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CAMPBELL BROWN: NO BIAS, NO BULL

President Obama Meets With Republicans to Push Stimulus Plan; Interview With Illinois Governor Rod Blagojevich

Aired January 27, 2009 - 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: Hey there, everybody.

President Obama's first major test could be just hours away now.

Bullet point number one tonight: The president fights to get Republican support for his $825 billion stimulus package. And he didn't wait around the Oval Office looking to find common ground. He took a very unusual step today of going to Congress to meet with Republican leaders.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We had a wonderful exchange of ideas. And I continue to be optimistic about our ability to get this recovery package done.

(END VIDEO CLIP)

BROWN: So, he is optimistic, but also reportedly telling Republicans -- quote -- "Feel free to whack me over the head," because he won't be compromising on everything.

Bullet point number two tonight: President Obama's message to the Middle East. In his first sit-down interview since being sworn in, he vows the U.S. will start looking for peace in the region by listening, not dictating, to Israelis and Palestinians on many fronts, a vastly different message from what we have heard from President Bush. You are going to hear key parts of that interview tonight.

And bullet point number three, one-on-one with Governor Rod Blagojevich. On the same day that we first hear tapes that could cost him his job, Blagojevich sits down with me for a NO BIAS, NO BULL interview. I asked him if he didn't put the president's old Senate seat up for sale, then why aren't more people rushing to his defense?

(BEGIN VIDEO CLIP)

GOV. ROD BLAGOJEVICH (D), ILLINOIS: I'm not comparing myself to Dr. King, but he had a saying. "In the end, we remember not the words of our enemies, but the silence of our friends."

And when you're in a situation like this, there is not a lot of people in politics who want to kind of get close to the heat. They'd like to stay away from it and that's what part of this is.

(END VIDEO CLIP) BROWN: The charges, the politics and, yes, the poetry all coming up.

First, though, "Cutting Through The Bull" tonight, a message for Detroit.

Hey, Detroit, wake up. One of President Obama's campaign pledges, of course, was to tackle climate change. And yesterday he took his first step. He reversed the Bush administration and asked the EPA to begin assessing if states could regulate automobile emissions.

After the president's announcement yesterday, automakers in Detroit had this knee-jerk reaction. They said, if standards as high as what California would require actually become the law of the land, then that would -- quote -- "basically kill the industry."

Are you kidding? Kill the industry? You guys have already done that to yourself. Most of Detroit is now operating on taxpayer life support. For years, U.S. automakers have been kicking and screaming, spending gobs of money, fighting against higher emission standards because they felt it would hurt their profitability, force them to cut jobs.

Well, news flash, you are already whacking jobs right and left. You have been begging the government and taxpayers to save you. So, don't you get it? You don't have a choice anymore. Get with the program now. It is truly your only hope.

And now the very latest on President Obama and his economic stimulus plan. One week after he was sworn in at the Capitol, the president returned today to try to sell his recovery plan to skeptical Republicans. He met with them, and then made it clear that this $825 billion bill is only the beginning.

(BEGIN VIDEO CLIP)

OBAMA: The recovery package that we've proposed and is moving its way through Congress is just one leg in a multi-legged stool. We're still going to have to have much better financial regulation. We've got to get credit flowing again. We're going to have to deal with the troubled assets that many banks are still carrying and that make the -- that have locked up the credit system. We're going to have to coordinate with other countries because we now have a global problem.

I am absolutely confident that we can deal with these issues, but the key right now is to make sure that we keep politics to a minimum. There are some legitimate philosophical differences with parts of my plan that the Republicans have and I respect that. In some cases they may just not be as familiar with what's in the package as I would like.

I don't expect 100 percent agreement from my Republican colleagues, but I do hope that we can all put politics aside and do the American people's business right now. (END VIDEO CLIP)

BROWN: So, bipartisan spirit aside, there was some political drama we didn't see.

So, we want to get the inside story now from senior White House correspondent Ed Henry.

And, Ed, you know, both sides were glowing in front of the cameras today. But take us behind closed doors. What really happened in that meeting between President Obama and congressional Republicans?

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: You are right, Campbell. It was pretty much a lovefest when they came to the cameras, a lot of warm and fuzzy talk, it's time to come together, a lot of Republicans congratulating President Obama for changing the tone and being serious about reaching out to Republicans.

But some Republican sources in the room tell me that at one point it did get pretty contentious when they got on the issue of who should benefit from tax cuts. And basically there were Republican lawmakers saying, look, if you are part of the working poor and you are not paying income taxes, you should not get a tax cut.

we're told President Obama shot back, look, these people are still paying payroll taxes, however, and so you can keep whacking me over the head about this, but I am not going to compromise on that point, pretty much the same thing he said last Friday here at the White House with Democratic and Republican leaders when you will remember he said, "I won," basically in reference to the election. He said, I'm not giving in on this tax cut point.

That is a large reason why a lot of Republicans are still staying away from this bill. And so while they all came out to the cameras afterwards congratulating each other, saying we're making progress, there really seemed to be very little progress in that room -- Campbell.

BROWN: Well, was there any at all, I guess, apart from being sort of an exercise in civility? The vote is tomorrow. And he does want it to pass with significant support. Were there any converts at all?

HENRY: It doesn't really seem like there were any. And White House spokesman Robert Gibbs after the meeting basically hedged on whether they would even get a dozen House Republicans on board tomorrow.

So, what it seems clear is that also tonight, Rahm Emanuel, the White House chief of staff, had about a dozen House Republicans here. There's no sign that he converted any of those people either. And so what I think is going happen tomorrow, very clear, from talking to Democratic and Republican officials who are inside the huddle, they are basically saying, Democrats will muscle this through the House tomorrow on largely Democratic votes, maybe a handful of Republican ones. And the best the White House can hope for is that as this process moves forward in the days ahead and this bill goes through the Senate, where it will get some changes, they hope to get more Republicans in the Senate, so they can call it bipartisan.

So, in the end, Barack Obama may get this bill in a couple weeks, but it's unlikely to be quite as bipartisan as he hoped. He wanted this first bill out of the chute to be overwhelmingly bipartisan. Maybe they will get there down the road. They're not there tonight -- Campbell.

BROWN: Ed Henry for us tonight from the White House -- Ed, thanks.

HENRY: Thank you.

BROWN: And, tonight, everybody, we're going to start a series, a NO BIAS, NO BULL look at the president's economic plan. And our goal is pretty simple here, breaking it down into real terms. What would it actually mean for you, your family, your job, your neighbors? And is it enough to actually get the economy moving again?

Chief business correspondent Ali Velshi is here to look at one of the most important parts of the package, and that is those tax cuts.

And, Ali, the Obama administration says this is the part of the plan that is aimed at helping working families. What can you tell us?

ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: All right. It is complicated.

And President Obama just said he hopes everybody has read the bill in Congress. There is a lot of information in here. Let's start with tax cuts. The centerpiece of this is the $500 per worker or $1,000 per family that Americans will get. That left-wing come right on to your paycheck.

It's not really a tax cut in the traditional sense, because it is not ongoing. It's not reduction in a percentage. Everybody under a certain income level -- and we don't know what that is yet -- is going to get it. But the Obama administration says 95 percent of working Americans will get that tax cut.

Then there is the child tax credit, an extension of that. The parents of 16 million more children will get a benefit under proposed child tax credit. Food stamps, 30 million people will get enhanced food stamps. This is not something that is ultimately going to stimulate the economy. If you are on food stamps, you are buying the minimum anyway. This is just to help people, the increasing number of people who are out of work and need extra money.

Social Security, there's an immediate $450 to people, a supplement to Social Security for some of the aged, some people on disabilities and things like that. So again that will be aid to older people or people suffering with disabilities in this program. And an extension of unemployment, the Emergency Unemployment Act extended until December 2009, an extension to your ability to buy COBRA, which is your health care benefits after you have been unemployed, although COBRA does tend to be very, very expensive. Many people who are laid off aren't able to do it.

The total of these tax cuts turn out to be about $275 billion. It's a big portion of the $825 billion plan, again, a great deal of disagreement about whether or not this will actually work.

BROWN: Well, and go back to a point you made earlier, food stamps, unemployment benefits not likely to stimulate the economy, because these are the people who are in the most dire straits spending the bare minimum.

(CROSSTALK)

VELSHI: That's right.

BROWN: So the stimulus part comes from the big spending package that we're going to talk about.

VELSHI: Right, and maybe the $500 or $1,000 you get per family.

But you are absolutely right. There are some of these things that are more about recovery than stimulus. The administration likes to call it a recovery bill. If you are giving food stamps and you're giving unemployment benefits, that's not stimulus. That is simply helping people out who are in a lot of trouble.

And as we report here almost every night, that is an increasing number of people.

BROWN: Absolutely. Ali. And we're going to be walking through the spending part of the bill as we know more about it.

(CROSSTALK)

VELSHI: We will break it down. We will talk about the health care parts of it. We want everybody to understand what it is and then you can decide whether you are in favor of it or not.

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

Coming up, Illinois Governor Rod Blagojevich has been the target of prosecutors, an impeachment trial and lots of comedians. Listen.

(BEGIN VIDEO CLIP)

BLAGOJEVICH: I hate all of this. This is a life-changing thing. I am about the be thrown out office for accusations that are false and not true.

(END VIDEO CLIP)

BROWN: So, he is here for our NO BIAS, NO BULL interview. Stick around for that.

Also, President Obama has his first TV interview aimed at the Arab world. He repudiated many of the words of President Bush. What did he say? And what is the reaction? That's coming up.

(COMMERCIAL BREAK)

BROWN: President Obama on his last-minute visit to Capitol Hill today just hours before the House is expected to vote on his stimulus package.

On some level, you wonder if he has got that old Rodney King line in mind. "Can't we all just get along?" Sure, the president and Republican leaders were all smiles for the cameras. But as the economic picture darkens, with more than 11,000 new job cuts announced today, we are hearing increasing tensions behind the scenes in Washington.

The president tried to downplay the discord this afternoon. Take a listen.

(BEGIN VIDEO CLIP)

OBAMA: I recognize that we're not going to get 100 percent of support. But I think everybody there felt good about that I was willing to explain how we put the package together, how we were thinking about it and that we would continue to welcome some good ideas.

(END VIDEO CLIP)

BROWN: So, after just one week in the White House, President Obama already facing the first major test of his clout. Can he forge the consensus he needs to push his plan forward in Congress?

We are going to ask our political team now, CNN senior political correspondent Candy Crowley joining us, Mark McKinnon, former media adviser to President George W. Bush, also an adviser to Senator John McCain, and "New York Daily News" columnist Errol Louis here with me in New York as well.

Mark, let me start with you.

President Obama says very clearly he wants to work with Republicans. This morning, though, before he even sat down with the president, House Republican Leader John Boehner was calling around to his colleagues telling them to vote no on the stimulus plan. What kind of signal does that send?

MARK MCKINNON, FORMER MEDIA ADVISER TO PRESIDENT GEORGE W. BUSH: Well, first of all, let me say, Campbell, that I think President Obama's moves today were terrific politics and I think he said all the right things and seemed to really extend a genuine hand of cooperation and really said a lot of the right things to those Republicans.

The problem for Republicans on this bill and on this vote at this time is, a lot of them are looking for cover for their earlier vote on the -- quote -- "bailout bill." They need some political cover for that. So, that's a lot of what is happening here.

Now, I think the bill is going to pass. It will go to the Senate. It will get amended. And I think it will come back to the House. And, ultimately, I think we will see more House members come over. I think we will see a considerable number of Senate -- senators come over. And ultimately it will pass.

But now there are starting to be problems on the left. And so ultimately we may get to the point where we have a bill that everybody is unhappy with, which usually means it's going to be a pretty good bill in the end.

(LAUGHTER)

BROWN: A fair point, Mark.

But you also just mentioned there -- Candy, let me get your reaction to this. Mark called it brilliant politics the way he is reaching out to Republicans. Do you see a real attempt by the president to negotiate policy differences, or a more calculated public relations campaign to convey how post-partisan he is, or maybe a little bit of both?

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: It's absolutely a little bit of both.

But it was a lot of show and a little built of go. He apparently did say, I am willing to look at some other tax cuts.

The problem that is going on here is that bipartisanship is now being defined as everybody gets together and votes for the same thing. It is not going to happen. Republicans have said all along, we don't think government spending its way out of this is the we to go with the economy.

They held their noses with the first stimulus package that they gave to George Bush, that first $350 billion. So, there is a huge philosophical difference, which Barack Obama himself, the president himself, said, I understand that there are philosophical differences.

Now, the question is, how many Republicans can he pull on board? And, believe me, they would like to be on board with this, because they understand that if they're not on board, the American people aren't going to look at Barack Obama and say, oh, why didn't the president get the Republicans on board? They're going to look at the Republicans and say, why didn't they agree with him?

But there are some fundamental principles here that some of those Republicans see that they don't see being carried out in that package.

CROWLEY: And you also heard, Errol, House Republicans, a lot of them, saying, hey, we're willing to work with the president and make some compromises here, but Democrats in Congress aren't doing the same, aren't willing to give, and they're stuffing pork into this package and everything else.

You know how much of this is incumbent upon President Obama to get Democrats on board as well?

ERROL LOUIS, CNN CONTRIBUTOR: Well, he will need to make a courtesy visit very much as he went around and met with Republicans for a couple hours today. He needs to do some of this with the same of his -- with the people in his same party.

But, you know, in trying to get everybody on board, I think one of the things when you actually look through the package, I think almost every politician is going to find something in there that is going to be good for their district. And that in the end is going to be what sells this thing. It's not going to be about ideology. It's not going to be about tax cuts vs. government spending. It's not going to be about increasing the federal debt.

The reality is when tens of thousand of people are getting thrown out of work on a daily basis, every single member of Congress is going to be called upon to act. And I think that is going to be the real trump card. We're waiting for the president to pull it out. But sooner or later he is going to do that.

BROWN: And, Mark, you worked obviously closely with George W. Bush. You have known him for a long time. And when he was governor down in Texas, he had a reputation of being post-partisan, if you want to use that word. But it became quite the opposite when he got to Washington as president.

What can Obama learn from him on that front?

MCKINNON: Well, he can learn that it is a lot easier to talk about than it is to do it. And Washington can be a pretty poisonous well to draw water from.

But the president actually had a pretty good run in the first year or so. On the No Child Left Behind, he had 43 Democratic senators that came over in that first year on that vote, had 13, I think, on his tax cut vote. So, there is a period of goodwill and especially given the times that we have, that President Obama really has an opportunity to spend his capital and pull over those votes now. It is going to get harder the longer he is there and the further he gets down the legislative calendar. So, the time to pull the trigger is now.

BROWN: All right. We have got to end it.

Guys, Candy, Mark, and Errol, many thanks. Appreciate the time.

When we come back, Rod Blagojevich on tape. Today, lawmakers in Illinois heard some of what prosecutors say they caught the Illinois governor saying. We are going to play some of what they heard and explain why they aren't hearing everything.

And later, we will tell you how Sarah Palin is taking a page out of Hillary Clinton's playbook and what it may mean for her future. (COMMERCIAL BREAK)

BROWN: As disgraced Illinois Governor Rod Blagojevich spent another day basking in the media glow here in New York, back home in Illinois, his words were coming back to haunt him.

Prosecutors in his impeachment trial finally played some of the secretly recorded tapes today courtesy of the FBI.

I sat down with Governor Blagojevich today for a NO BIAS, NO BULL interview. And we're going to share that with you in just a minute.

First, though, Jessica Yellin is here to tell us what came out of today at his impeachment trial and what didn't.

So, what did happen today?

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Well, first of all, prosecutors did play snippets of four taped conversations that Blagojevich had, but it was not that juicy stuff we are so familiar with from that original complaint.

Now, not to disappoint you, they did have a show-and-tell with posters of some of the more memorable comments Blagojevich allegedly made. So, the question is, why didn't they play the most shocking conversations?

Well, the prosecutor's office won't release those tapes because they don't want to taint their jury pool. So, we're going to have to wait for an actual trial to hear those.

BROWN: So, what was on -- I am a little disappointed.

YELLIN: Disappointed, I know. We all were.

(LAUGHTER)

BROWN: But we have seen the transcripts. So, what was on the tapes that they actually did play?

YELLIN: OK. It wasn't a smoking gun, no foolproof evidence that he definitely broke the law.

But what you hear on these tapes is the impression you get from the governor that he was no stranger to trading influence for cash. Now, in the call you are about to hear, Blagojevich is talking to a lobbyist who represents a racetrack owner.

Prosecutors say the governor wanted to get campaign contributions, and in exchange for signing a bill, he would help the track. Well, in this conversation, the governor is allegedly trying to arrange a meeting with the track owners to get cash.

(BEGIN AUDIO CLIP)

LON MONK, LOBBYIST: So, what are the chances based on that conversation with you yesterday that this gets done next week?

BLAGOJEVICH: You know, they're good.

MONK: OK.

He's -- I'm telling you, he's going to be good for it. I got in his face.

BLAGOJEVICH: OK. Well, I feel -- I feel like that somebody else is holding him back.

MONK: No.

BLAGOJEVICH: Will he quit?

MONK: No. No.

BLAGOJEVICH: Well, what took, you know, a whole year? You know what I mean?

Hey, Lon?

MONK: No, I don't think he's been talking to Chris.

(END AUDIO CLIP)

YELLIN: All right. So, there is no proof in any of that that he did anything wrong. It just doesn't sound great.

BROWN: And was that a big yawn?

YELLIN: It's endlessly entertaining.

(LAUGHTER)

BROWN: Yes, and much, much more to come.

Jessica Yellin for us tonight -- Jessica, thanks.

While lawmakers in Illinois were listening to Rod Blagojevich on tape, I got to listen to the man himself. I wish I could say it was an exclusive interview, but it wasn't, not by a long shot. The governor has done about 17 television interviews in the past 48 hours.

So, I started by asking him how exactly his media tour is doing the people of Illinois any good at all.

(BEGIN VIDEOTAPE)

BLAGOJEVICH: What I'm trying to do to the best of my ability is to highlight to the people of Illinois, because there are a lot of us in Illinois who watch your program, and the people across America that there's a process going on in Illinois, an impeachment process, an effort to remove me from office.

I'm a twice-elected governor by the people. But they're doing it with a process that doesn't allow me to bring witnesses in, doesn't allow me to be able to contest evidence, and doesn't require them to prove up criminal allegations by bringing witnesses and evidence in. And it's just so fundamentally...

BROWN: But how exactly are you explaining that to the people of Illinois when you go on a show like "The View" and you let the ladies run their fingers through your hair?

BLAGOJEVICH: Well, I didn't expect she would do that. She did that on her own.

BROWN: Right.

BLAGOJEVICH: How do you stop that when she does it?

But, again, the people of Illinois love your programs, and you can reach a lot more people in Illinois. But I want to talk to people across America, because there's a fundamental issue at stake. And that is, can a governor, whether it's in Illinois or in New York or in Louisiana, can a governor be removed by a legislature without giving that governor a chance to prove with witnesses and evidence that he did nothing wrong?

I want to call Rahm Emanuel, the president's chief of staff. They won't let me do it. I want to have every taped conversation of the wiretapped phone involved heard in that process. I am in many ways the anti-Richard Nixon, who worked very hard during Watergate to keep those tapes from being heard. I want every one of them heard, so that the full story could come out.

And I'd like to do it sooner, rather than later, so I can begin the process of clearing my name, because I did not engage in criminal wrongdoing.

BROWN: But why -- you could -- clearing your name is one thing. And there is a legal process. It's not like they're violating your legal rights. Do you believe they are?

I mean, they're following the Constitution as it's laid out in Illinois in terms of how they're going about this.

BLAGOJEVICH: Well, I would contend that they are not.

The Constitution is fundamental that everyone has a right to contest false accusations and to confront accusers. And they're simply denying me that right. But it's bigger than me. And that's why I'm talking to a national audience.

This is about the office of governor. And, if they're successful, which I suspect they will be with these rules, in removing me from office, then it's going to be difficult for my successors and any other government in future impeachments to be in a position where they can properly defend themselves.

BROWN: But it doesn't seem like, watching you, frankly, that it is about the office of the governor. It seems like you're making it very much about you.

You hold these press conferences. You trot these people out, these constituents you use as props. You're reciting poetry. It seems like you're very much enjoying the drama of all of this.

BLAGOJEVICH: No, I hate all of this.

This is a life-changing thing. I am about the be thrown out office for -- on accusations that are false and not true. It's completely affected my family, my two little girls. There's nothing about this that I like.

But there's principles involved. And that is, I did nothing wrong and I'd like an opportunity to prove it in a process that allows me to bring evidence, witnesses and sworn testimony, which this impeachment process would do.

Let me point out...

BROWN: But here -- you've got to make a distinction, because the impeachment process is one thing. And whether you like it or not, the Illinois state legislature can impeach you if they choose to.

(CROSSTALK)

BLAGOJEVICH: That's correct.

BROWN: But if you want to clear your name, don't you have the right to do that in a court of law? I mean, why are you merging the two?

I mean, step down as governor, resign, and then go clear your name in a court of law. But it feels like you're sort of forcing the people of Illinois to go through this, when it's not necessary.

BLAGOJEVICH: No, it's just the other way around. If I did something wrong, and I admitted it, I would have resigned, because I would have a responsibility to do it. But I didn't do anything wrong. And if they feel...

BROWN: But that's about you. That's not...

BLAGOJEVICH: No.

BROWN: Yes it is.

BLAGOJEVICH: No, because anybody then can take a governor, and they can make accusations, and then a legislature can choose, because they don't like the political dynamic, whatever the case may be, can choose to remove a governor elected by the people without a proper, fair process.

(END VIDEOTAPE)

BROWN: So, when we return, we're going to have more from Rod Blagojevich, who claims to have the most interesting role models, to say the very least.

(BEGIN VIDEO CLIP)

BROWN: You've compared yourself to Martin Luther King and to Gandhi. Help me.

BLAGOJEVICH: Sure. I would love to help you.

BROWN: I mean, it is absurd to make those comparisons, isn't it?

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BROWN: The allegations against Rod Blagojevich couldn't be more serious: trying to sell Barack Obama's Senate seat to the highest bidder; using his office to seek favors, extort money, and punish his political enemies? Rough stuff.

But to hear the governor tell it he has been the one that has been done wrong. Check out part two of our "NO BULL" interview.

(BEGIN VIDEOTAPE)

BROWN: You clearly see yourself as a victim here, as a martyr, and you've compared yourself to Martin Luther King and to Gandhi? Help me. I mean...

GOV. ROD BLAGOJEVICH (D), ILLINOIS: Yes. Sure, I'd love to help you.

BROWN: It is absurd...

BLAGOJEVICH: Yes.

BROWN: ... to make those comparisons, isn't it?

BLAGOJEVICH: The way you describe it is but see, this is what you do in the media and that's what's happening to me in this rush to judgment. Whatever happened to the presumption of innocence in America? I said I did nothing wrong. So give me a chance to show it.

BROWN: But that applies...

BLAGOJEVICH: Whatever happens -- OK. Yes.

BROWN: Presumption of innocence applies to a court of law. It doesn't apply to whether or not you can be impeached. Those are two separate things.

BLAGOJEVICH: Oh, but not necessarily. In any kind of hearing, whether it's a court room, an administrative hearing or schoolyard justice, if some kid says another kid did something but he's got other kids that say he didn't do it, there ought to be some fundamental fairness to allow him to be able to say that. You say ...

BROWN: This is simply not true. I -- I mean I hate to differ with you on this but...

BLAGOJEVICH: Yes.

BROWN: ... but presumption of innocence doesn't apply in all cases. For example, if you do something embarrassing.

BLAGOJEVICH: Yes.

BROWN: Like, I can get fired for that.

BLAGOJEVICH: Yes.

BROWN: And CNN is not going to say, presumption of innocent and treat it as ...

BLAGOJEVICH: Yes. CNN hired you. But the legislators didn't hire me, the people did. They are removing a governor chosen by the people...

BROWN: But the state legislature represents the people.

BLAGOJEVICH: The state -- well, the governor was elected by the people. If they want to fire me ...

BROWN: And so were all these people. They weren't appointed.

BLAGOJEVICH: They were elected in small districts and they come together and they're doing what they're doing ...

BROWN: And they're doing what they're doing because they represent the people.

BLAGOJEVICH: And there are -- they are taking away the choice all the people made by electing their governor without giving that governor a chance to show that what they're basing it on is simply not true.

You have to understand something. The are -- they are impeaching me on several counts but the principal one is they're alleging criminal activity which they are not proving up. Yes.

BROWN: Explain to me how you feel compelled to compare yourself in any way to Gandhi.

BLAGOJEVICH: Again, it's twisting it. It's not the case.

BROWN: OK. Well, I'm giving you an opportunity to explain.

BLAGOJEVICH: I was asked a question. I was asked the question. How did you feel when they came to your house and arrested you at 6:00 in the morning in fully -- in an unimaginable, unexpected way and they asked me what my thoughts were. I was asked a question what my thoughts were as I was leaving.

And I said I thought about my little girls, I thought about my wife who was -- I was leaving behind, and then I tried to find some inspiration from historical figures who had had similar experience because that gives you inspiration, and I thought of Mandela and Gandhi ...

BROWN: And those are similar experiences to what you're going through? What Mandela and Gandhi went through?

BLAGOJEVICH: They knew what it was like to be in custody and I was trying to put some -- historical perspective. Under no circumstances did I say I was Gandhi-like or Dr. King-like or Mandela- like. I was asked a simple question, gave a simple, honest answer about what my thoughts were at the time that I was being taken away from my home.

BROWN: You've said that you were one of the first people to endorse president, now president Barack Obama. You know him. He knows you. Why don't you think he is willing to give you the benefit of the doubt as so many of these other people aren't either, apparently?

BLAGOJEVICH: Well, I was the first governor to endorse him and when he was a state senator and I was a brand new governor he made recommendations to people who I put in different agencies and I think I signed every one of his bills, I'm glad that I did.

But I understand his position. You guys in the media have this tendency to do a big frenzy and sensationalization of things. These are serious charges that are leveled against me. I don't mean to dismiss them. He's doing the right thing to not have to get involved in something like this. He's got bigger challenges ahead and I respect the position that he's taking. It's not his...

BROWN: But you want to call -- you want many key members of his staff and many of his supporters to testify on your behalf.

BLAGOJEVICH: Because they're relevant to this story, because they were part of this story, because they were part of discussions on who President Obama's successor would be the United States Senate, because they can tell the truth and the truth will show that what I was trying to do was do the right thing for the people of Illinois.

BROWN: What would you say to Barack Obama right now?

BLAGOJEVICH: I would say good luck with your economic stimulus package and how can I help?

(END VIDEOTAPE)

BROWN: And I'm sure President Obama would so appreciate the help. So now that you have heard all of that, we want to bring in senior legal analyst, Jeff Toobin, who has been following this bizarre case from day one.

Did he win you over?

JEFFREY TOOBIN, CNN SENIOR LEGAL & POLITICAL ANALYST: You know, in two weeks, Rod Blagojevich is just going to be another guy out on bail. He is -- this impeachment trial is over. He got one vote in the House. He's not going to do a heck of a lot better in the Senate.

He just -- he threw in the towel. He's not presenting a defense. The irony here is, there is potentially a defense to be -- to be presented. And I think that's what his lawyer, a very distinguished lawyer, (INAUDIBLE), offered to do it. But he didn't to do it. He'd rather, you know, give interviews.

BROWN: Well, so, let me give him the benefit of the doubt as much as it pains me, frankly.

TOOBIN: Right.

BROWN: But his point, because he said he made this point a number of times while I was talking to him that he has the right to call Obama's aides, Valerie Jarrett, Rahm Emanuel, to testify on his behalf. Does he legally have a right to do that? Could that be a part of a -- of a trial when it actually comes to that?

TOOBIN: Well, certainly in a criminal case he would definitely have the right to call them as defense witnesses. I don't think there's any doubt about that. They'll almost certainly be prosecution witnesses, at least some of them.

What's unusual about Illinois' impeachment process is that there are no rules. The law specifies almost nothing about how the trial is supposed to take place. And Illinois, the legislature is saying, we are going to conduct this trial in a way that doesn't interfere with the criminal case. That we present evidence in a very summary way. And Blagojevich is saying that's unfair.

Instead of working within that system and trying to defend himself, he's giving interviews to you and Joy Behar. I mean he's just sort of throwing in the towel. I don't know what he thinks it's going to get him. But it's not something that legally will -- amount to much.

BROWN: And then we didn't play this portion of the interview, but he did talk about the tapes, you know, because I asked him. How do you explain away what you said on those tapes which was you were clearly -- there was some kind of quid pro quo according to the transcripts that were released? And he's basically saying, in a broader context, that's all going to make sense. Is there -- do you see any way for that?

TOOBIN: Well, this is the -- see, this what makes his media offensive so ridiculous is that, you know, this case is about something substantive. It's about did you say I will only give $7 million to the children's hospital in return for $50,000 in campaign contributions?

That's a fact. He doesn't want to talk about that. He'd much rather talk about Rahm Emanuel and Valerie Jarrett. But those are the facts that are presented in the complaint. He's chosen not to address them specifically. So I don't see where he gets the benefit of just dismissing them all without responding to the actual allegations against him. BROWN: Well, he certainly won't get the benefit in the criminal trial at least anyway.

TOOBIN: Well, you know he's -- that's all that's left for him because his political career is -- can be measured in days now.

BROWN: Jeff Toobin for us tonight.

TOOBIN: OK.

BROWN: Jeff, thanks.

We have posted, we should mention, too, extended excerpts from the complete interview or most of the interview with Governor Blagojevich on our Web site, CNN.com/Campbell. You can watch the governor's impeachment trial. It resumes tomorrow morning, check it out at CNN.com/Live.

And it is hard to find a silver lining on the financial pages these days. But we have, coming up, one former corporate titan who gave away more than $200 million last year. You will recognize this name.

And then later President Obama's eye-opening conversation about his family's Muslim roots and a whole lot more. It was aimed at a Muslim audience. Can one conversation change eight years of hatred against the Bush administration?

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

LIAM ENDE, 2ND GRADE, ROGERS MAGNET SCHOOL: Dear President Obama, hello, my name is Liam Ende and I am in 2nd grade. I am very glad you were elected to be our president because your principle is (INAUDIBLE). What is your hope for our country and what are you going to do about the war in Iraq? I hope you end the war because I want peace. Good luck with your new job. Sincerely, Liam Ende.

(END VIDEO CLIP)

BROWN: Simple but important question there from Liam who goes to the international school at Rogers Magnet in Stanford, Connecticut. Kids all over the country sharing their thoughts with the new president. To send us your letter, look for the iReport link on our Web site, CNN.com/Campbell.

He is wrapped in scandal, well, now Bernie Madoff may have some other unwrapping to do. Confused? We're going to explain. That's on the way. But first, Joe Johns has some briefing tonight. Joe?

JOE JOHNS, CNN CORRESPONDENT: Campbell, we begin with a family of seven in Los Angeles shot to death in their home. Police are calling it a murder-suicide. All seven of the dead are seen here in a photo posted on Facebook. Investigators believe the husband killed his wife and five young children before turning the gun on himself. In a fax sent to a TV station, the gunman wrote that he and his wife had just lost their jobs.

Is shoddy electrical work killing U.S. troops in Iraq? Two senators want Defense Secretary Robert Gates to step up the investigation into the electrocution of 18 soldiers. One of those deaths was just reclassified as negligent homicide. In an e-mail obtained by CNN one investigator says there's credible information that contractor KBR did not use qualified electricians and plumbers. KBR disputes that.

He runs the biggest city in the nation and New York mayor Michael Bloomberg can claim another number one ranking. He donated more money to charity than any other living American in 2008. $235 million according to "The New York Times." The billionaire mayor's causes include fighting cancer and promoting the arts, education and health care.

And an update on last night's bouncing baby news. Six boys and two girls, born to a California woman are said to be doing very well. Doctors were expecting seven babies, the eighth was a surprise. They're the only the second set of living octuplets born in this country. The mother whose name has not been released should be able to visit her newborns tonight or tomorrow.

BROWN: All right.

JOHNS: Pretty good news.

BROOKS: It is good news. Joe, thank you very much.

President Obama's first television interview getting reaction in the Muslim world. Here is Arwa Damon in Baghdad.

ARWA DAMON, CNN CORRESPONDENT: Many of the Iraqis who we spoke to did , in fact, closely followed President Obama's interview on Al- Arabiya. By and large saying that even though they felt optimistic about what he was saying, his thoughts and ideas about the Middle East, they still remain skeptical.

Remember, Iraqis are very used to politicians who are all words but no actions. And they want to wait to see if President Obama will, in fact, bring change to the Middle East and especially to Iraq.

BROWN: So what else do they want to hear? We're going to have that and more from President Obama's interview coming up.

(COMMERCIAL BREAK)

BROWN: Reaction pouring in from around the world tonight in response to President Obama's extraordinary interview with the Middle East based Al-Arabiya network. In his very first sit-down as commander-in-chief the president spoke directly to the Muslim world and made it very clear that American foreign policy is about to change in a big way.

This as the president's new Middle East envoy, George Mitchell, prepares for talks tomorrow in Egypt and Israel. The president tells Al-Arabiya's U.S. affairs editor, Hisham Melhem, that sending Mitchell is an important step. Listen.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I think the most important thing is for the United States to get engaged right away. And George Mitchell is somebody of enormous stature. He is one of the few people who have international experience brokering peace deals.

And so what I have told him is start by listening, because all too often the United States starts by dictating in the past on some of these issues. And we don't always know all the factors that are involved. So let's listen.

I have Muslim members of my family. I have lived in Muslim countries.

HISHAM MELHEM, U.S. AFFAIRS EDITOR, AL-ARABIYA: In the largest one.

OBAMA: In the largest one, Indonesia. My job is to communicate to the American people that the Muslim world is filled with extraordinary people who simply want to live their lives and see their children live better lives. My job to the Muslim world is to communicate that the Americans are not your enemy.

(END VIDEO CLIP)

BROWN: And I want to bring back senior political correspondent Candy Crowley and also senior political analyst Jeff Toobin to talk about this.

And Candy, you know, he never ran away from this in the campaign. But we certainly didn't hear candidate Obama sell himself as growing up in a Muslim country and having Muslim relatives. But now that he's President Obama, a different story, at least in this interview, huh?

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Well, you know, you're right. It's not something he emphasized neither is it something that he denied or ran away with. He had in -- in the campaign he had a larger problem with his relationship as many saw it here with Israel.

As you recall, at some point, Hillary Clinton after the race was over went before Jewish leaders and basically vouched for Barack Obama's interest in Israel and his fidelity to what has always been U.S. policy toward Israel. Now, however, obviously, he is president. And that he would pick this particular venue, an Arabic satellite network, to do his first outreach is hugely significant.

And certainly at this point just talk as he himself noted. But he is clearly trying to send a signal in the same way he did domestically with those executive orders and signing those executive orders. The message here is new direction, new guy in charge, will be different.

BROOKS: And Jeff, let's also listen to what he had to say specifically about al Qaeda in this interview and then I'll get your reaction.

(BEGIN VIDEO CLIP)

OBAMA: Their ideas are bankrupt. There is no actions that they've taken that say a child in the Muslim world is getting a better education because of them or has better health care because of them.

In my inauguration speech I spoke about, you will be judged on what you built not what you destroy. And what they have been doing is destroying things.

(END VIDEO CLIP)

BROOKS: He's asking the Muslim world to re-evaluate al Qaeda. And it's such a different argument, I guess, than we heard the Bush administration make for so long.

TOOBIN: The - one of the great struggles of American foreign policy has been to mobilize the middle of the Muslim world, the middle-class, the people who currently hate the United States, who are dedicated to Israel's overthrow. To get that group to recognize that America is not the enemy and Israel is here to stay and we need to work together for a better world.

That group is not going be changed by one interview. But it's a start. And it's clearly an attempt to change, as you say, the focus of who we are talking to and what our perspective is towards them.

BROOKS: And Candy, I mean you can't really overstate how -- the overall tone here. Very quickly, what a big change it is from what they've been hearing from the Bush administration?

CROWLEY: Well, I mean, absolutely. And it's his time to reset and Barack Obama as a president can do this much more easily than George Bush ever could because Barack Obama did not vote for, though he was not in the Senate, was always against the war in Iraq which has been a major implosion point for much of the Arab world. So this is -- if you're going to change course this is the president that is most likely to be able to do it.

TOOBIN: You half expected him to say, remember it's Barack Hussein Obama, that's the name. That didn't come up a lot in the campaign at least from him but...

BROOKS: No.

(CROSSTALK)

BROWN: Change of -- a very, very different tone there. All right, Candy Crowley tonight, and Jeff Toobin, as well, thanks guys, appreciate it.

When we come back, Sarah Palin has a new PAC a political action committee. I wonder what political action she may be thinking about. We'll talk about that.

(COMMERCIAL BREAK)

LARRY KING, CNN ANCHOR: Good evening. I'm Larry king. We've got a big show. We'll begin with President Jimmy Carter, and he'll tell us if President Obama is getting off to a good start. And President Carter will fill us in on his own plans for the Middle East. And then Mickey Rourke making his come back. Nominated for an Oscar, a candid conversation. All next and Campbell Brown returns right after the break.

(COMMERCIAL BREAK)

BROOKS: In the political daily briefing guess who's Sarah Palin's new role model? The answer is a former presidential candidate and not the one you may think. Tom Foreman's got that and a whole lot more in the PDB tonight.

Tom, let's start with Hillary Clinton's replacement. In the Senate she's on the job now right?

TOM FOREMAN, CNN ANCHOR: Yes, she is, Campbell. Democrat Kirsten Gillibrand took the oath this morning administered by Vice President Joe Biden, congressman from upstate New York appointed by the governor last week shortly after Caroline Kennedy pulled out.

Gillibrand has come under fire from fellow Democrats for her pro- gun stance. But she's in now, at 42 years old, the youngest U.S. senator. Campbell?

BROWN: And new indication today, too, as we just mentioned before, that Sarah Palin may be getting ready for a presidential run?

FOREMAN: Yes, could be, Campbell. The former VP candidate has set up a PAC, or political action committee, complete with a new Web site just launched SarahPAC.com. This will allow her to raise money and pay for running all over the country making speeches.

According to the site, "SarahPAC will support local and national candidates who share Governor Palin's ideas and goals for our country." But if you ask me, SarahPAC looks a lot like HillPAC, the site that Hillary Clinton launched when she geared up for her presidential run.

BROWN: Sure does. And now under the heading of "Fun Facts" about the inauguration, you may not have heard because we've only got a few more days, we didn't really (INAUDIBLE) a way with doing this. And this one is about Aretha Franklin's hat.

FOREMAN: The hat. Comedians had a field day with it immediately after the inauguration. Take a look at Ellen DeGeneres.

(BEGIN VIDEO CLIP)

ELLEN DEGENERES, HOST, THE ELLEN DEGENERES SHOW: One of my favorite things about the inauguration was the fashion. And oh, you know, I was going to go, and then we sent Tony. And it's a good thing I didn't go because I was going to wear this.

(CHEERS AND LAUGHTER)

(END VIDEO CLIP)

FOREMAN: But apparently, the Detroit man who made that hat is laughing, too, all the way to the bank. He told CNN a short time ago that since last Tuesday he'd received more than 3,000 orders and they're still coming in. He says Aretha's hat took two days to make. But with the uptick in orders if you want to be crowned like the queen of soul, Campbell, you can expect your hat in four to six weeks.

BROWN: Who knew? And finally tonight. I know you've got an update on a PDB story we told you about last night, Tom?

FOREMAN: Yes, the inaugural parade drum major suspended for his wink and wave to the president has now quit the band. The Cleveland Fire Fighters Memorial Pipes and Drums just released a statement saying John Coleman has officially unofficially resigned. They also said because of the amount of negative responses they have been receiving, they have now removed all contact information from their Web site, unplugged their phones and taken down their MySpace page.

Coleman continues to insist he shouldn't have been suspended for violating parade protocol because he never saluted the president. All my parade protocol comes from the movie "Stripes," Campbell, so I would be no help on that.

(LAUGHTER)

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

When we come back, trust fund brats take revenge on Ponzi schemer -- alleged Ponzi schemer, Bernie Madoff, in a creative way. They get our "Bull's Eye."

(COMMERCIAL BREAK)

BROWN: So check it out. See the toilet paper hanging from the trees outside this Pal Beach, Florida pad? Well, guess whose mansion it is? That's right, disgraced financier Bernie Madoff. Teenage boys called the Palm Beach post and said they lost their trust funds in his scam and they took credit for it.

That's it for us. Larry King right now.

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