's see what happens. Representative Ro Khanna, thanks as usual for joining us.

KHANNA: Thank you, Wolf.

BLITZER: Just ahead, a whistleblower is sharing new insight into the security failures on January 6th. I'll ask a former FBI deputy director, Andrew McCabe, for his take on the explosive allegations.

(COMMERCIAL BREAK)

[18:35:00]

BLITZER: Tonight, a former high ranking official in the U.S. Capitol Police has turned whistleblower. In a letter to Congress, that whistleblower claims two top Capitol police officials never shared vital intelligence with the rest of the department, particularly those commanders with real operational experience. The whistleblower goes on to say, if provided, this information would have dramatically changed the paradigm on January 6th. We're joined now by the former FBI deputy director, Andrew McCabe. He's a CNN Senior Law Enforcement Analyst and Author of the book, The Threat, How the FBI Protects America in the Age of Terror and Trump.

Andrew, how differently do you think January 6th would have gone if all available intelligence was properly disseminated in advance, which this whistleblower claims simply did not happen?

ANDREW MCCABE, CNN SENIOR LAW ENFORCEMENT ANALYST: Well, Wolf, I think that understanding the intelligence from every angle, right, what intelligence did the agencies collect, how did they share it with each other and what decisions did they make, what assessments did they make as a result of that intelligence, that is the key to not only understanding January 6th, but making sure this sort of failure doesn't happen again.

If the agencies, like DHS and the FBI and the Capitol Police, hope to get better at what they do, and that should be the goal here, right, to be better at protecting the Capitol and protecting the country, they will not be able to do that until they peel through how the intelligence was handled.

BLITZER: Does this whistleblower's account help you make sense of some of the law enforcement failures that we saw on January 6th.

MCCABE: Well, whistleblower's account is very serious. As you mentioned in the opening, he or -- I'm sorry, he or she, the whistleblower, claims that intelligence was received by the Capitol Police at the highest levels of leadership but not shared with the folks who could actually action it. The whistleblower then complains that there's been cover ups by leadership, covering up the good work of others, lying to Congress. He actually alleges that Congress is complicit in some sort of cover up. That's all very serious.

And whistleblower reports need to be taken seriously but they also need to be vetted. Whistleblowers don't always have a perfectly complete, accurate view of the situation. Oftentimes, they don't have access to all the information that's already been considered by the folks that are investigating this.

[18:40:04]

So it's important for investigators to consider it, but to really work through it and see if there's anything there.

BLITZER: The letter also underscores the ways the Capitol Police Department continues to grapple with the fallout from the insurrection. It says rank and file officers now get daily intelligence alerts on their cell phones. Is that a step in the right direction?

MCCABE: Hey, look, anything that they can do to ensure that important information that leadership has is getting shared with folks on the ground who need to action it is an improvement. That apparently didn't happen at all on January 6th. And I think that's probably one of the reasons why they were so caught off guard by that riot. So, any steps they can take to better handle intelligence, to better disseminate intelligence within the organization is going to be an improvement.

BLITZER: If they don't learn from mistakes, they are bound to repeat those mistakes. Andrew McCabe, thank you very, very much.

Coming up, the feds say two want to be spies tried to sell U.S. nuclear secrets by hiding them, get this, in a peanut butter sandwich. We have details.

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[18:45:00]

BLITZER, CNN HOST: Tonight, a U.S. Navy engineer and his wife are under arrest, accused of trying to sell very sensitive U.S. nuclear information. We're learning surprising details of the FBI sting involving clandestine drops and secrets actually hidden in a sandwich.

Here's our justice correspondent, Jessica Schneider.

(BEGIN VIDEOTAPE)

JESSICA SCHNEIDER, CNN JUSTICE CORRESPONDENT (voice-over): Some of the country's most closely guarded nuclear submarine secrets inside a peanut butter sandwich. Over the weekend the FBI and U.S. Navy arresting Navy nuclear engineer Jonathan Toebbe and his wife Diana for attempting to sell classified information to a foreign government, alleging the couple used methods out of a spy novel to pass the information to an undercover FBI agent.

After messaging with agents for months, the couple allegedly left a memory card at a dead drop location in West Virginia in June where the FBI found it wrapped in plastic and placed between two slices of bread on a half of a peanut butter sandwich. Allegedly inside, details of militarily sensitive design elements operating parameters and performance characteristics of Virginia class submarine reactors.

Virginia class submarines are some of the most advanced stealth submarines in the world, capable of staying under water for months at a time. They can engage targets at sea and on land, as well as gather intelligence and deploy Navy SEALs. The Toebbes allegedly conducted two more dead drops, the final one in August, with a memory card in a chewing gum package that allegedly contained schematic designs for the Virginia class submarine.

The FBI says that Jonathan Toebbe has been a Navy employee since 2012. He worked at a lab in Pennsylvania on nuclear propulsion where he maintained a top secret security clearance. His wife Diana is a teacher in Annapolis, Maryland, who allegedly acted as a lookout for her husband during the dead drops. In one of his messages, Jonathan Toebbe allegedly wrote he was extremely carefully to gather the files I possessed slowly and naturally in the routine of my job. We received training on warning signs to spot insider threats. DAVID SANGER, CNN NATIONAL SECURITY ANALYST: It was a mix of some very sophisticated methods used by Mr. Toebbe and his wife and some really sloppy ones.

SCHNEIDER: The couple wrote they were seeking a total of $5 million in crypto currency. The FBI says they paid the Toebbes $100,000 over the course of the investigation.

(END VIDEOTAPE)

SCHNEIDER (on camera): But the biggest mystery really remains, who did this nuclear engineer think he was selling these government secrets to? The FBI only refers to it as country one in the records and that country alerted the FBI, which began its undercover investigation. Toby and his wife will appear in federal court tomorrow, but prosecutors are asking they remain locked up. They're calling them a flight risk and say they could destroy evidence -- Wolf.

BLITZER: All right. Jessica, thank you very much. Jessica Schneider reporting.

Let's get some more on all this. CNN counterterrorism analyst Phil Mudd is joining us right now.

You used to work at the CIA, the FBI. How does this unfold? How does this happen, a story like this?

PHIL MUDD, CNN COUNTERTERRORISM ANALYST: The first part of it is when the, as Jessica said, we don't know who it is. It seems like a friendly country if they've notified us. You're sitting around the table with the FBI director, somebody walks in, your first reaction is we've got a problem.

Notice one of the facts in this case is these individuals appear to have been employed for almost a decade. So your first question is not only do you own this operation, in other words, these people are reporting to you. They think they're selling stuff to you. You're going back through those records saying, did they do this another time? Can we track their online behavior five years ago and determine if this is the first time?

That's pretty tough. That's a lot of data.

BLITZER: What do you think of this spy craft? Hiding some of the sensitive information in a peanut butter and jelly sandwich, or just a peanut butter sandwich for that matter or some bubble gum wrap.

MUDD: We need to do better than sandwich spies here. I mean, the spy craft, to get serious, there's a couple of things that jumped out. The first is they appeared to be sending a letter to a friendly country. Why would they assume, or at least a semi-friendly country. Why would they assume that country is not going to notify us? Why would they approach that person not knowing who that person is? Or just sending it to an intelligence ministry presumably and think that that person is trustworthy. Some of it, as an earlier guest said, was pretty good, some of the encryption stuff. But the initial approach, you got to be kidding me. I disagree. This is -- if this is a spy novel, this is not a very good spy novel.

[18:50:04]

BLITZER: How sensitive, potentially, was the intelligence that potentially could have been compromised involving nuclear submarines?

MUDD: I would say hugely significant. You are talking about stuff that costs a lot of money, obviously, for U.S. taxpayers. When you are look at the data, you are looking at things like vulnerabilities. Can the country that -- that acquired this find vulnerabilities in the U.S. system? Can they track that submarine better?

And then, a question that I can't answer, can they reverse engineer what we have spent a lot of money developing with their own if they have their own nuclear submarines, I think it's hugely significantly.

BLITZER: As you know, Toebbe said he had been trained on warning signs to spot as an insider, somebody who had top-secret clearances. Was he using some of that inside information that he had?

MUDD: Yes, if you look at -- I -- I made -- cast light on some of what I saw, you know, the sandwich, et cetera. But if you look at some of the communications measures and the fact that he says or she -- I think it's the male communicating -- the husband -- says, look, I ever been to those briefing sessions. I was very careful about acquiring the information over time. What you learn on the inside, for example, is digital the people in a place like the FBI are looking to see what you download to see if there are aberrations.

So, yeah, I think what they learned over time, top secret clearance is one of the highest you can get, what they learned over time helped these people to try to pretend to operate. But in the end, FBI got 'em.

BLITZER: They get caught.

MUDD: Well done.

BLITZER: All right. Thanks very much for that, Phil Mudd. Helping us appreciate the enormity of this.

Coming up next, disturbing body camera video showing police dragging a black man paraplegic man from his car by his hair during a traffic stop.

(COMMERCIAL BREAK)

BLITZER: An investigation is underway in Dayton, Ohio, into a very disturbing incident involving local police. Body-camera video shows officers dragging a black paraplegic man from his car by his hair during a traffic stop.

CNN's Amara Walker picks up the story, and we want to warn our viewers, the images are disturbing.

(BEGIN VIDEOTAPE)

AMARA WALKER, CNN CORRESPONDENT (voice-over): The nearly-12-minute police body cam video of the September 30th police encounter begins with a traffic stop.

CLIFFORD OWENSBY, PARAPLEGIC MAN: I cannot step out. I'm a paraplegic.

WALKER: And ends with 39-year-old Clifford Owensby screaming, showing officers dragging him out of the car by his arm and hair before putting him in their cruiser.

OWENSBY: I'm a paraplegic! I'm a paraplegic.

WALKER: In the body cam video released by the Dayton police department on Friday, police say Owensby was leaving a suspected drug house when they pulled him over. After running a background check and learning of past felony drug and weapon possession charges, the responding officers requested a narcotics detection K-9 to sniff the vehicle according to Dayton Police Major, Brian Johns.

That's when Owensby is asked to step out of the car. He explains he is paralyzed from the waist down and repeatedly refused to allow the officer to help him get out of the car.

OWENSBY: I cannot step out of the car, sir. I am a paraplegic.

OFFICER: How'd you get in?

OWENSBY: I got help getting in.

OFFICER: I will help you getting out.

OWENSBY: Excuse me?

OFFICER: I will help you getting out, get out.

OWENSBY: Well, I don't think that's going to happen, sir.

WALKER: The exchange continues as the officer insists on helping him, and explains to Owensby he needs to get out of the car, per the department's policy.

OWENSBY: I can't get out of the vehicle, sir.

OFFICER: Sir, I am going to assist you out of the vehicle.

OWENSBY: No, you're not. No, you're not.

WALKER: Then, things begin to escalate as Owensby appears to make a phone call.

OWENSBY: Come down the street. Come bring cameras and just bring somebody so they can witness what's going on. I'm not getting out. I just told you. I'm a paraplegic. I cannot get out.

Can you call your white shirt please?

WALKER: As Owensby insist that police call a supervisor, you can hear the officer getting more assertive.

OFFICER: You're getting out of this car, so you can cooperate and get out of the car or I drag you out of the car. Do you see your two options here? Which would you like to do, sir?

OWENSBY: I know I got rights. I would like for you to call your white shirt.

I'm trying to tell you that I got help getting in this car. You can (EXPLETIVE DELETED) hurt me.

OFFICER: Get out of the car.

OWENSBY: Ow! Ow! Ow! Somebody, help! Somebody, help! Somebody, help!

OFFICER: Stop.

WALKER: Owensby spoke at an NAACP news conference Sunday about the encounter.

OWENSBY: They dragged me to the vehicle like a dog, like trash.

WALKER: Owensby also says the $22,000 in cash found in his car was his savings. He says no weapons or drugs were found in the search.

"The Dayton Daily News" has reported the Dayton Fraternal Order of Police is defending the officer's actions saying in a statement that reads in part, the officers followed the law, their training, and departmental policies and procedure. Sometimes, the arrest of noncompliant individuals is not pretty but is a necessary part of law enforcement to maintain public safety which is one of the fundamental ideologies of our society.

Owensby's attorney tells CNN the arrest was illegal and unnecessarily brutal given the fact they were aware fully that he can't get out of the car on his own.

(END VIDEOTAPE)

WALKER: And, Wolf, as a result of this accidental, Owensby received two traffic citations for which he pleaded not guilty to. We also reached out to the Dayton police department to get clarification on its policy in dealing with people with disabilities and they referred us back to a statement which made no mention of it -- Wolf.

BLITZER: All right. Amara, thank you very much. Amara Walker reporting for us.

And to our viewers, thanks very much for watching. I'm Wolf Blitzer in THE SITUATION ROOM. You can always follow me on Twitter and Instagram @WolfBlitzer. Tweet the show @CNNSitRoom.

THE SITUATION ROOM is also available as a podcast. Look for us on CNN.com/audio or wherever you get your podcasts.

"ERIN BURNETT OUTFRONT" starts right now.