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PAULA ZAHN NOW

What Killed Anna Nicole Smith?; Hillary and Hollywood

Aired March 26, 2007 - 20:00   ET

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


KIRAN CHETRY, CNN ANCHOR: And thanks for joining us tonight. Paula has the night off.
And here is what we're bringing out in the open tonight.

We now know what killed Anna Nicole Smith, but why was she on at least nine different meds?

Also, the new road to the White House runs right through Hollywood's big money machine.

And, also, what's next for the transgender city manager, now that he's officially, finally fired?

Out in the open first: the sad and disturbing details of what killed Anna Nicole Smith. It's been a month-and-a-half since the former centerfold and tabloid icon she died after she was found unconscious in a Florida hotel room. Many wondered, was it murder? After all, a fortune was at stake, her claim of the estate of her late husband, oil baron J. Howard Marshall.

And, today, the medical examiner finally released his report on what killed her. He found that Smith had at least nine drugs on in her system, chlorohydrate, Benadryl, klonopin, Valium, oxazepam, Ativan, Topamax, Cipro, Tylenol, nine of them, on top of having the flu and also an infection that she got from injections of other drugs.

Chief medical correspondent Dr. Sanjay Gupta shows us how all of this added up to a recipe for death.

(BEGIN VIDEOTAPE)

DR. SANJAY GUPTA, CNN SENIOR MEDICAL CORRESPONDENT (voice-over): In the past six weeks, it's been hard to separate fact from fiction in the case of Anna Nicole Smith's death.

But, today, details of her autopsy report may just end the speculation.

DR. JOSHUA PERPER, BROWARD COUNTY, FLORIDA, CHIEF MEDICAL EXAMINER: This is death due to combined drug toxicity, due to not necessarily drugs which are illegal drugs, but drugs which are used for treatment purposes and are abused.

GUPTA: A total of nine prescription drugs -- yes, nine -- were found in Smith's body. But doctors emphasize there's absolutely no evidence of suicide or homicide. PERPER: There was so many other medication against depression and anxiety, but not in any toxic level, only in a therapeutic level. When somebody wants to commit suicide, they usually take insurance and take more than one drug.

GUPTA: She took more than one drug, but not in irregular doses, anti-anxiety and antidepressant drugs, like Klonopin, Valium, and Ativan, Soma, a muscle relaxant, Topamax, typically a migraine medication. There were also common over-the-counter medications, like Tylenol and Benadryl.

All of those were found to be at normal therapeutic levels in her body. But, ultimately, the combination proved deadly when one specific drug was added to the mix, chlorohydrate. It's an antiquated sedative used in the past to drug unsuspecting victims, rarely used these days for anything.

The medical examiner said that Anna had been using it as a sleep aid. Interestingly enough, Smith's idol, Marilyn Monroe, died of a lethal combination of chlorohydrate and barbiturates.

In Smith's case, doctors say a combination of nine prescription drugs is unusual, but not impossible.

PERPER: Yes. It's -- it's -- it's a bit unusual, but it's up to her doctors to make the determination what medication should she take.

GUPTA: Prescribing was up to her doctors. And there was not one, but several doctors treating Anna Nicole Smith.

Another eye-catching detail, a curious mixture of injectable human growth hormone, vitamin B-12, and Topamax. Dr. Perper described it as a longevity regimen. To be clear, there is little scientific evidence proving the concoction works for weight loss or rejuvenation, or, really, any aspect of prolonging life, for Anna Nicole Smith or anyone.

But it is clear the injections did cause a serious, but not lethal infection.

PERPER: God didn't create our body for receiving many injections. In the area of the buttocks and on her right thigh, there was damage caused by the injection, because there was scarring and destruction of fat tissue and tracks of prior bleeding from a needle.

GUPTA: An infection that cleared up with yet another medication, a strong antibiotic, Cipro, but left her system weakened against an intestinal flu.

PERPER: All those drugs are basically what you call psychoactive drugs. They act on our -- on our brain. And, in our brain, there are centers of respiration. There are center of circulation. And, in large amount, those kind of drugs just shut off those centers. It does -- switching a switch, and it's over. And then the person doesn't breathe anymore. This is a very common mechanism. Or the heart might stop. GUPTA: In the end, it was a rarely-used sedative mixed with a bizarre and dangerous combination of prescription drugs that proved too much for her body.

Dr. Sanjay Gupta, CNN, reporting.

(END VIDEOTAPE)

CHETRY: And, so, the medical examiner said it was an accidental overdose, but, if you're taking at least nine different drugs, like Anna Nicole Smith was, there is a good chance you have an addiction problem.

So, let's turn now to addiction specialist Dr. Drew Pinsky.

Thanks for being with us tonight.

DR. DREW PINSKY, AUTHOR, "CRACKED: PUTTING BROKEN LIVES TOGETHER AGAIN": My pleasure.

CHETRY: How common is this? I mean, we were talking about it around the NEWSROOM today. And we were thinking, how many people would have that many drugs in their body at one time?

PINSKY: Non-addicts or addicts?

Non-addicts would not have that combination. The fact is, there is -- I know of no good indication for Klonopin, Ativan, and Valium to be given in combination, particularly with someone who had a near- death overdose 10 years ago. She nearly did this 10 years ago. She swore off medication, didn't get into a program, and inevitably returned to drugs and alcohol. This time, people just didn't get to her in time.

It's very common today for addicts to mix benzodiazepines and opiates. She had been using methadone and multiple benzodiazepines. That's, again, the Klonopin, the Valium, and the Ativan. And those are the drugs together in combination will stop you from breathing.

If you add in some chlorohydrate, sure, yes, you're likely to stop breathing. That's how all my patients die. That's how addicts die.

CHETRY: Right.

PINSKY: They don't die by taking too much, necessarily. They forget what they took. They -- these drugs also cause amnesia. So, they don't remember what they took. They take a few things on top of another. And, then, pretty soon, they stop breathing. They go to sleep. And that's the end of that.

CHETRY: You know, I mean, anyone that watched her reality show or saw her -- she was in the public eye -- could see that maybe there were some, you know, issues there when it came to whether or not she was sober.

Is -- is there anyone to blame, doctor-wise, anybody who anything irresponsible or perhaps unethical by prescribing all of this?

PINSKY: If -- if one doctor was prescribing all these medications, you certainly would look into that, because, again, I know of no indication that Klonopin, Valium, and Ativan should be prescribed in combination. I mean, that's sort of a bizarre combination.

But the fact probably is that she was probably, as Dr. Gupta mentioned, shopping to multiple doctors, and they weren't aware of what one another was giving.

CHETRY: Mm-hmm.

PINSKY: Probably the nurse that was attending to her that night didn't know what she was taking.

She, the patient, didn't remember what she had taken, and kept -- kept things stashed around. I mean, this is such a common -- it's such a common story, I actually wrote a book about it. I wrote a book called "Cracked" about what it feels like to take care of this particular case, because it is a very, very common problem today, that people become addicted to pharmaceutical medications.

They defend it by saying they're just following doctor's direction, when, in fact, it's a very serious and potentially deadly form of addiction, as we all, I think, now understand.

CHETRY: Can anyone around a person like this save them from themselves, or is that just a...

(CROSSTALK)

PINSKY: You wish you could. I mean, ultimately, you really can't.

But the fact is that somebody enlightened, who is willing to put own their relationship or perhaps job with that person on the line, will have to step up and say: Look, you have got to do something. I'm frightened about your survival. This is completely unacceptable.

And I do know that many people did that to Anna Nicole. There was concern in the community of -- recovering community -- about her drug use long before all this happened.

CHETRY: Right.

PINSKY: And the fact was, she would have none of it.

So, ultimately, it is up to the patient. But you wish that somebody could have stepped in, meaningfully, and leveraged her into some kind of treatment before it became too late.

CHETRY: Right.

You know, the other thing is, is, all of these medications, I mean, a lot of them, seem like they are highly addictive. Did doctors think twice, I mean, in the medical community, before prescribing things that seem to be so addictive?

PINSKY: I think most doctors do.

A lot of physicians don't and practitioners don't really understand the implication of giving a benzodiazepine to an addict. I have never seen a drug -- I treat tens of thousands of addicts. I have never seen one stay sober on Klonopin, on Ativan, on chlorohydrate. These medications trigger the addictive biology. It distorts the drives and motivations that are normally in place for the -- the normal motivational systems that are in place become distorted, and the pursuit of drug becomes the priority.

CHETRY: All right. Sad case, for sure.

Dr. Drew Pinsky...

PINSKY: Indeed.

CHETRY: ... thanks for shedding some light on an addict's personality and behaviors.

PINSKY: My pleasure.

CHETRY: Well, there are so many questions that are still unanswered in the Anna Nicole story.

Who gets custody of her little baby? She does still have a little baby. Who gets custody of the money? We are going to get into all of that in a moment.

Also later: Hillary Clinton raised $2.6 million on one Saturday night. And you won't believe where it all came from.

That's ahead.

(COMMERCIAL BREAK)

CHETRY: Another story that is out in the open tonight: $2.6 million in one night, what Hillary Clinton's haul this weekend says about the new hot stop on every candidate's campaign trail.

Also tonight, we're bringing Anna Nicole Smith's death out in the open. The medical examiner issued his report today, blaming a combination of at least nine drugs for killing her.

But that's not even the beginning of the end of this story. There are so many questions that are still waiting for answers.

We asked Susan Candiotti to look into them.

(BEGIN VIDEOTAPE)

SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT (voice-over): Even though the police and medical authorities have found no evidence of foul play, the mystery and the controversy surrounding Anna Nicole Smith are far from resolved. A fundamental issue remains the sheer volume of prescription drugs in her possession. How did she get them? The medical examiner says most of them came from doctors in California and the Bahamas, all legal, all beneficial, as long as they are taken correctly.

Yet, the California Medical Board has said it's investigating Dr. Sandeep Kapoor, Anna Nicole Smith's Los Angeles-based doctor. He prescribed methadone while she was pregnant, and defends his treatment of her as being -- quote -- "sound."

The medical examiner raised another question, one many people have asked recently. Since it was clear Anna Nicole Smith frequently was high on something, shouldn't someone have said: Stop; enough?

DR. JOSHUA PERPER, BROWARD COUNTY, FLORIDA, CHIEF MEDICAL EXAMINER: There's no question that friends and people who love a person have a moral duty to give proper advice. But they cannot force the advice.

CANDIOTTI: Lawyers for Smith's partner, Howard Stern, today said he and others begged Smith to go to a hospital, but claimed she refused because she didn't want to create a media frenzy.

The medical examiner tells CNN that decision may have cost Smith her life. The medical examiner also says that, when Smith was discovered not breathing in her hotel room on the morning of February 8, it took one hour and 10 minutes for anyone to call 911. That delay apparently came when a nurse and bodyguard tried CPR on their own.

But was it reasonable? Dr. Perper told CNN, people panic. But there is an odd contradiction in the official accounts. A police spokesman says the delay was, at most, about 40 minutes, not more than an hour.

LILLY ANN SANCHEZ, ATTORNEY FOR HOWARD K. STERN: Clearly, any delay in getting medical attention to her is of a concern. However, we can't speak to that, because, as you all know, Mr. Stern had left.

CANDIOTTI: Smith's partner, Howard K. Stern, was nearby in the Fort Lauderdale area, shopping for a boat.

Other unanswered questions: How much will Smith's estate eventually be worth? The courts could award millions of dollars from her late husband's estate. Who will inherit? Stern is the executor of her will, but he is not named as a beneficiary. An estate battle won't surprise anyone.

Smith's infant daughter, Dannielynn, may grow up to be a wealthy girl, but who is her father? Possible candidates include Stern and Smith's ex-boyfriend, Larry Birkhead. DNA tests are being conducted at a lab in Ohio. And results could be available as early as next week.

One final question: Since there are no criminal charges, and the police case is closed, what are the chances someone could bring a civil negligence suit, and against whom? Remote, says one lawyer, mostly because Smith herself appears to have accidentally caused her own death.

JEFFREY WEINER, ATTORNEY: I don't think that there will be a suit. I don't think anyone has any standing whatsoever. But, you know, these days, lawsuits are brought for all sorts of meaningless reasons. And there's always lawyers who will do it.

(END VIDEOTAPE)

CANDIOTTI: The questions crisscross all the way from the U.S. to the Bahamas. The death of Anna Nicole Smith's son, Daniel, that happened three days after the birth of her daughter in Anna Nicole Smith's hospital room will take center stage at an inquest scheduled to begin in the Bahamas tomorrow morning -- Kiran.

CHETRY: And, Susan, are all three -- are the bodies going to be -- stay -- stay buried in the Bahamas?

CANDIOTTI: Well, it is possible, but Anna Nicole Smith's mom, Virgie Battle, tells me -- Virgie Arthur, tells me that that battle is far from over. She's not willing to give up on moving the bodies.

CHETRY: All right, Susan Candiotti, live for us tonight, thanks so much.

And we're going to take a closer look now at some of the legal battles that Susan talked about that have been going on since Anna Nicole Smith's death.

Court anchor Jami Floyd is here with me now to talk more about it.

And, you know, really not much was resolved, except a little bit of vindication, perhaps, for Howard K. Stern. There were a lot of people saying, did he have something to do with her death? And this medical examiner says, no, it was an accidental overdose.

JAMI FLOYD, COURT TV ANCHOR: Yes. For sure, he is now clear of any possible criminal culpability. People will talk about lawsuits.

And, of course, in the court of public opinion, what the medical examiner has to say probably doesn't matter a whole lot. But so what? There's still the baby battle, the body battle. As you just heard Susan report, that will go on. And then there's that $474 million, or $88, million estate, however you want to cut it.

So, this doesn't resolve a whole lot, although good news, if you will, for Howard K. Stern.

CHETRY: Right. At least there is some movement, though. We're -- we're -- in -- in terms of what's going on, because they have taken DNA, apparently, from Dannielynn.

FLOYD: Yes. CHETRY: And -- and it's been voluntarily given by at least two of the people claiming -- not Howard K. Stern, but the other two claiming to be the father. So, are we going to find out the paternity soon?

FLOYD: Well, we will find out the paternity, yes. That's been sealed until the next court date, which is April 3. Presumably, on that date, the court will know, and we will know.

But that doesn't mean we will find out who gets the baby, because, in the Bahamas, paternity is not dispositive, the way it is here in the U.S.

CHETRY: Right.

FLOYD: They're going to look at a lot of factors. And paternity is just one of many. So, we're closer, but we're not there yet.

CHETRY: The Bahamas will take into account what they believe or what the court believes Anna Nicole wanted, which...

FLOYD: Yes.

CHETRY: ... clearly, in this situation, apparently was for Howard K. Stern.

And, also, how does it -- the longer he drags it out and the longer she stays with him, how does that factor it?

FLOYD: That's a big factor.

This is the only father the baby has ever known. And the court will certainly factor that in. They are looking at the best interests of the baby. And they factor in all that you mentioned. But they also think about gender.

And, in the Bahamas, women are preferred caretakers.

(CROSSTALK)

FLOYD: And that means Virgie Arthur, at some point, may have a claim as well.

CHETRY: What about the argument that perhaps Larry Birkhead can make that, look, he was with -- Howard K. Stern was with Anna Nicole when she died; he was with Daniel when -- when he died; and we're talking about a litany of prescription drugs that were clearly being abused; is that the best environment for this baby?

FLOYD: Well, that's certainly a fair point to raise, in terms of the best interests of the child.

But Larry Birkhead's camp has to be very careful, at least in so far as Anna Nicole Smith is concerned, to stay away from implicating him in anything criminal or nefarious. He's now been cleared. And to call him anything even close to murderer is defamation. So, they can't go there, but they can certainly talk about the environment in which the baby will be raised. And you can infer what that will be, based on the life and death of Anna Nicole Smith.

CHETRY: Some interesting things, for sure.

Jami Floyd, thanks for joining us, as always.

FLOYD: Good to see you again.

CHETRY: And politics and cash, they're never too far from one another, are they? But can you believe that Hillary Clinton raised more than $2 million in just one night of campaigning? Where was she that she was able to scoop up all that cash? Out in the open tonight: the new must-stop for every presidential candidate on either side of the aisle.

Also out in the open later: one family's mortgage nightmare. Why do they say they were forced to sign for a loan that they didn't want and couldn't afford?

(COMMERCIAL BREAK)

CHETRY: Welcome back.

We're talking about Anna Nicole Smith and the autopsy report on what caused her death.

Right now, we want to take a look at what's been driving the fascination with her story and the case.

And we go to tonight's "Out in the Open" panel.

Joining us, Ben Ferguson, a nationally syndicated radio talk show host.

Great to have you.

Also the author of "It's My America, Too."

Christy Harvey, director of strategic communications at the Center For American Progress.

Good to see you.

CHRISTY HARVEY, DIRECTOR OF STRATEGIC COMMUNICATIONS, CENTER FOR AMERICAN PROGRESS: Hi.

CHETRY: And also CNN contributor Roland Martin.

Welcome.

ROLAND MARTIN, CNN CONTRIBUTOR: Glad to be here.

CHETRY: We're going to talk first a little bit about why it seems people are so obsessed, because anyone who says they weren't watching their TV today at 10:30 a.m. Eastern time... (LAUGHTER)

CHETRY: ... when they said they were having this press conference, is not telling the truth.

BEN FERGUSON, RADIO TALK SHOW HOST: No. I mean, I think people were obsessed with it because you saw this beautiful young lady who, all of a sudden, married someone that was so much older than her. So, right there, it's like why -- what did she find interesting about him?

Then we found out about the money. He passed away. And then it's all this -- I mean, she went to the Supreme Court. Not many people, in their lives, get a court case to go to the Supreme Court, on top of going from "Playboy" and everything else. So, I think people got obsessed with it.

And then you could literally -- from my opinion, you could see the demise of this woman on TV. You look at her TV, and you saw this, and you could see that she was out of her mind most of the time she was doing it. And it's like it was a -- it was a ticking time bomb. I mean, when I found out she died, I wasn't shocked. It was like, wow, it happened this early, but I wasn't surprised that she passed away.

(CROSSTALK)

CHETRY: Why do we, Christy, like to watch these train wrecks, then, these human train wrecks, like, he was describing?

HARVEY: Well, I think she was really also the daughter of all of the missing white women that we have been fascinated with for the last decade.

She is the daughter of Chandra Levy and Laci Peterson and the runaway bride. And we just have a fascination with this phenomenon that's been going on for the past few years.

And I think it's also because -- think about it -- for the last five to six years, the news has been really bad. It's been depressing. And, every time you turn on the TV, it's Iraq or war or terror. And I think people actually wanted to say, let's take a break and watch a soap opera for a while.

MARTIN: You know what, Kiran? I'm sorry. I can't buy that.

OK. Have you ever picked up one of these celebrity magazines in the store?

CHETRY: Of course.

MARTIN: Let's see.

CHETRY: I can barely walk around the side of my bed, I have so many sitting there.

MARTIN: Let's see. There are photos of people walking their dogs.

CHETRY: Mm-hmm.

MARTIN: There are photos of folks walking into a club. That's boring.

If you need that to -- to get away, you have some serious issues.

She...

(CROSSTALK)

MARTIN: We are a celebrity-based culture. We gravitate around that. And it's sickening.

I mean, I'm sorry. I really don't care who she's married to, who she's screwing, who she's laying with.

(CROSSTALK)

CHETRY: Ben, you're a...

(CROSSTALK)

MARTIN: It's crazy.

FERGUSON: Yes, but the average -- the average American does. Why are we so obsessed with Britney Spears when she cut her hair? It's because people love seeing people that screw up bigger than they do. It makes them feel better about themselves.

You look at this lady, and you think: I wish I had all that money. I wish I had the fame. I wish I was that beautiful. I wish that I could...

(CROSSTALK)

MARTIN: And I wish I overdosed.

FERGUSON: No, no, no, not that.

(CROSSTALK)

FERGUSON: But what I'm saying is, at first you see it. And, then, when you see people that have all of that, and they're not happy, you feel better about yourself.

(CROSSTALK)

CHETRY: The other thing, though, too, is that, for our kids these days, it doesn't matter what you're famous for, as long as you're famous. And it seems to be a scary message that we're sending the young kids, Christy.

HARVEY: It really is.

Every kid these days thinks that they have 15 minutes of fame coming to them.

CHETRY: Right.

HARVEY: They have an allotted 15 minutes, and they just have to wait for it to happen. There's no longer a drive to become famous because you have done something. There's a drive to become famous because of course you're going to get your 15 minutes on television.

CHETRY: And, Roland, do you find it ironic? People even -- I think it was Howard K. Stern's attorneys maybe blaming the media a little bit for this.

I mean, she's somebody that actively pursued -- I mean, with her shows. She was the paparazzi's favorite.

(LAUGHTER)

(CROSSTALK)

FERGUSON: She hated it so much.

MARTIN: Oh, right.

(LAUGHTER)

MARTIN: And Howard K. Stern, who is living off of her, wants to blame the media. That's how he paid for stuff. That's how she paid for stuff.

It's amazing. When people get in trouble, they all -- they want to blame the media, but they want to beg the media for coverage. I don't want to buy that. What Howard K. Stern should do is take a DNA test and own up to the fact whether he's the child's father or not, and then move on, because, frankly, I'm tired of talking about him and Anna Nicole Smith. They are living train wrecks.

(CROSSTALK)

FERGUSON: And Howard K. Stern is going to become a millionaire off of her, whether he gets the money or not.

He's going to write a book. He's going to do the exclusive interviews. He's going to do all these things.

(CROSSTALK)

FERGUSON: And you look at this man -- but you look at the drugs that were in her room. Half the prescriptions were in his name. She was taking them.

This man, she trusted to take care of her. And he didn't do it. And the bottom line was, is, he cared more about her fame and the story than he did about her.

(CROSSTALK)

HARVEY: That's been her job -- his job for the past few years, is to exploit Anna Nicole Smith.

FERGUSON: Yes.

CHETRY: But somebody is eating it up. Somebody is buying it, because people are watching.

MARTIN: Of course.

HARVEY: Oh...

CHETRY: And people want to see her.

(CROSSTALK)

MARTIN: If there's one thing that we can take away that is of news value that might be a little depressing is that...

CHETRY: Say no to drugs?

MARTIN: Well, no, not just that, but the fact that people are dying, 20,000 a year, who mix drugs together.

And, so, as we focus on the celebrity aspect, let's actually take some news out of it and say, how can people get the right information not to mix drugs, because 20,000 a year...

CHETRY: Yes. But, unless you're actively trying, you're not getting nine prescriptions for various types of sedatives either.

(CROSSTALK)

MARTIN: Yes. But, also, Gerald Levert, the singer, he died the same way, five different drugs in his -- he wasn't attempting to do it. But, again, he mixed the drugs. So, maybe as -- our job as journalists is to pull the news out of such drama.

(CROSSTALK)

CHETRY: Well, we have got to go, but I want to thank everyone, Christy Harvey, Ben Ferguson, and Roland Martin -- lively discussion. We will see you in a few minutes.

MARTIN: Absolutely.

CHETRY: Coming up -- stay with me -- we have got a lot more to talk about.

Hillary Clinton's campaign looking pretty flush with cash. She raised $2.6 million in just one stop this weekend -- out in the open, where every presidential candidate needs to go now to raise that kind of cash.

Also, a little bit later: The city manager who is getting a sex change and got fired for it, what happened when he made one last emotional pitch in front of the whole city to keep his job?

(COMMERCIAL BREAK)

CHETRY: "Out in the Open" tonight, cold, hard cash that's fuelling the race for the White House. In the campaign leading up to the 2008 elections, money may be more important than the issues or ideas for Republicans and Democrats alike. But isn't it ironic that the Democrats, the party championing the interest of the poor, the working class, are hobnobbing with the rich and super rich to fill their campaign coffers.

Barack Obama collected cash in Florida over the weekend before heading to Atlanta today for another fund raiser. No one expected John and Elizabeth Edwards to raise money today, just days after announcing that Mrs. Edwards was again facing cancer. John Edwards talked about combating global warming in San Francisco, while Elizabeth Edwards was in Cleveland appealing for more federal funding for health research.

And Hillary Clinton picked up the crucial endorsement of Iowa's former governor, Tom Vilsack, today fresh after raising more than $6 million around the country in Beverly Hills just this weekend. And Hollywood is a potential gold mine for anybody with an eye on the Oval Office. We asked entertainment correspondent Brooke Anderson to look into the connection between showbiz and presidential campaigns.

(BEGIN VIDEOTAPE)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I, George Walker Bush...

BROOKE ANDERSON, CNN ENTERTAINMENT CORRESPONDENT (voice-over): The American president. It's the role of a lifetime. And in 2008, the entertainment industry may have a big say in casting the part.

RAPHAEL SONENSHEIN, CAL. STATE FULLERTON: I think Hollywood is more influential this year than it has ever been.

ANDERSON: Between trips to the frigid but politically vital primary states of Iowa and New Hampshire, the candidates come here to the sunny entertainment capital. The reason, money.

SONENSHEIN: Hollywood and the whole West Los Angeles complex that is not just Hollywood, is probably the number one source of funding for Democrats. Even Republicans are coming out here trying to get some of this money.

NOAH MAMET, POLITICAL CONSULTANT: There is a fight among the campaigns for donors.

SONENSHEIN: The deep pockets they're reaching into belong to entertainment moguls like Steven Spielberg, Jeffrey Katzenberg, and David Geffen, who between them, brought us "Indiana Jones," "Shrek" and "Dreamgirls." The power trio hosted a fund raiser for Barack Obama last month that netted the Democratic candidate a cool $1.3 million.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: Thank you, Los Angeles, I love you. ANDERSON (on camera): This being Hollywood, there's plenty of drama over donors. When Geffen defected to camp Obama, he slammed his former friends the Clintons. He told The New York Times: "Everybody in politics lies, but they do it with such ease, it's troubling."

(voice-over): Not to worry. Hillary Clinton still has Beverly Hills billionaires in her camp, like supermarket magnate Ron Burkle, who host a million dollar fund raiser over the weekend that drew Hollywood stars. The event was co-chaired by Haim Saban, the 98th- richest American thanks to his shows like "Mighty Morphin Power Rangers," and Stephen Bing, a producer of, among other films, "The Polar Express."

On the Republican side, leading candidates like Rudy Giuliani and John McCain also have their share of big money backers in Hollywood, movers and shakers who are critical to a campaign because they donate and they get others to donate, a phenomenon known as "bundling."

MAMET: They're sort of magnets. These people are out there on the phone or sending e-mails or sending faxes trying to get their friends, their family, co-workers, anybody they know to write checks for the candidate that they support.

ANDERSON: The contributions can really add up. In the 2004 election, Hollywood donated more than $33 million to candidates. More than two-thirds of that sum to Democrats. So what do they want in return?

SONENSHEIN: I think they probably want to be taken a little bit more seriously. I think they feel that some of their issues that are bigger out here, such as environmentalism, global warming, issues like that, don't get enough attention in Washington.

GOV. ARNOLD SCHWARZENEGGER (R), CALIFORNIA: The main players in deciding who the candidates will be.

ANDERSON: California Governor Arnold Schwarzenegger has signed a bill moving up the state's primary from June to February 5th, which may only increase the entertainment industry's value to campaigns.

SONENSHEIN: That has turned Hollywood from wannabes who want to get closer to Washington to possible king- or queen-makers in these races.

ANDERSON: For candidates with an eye on the White House, the path to Pennsylvania Avenue may wind through Hollywood.

Brooke Anderson, CNN, Los Angeles.

(END VIDEOTAPE)

CHETRY: And one more thing. All of the candidates are just days away from a crucial financial deadline. At the end of this month, campaign donations for the quarter will be added up and all of the candidates and their competitors will know exactly where they stand. Well, we're staying on top of the mortgage crisis. There was a huge drop in home sales today. And we'll show you the desperate struggle of one couple. Why do they say they were forces to take on a mortgage that's now ruining them?

Another story we're bringing "Out in the Open" tonight, the city manager fired because he wants a sex change. He had one final chance to convince city leaders his gender makes no difference. So what happened when he made his emotional plea?

(COMMERCIAL BREAK)

CHETRY: Tonight we're bringing "Out in the Open" a story that we've been following very closely and that we're committed to covering. It's the wave of home foreclosures hitting American families. It is estimated that 2 million families cannot pay their mortgages. And they risk losing their homes. Many of them took out so-called teaser or subprime loans and they're now facing staggering mortgage interest payments.

Deborah Feyerick talked with one family whose American dream of homeownership is shattered.

(BEGIN VIDEOTAPE)

DEBORAH FEYERICK, CNN CORRESPONDENT (voice-over): When Ana and Radamus Rosado went to buy their first home in the Bronx two years ago, they didn't get what they had bargained for.

ANA ROSADO, HAVING TROUBLE PAYING MORTGAGE: There's an amended stamp on the top where the actual application was amended.

FEYERICK (on camera): So when you went to the closing, these were not the terms that you had originally agreed to?

ROSADO: Exactly. We were forced to sign this.

FEYERICK: When you say you were forced, why not just delay the closing?

ROSADO: Well, we had -- I had already turned in my apartment. We were packed. I just had a baby.

FEYERICK (voice-over): And they say they risked losing a $25,000 down payment. The Rosados say they had agreed to a fixed rate loan guaranteeing they would pay the same rate every month for 30 years. But at the closing, here's what they say they were told.

ROSADO: Oh, I'm sorry, the banks didn't approve this loan. Here's another loan. Then right before closing, that loan supposedly didn't go through and we got stuck with the loan we have.

My attorney said this is not the worst. And you can refinance in two years. So, you know, we swallowed it, took the loan and saved for the past two years to have enough money to refinance again. FEYERICK: That loan cost them $2,800 a month for two years at a rate of 6.75 percent. But then as written in the mortgage, that lower rate jumped nearly $700, raising to 9.9 percent this past January, or roughly $3,500 a month.

ROSADO: We should have went to the mob for a loan. That's the bottom line. I think the mob would have given us a better loan. Because it was -- they were all in cahoots, it looks like.

FEYERICK: The Rosados claim they were victims of a scam, a classic bait and switch. They were promised one loan but got another. Their loan application was prepared by Alliance Mortgage Banking Corporation. A company vice president says the was no bait and switch, telling CNN, quote: "I find it hard to believe that she was turned down for one loan but approved for another."

ROSADO: This is my son's room.

FEYERICK: Fremont Investment and Loan, the company which actually gave the Rosados their loan to begin was recently ordered by the government to stop providing high-risk subprime loans to people who can't afford to pay once the rates go up. Critics have called the practice predatory as it often targets people who are financially vulnerable.

DOUG DUNCAN, MORTGAGE BANKERS ASSOCIATION: There is no question that in the last couple of years, some lenders have lowered the threshold for qualifying for a loan.

FEYERICK: The Rosados have hired a new lawyer to help them refinance.

(on camera): When you look at this, how bad is this? How bad is the Rosados' case right now?

DANIEL KATZNER, ROSADOS' ATTORNEY: This is the absolute definition of a predatory loan, which has generally led to the current distress in the mortgage market.

FEYERICK (voice-over): Fremont Investment and Loan, one of the country's biggest subprime lenders last week announced it is getting out of the high-risk subprime business. A company spokesman would not comment about the Rosados' case, but tells CNN Fremont has retained service professionals to help customers who have questions or concerns about their loans. As for the Rosados, until they can refinance, they're borrowing money from family so they don't lose their home.

Deborah Feyerick, CNN, Bronx, New York.

(END VIDEOTAPE)

CHETRY: Chances are much higher that you're living dangerously under a high-interest mortgage if you're an immigrant or a member of a minority group. According the federal government, in 2005, subprime loans made up more than half of all the loans given to blacks, 40 percent of loans to Latinos, and only 19 percent to whites. So are these groups being unfairly targeted? We're going to run that by our "Out in the Open" panel tonight. We have radio host Ben Ferguson with us. We have Christy Harvey of the Center for American Progress. And also CNN contributor Roland Martin.

Again, great to see all of you. Roland, are minorities being unfairly targeted? Are they more often the victims of predatory lenders and why?

MARTIN: I think it's a combination of them being targeted, also them not having enough information to be able to ascertain what is right and what is proper. Everybody wants the American dream, everybody wants to be in a home. But you have to use some common sense. When someone comes to you and says, you can get a new home, $1,000 a month mortgage, no money down, you had better ask the question, what's going to happen five years down the road?

CHETRY: Right. Very true. And, Ben, it seems like we live in a culture where we all live above our means and it seems like it's OK and in some cases encouraged. I have very smart friends who said, I'm getting these interest-only homes, it's so great, you only pay the interest.

FERGUSON: Well, I think you -- first you had young people in this country where the -- you know, there was the standard of keeping up with the next door neighbor, keeping up with the Jones, where it was I want the Rolex, and then it went to, I want the cool car and so they'd pay more than they could afford for a car and now it's come to homes.

And I think you go to these people and you say, you can afford this $400,000 house. When I saw this lady that made basically $35,000 a year, you're an idiot if you think you can afford a half-million dollar house on $35,000 a year.

Now, I mean, is there oversight (INAUDIBLE)? Yes. But when you go to these banks, they go to these people and they, you know what? Here's a loan. We're going to give you a good deal. And then in a couple of years you can refinance it and it's going to cost you barely any money.

And they take it because they want to live in the huge house. And the reality is you can't afford it.

CHETRY: Can the government monitor ignorance and stupidity in some cases?

HARVEY: Well, I think that they can help out a little bit. I think that look at who these people are actually going for. They're also going for the little old ladies, they're also going for the single desperate moms who are working three jobs. They're trying to attack and trick people who don't have the education and who don't know what they're getting into.

And so I think there is a way that the government can, A, promote more financial education with people and, B, look out for those people also and know that there are these predatory places. MARTIN: Well the problem is deregulation because it was deregulated on the federal level which then left it up to the states. Then you have 50 different standards. It's going to be difficult to come back and say, let's have more federal regulation. People should be protected because again, they're running into serious trouble.

So you have to have two things happen. You to have to have regulation on the one hand, but you have to have people who are trained to go through the process, to understand that. You know, I was riding with a Chicago banker and I said, how are people affording all of these homes? She said, Roland, check due...

CHETRY: They're not affording it.

MARTIN: She said, check is going to be due, we have got wake up to it.

CHETRY: And it is a confusing situation. I mean, we could all go to college for four years and you know when you're signing a loan, you're just signing...

(CROSSTALK)

CHETRY: The next one could say your first born goes to us and you just keep signing.

FERGUSON: How many college graduates nowadays don't even know how to file their own taxes, but they have a four-year degree?

CHRISTY: Or do a budget or anything like that.

FERGUSON: Or do a budget. How many kids now go to college and graduate and they have got four maxed out credit cards? I mean, young people today have so much debt coming out of college.

CHETRY: So what is the answer?

MARTIN: Well, first and foremost, one of the answers is, when someone tells you, you can get a loan to own a home, and you don't have to show proof of income, run. Because you're going to have trouble down the road.

CHETRY: All right. Christy, add on to that one.

HARVEY: And another solution is to look out for these companies that are really just like Vinny the loan shark, but they just won't break your legs at the end. And to make sure that these companies that are targeting the people that they know won't be able to pay have to pay a price if they're looking predatory.

CHETRY: And last word.

FERGUSON: I think it's common sense. I think people have to look at it and see -- live within your means. And I don't think you can legislate that. If people want to be dumb and live in a huge house they can't afford, they're going to lose the house and it's not anyone's fault but their own.

MARTIN: And destroy their credit and lose all their savings, so it's all over.

FERGUSON: Absolutely. That's their own fault.

CHETRY: All right. Let's read the fine print, folks.

(LAUGHTER)

CHETRY: All of us. Me included. All right. Christy Harvey, Roland Martin, Ben Ferguson, thank you so much.

HARVEY: Thank you.

MARTIN: Thanks, much.

CHETRY: Well, "LARRY KING LIVE" is coming up in just a couple of minutes. Larry, great to talk to you. Who is on tonight?

LARRY KING, HOST, "LARRY KING LIVE": Hi, Kiran. Guess what we're doing tonight?

CHETRY: It starts with an A and ends with a Nicole Smith?

KING: You've got it.

(LAUGHTER)

KING: We'll cover the whole Anna Nicole Smith story. The results of the autopsy. Various reactions to it. We'll have Howard Stern's attorney on. An exclusive, in her first interview since Anna Nicole Smith's autopsy was released this morning, the Florida attorney for Howard K. Stern will be with us. The medical examiner, as we said, to answer questions. And Anna Nicole's aunt, does the family accept that her death was accidental? It's all ahead at the top of the hour, Kiran.

CHETRY: Yes. Howard K. Stern's attorney with some harsh words for the media as well about why Anna didn't go to the hospital.

KING: Yes, you're not kidding. It is what it is, this story. It doesn't end.

CHETRY: That's true. A lot to talk about. And we are going to watch it right here with you, Larry, in just a couple of minutes. Thanks so much.

KING: Thanks, dear. Bye.

CHETRY: Well, coming up, he lost his job because he wants to be a woman, the story we've been following out here. "Out in the Open," a final desperate plea. What happened to the transgender city manager when he begged for his job back?

(COMMERCIAL BREAK) CHETRY: Tonight, a story that we've brought "Out in the Open" and have been tracking for weeks. You might remember that the city manager in Largo, Florida, got fired because he wants a sex change. When Paula went off the air on Friday, Steve Stanton was still in a last ditch meeting before city commissioners, desperately trying to get them to give him his job back.

Carol Costello tells us what happened.

(BEGIN VIDEOTAPE)

CAROL COSTELLO, CNN ANCHOR (voice-over): The city manager of Largo, Florida, seemed hopeful. Steve Stanton believed he could still persuade the city council to let him keep his job despite his plans to become a woman.

STEVE STANTON, FIRED LARGO CITY MANAGER: This is real difficult. I wish I could say I'm sorry for being what I am. If I could have changed it, I certainly would have tried. And I did for, you know, 40-plus years. I would never have wanted to put any of you in a position that you all now find yourself in. I did not want to be in the position that I found myself in.

COSTELLO: At a final meeting with the council, successful public officials from around the country who are transgendered spoke on his behalf. Many in the gallery wore "don't discriminate" T-shirts.

UNIDENTIFIED FEMALE: Steve Stanton has been an exemplary administrator for you for years. The City of Largo has prospered and grown.

COSTELLO: But after some six hours of testimony, the voices against him won out.

UNIDENTIFIED MALE: There are a couple of people here that want to make Largo into a weirdo town.

COSTELLO: Stanton just could not overcome the wrenching public debate going on outside city hall. Largo was just not ready to have their city led by a man who says he's trapped in a woman's body.

NELSON SCHMIDT, LARGO CITY RESIDENT: It is awful, bizarre, weird for a person with a $120,000 a year salary, a nice family, a wife and everything like this, that has to, you know, announce something like this all of a sudden.

COSTELLO: By a vote of 5-2, the city commission reaffirmed its decision to fire Stanton.

MARY GRAY BLACK, LARGO CITY COMMISSIONER: I support the removal of the city manager from office because I find it to be in the best interest of the residents of our City of Largo to do so.

COSTELLO: His firing prompted the city's mayor, a supporter, to worry about other employees who in Florida and 41 other states can legally be fired for being transgendered. MAYOR PAT GERARD, LARGO CITY: I'm hoping that there will come a time soon when our gay, lesbian and transgendered staff can feel like valued members of our community again and feel like they're safe in their jobs. Because that is not the case right now.

COSTELLO: With his town divided and his family in turmoil, Stanton believes he may have little choice but to move on.

STANTON: I don't know. Maybe there's greater role for me in some other Largo far, far from Florida. I'll find out.

(END VIDEOTAPE)

CHETRY: An unbelievable story. And the mayor seemed really personally disturbed by the decision.

COSTELLO: Oh, she was. She's very supportive of Steve Stanton. She thought it would go better than this, but it was a 5-2 vote to oust him.

CHETRY: And it looks like it also looks like it has really caused some problems within his family. He's married. What about the future of his marriage?

COSTELLO: Well, you can see his wife was at the hearing. I actually had a chance to talk with her and try to wrap your mind around this, because it's very confusing. Steve Stanton, you could describe him as a lesbian trapped in a man's body.

CHETRY: That's how he describes himself.

COSTELLO: That's how he describes himself. So he's still sexually attracted to his wife whether or not he becomes a woman. Now whether she is attracted to him as a woman, that's a whole different story. She is not. But you can tell by the way she looks as him, she still loves him and probably will stay with him as a supportive friend.

CHETRY: So she seems to believe that he has a real desire and that he wouldn't do this if he didn't feel he had to?

COSTELLO: Oh no, no. They've been talking about this for years. In fact, she used to go stopping with him to buy women's clothing. I mean, they've been talking about this.

CHETRY: And there's a child involved too, a son, right, so it's even more upsetting.

COSTELLO: And I did ask her about the son. He's 13 years old. And of course, you know he goes, you know how cruel kids are in school, right? But both of them said the kid is doing great. In fact, he has taught them a lot about acceptance.

CHETRY: Wow. Carol Costello, very interesting story. Thanks so much.

COSTELLO: Sure.

(STOCK MARKET REPORT)

CHETRY: And again, Paula's on vacation. Lou Dobbs will be in this spot the next three nights. Lou will be holding forums on some of the toughest issues the nation is facing, the addiction crisis, the war on the middle class, and illegal immigration.

Tomorrow, it's a must-see, "Border Betrayal." Lou will be at the federal prison in Yazoo City, Mississippi, where Border Patrol agents Jose Compean and Ignacio Ramos are being held. They were found guilty of shooting and wounding a Mexican drug smuggler back in 2005. And it's a very controversial case.

Lou has been demanding answers from the start about why two border agents were prosecuted, convicted and sent to prison, as Lou sees it, for just doing their job. He'll also be looking into reports that one of the agents was beaten in prison. So join Lou tomorrow, 8:00 p.m. Eastern time for a "LOU DOBBS TONIGHT SPECIAL EDITION Border Betrayal."

And I'll see you again right back here on Friday. That's all for tonight. I'm Kiran Chetry. "LARRY KING LIVE" starts right now.

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