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American Morning
Where's the Pork in the Stimulus; Business Losses May Force U.S. Postal Service to Cut Back Its Work Week; Stimulus Plan Encouraging Economic Patriotism; Ford Loses $5.9 Billion in Fourth Quarter; Young Church Volunteer Comes Out With More Sex Allegations on Haggard
Aired January 29, 2009 - 07:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JOHN ROBERTS, CNN ANCHOR: It's a minute now to the top of the hour, and here are this morning's top stories. The digital television deadline is still on at least for now. A House vote kept it at February the 17th instead of pushing it to four months from now. The Senate voted on Monday to delay the transition to June the 12th fearing that an estimated 6.5 million households will not be ready for the shift away from those rabbit ears.
Sony's entire third quarter profit nearly wiped out. The electronic giants said that it expects to suffer its first full year loss in 14 years, because buyers can't get credit, retail chains are pulling, and it's facing new competition from companies like Samsung, Microsoft and Apple.
Day number ten of the Obama administration, and the House of Representatives has passed the new president's stimulus bill, that's $819 billion of your taxpayer money. The bill passed comfortably, even though every House Republican and 11 Democrats voted against it.
(BEGIN VIDEO CLIP)
REP. NANCY PELOSI (D), HOUSE SPEAKER: On this vote the yeas are 244, the nays 188. The bill is passed without objection and motion to reconsider is laid upon the table.
(END VIDEO CLIP)
ROBERTS: Breaking it down now the stimulus package provides for $1,000 a year in tax relief for most families and also dramatically increases money for alternative energy production. Three hundred billion dollars will go to the states to help struggling schools, provide health care to the poor, and rebuild roads and bridges.
President Obama did not get the bipartisan support that he wanted in the House, so last night the president lobbied key lawmakers from both parties at a cocktail party at the White House.
And with the stimulus passing along party lines, there is plenty of finger pointing over how much pork has been crammed into that bill. One of the biggest flash points, $335 million for STD education. So what's pork and what is it on Capitol Hill? It all depends on your perspective.
Jim Acosta joins us now live from Washington with a look. Good morning, Jim.
JIM ACOSTA, CNN CORRESPONDENT: Hey, John, sounds stimulating, doesn't it? One Republican congressman slammed the president's stimulus plan as a rampant spending spree and others said it's one giant earmark as in those pet projects that are slipped into bills in the dark of night but it's not just Republicans who are grumbling.
(BEGIN VIDEOTAPE)
ACOSTA (voice-over): If you listen to some Republicans and even some Democrats, the president's stimulus plan has a $1 trillion bridge to nowhere.
REP. JAMES COOPER (D), TENNESSEE: There are a lot of whole congressional bulls here who put all their wish list, their pet projects in this bill.
ACOSTA: But one politician's pet project is another lawmakers' worthy program.
UNIDENTIFIED MALE: There is not a single earmark in this bill.
ACOSTA: It all depends on your definition of the word "earmark." Members of Congress are squabbling over $335 million in funding for education on sexually transmitted diseases, and $650 million for digital TV coupons. A growing number of Republicans and Democrats say measures like those don't create jobs.
UNIDENTIFIED MALE: A stimulus bill should do just that.
ACOSTA: Counting a stimulus plan as pork free, President Obama is urging Americans to track the spending at a new government Web site, recovery.gov. But note what the site says, the plan can only be tracked after it's passed.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Most of the money that we're investing as part of this plan will get out the door immediately.
ACOSTA: Technically, the Congressional Budget Office estimates most of the money will be spent by September of 2010.
UNIDENTIFIED MALE: It all depends on your definition of immediate. You know, I mean, essentially is immediate what most people think, which is tomorrow? No.
ACOSTA: Government watchdogs say while much of the stimulus spending may not meet the criteria of an earmark or pet project, there are agencies like the Army Corps of Engineers that are seeing their budgets double with no mention of how the money should be spent.
UNIDENTIFIED MALE: Ask the people in New Orleans what they think about some of the Corps of Engineers Projects, particularly the people who live behind the levees.
ACOSTA: The White House acknowledged its plan is no silver bullet. ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: I don't think we're going to wake up on January 1st, 2011, you know, like Dorothy in "The Wizard of Oz" and we're going to go from black and white to color.
(END VIDEOTAPE)
ACOSTA: No, we're not in Kansas anymore. As for that spending on STD prevention, the Democratic rationale is that healthier Americans will be more productive and those millions for digital television coupons, the hope is that money will go to new call centers explaining how the technology works -- John.
ROBERTS: Well, they did take some of the more controversial provisions out of the bill such as the $200 million to renovate the National Mall.
ACOSTA: That's right.
ROBERTS: Money for family planning as well. When this bill gets to the Senate, is it expected that even more will come out?
ACOSTA: It's expected there will be changes. More could come out and more could go back in, and then it could go back to the House once again. This thing is not over yet. And as the president's press secretary said yesterday, they are open to new ideas, John.
ROBERTS: All right. Jim Acosta for us this morning from Washington. Jim, thanks so much.
ACOSTA: You bet.
KIRAN CHETRY, CNN ANCHOR: Well, neither rain nor snow nor sleet, that's how the saying goes, of course, but maybe it's not Saturdays anymore. The economy and the cultural shift away from snail mail may force the U.S. postal service to cut back its work week.
Christine Romans joins us now. It seems every business has been affected by what's been going on and there are billions in the hole right now.
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: They really are. They're sending a lot less mail than they used to, and a variety of things happening here. People not sending as much mail as they used to. There's a recession hitting here. They've got higher costs, so the postal service warning Congress yesterday that it might have to cut back on mail delivery.
Since 1983, they, by law, had to deliver mail six days a week. And the guy who runs the postal service, the United States postmaster general, Jack Potter, telling Congress look, we might have to have the flexibility to either reschedule some payments to our retirement health systems, wiggle room on how to pay into their retirement health plan. We might have to cut some services.
What they said in layman's terms, he said, "We are 23 billion pieces of mail left what we expected. Listen to what he said about just how much mail that is.
(BEGIN VIDEO CLIP)
JOHN E. POTTER, U.S. POSTMASTER GENERAL: Twenty-three billion pieces of mail is a significant amount of mail. That's more mail than most countries in the world have.
(END VIDEO CLIP)
ROMANS: More mail, they are not mailing, than most countries in the world even have. Now, it doesn't look -- he also told businesses, look, don't plan on a five-day a week schedule at this point. They're hoping that they can avert this.
And what would that day that we lose? Well, it would be in the summer. It would be maybe a Tuesday or a Saturday. Those are low days for mail delivery anyway. It wouldn't be everywhere in the country. It would be only some parts.
CHETRY: Right.
ROMANS: So, you know, before people get too alarmed, it looks like some people in Congress are saying still plan on six days a week this summer but this is the worst case scenario and they're preparing.
CHETRY: And you can see it happening in your own household.
ROMANS: Sure.
CHETRY: You can send -- you can pay your bills online now. You send eBytes (ph) instead.
ROMANS: I only get junk mail and pretty much Christmas cards.
CHETRY: I get junk mail and bills, and Christmas cards.
ROMANS: Even the bills come in my e-mail these days.
CHETRY: Thanks, Christine.
John?
ROBERTS: President Obama's $819 billion stimulus is also encouraging some economic patriotism, with two words, buy American. But is it limiting free trade? Opinions sharply divided between some lawmakers and economists.
Our Carol Costello is live in Washington for us this morning following all of the reaction to this. Buy American is supposed to be a good thing so why isn't it to some people?
CAROL COSTELLO, CNN CORRESPONDENT: I know, and it's kind of cool nowadays to buy American. But critics say that provision in the stimulus plan will cost America in the long run. But as you know, anything wrapped up in patriotism is hard to fight.
(BEGIN VIDEOTAPE)
COSTELLO (voice-over): Love your country? Well then stand up, America. It's time to become an economic patriot.
UNIDENTIFIED MALE: We must bring our jobs home.
COSTELLO: The travel channel's "Made in America" celebrates what's becoming a hot button issue. If you want to make America great again, buy products made in the USA." If that sounds familiar, it is.
When times are tough like they were back in the '80s, Americans like to practice economic patriotism. And today even powerhouse investor Warren Buffett is buying in, urging in an op-ed, those who are buying stocks, buy American. I am.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: That American recovery --
COSTELLO: Economic patriotism is part of President Obama's stimulus package, too. It includes a provision requiring that only steel made in America be used in any infrastructure project.
SEN. SHERROD BROWN (D), OHIO: We're going to spend hundreds of billions of dollars on this stimulus package then we're going to buy products from another country using taxpayer dollars? I don't think so.
COSTELLO: Senator Brown is so passionate about it he's insisting there be enforcement provisions included in the stimulus plan to make sure Uncle Sam follows the rules, but many economists aren't so passionate. They say taxpayers ought to get the best bang for the buck.
UNIDENTIFIED MALE: Buying from China is cheaper. That means we'll have more money to spend on other things. True the money goes to China, but it also comes back.
COSTELLO: Another economists say this buy America policy may tempt other countries to retaliate by refusing to buy American-made goods. Companies like Caterpillar and General Electric say it will hurt their business. But for steelworkers like Jack Sabolich, who was laid off in December, those arguments don't fly.
JACK SABOLICH, STEELWORKER: Anybody that turns around and says that we should export more jobs out of this country, maybe they ought to go over to China.
COSTELLO: Economic patriotism, he says, is what the country needs right now.
(END VIDEOTAPE)
COSTELLO: You know, this is a tough issue for the president, who often talks about policy in global terms but he's also beholden to those who helped put him in office, and those would be union members. And with the wave of economic patriotism, John, sweeping the country, my guess is that buy America provision in the stimulus plan will remain there.
ROBERTS: Yes. Difficult to make a case not to buy American when it's Americans taxpayers' money going into the stimulus plan.
Carol Costello for us in Washington. Carol, thanks.
CHETRY: This just in, Ford posting an almost $6 billion loss. Christine Romans is looking through some of the releases right now and trying to get us a little bit more information.
ROMANS: Right.
CHETRY: This was expected by the company, right?
ROMANS: Well, we knew that all of the automakers are really suffering. That's why they went to Congress, right, and said that the industry was losing money hand over fist because of the weak economy.
Now we know that in the fourth quarter, Ford lost $5.9 billion in the fourth quarter, but here's something quite interesting. The company says it still has no plans to seek federal aid.
You remember that Chrysler and GM went to Congress and said look, we are running out of money. We need low interest loans. It was the big bailout fight, part two of the big bailout fight at the end of last year, and Ford had said we know it's a tough situation but we think we can go forward without having to have low-interest government loans. And now, Ford continuing to say that.
A couple of other things interesting. It's a very big release, of course, but just trying to drill down some of the top headlines for you.
The UAW and Ford have agreed to end their jobs bank. The company and the union presently working out the details of how that will work. But you'll recall in a lot of the criticism of spending and relationships between the union and the companies, some of that criticism has been these jobs banks where people are paid to not work. They're paid to sit there and wait for a new job to come open in an industry where there aren't going to be new jobs coming open any time soon. For many years now, there have been complaints about those costs and now Ford and the UAW, according to this release are saying that they are going to end that jobs bank arrangement at Ford. So it's an interesting development.
There have been some congressmen who have been saying look, we're not going to give government money to any of these carmakers that they're just paying people to sit there and not do their work.
Again, I want to reiterate that Ford has always been seen as in the best position of the three. Also, Ford says that it gained market share in the U.S. and Europe and it "achieved" its cost target. So that can sometimes be cutting a lot of costs and cutting a lot of jobs along the way.
CHETRY: Yes. Interesting times when a $6 billion loss is, ooh, OK. ROMANS: Yes. Well, these are the times we live in.
ROBERTS: Thanks, Christine.
CHETRY: Thanks.
ROBERTS: They were warned. They knew and they shipped it out anyway. Today, new allegations against a peanut company at the center of the salmonella outbreak. Did its careless move cost people lives?
And a new sex and drug allegation against disgraced evangelist Ted Haggard. A young male church member saying he experienced that misconduct firsthand, and he has the tape to prove it.
(BEGIN VIDEO CLIP)
GRANT HAAS, FORMER CHURCH MEMBER: He really thought he was invincible because he used to say to me, "You know what, Grant, you can become a man of God and you can have a little bit of fun on the side."
(END VIDEO CLIP)
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
TED HAGGARD, FMR. EVANGELICAL LEADER: You know all the surveys say that evangelicals have the best sex life of any other group.
UNIDENTIFIED MALE: Oh, come on.
UNIDENTIFIED FEMALE: No way.
UNIDENTIFIED MALE: Oh, yes.
(END VIDEO CLIP)
ROBERTS: That was disgraced evangelist Ted Haggard joking about sex and religion when he was still at the height of his power. Revelations from a male prostitute forced him from the pulpit. Now, as he tries to clear his name, a young church volunteer is out with a story and a videotape. CNN's David Mattingly has both.
(BEGIN VIDEOTAPE)
UNIDENTIFIED FEMALE: So you don't know why he would be bringing up these allegations against you?
TED HAGGARD, FMR. EVANGELICAL LEADER: No, I don't.
DAVID MATTINGLY, CNN NATIONAL CORRESPONDENT (voice-over): Three years after a scandal involving allegations from a former male prostitute, disgraced evangelist Ted Haggard tries to answer the big question on "Oprah."
OPRAH WINFREY, HOST, "THE OPRAH WINFREY SHOW": Did you think and do you think you're gay?
HAGGARD: No, I don't think I'm gay. I did wonder about that. After this crisis, when I went to therapy, I said, I need to know, am I gay, am I straight, am I bi, what am I? And my first therapist said, you are a heterosexual with homosexual attachments.
MATTINGLY: But there are now even more questions about another alleged encounter that, until now, had remained private.
GRANT HAAS, FORMER CHURCH MEMBER: He wanted me pretty much to purchase him pornography, purchase him some drugs. The party formula pretty much. He told me, you know, that we don't have to do anything with each other. We can just, you know, watch porn, get high and masturbate.
MATTINGLY: Grant Haas was once a volunteer at Haggard's mega church. He says in 2006 he and Haggard shared a hotel bed while Haggard pleasured himself.
HAAS: He really thought he was invincible because he used to say to me, "You know what, Grant, you can become a man of God and you can have a little bit of fun on the side."
MATTINGLY: After the original scandal that caused Haggard his job, Haas says he also threatened a lawsuit. That's when he says he taped a phone conversation with Haggard.
HAGGARD: Here's the way it works. I wasn't an honorable pastor.
MATTINGLY: We can hear what sounds like Haggard, trying to convince Haas to not go public about their encounter.
HAGGARD: We need to figure out a way to make life successful instead of figuring out a way to make life painful for each other. Now I would never make life painful for you.
MATTINGLY: The man in the recording complains of falling on hard times. He pleads for time to rescue his marriage, and he talks of his struggle with sin.
HAGGARD: That is that addiction, that one moment you're enslaved by -- I'm enslaved by sin, and the next moment I'm seeking God with all my heart.
HAAS: Uh-huh.
HAGGARD: And that's -- that's the horror of it.
MATTINGLY (on camera): CNN is unable to confirm the authenticity of this recording. We spoke with Haggard and asked if he could verify that the conversation took place. Instead, he referred us to a PR company representing him.
Haggard, who is promoting a new documentary about his fall from grace, earlier released this statement through HBO, which, like CNN, is owned by Time Warner. "Haggard said, "Although there was no physical contact, I have regretted my irresponsible behavior. Once again, I ask Grant for his forgiveness as well as the people of the church."
(voice-over): By speaking out about his relationship with Haggard, Haas violates the terms of a settlement agreement with Haggard's former church worth $179,000. But the current senior pastor says the church will honor that agreement and do the right thing for the right reasons.
David Mattingly, CNN, Atlanta.
(END VIDEOTAPE)
ROBERTS: And you can hear a lot more from Haggard tonight on "LARRY KING LIVE." That's at 9:00 Eastern right here on CNN.
CHETRY: All right. There you have it.
Well, still ahead, President Obama said it wouldn't be politics as usual in Washington but his plan to turn around the economy and create jobs got through the House without a single Republican vote. Whether that could set the tone for the next four years.
ROBERTS: A favorite family comfort food linked to a deadly salmonella outbreak. Why the FDA says the nation's peanut butter scare could have been prevented.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: We have rising rates of food-borne illnesses. I do not believe the public is protected.
(END VIDEO CLIP)
ROBERTS: The report that will have you taking the "p" out of "pb and j." You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
CHETRY: Welcome back to the "Most News in the Morning."
There's some damning new information this morning about a deadly salmonella outbreak. The Food and Drug Administration now saying that a peanut butter company knew that its products might make people sick and shipped them anyway. Special investigation unit correspondent Abbie Boudreau has the story.
ABBIE BOUDREAU, CNN SPECIAL INVESTIGATION UNIT CORRESPONDENT: John, Kiran, just yesterday, the FDA announced that the peanut company is expanding its recall to include products manufactured since January, 2007 and it goes beyond just peanut butter. Peanut Corporation of America is also recalling peanut meal, peanut granules and whole peanuts produced at the Blakely, Georgia, plant.
(BEGIN VIDEOTAPE)
BOUDREAU (voice-over): This Georgia peanut plant is the center of the nationwide salmonella outbreak. CNN obtained these inspection reports dating back to January, 2006, of Peanut Corporation of America's Blakely, Georgia, facility.
The reports show the plant failed to take standard steps to prevent contamination. It was cited for having unsanitized food surfaces, dirty utensils, unmarked chemical containers and places where rodents could get in. National food safety experts blame the FDA for not properly regulating plants like this one.
UNIDENTIFIED MALE: I do not believe the public is protected. We have rising rates of food-borne illness and an FDA that's so underfunded it cannot protect us.
BOUDREAU: Federal food safety officials have closed the plant while they investigate, but the shutdown came too late for some. Shirley Almer was 72 when she died. She was in a nursing home recovering from cancer. Her son, Jeff, says she was there to get stronger and then she was supposed to come home.
UNIDENTIFIED MALE: My sister called me that morning and said, "You guys better come up here and see her because things have gotten bad." And I mean, I was just stumped to hear that.
BOUDREAU: She died that same day. According to a lawsuit filed by the Almer family against Peanut Corporation of America, and King Nut Companies, Shirley Almer ate contaminated peanut butter produced in that Georgia processing facility. The court filings state that lab tests from the Minnesota Department of Agriculture show that salmonella in the peanut butter genetically matches cases in the nationwide salmonella outbreak. Health officials have confirmed those findings to CNN.
UNIDENTIFIED MALE: This is a woman who planned on being around when her grandkids got married, so you know, we really feel cheated. We really do, and there's nothing -- nothing to bring her back.
(END VIDEOTAPE)
BOUDREAU: This week the FDA said that peanut company's internal testing found salmonella on at least 12 occasions in 2007 and 2008, but retested those products and they came back negative. So they shipped the questionable products anyway.
While the company would not talk about that, it did tell CNN that it's cooperated fully with the FDA, sharing every record the FDA has requested. The company adds that it's recalled any products suspected of containing the bacteria and deeply regrets what has happened.
Now, we asked the FDA if they're to blame for the outbreak. They told us it's the responsibility of the industry to produce safe products -- John, Kiran.
ROBERTS: Abbie Boudreau reporting for us this morning. Abbie, thanks so much.
After failing to win a single Republican vote for his stimulus bill in the House, President Obama tries to find bipartisan support in the Senate. And he tries to find it during the cocktail hour. And our investigators getting closer to answers in what could be the biggest Ponzi scheme in history. Clues in the Bernie Madoff scheme could be hidden in a Queens warehouse.
It's 24 minutes after the hour.
(COMMERCIAL BREAK)
CHETRY: Welcome back to AMERICAN MORNING, about 26 minutes past the hour now.
President Obama scoring a victory on Capitol Hill. The House passing his $819 billion stimulus plan to spark the economy, but it wasn't the way he wanted to win. There wasn't a single Republican in the House who supported it.
Joining us now from Washington is conservative commentator and author of "American Grit," Tony Blankley.
Tony, thanks for being with us this morning.
TONY BLANKLEY, AUTHOR, "AMERICAN GRIT": Thanks for having me on, Kiran.
CHETRY: Interesting because Barack Obama, the president, was taking some heat from the left. He urged them to get rid of the $200 million for contraception that was a real -- real point of contention among the GOP. He added about $275 billion in tax cuts. Some were saying that would also be something that would be more enticing for Republicans. Yet at the end of the day they unanimously said no, so why bother?
BLANKLEY: Well, I think it's a question of whether you're really trying to compromise toward a policy or just having some of the window dressing. I think the Republicans were looking for actual spending that would actually stimulate the economy this year. As his own spokesman said in the previous segment of this show this morning, they're going to look to 2011 to see whether, how the effect is going to be. That's very late from now.
There's an awful lot of pork and not enough stimulus in the bill, and I think that's why not only the House Republicans but I think currently even Senator McCain, who is not a conservative but is very concerned about a efficient (ph) economy, is currently planning to oppose it. So it's not just party. It's a question of principles of economics. And I think that's where we're going to have a lot of differences with the president.
CHETRY: According to our research this morning, the Congressional Budget Office is saying they believe that about 65 percent of the stimulus will be spent by September of 2010 and that some of the tax -- some of the tax cuts will be felt much sooner than that.
But it's interesting, you wrote a column warning fellow conservatives not to let Obama's charm win them over, writing, "One is entitled to be suspicious of a politician who openly brags, I serve as a blank screen on which people of vastly different political stripes project their own views. That strikes me as a conscious intent to deceive in order to diffuse opposition to his designs until it is too late to block them."
So you're viewing President Obama with a little bit of suspicion. Can you explain more and why?
BLANKLEY: Yes. Well, look, I mean, he's a brilliant man. He's a master of the English language, and I don't think that if he wanted to be clear about what his intentions were, he'd have any trouble doing that. And yet we find this president, unlike former presidents left or right, unlike Nancy Pelosi or Barney Frank or Walter Mondale, we always know where leading politicians stand. But there's tremendous confusion about whether Obama, and I go through his inaugural address. He uses language that talks about the marketplace and then he views it, which some conservatives took heart from. And then on the other hand, he talks with language (ph) that we got to have a watchful government which could mean anything.
I think he intentionally is trying to be as many things to as many people for as long as possible to try to move forward, and interestingly, EJ Deon (ph), a friend of mine who's a liberal, very admired columnist for "The Washington Post" he kind of reached the same conclusion that Obama is using a conservative language to advance a very progressive non-individualistic more collectivist agenda. So even people from the left and right can agree that we -- E.J. hopefully, mean suspiciously, see that he may be trying to get somewhere without being quite so direct about it.
CHETRY: And before we let you go, where does that leave the GOP? What is the GOP's role now as this moves into the Senate?
BLANKLEY: Well, I think in the Senate they need to stand by what they judge to be in the best interest of the United States and the economy, get the economy going as fast as possible, and not bow to any pressure that they may feel from the president.
The president, when he met with the Republicans, when he started arguing policy, he said, well, "I won the election and you lost." So while he's very charming about it, I don't blame him but he's going to use his power to try to get what he wants through, even if it's not going to be in the long run best interests of the U.S. economy.
CHETRY: Tony Blankley, great to have you on the show this morning. Thank you.
BLANKLEY: Thank you.
ROBERTS: Just crossing the half hour now, and here are this morning's top stories.
The White House says President Obama's first foreign trip in office will be to Canada, following the tradition of many of his predecessors, including Presidents Clinton, George H.W. Bush, Reagan and Kennedy. President George W. Bush made his first international trip to Mexico. Mr. Obama is scheduled to head north on February the 19th.
American Airlines is reportedly limiting the number of passengers on some of its flights. Why? Because of a life raft shortage on those planes. The airline said to be ordering more of the life rafts. The "Associated Press" reports the move is linked to last month's landing in the Hudson River by U.S. Airways Flight 1549.
And across several states, officials say more than 1.3 million homes and businesses are without power. Power lines are down because of recent ice storms. Utility companies say it could be mid-February before some people have the lights and heat back on. The storms have killed at least 23 people so far.
Well, breaking this morning, explosive charges against a former CIA station chief. He is accused of raping women while working overseas for the U.S. government. Our Pentagon correspondent Barbara Starr is working this developing story. Barbara, what do we know so far?
BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, John, a source familiar with the investigation has confirmed to CNN that the former station chief in Algeria is under investigation by the Justice and State Departments for allegations of raping two women.
Now, a government affidavit only identifies Andrew Warn as an employee of the U.S. embassy in Algiers but his identity was separately confirmed to us by sources. According to the affidavit, Warn told investigators that he had consensual sex with two women but there is extended discussion in this affidavit of the two women making allegations that they were forced against their will and that they believe date rape drugs were used. A search of his apartment in Algiers did discover pills believed to be associated with date rape activity according to the affidavit. It all remains under investigation. John.
ROBERTS: So it's just under investigation at this point, he hasn't been arrested or detained in any way?
STARR: As far as we know, according to the affidavit, it remains under investigation. He is back in the United States and told not to return to Algeria. The matter continues to be reviewed. John.
ROBERTS: Barbara Starr for us at the Pentagon with the latest. Barbara, thanks.
And just in to CNN our Suzanne Malveaux has been working her sources and just got reaction from the White House on this. She joins us now live and Suzanne, you know, last week we saw that stress in the last week we saw that big address from or I should say the interview with President Obama reaching out to the Muslim world. This has got to sting a bit.
SUZANNE MALVEAUX, CNN CORRESPONDENT: Well, absolutely, John. I just spoke with the Press Secretary Robert Gibbs about this. I asked him if he knew about the case. Obviously he did know about this very hot case. He said that they were very much aware of it at the White House and that they take this very, very seriously. He said details obviously coming out of the Justice Department but I followed up and I asked him, was he concerned, President Obama obviously making this effort to reach out to the Muslim community to establish a different kind of tone and respect, and he said look, he understands, you know this is something that took place back in October.
This is something that they are following. They are watching very closely but he says that he believes the president has made it very clear in that interview that he had with Al Arabiya that this is a new time and that these kinds of things are not going to be tolerated obviously that he wants to work with the Muslim community, with the Muslim world and that is a message that he hopes is not going to be undercut by these kind of reports and these kind of events because obviously you think about Abu Ghraib and some of them were serious things that have happened over time.
And you wonder, you know, just one incident, can that actually have a huge impact when it comes to how the Muslim world and folks are looking at this administration, so they're following the case very, very closely.
ROBERTS: Yes, and at the surface at least it looks like another black eye for the United States. On the subject of the stimulus package, it now goes to the Senate. The president was hoping to get some bipartisan support. He was working hard to get it on the House version of the bill and didn't get any. Is the White House disappointed today?
MALVEAUX: I asked him about that as well. Because obviously the president used a huge amount of political capital and also some personal grit, if you will. He was on the phones, he had that visit on the Hill with the Republicans. He was working the Democrats, and clearly, Robert Gibbs saying this morning, yes, there is a sense of disappointment.
(BEGIN VIDEO CLIP)
ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: I think he's a little disappointed that the Republicans decided to vote as a block in opposition to a plan that has garnered support from across the political spectrum, because economists know, liberals and conservatives, that it will put people back to work. I think the president understands that he can't change the way Washington works in just nine or 10 days, but he hopes that members of the House and the Senate from either party will not look at this through a political lens but instead what will work to get this economy moving again, to put money back in the people's pockets and to create, save and create three or four million new jobs.
MALVEAUX: What will the president do differently IN reaching out on the senate side? Is he going to be personally involved in trying to get democrats to offer more concessions to Republicans on the Senate side?
GIBBS: You know, I think what we need to do is make sure that we get a plan that works. This president reached out to House Republicans. He reached out to House Democrats. He'll do the same thing in the Senate.
(END VIDEO CLIP)
MALVEAUX: John, if you listen closely to what's saying there, he says he's disappointed that the Republicans voted in a bloc. There is a subtle message there that perhaps there were political motivations that this was not something that they took seriously from the president, at least the merit of the case.
But one thing that he says he is going to do, the president is going to do is to continue to try to get both sides together, democrats and republicans. Last night, there was a cocktail party that was here, they had about two dozen or so of the leadership from the Democrat and Republican side. And according to Congressman John Boehner, Republican, who had been critical of this stimulus package, he said well you know, if you want to invite the skunk to the garden party I guess I'll go. I'll show up and I'll smile.
And I asked Robert Gibbs about that and he says that's one of the things that the president is going to continue to do, to try to get people at the very least to socialize and be civil among one another and then perhaps they'll start to at least listen to each other and some of these ideas, but this is going to be a really tough sell here, John.
ROBERTS: Yes, I guess the issue was that House Republicans didn't think that House Democrats were listening to them at all, perhaps it will be a little bit different in the Senate.
MALVEAUX: We'll see.
ROBERTS: We'll see. Suzanne Malveaux for us this morning. Suzanne, thanks so much.
MALVEAUX: Thanks.
KIRAN CHETRY, CNN ANCHOR: Investigators right now are following the paper trail in the Bernard Madoff case. They set their sights on a warehouse in Queens. What else do they know about the alleged $50 billion scheme?
Also what does the 44th president have in common with singing sensation Beyonce? Apparently some dance moves. We'll explain. It's 37 minutes after the hour.
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ANNOUNCER: This is CNN breaking news.
CHETRY: Yes, that's right, we're following some breaking news this morning. It's 40 minutes past the hour. The paper trail in the Bernard Madoff fraud case leading to a Queens, New York, Warehouse. Investigators there are finding boxes and files cabinets stuffed with documents that could reveal more about the alleged $50 billion ponzi scheme. Christine Romans is following the story for us. And she joins us. It's quite busy this morning between all of these.
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: I know, there's a lot going on.
CHETRY: What are they really going to decipher from all of these papers?
ROMANS: Well, let's first say what we know. What we know is that the AP is reporting that the investigators have been led to a warehouse in Queens. A warehouse in Queens that was used to store records from Bernard Madoff's investment business.
We of course, don't know what is in that warehouse and we don't know what it could possibly tell us but what we do know is that investigators have been following the paper trail for some time. A paper trail that really must be voluminous. Because this is somebody who had an awful lot of clients, right? We've seen many of the documents that those clients have received, what they looked like, their statements, and there are big questions about could this one person have done this alleged ponzi scheme alone, who was helping making these documents?
Who was keeping track of the accounts and the like? Now Ponzi scheme, of course, is not an investment. It is a scam, where original investors are paid with the proceeds from new investors and it keeps going on like that until suddenly something happens and people start wanting to pull their money out and they can't get their money out.
Of course, federal investigators in criminal complaint have said that he admitted to some kind of a scam but indeed we're still continuing to follow this. And the AP is reporting investigators have zeroed in on a Queens, New York warehouse. We don't know the significance of it other than we are trying to figure out how he did this and whether he did this alone.
CHETRY: So a lot of digging.
ROMANS: Sure, a lot of digging.
CHETRY: Adding to the outrage by the way. Did you see the "New York Post" headline today - "Poor Bernie." Apparently, some people that are close to him that he is bemoaning the fact that he is stuck in his Park Avenue prison.
ROMANS: Well, the people who say they a lot of money from him are bemoaning the fact that he is not in a real prison. But you know, of course, he has to go through the entire legal system. And he is on bail and a judge twice now has decided that it's OK for him to be home under house arrest there and that's where he sits.
CHETRY: That's right. He can't even go to the corner and get something to eat. Life's tough.
ROMANS: Order in.
CHETRY: Thanks, Christine. ROBERTS: Obra cita.
The vice president's wife back in the classroom, why Jill Biden just couldn't stay away and why her passion for teaching could rub off on the Obama administration. It's coming up now on 43 minutes after the hour.
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(BEGIN VIDEO CLIP)
CONAN O'BRIEN, "THE LATE NIGHT WITH CONAN O'BRIEN": President Obama said that people in Washington can't handle harsh winter weather like people in Chicago. That's what he said.
UNIDENTIFIED MALE: Boo!
O'BRIEN: To be fair, Chicago is shielded from the snow and ice by the protective dome of Governor Blagojevich's hair.
(END VIDEO CLIP)
ROBERTS: Welcome back to the most news in the morning. Proof there that you can take the president out of Chicago but you cannot take the Chicago out of the president. Mr. Obama was a little bit surprised as his daughters Sasha and Malia got a day off of school because of some winter weather in the district. Listen.
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PRES. BARACK OBAMA, UNITED STATES: Can I make a comment that is unrelated to the economy very quickly? And it has to do with Washington. My children's school was canceled today because of, what? Some ice?
(LAUGHTER)
OBAMA: As my children pointed out, in Chicago, school is never canceled. In fact, my seven-year-old pointed out that you'd go outside for recess. You wouldn't even stay indoors. So I don't know, we're going to have to try to apply some flinty Chicago toughness to this town.
I'm saying when it comes to the weather, folks in Washington don't seem to be able to handle things, but anyway.
(END VIDEO CLIP)
CHETRY: After he lives there for a little while he'll start to realize he doesn't want D.C. drivers driving if there's a drop of snow or ice.
ROMANS: I'm from Iowa and I lived in Chicago, I moved to Chicago on October 2nd, there was a foot of snow by like the end of October and I never missed a day of work. I'm telling you. We all just put on the parka and go. ROBERTS: My daughter in Fairfax County had the day off yesterday as well. I don't know about today but I would expect.
CHETRY: My kid was off yesterday, too, in New York. But you know, what are you going to do? You don't want them driving around the beltway.
ROBERTS: I grew up in Canada where we used to joke that the only way they would ever close the schools was because of thermonuclear war.
ROMANS: I know.
ROBERTS: And even then, they probably just have a delayed opening.
ROMANS: Yes, we got the recess at minus 10. We just keeping moving, keep going. Wear a hat. Wear a hat.
CHETRY: Around the NEWSROOM here there's a lot of us who can't get enough of Beyonce's "Single Ladies." You know, the song and many of you know the dance. In fact, our producer, Brian, does the dance while well. I can tell you that firsthand. Christmas party.
As it turns out just before inauguration day President Obama also admitted to being a fan of the pop star's moves as well.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Mr. President. You didn't tell Beyonce about Single Ladies, your rendition?
OBAMA: But I'm not like Justin, I didn't put on the outfit. I didn't put on the outfit.
But I didn't want my girls thinking that I couldn't, you know. I got a little something. This part I got.
(LAUGHTER)
(END VIDEO CLIP)
CHETRY: Of course, the president was talking about the hilarious moment on "Saturday Night Live" when Justin Timberlake became one of Beyonce's backup dancers. I like Justin, no offense Beyonce, but he did better than she did. But I love Justin.
And there's the president giving himself a little bit of pop culture. How funny? I mean, he looks so at home in high heels, Justin Timberlake.
ROMANS: Justin Timberlake or the president? I was like, way what?
CHETRY: Justin Timberlake.
ROBERTS: You've got to hate her on how she does that dance.
CHETRY: She makes it look like hard work. Believe me, I couldn't dance anywhere near as she does. Justin Timberlake, very light on his toes.
ROBERTS: Bring it on. Come on.
CHETRY: No way.
ROBERTS: Joe calls her Jilly, the students call her Dr. B. The Vice President's wife returns to the classroom. Why she just couldn't stay away. We'll tell you. It's 49 minutes after the hour.
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ROBERTS: Well she has two masters degrees and a doctorate and no plans to quit her day job. The vice president's wife has found a new gig closer to her new home as a community college professor at Nova in Northern Virginia. Alina Cho joins us now with more on this. It's great to see her out there.
ALINA CHO, CNN, CORRESPONDENT: Yes, she never has - Her friends say she never really had a thought to do anything else, you know, but it is uncommon, certainly. John, good morning. Good morning, everybody. You know, she is one of the few second ladies to hold down a job while her husband is vice president but those who know Jill Biden say she is a teacher through and through and she wouldn't have it any other way.
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CHO (voice-over): She is best known as the vice president's wife. But to the students of Northern Virginia Community College, Jill Biden is just Dr. B, the school's newest faculty member.
JILL BIDEN, WIFE OF VICE-PRESIDENT JOE BIDEN: I'm an educator. I'm Jill Biden and I feel right at home at a college campus.
CHO: She has been a professor for 28 years and says she is thrilled to return to the classroom where her students are her heroes.
UNIDENTIFIED FEMALE: She has never wanted to be a political wife. She is a teacher.
CHO: But a vice president's wife working for pay?
UNIDENTIFIED FEMALE: It is unprecedented and good for her. You go, girl!
CHO: At Northern Virginia, Dr. Biden is teaching English as a second language twice a week. She started on Tuesday. And many students had no idea she was coming until their star professor walked in the door.
UNIDENTIFIED MALE: They've taken notice of the black cars that are rolling around and the men in black suits that are around campus.
CHO: As the VP's wife, Biden could have taught anywhere, so why a community college? The school's dean says it's in Professor Biden's DNA.
JIM MCCLELLAN, DEAN, NORTHERN VIRGINIA COMMUNITY COLLEGE: And by deciding to teach here, she sends a message to the students that they're important. We'll open the door for them to get in but they have to open the door to get out and we will help them every step of the way.
CHO: So what kind of teacher is Jill Biden? Those who know her well say incredibly capable and one who occasionally comes with a surprise.
UNIDENTIFIED FEMALE: One time she had a student who fell asleep in her classroom and she had all of the students get up and quietly leave and they turned off the lights and left that student to sleep in the classroom. She is just a great practical joker.
(END VIDEOTAPE)
CHO: Got to love a teacher with a sense of humor. Now, this new job is keeping her busy. Certainly, Professor Biden has already brought home a stack of papers after one day in class. It is clear the school couldn't be happier, either. The dean told us I didn't hire a second lady who happens to be a teacher. I hired a teacher who happens to be a second lady.
And guys, a lot of four-year institutions have expressed interests in having Jill Biden - obviously but she has a special place in her heart for community colleges. She wrote her doctoral dissertation on retaining students at two-year institutions and remember a lot of mothers coming back to school, a lot of economically disadvantaged students. And so these are kids or adults with special sets of challenges and she gets a kick out of helping them.
ROBERTS: I love the practical joking aspect of it, too. Although there has always been (inaudible) to the sleeping student to cover them with flowers and stick roses in their nose.
CHO: OK. That one I don't know about but she does it with her family, apparently.
ROBERTS: Here's a little known fact. That she was teaching before, but under her maiden name, not her married name. Why?
CHO: That's right. For many, many years because she didn't want people. She wanted to basically succeed on her own merits, you know? And so she didn't even put that is a family woman, of course. She had pictures of her children in her office, but never a photo of her husband. And, obviously, that - it's hard to avoid now. She can't do it now, obviously, especially after the inauguration.
ROBERTS: Especially the two big guys standing at her side with the sunglasses.
CHETRY: That's right and the ear piece.
CHO: Secret Service is a sure giveaway. That's right. ROBERTS: Thanks, Alina.
CHO: You bet.
ROBERTS: 55 and a half minutes after the hour. We'll be right back.
(BEGIN VIDEOTAPE)
CHETRY (voice-over): Critics call it an $800 billion pile of pork.
UNIDENTIFIED MALE: A catchall of traditional pet programs and more government.
CHETRY: Supporters say it's a down payment on our future.
UNIDENTIFIED MALE: There is not a single earmark in this bill.
CHETRY: Is Washington wasting our only shot at recovery?
Plus, great expectations.
UNIDENTIFIED MALE: People are really feeling good about things, in spite of all of the problems.
CHETRY: Black voters with high hopes for change but can President Obama live up to it all? You're watching the most news in the morning.
(END VIDEOTAPE)
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ROBERT GATES, U.S. DEFENSE SECRETARY: It is also clear that we have not had enough troops to provide a baseline level of security in some of the most dangerous areas. A vacuum that has increasingly been filled by the Taliban and that is why the United States is considering an increase in our military presence, in conjunction with a dramatic increase in the size of the Afghan security forces.
(END VIDEO CLIP)
ROBERTS: That's Defense Secretary Robert Gates talking about the need to deploy more troops to Afghanistan. President Barack Obama is now hearing from his military commanders and advisers concerning the missions in Afghanistan and Iraq.
Mr. Obama had his first official Pentagon briefing yesterday. To talk more about this and some of the other news of the day, from Washington, former CIA officer Gary Berntsen.
Gary, let's get to Iraq and Afghanistan in a second. But first of all, let me ask you about this news regarding the former station chief, CIA station chief in Algeria now under investigation for allegedly raping two women. What are the potential repercussions there?
GARY BERNTSEN, FMR. CIA OFFICER: Well, clearly, opponents of the United States politically in the Middle East are going to use this against the United States to, you know, claim that there are abuses by the U.S.. This individual will be afforded you know, due process - the bureau of diplomatic security would have investigated this. They brought the individual back.
Clearly if there is a violation of law, it will be prosecuted. You know, he will face that. But this really hurts the president the time where the day before, you know, he was giving a message to the Islamic world. This of course was done in Algeria, an Islamic country. Big problem.
ROBERTS: Another black eye for America here in the Muslim world?
BERNTSEN: It's a serious problem.
ROBERTS: Right.
It also seems like the president may have some problems in making good on his pledged to bring all of the troops out of Iraq with him in 16 months. He had a meeting with his commanders, General Ray Odierno who was interviewed in Iraq. He was the commander of all forces in Iraq, said well we might be able to get two brigades out within six months' time but we might not know until the end of the year when we can engage in significant draw downs. You know, is this just the reality that the new president faces on the ground?
BERNTSEN: Well, this is clearly where the -- you know, the politics of the campaign runs into reality. And the reality is you've got many, many people out there, a lot of gear, you know, the Iraqis are coming along. But this is a huge process, you know, moving people out of country. And there is absolutely no way that you could, you know, stay on that 16-month time line. It's just physically impossible for anyone who's in transportation or logistics or knows anything about this. It just could not be physically done.
ROBERTS: And at the same time, you know, drawing down the troops from Iraq was supposed to allow us to bolster troops in Afghanistan. The president was originally calling for some 7,000 troops, now people are throwing around a number of 30,000, and others saying that may not be enough troops at this point. Plus, you got to completely change the mission there if you want to win.
BERNTSEN: Well, clearly, Afghanistan, you know, there was this discussion by both candidates by Senator McCain and President Obama, where they talked about putting at least two or three combat brigades in. They're going to have to put those brigades in. They're going to have to increase the ETTs, the embedded training teams. That's a mission that's got to be widely expanded.
The problem we face is a shortage of human capital. Iraq had a lot of people who are highly educated, skilled, because Saddam wanted to sort of expand his power in the Middle East. Afghanistan has been destroyed by 30 years of war. There isn't much human capital there. The other problem he's facing is that the Afghans are waging -- or the Taliban are waging a very effective IO campaign, information operations. Any time there's an air strike, anything happens they claim that there are casualties -- you know, five or 10 times higher than actually occurred and there's always civilian casualties. And of course, there's going to be election this year. You know, in September, you know, Karzai is going to stand in front of the Afghan people and try to get reelected.
ROBERTS: Serious problem for this incoming administration. Gary, thanks for your perspective on it. It's always great to see you.
BERNTSEN: It's a pleasure, John.
