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CAMPBELL BROWN: NO BIAS, NO BULL

Chrysler Temporarily Shuts Down Plants; Obama's Promise of Transparency?

Aired December 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, everybody.
We're starting tonight with breaking news in the Big Three carmaker crisis.

Bullet point number one tonight, Chrysler has just announced it's closing all of its manufacturing plants for at least one month starting Friday. That is twice as long as they had planned. The company has repeatedly warned it could go under without taxpayer help. That help has not arrived. So, is this just a dangerous game of chicken with Washington?

And there's more breaking news. Bullet number two, Ford just announced it is shutting down most of its North American plants for one week longer than it usually closes during the holidays, a move that was expected, but, tonight, we're learning the specific details.

The bottom line, both companies taking a huge gamble that could make or break their futures. Even if it works, their suppliers could suffer a knockout blow from the loss of business.

Bullet point number three tonight, mum is the word from those in power. President-elect Obama reiterates today he will not answer questions about what his staff said and didn't say to Illinois Governor Rod Blagojevich until next week. That would be right around Christmastime, while Obama happens to be in Hawaii, while most of us actually probably won't be paying that much attention.

And bullet point number four tonight, Blagojevich, himself, who stands accused of trying to sell Obama's Senate seat, tells reporters he's -- quote -- "dying" to share his side of the story. But today, all he really did was ask for privacy, so he could resume his daily run.

Why can't he stay still long enough to answer the questions everyone is asking? We will have more on the .

But, first, as always, "Cutting Through The Bull" tonight, it goes without saying, the media is annoying. It is the media's job to be annoying, especially those members of the media assigned to cover the president, or, in this case, the president-elect.

Their role is not to support president-elect Obama, but to challenge him, to do their best to hold him accountable. And this week, no doubt, they are annoying Obama with daily questions about Rod Blagojevich and his allegedly trying to sell Obama's Senate seat and the role of certain members of Obama's team.

Here was the exchange Obama had yesterday with a reporter from "The Chicago Tribune."

(BEGIN VIDEO CLIP)

QUESTION: You told us at your first press conference after the election that you were going to take a very hands-off approach to filling that spot. Over the weekend, "The Tribune" reported that Rahm Emanuel, your incoming chief of staff, had presented a list of potential names...

(CROSSTALK)

SEN. BARACK OBAMA (D-IL), PRESIDENT-ELECT: John (ph), John, let me -- let me just cut you off, because I don't want to waste your question.

As I indicated yesterday, we have done a full review of this. The facts are going to be released next week. It would be inappropriate for me to comment, because, for example, the story that you just talked about in your own paper, I haven't confirmed that it was accurate, and I don't want to get into the details at this point.

So, do you have another question?

(END VIDEO CLIP)

BROWN: Mr. President-elect, this is the second time now I have observed you doing this, cutting off a reporter because the question didn't suit you.

Mr. President-elect, this sort of approach reminds a lot of us of the current administration now packing up to go, and it frankly doesn't fly in a democracy. You don't get to choose the questions you get asked at a news conference. That is not the way it works, even with a media that many believe has been more than friendly towards you, which makes it all the more surprising that you could act testy, annoyed, or intolerant of any question you get.

You have an extraordinarily high approval rating right now. People in this country who voted against you are pulling for you. These are desperate times for many Americans. And most of this country wants you to succeed.

But you will not succeed if you discard the very ideals you promoted during your campaign, directness, honesty, candor, transparency, openness. You made a deal with the prosecutor to keep a lid on certain information about this investigation until next week. Fine.

But that doesn't give you a blanket excuse to dismiss any and all questions associated with Blagojevich or anything else. You were the one who embraced openness. You could stand to be a little more open to it. If you have any thoughts, we would love to hear from you. Go to CNN.com/Campbell and click on the link to send us your questions and comments. And we will try to share some of them with you a little bit later.

And now we do want to go back to our breaking news. And it couldn't come at a worse time for Detroit's autoworkers. On the same day we learned Michigan's jobless rate soared to 9.6 percent, the highest in the nation, two legs of the Motor City's automotive tripod just got a lot less sturdy.

We want to get to right to our chief business correspondent, Ali Velshi, and "Fortune"'s magazine's managing editor, Andy Serwer, who are both with us right now.

Ali, let me start with you on this. The automakers said they were going to be in big trouble if they didn't get this bailout, the billions in loans from Washington. They didn't get the money. Tonight, we're seeing the fallout, I'm guessing?

(CROSSTALK)

ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Well, you pointed out earlier this might be a game of chicken.

I want to just tell you something about that Michigan unemployment rate, by the way, the highest in the nation closing in on 10 percent. Unemployment rate only measures those people who are actually working or collecting benefits. They had high unemployment in Michigan for so long that it's probably much higher than that.

Chrysler said it would have enough money to go until march. Now, typically, around Christmas, and in summer, the automakers shut down for two weeks. It's a typical thing for them to do. Chrysler announcing that it's going to double that amount of time.

The problem here isn't that Chrysler will suffer for it. In fact, they will probably save some money in doing it. That is what they're trying to do. The issue is that more than 40 percent of the supply base, the people who supply the parts to these carmakers, are shared between Ford and General Motors and Chrysler and by the way other manufacturers.

I just got off a plane to get this news. I was talking to the CEO of Ford, Alan Mulally, earlier today. And I actually said to him. I said, Ford is in relatively good shape. Wouldn't it be OK if one of your competitors went down? You think that would help you out. Listen to what he told me.

(BEGIN VIDEO CLIP)

ALAN MULALLY, CEO, FORD MOTOR COMPANY: It does sound funny, as a -- as a competitor, I'm sure, but the -- but the most important thing is that the automobile industry, as we have talked about, just touches all the tentacles of all of the industries throughout the United States, and especially all the suppliers.

(END VIDEO CLIP)

VELSHI: So, that's the fear, that if the supplier base goes down, they stop getting parts to Ford or General Motors, Ford said it could send them into bankruptcy.

BROWN: Wow.

Andy, give us a read on this Wall Street firm, Cerberus, private equity firm that owns 80 percent of Chrysler, they essentially refusing to pony up is what is sounds like without a bailout from Washington. Are they essentially going to let Chrysler fail if federal money doesn't show up?

ANDY SERWER, MANAGING EDITOR, "FORTUNE": Well, this is a real big issue here, Campbell.

That's why Chrysler is different. It was bought by this private equity firm, we should say, a Wall Street company, a buyout firm. And they put up their money and they're gambling here, rolling the dice that they can make this company work. And it looks like their timing was way, way off.

And you have to say that Cerberus should really exhaust all possibilities of financing this company on their own and getting more funding through the private sector, rather than taking government money. But it looks like they're up against it right now. They're the ones who are actually calling the shots here, by the way. There's Nardelli, who is the CEO, but Cerberus owns 80 percent. They're the owners of the company, so they're calling the shots.

VELSHI: And John Snow, the former treasury secretary, is the boss over at Cerberus. Dan Quayle is on the board there.

SERWER: Yes.

And Mr. Feinberg is another person who serves there. And these guys really need to understand that they're in a very public arena right now and it's not the private world of Wall Street anymore.

BROWN: So, clearly, they don't get that. Why haven't they done what you said and tried to...

(CROSSTALK)

VELSHI: Well, they say they have a charter, like many investment companies do, that don't allow them to invest more than a percentage of all of their investments in one company and that they would breaking that charter by going above that level.

BROWN: So, is that taxpayers' problem?

(CROSSTALK)

BROWN: Right. I have a charter, too, that says that I can't bail everybody in the entire world out without us sharing the pain.

We have agreed in the $700 billion bailout that we're sharing a little bit of the pain. Those who made money in good times, these private equity firms that make a lot of money in good times, it's time for them to pony up, too. I understand what Andy is saying. It's difficult for them to do so, but we have to share this.

BROWN: OK. Stand by, guys, because we want to talk about another angle on this. The men and women who work in the auto plants, obviously, none of this is good news for them.

And with us now by telephone, we have United Auto Workers president Ron Gettelfinger on the phone with us.

And, Ron, just give us a sense for how your workers are reacting to the news?

RON GETTELFINGER, PRESIDENT, UNITED AUTO WORKERS: Well, first of all, Campbell, thank you for having us on.

And, then, secondly, everybody is very anxious, but it goes much beyond our membership and the workers at the auto company. It's whether the hairstylists, doctors, pharmacists, retail store clerks. Everybody is extremely concerned about what is going on in our economy today and they recognize the impact that the auto industry has.

And then when you announce that you're going to be shutting the plants down like they have, General Motors first, and now Ford and Chrysler, Chrysler much longer than Ford, it just adds to everybody's concern. People are really worried out here.

BROWN: Ron, do you know if your workers are going to get paid during these shutdowns?

GETTELFINGER: Well, the people -- there are some requirements that people have to meet. They have to state reporting requirements. And then there's a seniority issue involved in that.

If you compare what they make this way, being laid off, as opposed to working, I can assure you people would much rather be working.

BROWN: OK. I'm a little confused, frankly. They are getting paid during this shutdown or they're not getting paid during the shutdown?

(CROSSTALK)

GETTELFINGER: First of all, they have to meet the state reporting requirements to be eligible for unemployment insurance. And then they get a percentage of their pay on top of that. But if you compare gross to gross, it's much less than they would make if they were working.

BROWN: Let me ask you, Ron, you went head to head with these Republican senators in the debate over this bailout. You lost. You were very angry with them. But if you had made the concessions they wanted, would these plants still be shutting down right now?

GETTELFINGER: No, absolutely. Yes, I believe the plants would be shutting down -- I'm sorry -- because what is happening here is they're balancing inventory to demand.

We're talking about big-ticket items here, where consumers cannot (AUDIO GAP) credit. In fact, Chrysler had told me today that they had a meeting with their dealers, and at least 20 percent to 25 percent of the consumers who come in and want to buy a vehicle does not qualify to get the credit to buy the vehicle.

So (AUDIO GAP) got a real issue here. But, in the meantime, we need to address this fact that the consumers can't buy the vehicles.

BROWN: Right.

GETTELFINGER: We went from 16.5 million, 17 million vehicles a year, down to these last two months of being under 11 million.

BROWN: All right.

GETTELFINGER: The industry around the world has compressed, Campbell, and that's what really irritates me as much as anything, is this is not a problem that is solely here in the United States.

BROWN: Right.

GETTELFINGER: And it's not just exclusive to the Big Three. Every manufacturer in this country is impacted, and manufacturers around the world.

(CROSSTALK)

BROWN: Ron Gettelfinger for us from the United Auto Workers, Ron, thanks. Appreciate your time.

And let me just get a quick reaction from both of you to what Ron had to say.

SERWER: Well, first of all, 10 percent of the car's cost is salaries. So, it's not that big. But the cost of the factories is huge. And what Chrysler is betting on is they're going to lose less money by shutting down 30 factories for 30 days than by operating them.

VELSHI: And what Ron was saying about the credit, that is a major problem. I was sitting with Carlos Ghosn, who is the CEO of Nissan-Renault, a substantially healthier company. They said the same thing. People come in, they want to close a deal, and they're just not getting the credit to buy those cars.

So, this is a double whammy. This isn't -- today's developments are not about how the U.S. auto companies ran themselves, as flawed as that was for years. This is a new problem this year.

BROWN: All right. SERWER: And Chrysler sales down 50 percent in November, Campbell. Huge.

BROWN: A lot to keep an eye on. A lot happening over the next couple of weeks, for sure.

Andy Serwer, of course, and Ali Velshi, as always, thanks, guys.

Next, profits, the bottom line and cutting jobs -- with unemployment now growing at an alarming rate, these business calculations seem maybe especially cold-hearted. That's why we asked Dan Simon to find out who killed a durable West Coast retailer and why -- 18,000 employees lost their jobs as part of this deal. And, hint, one of the key players also involved in today's bleak Chrysler news.

But, next, Illinois's embattled governor finally stops running from governors. He steps up to the microphone, sort of. We will hear what he has to say.

And the pictures are 20-some years old, but do you recognize this guy? Stay tuned for Barack Obama as you have never seen him before.

(COMMERCIAL BREAK)

BROWN: So check it out. Embattled Illinois governor Rod Blagojevich has been more or less in hiding since his arrest on allegations he tried to sell Barack Obama's Senate seat. Today, though, not only did he go jogging for the TV cameras. He also talked about not talking.

(BEGIN VIDEO CLIP)

GOV. ROD BLAGOJEVICH (D), ILLINOIS: I can't wait to begin to tell my side of the story and to address you guys, and, most importantly, the people of Illinois. That's who I'm dying to talk to. There's a time and place for everything. That day will soon be here.

(END VIDEO CLIP)

BROWN: For today, though, Blagojevich's lawyer did the talking, repeating that the governor has done nothing wrong.

Gary Tuchman has been keeping track of the story for us from Springfield, Illinois.

And, Gary, details came from Blagojevich's lawyer. How is this defense taking shape?

GARY TUCHMAN, CNN NATIONAL CORRESPONDENT: Well, that's right, Campbell.

His lawyer, Ed Genson, was inside this building all day, the state capitol in Springfield, talking to legislators during the impeachment hearings. It was very combative at times, but during that combat, we got a couple of hints about what a possible criminal defense strategy will be for the governor. The first hint came when I was walking with the lawyer in the capitol hallway.

(BEGIN VIDEO CLIP)

TUCHMAN: Sir, is that his voice on the tape?

EDWARD GENSON, ATTORNEY FOR BLAGOJEVICH: Never heard the thing.

TUCHMAN: So, is that possibly the defense, that you don't think that's his voice on the tape that they're making it out...

(CROSSTALK)

GENSON: I have never heard the tapes. No one has ever heard the tapes.

TUCHMAN: You're doubtful they exist?

(END VIDEO CLIP)

TUCHMAN: Now, he didn't exactly answer that question, but later during the hearing with legislators, he did. He said -- quote -- "I'm not so sure the tapes exist."

So, obviously, if they turn up, and he hasn't gotten access to him, that's why he saying something like that, but, if they turn, they have to have another defense. And that other hint came when to the legislators, the lawyers said that the words that we see from the governor on the transcripts of the tapes that I haven't seen yet are dumb and inappropriate and jabbering, but, as of yet, there's no proof that a crime occurred.

(BEGIN VIDEO CLIP)

GENSON: We also haven't seen the wiretap. We haven't seen how many conversations there were. We haven't seen whether these were taken out of context. We haven't seen if they were accurately described. We haven't seen whether in fact there were conversations that show a withdrawal of the statements that were made. We haven't seen any of this.

(END VIDEO CLIP)

TUCHMAN: So, Campbell, I'm guaranteeing nothing, but I have covered enough cases over the years to get an idea. This is kind of a hint of what the govern could ultimately talk about, that maybe he was joking, maybe he was being silly, maybe he was being stupid, but there aren't a lot of other defenses.

And that leads me to the final thing I want to tell you. You hear the governor saying he's dying to talk. Well, according to the lawyer, it's very possible that he and the governor will hold a news conference two days from now on Friday if the lawyer is done testifying here in Springfield by then -- Campbell.

BROWN: Should be very interesting. We will be watching, of course. Gary Tuchman in Illinois for us -- Gary, thanks.

Now, some people argue the governor may have a strong case here for the reasons that Gary just laid out, and they think that the prosecutor, that Patrick Fitzgerald, the U.S. attorney, has made some pretty big mistakes.

And one of the people making that argument is Joseph diGenova, a former U.S. attorney in Washington, D.C. He's joining me right now, along with our own senior legal analyst, Jeffrey Toobin, who is also a former assistant U.S. attorney. So, he knows his stuff as well.

JEFFREY TOOBIN, CNN SENIOR ANALYST: But I'm just an assistant. He was a real U.S. attorney.

(CROSSTALK)

BROWN: OK. OK. Let's make sure we get that right.

Joe, let me start with you.

You heard Gary. The governor is building a defense that all those tapes are just a bunch of guys posturing, but nothing really illegal here. Is it a strong defense, in your view?

JOE DIGENOVA, FORMER FEDERAL PROSECUTOR: Well, it's hard to tell right how, Campbell, because we don't know all of the evidence that Patrick Fitzgerald has.

But one thing is clear, and that is that this case was ended prematurely. Mr. Fitzgerald has said that himself. And that no completed crime, if they was any at all, has yet been shown to the public or to any court.

Right now, it is very difficult to see what the governor is going to use as a defense, and he's doing exactly the right thing, which is not talking to anybody, including the press. And I'm sure his attorneys are getting ready to file various motions, some of which will include what happened at that press conference the other day, when the arrest was explained to the press.

BROWN: But go back to your initial point, because what would you have had Fitzgerald do? Let the crime, in your view, be completed before he put his cards out on the table?

DIGENOVA: Well, I don't think there's any doubt that any prosecutor would rather have a completed crime. That is for example some exchange of something of value, some actual delivering of something of value, and then an official act of the state being performed by the governor or ordered by the governor.

All of the evidence we have now is none of that occurred and that what Mr. Fitzgerald has charged is an attempt to do something and a conspiracy to set something in motion. It certainly would have been a much better chase for Mr. Fitzgerald had there been a completed act and had it been allowed to go to its fruition. No prosecutor would -- any prosecutor would prefer to have a completed crime. Mr. Fitzgerald says he did it to prevent the governor from making an appointment. That's the reason we gave. We shall see whether or not that was a good reason.

BROWN: Well, we heard his argument, and it sounded fairly reasonable, that this would have created, if these allegations are true, a pretty nightmare scenario. Do you agree with what Joe said?

JEFFREY TOOBIN, CNN SENIOR ANALYST: I don't agree with Joe.

A prosecutor has two obligations. One is to build cases that will stick. The other is to prevent crimes from taking place. Imagine if, this week, having no indictment, no arrest gone forward, Blagojevich had appointed someone to the United States Senate.

Six months from now, the wiretaps come out with these fairly explicit quid pro quo -- quid pro quo...

(LAUGHTER)

BROWN: Quid pro quo, yes.

TOOBIN: ... exchanges of things for value on the tape, and he had done nothing.

Also, I think Joe is understating how good this case is. Remember, all he needed to do to get a complaint was to show probable cause that a crime was committed. He didn't have to show all of his evidence. I think there's a very plausible case that there was an illegal exchange here, that there was, in the words of the statute, depriving the people of Illinois of his honest services.

So, I'm not prepared to criticize Fitzgerald -- Fitzpatrick at this point.

BROWN: Fitzpatrick (sic).

(CROSSTALK)

BROWN: You're having -- I had the speaking disease last night.

(LAUGHTER)

BROWN: But let me ask you both this.

Blagojevich, as Gary reported a second ago, may come out and speak and talking about this and give us some information on Friday in much greater detail, not something you would typically hear a lawyer advise their client to do.

Is that a risky move, Joe?

DIGENOVA: Well, sure. It's a very risky move, and I'm not sure that it's going to occur. But, if it does, we will all be watching that. It's highly unusual. I doubt very much if they will deal with specific facts, because that would be extremely dangerous. There may be some generic explanations, this, that, and the other thing. Or there may just be some general talk about how the governor conducted his office and all that sort of thing.

(CROSSTALK)

TOOBIN: But he says he's still the governor of Illinois. Can he be continue to be the governor without ever speaking in public again? Presumably, he's got to start answering questions.

And I think he's -- I think it's kind of crazy that he's still governor as it is. But...

(CROSSTALK)

BROWN: But if he's not going to resign, he can't go into hiding.

TOOBIN: If he's not going to resign, he can't not talk about it.

BROWN: Guys, we have to end it there. Good point.

To Jeff Toobin, to Joe diGenova -- nether of us can speak tonight -- thanks very much.

TOOBIN: Can I say one thing?

BROWN: Thank you.

TOOBIN: Patrick Fitzgerald. I actually do know that.

(LAUGHTER)

BROWN: I know you know that.

Thanks, guys. Appreciate it.

Jeff, you're actually sticking around for more, I know.

Barack Obama also has been dunking a few questions about the Blagojevich scandal, as we talked about earlier. Coming up, we're going to talk about this question: What happened to Obama's campaign promise of transparency? Is he on the ropes with this one right now?

And then, later, Caroline Kennedy, someone with a longtime habit of avoiding the press, here what happened today when at least the U.S. Senate wannabe stopped to take a few questions.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: It's a little bit frustrating. There's been a lot of speculation in the press that I would love to correct immediately. We are abiding by the request of the U.S. attorney's office. But it's not going to be that long. By next week, you guys will have the answers to all of your questions.

(END VIDEO CLIP)

BROWN: You heard the president-elect. All our questions will be answered next week, when it just so happens that about everybody is on vacation, including Barack Obama.

Is this the best that the president-elect can do in terms of transparency? That's the question for our political panel tonight.

Steve Hayes, CNN contributor and senior writer for "The Weekly Standard," with us, CNN political analyst Roland Martin as well, and back again, senior legal analyst Jeffrey Toobin.

So, Roland, let me start with you on this. Real transparency here?

ROLAND MARTIN, CNN CONTRIBUTOR: Well, here's the deal. Here's the real issue. That is, Fitzgerald has said, look, don't release the report. I think our question, should be why is he saying that, as opposed to why won't the Obama team actually release it? That's what the holdup here is.

BROWN: Well, I get that there's a request from Fitzgerald, but Fitzgerald, as powerful as he is, is not as powerful as the president- elect and there certainly could have been pushback from Obama, who could have said, look, I want to get this out sooner, so that people are aware of all that we know, everything is on the table. I don't want to do this during Christmas week, so let's get it done quicker. Can we do it by Thursday or Friday?

(CROSSTALK)

MARTIN: But, Campbell, Christmas is absolutely irrelevant.

You have a U.S. attorney who has an ongoing case here. I think him prosecuting his case frankly is a little bit more important than us knowing exactly -- also, what took place, the conversations with Obama's folks, is a part of his case. And so I think his case trumps frankly Obama saying here is all what took place.

BROWN: OK.

But, Steve Hayes, let me go to you on this, because you made what I think is a suggestion that Roland shouldn't have a problem with. I think you said that Obama could wait until after the new year, when everyone is sort of back from the holidays, paying attention, hold a full press conference, devote a couple hours to this issue, put everything out on the table, get all the questions answers.

Is that the way to go?

STEPHEN HAYES, CNN CONTRIBUTOR: Well, look, you just said in the clip that you played that he was going to answer all the questions. That could take a while.

So, maybe after the new year would be a good idea. Look, I think we don't know that there was any reason other than the timing that Patrick Fitzgerald asked him to release this next week.

But I do have to say, for a guy whose people have remarked that he's been a lucky politician, in addition to be a good politician, if it's just luck, it's a tremendously lucky break that it would come, as you say, when he's in Hawaii, when the national press corps is probably gone, when people aren't paying much attention to this.

BROWN: Jeff?

TOOBIN: Are we going off the air next week or something? There's still news every day.

(LAUGHTER)

TOOBIN: The idea that next week is so different from this week or different from the week after...

(CROSSTALK)

HAYES: Are you serious? Really?

(CROSSTALK)

TOOBIN: Absolutely.

First of all, it's not up to Barack Obama. He is doing what Fitzgerald said to do, period, end of story. He can't ignore a request from a federal prosecutor. But the idea that next week is so different, I think that's just crazy.

(CROSSTALK)

HAYES: Well, your second argument is a good one. But your first argument is preposterous.

You think there's no difference between releasing this report during Christmas week and releasing it in a week, now, when everybody is focusing on him and his transition?

BROWN: I have got to agree with Steve on this. It's like the White House dumping everything Friday afternoon at 6:00 p.m. that they're embarrassed about.

(CROSSTALK)

TOOBIN: It may be, but that's not up to Barack Obama. It's up to Fitzgerald.

BROWN: I'm sure there was flexibility over this timing.

TOOBIN: Oh, absolutely not.

(CROSSTALK)

TOOBIN: Prosecutors don't deal that way.

(CROSSTALK)

TOOBIN: I just think this is so amazing. I think people out there in the real world don't draw a huge distinction between December 18 and December 23.

BROWN: But, to that point, let me bring in what I think people in the real world are -- where they are generally, which is look at this new Marist poll that was released today.

Obama has an 83 percent approval rating. And it seems like, for the time at least, the country does not care about this situation as much as the media does, frankly, about what is going on in Illinois, the sense, do you agree, that there are much bigger problems and there's -- you know, they're completely willing to give him a pass on this.

(CROSSTALK)

TOOBIN: Yes. Well, of course. Of course.

(CROSSTALK)

TOOBIN: The only issue people -- people care about the economy. That's -- that's what the overriding issue is now.

And, remember, in the Blagojevich scandal, the only evidence about Barack Obama is that Blagojevich can't stand the guy because he wasn't helping him. So why should Obama's ratings go down?

BROWN: And to be clear here, Steve, you know, no one is suggesting any wrongdoing.

STEPHEN HAYES, "THE WEEKLY STANDARD: Right.

BROWN: It's simply embarrassment that there may be members of Obama's team who show up on some of the tapes or something to that effect.

HAYES: Right. I mean, there's a lot of different ways that they can get caught up in this, whether it's an embarrassing comment here or there, on a transcript that's released, whether, you know, somebody makes a misstatement that later comes back to bite them, whether there are conflicts between statements between Obama advisers.

I expect that we probably will see some of those things. But, yes, I think -- I think Jeff is fundamentally right that the country is more focused on the economy because, you know, they're trying to buy Christmas presents and can't at this point.

BROWN: Hold on, Roland.

ROLAND MARTIN, CNN POLITICAL ANALYST: (INAUDIBLE) what it is. We in the media, this is the best that we have to latch on. So we're going to ride this until the wheels fall off.

BROWN: No. no. We've got something better. We've got something better. Stay right there. Don't go anywhere, Roland, or the rest of the panel. We do have other things to talk about.

A little bit later, we're going to talk about a potential political superstar, Caroline Kennedy.

Also coming up, an unprecedented joint effort on national security by the Bush and the Obama administrations. Will it keep us all safer?

And everybody who is anybody is angling for a job under Obama in the Democratic world. Why did one congressman turn him down? We're going to have the story in "NO BIAS, NO BULL" in our "Political Daily Briefing."

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: My administration leaves office next month. We will leave behind the institutions and tools our country needs to prevail in the long struggle ahead.

(END VIDEO CLIP)

BROWN: At the National War College in Pennsylvania today, President Bush took credit for making America safer from terrorism. The White House also taking unprecedented steps for a crisis during the change of administrations. It is urgently now putting together more than a dozen contingency plans for President-elect Obama to use in case of an international emergency.

There's also going to be a pretty remarkable get together at the White House before the inauguration. And senior White House correspondent, Ed Henry, has all the details for us tonight.

And, Ed, I know the level of planning here is really unprecedented. You've been working the story all day today. What are your sources telling you?

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: What's interesting, Campbell, I've gotten off the phone these last few moments of some more information about all this, because every four or eight years, both parties sort of talk a good game about working together during this hand -off and they don't do. This time, though, they really seem to be walking the walk. And here's why.

The Bush White House is very concerned about all kinds of doomsday scenarios. Terrorists sort of trying to take advantage of this first hand-off or transfer of power since 9/11 to launch some sort of a spectacular terror attack. So the Bush folks have really been presenting these detailed plans behind closed doors about what to do if there's an attack here or on U.S. assets overseas. Also, you know, how do you mobilize a response to that? How do you deal with something like some sort of a nuclear situation in North Korea?

Another big one that people don't like to talk about because it's scary, but what if there's a terror attack during the inaugural ceremonies? We have both the incoming and outgoing administrations there. All the cabinet secretaries and the president who would deal with it are now dead or injured.

The incoming cabinet hasn't even been confirmed by the U.S. Senate right now. It'd be total chaos in terms of trying to react to it. These are the kinds of scenarios they're trying to work through right now behind closed doors, Campbell.

BROWN: Wow. Ed, and today, we also heard that President Bush has invited Barack Obama to yet another face-to-face meeting at the White House.

HENRY: That's right. I'm told by inside sources that when the president and president-elect got together right after the election in the Oval Office, Barack Obama actually proposed this, that they get together again before the inaugural, but with a twist. He wanted to invite all three living former presidents to come along as well so they could compare notes. And I'm told that President Bush thought this is great idea and said let's pursue it.

And some new information now is the White House is confirming tonight, this will, in fact, happen on January 7. It's going to be a lunch. It's going to be really historic and high-powered, and it really shows how serious both sides are taking this transfer of power.

They want to make sure that Barack Obama is getting advice from all sides about how to handle various crises. Maybe talk about the economy, all kinds of issues on the table. Ought to be a fly on the wall there. Five commanders in chief, three who used to be, one who is right now, and one who is about to be, Campbell.

BROWN: Really amazing. Ed Henry, you're absolutely right. Ought to be a fly on the wall. Thanks very much, Ed.

HENRY: Thanks.

BROWN: Appreciate it.

Coming up, the man linked to the scandal that may have caused thousands of people their life savings. Find out why Bernard Madoff is out of jail but won't be going anywhere.

Plus, our future president as you have never seen him before. Yes, that is really Barack Obama. You got to hear the story behind these pictures.

(COMMERCIAL BREAK)

BROWN: Barack Obama still enjoys very strong poll numbers. Is that why he is willing to bring yet another Republican to his inner circle? Dana Milbank is on the way to tell us who got the nod. First, though, Joe Johns here with "The Briefing" -- Joe. JOE JOHNS, CNN SENIOR CORRESPONDENT: Campbell, the Wall Street giant accused of scamming $50 billion from clients is under House arrest tonight. A judge ordered Bernard Madoff to stay inside his New York apartment after the investment guru couldn't make bail. Madoff couldn't find four financially responsible persons to vouch for him.

More than 30 children were hurt today in an Indiana school bus crash. Icy roads may have caused a car to slide into the bus near the town of Franklin. One student passenger said classmates landed on top of him as the bus overturned.

Doctors at the Cleveland Clinic call a historic face transplant a success. It took 22 hours for surgeons to replace 80 percent of a woman's face using tissue from a donor. The operation two weeks ago is the first of its kind in the U.S. The hospital says the unidentified patient had been disfigured by severe trauma.

The Army is being sued by soldiers over combat stress. One veteran says the way he's been treated is a slap to the face. A group representing the vet claims the Army illegally cut off lifetime benefits to thousands of soldiers.

And the economy just got a whole lot better for 15 people in Ohio. They won $207 million in last Friday's mega millions lottery. Fourteen town employees in Piqua and one retiree pulled their money and bought tickets twice a week for five years. One of them says he'll keep his job in the town's street department. The other say they're now retired -- Campbell.

BROWN: I bet they are. Joe Johns for us tonight. Joe, thanks.

One of America's most famous preachers will stand with Barack Obama just as he takes office. The role that Pastor Rick Warren will play, and some of the angry reaction to it. That's coming up on the "Political Daily Briefing."

Also, Caroline Kennedy wants a Senate seat. Today was her first real test with voters and reporters. We'll listen to that and hear from our political panel.

(COMMERCIAL BREAK)

BROWN: Time now for the "POLITICAL DAILY BRIEFING." As always the PDB is full of the choicest news items picked out by CNN contributor Dana Milbank, national political correspondent for the "Washington Post."

Dana, topping tonight's PDB, word that Obama plans to appoint another Republican to his cabinet.

DANA MILBANK, CNN CONTRIBUTOR: True enough, among others. Democrats promised during the campaign that the era of cowboy diplomacy is over, but the cowboy era at the interior department, however, is just beginning.

Senator Ken Salazar of Colorado was named interior secretary today. Showed up for the announcement in a western hat and bollo tie.

Now, former Iowa Governor Tom Vilsack named to be agriculture secretary evidently did not get the dress memo because he came in a business suit as opposed to overalls.

But there will be another opportunity for wardrobe high jinx later on. Obama will name this Republican congressman, Ray LaHood, to be his transportation secretary. It will be the second Republican in the cabinet. And I think the recommended dress for that announcement is airline pilot casual.

BROWN: All right. Not often do you hear about somebody turning down a position offered by the incoming president, but today we found out that is exactly what one congressman has done.

MILBANK: Yes. It's the very first cabinet level diss of Obama. Xavier Becerra, he's a Democratic congressman from California, let it be known that he turned down Obama's request for him to serve as a U.S. trade representative because he said Obama didn't make trade a high enough priority. He told the Spanish language newspaper, "La Opinion," "I came to the conclusion that it would not be priority number one and perhaps not even priority number two or three."

His office released a more diplomatic statement today saying that working with Obama from the House of Representatives will be a thrill. It didn't hurt that Becerra just got a promotion to vice chairman of the House Democratic Caucus. That may have had something to do with it.

BROWN: Yes. Nancy Pelosi stepped in there. We love the candor from our politicians.

Finally, I know some big announcements made today about Barack Obama's official inauguration celebration and even an announcement that is bringing a little bit of controversy.

MILBANK: Yes. I think the way to look at it is inauguration week will have a little more soul and a little less booze. Aretha Franklin will be there. Yo-Yo Ma, and interestingly, Rick Warren, the minister who hosted both Obama and John McCain at his church, will give the invocation.

This has angered some gay rights groups because of Warren's opposition to gay marriage, but it may not matter anyway because many of those watching the inauguration will be hung-over. This is because members of Congress had objected to the D.C. government's law to let bars stay open until 5:00 a.m. during the inauguration week, so the D.C. council reconsidered and changed the closing time to 4:00 a.m.

BROWN: 4:00 a.m., that's far more reasonable.

MILBANK: Yes. I think we can still get our drinks.

BROWN: Yes, I think so. Dana Milbank for us tonight. Dana, thanks.

MILBANK: Thanks, Campbell.

BROWN: Coming up, everybody, Caroline Kennedy takes her U.S. Senate campaign on the road and even starts taking sort of taking reporters' questions. We'll tell you about that.

And take a look at this, teenager named Barack Obama. Pretty amazing story behind these photos. We're going to tell it to you tonight.

And stay with us at the top of the hour for "LARRY KING LIVE." Alec Baldwin is tonight's guest. We'll be back in a moment.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

CAMILLE CHAMBERLAIN, 3RD GRADE, CAMPBELL ELEMENTARY: Dear President-elect Obama, I invited by grandma's friends over tomorrow at my back to school clothes. We raised $500 for you to win the election.

Thank you for running for president of the United States. Thank you for all the things you said you will do for us. Love, Camille Chamberlain, third grade.

(END VIDEO CLIP)

BROWN: And go, Camille, who just happens to go to school in Georgia at Campbell Elementary.

By the way, we hear you turned 9 yesterday, so happy belated birthday to you, too.

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. Don't wait for your birthday. Look for the iReport link on our Web site, CNN.com/Campbell.

Coming up, Caroline Kennedy just starting her political career, but she already looks like a pro. Shedding her privacy habit, showing up for photo ops and dodging questions.

Does that make her a shoo-in for the Senate? Our "NO BIAS, NO BULL" look when we come back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: (INAUDIBLE) says that you're qualified. Are you ready for this, Mrs. Kennedy? Mrs. Kennedy, you're not going to answer questions at all?

(END VIDEO CLIP)

BROWN: That was would-be Senator Caroline Kennedy earlier today, brushing off questions from reporters on the first day of her tour of western New York. Kennedy spent the day meeting with local mayors and Democratic leaders as part of her shadow campaign to succeed Hillary Clinton. You could say it's the first time she has ever really been out on the trail stumping for herself.

And back with me to game out her chances, Steve Hayes, Roland Martin and Jeffrey Toobin.

And, Roland, Caroline Kennedy didn't take many questions from reporters today, but she did respond to one about her qualifications. Let's listen.

(BEGIN VIDEO CLIP)

CAROLINE KENNEDY, SEEKING APPOINTMENT TO SENATE: I have had a lifelong commitment to public service. I've written books on the constitution and the importance of individual participation. And I've raised my family, commitment to education in New York City, training principals, working for kids, and I think I really could help bring change to Washington.

(END VIDEO CLIP)

BROWN: And that was pretty much it, Roland. I mean, for the most part, she's still very much keeping the media at bay. Is she going to face some real pressure to put herself out there, open herself up to real questioning from reporters?

MARTIN: No. And again, there's an audience of one. That is Governor David Paterson. She has to make the case to him that she can actually do an effective job. And so I think what she's going to focus on is her public policy work over these last few years. That's all that matters right now is David Paterson.

BROWN: Well, are you suggesting she should be handled with kid gloves?

MARTIN: No, I didn't say that. Look, I don't have anything about kid gloves. What I'm saying is, she has an audience of one -- Governor David Paterson. He has the sole vote as to who is going to replace Senator Hillary Clinton.

Plus, Clinton has already said she's not going to step down until she's confirmed. But she has about a month, a month and a half to make her case to Paterson.

BROWN: Yes. But wouldn't he want -- and I'll let everybody weigh on this -- want her out there making her case to the people of New York. I mean, they are ultimately going to vote for him. I mean, he has to be able to justify this decision.

TOOBIN: I agree. I mean, yesterday's true there is only one voter in this election, David Paterson. But he's got to recognize that she has to become a politician. She has to be someone who can speak about the issues, who can persuade voters to vote for her. And she's got to start, I think, campaigning like a real person, answering questions, meeting voters, having policies, having opinions on issues. So, yes, it's only an electorate of one, but it is still an election and I think she's got to campaign.

BROWN: Steve?

HAYES: Yes, I don't know about a campaign actually. I mean, I think doesn't that get a little weird if she's out there making policy pronouncements and she's really only talking to the governor?

I think what she did today was fine. She answered a question about her qualifications because that's frankly what's been in the news and that's where she's come under the most scrutiny, I think, including from fellow Democrats.

So I think she tried to get past that question, and she would be wise to make a case to David Paterson that she has, and I guess will continue to do. But I don't think she needs to really run any kind of public campaign.

BROWN: But that's essentially what they're talking about. You may say that but she's hiring strategists, she's out meeting with people, doing what amounts to a sort of listening tour in a way.

MARTIN: But, Campbell, also understand that first of all, if she gets the nomination, she has to run again in 2010 in a special election then run again in 2012. So the reality is you have to put the infrastructure together to be able to do exactly what she wants to do. And so, yes, you got to have staff to do that. She can't be out here all by herself just doing it on the seat of her pants.

BROWN: Well, what do you think she should be doing as he deliberates, as Governor Paterson, her audience of one, as you say, Roland, over the next few weeks?

MARTIN: Making it clear this is the work that I have been focusing on for the last 20-30 years. Those policy issues, education, issue of the arts. That's what she has to do.

TOOBIN: Oh, Roland.

MARTIN: Because that's the body of her work.

TOOBIN: Well, no, you can't -- she's just got to talk about the future, not the past.

MARTIN: No, no, no.

TOOBIN: Really, she doesn't have enough in her past to talk about the past. She's got to talk about what she stands for.

MARTIN: But wait -- but, Jeffrey, if you don't know what she has in her past, how do you know that?

TOOBIN: I know what her career is. She's been mostly a homemaker. I mean, that's just a fact. She's raised funds for the American Ballet. She did some work for the New York City school system. She's written a couple of excellent books, but this is not a very full record.

MARTIN: Well, I wish she's not a politician, but again, you could be involved in public policy and not necessarily run for office, Jeff.

BROWN: Quickly --

TOOBIN: That's true.

BROWN: All right. Guys, we got to end it there. We are out of time. Much more on this at a later time.

To Steve, Roland and Jeff, thanks very much.

Of course, every U.S. president was once a young man, but look at these pictures of the young Barack Obama. Do you think Thomas Jefferson wore leather and a straw hat? More extraordinary photos of the president-elect in tonight's "Bull's-Eye."

(COMMERCIAL BREAK)

BROWN: Tonight's "Bull's-Eye" goes to a woman who is giving us an extraordinary new look at our new president. Check out these pictures.

This is Barack Obama in 1980. He was a freshman at Occidental College in L.A. when a fellow student, Lisa Jack, asked him to pose for a portfolio she was putting together. Jack says he was very charismatic even then, and in her words, really cute.

Not long ago on a dare from a friend, Jack dug the film out of her basement. Now these shots and more are in the new issue of "Time" magazine. Check them out.

Obama may be "Time's" person of the year, as you can see right there. But Lisa Jack wins our "Bull's-Eye" tonight for sharing those photos. Very, very impressive.

Time for your e-mail. A lot of you disagreed with tonight's "Cutting Through the Bull" commentary about Barack Obama avoiding questions about the Blagojevich scandal.

Julie of Arizona writes, "I certainly support a free press but to suggest that the president-elect is impeding such journalism is not fair."

Brenda in Mississippi agrees. She writes, "You need to give president-elect Obama a chance to give his side."

But Brenda has more to write. "You are correct. He doesn't get to choose the easy questions but should belly up and 'cut through the bull' and demonstrate what they have preached all along about change." Because of the breaking news, we couldn't get to the story we promised you earlier about the western department store closing. We'll do that tomorrow.

"LARRY KING LIVE" starts right now.