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D.C. Suburb Air Rescue; California Broke in Two Months; Home Price Drop Worst Since Depression; Obama Keeps Bush War Planners; Security Fear: Shirtless Obama Pic

Aired December 23, 2008 - 17:00   ET

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


SUZANNE MALVEAUX, CNN CORRESPONDENT: You're in THE SITUATION ROOM.
Happening now, a water main break in Maryland flooding out a street and endangering drivers. We have just received the dramatic 9/11 tapes.

It is already worse in California, which could run out of money in two months. Breaking news as Governor Arnold Schwarzenegger goes public to warn his state's infrastructure is at risk.

And a picture of a shirtless Barack Obama is raising fears about security. I'll ask CNN contributor Paul Begala if the paparazzi are getting too close.

Wolf Blitzer if off today.

I'm Suzanne Malveaux.

And you're in THE SITUATION ROOM.

ANNOUNCER: This is CNN breaking news.

MALVEAUX: Just in to CNN, a frantic 911 call from a woman trapped in her car as a suburban Maryland road instantly turns into a raging river. That is just ahead.

But first, a look at the desperate struggle as rescuers worked urgently to save motorists from the deadly current.

Our CNN's Brian Todd is on the scene Cabin John, Maryland -- Brian, really an extraordinary event.

What can you tell us about it?

BRIAN TODD, CNN CORRESPONDENT: Well, Suzanne, the water from that broken main is still cascading down River Road behind me. It is a sharp contrast, though, to the dramatic rescue operation that we saw earlier today.

(BEGIN VIDEOTAPE)

TODD (voice-over): This video tells it all -- water slams a rescuer's boat as he tries to pull a woman from her car with virtually no time to spare. Moments later, time runs out on him -- the boat is engulfed and Park Police have to save the rescuer.

UNIDENTIFIED MALE: A current like that can kill instantly.

TODD: A current triggered when a five-and-a-half foot wide water main burst open during the morning commute. A wall of water rushed down the steep incline, trapping several people in their cars. Helicopter rescues were very dangerous. As a woman climbs out of her car and grabs for a basket, the wind slams white capped water all around her.

Victims describe a harrowing sequence that came in an instant.

SHARON SCHOEM, RESCUED FROM CAR: All of a sudden, I just saw a bunch of muddy water and rocks and parts of trees and -- coming toward me. And I tried to turn around. But as I turned around, I was unable to turn around because the force of the water -- the water was just too high.

TODD: Another woman scribbles a note for rescuers to contact a family member. Officials say some victims were treated for hypothermia, but all were rescued.

(on camera): We're right at the edge of River Road, where the water main break really was at its worst earlier today -- about four to five feet deep behind me when it was at its worst point. You can see the water is still gushing down the road.

These are two of the cars that were stranded. People had to be airlifted out of these cars.

We're going to go down the hill this way. And you can see four other cars that were stranded. One of them still has the windshield wipers going.

And we're told by rescuers that the depth of the water hit about four or five feet at its worst point this morning, but the depth was not the problem. It's the speed with which the water is going downhill.

(voice-over): Veteran rescuers said they'd never encountered anything like this.

LT. FRANK DOYLE, MONTGOMERY COUNTY FIRE & RESCUE SERVICE: We train for river rescues every day and we train for flood rescues on the road. But you never expect to find something like we found today, with the mound of water coming down the road with multiple cars stuck.

(END VIDEOTAPE)

TODD: All of those cars have since been extracted from the scene. It took the responders hours to get to the main valve that burst today because it was under water -- under all that flowing water that was rushing downhill. We're told they eventually did shut it off. We're also told that many of the people around here should have had their water service restored by now -- Suzanne.

MALVEAUX: Brian, thanks so much.

We're going to get back to you in a little bit.

But first, the Montgomery County Fire & Rescue Service has just released the 911 calls, really, from this extraordinary event.

I want you to listen to this one. This is from a woman who was trapped in her car by this deadly current.

(BEGIN AUDIO CLIP)

UNIDENTIFIED FEMALE: The water...

UNIDENTIFIED FEMALE: No. Listen to me. You're going to have to calm down because you...

UNIDENTIFIED FEMALE: Fire and ambulance.

UNIDENTIFIED FEMALE: Yes. I've got one woman stuck in the high water on river.

UNIDENTIFIED FEMALE: Ma'am...

UNIDENTIFIED FEMALE: Yes, everybody is here. I can't (INAUDIBLE)...

UNIDENTIFIED FEMALE: OK, ma'am.

UNIDENTIFIED FEMALE: (INAUDIBLE).

UNIDENTIFIED FEMALE: Ma'am?

UNIDENTIFIED FEMALE: Yes?

Yes?

UNIDENTIFIED FEMALE: OK.

Are you in one of the vehicles?

UNIDENTIFIED FEMALE: Yes, in one of the vehicles.

UNIDENTIFIED FEMALE: OK. Listen, we have help on the way to you, OK?

UNIDENTIFIED FEMALE: OK.

UNIDENTIFIED FEMALE: Is your vehicle stuck right now?

UNIDENTIFIED FEMALE: Yes, everybody is stuck. And my vehicle is -- is going all the way down. It's getting full with water.

UNIDENTIFIED FEMALE: OK. The water is in your vehicle now, ma'am?

UNIDENTIFIED FEMALE: Yes. UNIDENTIFIED FEMALE: OK. How many people are in your...

UNIDENTIFIED FEMALE: It's getting (INAUDIBLE)...

UNIDENTIFIED FEMALE: How many people are in your car?

UNIDENTIFIED FEMALE: Just me.

UNIDENTIFIED FEMALE: Just you. OK

UNIDENTIFIED FEMALE: Yes.

UNIDENTIFIED FEMALE: And you can't get out of your vehicle?

UNIDENTIFIED FEMALE: No, I can't. The water is too rough.

It's going to drop me all down.

UNIDENTIFIED FEMALE: OK. How high is the water in your car, ma'am?

UNIDENTIFIED FEMALE: It's coming...

UNIDENTIFIED FEMALE: Where is the water to now?

UNIDENTIFIED FEMALE: It's getting all over my car. Please help me.

UNIDENTIFIED FEMALE: OK, ma'am...

(CROSSTALK)

UNIDENTIFIED FEMALE: Ma'am, listen to me.

OK, we have help on the way.

I need you to try to stay calm, OK?

Where is the water in your vehicle?

How high up is it in your car?

UNIDENTIFIED FEMALE: All the way. It's getting all the way.

UNIDENTIFIED FEMALE: OK. I understand you're saying all the way.

Can you give me a reference?

Is it up to your knees?

Is it up to your waist?

UNIDENTIFIED FEMALE: No just all the -- I can't say. I just need you to come, please.

UNIDENTIFIED FEMALE: OK. OK, ma'am we -- we are coming to you now, OK?

What kind of car are you in?

What color is your car?

UNIDENTIFIED FEMALE: A Honda Accord.

UNIDENTIFIED FEMALE: A Honda Accord.

What color is it?

UNIDENTIFIED FEMALE: Black.

UNIDENTIFIED FEMALE: Oh, black?

UNIDENTIFIED FEMALE: Yes.

UNIDENTIFIED FEMALE: OK. OK.

Ma'am?

UNIDENTIFIED FEMALE: Yes?

UNIDENTIFIED FEMALE: OK. Like I said, we are on our way, OK?

I need you to stay calm for us, OK?

UNIDENTIFIED FEMALE: OK.

UNIDENTIFIED FEMALE: OK.

Is the water still...

(END AUDIO CLIP)

MALVEAUX: We want to emphasize that all of the people got out safely. It really is quite a miracle when you think about what had happened. And these guys are responsible for that -- for the dramatic and dangerous rescue efforts.

Joining me now, Lieutenant Bill Phelps and Tony Bell of Montgomery County, Maryland Fire & Rescue Service.

And I want to start off with you, Lieutenant.

Obviously, we heard that woman. She was -- she was terrified and didn't know what to do.

What kind of state were those people in when you approached them from your truck?

LT. BILL PHELPS, MONTGOMERY COUNTY FIRE & RESCUE SERVICE: Well, they -- they were pretty -- they

Were pretty excited. It didn't take them long to calm down once we -- once we got on the scene. It didn't take them long to start to calm down. We'd give them pretty specific instructions on what we wanted, how we wanted them to act. And they followed our instructions and we were able to remove them from the cars pretty safely.

MALVEAUX: They were wet, they were freezing and obviously they were very scared.

What did you say to them?

PHELPS: I told them that, first of all, they had to calm down. They had to do exactly what I asked them to do. They couldn't try to run and they couldn't grab a hold of me. They had to be very careful. We had to walk through slowly to get them to the fire truck.

The water was at such a fast pace coming down the hill that if they'd have lost their footing or I'd have lost my footing, we could have all been swept away.

MALVEAUX: Tony, you were part of this rescue effort, as well. You were pulling these people out of the cars onto your -- onto your truck.

What was the worst case scenario that you imagined during that time?

TONY BELL, MONTGOMERY COUNTY FIRE & RESCUE SERVICE: Well, at that particular time, our worse case scenario is that the cars would start to roll down the hill. The water was moving pretty swiftly at that time and we didn't want the cars to start moving. That was our biggest concern at that time.

So we wanted to move quickly, safely and swiftly to get the victims back into the fire engine so we could get out of there.

MALVEAUX: Tony, was there a moment -- we're looking at these pictures now and really kind of extraordinary, when we all kind of went through this together, watching that rescue effort.

Was there a moment when you feared that it wasn't going to work -- that you weren't going to succeed in actually getting them out of those cars onto the -- onto those lifts and into safety?

BELL: No, I did not. We are a river rescue team in general. That's what we do. We train for that. We do most of the Potomac River rescue training. And we train for that on a continuous basis.

So we did not have a fear that what we was doing wouldn't work. We just needed to be cautious and safe at what we were doing.

MALVEAUX: Well, Tony Bell and Lieutenant Bill Phelps, I want to thank you both. It was kind of an extraordinary effort on both your parts, as well as the others who participated. And, obviously, everybody, miraculously, got out safe and secure from that.

Thanks again for joining us in THE SITUATION ROOM.

Dramatic moments today came when U.S. Park Police helped to rescue one of the rescuers using a helicopter to lift him to safety. The Park Police trains the local rescue unit to work with these helicopters. And the Park Police itself is involved in some 100 swift water rescues each year.

Now, the service sent a helicopter to assist in the wake of Hurricane Katrina. And it helped rescue passengers after an airliner crashed into the Potomac River in 1982.

Well, a picture of Barack Obama on the beach is drawing some attention.

(BEGIN VIDEO CLIP)

HARVEY LEVIN, TMZ.COM: He's a sexy president. And I think that's the game here. People love looking at attractive people when they're famous.

(END VIDEO CLIP)

MALVEAUX: But are the photographers getting too close to the president-elect?

He's accused of masterminding one of the greatest rip-offs in history, but how made Bernard Madoff tick?

And why is Condoleezza Rice spending her final days in office battling pirates?

(COMMERCIAL BREAK)

MALVEAUX: Breaking news on the economy from California, as Governor Arnold Schwarzenegger plans -- actually, warns the public that the state's infrastructure is at risk. His state could go broke in two months.

Let's go straight to CNN's Dan Simon.

The governor just held a news conference.

What is the update -- Dan?

DAN SIMON, CNN CORRESPONDENT: Well, hi, Suzanne.

Still no resolution to this incredible problem here in California -- a problem growing by the day. It is believed that the deficit here in the State of California will balloon to about $42 billion within 18 months. It's believed that if the legislature and the governor don't get an agreement in place soon, that the State of California -- the eighth largest economy in the world -- will run out of money, as you said, in about two months.

This is what the governor had to say just a short time ago during a news conference which was broadcast on his Web site.

Take a look.

(BEGIN VIDEO CLIP, COURTESY GOV.CA.GOV)

GOV. ARNOLD SCHWARZENEGGER (R), CALIFORNIA: The $40 million a day that we are wasting by not having a budget and there's a billion dollars a month. So I don't have to tell you of how many kids we can ensure or how many vulnerable citizens that we can provide for with a billion dollars a month.

So I urge the legislators to work as hard as we can and to come up and have a budget solution as quickly as possible.

(END VIDEO CLIP)

SIMON: For the past couple of weeks, the governor has been working with lawmakers trying to get an agreement in place. And I think he would be the first to admit that he's having a difficult time negotiating with his fellow Republicans.

Instead, he's having more success, actually, with the Democrats. The governor addressed that, as well.

Take a look at that.

(BEGIN VIDEO CLIP, COURTESY GOV.CA.GOV)

SCHWARZENEGGER: I prefer to have my Republican friends at the table and I prefer to get a two-thirds vote on revenue increases. But we do need revenue increases. And it's sad for me to say that they're not at the table.

I cannot force them to the table. So, therefore, in order to save California, I am forced to go and just negotiate with the Democrats at this point and then also resolve this issue just with the Democrats.

So this is an issue that I was -- a situation that I'm forced in.

(END VIDEO CLIP)

SIMON: So bottom line, here is the situation. The state is spending more money than what's coming in because of the salary and economy. And if there is no agreement put in place soon -- and most people agree that it will probably result in tax increases and deep spending cuts here in California -- if that agreement is not put in place soon, then the State of California will be broke in about 70 days. That according to the state controller.

And if that agreement is not put in place, it's believed that there will be a major consequence to that California residents, that there could be a cutback in certain services. We're still trying to get an understanding of what those services will be, Suzanne.

But, of course, a very dire situation here in California.

MALVEAUX: OK, Dan Simon.

Thank you so much, Dan. Another stunning blow for Americans who may feel like the economy is already on the ropes. The latest figures show a stomach turning plunge in home prices last month. The National Association of Realtors says it's the worst on record and most likely the worst since the Great Depression.

It doesn't end there, though.

Here's CNN's White House correspondent Elaine Quijano -- Elaine?

ELAINE QUIJANO, CNN CORRESPONDENT: Suzanne, in just four weeks, President Bush will turn over the reins of the U.S. economy to his successor, Barack Obama -- an economy that continues to show signs of faltering.

(BEGIN VIDEOTAPE)

QUIJANO (voice-over): It's the biggest drop in home prices since the National Association of Realtors started recording the data. In November, the median existing home sale price dropped more than 13 percent from one year ago. And the actual number of existing houses sold was down almost 9 percent -- all of it against the backdrop of continued foreclosures.

TONY FRATTO, WHITE HOUSE DEPUTY PRESS SECRETARY: Trying to make that system work is very difficult and complicated. We have our own ideas. I'm sure that the next administration will have ideas.

QUIJANO: For now, Bush administration officials say they're tackling the problem as best they can.

FRATTO: What you what find as you work through all these foreclosure mitigation programs is that they have strengths and weaknesses. And not one of them is perfect. If there was a perfect program out there, I think we would have -- I think we would have implemented it already.

QUIJANO: The housing and credit crisis continues to hit the broader economy. The Commerce Department reported the U.S. economy shrank in July, August and September by half a percent. And the White House braced Americans for even worse news about October, November and December.

FRATTO: The fourth -- fourth quarter, we know, because of the credit crisis -- the standstill in credit as markets froze up and the financial market turmoil -- will be significantly weaker.

(END VIDEOTAPE)

QUIJANO: So with those figures yet to come in, the economic picture may get worse before it gets better. And with only 28 days left in the Bush presidency, the worst news of the recession will likely confront the Obama administration in its first days in office -- Suzanne.

MALVEAUX: Thanks, Elaine. Barack Obama will be sworn in just a few weeks from now. But hundreds of Bush administration loyalists may continue to run the Pentagon -- at least for now.

Our CNN Pentagon correspondent, Barbara Starr, is joining us -- and, Barbara, this is surprising for some people. But others, there's been a lot of talk about this.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: There's been some talk, Suzanne. But you're right. It's really an odd thing.

You know, Barack Obama ran against the Bush administration's war record. And it's now the Bush administration that's going to help him run the Pentagon -- at least in the first few weeks.

(BEGIN VIDEOTAPE)

STARR (voice-over): As Defense Secretary Robert Gates gets ready to stay on as Barack Obama's defense chief, he needs some temp help. With two wars underway, Gates is taking an extraordinary step -- asking most of the 250 political appointees at the Pentagon -- all Bush loyalists -- to stay on the job until the Obama administration can gets its own people into place. It could mean temporarily keeping the current civilian heads of the Army, Air Force and Navy, as well as top intelligence and weapons buying officials, on the job until they can be confirmed by the Senate.

MICHAEL O'HANLON, BROOKINGS INSTITUTION: We are a nation at war. And many elements of our policies, especially in Iraq and Afghanistan, do need to continue without interruption or even the perception of interruption.

STARR: In an e-mail to top staff, Gates: "I have received authorization from the president-elect's transition team to extend a number of Department of Defense political appointees" -- an invitation to voluntarily remain.

It's more than just the wars in Iraq and Afghanistan. Shaping the Pentagon's expected $524 billion budget for next year is a huge job. Gates is signaling the old guard will only be around for a short time to deal with that.

ROBERT GATES, SECRETARY OF DEFENSE: You will have a significant number of new civilian leaders in this building. They're clearly is going to be very close scrutiny of the budget.

STARR: There is pressure to Bush-era military spending dear to the hearts of defense contractors. Topping the list, the Air Force F- 22 fighter and a new generation of Army tanks and combat vehicles. That price tag -- $200 billion.

O'HANLON: Let's also remember that as of January 20th, Mr. Gates will be President Obama's secretary of Defense. And so we can talk all we want to about his political roots. But he will be working for new commander-in-chief.

(END VIDEOTAPE)

STARR: Now, despite this spirit and talk of bipartisanship, Suzanne, the political reality is Barack Obama has to get his own people into the Pentagon very quickly if he hopes to exert real control over the massive military bureaucracy -- Suzanne.

MALVEAUX: A reality check.

Thanks to Barbara Starr.

A vacationing Barack Obama caught in a candid moment -- the paparazzi got close enough to snap shirtless photos.

(BEGIN VIDEO CLIP)

FRANK GRIFFIN, BAUER GRIFFIN: There's a hell of a lot of sour grapes flying around because the press corps that flew out with him didn't -- you know, they were all eating there and sipping on their Mai Tais or Pina Coladas.

(END VIDEO CLIP)

MALVEAUX: But some are wondering if line is too close when it comes to the president-elect.

And the man accused of pulling off one of the greatest frauds in history described as shy -- a look at Madoff the man.

Stay with us.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

MALVEAUX: Zain Verjee is monitoring the stories that are coming into THE SITUATION ROOM right now -- Zain, what are you working on?

ZAIN VERJEE, CNN CORRESPONDENT: Suzanne, American Express Company says it has preliminary approval for a nearly $4 billion government bailout. The money will come from the Treasury Department's $700 billion Troubled Asset Relief Program. About a month ago, American Express asked to become a bank holding company. That means it would then have access to federal funding and rescue programs.

The work of some of Santa's helpers in Tempe, Arizona could get them coal in their stockings. Take a look at this video. It's on YouTube and it shows four Santa impersonators covering red lights and speed enforcement cameras with Christmas wrapping and a red sheet. At the end of this video there's a message -- "Death to the surveillance state. Free movement for all people."

And it's another sign of improving relations between two rivals -- a pair of giant pandas arrived in Taiwan today. And look at them. They were a gift from China. This comes a week after transportation ties were expanded across the 100-mile Taiwan Strait. Beijing has employed so-called panda diplomacy for about 50 years. They send animals like this to signal good diplomatic relations with another country. These two pandas are called Tuan Tuan and Yuan Yuan, which, Suzanne, apparently means reunion in Mandarin, but you have to say them together.

MALVEAUX: Now, I don't know if I can say them again twice or three times. Maybe once, that's it.

VERJEE: Yes.

MALVEAUX: Tuan Tuan, Yuan Yuan. OK.

VERJEE: Yes, that's not bad. That's not bad. Yes.

MALVEAUX: Thanks, Zain.

Barack Obama shirtless on the beach -- but are the paparazzi getting too close?

I'll ask CNN contributors Paul Begala and Alex Castellanos.

Four shootings on Texas highways just minutes apart -- a gunman going after innocent people. We'll tell you what the surveillance video may show. And has "Joe the Plumber" been treated fairly?

Has he treated John McCain fairly?

That controversial campaign symbol is speaking out to CNN.

(BEGIN VIDEO CLIP)

JOHN ROBERTS, CNN ANCHOR: Hey, I'm not out there stumping for anybody. I'm a journalist.

(LAUGHTER)

ROBERTS: No, seriously.

JOE WURZELBACHER, "JOE THE PLUMBER": Oh, I'll leave that one alone.

ROBERTS: No.

WURZELBACHER: Well, no, I -- you know, I was out there during all -- I told everybody...

ROBERTS: Excuse me, Joe.

WURZELBACHER: ...Obama's...

ROBERTS: I mean, why would...

WURZELBACHER: You go ahead.

ROBERTS: Why would you cast aspersions on my journalistic integrity when I don't even know you?

WURZELBACHER: Oh, I wasn't...

(END VIDEO CLIP)

(COMMERCIAL BREAK)

MALVEAUX: You're in THE SITUATION ROOM.

Happening now, the pictures that have everyone talking -- the president-elect captured without his shirt and now questions about security that allowed the paparazzi to get so close.

The man accused of pulling off a $50 billion scheme -- he was already rich, but acquaintances say that Bernard Madoff -- well, he had something to prove.

And unsuspecting drivers target by a gunman -- four separate shootings minutes apart. The hunt for a rush hour killer is on.

Wolf Blitzer is off today.

I'm Suzanne Malveaux.

And you're in THE SITUATION ROOM.

Barack Obama captured in an uninhibited moment. We saw it during the campaign -- body surfing while on vacation. But now that he's the president-elect, a new picture is raising some questions -- how did paparazzi get close enough to snap pictures of Obama at the beach?

CNN's Ted Rowlands is looking into those security concerns -- Ted, what have you learned?

TED ROWLANDS, CNN CORRESPONDENT: Well, Suzanne, obviously, this photo raises a lot of eyebrows on a lot of different fronts. According to the guy that owns this photo, the photographer that took it was on a public beach and he did absolutely nothing wrong.

(BEGIN VIDEOTAPE)

ROWLANDS (voice-over): According to the agency that owns the shirtless Obama photograph, the photographer who took the shot was simply in the right place at the right time and wasn't a threat to the president-elect.

GRIFFIN: They had snipers posted and people with binoculars.

ROWLANDS: Frank Griffin of the Bauer Griffin Agency says his photographer had his equipment Taiwan Strait by the Secret Service and was restricted to a certain area of beach before the president-elect walked into view about 100 yards away.

GRIFFIN: The security drew a line in the sand and said you can stand behind that line. You go in front of it, you're in trouble. That's how it happened, as simple as that.

ROWLANDS: Images of presidents on vacation are nothing new. Many remember seeing Ronald Reagan on his horse in California. Whether it's golfing or fishing, the demand to see the commander in chief at play has always been high. But with President-Elect Barack Obama, it's at a whole new level according to TMZ creator Harvey Levin.

LEVIN: He's a sexy president. I think that's the game here. People love looking at attractive people when they are famous. He's this young, energetic guy who is not a conventional politician. You know, breaking the color barrier is a big deal. This really beautiful family. It makes a difference.

ROWLANDS: For the Obama family, it means vacations will never be the same. Yesterday on the golf course, President-Elect Obama told the press corps he'd buy them some beer if he would just leave them alone for a while.

UNIDENTIFIED MALE: He was getting a little frustrated we were taking so many pictures of him on the golf course.

ROWLANDS: Obama isn't the only politician or head of state to be popular with the paparazzi. French president Sarkozy is a fixture in the European tabloids as are the British royals who have endured decades of interrupted vacations, something the Obamas will have to get used to.

(END VIDEOTAPE)

ROWLANDS: Suzanne, apparently this photographer's mother lives very close by in Hawaii, so he had a little bit of inside information, probably gave him a leg up. No word on how much this guy made on this photo which has been broadcast internationally all over the place today.

MALVEAUX: Obviously a lot of attention those photos. Thank you so much, Ted.

As Ted mentioned, capturing U.S. presidents in care-free moments is really nothing new. One of the most famous, John F. Kennedy shown in swim trunks swarmed by adoring women. The 1962 photo raised questions whether the media and country had crossed the line. Photographers caught the Clintons dancing on the beach in St. Thomas in the '90s. At the time, the White House called the pictures an invasion of privacy. And of course there were some beach pictures of President Nixon, in this case though he was fully clothed, including some socks and shoes.

Joining me now a pair of CNN political contributors; Democratic strategist Paul Begala and Republican strategist, Alex Castellanos. I guess nobody objected to Nixon, he was fully clothed.

PAUL BEGALA, DEMOCRATIC STRATEGIST: Alex dared me to do the interview with you bare-chested.

MALVEAUX: What do you make of this, there is a sense the photographer, the paparazzi crossed the line in this case? I'll start with you, Alex. ALEX CASTELLANOS, REPUBLICAN STRATEGIST: We all want to get to know our leaders in a more intimate way. The forbidden fruit is knowledge. The more we know about our leaders, the closer we get, the more empowered I think we feel. That's why celebrities are so important in our culture. But celebrity is not leadership. In Hollywood they have movie stars and they have actors. Actors last a long time and they get work. Movie stars fade after 15 minutes. The danger of course in celebrity alone is you have to back it up with substance. I think Obama has done a very good job so far of doing just that.

MALVEAUX: Paul, if you look at your president as for bidden fruit, how does that impact his presidency, his ability to do his job and to be taken seriously. Is there a risk there?

BEGALA: I don't worry about that. He can clearly do the job and he's a very serious man. For me, I was working for President Clinton when they took that picture in the Virgin Islands, he and his wife. It was very private. They were trying to get away. I was livid. Now, ten years later I look at it and say, as long as it's not the kids. I do think they need to back off of the kids. You know Malia and Sasha are young girls. They are going through an interesting time of change and we really want, I think, that to work out for them. He's more fair game unfortunately. He seems to take it in pretty good stride and humor. I don't think he's overly concerned with that kind of stuff.

MALVEAUX: He's an electrifying figure. He does have celebrity status as we've seen. How does he use that to his advantage as president? How does he turn all that attention and magnetism that surrounds this figure and become an effective communicator reaching out to the American people?

CASTELLANOS: It's such a great gift. Reagan had it, John F. Kennedy had it. It's become very valuable to a country when it's uncertain about its future. How does he use it? Look at the way he's using it now. There was interesting research done that said the president's job is to be half late night talk show host, half Moses. He gathers the country together, share the common stories of the country, then say here is where we're going to go. How does he use this stature, celebrity, you inspire? You don't stop campaigning because just the campaign is over. You still communicate regularly with the country. It's not about policy. Say, hey, here is the future. We're going to go over here. Follow me. He's doing that, and I think that's an important part of leadership in this uncertain world.

MALVEAUX: I want to turn the corner to obviously the person, the character that we had heard so much about during the campaign Joe the plumber who really became kind of a symbol for the working class guy. There was an exchange he had with our own John Roberts on AMERICAN MORNING. I want to you take a listen to this.

(BEGIN VIDEO CLIP)

WURZELBACHER: The media is saying I'm throwing them -- let's correct that let them make the decision when they read the book. So far I've heard that and it's been written about since the interview with Glenn Beck. That's what I've heard from the media, not the general populace of America. They can read the book and decide if I have thrown them under the bus. I stated facts, as well as other politicians. I'm not singling John McCain out. He's the one I got to meet and work with for six hours. He's a good example I can use.

ROBERTS: If you disagreed with his policies, why were you out there on the campaign trail supporting him?

WURZELBACHER: Do you agree with your candidate's policies?

ROBERTS: I'm not out there stumping for anybody. I'm a journalist. No, seriously.

WURZELBACHER: I'll leave that one alone. I was out there -- Obama's -- go ahead.

ROBERTS: Why would you cast aspersions on my journalistic integrity? I don't even know you.

WURZELBACHER: I wasn't -- you specifically in general with the media is slanted to the left. You personally, John, I don't know you. I don't mean to cast any kinds of bad things about you, brother. In general, you can say the left pretty much shot me up. Wouldn't you say?

ROBERTS: I guess when you entered the political fray you've got to expect some people are doing to take shots at you. When you get out there and enter the political arena, it's a tough place to be. It's like gladiator sport going into the coliseum.

(END VIDEO CLIP)

MALVEAUX: John Roberts with the guy who has been -- now he's known as Joe the plumber. Do you think he's been treated fairly by the media?

BEGALA: No, too nicely. His name is not Joe and he's not a plumber. He was whining about taxes, clearly doesn't even pay his own taxes.

CASTELLANOS: Come on.

BEGALA: This guy was the principle clown in the circus. He wasn't a gladiator in the arena, the notion he can criticizes John Roberts journalistic integrity is remarkable to me. It's astonishing. We've been too easy on him. He's not a symbol. Working man. He's cashing in on media excess by writing a book.

MALVEAUX: Alex, do you agree?

CASTELLANOS: It's Christmas and we should be more charitable. You have no license to commit punditry but you do, and so do I. We don't need them. Neither does Joe the plumber, by the way. When you work as a subcontractor you don't need it. It's the way it works. We're talking about ridiculous things like that instead of a middle class American that got up and said, what about us, the silent minority, who have forgotten to pay our taxes.

BEGALA: He didn't pay taxes.

CASTELLANOS: By the way, a lot of politicians by the way, Democrats and Republicans haven't now and then. So he owed a few bucks. Big deal. Bit way, his friends call him Joe. So what? He became a powerful symbol.

MALVEAUX: Alex, there is a risk, however, McCain used this figure as somebody, a symbol, a character to represent something. He became an icon. Has he been taken out of context? Is this really something that's gone beyond who this guy is and what he really meant to people?

CASTELLANOS: Obviously there's always a danger. In a campaign the first thing you do is vet somebody like this. You don't want the story to be his flaws and failings but the message. We love democracy until the voters get involved in it. We ought not get the impression that when regular Americans speak up in a political campaign they are going to be punished.

MALVEAUX: I'm going to have to leave it at that. We're running out of time. Thank you, Alex and Paul and Joe the plumber.

BEGALA: Let's hope my plumbing have a leak and I'll call Joe.

MALVEAUX: I've got to get back to the show here. Investors bilked out of billions of dollars. The questions so many people want answered is how could someone pull it off?

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Madoff made it feel as if it was an exclusive. That's how he sucked his people in.

(END VIDEO CLIP)

MALVEAUX: A closer look at the man accused in one of the biggest frauds in history.

Pirates have made off with millions this year alone. The century's old problem, modern day leaders are now grappling with.

Innocent drivers gunned down during their rush hour commute. What police think set off the gunman still ahead. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

MALVEAUX: Accused of pulling off one of the greatest frauds in history, Bernard Madoff faces allegations that he bilked investors out of $50 billion. What does it take to organize a scheme like that? Our CNN senior correspondent Allan Chernoff overlooks at Madoff the man. Allan, you interviewed him a number of times. What have you learned about this guy?

ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT: Well that's right Suzanne. I did interview Bernie Madoff several times almost a decade ago. He was polite, charming and reserved.

(BEGIN VIDEOTAPE)

CHERNOFF (voice-over): In the Wall Street world of big personalities, Bernard Madoff did not stand out. He was low-key, understated. His business card had no title. Friends say he was shy. But inside was the drive of a highly competitive person.

UNIDENTIFIED MALE: There's a need to prove to the world that I am somebody powerful. I am so intelligent, I am so respected by the rest of the world.

CHERNOFF: Madoff earned respect. In the 1970s and '80s, he built an innovative high-tech trading term correctly anticipating that the buying and selling of stocks would become computerized. The Madoff Firm traded for big retail brokers like Fidelity and Charles Schwab, stealing volume from New York stock exchange. He impressed trading expert Jim Angel.

PROF. JIM ANGEL, GEORGETOWN UNIVERSITY: Here is a man who knew this business very well and was very driven to succeed.

CHERNOFF: Madoff was successful. But matching buy and sell orders is not a glamour job on Wall Street, not like managing other people's money. He bolstered his reputation by becoming non-executive chairman of the NASDAQ stock market in 1990, '91, and '93. At that point, Madoff was earning tens of millions of dollars. He owned properties that dwarfed his 1970s home in New York.

UNIDENTIFIED MALE: Here is somebody who didn't need to start a scam to become a multimillionaire many times over. And yet apparently there must have been some flaw in his makeup that led him to get into this mess and dig himself in deeper and deeper.

CHERNOFF: Madoff graduated in 1960 from Long Island's Hofstra College before it became a university with a major in political science. One investor told the "Wall Street Journal" that Madoff confessed to him this year "I wish I had gone to Wharton or Stanford." Madoff lacked a pedigree. He was not an alumnus of a pedigreed school. But at the Palm Beach Country Club and other social circles, he created an aura of exclusivity by selectively choosing whose money he would manage, in effect creating a velvet rope like a chic nightclub.

UNIDENTIFIED MALE: Madoff made it feel as if it was an exclusive club and that's how he sucked them in, that's how he got them into it. It was a fantastic job of marketing.

CHERNOFF: Madoff reported steady annual returns, 10 to 18%, year in, year in-of- out, never seeming to lose. UNIDENTIFIED MALE: That determines whether you're a success or failure. They get their identity from how solid their returns are.

CHERNOFF: Bernie Madoff joined the board of the Yeshiva University then became chairman of its business school. His prominence kept investors from questioning his success, even those whose month account statements were pure fiction. Last month, Madoff reported to them cash was held in Fidelity Spartan U.S. treasury money market fund. Fidelity says it hasn't had a fund by that name for three years.

(END VIDEOTAPE)

CHERNOFF: Several people who know Madoff says the saga reminds them of a Greek tragedy, like Icharus, who tried to fly too close to the sun, he destroyed himself as a result of his never-ending quest for success and respect. Even Madoff's lawyer tells CNN this is a tragedy - Suzanne?

MALVEAUX: OK. Thank you so much.

Four roadway shootings miles and minutes apart. Unsuspecting drivers near Dallas last night were attacked by a gunman police say targeted innocent people. A surveillance video may help track him down. In all two drivers were killed, a third injured. CNN's Rusty Dornin tells us why one victim is called a hero - Rusty?

RUSTY DORNIN, CNN CORRESPONDENT: Suzanne, Dallas police are puzzled as to the motive in these shootings. Some witnesses say they saw one man in a pickup, but police say it's too early to say if more suspects might be involved.

(BEGIN VIDEOTAPE)

DORNIN (voice-over): Flashlights waving, Dallas police scoured the roadways searching for evidence that would lead them to whoever killed two men in four rush hour shootings. The driver of this eighteen-wheeler, William Miller, was killed as he was driving on the freeway. Police hailed him as a hero for pulling his rig over safely as he was mortally wounded.

SGT. GIL CERDA, DALLAS POLICE: He was gong to be traveling home. He was about to park his rig. He was going to get on a plane and fly to be with his wife and children for the Christmas season and come back to this location.

DORNIN: Miller's shootings was the third of four attacks. Shootings happened within three minutes of a three-mile stretch on and near LBJ freeway. The first man killed George Lopez seen here in a photo taken by friends. Witnesses say he was shot when a pickup pulled alongside him as he sat stopped at a light. His friends called him a straight up guy that never had problems with anyone.

UNIDENTIFIED MALE: This is devastating news. It's not something you want to hear every day at all. DORNIN: The two other incidents involved truck drivers. One escaped injury, the other hit by flying glass when the bullet shattered his windshield.

UNIDENTIFIED MALE: Proximity leads us to believe they could be related to one another. However we have no witnesses that saw anything on the road that reassembled a tan vehicle.

(END VIDEOTAPE)

DORNIN: Witnesses to the first shooting say the speck is a white man, balding in his 40s driving a tan F-140 pickup. The problem is no witnesses have come forward to report seeing any of the other three shootings. So police say no one reported an angry driver or evidence the shootings were road rage. At this point investigators are calling the shooting random. Suzanne.

MALVEAUX: Thank you, Rusty.

Piracy on the high seas, may seem like a danger from our time before but think again.

CONDOLEEZZA RICE, SECRETARY OF STATE: The pirates are a threat to commerce. They are a threat to security. And perhaps most importantly they are threats to the principle of freedom of navigation on the sea.

MALVEAUX: So it's an age old dilemma. But modern day leaders are now grappling wit. Plus conservative Pat Robertson gives President Bush mediocre grade. Wait until you hear his opinion, though, of Barack Obama. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

MALVEAUX: China is the latest nation to send warships to the pirate plagued waters off of the African coast. Beijing says that its ships with the Special Forces and helicopters will leave Friday to help protect Chinese vessels and crews. As the pirates prey on helpless merchant ships, the United States has been calling on the world community to fight back. Our CNN Zain Verjee joins us now.

Zain, there is an eerie echo of history in the battle. What is going on?

VERJEE: Well, there really is, Suzanne. Piracy has plagued presidents past and present and hijackings as well as the ransom demands off of the Somalia coast will also be a problem also for the future administration.

(BEGIN VIDEOTAPE)

VERJEE: Condoleezza Rice, Thomas Jefferson, two secretaries of state, two centuries apart, both spent their final days in office worrying about pirates.

RICE: It is kind of ironic, that Thomas Jefferson came in worried about pirates, and looks like I'm going to leave worried about pirates.

SEAN MCCORMACK, STATE DEPT. SPOKESMAN: Thomas Jefferson for a secretary of state came into office worrying about the Barbary pirates which led to the creation of the U.S. navy and here we are 200 plus years later once again dealing with pirates.

VERJEE: Secretary Rice is calling to the world to battle pirates operating off Somalia's coast. At the United Nations last week, Condoleezza Rice approved the council to push for force.

RICE: The pirates are a threat to commerce. They are a threat to security. And perhaps most importantly, they are a threat to principle of freedom of navigation on the sea.

VERJEE: Officials estimate the pirates have made about $30 million this year hijacking ships for ransom. U.S. navy and NATO and Russian ships among others are on patrol, and even China and Iran say they are sending support.

BRET STEPHENS, WALL STREET JOURNAL: We have so many laws to govern on how to deal with the pirates, and in so many ways they are confused that it is a classic of everybody's problem is nobody's problem.

VERJEE: Piracy on the high seas goes back 200 years when the United States battled pirates along northern Africa. Jefferson favored force, but he was overruled and the U.S. paid millions of dollars in ransom to rescue American sailors. When Jefferson later became president, he chose war to force the pirates to shore.

(END VIDEOTAPE)

VERJEE: Suzanne, it does matter to the U.S. what is going on with the pirates, because the area where they are operating is the key shipping route for cargo coming to and from the U.S., and things like oil shipments and other trade. Analysts say it is really in the U.S.'s economic interest that those sea lanes are stable - Suzanne?

MALVEAUX: How can the Obama administration deal with this so- called pirate problem?

VERJEE: Well, one thing they can do is crack down harder than the world is already cracking down now. But what some experts and analysts of the region have said is that the Obama administration shouldn't just look at Somalia as a place where terrorists roam free and it is a lawless place. I mean, it is what they say is that it that they need to refocus on rebuilding Somalia and the restructure of the state so that they cannot operate.

MALVEAUX: OK. Thank you Zain. Very interesting.

The Somali coast is not the world's only pirate hot spot, but it is certainly the most active with 42 ships attacked this year. But on this other side of Africa there have been 32 pirate attacks of Nigeria. Now pirates there have been commandeering ships long enough to seize hostages they hold on land. There is also a pirate problem in the waters off Indonesia where there have been 28 attacks this year.

Pat Robertson, you may think you know what he will say about President Bush, but, well, not so fast.

(BEGIN VIDEO CLIP)

PAT ROBERTSON, THE CHRISTIAN BROADCASTING NETWORK: I hate to be critical. I am a Republican, and this is, you know, the president of the party they at I'm a member of. But I think that we have had some serious goofs along the way.

(END VIDEO CLIP)

MALVEAUX: And the conservative has surprising opinions about Obama as well.

Plus the Obama's own report is out, and what it says about the president-elect's ties to the embattled Illinois governor. You are in THE SITUATION ROOM.

(COMMERCIAL BREAK)

MALVEAUX: I want to go to Zain Verjee about a mall shooting in Maryland.

Zain, what do you know?

VERJEE: Suzanne, CNN is learning that the shooting that happened in Wheaton, Maryland, our affiliate WJLA says at least one person has been shot. That person is seeking medical attention. We don't know how severe their condition is. It's unclear whether this happened inside or outside the mall. We understand, too, that the shooter in on the loose and an active search is going on - Suzanne.

MALVEAUX: Thank you so much. We'll get back to you as more information develops.

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