TAPPER: Shahzad was on a Treasury Department watch list since the late 1990s for bringing large sums of cash into this country. He was taken off that watch list. Did the U.S. government drop the ball?
HOLDER: No, I don't think so. I think we have done a good job in monitoring those people who we need to identify as potential threats to the, you know, government, and I think one has to understand that in connection with the -- the resolution of this plot, American law enforcement I think was very successful.
TAPPER: More than 200,000 people from the U.S. traveled to Pakistan last year. How on Earth do you keep track of which ones intend to do us harm?
HOLDER: It is a difficult job. We have to try to use the various intelligence sources that we have, try to look for telltale signs for who we should be concerned about.
The vast majority of people who go to Pakistan and come from Pakistan to the United States are well intentioned. They have relatives. They have cultural ties to both countries. So we have to really try to focus and make sure that our attention is directed at those people who would do our nation harm.
TAPPER: There have been reports that others arrested this year in terrorist plots in the United States had traveled to Pakistan. Are there any ties with Shahzad?
HOLDER: Well, the investigation's ongoing. And we're looking at a variety of things to try to make sure that we hold everybody accountable who was responsible for this attempted attack. I think the investigation is proceeding at a good pace. We have developed, I think, a good amount of information in a relatively short period of time, but we will be continuing to work on it.
TAPPER: There was a time when the FBI and law enforcement lost track of Shahzad after the attempted incident, before he got on the plane. What happened?
HOLDER: Well, we lost contact with him for just a bit of time, but I think what people have to understand is that we had a layered approach so that at the end of the day I think we were always confident that he would be picked up, and the question was only where he would be picked up and when he would be picked up.
A surveillance was conducted, but we wanted to have him at a fairly good distance so that we could observe him and see if he would make contact with other people who were connected to the plot. Contact was lost for a relatively short period of time.
TAPPER: How long? An hour?
HOLDER: Oh, I don't know, about an hour, so maybe something along those lines. But what was key and what ultimately proved to be successful was this layered approach. He was caught before he was able to leave the country.
TAPPER: But he almost got out, right? I mean, we got lucky in a few ways. First of all, let's be honest: The reason that we avoided a horrible incident is because he was apparently an incompetent bomb- maker, right?