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Dow Tanks Again; Campaign Wars; Presidential Candidates Argue on Mortgage Buyout Plan; ACORN Under Fire for Alleged Voter Registration Fraud; The Palin Factor: Honeymoon Not Over

Aired October 9, 2008 - 20:00   ET


CAMPBELL BROWN, CNN ANCHOR: And what a bloodbath on Wall Street today, everybody, the Dow industrials now below 9000. It closed at 8579. That's down another 678 points. And believe it or not -- I swear this is true -- Ali Velshi says this actually may be good news. That's right, good news.
He's going to be here in a minute to explain, because I certainly don't get how -- why this is true in just a moment.

In the presidential campaign, tempers starting to flare. Take a listen.


UNIDENTIFIED MALE: I'm mad. I'm really mad. And what's going to surprise you, it's not the economy. It's the socialists taking over our country.



BROWN: And those are just the voters.

The candidates not pulling any punches either right now. Today, they're clashing over who wants to keep people in their homes, who wants to help out Wall Street.

We're going to put that to our no bias/no bull test coming up.

But first tonight, we are cutting through the bull. In the middle of the mortgage crisis, with literally thousands of people being evicted from their homes this month alone, a sheriff in Chicago is making quite a name for himself. Cook County Sheriff Tom Dart has announced that, for the foreseeable future, he is not going to evict anyone else from a home that banks have foreclosed on. How come? He's fed up.

He says what is happening more often than not is that his officers show up at a home. They find the people are not the homeowners, but just renters who had been paying their rent on time and had no idea that the owner had fallen behind on mortgage payments.

These are families with children, and the first they heard of their eviction was when the officers appeared at the door. So, Sheriff Dart just said, enough. Now, I can't support vigilante justice. I think our law enforcement officers should enforce the law. But is there some gray area here? The law in Illinois says people have to be notified well ahead of time when they're going to be evicted, that banks are supposed to contact these people, find out who lives in these homes, and do their due diligence.

Sheriff Dart says the banks aren't doing this in all cases, that they're not meeting their obligations. So, he put a moratorium on all foreclosure evictions. And the banks are trying to have the sheriff held in contempt.

Now, you can decide who is right or who is wrong here, but the fact is, things are getting desperate out there for a lot of people. Families are being literally kicked to the curb. And our national leaders, our politicians in Washington, and our presidential candidates don't seem at all close to figuring this out.

There is an absence of leadership right now. And the actions of Sheriff Dart are yet another example of just how badly we need it.

We turn now to Wall Street's latest history-making collapse. Stocks were down all day, but they really went off the cliff during the last hour of trading. And that caused the 679-point loss. The Dow industrials haven't fallen below the 9000 level since August of 2003, and we ended up way below 9000, at 8579.

And consider this. It's hard to believe, but exactly one year ago today, the Dow hit its highest point ever, 14164.

And, yet, senior business correspond Ali Velshi came into the newsroom this afternoon and calmly told everyone, this could actually be good news.

And so he is here to explain what the heck he meant by that -- Ali.

ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: Kind of like being maybe at the end of your cold, the end of your sickness, not the whole economy, but for the market. And let me show you why.

BROWN: What, it gets worse before it gets better?

VELSHI: It does get worse before it gets better. And I don't think it's not going to get worse. Take a look at this picture.

As you said, that line there is break-even, right? So, we started off the day a little bit above. We bounced down. Then we bounced above it a bit. And we were kind of just meandering along. But the pattern we have been seeing for the last several days is in that last hour of trading. It just goes off a cliff and goes down below 8500.

Now, you just mentioned that a year ago, the Dow hit the highest point it's ever been at, a year ago today. So, let's take a look at what this looked like then, 14164 for the Dow. And, listen, we just used the Dow as one example. The S&P 500 looks very similar. So, this is where it's been going. This is your 401(k) all year. You know what it's down to now? You have lost more than 35 percent if you had a well diversified account. Now, I want to show you something. See this little band along the bottom? That band is between 8000 and 8500 on the Dow. That is the number -- there is no science to this -- that is the number that a lot of people who are professional traders tell us that the stocks and the Dow start to look like a bit of a bargain at.

In other words, once we penetrate that 8500, between 8500 and 8000 is where a lot of professional investors who have been holding on to your money, by the way, your 401(k) money, are waiting to get in and start investing. Like I said, this isn't a science. It's not that it's an absolute that it's going to happen. But people are feeling we are getting very close to this bottom.

Now, you're going to say, with all that's going wrong in the economy, why would the stock market being bottoming now? We have to lean back on history to explain this. Typically speaking, the stock market starts to recover several months ahead of when the rest of the economy recovers, Campbell.

BROWN: All right, Ali, I will take that explanation.

The other big thing getting news, getting a lot of attention in the news today was this new government fix. They're considering yet another plan to fix our financial woes. Explain what they're doing, how it would work.

VELSHI: Very preliminary stages, but we have heard from the Treasury Department that one of the options they're considering with respect to trying to free up credit at the banks is to invest directly in banks.

Here's how it would work. The federal government would give money directly to U.S. banks. They would invest in them. Instead of it being a loan, like the AIG loan, what the banks will give the government back is stocks. Why is that an advantage? Because, if the bailout actually works, if American banks start to give credit, and they start to make money, well, now the government actually owns a piece of the action and could actually profit from it.

And, when the government profits, that's your money. So, there is some hope that this system could work. There's no clear definition. We don't know that it's going to happen, but the Treasury has floated the idea that they are thinking about this. If it were to happen, we wouldn't see purchases of these stocks being made until probably the end of October, Campbell.

BROWN: All right. Ali Velshi for us tonight -- Ali, as always, thanks.

There is some big news today about AIG, one of the companies already being bailed out. Right after the government put up $85 billion to save AIG last month -- we told you about this last night -- some of its top employees took off for a resort vacation that cost $440,000. Well, guess what? After a roar of outrage, AIG announced today that another resort bash for its brokers has been called off. Well, that was smart.

Now, all this week, our Joe Johns is fingering the 10 most wanted culprits of the financial collapse.

Tonight, Richard Fuld, CEO of a company that the government didn't bail out, Lehman Brothers.

Here's a preview.


UNIDENTIFIED MALE: Either he should have known that the company was in difficult circumstances, or, if he did know and didn't tell, it creates another problem. So, on the one hand, he was either a liar or else, on the other hand, he was stupid. Either way, it doesn't prevent a very attractive candidate as a CEO for a major investment bank.


BROWN: The full story tonight at 10:00 Eastern. "A.C. 360" fingers the 10 most-wanted culprits behind the collapse. That will be tonight at 10:00 Eastern.

On the campaign trail today, Barack Obama fired up about the expensive AIG junket story. Listen to this.


SEN. BARACK OBAMA (D-IL), PRESIDENTIAL NOMINEE: If I were president, I would order them back. And I want to check for the taxpayers, and they would be fired on the spot.


BROWN: Well, you think that's tough? Next, it is getting raw. You're going to want to hear what Obama has to say about John McCain today, and what McCain supporters have to say about Democrats.


UNIDENTIFIED MALE: When you have an Obama, Pelosi and the rest of the hooligans up there going to run this country, we have got to have our head examined.



BROWN: OK. So, get a load of the stagecraft at the start of Governor Sarah Palin's rally. This is tonight in Wilmington, Ohio. There is music. There is a fog machine. We're not kidding. And the Straight Talk Express pulls right into the arena, very much the rock star entrance going on there.

Twenty-six days and counting until the election, and the candidates are barnstorming the battlegrounds. Barack Obama did three stops today in the all-important state of Ohio, where CNN statewide poll of polls shows him four points ahead of John McCain.

McCain held a pair of rallies in Wisconsin, where a new Research 2000 poll shows him trailing Obama by 10 points, and a recent CNN poll has Obama five points ahead there. After sharing the stage with McCain in Wisconsin, Sarah Palin headed for Ohio. Joe Biden made two stops in Missouri, a traditionally red state where our poll of polls has the Democrat only one point behind.

The strain, frustration and the urgency of the campaign is really starting to show, though. These candidates are blasting one another right now.

And Republican crowds are urging McCain and Palin to hit even harder. Here is a sampling of what we heard at one of the town hall meetings today.


UNIDENTIFIED MALE: We're all wondering why that Obama is where he's at, how he got here. I mean, everybody in this room is stunned that we're in this position.


UNIDENTIFIED MALE: We are all a product of our association. Is there not a way to get around this media and line up the people that he has come with?


UNIDENTIFIED MALE: It is absolutely vital that you take it to Obama, that you hit him where it hurts.



UNIDENTIFIED MALE: Sir, ACORN is out there. We have the good Reverend Wright. We have Pfleger. We have all of these shady characters that have surrounded him. We have corruption here in Wisconsin and voters across the nation.

I am begging you, sir, I am begging you, take it to him.



BROWN: Our own Ed Henry is on the trail with McCain. He is joining us right now from Wisconsin.

And, Ed, that was a pretty angry crowd out there. Set the scene for us a little bit. Tell us how McCain reacted to all of this.

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: I can tell you, in recent days, we're seeing something we hadn't seen before, which is rage at these events.

People are really frustrated. And that's what we saw. These events tend to be very scripted on both sides. This was raw emotion coming out from these Republican voters. They're mad that John McCain is behind right now. They're mad that he is not doing more, in their estimation, to stand up. And they're also, frankly, mad at us.

They think the media is being tougher on McCain. They think the media is giving a free pass to Barack Obama on issues like his ties to William Ayers, as you heard there.

Take a listen to how McCain responded on the question of William Ayers, this former 1960s radical.


MCCAIN: We don't care about an old washed-up terrorist and his wife who still, at least on September 11, 2001, said he still wanted to bomb more.

You know, but that's not the point here. The point is, Senator Obama said he was just a guy in the neighborhood. We know that's not true.


MCCAIN: We need to know the full extent of the relationship because of whether Senator Obama is telling the truth to the American people or not.


HENRY: So, McCain is signaling there he is taking the gloves off on the William Ayers controversy. But when he was asked, as you heard earlier, about Reverend Wright, he ducked that. He's not touching that one, in part because, previously, McCain suggested he would not touch that, he didn't think it was fair game, so he is sort of in a box on that one -- Campbell.

BROWN: Well, so, Ed, what are you hearing from the campaign? Is this really the strategy going forward, feeding off of this anger? Because you have got a lot of Republicans saying that they think it's a risky move that could backfire.

HENRY: McCain aides say, in fact, that this is what they plan to do. The game plan from here until November is to hit Obama day after day on the issue of candor and judgment.

The way you heard Senator McCain frame it right there, that, basically, it's not about William Ayers; it's about Barack Obama, and not only associations, but the fact that they believe he has not been truthful with the American people. It could backfire. It's very risky. It could look like Bob Dole in 1996 when he was running around the country saying, where is the outrage?

Angry candidates tend not to win. And we saw today Frank Keating, a former Oklahoma governor, an ally of Senator McCain, came out today and said -- quote -- that Obama should say -- quote -- "I was a guy of the street. I used cocaine."

The McCain camp tonight is saying, look, we didn't know he was going to say that, we didn't approve of it, but maybe he just read Barack Obama's book, because the cocaine use was in there.

But the fact of the matter is, if you put that kind of stuff out there, it can really backfire with the undecided independent voters, especially when they're watching their 401(k)s disappear. And when they are hearing that negative stuff, it might really backfire, Campbell.

BROWN: Yes, with so much going on. Ed Henry for us -- Ed, thanks very much.

The mood at Barack Obama's rallies today much more upbeat. Our latest national poll of polls shows Obama with a six-point lead, 49-43 percent. Obama led McCain by four points yesterday.

Today, in the all-important state of Ohio, Obama hit McCain pretty hard on the financial crisis. Listen.


SEN. BARACK OBAMA (D-IL), PRESIDENTIAL NOMINEE: This is the kind of erratic behavior we have been seeing out of Senator McCain.

You remember, the first day of this crisis, he came out and said the economy was fundamentally sound. Then, two hours later, he said we were in a crisis. I don't think we can afford that kind of erratic and uncertain leadership in these uncertain times. We need steady leadership in the White House. We need a president we can trust in times of crisis.


BROWN: Pay attention to the language here, erratic, uncertain.

Senior political correspondent Candy Crowley is following Obama in Ohio.

And, Candy, Obama isn't the only one using this language. This is really a campaign-wide strategy, isn't it?


And, Campbell, while he's using the economy to wrap around, the basic underlying theme here, as Joe Biden has picked up on it, too, are those words you mentioned, erratic, angry, lurching. The whole idea is to kind of go at the strength of John McCain in the polls.

He has always outpolled Barack Obama when it comes to the question, has the experience to be president. So, this goes right at it and basically says, listen, John McCain is too unsteady to be president. He has done this or that or he has said one thing and then he said the other.

And what I think is fascinating about this is that, really, the McCain campaign started out long ago looking at this campaign, saying, you know, the issue is Barack Obama. But, in so many ways, the issue has also become John McCain and his behavior.

So, they are pounding that. I mean, Joe Biden was out today saying, look, he lurches from one thing to another. He's clearly very angry. There is also sort of a theme that runs through it that he is old and has old and tired ideas.

So, while they are talking about the economy, it is very clear that the subtext here is John McCain and his temperament to be president.

BROWN: And Candy, today, the campaign announced it is buying 30 minutes of prime-time airtime, a very expensive purchase. Tell us what you know about that. What are they up to?

CROWLEY: Well, this is something, if you remember, that Obama did in the primaries in a couple of states. He had anywhere from two to five minutes that he would buy up. In Iowa is the first time he did it. And it was a straight Obama to camera, almost, if you will, a presidential address.

Now, we're not sure whether he will, in fact, use an entire half-hour and just be Barack Obama, the camera, and the voters. But I think it's very likely, if we look in the past and see what he did on those sort of mini-times that he took in the primaries, and it really was very much a, here's what I'm about, here's where I come from.

So -- and -- and it's obviously not a coincidence that it is happening, this address, on October 29, on we're not really sure how many broadcast networks, because they're still negotiating. But that's less than a week before the election and time for Barack Obama to give what I assume is going to look very much like kind of a presidential address, you know, give them both a visual and some of the substance that goes behind it.

So, it's something he used, obviously, very effective in Iowa. It is a multimillion-dollar endeavor.

BROWN: All right, Candy Crowley with us tonight with the Obama campaign -- Candy, thanks.

When we come back, we have got a panel of top political strategists. They're going to talk to us about John McCain's attack strategy, whether it will give him the boost he needs right now.

And, later, some women you're going to want to hear. They are in the all-important tossup state of Florida, and they really like Sarah Palin. Listen to this.

(BEGIN VIDEO CLIP) UNIDENTIFIED FEMALE: She just inspires me. And I think she inspires a lot of women. She started out as a hockey mom, went to city council. You know, first, it was PTA, city council, mayor, governor.



BROWN: We told you a little earlier how angry the crowd was at that McCain rally today. Well, this is not the kind of campaign that John McCain said he wanted to run. But he is not backing down now from the strategy of trying to tie Barack Obama to the founder of the Weathermen, a violent anti-Vietnam War group.

Listen to what McCain told ABC's Charlie Gibson. This was just a little while ago.


CHARLES GIBSON, ABC NEWS: ... thoroughly vetted, having gone through all the primaries? He did all the campaigning, running for president, as long as you have, two years.

MCCAIN: No, actually, I don't.

In fact, Senator Clinton, in their debates, said that the American people didn't know enough about him, including his relationship with Mr. Ayers. That's what she said. And I agree with that.


BROWN: Our political panel is ready to talk about the campaign wars, just how low they will go.

We have got tonight Paul Begala, Democratic strategist and CNN political contributor, Dana Milbank national political correspondent for "The Washington Post" and a CNN contributor, and Bay Buchanan, Republican strategist, former senior adviser to the Mitt Romney campaign, also a CNN contributor.

Welcome, everybody.


BROWN: Bay, the campaign strategy for the McCain campaign right now, they have made no bones about it. It is aggressive. It is going after his character.

As you know, Obama had written about in his book that he had experimented with drugs when he was young. Well, today, one of McCain's campaign co-chairs said Obama should admit that -- quote -- "He was a guy of the street who used cocaine."

Is this, Bay, really what you think Republicans ought to be talking about in this campaign, given all that's going on right now? BAY BUCHANAN, REPUBLICAN STRATEGIST: I think it's part of a very legitimate theme. Whether I care -- I could care less whether he used the drugs or not.

I think a more important question is, did he supply it? Did he sell it? Was he part of that scene? Because that goes to your judgment, your character. And that is legitimate.

BROWN: But there is no evidence at all to suggest he was part of that scene, by any means.


BROWN: And he says he was a guy of the street. What does that mean?

BUCHANAN: I think that's what it means. And I think it's a legitimate question for somebody who is involved in those kind of drugs to ask. I think it's a legitimate question for the media...


BROWN: You don't think this has a racial subtext to it, Bay?

BUCHANAN: Oh, my gosh, no. If I remember correctly, similar questions were asked of George Bush, who there was suggestions he may have used hard drugs.


BROWN: I don't recall anybody ever saying George Bush was a man of the street.

BUCHANAN: Well, man of the street.

BROWN: Guy of the street.

BROWN: Basically, you know, it's -- put words -- you may want to put a spin on it, but it's certainly not there. It's a legitimate question. He wrote about it in his book.

I think what is not legitimate is that the press will overlook all of this. Does it matter at all? There is an integrity issue when it comes to the relationship with a domestic terrorist.

Imagine if John McCain had some kind of relationship ongoing through the years with a white supremacist who was blowing up churches or something. You all would think it most interesting and would make certain that you exposed every aspect of it.

BROWN: Paul, are these legitimate questions?


And the only reason that they're raising them is that John McCain is losing. If he were ahead by six or eight points, instead of behind by six or eight points, does anybody believe that McCain and his campaign would be raising these things? Of course not.

You know, the challenge for McCain is to win those independent, undecided voters. And these hateful sort of rallies, like we saw in Waukesha, Wisconsin today, these extreme incendiary charges, palling around with terrorists, that's a Hail Mary, desperation sort of campaign.

And it bespeaks a guy who is losing. And it's self-defeating. I'm telling you, if I were advising John McCain, I would say get back to the guy who used to talk about service, suffering, and sacrifice that he went through in Vietnam. Go back to a cause larger than yourself, as McCain always used to say. Call us to the better angels of our nature.

That John McCain got huge support among independence and even Democrats. And those are the people who are going to decide this campaign, Senator McCain, not the people who are saying these really hateful things about Obama. They're already for you.

BROWN: Dana Milbank, I know you have been to some of these rallies where things have gotten pretty ugly, these McCain rallies. What is your sense? Are people responding to this message? Maybe it's targeting the base and the people who show up at these rallies, but what is your sense of how people are reacting?

DANA MILBANK, CNN POLITICAL CONTRIBUTOR: There is a small minority of them who are responding in ways that surely McCain and Palin cannot want them to be.

I have seen threats of violence. I have seen racial epithets. I think, if this goes on any further, the Secret Service is going to have to hand out some Prozac when they go through the magnetometer there.

In fact, at the McCain rally yesterday, I walked around to try to lighten things up, carrying a sign saying, "I need a hug." But one guy threatened to knock my teeth out.


MILBANK: But it's a fine line here. Obviously, they can't be blamed for everything that any wacko says at a rally. On the other hand, as Paul was saying, they're taking things pretty close to the line with this Barack Hussein Obama, even Cindy McCain suggesting that Barack Obama does not -- is wishing ill to her son serving in Iraq.

These are really close to the line that are causing some of the supporters to go right over that line.

BROWN: OK, guys, stick around. We have got a lot more to talk about. You're coming back in a minute, I know.

I just want to mention, tomorrow night, we're going to do something tomorrow night, a special show. We're going to tackle, I think, which is something that is a big unanswered question hanging over this election. Could it all come down to how Americans feel about race? Listen to this.


UNIDENTIFIED MALE: And she flat-out said to me, "I can't vote for that black boy."

UNIDENTIFIED MALE: They talked about him being a Muslim. He said countless times that he's a Christian.

UNIDENTIFIED MALE: What they're saying is really probably a cover for being uncomfortable with him because of his -- because of his race.


BROWN: You can see our ELECTION CENTER special, "Race in the Race: The Great Unknown." That is tomorrow night at 8:00 Eastern time. So, be with us for that.

John McCain says he can save homeowners from foreclosure. Barack Obama says, McCain's plan is too risky. Our no bull test -- coming up.

Also, dead people registering to vote in this election? Yes, it's happening. Here we go again, apparently. It appears we have got evidence of possible voter registration fraud, also, dozens of forms all in the same handwriting.

See for yourself -- when we come back.


CAMPBELL BROWN, CNN ANCHOR: Here we go again, apparently. It appears we've got evidence of possible voter registration fraud. Also, dozens of forms all in the same handwriting. See for yourself, when we come back.


BROWN: Beyond all the anger and name-calling on the campaign trail today, the candidates did find time to talk about something vitally important to millions of homeowners and also to taxpayers, this mortgage mess. Barack Obama attacked John McCain's plan to have the government buy up mortgages, saying that it rewards banks that made the bad loans. McCain hit right back, accusing Obama of not fighting for the little guy.

Let's listen to what they both had to say, then we're going to put their words to our "No Bull" test. Here we go.


SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: As you know, the other night I proposed that the secretary of the treasury purchase mortgages directly from homeowners and mortgage services and replace them with manageable mortgages. Let's go out and buy people that cannot stay in their homes, buy their mortgages, give them mortgages that they can afford and stay in their homes and make the payments.

Now, my friends, that's what we need to do in America. We must stabilize housing values in America.

SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: On Tuesday, his campaign said, he would ask the banks to absorb some of the costs of his plan by selling the bad mortgages to the government at a discount. Then by Wednesday morning, he changed his mind. He was proposing to bail out banks and lenders with taxpayer money, no questions asked.

Senator McCain actually wants the government to pay the full-face value of mortgages on the books, even though they're not worth that much anymore. So banks wouldn't take a loss, but taxpayers would take a loss.


BROWN: Tom Foreman here to put it all to our "No Bull" test -- Tom.

TOM FOREMAN, CNN CORRESPONDENT: Campbell, Obama is raising a fair question here about a detail of McCain's plan. Exactly how much will voters, homeowners and lenders each have to pay to end the mortgage crisis and who will get the most government help? And will all this be based on the value of the homes back when the bad loans were made or the value of them now? That's just not really clear yet. But each candidate is calling the other's plan for the economy too risky. They've both done it this week. Is that fair?


FOREMAN: As both candidates try to address the underlying cause of our economic woes, both have said we must stabilize home prices, they can't keep falling or everything will keep getting worse. And the Center for Responsible Lending, which is a nonpartisan group that fights for homeownership and against abusive financial practices, says both men are right. And further, the center says, it is critical that lending institutions be forced to work at keeping people in their homes, because if that doesn't happen, everyone will pay. Look at this.

Currently, we're talking about more than a million homes in foreclosure. It is estimated that 6.5 million more could wind up that way within five years, and that could drive down the value of 40 million homes near the foreclosed properties, more than a third of the households in America.


FOREMAN: That's why this is about all of us. Now, despite that, not everyone agrees that homeowners who bought into shaky loans deserve such consideration. But not everyone also agrees that these lenders must be forced to take part in it this way. And as we get more details on McCain's and Obama's ideas, we may very well find that there are critical flaws on each side. But for now, for either one of these guys to call the other one's proposals too risky with so many moving parts and so many unknowns in our economy right now, appears to be misleading and alarmist -- Campbell.

BROWN: The bottom line from Tom Foreman for us as always. Tom, thanks.

Still ahead, we are going to meet some of Governor Sarah Palin's biggest fans. And they are not from Alaska, but from a state that could make or break this election.

And up next, an important investigation into allegations of massive voter fraud by a group with ties to Barack Obama. Listen to what Drew Griffin found. It's pretty unbelievable.


DREW GRIFFIN, CNN SPECIAL INVESTIGATIVE UNIT CORRESPONDENT: Registered to a dead person, registered as a person who lives at a fast food shop.


GRIFFIN: Or just all of them amazingly in the same hand.



BROWN: Now to a developing scandal involving a group known as ACORN, the Association of Community Organizations for Reform Now. It is officially nonpartisan, but this group works hard to register low- income voters who tend to vote for Democrats. ACORN is under fire over allegedly phony voter registration in several states, and Drew Griffin of CNN's special investigations unit is digging into this for us. You'll be pretty surprised by what he found.



(on camera): This?




GRIFFIN: And these.

(voice-over): They are new voter registration applications turned in by the community organizing group, ACORN, which has launched a massive voter registration drive. And with 5,000 applications in this one county dumped on just before the October 6th deadline, it looked to Elections Board administrator Ruthann Hoagland like ACORN was extremely successful until her workers began finding problems.

GRIFFIN (on camera): A lot of them?

HOAGLAND: Fifty percent. We had close to 5,000 total from ACORN, and so far we have identified about 2,100.

GRIFFIN: So roughly half of them.

HOAGLAND: Roughly half are bad. Correct.

GRIFFIN: Registered to a dead person. Registered as a person who lives at a fast food shop.


GRIFFIN: Or just all of them amazingly in the same hand.

HOAGLAND: Yes. Yes. All the signatures look exactly the same. Everything on the card filled out looks just the same.

GRIFFIN: Ruthann, fraud?

HOAGLAND: We have no idea what the motive behind it is. It's just overwhelming to us.

GRIFFIN (voice-over): It's not that some are bad. Once they started going through them, every one they looked at was bad.

HOAGLAND: Right. We've run into a lot of the same -- we'll go through ten cards, and the exact -- in the exact same hand, the card is filled out the same, the signature is the same. We'll make telephone calls and every phone has been disconnected.

GRIFFIN: Hoagland decided to stop the review all together, work on other apparently legitimate registrations and get back to the other half of what she now calls "the fake pile," later.

HOAGLAND: It's frustrating. It's very frustrating.

GRIFFIN (on camera): Here's another ACORN filled out registration form. It's for Jimmy Johns, 10839 Broadway in Crown Point. Jimmy Johns. We decided to track him down. Here he is.

Is there anybody here that's actually named Jimmy Johns? Nobody registered to vote here named Jimmy Johns?

This could really -- I mean, there has been no fraud yet because people haven't voted yet, right?

HOAGLAND: Correct. We'll find out on Election Day.

GRIFFIN: But it certainly sets up a potential.

HOAGLAND: The potential, I suppose, is always there. It's just that the volume -- the volume is just incredible.

GRIFFIN (voice-over): The elections board is run by both Republicans and Democrats.

(on camera): Regardless of whose party, we've got a problem with these ballots.


GRIFFIN: These registrations.

SALLY LASOTA (D), LAKE COUNTY ELECTION BOARD: Both sides, Democrats and Republicans. For us, it's unfortunate. ACORN, with its intent, perhaps, was good to begin with. But unfortunately, went awry somewhere.

GRIFFIN (voice-over): It is fraud, says the Democrat director, Sally Lasota.

LASOTA: Well, if you look, it's the same signature for all three voters. It's though the one individual tried to do three separate applications but put -- you know, you can tell the signature. We're not handwriting experts, but what's obvious is obvious.

GRIFFIN: ACORN's voter registration drives are under investigation or suspicion in several states. Just yesterday, local authorities raided this ACORN office in Las Vegas where ACORN workers allegedly registered members of the Dallas Cowboys football team. Over the last four years, a dozen states investigated complaints of fraudulent registrations filed by ACORN, and complaints of fraud by ACORN have exploded nationwide in just the last few weeks.

We tried to contact the ACORN director in Gary, Indiana, but when the phone messages went unanswered, we went to the office. It's abandoned. ACORN told us the state director for Indiana ACORN is actually based in this office in Milwaukee. But today, we found it empty, too.

ACORN's attorney in Boston told us allegations his organization has committed fraud is a government attempt to keep the disenfranchised from voting.

BRIAN MOLLER, SENIOR COUNSEL, PROJECT VOTE: We believe their purpose is to attack ACORN and suppress votes. We think that by attacking ACORN that they are going to discourage people who may have registered with ACORN from voting.

GRIFFIN: Brian Moller says ACORN has its own quality control, has fired workers in the past, including workers in Gary. Despite its past, the Obama campaign gave $800,000 to ACORN to help fund its primary registration drive, and ACORN has endorsed Barack Obama for president.

The Obama campaign reacted this afternoon, saying, it is committed to protecting the integrity of the voting process, and said it has not worked with ACORN during the general election.

(END VIDEOTAPE) BROWN: Drew Griffin with me now. Drew, though, the campaign, or Obama, rather, has worked with ACORN, though, in the past. Is that accurate?

GRIFFIN: That's accurate. As an attorney, he represented ACORN in a motor voter court case, which, by the way, Barack Obama won for ACORN. But all afternoon long, the campaign has been calling us trying to distance themselves from ACORN.

BROWN: All right. Drew Griffin for us tonight. Drew, as always, thanks.

Coming up, for those who say that the honeymoon is over for voters and Sarah Palin, listen to this.


TAMI NANTZ, PALIN SUPPORTER: When he introduced her as his running mate, it -- I was jumping and screaming and crying. And I was so excited, and I hadn't been before that.


BROWN: When we come back, there is something about Sarah that works for a lot of women out there. We're going to talk about that with the panel.


BROWN: In just a few minutes, politics is king. "LARRY KING LIVE" looks at the politics of anger in this election. And, Larry, there's a lot to talk about right now.

LARRY KING, HOST, "LARRY KING LIVE": You're not kidding, Campbell. Is it possible that the nasty tone of the campaigns gets nastier, meaner? It's one of the questions we'll be asking our guests tonight.

Some others, well, if the election were held today, who'd win? And does Sarah Palin have a political future if the Republicans lose this? Some answers, and some surprising polls. Next on "LARRY KING LIVE," Campbell.

BROWN: Thanks, Larry. We'll be watching.

Coming up next, for a lot of voters, Sarah Palin is a punch line. But Randi Kaye talked to some women who say the critics and the comics just don't get it. They are keeping the faith, and they're going to tell us why, when we come back.


BROWN: From the moment Sarah Palin became John McCain's running mate, she transformed from a governor few people had heard of into a Republican superstar. But the Palin factor may not go beyond the GOP base, frankly. A Pew Research survey released just last week found Barack Obama now leads McCain by 17 points among women. That's up seven points from just a week ago. Still, Palin has ignited a special passion among evangelical women, as Randi Kaye found out.


UNIDENTIFIED FEMALE: We pray that we may be an example for the Lord Jesus.

RANDI KAYE, CNN CORRESPONDENT (voice-over): These Florida women hope their prayers are answered, and Republicans win the White House. They are conservative Christians, bible-study members, and big fans of Sarah Palin.

TAMI NANTZ, PALIN SUPPORTER: She's the rock star of the Republican Party right now.

KAYE: At 37, Tami Nantz is a Born-again Christian, a wife and mother, who sees a kinship in Palin like no other candidate before. She waited seven hours at a rally just to shake her hand and get this autograph.

(on camera): Do you feel like she's someone you can hang out with?

NANTZ: Yes. I feel like if she walked in my door right now, and we could sit down and have snacks with her and talk and have a ball, I feel like she's one of us.

KAYE (voice-over): One of us, because she's a woman, and because she has conservative views.

UNIDENTIFIED FEMALE: Being a mom and being a Christian woman.

KAYE: Tami and her friends are just a small sampling of the conservative base Palin has re-energized, but they speak volumes.

UNIDENTIFIED FEMALE: She was bold, she's authentic, she tells the truth.

KAYE: These women were not sold on John McCain until he picked Palin. He isn't conservative enough for them. Like Palin, they oppose embryonic stem cell research and abortion rights. They admire her for knowingly giving birth to a Down syndrome baby and for supporting the pregnancy of her teenage daughter.

BRENDA MYNKS, PALIN SUPPORTER: It's such a great example for the country that people have these challenges, but with the grace of God, with the love of family, these challenges can be overcome.

KAYE: Even the single registered Democrat in the bunch says she can relate to Palin.

CARA GARCIA, PALIN SUPPORTER: When she came on the ticket, it excited me. I personally started listening to her, and I liked what I heard. So I'm a fan.

KAYE: So why aren't all these fans showing up in the polls? CNN polls show McCain hasn't made any gains among women since naming Palin. And a "Time" magazine poll this month gives Barack Obama a 17- point lead among women.

UNIDENTIFIED FEMALE: I think there's a silent majority out there. I have never been polled. Have any of you guys been polled?


KAYE (on camera): The ladies we talked with believe Palin's appeal goes beyond the conservative base. They say even if voters don't agree with her conservative beliefs, they will be attracted to what our group calls her authenticity.


KAYE (voice-over): And her feistiness. In Palin, these women have found their champion.

NANTZ: She has got that personality. She's got that, you know, that tenacity about her. She's -- she's a pit bull. She really is.

KAYE: In lipstick.

NANTZ: In lipstick, absolutely in lipstick.

KAYE (on camera): What do you say to critics who say that she is more about style than substance?

NANTZ: I say that I think they just don't get her. We get her. We get the little winks and nods and the little comments, the sarcastic remarks. We get them.

KAYE (voice-over): Tami was so angered by criticism of Palin, she started this blog, "Moms for Sarah Palin." It's received more than 11,000 hits, about half anti-Palin.

NANTZ: Emma wrote me, and she said, "I thought this was the moron blog, and I wasn't disappointed. Morons for Sarah Palin. And she called her an animal killer and a pig.

KAYE: Bloggers have also targeted Tami personally. But like Sarah Palin, Tami Nantz isn't backing down. It only strengthened her faith.


KAYE: And this really is the first time conservative women have a strong female conservative voice on the national stage. And what's interesting is they all say that she is giving them a voice. Campbell, they say that as Republican women, they're known for being quiet and not speaking their mind, and she has helped them find their voice.

BROWN: An interesting perspective. Randi Kaye for us tonight. Randi, thanks.

And coming up, we've got some breaking news to tell you about. It is Friday morning in Asia. Stock markets are open, and you do need to hear what's happening there right now. Ali Velshi is going to be here next to brief us on the breaking news. Stay with us.


BROWN: Some breaking news now. In the wake of the Dow's big loss today, Asian markets are plummeting in early Friday trading. We want to quickly go back right now to senior business correspondent Ali Velshi.

Ali, what's going on?

ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: All right. We kind of expected this because at the end of the day in the Dow we saw, it took us a long time to settle in. The Dow just kept on going down even after the bell rang. When that happens, that means there's just a lot of people trying to sell stocks. It is carried over into Asia, and we now have seen fairly unprecedented losses in the Japanese market. At one point, it had exceeded 10 percent right in the opening minutes of trading.

We're tracking it right now. It is going back and forth, but all of the Asian markets now are down precipitously. Again, I want to tell you that as serious as that sounds, there are those who say we are trying to find the bottom of this market, and you can't find the bottom until it gets to the bottom.

At some point, there are bargain hunters who go in and say, look, these companies are oversold. There's too much fear in the market. There's actually value in these underlying companies. These are not stock markets, these are companies. Remember that.

BROWN: You got to have a strong stomach for this.

VELSHI: You have to have a stomach of steel for this one. The bottom line is, if you have endured the last year in the stock market and your portfolio has taken that hit, and you didn't sell out already, you might. Clearly, you have a strong stomach. So as much as you are fearful out there tonight, understand that you've made it this far. This could be the end of this thing.

It's not going to be tomorrow, it is not going to be next week. But we could be coming to the end of this. At some point, the underlying companies have value.

BROWN: But give us some sort of time frame. I mean, what people want to see is some kind of leveling out, some sort of stability.

VELSHI: Right. And sometimes the leveling out takes a while. But you can't have 10 percent losses on a daily basis.

The fact is we're just trying to get through something. If the markets are allowed to do what they're supposed to do and just sell off, don't panic overnight. This will go on all night. It will move into Europe in the morning. It may come back to us tomorrow, but let's just stay on this rollercoaster for a while. If you can hang on until the end, you could come out a winner in the end.

BROWN: Well, still a lot to keep an eye on.


BROWN: And, of course, you --

VELSHI: Look, I know it sounds overly optimistic, but the fact is, at this point, that's all you have.

BROWN: Oh, I hope he's right.

VELSHI: Stick with me on this. We'll get through it.

BROWN: OK. Ali Velshi for us, everybody.

That's it for us tonight. We will see you tomorrow night, right back here for our special on race in this Campaign." Have a good night.

"LARRY KING LIVE" starts right now.