Iran faces oil revenue problem

By John Defterios, CNN

January 8, 2013 -- Updated 1535 GMT (2335 HKT)

With elections in June, it remains unclear how energy policy will evolve after President Mahmoud Ahmadinejad's era

STORY HIGHLIGHTS

• The IEA has suggested Iraq surpassed Iran in output for the first time in over 20 years


• The Iranian people are faced with spiralling inflation and job layoffs within the state sector


• Iranian oil revenues in the country plummeted 40 percent, while gas export revenues fell by 45%

Editor's note: John Defterios is CNN's Emerging Markets Editor and anchor of Global Exchange, CNN's prime time business show focused on the emerging and BRIC markets. You can watch it on CNN International at 1600 GMT, Sunday to Thursday.

Abu Dhabi (CNN) -- All indications are that sanctions against Iran are really starting to bite and this time it is coming from the oil ministry in Tehran, which for months has denied that oil production was suffering due to international pressure.

In an interview with the Iranian Student News Agency (ISNA), Gholam Reza Kateb a member of the national planning and budget committee in Parliament referenced a report from Iran's oil minister Rostam Qasemi. In that report, the minister suggested that oil revenues in the country plummeted 40 percent, while gas and gas products' export revenues fell by 45% compared to the same period last year.

Read more: Official: Iran, nuclear watchdog group deal close

This is a hot button issue in Iran, where the currency due to sanctions has dropped 80 percent from its peak in 2011. The Iranian people are faced with spiralling inflation and job layoffs within the state sector.

I spoke with a source in Iran's representative office to OPEC who declined to comment and referred all matters to the Oil Ministry. A spokesman at the state oil company Iran Petroleum would only say "in this political climate it is difficult to confirm these statements."

Read more: Iran steps up uranium enrichment, U.N. report says

Hours later, a spokesman from the Ministry told another Iranian news agency, Mehr, that the numbers quoted about revenue and production drops are not true, although he offered no specific numbers.

Until this report to the Iranian Parliament, Minister Qasemi has maintained that Iran's production was hovering around four million barrels a day, where it was two years ago.

Read more: Opinion: Time to defuse Iranian nuclear issue

Back at the OPEC Seminar in June 2012, the minister told me that sanctions would not have any influence on plans to expand production and investment, shrugging off questions that suggested otherwise. This despite analysis to the contrary from the Paris based International Energy Agency and Vienna based OPEC of which Iran is a member.

The IEA back in July suggested that Iraq surpassed Iran in production for the first time in over two decades and production in Iran dipped to 2.9 million barrels a day. OPEC in its October 2012 survey said it slipped to 2.72 million at the time Minister Qasemi said output remained at 4 million barrels.

Minister Qasemi was recently quoted at a conference in Tehran that Iran needs to invest $400 billion over the next five years to maintain production targets and to play catch up after years of under investment.

Iran is a land full of potential. According to the annual BP Statistical Review, Iran sits on nearly 10 percent of the world's proven reserves at 137 billion barrels. The South Pars field which it shares with Qatar is one of the largest natural gas fields in the world -- but Iran, due to sanctions, cannot expand development.

This is a highly charged period. With elections in mid-June, it remains unclear how energy policy will evolve after the era of President Mahmoud Ahmadinejad passes. It has been eight years of his tough line against Washington, Brussels and other governments that put forth sanctions against Iran. It is not clear if a new President will usher in a new nuclear development policy to ease the pressure on Iran's energy sector and the country's people.

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India says two soldiers killed in clash with Pakistan troops

SRINAGAR, India: Pakistani troops killed two Indian soldiers on Tuesday near the tense disputed border between the nuclear-armed neighbours in Kashmir and one of the bodies was badly mutilated, the Indian army said.

The firefight broke out at about noon on Tuesday (0630 GMT) after an Indian patrol discovered Pakistani troops about half a kilometre (1,600 feet) inside Indian territory, an army spokesman told AFP.

A ceasefire has been in place along the Line of Control that divides the countries since 2003, but it is periodically violated by both sides and Pakistan said Indian troops killed a Pakistani soldier on Sunday.

Relations had been slowly improving over the last few years following a rupture in their slow-moving peace process after the 2008 attacks on Mumbai, which were blamed by India on Pakistan-based militants.

"There was a firefight with Pakistani troops," army spokesman Rajesh Kalia told AFP from the mountainous Himalayan region.

"We lost two soldiers and one of them has been badly mutilated," he added, declining to give more details on the injuries.

"The intruders were regular (Pakistani) soldiers and they were 400-500 metres (1,300-1,600 feet) inside our territory," he said of the clash in Mendhar sector, 173 kilometres (107 miles) west by road from the city of Jammu.

In Islamabad, a Pakistan military spokesman denied what he called an "Indian allegation of unprovoked firing". He declined to elaborate.

On Sunday, Pakistan said Indian troops had crossed the Line of Control and stormed a military post. It said one Pakistani soldier was killed and another injured.

It lodged a formal protest with India on Monday over what it called an unprovoked attack.

India denied crossing the line, saying it had retaliated with small arms fire after Pakistani mortars hit a village home.

A foreign ministry spokesman said Indian troops had undertaken "controlled retaliation" on Sunday after "unprovoked firing" which damaged a civilian home.

The deaths are set to undermine recent efforts to improve relations, such as opening up trade and offering more lenient visa regimes which have been a feature of talks between senior political leaders from both sides.

Muslim-majority Kashmir is a Himalayan region which India and Pakistan both claim in full but rule in part. It was the cause of two of three wars between the neighbours since independence from Britain in 1947.

- AFP/fa

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After affair and resignation, track coach feels 'ratted out'

STORY HIGHLIGHTS

• The coach is a giant in women's track


• She learned to walk again after a devastating accident


• The affair with the student occurred a decade ago


• She said she's "never stepped outside the lines" in her career

(CNN) -- The University of Texas women's track coach who resigned under fire after the disclosure of an affair with a female student a decade ago doesn't understand why she was targeted for punishment and questions whether she's being treated fairly.

"Is it because I have a disability? Is it because I'm black? Is it because I'm female? Is it because I'm successful? Is it now because of my sexual preference?" Coach Bev Kearney asked on CNN's "Starting Point" Tuesday. "I had to finally come to embrace not knowing why, and I had to embrace it because the more you try to figure out why, the harder it is to forgive."

A head coach at Texas since 1993, Kearney is held in great esteem in the track world. She led the Longhorns to six national titles and was inducted into the U.S. Track & Field and Cross Country Coaches Association Hall of Fame in 2007.

She is widely admired for her gritty resolve to walk again after she was partially paralyzed in an auto accident.

But things turned sour for Kearney last year when the university learned of an affair in 2002 with a female student. The revelation came at just about the same time Kearney was discussing a pay raise and a contract extension.

Told the university was going to fire her, Kearney -- the first African-American to serve as a head coach at Texas -- resigned Saturday.

Lawyer: Coach was set for big raise when she was forced to quit

Asked by CNN's Soledad O'Brien whether people around her and maybe even her former lover, a one-time student, now age 30, "ratted her out," Kearney said, "That's fair."

The affair began in August 2002, which was not long after the university put a policy into its handbook about consensual relationships between staff members and students. Kearney said she never really thought about the relationship from a legal perspective.

"You know, you get caught up in the emotional and the physical components of a relationship, and the last thing you're doing is thinking rationally," she said.

The relationship dissolved after Kearney was paralyzed in an SUV accident in December 2002, and the coach spent many months in recovery.

"As the accident occurred, you know, there was a transformation that went on within me that really changed my perspective on life."

The policy said that employees in positions of authority must report such relations to "eliminate conflict of interest or appearance of impropriety" or be subject to discipline.

In an e-mail to CNN on Sunday, Patti Ohlendorf, head of the university's legal affairs department, said: "In intercollegiate athletics and the coaching profession, it is unprofessional and unacceptable for a head coach to carry on an intimate relationship with a student-athlete that he or she is coaching. We told Coach Kearney ... that such a relationship crosses the line of trust placed in the head coach for all aspects of the athletic program and the best interests of the student-athletes in the program."

Ohlendorf denied Sunday that gender played a role in the university's review and said she knows of no other "UT head coach who has entered into such a relationship with a student-athlete on his or her team."

"I didn't know that there was even a rule on the book, and I think the rule had come into play maybe a year prior to the relationship, and I don't ever even remember reading such a rule, but you know, it talked about disclosure," Kearney said.

"Throughout the whole process, the disclosure part was never brought to me as to why I was being terminated. I was being terminated as a result of the relationship, and at that point, I said then, 'Has everyone else been terminated as a point of reference of having had a relationship?' and the answer was... we don't view those the same as yours."

Derek Howard, Kearney's attorney, said Monday that he and the coach were discussing her legal options, including a gender and race bias lawsuit. He planned to file open-records requests with the school this week, he said. He claimed that male coaches and professors at the school had similar relationships and weren't punished.

"I don't see how you distinguish between the value of one student over another because of what they do, whether it's a musician, a musical student, a business student or an athlete," Kearney told CNN.

"I think the one thing that I hired an attorney for is not to deny, because the moment it was brought to my attention, I openly admitted to its existence, and so it was never to deny, it was just to guarantee I was given equal treatment because I had grown to not trust the university that I served in terms of equal treatment."

Kearney said she never denied she was wrong and agrees she made a mistake. She just wants fairness.

"I feel like I've been a casualty within this whole process, not because I was innocent but all I've asked for was fair due process and equal treatment as opposed to how everyone else that had been under similar circumstances have had," she said.

She said she's "never stepped outside the lines" in her career.

"Even in this situation, I self-corrected the situation myself. I admitted to it when brought to me and even after I admitted it, they sent me through an eight-week investigation for something, for other things and ended up firing me for something that I admitted to from the beginning. Why does someone have to suffer through all of that and they even called me in on December 26, the 10th anniversary of the accident, to fire me."

A CNN story in August profiled the coach, who learned to walk again after she was injured in the accident that killed two of her friends. Thrown more than 50 feet from an SUV, she suffered extensive spinal injuries that left her partially paralyzed. Kearney said she never doubted her ability to walk again and continued to lead her team from her hospital bed.

"When they told me I was paralyzed, it went in one ear and out the next ... because I had to get up and coach," she said.

Track practices were recorded and then played for Kearney on a VCR in her hospital room.

"Because I was an intuitive coach ... whatever it is you need to do, I can describe it in a way that you internalize it and you feel it without me having to demonstrate it," she said in the August story.

Now, she may face an uphill trek in court.

"I don't want anybody to lose their job. I don't want to create harm to anyone but I do want to bring to light that you don't get to arbitrarily administer your rules and decide who is punished at what levels because of something that you don't like, because you never know if it's because of that particular situation or is it because of the fact that you may be harboring some type of ill will towards that individual."

Kearney said "everyone should deserve an opportunity to have fair treatment based upon your policies, whether something is morally acceptable to an individual or not, our law says it's about the application of the law, and then at some point, there ought to be some form of consideration for that person's past history, they didn't find a prior relationship or a subsequent relationship."

Read More..

Concordia capt. "painted worse than bin Laden"

Ahead of the one-year anniversary of the Costa Concordia disaster, in which 32 people were killed when the cruise ship ran aground off the Italian island of Giglio, the captain of the ship told an Italian newspaper that he "was painted worse than bin Laden."

82 Photos

Luxury cruise ship runs aground

Francesco Schettino said in an interview with the Turin newspaper La Stampa that he is tormented by the disaster.

"It is sincere pain from the bottom of my heart," he said.

The 950-foot-long Costa Concordia struck rocks and capsized on January 13 last year. Thirty-two people aboard were killed and hundreds injured in the panicked evacuation.

Prosecutors have accused Shettino of sailing the luxury liner too close to shore. He faces multiple charges of manslaughter and of abandoning ship during the evacuation of the 4,200 passengers and crew on board.

Italian media have referred to Schettino as "Captain Coward,"

He complained to the paper that the press' characterization of him and his actions "ridicules not just 30 years of my work, my experience in the whole world, but also the image of our country, which has been exposed to the criticism, often unjust, of the entire planet."

The Costa Concordia cruise ship is seen on its side near the Italian island of Giglio, January 7, 2013.

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FILIPPO MONTEFORTE/AFP/Getty Images

Schettino - who told the paper that he did not intentionally abandon ship, but slipped and fell into a lifeboat when the Concordia listed to its side - says he may have made a mistake by sailing too close to land, but he was not given exact information, and should not be the only one to get the blame.

In fact, eight others (including the ship's first officer and four other crew members, and three members of a crisis unit set up by the cruise ship's owner) also face possible criminal charges following the Italian prosecutors' investigation, which concluded last month.

Play Video

Costa Concordia: Salvaging a shipwreck

Last Thursday at a Naples courtroom, Schettino brought a case against Costa Cruises, the ship's operator, for wrongful dismissal.

Efforts by salvage crews to right the ship are underway.

Read More..

Jodi Arias: Who Is the Admitted Killer?

Jodi Arias is a woman that many can't keep their eyes off of--a soft-spoken, small-framed 32-year-old who last year won a jailhouse Christmas caroling contest. But she is also an admitted killer who is now on trial in Arizona for the 2008 murder of her ex-boyfriend Travis Alexander.

Sitting in a Maricopa County court, Arias, whose trial resumes today, cries every time prosecutors describe what she admits she did -- stab her one-time boyfriend Travis Alexander 27 times, slit his throat and shoot him in the head.

Arias grew up in the small city of Yreka, Calif. She dropped out of high school, but received her GED while in jail a few years ago. She was an aspiring photographer; her MySpace page includes several albums of pictures, one of which was called "In loving memory of Travis Alexander."

FULL COVERAGE: Jodi Arias Murder Trial

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"Jodi wanted nothing but to please Travis," defense attorney Jennifer Wilmot said in her opening statements, but added that there was another reality – that Arias was Alexander's "dirty little secret."

Arias' attorneys want the jury to believe she killed Alexander in June of 2008 in self defense, that he abused her, and she feared for her life when she attacked him in the shower of his Mesa, Ariz., home.

Alexander's family and friends say Arias was a stalker who killed him in cold blood. They say the 30-year-old was a successful businessman who overcame all the odds. His parents were drug addicts, and he grew up occasionally homeless until he converted to Mormonism and turned his life around.

Jodi Arias Trial: A Timeline of Events in the Arizona Murder Case

"He actually had everything going for him," said Dave Hall, one of Alexander's friends. "A beautiful home, a beautiful car, a great income."

Alexander kept a blog, and in a haunting last entry, just two weeks before his murder, he wrote about trying to find a wife.

"This type of dating to me is like a very long job interview," he wrote. "Desperately trying to find out if my date has an axe murderer penned up inside of her."

Alexander did date a killer. It's now up to the jury to decide if she killed in self defense.

Read More..

Depardieu exit causes French storm

STORY HIGHLIGHTS

• Russian President Vladimir Putin has bestowed Russian citizenship on actor Gérard Depardieu


• For Depardieu, a public war of words erupted, with many in France disgusted by his move


• Depardieu more than anyone, represents the Gallic spirit, says Agnes Poirier


• Majority of French people disapprove of his action but can't help loving him, she adds

Agnes Poirier is a French journalist and political analyst who contributes regularly to newspapers, magazines and TV in the UK, U.S., France, Italy. Follow her on Twitter.

Paris (CNN) -- Since the revelation on the front page of daily newspaper Libération, on December 11, with a particularly vicious editorial talking about France's national treasure as a "former genius actor," Gérard Depardieu's departure to Belgium, where he bought a property just a mile from the French border, has deeply divided and saddened France. Even more so since, as we have learnt this week, Russian President Vladimir Putin has bestowed the actor Russian citizenship.

Read more: Depardieu's puzzling love for Russia

Back in mid-December, the French media operated along political lines: the left-wing press such as Libération couldn't find strong enough words to describe Depardieu's "desertion" while right-wing publications such as Le Figaro, slightly uneasy at the news, preferred to focus on President François Hollande's punishing taxes which allegedly drove throngs of millionaires to seek tax asylum in more fiscally lenient countries such as Belgium or Britain. Le Figaro stopped short of passing moral judgement though. Others like satirical weekly Charlie hebdo, preferred irony. Its cover featured a cartoon of the rather rotund-looking Depardieu in front of a Belgian flag with the headline: "Can Belgium take the world's entire load of cholesterol?" Ouch.

Quickly though, it became quite clear that Depardieu was not treated in the same way as other famous French tax exiles. French actor Alain Delon is a Swiss resident as is crooner-rocker Johnny Halliday, and many other French stars and sportsmen ensure they reside for under six months in France in order to escape being taxed here on their income and capital. Their move has hardly ever been commented on. And they certainly never had to suffer the same infamy.

Read more: Actor Depardieu makes Russia trip after accepting citizenship

Agnes Poirier

For Depardieu, a public war of words erupted. It started with the French Prime Minister Jean-Marc Ayrault, and many members of his government, showing their disdain, and talking of Depardieu's "pathetic move." In response the outraged actor penned an open letter to the French PM in which he threatened to give back his French passport.

The backlash was not over. Fellow thespian Phillipe Torreton fired the first salvo against Depardieu in an open letter published in Libération, insulting both Depardieu's protruding physique and lack of patriotism: "So you're leaving the ship France in the middle of a storm? What did you expect, Gérard? You thought we would approve? You expected a medal, an academy award from the economy ministry? (...)We'll get by without you." French actress Catherine Deneuve felt she had to step in to defend Depardieu. In another open letter published by Libération, she evoked the darkest hours of the French revolution. Before flying to Rome to celebrate the New Year, Depardieu gave an interview to Le Monde in which he seemed to be joking about having asked Putin for Russian citizenship. Except, it wasn't a joke.

Read more: French star Depardieu ditches France for Putin's Russia

In truth, French people have felt touched to their core by Depardieu's gesture. He, more than anyone, represents the Gallic spirit. He has been Cyrano, he has been Danton; he, better than most, on screen and off, stands for what it means to be French: passionate, sensitive, theatrical, and grandiose. Ambiguous too, and weak in front of temptations and pleasures.

In truth, French people have felt touched to their core by Depardieu's gesture. He, more than anyone, represents the Gallic spirit
Hugh Miles

For more than two weeks now, #Depardieu has been trending on French Twitter. Surveys have showed France's dilemma: half the French people understand him but there are as many who think that paying one's taxes is a national duty. In other words, a majority of French people disapprove of his action but can't help loving the man.

Read more: Paris promises flurry of economic reforms

Putin's move in granting the actor Russian citizenship has exacerbated things. And first of all, it is a blow to Hollande who, it was revealed, had a phone conversation with Depardieu on New Year's Day. The Elysées Palace refused to communicate on the men's exchange. A friend of the actor declared that Depardieu complained about being so reviled by the press and that he was leaving, no matter what.

If, in their hearts, the French don't quite believe Depardieu might one day settle in Moscow and abandon them, they feel deeply saddened by the whole saga. However, with France's former sex symbol Brigitte Bardot declaring that she too might ask Putin for Russian citizenship to protest against the fate of zoo elephants in Lyon, it looks as if the French may prefer to laugh the whole thing off. Proof of this: the last trend on French Twitter is #IWantRussianCitizenship.

Read more: Brigitte Bardot threatens to spurn France, embrace Russia if 2 elephants killed

The opinions expressed in this commentary are solely those of Agnes Poirier.

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Airbus unveils deal for Indian air refuelling tankers

PARIS: European aircraft manufacturer Airbus said Monday that it has won a tender to supply India with six A330 air refuelling tankers, a deal potentially worth more than US$1.0 billion.

"Airbus Military is pleased to confirm that it has been selected by the Government of India as the preferred bidder to supply its A330 MRTT Multi Role Tanker Transport to the Indian Air Force," an Airbus statement said.

A spokesman for Airbus Military, the group's defence division, declined to comment on the deal's value, which would have a catalogue price of US$1.25-1.38 billion.

Airbus still has a way to go before it can take a signed contract to the bank however, as the development opened the door to a long process of negotiations between Delhi and the aircraft manufacturer.

As an example, the French company Dassault Aviation was chosen by India in January 2012 to supply 126 Rafale combat jets, but that deal has yet to be finalised.

Airbus Military chief executive Domingo Urena Raso was quoted as saying: "We are fully committed to the next stage of the negotiations, and ultimately to providing the IAF with what is unquestionably the most advanced tanker/transport aircraft flying and certified today."

Airbus had already won a contract to build air refuelling tankers for India, but that deal was cancelled owing to irregularities in the tender process.

This time around, Airbus was competing head-to-head with the Russian group Ilyushin, which has already supplied aircraft to India.

If the Airbus contract with India is finalised, it would mark the sixth country to buy or say it will buy the tankers.

The others are Australia, Britain, France, United Arab Emirates, and Saudi Arabia.

An industry source said that India might need many more than just six of the planes, meanwhile.

The A330 MRTT (multirole tanker transport) can supply two aircraft with fuel at the same time, and in the configuration now being used by the Australian air force, can carry 111 tonnes of fuel, 37 tonnes of material and 270 passengers.

The deal would be a welcome fillip to Airbus, which suffered a bitter defeat in the United States almost two years ago when arch rival Boeing won a US Air Force contract for 179 air refuelling tankers.

- AFP/jc

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The Hagel record: 'War is a terrible thing'

(FILE PHOTO) In this composite image a comparison has been made between US President Barack Obama (L) and Chuck Hagel.

STORY HIGHLIGHTS

• Officials say Obama will nominate former Sen. Chuck Hagel as defense secretary


• Several GOP lawmakers voicing staunch opposition to his nomination


• Hagel has taken controversial positions on several issues that could be on his plate

(CNN) -- He forged his views of war and the military as a young man in mine-plagued fields of Vietnam. Now Chuck Hagel may become the first Vietnam veteran and first enlisted soldier to serve as U.S. defense secretary.

But the road from his nomination, which President Barack Obama will announce on Monday, to confirmation is packed with obstacles -- political landmines that could derail the effort.

In choosing this Republican to take over for outgoing Defense Secretary Leon Panetta at the Pentagon, Obama ignited controversy and anger among many of the Republicans who will be poised to grill him.

"Let's just say if Chuck Hagel is nominated," CNN Chief Political Correspondent Candy Crowley said Sunday, "set your TiVo for the hearings."

Some of flashpoints that his critics point to are the same ones that his vocal supporters like.

Hagel has said he favored U.S. negotiations with Iran and opposed increased sanctions. He has supported Israel entering negotiations with Hamas, though also insisted Hamas end terrorism and accept Israel's right to exist.

And the former U.S. senator from Nebraska has criticized U.S. policy on Afghanistan, including a 2009 "surge" that sent in 30,000 additional troops. If he becomes defense secretary, Hagel will face the challenge of ending that U.S.-led war and overseeing a smaller training force in the country.

But the controversies surrounding Hagel aren't just about his policy positions. They're also about his views.

Some are bothered by a comment he made in 1998 about an ambassadorial candidate being "aggressively gay" -- which he recently apologized for. And in a 2007 interview, he said a "Jewish lobby intimidated lawmakers" -- sparking heated criticism. A rabbi in Hagel's home state insists he is "a friend of Israel."

Sen. Lindsey Graham, R-South Carolina, told CNN he believes that if confirmed, Hagel "would be the most antagonistic secretary of defense towards the state of Israel in our nation's history."

Sen. Chris Murphy, a freshman Democrat from Connecticut, said that he believes "Republicans are spoiling for a fight."

The rhetoric over Hagel on both sides is ratcheting up.

Past controversies have led presidents to pull some nominations. But the bumpy road ahead is unlikely to faze the 66-year-old at the center of it all.

"Chuck Hagel is not afraid of challenge -- or risk," his biographer, Charlyne Berens, wrote in 2006.

'All I can to prevent war'

If he becomes defense secretary, Hagel will be tasked with carrying out the orders of a president who vowed to end two wars -- Iraq and Afghanistan.

Ending and avoiding war are part of what he committed his life to while in his 20s in Vietnam, Berens writes.

"After a year of Vietnam's miserable heat, nearly constant danger, and violent campaigns like the Tet Offensive, Chuck Hagel came back to the United States ready to get on with things -- and with both a loyalty to the U.S. military and a belief he should do all he could to prevent his nation's being involved in another war."

His fierce opposition to the Iraq War, launched by President George W. Bush, went far toward creating the schism that now exists between him and the Republican establishment.

"The damage this war has done to our country will play out for years to come," he wrote in his 2008 book, "America: Our Next Chapter."

"While it is easy for nations to blunder into war, they never blunder into peace," he added.

"If I ever get out, if I ever can influence anything, I will do all I can to prevent war," he told Berens.

His opposition to the 2009 surge in Afghanistan put him at odds with the president who is now nominating him. The surge showed a rare moment of support for Obama among many Republicans, with Hagel as a standout exception.

But his willingness to be an independent voice has won him cheers as well.

"He's a guy with really serious foreign policy chops and someone, frankly, who hasn't been afraid to depart from his party when he thought they were wrong," Murphy said in an interview with CNN.

Apology for 'insensitive' remark

As defense secretary, Hagel would oversee a military that recently dropped its "Don't Ask, Don't Tell" policy for gay and lesbian personnel -- a policy he supported. Battles continue over whether same-sex marriages can take place at some U.S. bases.

So his perspective on gays and lesbians carries particular weight.

In 1998, he opposed James Hormel, an openly gay man, for an ambassadorship. Hagel questioned whether Hormel was suitable, describing him as "openly, aggressively gay."

In December, 14 years later, he apologized, calling those comments "insensitive."

"They do not reflect my views. I apologize to Ambassador Hormel and any LGBT (Lesbian, Gay, Bisexual, and Transgender) Americans who may question my commitment to their civil rights."

The Log Cabin Republicans, a group that supports gay rights, argues the apology was "too little, too late."

But gay rights activist Rick Jacob, head of the Courage Campaign, said he supports the president making his choice for defense chief, and noted that "no one trying to derail (Hagel's) nomination attacks his qualifications."

Hagel's support for Israel questioned

Concerns about Hagel's support for Israel could prove to play a big role in confirmation hearings.

In addition to calling for talks with Iran, which openly antagonizes Israel, Hagel has spoken out against some additional sanctions -- a cornerstone of Obama's foreign policy aimed at pressuring Tehran amid questions about the country's nuclear program.

Graham noted that Hagel has wanted Israel to talk with Hamas, a "terrorist group that lobs thousands of rockets into Israel. He also was one of 12 senators who refused to sign a letter to the European Union trying to designate Hezbollah as a terrorist organization."

That and questions about his remark on a "Jewish lobby" have drawn criticism from across the political spectrum and from some Jewish organizations.

"Senator Hagel would not have been my first choice, but I respect the president's prerogative," Abraham Foxman, head of the Anti-Defamation League, said in a statement.

"I trust that the confirmation process will provide an opportunity for Sen. Hagel to address concerns about his positions. ... I particularly hope Senator Hagel will clarify and explain his comments about the "Jewish Lobby" that were hurtful to many in the Jewish community."

Hagel joined two other senators in introducing a resolution in June, 2007, pushing for a two-state solution to the Israeli-Palestinian conflict. The resolution called on Hamas "to recognize the State of Israel's right to exist, to renounce and end all terror and incitement, and to accept past agreements and obligations with the State of Israel."

Rabbi Aryeh Azriel of Temple Israel in Omaha, Nebraska, a longtime friend of Hagel's, told CNN that Hagel is "definitely a friend of Israel. He is independent, has wonderful, fresh ideas to try to reengage the discussion about the Middle East."

Azriel grew up in Israel, and said he personally supports the idea of doors being "opened for negotiation even with Hamas and Hezbollah."

'Thorough vetting' ahead

Sen. Mitch McConnell, the Republican leader in the Democratic-controlled Senate, vowed Hagel would receive a "thorough vetting" just like any other presidential nominee.

"Whoever is nominated for secretary of defense is going to have to have a full understanding of our close relationship with our Israeli allies, the Iranian threat, and the importance of having a robust military," McConnell said on ABC's "This Week." "And if Sen. Hagel is nominated, he'll be subjected to the same kinds of review of his credentials as anyone else."

Hagel has generally avoided public comments since word surfaced that he could be nominated as defense secretary.

But a line from his 2006 biography offers insight into who he is and how he would lead at the Pentagon.

"I'm a hard-edged realist. I understand the world as it is," he said. "But war is a terrible thing. There's no glory, only suffering."

CNN's Mike Mount, Kevin Liptak, Jill Dougherty, and Catherine Shoichet contributed to this report.

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Aurora massacre prosecutors lay out case to judge

CENTENNIAL, Colo. Nearly six months after the Colorado movie theater massacre, prosecutors began laying out their case Monday against the former neuroscience graduate student accused in the rampage.

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The Aurora shooting victims

Investigators say James Holmes wore body armor and a gas mask when he tossed two gas canisters and then opened fire during the midnight showing of the Batman movie "The Dark Knight Rises," killing 12 people and wounding dozens.

Whatever details emerge at the preliminary hearing, they will do so in a nation that has changed dramatically since the July 20 attack that pushed the problems of gun violence and mental illness into the forefront before receding.

That debate reignited last month when a gunman killed 20 children and six adults at Sandy Hook Elementary school in Newtown, Conn., spawning calls for better psychiatric care, tougher gun laws and the arming of teachers.

The preliminary hearing, which is expected to last all week, will allow the judge to determine whether the prosecution's case is strong enough to warrant a trial.

CBS News senior legal analyst Andrew Cohen reports the prosecution has a low burden to meet at the hearing, but notes that the proceeding allows the defense an early chance to evaluate the strength of the state's case and to question law enforcement officials.

"It's likely to be dramatic and in many ways heartbreaking," Cohen told CBS Radio News. "The public will hear details for the first time about what police believe went on inside that theater. We could hear 911 tapes. There will likely be photos and video, and Holmes will be at the defense table through it all."

Holmes is charged with more than 160 counts, including murder and attempted murder.

Legal analysts say that evidence appears to be so strong that Holmes may well accept a plea agreement before trial.

In such cases, the preliminary hearing can set the stage for a deal by letting each side assess the other's strengths and weaknesses, said Laurie Levenson, a former federal prosecutor and now a professor at Loyola Law School in Los Angeles.

They "are often the first step to resolving the case, a mini-trial so both sides can see the writing on the wall," she said.

In general, plea agreements help prosecutors avoid costly trials, give the accused a lesser sentence like life in prison rather than the death penalty, and spare the victims and their families from the trauma of going through a lengthy trial.

At this stage, prosecutors must only meet a "probable cause" standard — much lower than the "beyond a reasonable doubt" standard for a guilty verdict, said Mimi Wesson, a professor of law at the University of Colorado Law School.

Many of the survivors and family members of the dead are expected to attend the hearing, and court officials expect an overflow crowd of reporters and spectators.

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Aurora movie theater massacre pre-trial to begin

Chantel Blunk, whose husband, Jonathan Blunk, died in the attack, flew from Reno, Nev., to attend the hearing. She wanted to be there for the late father of their children and the other victims, CBS News correspondent Manuel Bojorquez reports.

"No matter what this guy did to everybody, you know, we're still going there and representing the people that were lost, that were hurt, and that he is not going to win," Blunk told Bojorquez. "You know, it's not about his name or remembering him. It's about the people that were taken away."

The hearing is the first extensive public disclosure of the evidence against Holmes. Three days after the shooting, District Judge William Sylvester forbade attorneys and investigators from discussing the case publicly, and many court documents have been filed under seal.

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Prosecutors: Holmes threatened university prof.

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Psychiatrist who treated Holmes testifies

It took this long to get to the preliminary hearing because lawyers have been debating what physical evidence should be made available to one side or the other, whether a psychiatrist who met with Holmes is barred from testimony by doctor-patient privilege, who was responsible for leaks to the media, and other issues.

Police say Holmes, now 25, had stockpiled weapons, ammunition, explosives and body armor. He was a first-year student in a Ph.D. neuroscience program at the University of Colorado, Denver, but he failed a year-end exam and withdrew in June, authorities have said.

The shootings happened six weeks later.

Federal authorities have said Holmes entered the theater with a ticket and is believed to have propped open a door, slipped out to his car and returned with his weapons. Police arrested him outside the theater shortly after the shootings ended.

Holmes' mental health could be a significant issue — and possibly a contentious one — in the preliminary hearing.

His attorneys have told the judge Holmes is mentally ill, but they have not said whether they plan to employ an insanity defense. He had seen a university psychiatrist, and his lawyers have said he tried to call the psychiatrist nine minutes before the killing began.

Defense lawyers have said they plan to call at least two people, described as "lay witnesses," who could testify about Holmes' mental health. Prosecutors asked Sylvester to block the witnesses, but he refused.

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New Evidence Expected in Colo. Shooter Hearing

A preliminary hearing for accused Aurora movie theater shooter James Holmes begins today in Colorado, with victims and families expected to be present. One family member likened attending the hearing to having to "face the devil."

This is the most important court hearing in the case so far, essentially a mini-trial as prosecutors present witness testimony and evidence—some never before heard—to outline their case against the former neuroscience student.

The hearing at the Arapahoe County District Court in Centennial, Colo., could last all week. At the end, Judge William Sylvester will decide whether the case will go to trial.

Click here for full coverage of the Aurora movie theater shooting.

Prosecutors say they will present potentially gruesome photos and videos in addition to 911 calls from the night of the shooting that left 12 people dead and 58 wounded. They will aim to convince the judge that there is enough evidence against Holmes to proceed to a trial.

It is expected that the prosecution's witnesses will include the Aurora police lead detective, first responders, the coroner and a computer forensic specialist.

Arapahoe County Sheriff/AP Photo

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In an unusual move, defense attorneys may call two witnesses. Last week, the judge ruled that Holmes can call the witnesses to testify on his "mental state," but it is not clear who the witnesses are.

A court-imposed gag order days after the shooting has kept many of the details under wraps, so much of the information could be new to the public.

Hundreds of family members and victims are expected to attend the hearing.

Holmes allegedly opened fire at the crowded Aurora movie theater during a midnight showing of "The Dark Knight Rises" on July 20, 2012. He was wearing a bullet-proof vest, dyed his hair red and was wearing a gas mask.

Holmes has been charged with 166 counts of murder, attempted murder, possession of explosives and crime of violence. The district attorney has not decided whether to seek the death penalty, and Holmes' defense team believes Holmes is mentally ill. He has not entered a plea.

One of the attendees will be MaryEllen Hanson, whose great-niece Veronica Moser Sullivan, 6, was killed in the shooting. Veronica's mother Ashley was shot and is now a quadriplegic and suffered a miscarriage.

"It's one of those things that you almost have to face the devil," Hanson told ABC News. "I don't feel he has the right to intimidate people. I think it's really important to know the details."

Hanson said she will have to "brace herself" to see and hear photos and videos, but is firm in her desire to have a "first-hand experience" with the proceedings.

"I want to know the facts," she said. "There's been a lot of misinformation out there and a lot of information that hasn't been revealed…I need to know what happened that night so I have a better understanding of the horror." Hanson said that she sees Holmes as a "very troubled person."

"The first time I was in court to see him…I felt he was a personification of evil, extremely troubled," she said. "I just can't wrap my head around how someone can be like that and do the things he's done."

She hopes that an understanding of what happened can provide some closure, even though she doesn't foresee ever fully healing from what happened.

"I hope to get to a place where we can move forward," she said. "I really don't think that James Holmes should leave a large footprint in the community."

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