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Campbell Brown
Wall Street's $50 Billion Scandal; Obama and Blagojevich
Aired December 15, 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, everyone.
We are getting brand-new information tonight on the stunning $50 billion scam that has rocked investors from coast to coast.
Bullet point number one: the staggering swindle allegedly masterminded by investment guru Bernie Madoff. Each hour seems to reveal a new victim. And the list of business casualties stretches from Wall Street to Hollywood to Paris, France. Tonight, we're going to take you behind the scenes of an extraordinary con job.
Speaking of scandals, bullet point number two tonight: Barack Obama and Rod Blagojevich. Today, more questions for the president- elect what about his staff did and didn't discuss with the embattled Illinois governor. Obama himself gave us a preview of a just completed internal review only hours ago. Take a listen.
(BEGIN VIDEO CLIP)
SEN. BARACK OBAMA (D-IL), PRESIDENT-ELECT: There is nothing in the review that was presented to me that in any way contradicted my earlier statements that this appalling set of circumstances that we've seen arise had nothing to do with my office.
(END VIDEO CLIP)
BROWN: As for what is actually in that review, well, you're just going to have to wait on that.
Bullet point number three: the Iraqi journalist who threw his shoes at President Bush. By now, you have probably seen the video. Across the Muslim world tonight, lots of people calling that man a hero. But right now, he is behind bars, facing an uncertain fate. We're going to bring you the latest from Baghdad and from Washington, where some security types are also wondering how this could have happened in the first place.
And bullet point number four tonight, Caroline Kennedy is in it to win it? Yes, CNN has confirmed that John F. Kennedy's daughter is making a play for the New York Senate seat being vacated by Hillary Clinton. Tonight, we are taking a NO BIAS, NO BULL look at her chances and her qualifications.
First, though, as always, "Cutting Through The Bull" tonight, we're going to be talking more tonight about the stunner that kicked off the weekend, the arrest of Bernie Madoff, a widely respected Wall Street figure, for running what he himself now acknowledges was the investment equivalent of -- quote -- "one big lie" -- unquote.
And it gets even better. Eight years ago, a financier working at a rival firm wrote a letter to the Securities and Exchange Commission calling Madoff's operation the world's largest Ponzi scheme.
So, should we now blame the SEC for not being more on top of this? Well, here's the thing. Yes, our financial institutions have failed us over these past few years. And, no, our government hasn't protected us the way we hoped it would.
But not even a scrupulous, prudent financial industry, if you can imagine such a thing, or a vigilant, honorable government, if you can imagine that, too, can save us from every con man trying to pull a scam, because our country, our economy isn't just built on banks and regulators. Its foundation is the American people and the choices we make.
And if one of us decides to exploit the trust and the goodwill of our fellow citizens to orchestrate a massive swindle, well, sometimes, that kind of thing just can't be stopped.
I frankly think "The Wall Street Journal" editorial page made a pretty strong case today, pointing out that it is impossible to prevent every financial fraud, just as it's impossible to prevent all crime. In general, given that, the best advice may be just be careful who you trust and diversify. Don't invest all your money in one place.
The stories to emerge from this, people who have lost their entire life savings, foundations obliterated, charities forced to shut down. As heartbreaking as these stories are, the simple truth is, the government and its best investigators cannot save you from a really good con man.
If you have any thoughts, we would love for you to share them with us. Go to CNN.com/Campbell, and click on the link to send us your questions and your comments and we will share some with you a little bit later.
Now back to Wall Street's newest scandal.
Chief business correspondent Ali Velshi here to explain this alleged Ponzi scheme that allegedly cost his investors $50 billion.
And, Ali, walk us through it. Walk us through how it happened.
ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: A few years ago, I bought this book. It's called "Ponzi Scheme." It's the story of Charles Ponzi, who did this in the '20s. And I just picked it up again today because of this.
And I should to you. They were talking about Charles Ponzi. And he said: "Ponzi may have been a but a charlatan, but he was also a wonderfully likable man. His intentions were noble, his manners impeccable, his sales pitch enchanting." It's a rob Peter to pay Paul kind of thing. And it's based on confidence, based on people continuing to give you money, so that you can keep it going.
Let me show you how this worked. Here's Madoff right in the middle. Now, what would happen is, he would get investors and he would promise them a return, let's say 10 percent. Now, in order to pay that 10 percent, he would have to get new investors in that -- let's say he promised those guys each 10 percent on a $500 investment. So, he has to come up with $500.
That's $50 each. He has got to come up with $250, actually. So, he gets another investor who invests more money on the same promise, but this investor's money is going to pay those investors. Then it grows, because he's got to actually keep on doing that. So, now you have got double the number of investors who need to get paid, so he's got to keep on going out and getting new people in order to keep the scheme going.
It continues to grow. It just gets bigger and bigger. Now, it's unclear whether he thought he was going to keep this going, just continuing to attract more investors, or whether he thought one day the actual investments he was making with all of their money was going to pay off and somehow this would end.
It's never clear and I think it will be a while before we actually know what Madoff was trying to do. But, in the end, that is what a Ponzi scheme is. You're taking one person's money to pay someone else. And they all think that they're getting is being invested. They think they're getting real money from investments and these guys think their money's being invested.
BROWN: And, Ali, Madoff claims he acted alone in this scheme. But reality-check this for us, because it seems there's no way he could have done this by himself.
VELSHI: Well, again, like Charles Ponzi, it's about confidence. I have spoken to people who knew Madoff. They thought he was a very agreeable guy, a very friendly guy.
They weren't entirely sure how he was making these consistent returns. So, he could have attracted the investors on their own. He actually turned investors away. So, there was a sense that if Madoff invited you to invest with him, then you were lucky.
Now, by the same token, $50 billion, that's a lot of accounting. Even if you weren't doing the accounting properly, it's not entirely clear how you do that without the knowledge and support of other people. Again, that's part of this investigation. And we're yet to see who else might have been involved in this -- Campbell.
BROWN: Ali Velshi for us tonight -- Ali, thanks very much.
And now we want to take a closer look at one of the most troubling aspects of the scandal, the list of reported victims. It includes some of the most famous names around and hundreds of anonymous people like you and me, who are now watching their life savings slip away.
Joe Johns has been looking into their stories for us all day today and has the very latest on that -- Joe.
JOE JOHNS, CNN SENIOR CORRESPONDENT: Campbell, it will be a while before we know who got hit the hardest and for how much.
There were simply so many prominent people who trusted Bernard Madoff and tonight they simply cannot be happy about it.
(BEGIN VIDEOTAPE)
JOHNS (voice-over): The roll call of investors who may have lost millions in the Bernie Madoff scandal reads like an American society A-list, movie director's Steven Spielberg's charity, billionaire public Mort Zuckerman, Fred Wilpon, the owner of the New York Mets, New York Senator Frank Lautenberg's family foundation, Nobel Peace Prize winner Elie Wiesel's Foundation For Humanity.
And it's not like all the charities and foundations affected were throwing money at Madoff to get quick returns. The JEHT Foundation of New York technically had nothing do with him at all. The problem was that the Levy-Church family that gave up to $30 million a year to the foundation used Madoff for their investments.
After Madoff crashed, the foundation which supports justice issues and election reform decided over the weekend to shut down by the end of next month.
ROBERT CRANE, CEO, JEHT FOUNDATION: I do view as it a tragedy. I think it's a tragedy obviously for the people that we support, the issues we care about, and for the personal lives of everyone who's going to lose a job.
JOHNS: But it wasn't all about the high rollers. Today on "Good Morning America," Joan and Arnold Sinkin, who had saved close to $1 million from his job as a carpet salesman, gave it to Madoff and may have lost everything.
JOAN SINKIN, MADOFF FUND INVESTOR: If you can get in with Bernie Madoff, wow, you're lucky. And it's just gone in one telephone call.
ARNOLD SINKIN, MADOFF FUND INVESTOR: This is what they refer to as the golden years, where you retire and you try and enjoy life. And then you get wiped out in 48 hours.
JOHNS: Another sign of the impact, over the weekend, four multimillion-dollar condos owned by Madoff investors in this Florida complex went up for sale when Madoff went down.
(END VIDEOTAPE)
BROWN: And, Joe, do these investors, do they have any hope of getting their money?
JOHNS: Well, probably not all of their money, quite frankly. But a bankruptcy court is apparently going to get this case and start looking over it. And that opens up the hope that at least some of the investors could get some of our money back. But it may be a long process, Campbell.
BROWN: Joe Johns for us tonight -- Joe, thanks very much.
We're going to turn our attention now to the -- from the financial scandal to a political scandal, of course, the drama in Illinois. Tonight, the Illinois state legislature is a step closer to impeaching Governor Rod Blagojevich for allegedly trying to sell Barack Obama's Senate seat. The president-elect spoke out about Blagojevich again today. Stand by for the very latest on Obama's internal staff investigation.
And then a little bit later, the guy who lobbed his shoes at President Bush in Baghdad, what's going to happen to him? And why do so many people consider him a hero?
Plus, did "SNL" go too far? This sketch that drew this response from New York's legally blind governor, David Paterson, take a look.
(BEGIN VIDEO CLIP, "SATURDAY NIGHT LIVE")
GOV. DAVID PATERSON (D), NEW YORK: Well, I appreciate a sense of humor everywhere, and even from "Saturday Night Live." Now that Governor Palin is not around, they seem to have run out of material.
(LAUGHTER)
(END VIDEO CLIP)
(COMMERCIAL BREAK)
BROWN: President-elect Obama introduced key members of his energy team at a news conference today. But after promising a review and more answers about his campaign's dealings with Governor Rod Blagojevich, Obama got more questions today. Here's what he had to say.
(BEGIN VIDEO CLIP)
OBAMA: we were prepared to release the findings of the review that had been done, which are thorough and comprehensive. The U.S. attorney's office asked us to hold off releasing those for a week.
So I would ask for your patience, because I do not want to interfere with an ongoing investigation.
(END VIDEO CLIP)
BROWN: So, the review now done, but we're not going to get a look at it until next week.
There are other developments in the case today. And Jessica Yellin has all of the details now from Chicago. And, Jessica, the Obama team staying quiet until next week as we just heard at the request of the U.S. attorney. Behind the scenes, I understand they're saying that they're fine with that, more than fine with that. Explain what's going on.
JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Well, the folks I'm talking to say that, first of all, they genuinely don't want to cross the U.S. attorney. The U.S. attorney has confirmed to us he asked for them to put this off. So, that's the first concern.
But the second level of this is, look, Campbell, the folks I'm talking to say they're absolutely convinced that everyone in their words will be disappointed when we see the results of this, that there's no wrongdoing, and so there's no urgency to release it.
Yes, it drags this on for another week, but at the same time it gets let out the week of Christmas, when maybe fewer Americans will be paying attention. It might get buried in that news cycle. And so really is this such a bad thing for the Obama team? Maybe not. One more week won't kill them on this one.
BROWN: Yes.
And, Jessica, in the meantime, Governor Blagojevich still the governor. No sign he's going to resign. So, today, the legislature began the process of impeachment. Give us the timeline on that.
YELLIN: Right.
The timeline is slow. Even if impeachment is the way they decide to go, it doesn't look like that could happen before the new year. First, today, what has happened is they have convened a committee. That committee of the house, the statehouse, will decide whether impeachment is appropriate. Then the house legislature has to vote to decide whether they will file charges against the governor.
And, after that, if all that is a yes and a go, then the state Senate has to decide if they will impeach him. So, that's a three- step process. The first step just began today. And we're told the first step could take many weeks. So, this one's going to drag on a while -- Campbell.
BROWN: All right, Jessica Yellin keeping track of things for us from Chicago -- Jessica, thanks.
And we should also mention tonight CNN has been told that Obama has two choices now -- or intends to name two more people to his Cabinet. Ken Salazar, one of Colorado's U.S. senators, will be announced this week as the nominee for interior secretary. And the man in charge of Chicago's public schools, Arne Duncan, is to be nominated as secretary of education.
Stay with us. When we come back, our panel next with quite a few things to say, like, is the media letting the president-elect off way too easy on this Blagojevich story? We will dig into that.
Also, now he tells us. John McCain goes maverick on Sarah Palin. Wait until you hear what he has to say about her future.
Plus, she is the closest thing to American royalty. Tonight, new information about Caroline Kennedy and her desire to replace Hillary Clinton in the Senate. We're going to look into it, NO BIAS, NO BULL, when we come back.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
(BEGIN VIDEO CLIP)
GOV. ROD BLAGOJEVICH (D), ILLINOIS: There will be an appropriate time to talk about this. But let me just wish everybody happy holidays. And things will be -- work out just fine.
QUESTION: The rumor is you intend to resign. Is that true or false?
BLAGOJEVICH: I just think that you all should have a great holiday season.
(END VIDEO CLIP)
BROWN: Well, the besieged of Illinois there, his Christmas might be a little less than picture-perfect this year, more lump of coal than bright shiny package. And there are still some questions for president-elect Obama over the Blagojevich mess.
Our political panel back with us now, CNN contributor Stephen Hayes, a senior writer for "The Weekly Standard," "New York Daily News" columnist Errol Louis, also morning host for WWRL Radio in New York, and "TIME" editor at large and senior political analyst Mark Halperin.
Welcome, guys.
Errol, let me start with you here.
As we have been talking about, the U.S. attorney asked Barack Obama, the transition team, to delay releasing their internal findings for at least a week, until they have had a chance to do interviews of their own. Probably some pluses to that for Obama, as well as minuses. What do you think?
ERROL LOUIS, COLUMNIST, "THE NEW YORK DAILY NEWS": Nothing but pluses, in my opinion. It will come out some time in that weekend when nobody is going to be around. Most of the editors and producers will be on vacation. There won't be a lot of viewership. It will come out sort of quietly. If there any embarrassments in there for the Obama team, we know about them at full blast. And that suits Rod Blagojevich just fine. That suits Obama just fine.
BROWN: You agree?
MARK HALPERIN, CNN SENIOR POLITICAL ANALYST: I pretty much agree.
I think this is one of those rare cases in our political media life where the facts will actually matter. If there are no embarrassing contacts or politically sensitive contacts, they're fine. And what we do know and get the strong sense from talking to people around the investigation and based on what the independent counsel -- or the U.S. attorney did today is, there's no indication that Fitzgerald, the prosecutor, thinks that anyone associated with Obama did anything illegal.
As long as there's no law-breaking, any of the politically embarrassing stuff I think won't matter.
BROWN: Steve, I know you think that reporters are letting Obama get off easy today on this one. Today, he only got one question on it at this news conference.
STEPHEN HAYES, CNN CONTRIBUTOR: Yes, I just think he's gotten a little bit of a pass on it. And that's not to say -- I agree with both Mark and Errol.
That's not to say that I think that it's likely to show that they have done anything wrong or anybody did any law-breaking. I just think that if we were talking about Republicans here, if we were talking about the Bush administration -- you had two senior aides to Barack Obama who had said things in the past that contradicted what Obama was saying today in Rahm Emanuel and David Axelrod on two different issues.
I think if this had been a Republican or this were the Bush administration, you would have had huge headlines, you know, Bush contradicted by top aides. And we simply haven't seen that. Those facts have been buried, I think, in "The New York Times"' story that I read on this. It just hasn't been the same, I think, same level of -- same standards.
BROWN: And, Mark, the Republican National Committee working overtime to try to connect Obama with Blagojevich, releasing a Web video raising questions about their relationship. And yesterday on ABC's "This Week," John McCain told them to back off. Let's listen to what he had to say.
(BEGIN VIDEO CLIP, "THIS WEEK")
SEN. JOHN MCCAIN (R), ARIZONA: The Obama campaign should and will give all information necessary. You know, in all due respect to the Republican National Committee and anybody, right now, I think we should try to be working constructively together, not only on an issue such as this, but on the economy, a stimulus package, reforms that are necessary.
(END VIDEO CLIP)
BROWN: Who's right here, in your view? Is this the best use of the RNC's time? HALPERIN: I don't think it is. I think, both substantively and politically, the path back for conservatives in this country is not attacking on this issue at this time, when the economy is so bad, when there's no indication that Obama himself has done anything wrong.
I think, if there's criticism of Obama, if there is something is that people should be asking about, it's his failure in the past to denounce Blagojevich, not waiting for the U.S. attorney to get involved and take him into custody briefly. But, over the years, Obama has not distanced himself or denounced Blagojevich in terms that I think he probably should have.
BROWN: Steve, what do you think? Is this what the RNC's message should be these days?
HAYES: No, I actually agree with Mark.
It's one thing I think that reporters haven't paid probably enough attention, haven't grilled him as hard as they might have. But I don't think this is an issue that Republicans are likely to gain a lot of traction on, in part because I think, at the end of the day, if you look at the 76-page affidavit, it doesn't look like there's a lot of "there" there in terms of what Obama himself or his staff has done. If that changes, they can pounce when it changes.
But, right now, it seems like they're setting themselves up for disappointment. If they're harping on this sort of constantly and then there's not much there, then they just look sort of foolish.
BROWN: You know, Errol, Blagojevich, he's still the governor. He goes into work today. He signs a tax bill. He's still acting like a governor. How long is this going to go on?
LOUIS: Well, until it's to no longer to his advantage to do so. It's the one card that he's got left. If the wiretaps as laid out in the criminal complaint suggest anything, this is a guy who understands leverage. He understands his position.
He's going to play it to the hilt. The one card he's got left is stepping aside, because everybody wants him to go.
And just to add on to something that Mark and Stephen were talking about, John McCain is somebody the RNC should listen to. We just went through 11 months of trying to tie Obama to every questionable character in Chicago, whether it's Farrakhan, whether it's Jeremiah Wright, whether it's Rezko, whether it's the bomber William Ayers. And none of it seemed to have worked.
So, politically, we know that that doesn't seem to work. Pulling out one more shady character and trying to act as if because they were in the same room -- look, they kept the governor away from his victory speech. They kept him off the podium at the DNC. He's signaled in a lot of ways this is not his friend.
BROWN: All right, guys, stand by. You're going to come back. I know we're going to talk about Caroline Kennedy and what's going on there in a moment.
Coming up, though, the "Political Daily Briefing," Barack Obama reaching back in the 19th century for a very important trip to Washington.
Also, a Christmas card from a congresswoman, that's not unusual, but this one is. And it is coming up.
Also still ahead, the reporter who threw his shoes at President Bush. The president's reflexes faster, some say, than the Secret Service's. We are going to look at their response coming up.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
MAX HAMPEL, SECOND-GRADER: Dear president-elect Obama, I have a few things I would like to tell you for our country.
Number one, so that the occurrence of 9/11 doesn't happen again, you should have security on board each plane. Number two, to make the ozone hole the same size it is now, we should have more hybrid cars. Number three, you should pass out stimulus checks to calm down the economy.
Sincerely, Max Hampel.
(END VIDEO CLIP)
BROWN: Some fairly smart ideas there from Max, who happens to be a second-grader at Riviera Elementary in Torrance, California.
All over the country, kids are writing letters to president-elect Obama. We love it when you share them with us. So, send us your letter to the next president with or without suggestions. Look for the I-Report link on our Web site, CNN.com/Campbell.
Time now for the "Political Daily Briefing," our "PDB."
Today, Sarah Palin might be a little bit peeved, for good reason, and the president-elect will be traveling to Washington just like President Lincoln.
Our good friend Dana Milbank has all the details from the nation's capital.
Dana, how are you?
DANA MILBANK, CNN POLITICAL CONTRIBUTOR: Good, Campbell. How you doing?
BROWN: I'm great. So, it's no secret that president-elect Obama is a fan of Abraham Lincoln. We have talked about it a lot. But some news today may indicate he's his admiration a bit far.
MILBANK: Yes. I think, at this rate, Campbell, it's probably just a matter of weeks until he starts growing a beard and wearing one of those stovepipe hats. But he's been quoting Lincoln in the speeches you have heard. He's pointing out their shared roots in the Illinois legislature, making his Cabinet look a bit like Lincoln's.
Now he's literally retracing the great emancipator's root to the inauguration, chartered a train to take him from Philadelphia, down to Wilmington to pick up the Bidens, then on to Baltimore and Washington.
Now, Lincoln worship is all well and good, but maybe somebody should point out to the president-elect Obama that in the years since Honest Abe, Chicago has because a major hub for United, American and Southwest Airlines, get here in an hour-and-a-half, starts at 55 bucks.
BROWN: But no scenery. You miss the scenery, Dana. Come on.
A lot of buzz out there on another topic. There were some comments that John McCain made over the weekend about his former running mate. Tell us about it.
MILBANK: Yes. I suspect that right about now that Sarah Palin wants to throw her shoes at John McCain.
(LAUGHTER)
MILBANK: He -- McCain told ABC's George Stephanopoulos yesterday that he's not sure he's going to support his former running mate in her expected 2012 presidential run.
BROWN: Wow. OK.
(BEGIN VIDEO CLIP, "THIS WEEK")
MCCAIN: I can't say something like that. We have got some great other young governors. I think you're going to see the governors assume a greater leadership role in our Republican Party, Pawlenty and Huntsman and...
GEORGE STEPHANOPOULOS, ABC ANCHOR: But why not? Six months, you thought she was the best person...
MCCAIN: Sure. Yes.
STEPHANOPOULOS: ... to succeed you if something had happened to you?
MCCAIN: Sure.
But now we're in a whole election cycle. Have no doubt of my admiration and respect for her and my view of her viability.
(END VIDEO CLIP)
MILBANK: Well, McCain said, of course, it has absolutely nothing to do with her abilities, only the fact that, as he put it, "My corpse is still warm."
In fact, I suspect his corpse seems to be a bit smoldering at this point.
BROWN: Yes, wow. OK. That's interesting.
(LAUGHTER)
BROWN: Finally, tonight, it is the holiday season. So, naturally, we think of gifts, holiday cards.
You have managed to dig up some interesting choices being made by some politicians. What have you got?
MILBANK: You know, well, first, I think it's going to be a pretty blue Christmas in the household of Michigan Governor Jennifer Granholm. She announced that she is going to be placing 100 chairs of automaker stock under the tree for each of her three children.
BROWN: Lucky kids.
MILBANK: Yes. So far, now, if you bought it last Thursday, the stock is rising like the proverbial lump of coal. I'd say she's lost about $160 on that $1,400 investment so far.
Now, if you can't annoy your kids and if you're a politician, you might just decide to annoy your cat. Congresswoman Loretta Sanchez, a California Democrat, made her cat, Gretzky, pose with her aboard a Harley for her holiday card this year. It's not as bad as in past years. She's been seen sitting on the beach with Gretzky under the words "pet the cat." And in another one she appears to be setting the animal's tail on fire, Campbell.
BROWN: Hey, it's all in good fun, right?
MILBANK: True enough.
BROWN: A little humor for the holidays.
MILBANK: True enough. That's California.
BROWN: Oh, yes, she can get away with it.
Dana Milbank, thanks very much. Appreciate it.
MILBANK: Thanks, Campbell.
BROWN: President Bush, and that bizarre shoe attack. One man's attempt to insult and assault the president is getting lots of coverage here and overseas as well. But depending on where you are, you get two different types of stories here.
Also, ahead, it's not her job yet, but when a Kennedy has her eyes on a Senate seat, it raises all kinds of questions. Our political panel is back with some answers, "NO BIAS, NO BULL."
(COMMERCIAL BREAK)
BROWN: They have left a giant imprint around the world, that pair of shoes thrown at President Bush. Call it scary or symbolic, everybody is talking about it. We will too. First, Randi Kaye though joins us with "The Briefing" -- Randi.
RANDI KAYE, CNN CORRESPONDENT: Lots of weather to talk about tonight, Campbell. A severe storm is causing big problems in California tonight. Thirteen people were hurt in Anaheim when part of a roof collapsed at a technical school. Not far away in Yorba Linda, hundreds have been evacuated because of mudslide fears after recent wildfires.
In the Midwest, bitter cold has places like Bismarck, North Dakota suffering. Twenty-four below zero predicted tonight. Nearly 1,000 people have died in Zimbabwe's cholera outbreak as well. The U.N. reports more than 18,000 suspected cases have been documented. President Robert Mugabe claims the west is using the numbers as an excuse to invade.
After 86 down days in a row, gas prices have stopped falling. AAA says the average gallon of unleaded costs $1.66, still about 60 percent cheaper than five months ago.
In Turkey, a boy is safe tonight after being rescued from a safe. One of the 8-year-old's friends may have shut the door behind him. Firefighters used an electric saw and a sledgehammer to make air holes and then free the child.
And Madonna and Guy Ritchie have settled their divorce and it's not cheap. After eight years of marriage, Madonna will give Ritchie, get this, $75 million. Their divorce will become final next month.
BROWN: Great, Randi Kaye. Randi, thanks very much.
Coming up, we're going to talk to CNN's Michael Ware in Baghdad about that reporter's shoe attack on President Bush. So much more than meets the eye here.
Also, Caroline Kennedy wants Hillary Clinton's Senate seat. She's got the same star power but not the same political experience. We'll ask our political panel what are the odds that Kennedy gets the job.
(COMMERCIAL BREAK)
BROWN: She is the daughter of American icons John and Jackie Kennedy, the keeper of the Camelot flame. Tonight, Caroline Kennedy is telling New York's political powerbroker she wants Hillary Clinton's Senate seat. The man who will make the call, New York Governor David Paterson. And today, he wasn't showing his cards. Take a listen.
(BEGIN VIDEO CLIP)
GOV. DAVID PATERSON (D), NEW YORK: She told me she was interested in the position. She realized it was not a campaign, but she was talking to other people, because she thought that a number of people she felt should know that she's interested in the position. She'd like at some point to sit down and tell me what she thinks her qualifications are. (END VIDEO CLIP)
BROWN: And that is the key word there, "qualifications." A lot of political types are asking what qualifications does Caroline Kennedy have beyond a famous name and the ability to raise a ton of money? So we want to go back now with that to our political panel, Stephen Hayes, Errol Louis and Mark Halperin.
Mark, so Caroline Kennedy is now essentially campaigning for the job. And lots of people calling, reaching out to the governor on her behalf. How do you rate her chances?
MARK HALPERIN, "TIME" MAGAZINE: I don't mean to have to sound goofy. She would not be the least qualified United States senator. She is I think --
(CROSSTALK)
BROWN: That's a fair point.
HALPERIN: She brings plenty of qualifications. I think she would be at a minimum, a decent senator, and maybe a very good one. She's got a legacy hold on the seat because of Robert Kennedy.
I think the real issue here that you haven't mentioned so far is the soap opera now of the Kennedys versus the Clintons. Because I think the biggest obstacle to her getting the seat far and away is the apparent opposition of the Clintons themselves and certainly of many Clinton allies who want to stop her.
BROWN: Elaborate on that a little bit. Explain by going back --
HALPERIN: Well, the Kennedys and the Clintons got very close...
BROWN: Right.
HALPERIN: ... during the years the Clintons were in the White House. But the endorsement of Senator Kennedy, Ted Kennedy and of Caroline of Barack Obama during a critical period in the nomination season I think wounded the Clintons and angered the Clintons as much as...
BROWN: And they haven't gotten over it.
HALPERIN: ... as much as any other nomination. And you've seen many Clinton allies speak out not just saying she wouldn't be the best candidate but really denigrating her qualifications with it. So, often I think the press focus is a little too much on the soap opera aspect. This is New York City. We've got tabloid newspapers. We've got lots of local TV stations. This is a binary choice.
The Clintons win or the Kennedys win. Right now, I'd put my money on the Clintons.
BROWN: You do.
Errol, you know New York politics. What do you think?
ERROL LOUIS, "NEW YORK DAILY NEWS": Well, I tell you what, I'd add a third clan, the Cuomo clan.
HALPERIN: Yes.
LOUIS: Andrew Cuomo, the attorney general, who used to be married to a Kennedy, as a matter of fact, had a very bitter public divorce. He is in the running. He's been kind of nosing around. He'd like some consideration.
And so, David Paterson, the governor, is the man in the middle. He's got to deal with all these warring political tribes. He's also got his own re-election to worry about and whoever gets the seat is not only -- not only going to run for the unexpired term in 2010, but is going to run for a full-term in 2012. And so, David Paterson has got to be thinking about that as well. So it's a pretty messy affair down here.
BROWN: Steve?
STEPHEN HAYES, "THE WEEKLY STANDARD": Yes. No, I think it's fantastic.
(LAUGHTER)
And I think her main qualifications at this point may be that she's -- maybe that she would be the one to keep Andrew Cuomo from getting the seat. I mean, he's got a power base up in New York but he's also despised I think by a lot of people. He's made a lot of enemies over the years.
And, you know, his kind of qualifications, I would say when he was running HUD, he was taking trips back to New York in preparation for his future career there, you know, in a sense, you could make the argument that his kind of qualifications are exactly the kind of qualifications that people aren't looking for in a senator, and that, you know, plus the fact that she's written a book about the bill of rights. I mean, I agree with Mark, there are senators I know who probably have never read the bill of rights, and she's written a book about it.
BROWN: So, but where are you -- where are you putting your money then?
HAYES: I think she's more likely than not to get it, in part, because I think it would enhance Paterson's ability to get re-elected. It would help him with his political situation up there.
BROWN: Who is the Clintons' candidate in this, Mark?
HALPERIN: Well, I think it's anybody but Caroline at this point. They've got the ABC strategy, anything to stop her.
Look, it's an electorate of one. And it's a guy who's governor because Eliot Spitzer resigned. So Governor Paterson has a lot of power for a guy who wasn't elected to the office. And I don't know him well enough to say exactly what he's going to do.
I think he will be under a lot of pressure from pro-Clinton forces to say, look, she won the seat. She put it into the Democratic Party's hands. She's entitled to have some say. And again, I think it's fair to say that at least her allies do not want Caroline Kennedy to get it.
BROWN: She, though, has to become, essentially like a different person at least in terms of her public persona if she's going to do this though. I mean, look at the years she's kept the media at bay.
The media I think has overall respected her privacy and not pounded away at her, you know, with any. But you're putting yourself out there. You choose to become a politician. The entire dynamic, the relationship she has as a Kennedy is going to change drastically with the media.
LOUIS: Well, that's right. You know, she'll get a lot more scrutiny. It's worth pointing out though, she's known as a fund- raiser and that's the primary job she has with the New York City Board of Education, but she's also in charge of mentoring programs.
I mean, she's done quite a lot. She's been in schools personally. I mean, one nice thing about our system is that there are no official qualifications other than what the voters decide is relevant. And so, it will be up to all of us.
I mean, you know, the only hesitancy she might want to think about is that in 1970, when her uncle -- after her uncle was murdered, the person who filled in for -- you know, who had the unexpired term ran in 1970 and lost. And that's what happens to most candidates who fill unexpired Senate terms nationwide. So, it's not a gift. It's a chance.
BROWN: But most candidates don't have her ability to fund raise as you say.
HALPERIN: Now, when you talk about her ability to fund raise, she's raised money from very wealthy people in big amounts. This is raising money under the federal limits. $2,300 at a time, not just in New York City, but traveling the country and selling herself. Not selling education or literacy or other causes that she might have worked on.
I think almost every part of being a Senate candidate, being out in public, as you said, raising money in those small chunks is antithetical to everything she's ever done.
BROWN: She's ever done.
All right, guys, we got to end it there. We're out of time. But to Steve, Errol and Mark, thanks so much. Appreciate it.
New York's governor didn't just hear questions about Caroline Kennedy today. This weekend, "Saturday Night Live" made fun of his blindness. Should that be off limits? We're going to hear what the governor says, and show you some of that sketch. "NO BIAS, NO BULL" when we come back.
Plus, more on the attack of the flying shoes. I mean, the guy had good aim, seriously. Two in one shot. In the Muslim world, this is actually much worse than it looks. We're going to have the back story when we come back.
(COMMERCIAL BREAK)
BROWN: Lots of buzz tonight about Hillary Clinton's soon to be vacant Senate seat. Caroline Kennedy wants it but she could face some stiff competition. And Larry King is going to be talking about that tonight.
Larry, who have you got?
LARRY KING, HOST, "LARRY KING LIVE": Well, Caroline Kennedy, as you just said, says she'd like Hillary Clinton's Senate seat. At least 12 others are interested -- 12. Why is she getting all the attention? That's what Fran Drescher wants to know because she'll be here to tell us why she wants to be considered.
No kidding. Fran Drescher is going to be here. My friend, Fran.
And Caroline's cousin, Kerry Kennedy, will join us too. And Jim Carrey will brighten the world. He's a real "yes" man these days. All next on "LARRY KING LIVE."
BROWN: All right, Larry, we'll see you soon.
President Bush's surprise visit to Iraq produced more surprises than anybody bargained for. Coming next, flying shoes, ruffled feathers and what may happen to the Arab world's newest folk hero.
(COMMERCIAL BREAK)
BROWN: Followers of anti-American cleric Muqtada al-Sadr staged an angry protest today in Baghdad over the arrest of the Iraqi reporter who threw his shoes at President Bush during a news conference on Sunday.
President Bush tried to brush it off. But the video of the leader of the free world getting pelted with a pair of shoes, well, it kind of ricocheted around the globe today. This as Iraqi government officials said that the journalist who threw the shoes is being tested for drugs or alcohol. He could face charges of assaulting the Iraqi prime minister who is standing right next to President Bush. But is the story bigger than it seemed at first. In the Muslim world after all, the shoe thrower has become a modern day hero.
And joining me now to talk about this, Ed Henry, at the White House, Michael Ware for us who is in Baghdad tonight.
Ed, let me start with you. First of all, walk us through what happened. I mean, we've all seen the video obviously. The president's reflexes in a way though seem faster to some than the Secret Service. Are they reviewing this incident?
ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Campbell, they are taking a look at it. Nothing else. When you look at that video, it's clear that the lead Secret Service agent is supposed to dive on the president and God forbid some bad situation like this, didn't react after the first shoe.
You know, it's understandable he didn't see the first shoe coming, but he didn't actually go until after the second shoe. It took two full shoes before that agent really run towards the president and said, look, back off, I'm fine.
I've been in a lot of these press conferences. They have what they call a hand mag, where they wand you beforehand to make sure you don't have a gun or a knife. But it's an imperfect system. You've been through this. You know, Campbell, you could have your keys. You could have a digital tape recorder. You could have your BlackBerry.
You could obviously have your shoes. You can take them off and throw them. Nobody's really thought to do that before. But now, I have to wonder whether they're going to start doing it because we've taken our shoes off at the airport. Maybe before presidential press conferences, that's what we're going to be doing pretty soon too. It's going to be just as annoying.
BROWN: Can you imagine, Ed?
Michael, let me go to you. In the Arab world, it is incredibly derogatory to throw your shoe at someone. It does mean a lot, doesn't it?
MICHAEL WARE, CNN INTERNATIONAL CORRESPONDENT: Oh, absolutely, Campbell. I mean, it is the height of insult.
I mean, here in Iraq and the region just showing someone the sole of your shoe is an enormous mark of disrespect. But to actually throw your shoe is egregious. Now, we've seen -- we've seen this in the past, for example, after the invasion. Do you remember when the statue came down?
BROWN: Yes.
WARE: And all the Iraqis leapt upon it. And they hammered it with their shoes. That's the level of loathing. That's the anger. That's the disrespect we're talking about.
And this action by just one angry Iraqi journalist has resonated throughout this entire region, Campbell.
BROWN: And, Ed, you know, President Bush, I think to his credit, really seemed to have shrugged it off, right? HENRY: Sure. And I mean, he tried to tell reporters afterwards, look, this is just one guy. He's speaking for himself. You can't read too much into it.
But as Michael is reporting on the ground there in Iraq, it certainly looks like it's not just one person. It's resonating. Nevertheless, the president did try to downplay. Take a listen.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: But let me talk about the guy throwing the shoe. It is one way to gain attention. It's like going to a political rally and having people yell at you. That's what happens in free societies where people try to draw attention to themselves.
(END VIDEO CLIP)
HENRY: And so you can see right there, I mean, clearly the president trying to turn this politically to say, look, there's now freedom in Iraq, so the guy's ability to do that. But on the other hand, this is not the storyline the White House wanted.
BROWN: Yes.
HENRY: This could have actually been a positive trip for him because security has improved on the ground. Instead, this is overshadowing everything.
BROWN: Completely. And Michael, a much stronger reaction to the incident in Iraq and the rest of the Muslim world even. And a lot of support for this journalist?
WARE: Oh, absolutely, Campbell. I mean, in so many ways, he has expressed the sentiment of a lot of Iraqis. Iraqi local opinion here is divided now, and it's almost straight down the middle.
There's one body of opinion that condemns what he did. But not because they assaulted -- he assaulted President Bush, but because he did it in front of the Iraqi prime minister. And that's embarrassing to the Iraqi prime minister so it's not polite. The other body of opinion which is just as big says that President Bush deserved what he got.
It seems to be agreed here in Iraq, by and large, that this journalist shouldn't be punished for this. And that even though you don't approve of his method, everybody here can relate to his message, Campbell.
BROWN: And the frustration that they're feeling there.
WARE: Yes.
BROWN: Ed and Michael, appreciate it. Thanks very much for your time tonight.
HENRY: Thank you.
BROWN: And we should let you know that tomorrow Candy Crowley sits down with President Bush for a one-on-one interview in these final days of his presidency. We're going to have that right here tomorrow night at 8:00 Eastern "NO BIAS, NO BULL."
Coming up, the governor of New York is known as someone who can take a joke. But he's not laughing at a "Saturday Night Live" sketch that poked fun at his blindness. Did "SNL" go too far this time? That's coming up next.
(COMMERCIAL BREAK)
BROWN: Time now for our "Bull's-Eye" which we award to New York Governor David Paterson, who you may not know happens to be legally blind. The folks at "Saturday Night Live" obviously did know and decided to make fun of it in a sketch.
Here's a clip. See what you think.
(BEGIN VIDEO CLIP, SATURDAY NIGHT LIVE")
FRED ARMISEN, PLAYING GOVERNOR DAVID PATERSON: Whoever is appointed senator must, like me, be caught totally off guard and be comically unprepared to take office? I don't know how many people remember this, but I was not supposed to be your governor. I kind of fell ass backwards into this about ten months ago due to a sex scandal that I was miraculously not at the center of.
I mean, come on, I'm a blind man who loves cocaine, who was suddenly appointed governor of New York. My life is an actual plot from a Richard Pryor movie.
(END VIDEO CLIP)
BROWN: Now, the National Federation for the Blind called that sketch absolutely wrong. Paterson, though, took it more in stride. Take a listen to what he said.
(BEGIN VIDEO CLIP)
GOV. DAVID PATERSON (D), NEW YORK: And I can take a joke. And I dished them out enough and I can certainly take them. But you know in the lower frequencies of societies, I don't know if people know that the unemployment rate in the disabled community is 63 percent. Only 10 percent of deaf people are working, 29 percent of blind people don't have jobs. And yet, the most interesting thing about that is their educational performance is higher than the national average.
So there's only one way that people could have an unemployment rate that's six times the national average. It's attitude. And I'm afraid that the kind of third grade depictions of individuals, and the way they look, and the way they move add to that negative environment.
(END VIDEO CLIP)
BROWN: And Governor Paterson's very graceful answer gets our "Bull's-Eye" tonight.
We had a lot of reaction to tonight's "Cutting Through the Bull" about the Madoff scandal and we want to share a little bit of it with you.
Warren from Illinois writes, Campbell, you're right. We can't stop every fraud scheme, but $50 billion? The SEC really let us down on this one, and we need journalists like you to point out those failings.
But a viewer named Gem (ph) from Pennsylvania writes, I totally disagree with Campbell's assertion that nothing could have been done to stop scams such as Madoff's. This is exactly what Wall Street people would like us to believe in order to stop more regulation and required transparency.
We love hearing from you. So please keep sending us your e-mails and response through "Cutting Through the Bull" and pretty much anything else on the show, and we will try to get them on the air when we can.
That is it for us. Thanks for joining us tonight.
"LARRY KING LIVE" starts right now.
