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Madoff Pleads Guilty to All Charges; Space Station Evacuated; Second Stimulus Package Proposed
Aired March 12, 2009 - 13:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
DON LEMON, CNN ANCHOR: Guilty, 11 times over. But that's not the end of the Bernie Madoff saga. We're pushing forward to payback for two decades of greed, fraud and, of course, lies.
Some look at Braddock, Pennsylvania -- there it is -- and see they rock bottom. The mayor sees prosperity just around the corner. You'll see a town pushing forward through good times and mostly bad.
Hello, everyone. I'm Don Lemon. Kyra is off today. You're in the CNN NEWSROOM.
And we begin the NEWSROOM this hour with some breaking news: A high-tech drama playing out at the International Space Station. According to our sources, and our John Zarrella who has been following this story, the space station, just precautionary, has been evacuated, has been evacuated due to floating debris. They're checking into that.
As of now we're told, just moments ago, that they have been given the all-clear, but we're going to get -- check in with our John Zarrella in a minute and see exactly what's going on. Meantime, the International Space Station, as I said, evacuated as a precautionary measure. Details to come.
Meantime, a lot to get to today. And here's what's on the rundown for you.
We're talking about this man. Bernie Madoff admits to one of the biggest scams in American history. We are hearing from the victims here. They're rich; they're poor, and everyone in between, all asking the same question: how did we miss this and how did we miss it for so long?
Plus, please hire me. Millions of people screaming that same thing right now. The risks of the jobless numbers, or ranks of the jobless numbers, just got a whole lot more crowded, and they are growing by the day.
And lost jobs, lost homes. House after house after house. Maybe you've seen it in your neighborhood. One crisis feeds into another here.
OK, take a deep breath. We're not going to leave you with doom and gloom and all the negative numbers. We're going to push forward for you to your neighborhood, to your home, and also to your wallet today, right here in the CNN NEWSROOM. This is what he said: "I always knew this day would come." That is a quote from Bernie Madoff to the federal judge who accepted Madoff's guilty pleas and sent him to jail until he goes to prison. The one-time wizard of Wall Street could -- could -- get as much as 150 years, at least on paper.
Straight to the action now in New York. Outside of a New York courthouse is Allan Chernoff. He has been following the story all day.
As I understand, Allan, you have been speaking to some people who were duped by this man. And also, I want to know what had he to say for himself besides "guilty."
ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT: He said that "I'm deeply sorry and ashamed of myself." He gave a five-minute presentation to the court, describing his crime in detail, saying that, instead of actually investing clients' money into the stock market, he simply deposited the money into Chase Manhattan Bank and then told people that he was beating the stock market, earning spectacular returns. That's how he said he did his crime.
And he said he started all the way back in the early '90s. And he said he thought it would end quickly, but he said he wasn't able to extricate himself. He wanted to satisfy his clients at any cost.
And after that presentation, the judge read all 11 counts: perjury, wire fraud, mail fraud, on and on, money laundering. And to each one, 11 times, Bernard Madoff said "guilty."
Did it bring some satisfaction to his victims? Let's find out from one. With us right now is Miriam Siegman. She actually knows Bernard Madoff personally.
You've invested with him. You did invest with him for 17 years?
MIRIAM SIEGMAN, VICTIM OF BERNARD MADOFF: Yes, I did. I began in 1992.
CHERNOFF: Tell me: When you were sitting in that courtroom and first you heard Bernard Madoff say "guilty" the first time, what did you feel inside?
SIEGMAN: It was not very satisfying, because he had pleaded guilty, in fact, was controlling this whole process, from the very beginning. He pleaded guilty four or five months ago.
CHERNOFF: Now the judge did, at the end, remand him to jail and, as we speak right now, Bernard Madoff for the very first time is in jail, no longer in his penthouse apartment.
SIEGMAN: That made me happy. I admit it. When I heard those handcuffs go "click," I said "yes."
CHERNOFF: Next step, of course, I'm sure you want to get at least some money back. Any hope? SIEGMAN: I'm very dubious that I or any of the others will be getting anything much back and that some have initiated lawsuits. I think those lawsuits will take years and produce very little.
CHERNOFF: OK. Well, Miriam, as you know, there is at least the Securities Investor Protection Corporation. They are supposed to -- supposed to -- protect investors up to half a million dollars for their losses when a firm does go bust. So far, though, they've only sent out 12 checks to Madoff investors, and there are thousands and thousands of them.
Quick thoughts?
SIEGMAN: Also, work -- I agree, working very slowly and making it very hard for us, for individual investors, demanding lots of paper, asking lots of questions.
CHERNOFF: Miriam, best of luck to you.
SIEGMAN: Thank you.
CHERNOFF: Tony -- Don, of course, so many victims feeling at least a little bit -- a little bit of satisfaction today that, at least, Bernard Madoff is behind bars -- Don.
LEMON: Maybe they'll start to get some answers. Thank you very much for that, Allan Chernoff.
Meantime, we told you about the breaking news at the top of this newscast. Want to get back to that. It's involving the International Space Station.
Joining us now from NASA, Kelly Humphreys, who is a spokesperson.
Mr. Humphreys, is this an evacuation? Is this a precautionary measure? Explain to us what's going on.
KELLY HUMPHREYS, NASA SPOKESMAN: First of all, the good news is that it is all clear. The debris passed without striking the station. The crew is in the process of getting back to its normal duties.
It was a precautionary move. We got word late last night that there might be a close approach of a piece of an old rocket motor going by the space station.
Normally what we do, we maneuver the space station out of the way. But because of the late notice, we didn't have time to coordinate that. And so the next thing we do is we have the crew get into their Soyuz landing vehicle so that, if something were to strike the station, they could undock and land safely back at home.
But the crew went into the Soyuz for about ten minutes. The debris passed, and they're getting back out of the Soyuz and reactivating all the station systems so they can get back to normal duties.
LEMON: How often does something like this occur, if often at all?
HUMPHREYS: It doesn't occur that often. This is the first time we've had to shelter in a Soyuz. But it doesn't happen every day, certainly. And throughout the course of the eight years the space station has been in orbit, we've only had to do what we call those debris avoidance maneuvers eight times.
LEMON: OK. Great. And everyone is fine. Kelly Humphreys from NASA, NASA spokesperson. We appreciate that on the breaking news concerning the International Space Station..
Now back to our big story this afternoon. There wasn't a trial. I'm talking about Bernie Madoff. There wasn't a trial, but there weren't any deals either. Madoff pleaded guilty to everything the feds threw at him.
Want to push forward now, especially on the legal front, with CNN's senior legal analyst, Jeffrey Toobin.
Jeff, what does this mean? Does this mean, the lack of a trial, mean the lack of an investigation? There's not much to investigate here? What does it mean?
JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: Oh, there's not going to be a trial of Bernie Madoff, but the investigation very much continues, because there are two big unanswered questions. The first is, where's the money? How much money can be recovered?
Certainly, all the billions that were lost are not going to be recovered. And frankly, most of it won't be, because that's just how frauds work. But the victims want to try to get as much as they can, and certainly that investigation is going forward.
The other thing is, who else was involved? Were his two sons involved? Was his brother involved? Was his wife involved? Are there going to be other criminal charges in connection with this massive fraud? Because a lot of people say -- I think with good reason -- that one 70-year-old man could not have run a scam of this size by himself.
LEMON: And a number of...
TOOBIN: And investigators are going to say, who else was involved?
LEMON: And Jeffrey, I want to get back to that. That's an important point, because a number of news agencies and blogs and what have you are reporting that there may be some family involvement and also talking about the wife, talking about the property they own. That property should be given to some of the people who were caught up in this.
TOOBIN: Well, that's part of this continuing investigation. And that's why it's likely to take a long time. Because certainly any money that was the direct proceeds of this criminal activity will go to the victims. But the Madoff family has already said that, "Look, we made some of the money from legitimate activities, and we want to keep that." Ruth Madoff, Bernie's wife, has said that she wants to keep $62 million plus this penthouse apartment on the Upper East Side. That's something that makes the victims enraged, that she wants to keep that much money.
Those sorts of controversies about the money will likely occupy quite a few more years.
LEMON: Again, what's also interesting about property. I've been hearing about property in Florida, the homestead exemption, being transferred to that. So there are a lot of -- lot of little details to get to in this.
But here's what I want to know: 150 years in prison. Really, what is -- what is Bernie Madoff getting out of this? Is he going to get anything in exchange for pleading guilty and opening up his books?
TOOBIN: Well, this is not a plea bargain. He was not promised anything. He was not promised a reduced sentence. He got nothing officially.
As for why he did it? I think that's an interesting subject to speculate about.
LEMON: OK.
TOOBIN: But we can only speculate. I think the one key issue is, he will not have to sit through a trial. There will not be people testifying under oath who may wind up incriminating others. So he avoids that. He avoids the humiliation of sitting there for month after month.
LEMON: Yes.
TOOBIN: And he gets to try to allow his relatives to move on with their lives, which they certainly couldn't do if he was facing a trial.
LEMON: Right.
TOOBIN: But, he doesn't get much direct out of it. And frankly, given the magnitude of these crimes, he's very, very likely to die in prison.
LEMON: All right. Our senior legal analyst, Jeffrey Toobin. Jeffrey, thank you.
Bernie Madoff's worldwide web of fraud ensnared fat-cat investors, sure. But also small investors, charities, hospitals. And, yes, some celebrities as well. One man who lost more than $3 million made it his business to be at the courthouse this morning. Listen.
(BEGIN VIDEO CLIP) RICHARD FRIEDMAN, LOST $3.1 MILLION IN MADOFF SWINDLE: Bernie Madoff is somebody I just want to get by and put into my past. Expressing an anger to him doesn't do me any good. I can only go forward.
And in going forward, my objections are to the SEC, to SIPC, for making it so difficult for people to recover money, and for their call-backs against investors, and for the IRS not issuing any guidelines as far as amended returns or carried-back theft losses.
People are just waiting. There are people who have to sell their homes to find their next meal while Madoff continues the last few months in his $7 million penthouse. It's not right.
(END VIDEO CLIP)
LEMON: A lot of people feel the same way. As you've heard, Madoff won't be going back to that penthouse. The judge sent him to jail pending sentencing June 16. He'll be sentenced on June 16.
Ian Theirmann may be at work that day -- may be at work that day when it happened. He lost his life's savings and came out of retirement when Madoff's scheme fell apart. Everything he had saved, he lost it. He's 90 years old and remembers that fateful call from his lawyer.
(BEGIN VIDEO CLIP)
IAN THEIRMANN, 90-YEAR-OLD MADOFF VICTIM: It took my breath away is all I can say. I -- you know, "Oh, really? I mean, is that possible?"
(END VIDEO CLIP)
LEMON: Well, later this hour we'll hear more from Mr. Theirmann and his new employer, who calls him an inspiration. More, a little bit later on this hour.
Allen Stanford is no Bernie Madoff. He's a Texas financier accused in a multibillion-dollar fraud scheme. But Stanford's not admitting anything. Court papers filed in Dallas indicate he is pleading the fifth, refusing either to testify or give up documents the government wants. For now, at least, the case is civil, brought by the SEC. It is not a criminal case.
"Worse than expected." We're saying these words way too often these days, but today we can say "better than expected," at least about our economic number. First, let me give you the bad news. Here's the bad news: 660 -- 654,000 Americans -- 654,000 Americans filed first-time claims for jobless benefits last week. Worse than what economists had predicted.
Overall, the number of Americans continuing to file claims, getting those benefits for the long term, has topped 5.3 million. That's the highest number on record, and it's one in a series of records. We're also getting new numbers on foreclosures. More than 74,000 of them last month, up from 67,000 the month before. Foreclosures are up a staggering -- get this -- 30 percent just from one year ago.
OK. Now a bit of good news for you and possible signs of life at your local mall. Retail sales edged down 0.1 percent last month, less than predicted. This is the latest in a string of declines, but at least one economist we talked to hopes the trend could reverse before the end of the year.
If you're losing your home, shopping's probably the last thing on your mind. The foreclosure crisis seems to be spreading straight to the nation's heartland. I'll show you where you can find the latest numbers right in your own neck of the woods. Really, right on the tap [SIC] of your fingers. That's just minutes away.
But first, let's a look, a quick look at what the markets are doing right now. Take a look at the Dow, the Dow up 149 here and trading at 7,000. We'll continue to update those numbers. We'll go to Susan Lisovicz at the New York Stock Exchange in just a bit. Wall Street pushing its rally to a third day, despite the jobs and the foreclosure numbers that we have just gotten.
This just in to CNN, as well: the FBI has made two arrests after searching the office of Washington, D.C.'s chief technology officer. An FBI spokeswoman says the search is part of an ongoing investigation, but she didn't reveal what it's about.
One week ago, President Obama named the former head of the office, Vivek Kundra, as his administration's chief information officer. A law enforcement source tells CNN that Kundra is not involved in this.
The president already signed one stimulus bill, and already there's talk about another spending package. Who's calling for it? And can we afford it? And do we really need it?
(COMMERCIAL BREAK)
LEMON: President Barack Obama has some advice for states getting billions of dollars in the government's massive stimulus package. That advice: don't blow it.
Mr. Obama made his comments to a group of state officials today at the White House. He said if his administration sees states misspend the money, then in his words, "We're going to put a stop to it."
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We're going to have to make sure that every single dollar is well spent. We've got to go above and beyond what I think is the typical ways of doing business in order to make sure that the American people get the help that they need, and that our economy gets the boost that it needs.
(END VIDEO CLIP)
LEMON: Right now let's get more on that White House conference and the talk on Capitol Hill about already a second stimulus package. Second stimulus package. Let's bring in now Lisa Desjardins of CNN Radio.
Lisa, what's the reason for today's stimulus conference? Is it really that much consideration given to the possibility of a second stimulus? Is that what this is about?
LISA DESJARDINS, CNN RADIO CAPITOL HILL CORRESPONDENT: Well, there's a lot going on, right. Today's conference at the White House is rubber meets the road on stimulus No. 1. This is really -- it's one thing, I guess, to have a fleet-load of buses, but you've got to train the drivers and get them in the seats.
And that's what's happening today, as states come, send their chiefs of staff to figure out what do we need to do to get this money and how do we spend it?
But on son of stimulus or stimulus II, whole different question. There has been, honestly, Don, a bit of a mess up here on Capitol Hill in the last two days over this.
House Speaker Nancy Pelosi opened up the subject of a second stimulus. Then her staffers yesterday frantically denied, denied, denied, said nobody's working on it. I think the truth is somewhere in between. The fact is that it's on the radar.
We've spoken to House appropriations chair David Obey. He mentioned to his staff that he wants them to be thinking about it. That's what he told us. So it seems like it's on the radar but no time soon.
LEMON: Well, we've been hearing about the possibility of a second stimulus for a couple of weeks now. And what I heard over the weekend, especially when it came to the Sunday morning shows and also from sources, is that "let's see if the first stimulus package works before deciding about a second one. There may be need for a second one -- we'll have to see how the American people feels about that -- but let's see where this goes first before doing that."
DESJARDINS: Exactly. I think that congressmen realize that's the right answer right now, that Americans are pretty fed up and worried about the spending level, even as they're worried about the economy. And I think that's what House Speaker Pelosi said today. Her exact words -- you could have been a, you know, P.R. for her -- she -- she said that "let's see what this first one does, and then we'll move from there."
But I think they realize that they don't know what the future is and, you know, a lot of people think worst-case scenario would be another stimulus plan. It's something that's in the air.
LEMON: All right, we shall see. In the air.
DESJARDINS: Right.
LEMON: Lisa, we appreciate it, from CNN Radio.
One more note from Capitol Hill I have for you today. I'm talking about the treasury secretary. Tim Geithner is taking some heat today from senators in both parties. He is on the Hill to talk about the president's budget priorities. Geithner insists the president calls for more spending, and the higher deficits that will result are just temporary.
The committee's Democratic chairman, Kent Conrad, calls those projected future deficits, quote, "unsustainable."
It is a race against time in the North Atlantic. Search crews have found one survivor from a helicopter crash off Canada's Atlantic coast. The chopper was carrying 18 oil-rig workers.
(COMMERCIAL BREAK)
LEMON: No other way to describe this: a frantic search and rescue operation underway this hour off the coast of Newfoundland.
A helicopter with 18 people on-board went down in the frigid windy conditions. At last word, one survivor had been found and rushed to a hospital in St. John's in Finland. The chopper was ferrying workers to an offshore oil platform when it made what's described as a controlled emergency crash landing. The area is about 56 miles southeast of St. John's.
CNN's Jacqui Jeras joins us now in the CNN severe weather center.
Jacqui, we've got a lot happening.
JACQUI JERAS, CNN METEOROLOGIST: Yes.
LEMON: You know what we've been talking also about, that space junk and debris...
JERAS: yes.
LEMON: ... having those -- having to take precautionary measures out at the International Space Station. What have you found out?
JERAS: Yes, scary moments. You know, three of the astronauts actually went into the escape capsule for about 11 minutes.
What happens is that there's all kinds of junk, believe it or not, that's orbiting around the earth, all kinds of space junk that's out there. And recently, about a month ago, February 10, two satellites imploded. They ran into each other and basically exploded. And the satellite -- other satellites are actually able to track some of this debris. So the Iridium satellite is the debris that you see here in the red circle, and then the white circle is another one that's called the Cosmos satellite. And it's some of this debris that got very close to the International Space Station. They're actually able to maneuver it a little bit, apparently. There were no injuries, no damage to the International Space Station, so that's some good news.
But basically what is all this stuff that's out there? Take a look at this now. We're going to put on all the debris that is out there. It's amazing. There's over 170,000 people -- pieces of space debris that's four inches in diameter or more. So that's a lot of stuff to navigate around.
And there's also -- you know, this is like satellites, Don. This is rocket bodies, all kind of junk that's out there. We're actually able to track it. The space shuttle, also, by the way, once in a while has to maneuver around it.
So some scary moments but the good news is everything turned out A-OK.
LEMON: Everything -- they're all fine?
JERAS: Everybody's good.
LEMON: We like to hear that. Jacqui Jeras, thank you very much for that.
Meantime, we're waiting on the president. The president is speaking at this moment. We will bring that to you live in the CNN NEWSROOM just moments away.
(COMMERCIAL BREAK)
LEMON: All right. The president at a dedication this morning, talking about, really, the person he calls his role model, the former President Abraham Lincoln. This is a dedication of Abraham Lincoln Hall. We're going to listen in now to President Barack Obama.
OBAMA: Thank you, General Wilson, for the wonderful introduction and your hospitality. Thank you to Secretary Gates and Admiral Mullen for the extraordinary service that they render to this country.
I want to acknowledge the other members of the Joint Chiefs of Staff, who are doing outstanding work and have been a great support to me, and Ambassador Ross.
To each of you who are here for your service to our country and your commitment to our security, I want to say thank you on behalf of the American people. You know, I think so highly of NDU that I've picked one of your alumni, General Jim Jones, to be my national security adviser. And...
(APPLAUSE)
I know many of you have served in harm's way. And for that, you have the respect of a grateful nation.
And before I go any further, I want to acknowledge all of our troops now serving overseas. They have shouldered an awesome...
(APPLAUSE)
They have shouldered an awesome responsibility. They have performed brilliantly, and they have the full support of the American people.
Today, it is my privilege to join you in dedicating this building to the memory of President Abraham Lincoln. We know, of course, that there are many monuments to Lincoln's memory across this country. His words are written into stately walls, and his image is printed on our currency. His story is taught in our schools, and his name is synonymous with freedom. You and I live in the union that he saved, and we inherited the progress that he made possible.
Yet, despite this far-reaching legacy, it is still, to quote the man himself, "altogether fitting and proper" that we should set aside this ground and dedicate this hall in his memory, because Lincoln's presidency was characterized by war, even as his ambition was a just and lasting peace.
Here, in this indispensable institution, we find a living legacy to that ambition. Here at National Defense University, men and women come together to think, to learn and to seek new strategies to defend our union while pursuing the goal of a just and lasting peace.
The grounds that make up this campus tell us an interesting story about how America can pursue this goal. Fort McNair was built over two centuries ago to protect a young capital against invasion. Its defenses were traditional: training for soldiers, stockpiles of arms, fortifications to hold advancing armies at bay. It was overrun by a British attack in the War of 1812 and treated the wounded warriors of the Civil War in Lincoln's day.
And then, just over a century ago, President Theodore Roosevelt came here to lay the cornerstone of the Army War College. In dedicating the school, Roosevelt spoke words that resonate to this day. He said, "More and more, it has become evident in modern warfare that the efficiency of the unit, of the individual officer and the individual enlisted man is going to be the prime factor in deciding the fate of fought fields."
More than 100 years later, Roosevelt's insight remained the essential mission of this institution: The belief that, even as our weapons have grown more powerful, individuals still determine the strength of our national security, the belief that individual Americans remain, as Roosevelt said, the prime factor in deciding the fate of fought fields.
The battlefields that we now face would be unfamiliar to Lincoln and Roosevelt. The days when President Lincoln would wander down to the War Department's telegraph office to get reports from the front are long passed. But the threats to our nation are real, and they are direct.
From this fort, which was founded to defend the city of Washington against invasion, you could stand on September 11, 2001, and watch the smoke from the Pentagon billowing up across the Potomac. The attacks of 9/11 signaled the new dangers of the 21st century. And today, our people are still threatened by violent extremists, and we're still at war with terrorists in Afghanistan and Pakistan who are plotting to do us harm.
Yet terrorism and extremism make up just one part of the many challenges that confront our nation. In Iraq, we will surely face difficult days ahead as we responsibly end a war by transitioning to Iraqi control of their country.
A historic economic downturn has put at stake the prosperity that underpins our strength, while putting at risk the stability of governments and the survival of people around the world. We're threatened by the spread of the world's deadliest weapons, by emerging cyberthreats and by a dependence on foreign oil that endangers our security and our planet. Poverty, disease, the persistence of conflict and genocide in the 21st century challenge our international alliances, partnerships and institutions, and must call on all of us to re-examine our assumptions.
These are the battlefields of the 21st century; these are the threats that we now face. And in these struggles, the United States of America must succeed, and we will succeed.
We also know that the old approaches won't meet the challenges of our time. Threats now move freely across borders, and the ability to do great harm lies in the hands of individuals, as well as nations.
No technology, no matter how smart, can stop the spread of nuclear weapons. No army, no matter how strong, can eliminate every adversary. No weapon, no matter how powerful, can erase the hatred that lies in someone's heart.
So, it falls to institutions like this, and to individuals like you, to help us understand the world as it is, to develop the capacities that we need to confront the emerging danger, and to act with purpose and pragmatism to turn this moment of peril into one of promise.
That's how we will find new pathways to peace and security. That is the work that we must do.
Now, make no mistake: This nation will maintain our military dominance. We will have the strongest armed forces in the history of the world, and we will do whatever it takes to sustain our technological advantage and to invest in the capabilities that we need to protect our interests and to defeat and deter any conventional enemy.
But we also need to look beyond this conventional advantage as we develop the new approaches and new capabilities of the 21st century. And in that effort, this university must play a critical role.
Our troops are faced with complex missions. Increasingly, they're called upon to defeat nimble enemies while keeping local populations on their side. And that's why my administration is committed to growing the size of our ground forces and to investing in the skills that can help our troops succeed in the unconventional mission that they now face.
We must understand different languages and different cultures. We must study determined adversaries and developing tactics. That's the education that takes place within the walls of this university, and that is the work that must be done to keep our nation safe.
(APPLAUSE)
America must also balance and integrate all elements of our national power. We cannot continue to push the burden onto our military alone nor leave dormant any aspect of the full arsenal of American capability.
And that's why my administration is committed to renewing diplomacy as a tool of American power and to developing our civilian national security capabilities.
This effort takes place within the walls of this university, where civilians sit alongside soldiers in the classroom. And it must continue out in the field, where American civilians can advance opportunity, enhance governance and the rule of law and attack the causes of war around the world.
We have to enlist our civilians in the same way that we enlist those members of the armed services in understanding this broad mission that we have.
And, finally, we know that the United States cannot defeat global threats alone. There's no permanent American solution to the security challenges that we face within any foreign nation, nor can the world meet the test of our time without strong American leadership.
That's why my administration is committed to a comprehensive engagement with the world, including strengthened partnerships with the foreign militaries and security forces that can combat our common enemies.
Those partnerships are advanced here within the walls of this university, where we welcome men and women from around the world to study alongside Americans, to understand our values, to forge partnerships and hopefully friendships that contribute to a safer world.
The lesson of history is that peace and security do not come easily. Each person who passes through this university will play a different role.
Some of you will serve in uniform abroad or help train troops here at home. Some will be diplomats, intelligence officers or congressional staffers. Others will work in the private sector. Some will rise to be senior officers and top strategists, and some of you might even decide to run for public office, although I'd warn you about that. (LAUGHTER)
Your story is your own, and the education that you're receiving will help you advance it. But you're here because you've also accepted the responsibility of having your story as part of the larger American story, your story serving your fellow citizens in the wider world.
And my message to you today is simple: Your individual service makes all of the difference. You will make the decisions, large and small, that will help shape our future.
So, as we dedicate this building where you and future generations will be prepared to make these choices, remember that the true strength of our nation comes not from the might of our arms or the scale of our wealth. It comes from the power of our ideals: democracy, liberty, equality, justice and unyielding hope.
Those...
(APPLAUSE)
Those ideals are embedded in our national character because generations of Americans have chosen to live them in their own lives, to advance them through their service and through their sacrifice.
This is the truth that Lincoln understood, that pragmatism must serve a common purpose, a higher purpose. That's the legacy that we inherit. And that, in the end, is how government of the people, and by the people, and for the people will endure in our time.
So thank you. God bless you. And God bless the United States of America.
(APPLAUSE)
LEMON: President Barack Obama speaking today at the National Defense University in Fort McNair. Really, it is a dedication to Abraham Lincoln Hall there. I just want to give you a little bit of information and talk about the what the president said. Lincoln Hill is a new three-story building. And you see the dedication. There's a portrait of former President Abraham Lincoln.
Located at the National Defense University in Fort Leslie J. McNair, the 250,000 square-foot building will provide the National Defense University with additional classroom, meeting and conference space. It will house about 600 -- 600-seat auditorium, which part of it they're in now. It's 6,800 square feet. It will make it 2,000- person capacity meeting space.
So, they're doing huge renovations here in this dedication: Classrooms, offices, support areas and of course a cafeteria there. The president using this time at this dedication to talk about warfare and terrorism in the country. Also saying that at that same university that foreign students will come and learn alongside American students, learn about America's traditions, saying that old approaches really don't have a place now in this time, especially when it comes to terrorism and it comes to warfare, asking people to provide service, not just military folk, but civilian as well. President Barack Obama in Washington at a dedication now.
Let's get back to our big financial story of the day. We're talking about Bernie Madoff. It is payback time for him. As you know if you've been watching CNN, the New York investment guru who fleeced thousands of clients out of billions of dollars might never breathe free air again. He's expected to be in prison for a long time.
Madoff pleaded guilty to 11 counts of fraud, money laundering and perjury today in federal court in Manhattan. Add it up, they could buy him 150 years in prison when he is sentenced on June 16th. Until then, Madoff won't be returning to his multi-million dollar penthouse in Manhattan. The judge sent him directly to jail.
Well, by now, you know Madoff's operation is described as the biggest Ponzi scheme in history. A Ponzi, by definition, is destined to fail. It can last for quite a long time, though. The swindler pays investors from their own money and the money paid by later investors rather than from a profit from that investment scheme.
The scheme offers huge term -- short-term returns in order to lure new money. It needs that money from a constant flow of new investors to keep going. It ultimately collapses because earnings are less than the payments.
If you can't retire at 90 -- at 90 years old -- there is a problem. Something is wrong. Well, here now, the story of a California man whose golden years were stolen by Bernie Madoff. The reporter is Colleen McEdwards of CNN international.
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COLLEEN MCEDWARDS, CNN INTERNATIONAL CORRESPONDENT (voice-over): If you want to understand how the Madoff scandal hits home, meet 90- year-old Ian Thiermann and his wife, Terry. Thiermann lived through the Great Depression of the 1930s. He learned to save and says he had almost $700,000 invested with Madoff. His attorney called him when the scandal broke, with devastating news. His life savings was gone.
IAN THIERMANN, MADOFF VICTIM: When he called me in December, he was in a state of total shock. I've never heard him -- I mean, he was an attorney. He said my father, my mother, my aunts, uncles, we have lost everything. I have lost everything, and you've lost everything.
MCEDWARDS: He still has house payments to make, and his wife has medical bills that are piling up. Determined to get through this, Thiermann is working 30 hours a week for $10 an hour. He just refuses to feel sorry for himself.
THEIRMANN: They may have put this job out for me, and so I'm going to do the best I can.
MCEDWARDS: Market owner Ron Clements calls Thiermann an inspiration to others going through tough financial times. RON CLEMENTS, MARKET OWNER: His will to succeed after losing everything, people are saying to me, you know what? I'm going to step up to the plate. I'm just not going to sit here and take it.
MCEDWARDS: You might expect some bitterness on the other end of this spectrum. But the Thiermanns just won't go there. They pity the former Nasdaq chairman for his alleged fraud scheme.
TERRY THEIRMANN, MADOFF VICTIM: I feel sorry for him because he has to live with the consequences of what he did.
MCEDWARDS: And living with the consequences is what thousands of investors are having to do as well.
Colleen McEdwards, CNN, Atlanta.
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LEMON: Ninety years old, can't retire.
You know, worse than expected. We're saying those words way too often these days: "It's worse than expected. My gosh, it is so bad." But today, we can say "better than expected," at least about one economic number.
But I want to give you the bad news first -- 654,000 Americans filed first-time claims for jobless benefits. That was last week. That's up from the week before. Overall, the number of Americans continuing to file claims -- well, it's getting those benefits for the long term -- has topped 5.3 million Americans. That's the highest number on record.
More than 74,000 homes were lost to foreclosure last month. And filings for foreclosures are up a staggering 30 percent just from a year ago. OK, now a bit of good news. We're going to get to those foreclosure rates in a moment.
Retail sales, I want to tell you about, edged down one-tenth of a percent last month. And that's less than what most people predicted. This is the latest in a string of declines, but at least one economist we talked to hopes the trend could reverse before the end of the year.
And so, you want to get our hands on these numbers. We want to talk to you now. We've been talking about the foreclosure rates and how they are up, and in areas that had strong, really strong real- estate values and markets before. Check it out, the numbers here in red, the states here in red, the reddest ones like Nevada, you can see, they have huge problems here. Foreclosure rate, 1.429. Foreclosure filings -- that was just last month -- 15,783. Almost 16,000 foreclosures.
Same thing in California, which usually has a very strong real estate market, especially being along the ocean there and because of all the different climates you get. Foreclosure rate here, 0.66 percent -- 80,000. Check it out, 80,775 filings just last month there. And then when you get here, sort of in the manufacturing belt, around Michigan, Illinois, what have you, of course, hardest hit as well. Same thing happening over on the East Coast in places like Connecticut, very strong housing value. Maryland., D.C. and also Florida. A lot of foreclosures there.
The interesting one for me was I didn't expect states like Idaho to be in there, even Colorado, which is very strong as well. Lots of people want to move there because of the climate. But you see the foreclosure rates and filings going up in America. Not good news. Hope we get them down soon.
Meantime, not having health insurance, of course, is really scary. But so is shopping for it. Our Elizabeth Cohen will help you sort things out.
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LEMON: We have just got those jobless numbers, so this is a good question to ask, or a good one for you to pay attention to. If you just lost your job -- a lot of you have -- and with it, your health insurance. Choosing new coverage can be daunting. In this week's "Empowered Patient," our senior medical correspondent, Elizabeth Cohen, helps you separate the good policies from the bad ones.
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ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: Shopping for health insurance on your own can be a daunting task, but it's a task that millions of people may have to do. Let's take a look at some recent job numbers. What happened in January and February of this year is that 1.25 million jobs were lost, and it's estimated that half of those people also lost their health insurance along with their job.
And they now have a choice. They can either try to go for COBRA, which can be very expensive, or they can just go on the open market and find a private health insurance policy of their own. Now, doing this on your own, as I said, can be very difficult.
So, at the "Empowered Patient," we wanted to give you some tips for how you can be a smart shopper for health insurance. Take a look at these three pieces of advice.
First of all, you need to ask when you're shopping, will my premiums go up? Maybe they tell you what your premiums are, but those may not be your premiums forever. So, ask if there is a point at which your premiums will go up. Also, find out if the insurance company is licensed in your state. Sometimes companies will sell in states where they're not licensed. That can be a big problem for you down the road. Also, make sure you understand and make sure you see it in writing: What are your deductibles and your copays? A deductible is how much do you have to spend out of pocket before the insurance kicks in. With some insurance policies, you have to spend thousands of dollars before the insurance will start paying.
And then, let me talk about copays for a minute. Even when the insurance does kick in, usually you're responsible for a portion of any bill. So, for example, when you go to the doctor, you might have to spend $25 as your copay. So, make sure you see those deductibles and those copays in writing. To learn more about how to be a smart shopper for private health insurance, go to CNNhealth.com.
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LEMON: Elizabeth Cohen, we appreciate that information. You're looking now at Robert Gibbs, the White House spokesperson, holding the daily briefing in Washington, D.C. We're going to get to it and listen in. Robert Gibbs.
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ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: He's asked the Office of Management and Budget to review the legislation and come back. Staff will make a recommendation regarding whether a rescissions package should go forward or not, so that review is current and ongoing.
QUESTION: Any idea when that might...
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GIBBS: I can certainly check with those guys, but I -- it's an ongoing review.
Yes, ma'am?
QUESTION: France and Germany have rejected the U.S. calls for a stimulus, and the president outlined a dual goal of pushing stimulus at the G-20 and also revamping financial regulations. Does this alter his message at the summit? Or how is he going to get around that objection?
GIBBS: Well, let me -- I think, and as I talked about this I think it was last week -- that the president looks at his trip to the London economic summit in -- not as an either/or but as a both/and proposition, that we have two equally important ideas and messages for that summit.
And the first is that we must manage and overcome the current economic crisis that the world finds itself in, and then we must also take steps to prevent future crises from happening to the global economy.
What the president and what this country will do, we're not going to negotiate some specific economic percentage or commitment, but continue to talk about the notion that, as the president has talked for some time, that it is important that the world act together in growing our economy, as well as that we together take steps to ensure that the crisis doesn't happen again.
Obviously, different international bodies have said that the global economy is likely to contract at about 2 percent of GDP over the course of the next two years and that their recommendation is that countries stimulate their economy to that degree.
That's in large measure what the United States has done, and the president will talk to other nations of the G-20 about acting together in hopes of doing the same without, again, negotiating some specific commitment.
And then, obviously, it's incredibly important, and the administration has begun work on reworking our financial regulatory system here in America to ensure, as I've said, that the crisis that we've -- we are experiencing now, the same factors don't lead us to experience that crisis again.
QUESTION: But if you already have two countries saying no to that, how does he get around that?
GIBBS: Well, I -- as I said yesterday, I think partly that's what summits are for. I think we're going to talk to other countries and other nations about continuing to do what's necessary to get through this crisis.
But, again, this isn't -- I also think it's important that we not think of this event as just simply one moment in time. Obviously, once we're done with the summit, people are going to have to evaluate both where their economies are and where the global economy is and make changes.
So, obviously, the president looks forward to talking to leaders about a shared agenda to manage the crisis that we're in and that -- and to also prevent a future crisis from happening.
Jake, happy birthday.
QUESTION: Thank you. Yesterday, in an interview with a bunch of regional newspapers, President Obama suggested that congressional Republicans needed to do more than just say no to what the president and Democrats were proposing. They needed to present alternatives when it comes to stimulating the economy.
How does the president reconcile that with the meeting he had with bicameral, bipartisan congressional leaders in, I think, January where House Republicans gave the president a list of ideas and the president said, "I don't see anything crazy on this list," but few of them, if any, were incorporated into the stimulus. It seems that there's a disconnect.
GIBBS: Is this -- are you talking about the meeting that we went to before the president was sworn in, in early January?
QUESTION: Whenever he told Congressman Cantor...
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QUESTION: ... Cantor gave him a list of things and said -- of suggestions, things they wanted to see in the stimulus. The president said, "I don't see anything crazy on this list," but the Republicans say none of them were -- or few of them were incorporated into the stimulus bill.
GIBBS: Right. I do think -- I think if you go back and look at the bill, I do think, as you just mentioned, some of their ideas were incorporated. The earlier meeting that we did on Capitol Hill had the same congressman, Eric Cantor, suggesting that, in order for the American people to see transparently what the administration was spending the taxpayer money on for economic recovery, that a Web site be created so that the public could track that funding. That's exactly what the administration has done.
And I made a similar argument here yesterday, not just on recovery, but on the budget. We have members of Congress rightly concerned about the growth of deficits and debt, yet at the same time the -- one of the primary drivers of a deficit and a debt are our obligations to Medicare, and Medicaid, and health care spending.
If they're concerned about the deficit, the best way to exercise that concern, if you're critical of what the administration has proposed, would be to come up with, as I said yesterday, an honest budgeting document that pays for both wars, that pays -- takes into account natural disasters or future money for economic and financial stability, and does so in a way that demonstrates clearly for the American people that you're putting this country back on a path towards fiscal responsibility and fiscal sustainability.
Certainly the president would welcome looking at -- the administration, I'm sure all of Congress would welcome looking at a document very similar to that.
QUESTION: If the president incorporated some of -- if the Democrats on Capitol Hill and the president incorporated some of the Republican ideas, Why would the president say the Republican Party is a party of no ideas?
GIBBS: Well, I do think you've heard, certainly, recently a lot more criticism than you've heard suggestions. I think you've -- I think the obligation of anybody involved -- I'll quote my friend, Warren Buffett again. He certainly made mention of the fact that Democrats and Republicans, because of the gravity of the situation and the many challenges that we face, should work together. I think working together would include sharing ideas on both sides of the aisle about what has to be done.
There's, you know, coequal branches of government. I think it's important that everybody be involved in a healthy debate about the solutions that might surround a recovery plan and how to get our economy growing for the long term.
LEMON: All right, White House spokesperson Robert Gibbs holding a press conference there, talking about the economic global -- the global economic crisis, what America can do about that, talking about the summit coming up with world leaders and what they expect, at least, to get accomplished there. Robert Gibbs, holding the daily White House briefing, as he does every day. We'll continue to monitor that for you and bring you any news out of that.
