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Power Play 11/16/2012

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    Petraeus' testimony on Benghazi conflicting with White House report

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Not my values -- you too many streams of intelligence but he also.

Stated that he thought only made equipped.

That there was.

Significant terrorism problem.

And that is not my recollection of what it's almost.

-- just emerging from a closed door briefing with former CIA director David -- Petraeus.

Highly anticipated meeting that again very very early this morning about 730 ended about 915 -- -- nobody knows how Petraeus got into the building he was -- -- by the horde of media.

All around the building but had to discuss what his testimony means this morning.

Is Stephen Hayes of the weekly standard's Stephen good to have you take us.

What do you make of his testimony this morning and what you just heard from Peter can -- teachers here in this has been this has been 1 of the Swiss central issues from the outset as -- David Petraeus.

Briefing on September 4 of the House Intelligence Committee different so much from what we.

Happen what we now know and what many people knew at the time.

Was a collection of intelligence that suggest this was a terrorist attack in it.

David Petraeus testified on September 14 and was very vague and gave an account that suggested that this was maybe just a protest gone bad and I remember.

At the time -- that was that was after these CIA talking points had already been released that was that was after the talking points were sent to lawmakers into the to the White House.

David Petraeus gave his briefing on September 14 and Susan Rice -- force goes on.

The five Sunday shows on September 16 and basically blames.

This video and I remember talking to members of congress and staff on September 17 groups that Monday.

About why Susan Rice said the things that she's and they said well.

Her account tracks pretty closely -- what David Petraeus told the house.

On September 14 which you know there's been a lot of questions about Susan Rice and and what she said and there should be.

There should be additional questions but David Petraeus and what he said on September 14 -- this is that somewhat -- -- suggests.

That's not the way most Republican lawmakers who -- in that briefing remember Petraeus testimony.

I'm disturbed by what we've heard so far from members stepping out -- closed door briefing today none.

Have talked about that dichotomy between what Petraeus -- -- on September 14.

And what the CIA talking points suggested which was that there was as a terrorist -- -- -- -- different versions of the CA talking points -- was an original classified version.

Which included references to.

The the al-Qaeda affiliates who were involved in the attack.

And the unclassified version which is the class which is the version that Susan Rice and others were working from now did that -- -- -- that had been taken out.

So the question is.

Why well two questions who wrote that the talking points and why was that very important reference to al-Qaeda affiliates taken out.

For the public presentation.

Of what happened.

Knows -- admitted there's only one entity which could have made those changes that would be the White House.

I would certainly think the White House was he hit somebody that they were going to look at very carefully -- you have a statement from the Office of the Director of National Intelligence not from the director himself.

But from his spokesman.

Taking basically taking responsibility for.

They did the way that the intelligence was presented in public and Susan -- -- presentation.

So was it the office of Director of National Intelligence who put these talking -- together were they the ones who pulled that one reference to.

Al-Qaeda and its affiliates having been involved we need more it's just -- -- questions didn't Director of National Intelligence testified yesterday.

That they don't yet know how these changes were made yes he did and -- -- -- several officials top officials might morality acting director of the CIA James clapper the director national doesn't.

-- David Petraeus and others say basically we don't know what happened with these talking points that is going to be.

The focus I think -- the discussed in the national discussion we're having about.

Ben Ghazi for the next several days until we get an answer we'll go to.

That they will have to provide an answer somebody at some point so we'll have to -- -- because it's it is an untenable position for the White House to say.

We work from this intelligence product.

And we know what's wrong.

But they won't.

Tell us why it's wrong or who put it together that -- -- community after these questions I think they can't it is politically untenable for them to try to say.

We're not gonna tell you how how these talking points came to -- well we're we're getting a little taste of.

Of the politics.

Of the Petraeus scandal in the tournament the sex scandal talking about the -- does he -- But right now and and it comes in the form of a letter from several democratic congresswoman.

Written two -- -- -- it is written by.

Reps and Gwen -- from Wisconsin Marcia fudge Ohio Karen -- California on -- sort of DC of course.

An opening statement that reads -- all -- part of your quote.

Over the last several days senators McCain Graham and -- had gone to extraordinary -- -- level unfair attacks against the stall -- American.

Ambassador Susan -- Whose public service -- two administrations in particular mr.

McCain's assertion that ambassador rice is unqualified is unsettling.

It is disappointing to someone who has served his nation with distinction both in the navy and senate.

Would stoop to petty politics rather than direct precious time and energy discussions about the safety security -- service and civil service.

There's no thanks -- -- I think it is but I mean that's that's a very difficult argument next season ranked as the public face of the case that the administration made.

On -- got five days after these attacks we now know that virtually everything she said in these five appearances was wrong was factually incorrect.

She's the one who made the case -- the president when he was asked about this that is that is press conference said Susan Rice quote had nothing to do with Ben Ghazi.

Which raises and and obviously I think very important question if she had nothing to do with Ben Ghazi and that's the way the president's defender now.

Why did the administration putter out.

All of these news shows on the Sunday shows at least a couple of -- with whom I've I've spoken.

After Hillary Clinton or somebody -- able to speak about these issues in an authoritative way why would you put somebody on the Sunday shows.

Who by the president's own admission had nothing to do within Gaza.

I mean would he put.

The Agriculture Secretary -- to talk about the fiscal clip from it doesn't make sense you need to put somebody out.

Who's qualified to talk about these issues and if she wasn't I think the president needs to answer.

Why she was sent.

Have you heard from anybody I know it's very early in the united I believe that that the Senate Intelligence Committee hearing closed door hearing is under -- even as we just have you heard from anybody was in -- of these briefings.

Who can explain the dichotomy.

Between what Petraeus said on September 14 and what he's talking points to -- talking points no nobody can explain that we've had public statements by -- and -- refresher because.

Why wouldn't betray -- explain that in these -- were meetings going on right now well I don't I don't know that he wasn't asked but didn't do what we've seen from at least.

Public statements from Peter King we played earlier.

And -- -- burger who's the democratic.

Vice chair of the committee of the intelligence committee.

Petraeus wasn't able to reconcile that those two there's two competing versions of -- the talking points so I don't know that we have.

Interest of that and as I say I think we need to get them to get them soon let's listen to a what the Internet is saying about -- -- Tonya in Bayonne New Jersey -- -- Can we -- Steve where Petraeus goes from here always -- on Capitol Hill again.

Yeah that's a very interesting question I think there is an appetite for some Republicans to have Petraeus in an open hearing.

To talk about Ben -- not to talk not necessarily to talk about.

You know what his relationship with with -- -- -- -- but to talk about.

Ben Ghazi from from the person who was in the middle -- but I know that that at least some of the members of the House Intelligence Committee -- -- -- in asking he had no concession remains to be seen as if he's done I guess I would be skeptical that he would.

Want to do that and publically now that he's done it and in closed session because can you get to the salient issues in this.

In an open session without revealing classified secrets well I think you can especially because we've already had a classified -- -- he was.

Presumably able to.

-- in and get a direct and open and straightforward way one hopes.

With the members of congress needs to the questions.

But we don't have answers for the public yet and you know the president has said.

Repeatedly throughout this process that he's going to provide all of the information.

As soon as he can we haven't seen over the first eight weeks of this one hopes that now we're after the election.

We will see that and the president himself and in what I think was a very revealing comment at -- press conference the other -- said exactly that he said now that we're after the election.

I'm interested in sharing as much information as I -- with welcome back did the Stephen Hayes in the third segment of.

Power play today -- coming up next Peter Barnes from the Fox Business channel talking about FHA -- federal housing and forty they are in the red could that portend.

Another housing crisis -- with more power play right after this.

This in the Wall Street Journal today quoting the Federal Housing Administration I said authorities last -- excuse me.

We'll exhaust its capital reserves and face a deficit of 315.

Billion.

At the end of September the report shows the agency's reserves are adequate to pay for expected losses on the one point one trillion and -- that it guarantees which means the agency.

Is likely to require taxpayer funding for the first time.

In its 78.

Year.

-- -- -- -- Let's ask Peter Barnes from the Fox Business deputy there.

No he's done.

Generally not here.

Yeah I'm here I'm here I'll bet you -- out of prison if that happened to Robbie buddy and -- the I'm -- do you make of this this is the first obvious that -- -- history that this is.

Yeah I am now in my -- a trifecta here -- housing bail outs we had Fannie Mae Freddie Mac got a 187 million dollars because of bad mortgage underwriting and and that's what's happening over -- that -- -- at -- did FHA which is the third.

Government agency.

That insures the mortgages it's got a trillion dollars and businesses and some of these mortgages are going bad and so we got the annual audit today.

Of the agency which found a sixteen point three billion dollar capital shortfall but.

The FHA is trying to downplay the possibility that well at -- -- -- the treasury for a taxpayer bailout it has an unlimited line of credit.

At the treasury for one thing it says it's gonna bring -- Eleven million dollars.

In new capital from.

New mortgage underwriting business in the year ahead it's also going to be announcing at noon some new changes and new reforms that -- says well.

Help improve its finances and it says that.

To altogether and hopes that these will return.

Its capital reserves to to the positive put it put it back in the black within the year that.

Peter put put this into context -- -- -- -- we'll explain what what FHA ears and how it differs from Fannie Mae and Freddie.

Well Fannie Mae and Freddie Mac used to be kind of quads I government.

Agencies you know they were private companies that had a government guarantee.

To backstop them and then when they in fact got into trouble on the housing crisis in 2008.

The government took them over the treasury department took them over and so the taxpayers have been keeping them alive.

Since 2008.

The FA -- was actually.

It was actually all along a government agency that was a set up.

In the new deal to help you try to get the housing market back on its feet out of the Great Depression.

And and it is they're all the same business they guarantee they are they provide insurance.

To lenders who provide loans under special terms and conditions.

They're from they guarantee them against the fault that so that.

If the mortgage goes bad if -- if it goes into foreclosure.

Then the the agency whichever one it is.

Pays the land -- off and then -- the losses and so the FHA.

Is distinct from Fannie and Freddie because it's always -- a government agency it's part of that Housing and Urban Development Department.

But but why now this right what you put this into context for me because.

No doubt about it -- troubles Fannie Mae and Freddie Mac a couple of years -- seemed that things have pretty much bottomed out there.

But brown why and this is going into the Redford asked if AJ now at this point well that there critics of the agency -- of the administration who say.

That.

The administration has been kicking the can down the road and you know.

Who knows -- doing whatever it can.

Two.

To avoid it.

Showing any trouble at the FHA particularly head of the election in the last thing that the administration needed would be headlines saying hey.

Bailing out housing once again this time through another government agency the FHA.

But that.

That aside.

The fact is is that what you did after the crisis the private insurance market that private mortgage verdict dry -- you know.

Regular insurance.

Were private mortgage insurance companies and others and and other lenders.

Basically stopped writing mortgages unless they got some form of government insurance and as a result.

We see Fannie Freddie and the FHA underwriting more than 90%.

Guaranteeing more than 90% of all the mortgages that they -- -- is actually closed the 95%.

So as a result the FHA like the others.

Started to take -- a lot more business.

But it didn't raise its fees for doing this story just that.

Just it's.

That the charges that it it levees.

They -- provide these guarantees until just the last couple of years and so so that loans that it underwrote in 20082009.

Have been have been the wanted it underwrote it.

Under more generous terms.

Have gone South Bend and are some of the -- and and so it's having to pay off now it it is in your views -- does this portend another housing crisis around event.

Well housing market is definitely getting better.

And Fannie and Freddie and the FHA all expect that that will help their finances but they still have.

Old loans on their books that are are going bad we still have.

Pretty high unemployment we still have people -- having some people having a hard time making their mortgage payments were still have.

Delinquencies and foreclosures and that's gonna continue at it at at at a slower and slower pace as the housing market recovers but it's still gonna happen.

And and that means that that these entities are still gonna suffer some losses.

And that's what what would -- a certain different sort of we've seen this wave of of bad economic news since the election.

You.

Today we received -- hostesses is.

Basically calling it quits -- I think 181000 employees.

After these union negotiations would sour the need is apparently just asking because -- -- -- -- for for too much.

The management saying that they couldn't sustain that.

We see -- undergoing a restructuring.

Applebee's restaurants saying that they can't meet does that requirements.

Obama care many other companies expressing the same kind of sentiment.

Precipitous drops in the stock market is this a short term readjustment to the that this second term.

President Obama that will level off course this all bad news it's going to be snowballing.

My hope that I hope it's short term I hope we -- hope hope its short term but listen absolutely you have a conjunction.

Of events going on right now we have and the market is very worried about the possible fiscal cliff about I -- -- higher taxes including higher taxes on.

Dividends.

Where we're seeing now full blown recession in Europe Europe is the largest export market for American goods and services something like.

Half of the revenues for the S&P 500.

Come from Europe and so that means lower potentially lower corporate profits so that's the stock market side of things you do have.

Provisions of the president's Health Care Reform law kicking in so that is affecting some companies and the host this story.

Actually know a little bit about that -- because I've covered it and that that is it might be.

A unique situation because.

This is a company that was built as a conglomerate through years and years of acquisitions and mergers.

And without any harmonization of union contracts and you know you have a I have a source there that says that that that the guys who drive.

Don't drop off the bread in the trucks to the grocery stores.

Under the union contracts cannot deliver the twinkies and guess what.

Big daddy I get this straight they -- delivered they can deliver hostess bread but they can't -- twinkies yep.

Under the union contracts.

The the bread -- has to be I'm told.

Has to be delivered.

Separately because -- is there's a separate contract that covers those workers from a separate company that was acquired.

By -- this and so so you know.

You have.

Two or three track showing up at the same grocery store from hostess every day that's not economic and so as a result you're you're seeing really big problem that hostess and and you know that investors there as a company that's been in trouble gone through bankruptcy before in the investors there thinker thrown in the -- they're gonna try and the -- about themselves off the pieces.

You know there's an old adage when it comes to private sector union negotiations like the negotiations like this it doesn't apply to public sector union negotiations but.

But if one side or the other management or the union asks for too much data they threatened to kill the golden goose it appears that's exactly what the -- union.

-- done here.

Peter -- great to talk job on covering the story for special -- that somebody come walked down the hall and talk to a little bit later Rossi could tell me that's the sources that is very much Peter yeah that's all right we will continue our discussion with Stephen -- on Ben -- right after this break.

Made the determination as we were going through the matter that there was not a threat to national security.

Had we made the determination that a threat to national security insisted we would of course have made that known to -- president.

And also to be appropriate members.

All on the hill.

What is clear is that this administration.

Including the president himself.

Has intentionally.

Misinformed.

Read that lied to the American people in the aftermath.

Of this tragedy.

All right there you have it does two very very different perspectives on Ben Ghazi.

Incidents of scandal whatever you wanna call -- joining us now.

All the panel Debbie dingle from a what do you make of -- holders rationale for not informing the White House.

That that they knew of this Petraeus a fair and yeah I was I mean -- -- little old school on this I think if this is the director of central intelligence is having an affair.

It is inherently it is by itself.

A national secure -- potential national security threat potential national security issue I mean.

We have all heard about the so called honey traps you going back years.

It's a way that that you've had foreign intelligence services try to penetrate and extract information from the US government.

And I would think that that that has to at least be.

It's something that they thought -- are considered at the time.

-- -- Good to have you what do you what do you make it to be here.

You know I feel sorry for the first person that realized -- it didn't General Petraeus -- -- it get infected Petraeus was involved in this.

A whole hot football that nobody knew what to do I think that we are in a very challenging time.

And I think that this highlights privacy issues that everybody's got to deal -- are -- going back to -- so I think that they made a judgment call and that are -- judgment call that they need.

-- not shared until they did until they finished all of the investigations -- -- when all the facts -- it was a political hot.

-- and racism a lot of issues we're going to be talking about for weeks and months.

I'm glad you raised the issue of in in -- -- that.

Swore to over there -- in many cases as a political tool and that's why these protocols that the FBI has in place now.

Were developed as I understand that you buy that -- Well and you look we don't there's a lot we don't know when we we've we've learned a lot over the past week but there's a lot we don't know and I agree with Debbie and there's there's so much information that we have yet learned it's one of the reasons will be talking about this for.

Weeks and months to come but it does raise all sorts of questions about privacy about how we -- extract this information what kinds of you know what kinds of access what kinds of windows does the federal government have on individual citizens beyond.

What it was looking at -- director Chris and I think there's there are a lot of questions and it's hard to reach a conclusion on some of these issues because there's still so much information we need to get.

I think there are a lot of lessons here I mean what was this woman in the Kelly put them in Florida going to the FBI think they need to do not recognizing that her entire -- email is going to be subject to.

Investigation in everything she wrote -- it -- it level of stupidity and quite frankly.

I think it's just court judgment in all of these people's lives not only as we were talking earlier about the fact that he lied to his wife.

Cheney's secret anymore I do believe people are entitled to privacy but you are fewer in public -- you're not gonna get away with that something's gonna find out it's going to be out there so it shows incredibly poor judgment here -- My a lot of people on the subject of of them quote unquote honey trap that you mentioned just Angel.

-- factor.

People in prominent positions.

We we look it did this woman -- brought well.

She apparently according to information the FBI has extracted from her computers and -- -- you that -- -- -- home chose to have.

Classified information.

This is very disturbing it goes to the heart.

Of the honey -- Yeah yeah I think that the more likely and if we were in and look I wanna be sure that -- that I'm labeling this speculation and make -- yeah it's just it's it's a question about.

What kind of a security threat that could -- and I think.

The more likely potential honey -- would have involved Jill Kelly.

-- Tampa but having said that -- that the question about about Paula brought well and how she got these classified.

Documents is a real question and we've had a couple different accounts had leaks today suggests that they did not come.

The FB has made the determination that they did not come from David -- -- I think we need to see some additional back up.

For that claim that you also have this broader question of whether these.

Documents were still classified mean you know it may have been the case that they were.

It was battle reports after action reports.

Things that happen in Iraq that -- used for putting together this biography that we're no longer classified it's still would have been labeled secret.

On her computer thinks she had her possession so -- again a lot of questions that we need additional answers to.

It -- -- lets talk about political implications of this week we talked to live with Steve in the first segment about this but.

But -- seen.

Democrats are erecting barriers already there are different interpretations already from this morning briefing closed door briefing that we saw with general.

The Petraeus.

We solve the present in this press covers we challenging.

Reporters basically -- to pin the blame on him.

We -- -- a letter from female members Democrats in the members of congress saying it's unfair to besmirch the Secretary Rice in the way that.

Some have been doing that what are your thoughts about the political implications of this.

I think we're going to be here very complicated time and I think we've got so many cross currents and dynamics going on right now.

And there are a lot of different issues -- -- to each of them think that.

There are the whole issues of sex and privacy and everybody's talking about what our Susan -- his credentials to be secretary of state and I think that there are people that are raising issues that president -- if the president want to we don't know that that's who the president is gonna put.

-- forward.

I think that all of this is -- -- very complicated time and we need to happen seeing what these visits are overseas we need to have a strong national security team and people or were you even if people wrote decent movie or an apple do.

It in any of this.

What's happening and I think if people want to do the right thing that you want to support the president wanted to ask that I think.

Every senator I plea to congress is an equal branch of government Democrats and Republicans and they have a right to raise legitimate issues I don't think the president can just.

Say this is we get it taken out of the race question I think it's very complicated time.

Debbie -- Steven Hayes thanks very much for you -- -- final word now.

From Charles.

Did he wasn't willing.

To allow this CIA or the intelligence community to be thrown under the bus into -- -- I have all the blame placed on them.

Which is clearly what the administration is trying to do.

And -- president says Susan Rice was simply listening.

Repeating what the CIA and others it said.

And he's saying look we've now begun to hear from the CIA and the rest of the intelligence community and whenever there -- -- was.

This was a political statement.

Coming from a president who is remember one week after a convention.

Where they were dancing on the grave of bin Laden and saying al-Qaeda is dead at a time when we now know.

That al-Qaeda affiliates were active -- Iran and North Africa and most likely.

Behind this attack.

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