Return to Transcripts main page

Campbell Brown

Former Lehman Brothers CEO Subpoenaed; Cindy McCain's Tax Returns Released

Aired October 17, 2008 - 20:00   ET

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

CAMPBELL BROWN, CNN ANCHOR: Hi there, everybody.
Tonight, we're beginning with breaking news.

CNN has confirmed that former Lehman Brothers, CEO Richard Fuld has been subpoenaed in connection with three grand jury probes into the bankruptcy of that company, this coming from a source with direct knowledge of the Lehman Brothers bankruptcy filing last month. We're going to have more on why they may be looking at Fuld coming up in just a moment.

Also tonight, Governor Sarah Palin explains what she meant when she told a crowd she enjoys visiting the pro-America parts of this country. Joe Biden and the Obama campaign called her on it today. You are going to hear it all, no bias, no bull.

Also on the campaign trail, huge crowds, high energy, hard- hitting, and a real sense of urgency. Just listen.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL NOMINEE: The future that you seek and I seek for our children is too important to let up now. The time for change has come. We can do this. Americans have done it before. But I need you to stand up.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL NOMINEE: Don't give up hope. Be strong. Have courage and fight. Fight for a new direction for our country.

(CHEERING AND APPLAUSE)

J. MCCAIN: Fight for what's right for America.

(END VIDEO CLIP)

BROWN: With all that standing up, the call to arms, you would never guess that John McCain and Barack Obama were just trading jokes at New York's premier charity dinner last night. We are going to have the highlights for you. And it was very, very funny.

First, though, we are going to turn to our breaking news, a serious story.

Senior business correspondent Ali Velshi is here with more on the subpoenas for former Lehman Brothers Richard Fuld. And, Ali, so much reporting has been done on the downfall of Lehman Brothers. What are investigators, do you think, trying to find out with these subpoenas?

ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: OK. Well, we don't have the specific details of what they are looking at, but I will tell you what they must be looking at.

Dick Fuld was the CEO of Lehman Brothers when that company declared bankruptcy on September 15. Now, prior to the early part of this decade, when we had those collapses of Enron and WorldCom, it wasn't a federal offense in all of these cases to materially misrepresent information to your investors.

But ever since the Sarbanes-Oxley law, companies have got to sign off and executives have got to sign off that everything they tell investors is the truth, and that they know it to be. Now, on September 10, five days before the bankruptcy, Lehman Brothers and the CEO held a conference call. And they may be looking into whether the information that was disseminated to investors and to analysts at that conference call was accurate, whether they knew something other people didn't know.

Now, a source with direct knowledge of the bankruptcy proceeding has confirmed to CNN that Dick Fuld is one of a number of people who have been subpoenaed to grand jury investigations taking place in New York and New Jersey. They may be looking at separate things. They may be looking at the same thing.

But what do you know is, if it's a grand jury, they are looking at whether a federal offense was committed -- Campbell.

BROWN: And, Ali, so much outcry about these corporate fat cats getting off scot-free, taxpayers left holding the bag. Is anybody here, do you think he could or anybody else face jail time?

VELSHI: Well, here's the thing. Before it became a federal offense, it was an SEC, a Securities and Exchange Commission, offense, and those were civil suits. So, you would get a fine.

Now that it's a federal fence, the bottom line is, yes, in fact, it means it could be. If somebody is found guilty of a federal fence, that means they could serve jail time.

BROWN: Ali Velshi for us tonight -- Ali, thanks. Appreciate it.

We're going to turn now to cutting through the bull on the same subject. How tone-deaf are the titans of Wall Street? It is amazing to me that many of these companies that the federal government -- and that means we, the taxpayers -- are bailing out right now still just don't get it.

I was shocked this week to hear about the big insurance company AIG sending its top executives on a $90,000 English hunting trip at the exact time that Americans are forking over $123 billion to keep that company afloat. How does this happen? Well, AIG explained it this way. It was just an annual event to thank its customers, planned long before the government bailout. So, what, you couldn't cancel? The deposit was nonrefundable? What makes this so ridiculous is that AIG is a repeat offender. A couple of weeks earlier, AIG spent a small fortune, more than $440,000, on a lavish California retreat that included spa treatments and golf outings. The White House called it despicable.

What does it take for these guys to get it? Apparently, in AIG's case, it took New York Attorney General Andrew Cuomo threatening to file charges against the company and its executives. Only then did AIG see the light.

The company now says it regrets that that hunting trip wasn't canceled -- yes, I will bet -- and they have opted to put all their future lavish getaways on hold until the financial crisis sorts itself out.

Note to the tone-deaf Wall Street titans. This is not about you losing your vacation home or you having to give up your private jet and fly commercial. This is about real life, real people. And it is real people who are saving your skin right now. You should be so grateful.

BROWN: Now we want to turn to our top political story. And it is still developing at this hour.

Tonight, the Democrats are jumping all over Governor Sarah Palin's comment about visiting pro-America parts of this country.

Our Gary Tuchman is in southern New Mexico, where, a little bit ago, Joe Biden told a crowd, this is serious stuff.

And Gary, let's back up a little bit here, because Sarah Palin was in North Carolina last night addressing the crowd at a Republican fund-raiser. She talked about the pro-America areas of the country. And we were able to get an audio recording of her comments. We want people to hear it in full. Let's listen.

(BEGIN AUDIO CLIP)

GOV. SARAH PALIN (R-AK), VICE PRESIDENTIAL NOMINEE: We believe that the best of America is not all in Washington, D.C. We believe...

(CHEERING AND APPLAUSE)

PALIN: We believe that the best of America is in these small towns that we get to visit, and in these wonderful little pockets of what I call real America, being here with all of you hardworking, very patriotic, very pro-America areas of this great nation.

This is where we find the kindness and the goodness and the courage of everyday Americans, those who are running our factories and teaching our kids and growing our food and are fighting our wars for us, those who are protecting us in uniform, those who are protecting the virtues of freedom. (END VIDEO CLIP)

BROWN: And, Gary Tuchman, you were out on the road today with Joe Biden. He hit back pretty hard on this, didn't he?

GARY TUCHMAN, CNN NATIONAL CORRESPONDENT: Yes, Biden was pretty fiery, Campbell. We're in the town of Mesilla, New Mexico. This is where Biden had his rally today. This is the same town where the famous outlaw Billy the Kid was tried for murder 127 years ago.

But when Biden came today, he had his figurative guns unloaded. He was very angry. And he felt that he felt that Sarah Palin was implying that the Democrats were not as patriotic.

(BEGIN VIDEO CLIP)

SEN. JOSEPH BIDEN (D-DE), VICE PRESIDENTIAL NOMINEE: Folks, it doesn't matter where you live. We all love this country. And I hope it gets through. We all love this country.

(CHEERING AND APPLAUSE)

(END VIDEO CLIP)

TUCHMAN: Biden went on to say that he was tired of the -- quote -- "politics of division" -- unquote -- Campbell.

BROWN: And, Gary, I know reporters on Governor Palin's campaign plane today asked her to explain herself, to elaborate what she meant by pro-America areas of the country.

And here's what she told them.

(BEGIN VIDEO CLIP)

PALIN: Every area, every area across this great country where we're stopping and where also the other ticket is stopping and getting to speak at these rallies and speak with the good Americans. But it's all pro-America.

I was just reinforcing the fact that there, where I was, these good, patriotic people there in these rallies, so excited about positive change and reform of government that's coming, that they are so appreciative of hearing our message, hearing our plan, but not, not hinting one area of America is more pro-America or patriotic than another."

(END VIDEO CLIP)

BROWN: And, Gary, I know you had a chance to sit down actually today with Senator Biden. Was he satisfied with what Governor Palin told the reporters?

TUCHMAN: Well, I will tell you, Campbell, that, when I talked with Joe Biden today, he wasn't aware of Sarah Palin's latest statements. (BEGIN VIDEO CLIP)

TUCHMAN: Sarah Palin did talk to reporters today, though, and she clarified her remarks...

BIDEN: Good.

TUCHMAN: ... saying that you get pro-America crowds, too, you and Obama. And she -- her exact quote -- actually, her exact quote -- let me just tell what her exact quote was.

She goes, "Not any one area of America is more pro-America, patriotically than others."

BIDEN: She's right. Every crowd we get is pro-American. Every crowd she gets is pro-American.

TUCHMAN: So, do you take that as an apology from her?

(CROSSTALK)

BIDEN: Oh, I just -- it's a clarification I accept.

I'm glad to hear that everybody knows that, look, as I said today, I have not been in a state where people haven't sent their children to die for America, where they haven't sent their children to serve America. And the idea that somehow one part of the country is better at it than others, I -- but she clarified it. I accept the clarification.

(END VIDEO CLIP)

TUCHMAN: So, the latest campaign controversy may be over, less than 24 hours before it began -- Campbell.

BROWN: All right, Gary Tuchman for us.

So, no bias, no bull, is this a real issue? When we come back, our political panel on what Sarah Palin meant by pro-America, pro- America parts of America. Was it a slip of the tongue or did she have a different intent?

Also ahead, it is after business hours on a Friday night and the McCain campaign has finally released details of Cindy McCain's tax returns.

But we're not all serious tonight. It was as if both presidential candidates landed at an open-mike night at a comedy club last night. They both won over the audience big-time. Take a listen.

(BEGIN VIDEO CLIP)

J. MCCAIN: It's true that, this morning, I have dismissed my entire team of senior advisers. All of their positions will now be held by a man named Joe the plumber.

(LAUGHTER)

OBAMA: At least we have moved past the days when the main criticism coming from the McCain campaign was that I'm some kind of celebrity. I have to admit that that really hurt. I got so angry about it, I punched a paparazzi in the face on my way out of Spago's.

(LAUGHTER)

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: You said that Obama doesn't see America the way you and I see America.

Do you think Obama loves America as much as you do?

PALIN: I know Obama loves America. And I'm sure that's why he's running for president, is because he wants to do what he believes is in the best interests of this great nation. I don't question at all Barack Obama's love for this great country.

(END VIDEO CLIP)

BROWN: Alaska Governor Sarah Palin talking to reporters on her campaign plane today.

And joining me now, we have CNN contributor Dana Milbank, national political correspondent for "The Washington Post," Republican strategist and former senior Romney adviser Bay Buchanan, also a CNN political contributor, and Errol Louis, "New York Daily News" columnist and host of the morning show at New York's WWRL Radio.

Welcome, everybody.

Bay, let me start with you.

You heard about this. Sarah Palin comes out last night. She says she loves campaigning in small-town USA, the pro-America parts of the country. And, now, she's backed off that somewhat today. But I want to get your take on this. Pro-America parts of the country, what did she mean by that?

BAY BUCHANAN, CNN POLITICAL CONTRIBUTOR: I would interpret it to mean those people across the country which are our heart and soul of this nation who are always proud to wear our flag, who are always proud of this nation, unlike Barack Obama, unlike Michelle, who have made comments to the contrary. She's talking about people who, unlike, for instance, William Ayers, who is a domestic terrorist...

(CROSSTALK)

BROWN: She just disagreed with you in the sound bite you just heard her speak a moment ago. BUCHANAN: I think that she's aware that there's people all across this country who do, indeed, love the country and are proud always.

But there are people who are not. Look at the universities, who teach the worst, focus on the worst about this country, and teach that part of the history. And look at churches like Reverend Wright's, where they actually talk about hatred for this nation and for our people.

There are pockets that aren't as proud of this nation.

(CROSSTALK)

BROWN: So, is it your view, Bay, that no one is allowed to criticize America?

BUCHANAN: We can -- criticizing is one thing. Focusing on what is bad, making certain people feel that this isn't the greatest nation in the world -- Reverend Wright is a perfect example. And he's been raised in this campaign. It's a legitimate issue in this campaign.

You have Michelle Obama only this year proud of America.

BROWN: Bay, you're the only one in the campaign who wants to bring it up.

But let me go to Errol Louis on this.

Is this not classic Palin, I guess? She's out there. Her job, her mission, clearly, is to rally the base. Is that what she is trying to do, throw some red meat?

(CROSSTALK)

ERROL LOUIS, "THE NEW YORK DAILY NEWS": She's trying to rally the base.

Unfortunately, trying to rally the base is not going to win the election at this point. We know that there are a handful of battleground states. We know that the independent and undecided voters in those states are really going to be the margin of victory here.

So, what Sarah Palin is doing is, I think, trying to rally the base, but it's kind of the wrong tactic. I mean, those people in the small towns that Bay Buchanan says are the real Americans who always wear their flag pins and so forth, I don't know that any of them were going to vote for the Obama ticket anyhow.

So, you know, what she's doing in that case, I'm not entirely clear on. It's one of the reasons I think why the McCain/Palin ticket is behind in the polls, including in most of the battleground states.

(CROSSTALK)

BROWN: Dana Milbank, where are the anti-America parts of the country? Is it right here in New York City?

(LAUGHTER)

DANA MILBANK, CNN POLITICAL CONTRIBUTOR: Well, unfortunately, yes, I think we may not be qualified to judge, since you're in New York and Bay and I down here in Washington, definitely in the anti- America America tonight.

But there's a danger of a bit of a backfiring here. The real America comment of the former Senator George Allen, it had a similar sentiment. Surely, he didn't mean to set off exactly what he did. But as in that case, we're seeing that kind of -- it's sort of an easy chip shot that she has given the Democrats on this.

BROWN: And let me go back to this with you, Bay.

We just heard Sarah Palin say that she knows Barack Obama loves America. But the McCain campaign and you just did, yourself, continue to take digs at Obama's patriotism. And let's -- you brought this up. Let's listen to what Cindy McCain said today.

(BEGIN VIDEO CLIP)

CINDY MCCAIN, WIFE OF SENATOR JOHN J. MCCAIN: We are so happy to be here.

(CHEERING AND APPLAUSE)

C. MCCAIN: It feels like coming home when we come to Florida. Thank you.

(CHEERING AND APPLAUSE)

C. MCCAIN: And, yes, I always have been proud of my country.

(CHEERING AND APPLAUSE)

(END VIDEO CLIP)

BROWN: And, as you know, Bay, right there, that was a dig at Michelle Obama.

BUCHANAN: Sure.

BROWN: Not the first time we have heard this from Cindy McCain. She said it before, and then she took it back, after she said it, saying she wish she hadn't, that she should duck-tape her lips. But today she goes ahead. She says it again. What's up?

BUCHANAN: Well, it's a very legitimate point to make.

A candidate and a candidate's wife, what they say, what they do, who they associate is a legitimate point of discussion and a debate. And Michelle Obama said very clearly right after her husband, I believe, won Iowa, this is the first time she's been proud of this nation, of America. And what, I think, Sarah Palin is making a point, as well as Cindy McCain, is that they are people and they relate to people who are always proud in the tough times, as well as the good times. We are proud to stand up tall as Americans.

And that's -- Michelle Obama made it clear that that's not the case for her.

BROWN: Dana, can this line of attack work? Are voters responding to it?

MILBANK: No. I think she might want to put that duct-tape back on. I mean, Bay is right; it's a legitimate thing to raise.

The question is, do they want to be raising it? There was a "New York Times" poll earlier this week that showed, since it has taken such a negative turn, huge jump in the unfavorable views of McCain, and a huge rise in the favorable views of Obama.

So, strictly as a tactic, it seems to be having the reverse effect.

BROWN: You agree with that, Errol?

LOUIS: Oh, absolutely.

Trying to divide people, it doesn't work. It barely worked in the last two election cycles. It's not going to work this time, because no matter how many monsters you try and pull out of the closet, the whole cast of characters, the Bill Ayers and the Jeremiah Wrights and this one and that one and even the candidate's wife, nothing is as scary as the economy, as the trillions of dollars being lost, people's retirement funds, their future, their jobs. That's real scary and that's real. That's not some imaginary...

BROWN: And it does seem to be trumping pretty much any other message that either of candidates is trying to get out there.

OK, many, many thanks to our panel. Guys, we're out of time. Appreciate it, though.

Coming up: The campaign just released Cindy McCain's 2007 tax returns. The McCains file separate returns, his already public. Because of her wealth, there has been a lot of pressure also to make her tax returns public. We are going to have those for you when we come back.

And then later, our no bull test -- does John McCain really wants to make cuts to Medicare? Obama says he does. And what about McCain's charge that Obama's tax plan is welfare?

The truth when we come back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP) OBAMA: Looking around tonight at all the gourmet food and champagne, it's clear that no expenses were spared. It's like an executive sales meeting at AIG.

MCCAIN: What they don't know is that Joe the plumber recently signed a very lucrative contract with a wealthy couple to handle all the work on all seven of their houses.

(END VIDEO CLIP)

BROWN: Well, it's not easy to get laughs out of the economy these days, but the candidates did get quite a few zingers at last night's Al Smith Dinner. We're going to have more of the senators' stand-up throughout the show tonight.

But, right now, Cindy McCain's tax returns. She is, as we all know, a wealthy woman. Strangely enough, though, the campaign released her returns just a little while ago on a Friday night after 6:00? Come to think of it, maybe that's not so strange.

Ali Velshi back with all of the highlights.

And, Ali, explain to us -- what have you got? I know they released the first two pages, right?

VELSHI: Right.

BROWN: What does that tell us?

(CROSSTALK)

VELSHI: On your first two pages of your tax return is the sort of the summary of everything.

BROWN: Right.

VELSHI: So, a lot of the detail is left off.

But let's show you what we already know. Cindy McCain claimed that her income in 2007 was more than $4,000 -- $4 million -- I'm sorry -- $4,197,028. She had lots of write-offs as well. She claimed more than $500,000 in itemized deductions, which brought her income down to about $3,600,000 -- $3,669,000.

She paid the federal tax rate of about 27 percent on that. So, her tax payable for the year was about -- was just over a million dollars that she is owing. She had actually paid a lot of that in advance, so she's actually going to get a refund, but $1,138,189 was her tax due in 2007.

BROWN: And, Ali, I know she -- they have a charitable foundation, the McCains, and she also does a lot of work, aid work, overseas, and has over the years. Does the tax return tell us anything about what they gave in terms of charitable contributions?

(CROSSTALK) VELSHI: We know that they're very charitable, actually. And we don't know have the breakdown, because we only got the first two pages. But we know that $500,000-plus in itemized deductions, if there was charitable giving, it would be within that.

So, you can sort of imagine, given their history of charitable giving, it was probably a significant sum in there. But, unfortunately, that wasn't released for us.

BROWN: All right, Ali, thanks again, doing double duty tonight -- Ali Velshi.

Before we move back from business -- or before we move from business back to politics, be sure to watch this weekend as the CNN Special Investigations Unit presents the "Fall of the Fat Cats," an inside look at the multimillionaires who ran wild on Wall Street before it all went bust. You can see it Saturday or Sunday night, 8:00 p.m. Eastern time.

Coming up in just a moment, on a debate week and high intensity on the campaigns, the candidates, both took their inner comedians to Broadway last night, and they both killed. Who knew these guys could be really funny? We're have the best of for you?

And, then, later, Tina Fey plays Sarah Palin on "Saturday Night Live." That's not news, but this is. Tomorrow, Sarah Palin will play herself on the show. We will have her remarks, her own thoughts about her debut coming up.

(COMMERCIAL BREAK)

BROWN: With the election only 18 days away, Barack Obama picked up some history-making newspaper endorsements today.

For the first time ever, "The Chicago Tribune" is backing a Democrat. So is "The Los Angeles Times," which hasn't come out for any presidential ticket since 1972. "The Washington Post" announced today it is also going for Obama.

Editorandpublisher.com has been tracking endorsements for decades. As of today, 51 papers favor Obama, vs. 16 for John McCain.

Both presidential candidates are taking hard swings at each other today. At a rally in Roanoke, Virginia, Barack Obama raised a red- meat issue, telling a crowd, John McCain would cut Medicare benefits in order to pay for his health care plan.

Here's what he said.

(BEGIN VIDEO CLIP)

SEN BARACK OBAMA, (D) PRESIDENTIAL NOMINEE: So what would Senator McCain' cuts mean for Medicare at a time when more and more Americans are relying on it? It would mean a cut of more than 20 percent in Medicare benefits next year. If you count on Medicare it would mean fewer places to get care and less freedom to choose your own doctors. You'll pay more for your drugs, you'll receive fewer services. You'll get lower quality care.

I don't think that's right. In fact, it isn't right. When you've worked hard your whole life and pay into the system, and done everything right, you shouldn't have the carpet pulled out from under you when you least expect it and can least afford it.

Health care, it isn't right. Health care shouldn't be some kind of either-or tradeoff where our seniors get left out in the cold. It isn't right.

(END VIDEO CLIP)

CAMPBELL BROWN, CNN ANCHOR: So, would John McCain cut Medicare benefits? Tom Foreman is here to put that statement to our "No Bull Test."

Tom, walk us through it.

TOM FOREMAN, CNN CORRESPONDENT: Campbell, he says it isn't right.

Well, let's look at this plan about McCain. Medicare and Medicaid provide health care to the elderly, the poor and the disabled along with social security. They cost the government $1.25 trillion a year, that's a lot.

McCain does, indeed, want to cut what he considers wasteful spending in those programs. And Obama has also talked about cutting out the waste. But there is no evidence we can find yet that either man would cut care to people. So this statement is false. Or as he said, it isn't right.

To the contrary both men say they will make the program stronger and more efficient with these cuts -- Campbell.

BROWN: All right Tom.

John McCain got in a dig of his own this afternoon at a rally in Miami where he blasted Obama for what he told Joe the Plumber. And that really got the crowd fired up.

Let's listen.

(BEGIN VIDEO CLIP)

SEN JOHN MCCAIN, (R) PRESIDENTIAL NOMINEE: Senator Obama says that he wanted to spread your wealth around. And you know what, he could have had a simple answer to Joe's question. All he had to do was to say to Joe, the Plumber and millions of small business people around this country, I won't raise your taxes. But he couldn't do that because he's going to raise their taxes.

My friends, my friends, when politicians talk about taking your money and spreading it around, you better hold on to your wallet. Senator Obama claims that he wants to give a tax break to the middle class but not only did he vote for higher taxes on the middle class in the Senate, his plan gives away your tax dollars to those that don't pay taxes. That's not a tax cut, that's welfare.

(END VIDEO CLIP)

BROWN: So what about it, Tom? Does that pass the "No Bull Test?"

FOREMAN: Well, Campbell, you heard him use the "welfare" at the end there. We'll get to that in a minute.

McCain has been pounding on this idea and we pointed out before that it is misleading. Yes, this past summer Obama voted on a resolution that said the Bush tax cuts should go away; that's what McCain is calling a tax increase.

But the Dems proposed their own cuts in that same resolution but welfare for people who don't pay taxes, that is specifically where McCain goes beyond misleading into saying something that is simply false. One more time with feeling, the Tax Policy Center says a large majority of Americans will get a tax break under Obama's plan and the overwhelming number of them will tell you, oh, yes, Campbell, they pay taxes.

BROWN: All right, Tom Foreman for us. Tom thanks very much, appreciate it.

Coming up next, the candidates make nice. We have some of their best jokes from last night's white tie fundraiser here in New York. You'll enjoy it. Stay right there.

(COMMERCIAL BREAK)

BROWN: The cutthroat presidential campaign took a time out here in New York last night. John McCain and Barack Obama poked fun at each other and at themselves during a white-tie benefit dinner in honor of Al Smith, the first Catholic ever nominated for President.

Take a listen.

(BEGIN VIDEO CLIP)

MCCAIN: This campaign needed the common touch of a working man. After all, it began so long ago with the heralded arrival of a man known to Oprah Winfrey as "the one." Being a friend and colleague of Barack, I just called him, "that one." My friends, he doesn't mind at all. In fact, he even has a pet name for me, George Bush.

OBAMA: Many of you know that I got my name, Barack, from my father. What you may not know is Barack is actually Swahili for "that one". And I got my middle name from somebody who obviously didn't think I'd ever run for president.

MCCAIN: In case you haven't been following my opponent's get out the vote campaign, ACORN is helping to register groups previously excluded, overlooked, and underserved. Second graders, the deceased, Disney characters.

OBAMA: And while the collapse of the housing market has been tough on every single homeowner I think we all need to recognize that this crisis has been eight times harder on John McCain.

(END VIDEO CLIP)

BROWN: Okay, we've saved a couple for you; we've got a few more coming up. So stay with us on that front.

also coming up, if you've seen the cover of the new "Time" magazine you know there's a lot of political discussion right now. Not about tempers but about temperament in the presidential race. That's a vague but critical set of characteristics that can make for a great or not so great president.

So what does temperament say about which candidate is best suited for the Oval Office. We're going to dig into that when we come back.

(COMMERCIAL BREAK)

BROWN: Still ahead, we've seen the debates. We've heard the speeches and we poured over the policy positions but when voters make the big decision less than three weeks from now, will it come down to what they know or what they feel? Is it just a question of the candidate's temperament?

First though, Jason Carroll is here with tonight's briefing.

JASON CARROLL, CNN CORRESPONDENT: Hey, how are you.

We're going to start with a little bit of developing news here.

Disgraced New York Congressman, Vito Fossella has just been convicted of drunk driving charges. Fossella will be sentenced by a Virginia judge in December and he could spend five years in prison.

After his arrest five months ago, Fossella admitted to a double life; that he had a wife and mistress who he had fathered a child by. Fossella, a Republican, then called off his re-election campaign.

Georgia police say the man responsible for an explosion in a small town law office is dead. The 78-year-old man's body was found inside the Dalton, Georgia building. The explosion injured four others. Police say moments after an argument something blew up.

Las Vegas police say a suspected smuggler involved in a Mexican drug cartel kidnapped his own six-year-old grandson. They say the Clemens Tinnemeyer was among a group of armed men who took the young boy. An amber alert was posted for Cole Puffinburger. The police stay boy's family laundered drug money and owe the cartel millions of dollars.

And a 91-year-old British woman shaken up during a break in at her home says the burglar sent her a gift. She says he sent her flowers to apologize. The police say the suspect got away without taking anything. Now they want him to turn himself in. Strange, a polite burglar.

BROWN: Such a nice guy. Maybe he will.

CARROLL: Let's hope so.

BROWN: All right, Jason Carroll for us. Jason thanks.

Coming up in a few minutes, "Larry King Live" unites members of two iconic political families. Larry tell us about this Kennedy- Reagan debate.

LARRY KING, CNN HOST: You got it, Campbell.

Robert F. Kennedy, Jr. and Michael Reagan are with us and they're going to face off over, guess what, Obama and McCain. And we're going to talk about Colin Powell. Is he finally ready to endorse a candidate?

And Sarah Palin, could she have a career in comedy if the election doesn't work out? We'll get into her appearance tomorrow night on "Saturday Night Live." That's all ahead on "Larry King Live," Friday next -- Campbell.

BROWN: All right. Thanks Larry. We'll be watching.

Coming up, think you know everything you need to know about John McCain and Barack Obama? What about temperament? Could that be the X factor in this campaign?

And they laugh alike, they walk alike at times, they even talk alike. But only one will make her "Saturday Night Live" debut tomorrow, as Larry just mentioned. We're going to preview when we come back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: There was a point in my life when I started palling around with a pretty ugly crowd. I have to be honest. These guys were serious dead beats, they were lowlifes. They were unrepentant, no-good punks. That's right, I've been a member of the United States Senate.

MCCAIN: If you know where to look there's signs of hope, even in the most unexpected places. Even in this room, full of proud Manhattan Democrats, I can't shake that feeling that some people here are pulling for me. I'm delighted to see you here tonight, Hillary.

(END VIDEO CLIP)

BROWN: That was last night at the Al Smith dinner. The candidates played it for laughs, just a couple of easy-going guys. But that's not your typical take away from the campaign trail. When it comes to temperament the two couldn't be more different. And on November 4th, that's what could matter the most to voters.

Ed Henry, here to talk about that. Temperament -- Ed.

ED HENRY, CNN CORRESPONDENT: Campbell, it's interesting. We hear these caricatures that John McCain is angry. Barack Obama is calm and cool. But it turns out that what we see of them on the campaign trail is not always a good barometer of how they'll perform as president.

(BEGIN VIDEOTAPE)

HENRY: It could not have been more different in the final debate. John McCain relentlessly dishing out rapid-fire charges while Barack Obama was killing him with calmness.

MCCAIN: We're not going to do that in my administration.

OBAMA: If I can answer the question. Number one, I want to cut taxes for 95 percent of Americans.

HENRY: McCain, who has a reputation for senate temper tantrums played into Democratic charges that he's erratic by abruptly running back to Washington to deal with a financial crisis. In contrast, Obama has won high marks for appearing unflappable through the crisis.

But a new "Time" magazine cover story notes the temperament voters perceive in a politician is not always what they actually get when a candidate makes it to the Oval Office.

RICHARD STENGEL, MANAGING EDITOR, TIME MAGAZINE: One of the examples was John Kennedy who also seemed very cool and unruffled. And the historian said that actually when he was in office he was often hot-tempered and fiery. And except for the Cuban missile crisis, he often lost it sometimes.

HENRY: As a candidate, Ronald Reagan faced Democratic charges he was dangerous and too rigid a conservative. And yet he was an effective president in part by reaching across the aisle to work with liberal Democratic speaker, Tip O'Neill.

MCCAIN: Senator Obama wants government to do the job.

HENRY: To his supporters, McCain feistiness shows he's ready to take charge in a crisis, though all the eye-rolling suggests that as president he may not always listen to contrary views.

Obama's deliberate style might help him build up his base and yet even some Democrats worried this summer that he just didn't have enough fire in the belly.

STENGEL: Temperament ultimately is in the eye of the beholder. Is it impulsive or is it decisive? Is it angry or is it determined? I think when people are watching the candidate, they make that determination themselves.

(END VIDEOTAPE)

HENRY: And in the end it's really a gut check for voters about how they think a candidate's personality will have an impact on how they eventually govern.

We hear all this about now John McCain, well, he is angry and he's tough. You remember Lyndon Johnson, it actually worked well for him. He grabbed people by the lapels but at that time the Congress demanded to get civil rights legislation through. You needed a bull in a china shop. There are other times in history that doesn't work so well.

BROWN: We'll see what everybody thinks. In fact, we have a panel here to talk about this some more.

Ed Henry thanks for being here.

Coming up, a question of temperament. What does it tell us about the kind of president either McCain or Obama would be? As I said before, we are going to break it down.

And then later the real Sarah Palin making her SNL debut tomorrow night. Will she come face to face with her comic alter ego, Tina Fey? We're going to have that when we come back.

(BEGIN VIDEO CLIP)

GOV. SARAH PALIN, (R) VICE PRESIDENTIAL NOMINEE: Oh, man. Oh, I'm excited for tomorrow night. I have no idea what to expect, but it will be fun.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BROWN: Presidential temperament is one of those qualities that can be hard to define. So how can voters make a judgment about it? Joining me to talk about that with some insight on presidential temperament, psychiatrist Gail Saltz. We have historian David Brinkley and David Gergen an advisor to five presidents both Democratic and Republican.

Welcome to everybody.

Gail let me start with you on this. When it comes to the next president, the temperament of the next president, what are voters looking for, do you think and almost as important, what might turn them off?

GAIL SALTZ, ASSOCIATE PROFESSOR OF PSYCHIATRY: I think it's incredibly individual because what people respond to is sort of whatever their past history tells them they like. Whatever they've had a good experience with. Whatever they see as, that's like me. So actually when they look at those candidates' temperaments I had their own temperament that makes them either resonate positively or negatively with somebody.

So David, I guess it also has to do with what the times call for? So given that, which of these two candidates do you think has the tougher sell right now?

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: John McCain is having a tougher sell.

I think voters often are looking for what they think is missing in the president who's in office so that when voters -- when Richard Nixon left office and we had Gerald Ford, people were looking for honesty and plainspokenness. That's what helped to elect Jimmy Carter.

And right now I think people are looking for -- George W. Bush is well-anchored I think as a human being. He's doesn't have the character flaws that some of his predecessors had but there's a sense -- to the public he has a lack of judgment. It's not a well-informed judgment and I think they're looking for someone who is calm in a crisis but also has very good judgment.

BROWN: Doug, what can a candidate's temperament tell you about the kind of president he's going to be? Historically has one had any bearing on the other?

DOUGLAS BRINKLEY, PRESIDENTIAL HISTORIAN: Yes. I think the main thing is exuding a sense of optimism. If you look at the great presidents of the 20th century, whether it's Theodore Roosevelt or Franklin Roosevelt or John Kennedy or Ronald Reagan, they were optimistic. They promoted hope.

There's also what I would call the likeability factor in Dean Acheson, former great Secretary of State once had a meeting in the White House with Lyndon Johnson and Johnson was moaning that his poll numbers were so low due to Vietnam and he said to Acheson, why are polls dropping on me? And he said, because, sir, you're not a very likable fellow.

And the point of the story is these guys have to wear well on you. We have to live with them every night on TV. Jimmy carter didn't wear well on people. Nixon didn't. Of course, Ronald Reagan did.

BROWN: Do you agree with that, David, given your experience, how many presidents you've been around?

GERGEN: I think Doug is right that we look for that much more in a television age. A Dwight Eisenhower smile, "I like Ike" was the most popular button we've ever had in American political history. But if you go back before the television age, Abraham Lincoln was famous for his brashness (ph) which you would understand, Gail. But he also had a very sort of fairly dark view toward the future and about life. He was pretty fatalistic. But he had a steely determination to get us through.

But I think the most famous statement we've ever had about temperament was a description of Franklin Roosevelt by Oliver Wendell Holmes, Jr. the jurist. Roosevelt came to seem when Holmes is turning 92, Doug knows this story. And when Roosevelt left, he said of him, second class mind, but a first class temperament. And that was the combination that really produced magic in that period.

SALTZ: You know, to relate to what's going on now, you know, now people are so upset that if you think about it, what we're choosing our leader and it's got a kind of paternalistic role and when we're upset and disturbed we revert back particularly to a childlike state and we want to pick somebody who we would relate to as a good parent, if you would. So is that for someone who's going to be calm and thoughtful about it? Or is it somebody who's going to really take the bull by the horns?

BROWN: You might think especially given the economic crisis, what's going on in the country right now, that the fighter, John McCain, would be very appealing. We know he's behind in the polls but it would seem that based on what you're saying that that might resonate.

SALTZ: For some people that is still resonating. For some people they see him as a fighter and that appeals because they think they want someone to go in there and take over because of the crisis. But for other people it's such a scary time that they actually want someone who is going to be calmer and more analytical and thoughtful.

GERGEN: I agree with that because I think if the central issue of our time is national security, John McCain, the warrior, is going to protect you at home. That was his great strength. But now when there's no enemy but there's uncertainty. There's fear. And we're in an uncharted territories, you want somebody who is steadier and perhaps, can help figure it out and I think that's helped to give Obama the edge here in these closing weeks.

BROWN: Would you agree with that, Doug, Obama's temperament may have helped him get over the inexperience hurdle?

BRINKLEY: There's absolutely no question. He's been a master in his career of navigating the racial divide of black and white in this country. He was a master of unifying the Democratic Party. Just six months ago people said the Democratic party couldn't be unified because of Hillary Clinton and Obama but, of course it is now. And that's a testimony to his temperament.

BROWN: All right. Many, many thanks Doug Brinkley for us tonight, along with David and Gail, here with me in New York.

Appreciate it guys.

Coming up next, a special guest star on tomorrow's "Saturday Night Live." Here's a hint, she looks a lot like Tina Fey.

(COMMERCIAL BREAK) BROWN: Bet you can't wait to see Sarah Palin on "Saturday Night Live;" no word whether Tina Fey is actually going to appear with Palin tomorrow night but Palin tells reporters she's ready.

(BEGIN VIDEO CLIP)

PALIN: Oh, man, I'm excited for tomorrow night. I have no idea what to expect. I haven't seen any scripts or anything else. It will be fun.

The opportunity to show American television watchers, anyway, that, you know, you have to have a sense of humor through all of this or this could really be wearing and tearing on you. So an opportunity to show that sense of humor and that side of all of this, I look forward to it.

(END VIDEO CLIP)

BROWN: We'll be watching.

That's it for us, have a great weekend everybody.

"Larry King Live" starts right now