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American Morning
Iraqi Shoe-Thrower Sentenced to Three Years in Prison; Madoff to Plead Guilty to Criminal Charges; North Korea Threatens to Launch Missile; Terror Groups Creep Closer to Kabul; Recession Hits "Sesame Street"; Clinton Talks About Health Care Reform and Concern With Parkinson's Disease; $65B Con Man Pleading Guilty; Splitsville for Bristol & Levi; Banks Reject Bailout; Hill Hearings on Cartel Violence
Aired March 12, 2009 - 06:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KIRAN CHETRY, CNN ANCHOR: I'm glad you're with us this morning. It is Thursday, March 12th. I'm Kiran Chetry along with Rob Marciano. John Roberts taking a couple of days off. Good to have you with us here.
ROB MARCIANO, CNN CO-ANCHOR: Yes. And nice to be here. A couple of days for John back in the home country. He'll be back here on Monday.
CHETRY: The home country being Canada.
MARCIANO: That's right.
Lots to cover this morning. We'll start you off with some of the top stories on our agenda right now. We'll be breaking them down for you in the next 15 minutes.
Three years in prison for the Iraqi journalist who threw his shoes at former President George Bush back in December. The sentence handed down by an Iraqi court in just the past hour. The journalist was hailed as a hero in many parts of the Islamic world for the shoe- throwing incident. We're live in Baghdad with that story.
Meanwhile, here in this country, we're just hours away from Bernard Madoff's expected guilty plea to all 11 felony counts against Madoff, who is 70 years old, could get 150 years in prison, basically putting him behind bars for the rest of his life.
We're standing by live outside the courthouse and we have new details on the investigation into where the billions Madoff allegedly stole from investors went.
And breaking overnight, North Korea reportedly setting a time frame to fire a satellite into space next month. The U.S. and South Korea suspect the satellite launch is a cover for testing a missile, and Pyongyang warns any attempt to shoot it down will be considered an act of war. Tensions remain high, and we're covering the story from Seoul, Korea, to south to Washington.
CHETRY: And we begin with breaking news just in to CNN. Again, the Iraqi journalist who threw his shows at former President Bush back in December gets a three-year prison sentence. Muntadhar al-Zaidi says that the shoe-throwing was a protest against U.S. occupation of Iraq. It happened during a joint news conference in Baghdad with President Bush and Iraqi Prime Minister Nouri al-Maliki. It's also something that even the former president himself called one of the strangest moments of his presidency.
We bring in CNN's Nic Robertson live in Baghdad. So this is quite a serious sentence, Nic, for a guy who was hailed as a hero by some in Iraq after this incident.
NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, you know what, his lawyers, Kiran, said the sentence could have been much worse. They were expecting maybe 15 years. He's been convicted of assault of a visiting head of state, so a pretty serious charge. But his lawyers, he had 17 of them in the court with him today, they say they'll appeal this case.
His family were distraught. Cursing President Bush, cursing the prime minister, Nouri al-Maliki. When he was -- when the sentence was handed down into court, apparently Muntadhar al-Zaidi shouted out, long live Iraq, long live Iraq. That was his reaction to the sentence. But it could have been worse but he has so much popular support here and in the region. It is going to come as quite a shock and a surprise. Even one of the top lawyers in the country thought he would get off -- Kiran.
CHETRY: Well, all right. Nic Robertson for us in Baghdad this morning. Thanks so much.
MARCIANO: And developing this morning in just a few hours, Bernard Madoff is expected to plead guilty to running the biggest investment fraud in history, which could send him to prison for the rest of his life. He's charged with robbing investors of billions of dollars. For many of them, their entire life savings. But if Madoff thought pleading guilty would end the investigation, well, he thought wrong.
Right now, federal investigators are ripping apart 25 years of fraud inside Madoff's firm to find out where all the money went.
CNN's Allan Chernoff is live at the federal courthouse in Lower Manhattan. Good morning, Allan.
ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT: Good morning, Rob. And Madoff is expected to plead guilty to 11 criminal charges, admit that he ran a huge and massive investment fraud that cost thousands of people billions of dollars. He's expected to make this plea without an agreement with the government that would require him to tell prosecutors everything he knows. So the question remains, where is the money?
(BEGIN VIDEOTAPE)
CHERNOFF (voice-over): Eleven days before confessing his alleged fraud to the FBI, Bernard Madoff sent account statements to thousands of clients around the globe, claiming they had assets of nearly $65 billion with him. The number was pure fiction. In fact, Bernard L. Madoff Investment Securities appears to have been holding less than two percent of that amount. Victims are wondering, what happened to their money?
RONNIE SUE AMBROSINO, MADOFF VICTIM: I want to make sure that the rightful people get their rightful money back.
HELEN LOUIS CHAITMAN, MADOFF VICTIM: The justice for me would be restitution to all the victims.
CHERNOFF: The bulk of the money, prosecutors charged, was used to fuel the allegedly Ponzi scheme. Money coming in was used to pay investors withdrawing funds.
DAVE KETTEL, FMR. FEDERAL PROSECUTOR: It is a con game. And it's always surprising that people think that they can get away with this. Because eventually in every single case, the house of cards eventually falls down.
CHERNOFF: Madoff allegedly took a big cut for himself. The criminal complaint says he spent investor dollars buying and maintaining properties. He has homes in France, Palm Beach, Florida, Montauk, New York, and the Manhattan apartment where he's been under house arrest.
The government also charges Madoff laundered money, transferring $250 million from his New York headquarters to a London office using some for his personal use and sending some funds back to the New York office. Madoff also allegedly used millions of investor funds to support what had appeared to be a legitimate stock-trading business, which matched buy and sell orders for brokers, like Fidelity and Charles Schwab.
(END VIDEOTAPE)
CHERNOFF: Victims will be permitted to speak before the court on two issues -- should the court accept a plea and should the court send Mr. Madoff to prison right away or allow him to stay out on bail? And you know he's been staying at his luxurious apartment on the Upper East Side of Manhattan. You better believe the victims have a lot to say on that final issue -- Rob.
MARCIANO: No doubt about that. Not bad digs up there.
All right. Allan Chernoff on the story for us in Lower Manhattan. Thanks, Allan.
And coming up at 6:30 Eastern, we'll talk to one of Bernard Madoff's victims who lost millions in the alleged Ponzi scheme. Wait till you hear what he thinks would be just punishment for the accused Wall Street swindler.
CHETRY: Also developing in morning, North Korea reportedly a step closer to a satellite launch. The South Korean news agency says that Pyongyang has told international maritime and aviation officials that this launch will happen between April 4th and April 8th. The U.S. believes it's a cover actually for testing a long-range missile that could possibly reach Alaska or even the western part of the U.S. North Korea has threatened retaliation if this satellite is intercepted. Meantime, Secretary of State Hillary Clinton says the U.S. is still determined to get Pyongyang to abandon its nuclear program.
(BEGIN VIDEO CLIP)
HILLARY CLINTON, SECRETARY OF STATE: It is important to recognize that the North Koreans entered into obligations regarding de-nuclearization that we intend to try to hold them to. And that is something we're going to do regardless of what happens with their -- with what they may or may not launch in the future.
(END VIDEO CLIP)
CHETRY: CNN's Jill Dougherty is following the story for us from Washington this morning. What are you picking up from your sources this morning about how this is playing out?
JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: Well, Kiran, you know, North Korea has been threatening for weeks to launch a long- range missile, what they call a Taepodong-2. And this one making a lot of countries nervous. Now the North says that it's for space communications research. The South Korea and the U.S. believe that it's for military purposes and theoretically that kind of missile could hit Alaska.
So, Secretary of State Hillary Clinton is saying essentially go ahead, launch it. It's not going to change our policy.
Now, a senior administration official says Clinton is actually calling their bluff. North Korea has been getting a lot of attention with this threat. But she's saying, you can act out all you want, but we're still going to push you to give up your nukes and we're going to do it with our allies in the Six-party talks. Clinton says her envoy, by the way, to North Korea, Stephen Bosworth, was ready at a moment's notice to go to North Korea, but the North didn't invite him and she says, the U.S. regrets that -- Kiran.
CHETRY: All right, Jill Dougherty for us this morning. Thanks so much.
MARCIANO: Turning to the war in Afghanistan, right now the Obama administration is considering whether it can weaken the Taliban by creating alliances with more moderate insurgents. But negotiations seem unlikely at a time when the terror group is gaining momentum, taking its bloody war to the capital, attacking Afghan police and government targets with increasing frequency.
This morning, CNN is dedicating more time and resources to a dangerous region where American troops are risking their lives. CNN's international security correspondent Paula Newton is working the story from Kabul, Afghanistan.
(BEGIN VIDEOTAPE)
PAULA NEWTON, CNN INTERNATIONAL SECURITY CORRESPONDENT (voice- over): Some days all that's standing between the Taliban and its prime targets in Kabul is this work-weary dog and his underpaid masters. The Kabul police are front line warriors against a raging insurgency, an insurgency creeping ever closer to the capital.
More proof of that came last month as eight Taliban fighters brimming with weapons and suicide vests bursts into three government buildings in the center of town. Twenty people were killed, dozens wounded.
(on camera): Ah, what a massacre.
(voice-over): Commander Mohammed Daud Amin is pointing to the dead justice ministry staff. But as he opens his evidence book to us, he says the attack could have been much worse.
With every flip of the page, the gruesome scene unfolds. Commander Amin says his force prevented these fighters from taking dozens of hostages and blowing them all up.
COMMANDER MOHAMMED DAUD AMIN, KABUL POLICE (through translator): We are working on a security strategy for the city, and if we don't get it right, they can attack at any minute, at any hour, anytime.
NEWTON (on camera): The attack on the justice ministry here took many by surprise. It struck at the heart of Kabul, a direct hit against government institutions. And the Taliban says they will strike again.
(voice-over): Just listen to how those Taliban fighters slipped into the city last month.
ABDULLA MAHBOB, KABUL POLICE OFFICER (through translator): They used government cars with tinted glass, and we don't have any authority to stop them.
NEWTON: But coalition forces here are still rooting for Kabul's cops, handing over much of the city's security to them. It's more than symbolic. It's a crucial test to see if this country can stand on its own even with the Taliban hovering at the gate.
(END VIDEOTAPE)
NEWTON: You know what is interesting here is when President Obama talks about trying to redefine what the mission is in Afghanistan, Kabul, hanging over security in Kabul is absolutely crucial. At some point in time, they are going to have to really deal with security themselves. And that's part of those goals, those well- defined goals for U.S. troops now surging into Afghanistan.
MARCIANO: Judging from your report, Paula, you know, negotiations with moderates seems a little bit dicey. I hear you actually spoke with the Taliban commander on the phone. What did he tell you? NEWTON: Well, you know it's interesting. If they are going to negotiate, they won't even admit that they will negotiate. They want to do it from a position of strength.
What does that mean? That means more attacks. And what they told me about Kabul is saying, look, we understand it's defended by thousands of coalition forces, plus the Afghan army, plus the Afghan police, and they're saying we can still strike at anytime. And we will strike at anytime. They confirmed that indeed, Kabul, is still a prime target.
MARCIANO: Dicey situation for sure. Paula Newton live for us in Kabul. Thanks, Paula.
CHETRY: Well, layoffs on "Sesame Street," even Big Bird getting hit by the recession. Christine Romans tracking the story, still ahead.
Also, former President Bill Clinton opening up about his health. He talks exclusively with Dr. Sanjay Gupta about life after heart surgery and his fear of having Parkinson's disease.
It's 11 minutes after the hour.
(COMMERCIAL BREAK)
MARCIANO: Well, John for you, "Philadelphia Freedom," you can find that song on Bill Clinton's autographed red iPod Nano.
Good morning, everybody. It's 13 minutes after the hour. Let's fast forward to the stories you'll be seeing on CNN and CNN.com today.
The former president's MP3 player is up for grabs online through tonic.com. Just over seven hours left on the auction. Get in on the auction. Bids have topped $1,200. All proceeds go to health, music programs in areas hit by hurricanes Katrina and Rita back in 2005.
And first lady Michelle Obama makes her first official trip outside of Washington today. Travel to North Carolina, as a matter of fact. At about 12:45 Eastern Time, she'll be tour the Fort Bragg military base and meet with families. At 4:30 Eastern, she speaks to community groups in Fayetteville that provide support to soldiers and their families.
And at 10:00 a.m. Eastern Time, three American hostages held for more than five years in the Colombia's jungles will receive the civilian equivalent of the Purple Heart, Defense of Freedom Medal honors Defense Department employees and contractors injured or killed in the line of duty.
Quite an honor there, for sure. And they're definitely glad to be back at home. And glad that the markets have stabilized just a little bit. Thanks, Christine.
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Thanks (ph) to you, Rob. MARCIANO: Yes, exactly.
CHETRY: Rob comes to town, the markets stay positive.
ROMANS: Oh, he's wearing a red tie, so I'm a little worried about that.
CHETRY: And you're wearing a bright red suit.
ROMANS: I know.
CHETRY: But you know, also this morning...
ROMANS: True.
CHETRY: Anything on "Sesame Street" not as sunny as it usually is. A nonprofit organization that produces the popular kids show is cutting 20 percent of its workforce. It's about 67 positions and while the company is funded by government agencies, foundations and corporations as well as licensing and syndication deals, the CEO recently said that the company was not immune to the recession.
So Christine Romans is here. Now you know what's bad if they're targeting Big Bird.
ROMANS: Poor Elmo.
MARCIANO: That's not right.
ROMANS: I know. Well, Wall Street, Main Street, "Sesame Street," look. And what's happening there is what's happening to a lot of different companies, just cutting 20 percent off the top. Every single part of the company is going to be hurt.
We've seen it this week in United Technologies, McClatchy, the newspaper company. We've seen a bunch of lawyers lose their jobs this week, feeding the whole cottage industry, lawyer jokes, unfortunately. And Dell yesterday, cutting workers worldwide but it wouldn't say exactly how many.
Couple of things here I want to point out is that how does this look in your neighborhood? Some parts of the country are better than others, believe it or not. Double-digit unemployment rates now in four states, if you take a look -- Rhode Island, California, Michigan, those red states are where unemployment is now 10 percent or higher.
But look at the green states. And Texas is well, has been doing well. It's right there along the national average, but look at those green states. Those are places that are doing a little bit better than the rest of the country. So that's something --
ROMANS: The four states which is South Carolina, Rhode Island, California and Michigan. Michigan has 11.6 percent unemployment. And this is all feeding you guys the foreclosure crisis. Foreclosures in February up 30 percent. Remember, we keep talking about moratoriums on foreclosures. We're talking about servicers who are not doing foreclosures right now because of just how difficult it is. Foreclosures up 30 percent, so these three things really feeding on themselves.
You know the job cuts, the unemployment rate spiking, foreclosures spiking, and then that hurts the retailers, the consumers. We're going to get data, more data on all of this later today.
CHETRY: All right, Christine, thanks so much.
ROMANS: Sure.
MARCIANO: Thanks, Christine.
Well, Dr. Sanjay Gupta's exclusive sit-down with Bill Clinton. The former president talks about the need for health care reform and his own health issues, including the fear of having Parkinson's disease.
Right now, we're just hours away from Bernard Madoff's expected guilty plea to a long list of felonies. And this morning, we're talking to one man who says he lost millions. Find out what he thinks about Madoff not getting a jury trial.
It's 17 minutes after the hour.
(BEGIN VIDEO CLIP)
DAVID LETTERMAN, HOST, "LATE SHOW WITH DAVID LETTERMAN": Yes, I'm telling you, this guy is in trouble now. He could go to prison -- could go to prison for 150 years, 150 years.
And here's the deal. People who knew about this kind of stuff are saying that when Bernie gets out of prison in 150 years, the recession might be over. So that's something, right?
(END VIDEO CLIP)
CHETRY: Welcome back to the Most News in the Morning. Sitting in for Larry King, Dr. Sanjay Gupta got an exclusive interview with former President Bill Clinton. He talked about health care reform, but also the talk turned personal.
(BEGIN VIDEO CLIP)
DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: I have to ask you, how are you feeling? I was there outside the hospital when you had your heart surgery. Are you back 100 percent?
BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: I think so. It's interesting. In some ways, I'm stronger than I was before my surgery. And by conventional measures, I'm healthier. I still got about ten pounds to lose that I've gained in the campaign last year working for Hillary, but otherwise I think I'm fine. The one thing I noticed was in my balance is better, when I'm doing balance drills. But the one thing I noticed is what a friend of mine referred to as raw country strength. I don't know if I've recovered. Like, I can't hit a golf ball as far even though I can lift more weights.
GUPTA: One thing I've noticed even when I was talking to you and we talked about this before, when you point with your finger --
B. CLINTON: Sometimes it shakes. See, it's a little shaky, no shake here.
GUPTA: Is that it? And is that...
B. CLINTON: I've been tested for it. I don't have Parkinson's.
GUPTA: You don't have it.
B. CLINTON: No. The doctors tell me that as people age, they become more vulnerable, for example, to having these muscles, like if I write a lot...
GUPTA: Yes.
B. CLINTON: ... or play video games or, you know, just do anything like that, anything with a lot of my fingers, and these things -- these tighten up. Or if I'm tired, if I'm working hard, it will cause your hands to shake. So that, see, that's pretty calm -- a little bit of shake, not much -- none over here.
And some days they both shake, some days none of them do. And I was quite concerned about it because if I had Parkinson's, I wanted to know so I could prepare.
GUPTA: Right.
B. CLINTON: And I had it tested and the doctor says no. He says it's just a normal aging phenomenon.
(END VIDEO CLIP)
MARCIANO: That makes sense. My dad also had open-heart surgery and he shakes quite a bit.
CHETRY: Oh, really.
MARCIANO: So, I think it's -- my prognosis is that the former president will be OK.
CHETRY: And he's so just amazing how candid he was with Sanjay about all of this. Well, because, you know, I mean, it's very personal to talk about your health and especially when you get older. You know, you're sort of protective of that. You want to hold on to, you know, feeling like you are just as robust as you were.
MARCIANO: And, Sanjay, he just can't help himself, you know. As a doctor, he wants to ask a personal question.
CHETRY: Right. Pry into his medical records.
MARCIANO: But his other job also is to kind of pry into health reform, so he talked to President Clinton about the possible roadblocks to health reform.
(BEGIN VIDEO CLIP)
GUPTA: Should we be focusing on the economy for now? Health care is important, education is important, energy is important, but how does that help the economy? How do you sell that?
B. CLINTON: Well, first, I believe that health care and education and energy are all economic issues. It's difficult to see how America can be a preeminent country in the 21st century without an affordable high quality health care system, without doing a better job in K-12 education and doing a better job of getting more people into college and out of college, and without becoming more energy independent through clean energy and greater efficiency.
And if we do the right things, then education will give us more of the right kind of jobs. Energy will generate millions of jobs, and health care will both make us a healthier, stronger, more productive country and free up money that we would otherwise be wasting on health care to invest in our children's futures.
(END VIDEO CLIP)
MARCIANO: And we'll have more of Sanjay's exclusive interview with Bill Clinton when he joins us live at 7:40 Eastern Time.
CHETRY: All right. Well, of course, former president, by the way, 62. So he still looks great.
MARCIANO: Yes, looks good.
CHETRY: Sure does.
All right. Well, new this morning, this video of an amazing rescue at Niagara Falls. Witnesses say that a man jumped into the icy waters on the Canadian side yesterday, plunging over the 180-foot Horseshoe Falls and incredibly survived. They say that he was in critical condition, semiconscious, suffering from a head injury and hypothermia after that plunge. He was in the water for more than 40 minutes, but he was eventually rescued.
As we said, a firefighter, brave guy, jumped in and grabbed him. Only two other people had ever survived that plunge without protection.
And Michael Phelps'S loss is apparently hungry's (ph) gain. Kellogg's donated about 3,000 boxes of cereal featuring the Olympic champion on the box to a food bank in San Francisco. Kellogg's did not renew its endorsement contract with the swimmer after he was photographed, looked like smoking out of a bong at a party in South Carolina. And the food bank says cereal is a rare item for them to receive. Kellogg's says it routinely donates food nearing the end of its shelf life but still good.
And the teen romance involving Sarah Palin's daughter back in the spotlight. CNN learning new details of Bristol Palin and Levi Johnston's marriage plans. We'll tell you what's new.
It's 25 minutes after the hour.
(COMMERCIAL BREAK)
MARCIANO: Welcome back to the Most News in the Morning. Ellen DeGeneres desperately wants to be a cover girl. You know this, right?
The daytime talk show divas are at it. It seems like she's the only woman besides the first lady who hasn't been on the "O" magazine.
CHETRY: Yes. Well, so -- yes, she appeared on "The Tonight Show With Jay Leno" last night. Here's what she said about it.
(BEGIN VIDEO CLIP)
ELlEN DEGENERES, COMEDIAN: I guess Michelle Obama, the first lady, is going to be on first, which is fine. You know, I mean...
JAY LENO, HOST, "THE TONIGHT SHOW WITH JAY LENO": You can live -- you can live with that.
DEGENERES: Yes, she's the first lady. She should be on first.
LENO: Right. Right.
DEGENERES: But I just want to set this record straight that I started talking about this to be the first person other than Oprah to be on the cover.
LENO: Right.
DEGENERES: Of course, here's the real cover. This is Michelle and Oprah, which is a beautiful cover. If they had not gone to press yet, because this is the May issue, what if they do this?
Look at that.
(END VIDEO CLIP)
MARCIANO: All right. Well, that issue doesn't hit the newsstands until next month so Oprah definitely has a little time to, you know, weigh her options and maybe listen to Ellen's plea. And one of the reasons --
CHETRY: She should be on the cover. I love Ellen DeGeneres.
MARCIANO: You do. Well, you and Ellen have a special relationship, you know.
CHETRY: No, no.
MARCIANO: Well, you...
CHETRY: Hopefully my husband's still sleeping.
MARCIANO: Yes.
CHETRY: No, the reason I'm laughing is because I guess we all got sent -- we all sent something for breast cancer month. Because you don't have -- I mean, you do have...
MARCIANO: I do -- I know what you're saying.
CHETRY: You don't need as much help in that department, if you know what I mean. Ellen DeGeneres was trying to make people aware that October was breast cancer month. So she sent little messages, but I thought it was just for me. I got really excited.
MARCIANO: Listen.
CHETRY: Listen, here it is.
(BEGIN VIDEO CLIP)
DEGENERES: Hey, Kiran. This is Ellen DeGeneres and this is your one a day wake-up call. Your friend asked me to give you a call.
(END VIDEO CLIP)
MARCIANO: Can you say it again? Now, she thought it said, hey, "Kiran".
Clearly, it says "Karen." Clearly.
CHETRY: OK, so she had the script. She just doesn't know how to pronounce my name. But anyway, I was really excited till I find out that she sent that to thousands of people.
MARCIANO: I'm sure she was thinking of you.
CHETRY: Uh-huh.
MARCIANO: By the way, you want to stick around for this. Coming around in the next half hour, our Suzanne Malveaux looks at Michelle Obama's first 50 days in the White House and the role she's embracing in her husband's presidency.
It's 30 minutes after the hour. Checking on our top stories, more fallout after the U.S. military said five Chinese vessels surrounded a U.S. Navy ship in the South China Sea. China's defense minister now demanding the U.S. Navy end surveillance missions off China's coast. The U.S. military says the unarmed American ship was in international waters when the incident occurs.
Authorities in Alabama are trying to determine the motive for a gunman's killing spree. Michael McLendon killed ten people in a rampage across southern Alabama targeting relatives and strangers alike before killing himself. McLendon was said to be depressed about job issues. Police say they found lists in McLendon's homes of people he believed had wronged him.
And the National Transportation Safety Board has issued an urgent safety warning concerning an engine part in the Boeing 777 aircraft. The Roll's Royce engine is blamed for two major incidents last year when planes lost power mid-flight. One crash, while landing at London's Heathrow Airport. And the NTSB says there is a, quote, "High probability of a reoccurrence."
CHETRY: Well, we're turning to one of our top stories this morning. The accused Wall Streets swindler Bernie Madoff is expected to plead guilty in just a few hours. He's accused of stealing more money from more people than anyone in American history, and he could get 150 years in prison. You're looking at a live shot right now downtown New York. But may be a little justice to the people who lost virtually all of their money.
Joining me now is Bennett Goldworth. He is one of the victims. He invested almost $4 million with Bernard Madoff, and he's going to be attending Madoff's hearing today. He joins me live from outside of the courtroom in Manhattan.
Bennett, thanks for being with us this morning.
(CROSSTALK)
Why did you want to be there today? Why did you want to be a witness in that courtroom today?
BENNETT GOLDWORTH, LOST NEARLY $4 MILLION: Well, I think it's important to -- for some closure to see this through. This is one of the most dramatic things that has ever happened in my life.
CHETRY: Absolutely. I mean, it's unbelievable. You lost $4 million. You said that was 97 percent of your net worth. What -- how did you discover it? And what has happened since?
GOLDWORTH: Well, I got a call from my sister who informed me that he'd been arrested. And it's turned my life inside out, upside down. Just really has changed everything. I was retired. I'd moved to Florida. I was starting over. And now I've had to move back to New York, move in with a parent at 52 years old. Start over with my business, which I had retired from. So, you know, it's really, really difficult.
CHETRY: I can't imagine what it must be like to just wake up one day and find out that everything you've saved and invested is gone. Do you think, in your heart of hearts, that there is hope that you will get some of this money back?
GOLDWORTH: Well, for me personally, there's some hope. But there are many victims that we all have different situations. And it's not being treated justly and equally in terms of how they're determining this. So it's -- it's, you know, it's scary for all of us because we really don't know. You know the SIPC insurance is out there, and yet, you know, they've only paid 12 people.
CHETRY: Right.
GOLDWORTH: It's a joke.
CHETRY: And how do you think this has been handled in general? You talked about that, and also the fact that, you know, Bernie Madoff is basically not getting a jury trial. It's been a plead guilty and he's probably going to go to jail for life. How do you think this whole thing has been handled?
GOLDWORTH: Well, I have not been happy with the way it's been handled, in terms of the government involvement. You know, they've done nothing in this whole process to address the victims. We've been stripped of everything. This is like any other emergency that's occurred in our country. You know, no -- I don't have next month's rent. You know? I don't know where I'm going to work. I don't have anything. And there are many victims who are older than I am who can't start over, who can't work, and they have nothing. And they don't have relatives to turn to and the government has done nothing to help.
CHETRY: It really is a shock. And we thank you for coming out to talk about it today. I know it's important for you to be in that courtroom. And good luck. I hope that, you know, you and the other victims do find some way to get some of that money back.
Bennett Goldworth joining us this morning. Thank you.
GOLDWORTH: OK. Thank you.
CHETRY: And again, here is a live shot from right outside of Bernard Madoff's apartment. He should be leaving any minute now, headed to court, and of course we're following this story this morning on AMERICAN MORNING. We'll bring you the latest developments as he gets ready to go to court today to enter his guilty plea -- Rob.
MARCIANO: Kiran, also this morning, a growing number of banks are saying thanks, but no thanks to the government's financial bailout. Find out why the banks are now having second thoughts about accepting your tax dollars.
And Bristol Palin and the father of her baby make it official, but it's not what you think. We're live with the relationship news. It's 35 minutes after the hour.
(COMMERCIAL BREAK)
MARCIANO: It's 38 minutes after the hour. Let's fast forward to some of the stories we'll be telling you about later today. At 10:00 a.m. Eastern Time, Treasury Secretary Timothy Geithner will go before the Senate Budget Committee. And tonight, Secretary Geithner heads to London to urge global action in the worldwide recession.
And the space shuttle was supposed to be in orbit right now, but "Discovery" remains on the launch pad awaiting its next launch at the Kennedy Space Center. Last night's launch was delayed because of a problem with the fuel system. NASA says it will try again for a "Discovery" liftoff on Sunday night.
And at 4:00 p.m. Eastern Time, Oprah is broadcasting a live show today. A show devoted entirely to dating and domestic violence in light of the alleged beating of Rihanna and her boyfriend Chris Brown. This as word this morning that the two singers are reportedly recording a duet. Lola Ogunnaike is watching this story, and we'll have much more on that. If that continues on (INAUDIBLE), I guess she's taking him back. And that's some of the relationship news this morning.
Jason Carroll here with more relationship news.
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CHETRY: Exactly. This is the one that sort of really -- it was a pregnant pause in the campaign, let's put it that way.
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JASON CARROLL, CNN NATIONAL CORRESPONDENT: An interesting way of putting it.
CHETRY: Her unexpected pregnancy sent shock waves throughout presidential campaign at the time. And now it looks like Sarah Palin's teenage daughter truly is a single mom. This morning, we're hearing some ugly back and forth between the families. Jason Carroll is following this for us.
They were talking about a summer wedding.
CARROLL: Right. You remember it. And in fact, it was just last month. In fact, Bristol Palin had said that she and her fiance, Levi Johnson, were in fact considering a summer wedding. But now it appears that those nuptials are off. The 19-year-old Levi Johnson confirmed to the Associated Press yesterday that he and Bristol Palin decided, quote, "a while ago their relationship was over." The two have a baby boy named Tripp. Bristol had said in a previous interview Johnston saw their baby daily, calling him a hands-on dad.
But a recent tabloid report in the "Star Magazine" quoted Johnston's sister as saying, quote, "Levi tries to visit Tripp every single day, but Bristol makes it nearly impossible. She tells him he can't see the baby -- take the baby to our house because she doesn't want him around, quote, 'white trash.'"
Bristol Palin released a statement responding to the article saying, "I am devastated. Unfortunately, my family has seen many people say and do many things to 'cash in' on the Palin name. Sometimes that greed clouds good judgment and the truth."
A Palin family spokeswoman says Bristol Palin was responding to the article when she said that she was devastated, not the pair's break-up. The couple made their national debut at the Republican convention last September, greeted personally by Senator John McCain. We haven't been able to reach out to Johnston's family. The family disconnected their home late last year. As for Governor Palin, she has not commented on the apparent break-up.
Not good for the Palin family.
CHETRY: No.
CARROLL: It's tough when you're a teenage couple trying to make it work...
CHETRY: Exactly.
CARROLL: ... and in the public spotlight, it's even tougher.
MARCIANO: And when you have a baby as well. It throws a little bit of a wrench there.
CHETRY: Exactly.
MARCIANO: Thanks, Jason.
CHETRY: All right. Forty-one minutes after the hour.
MARCIANO: Giving back their bailouts.
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UNIDENTIFIED FEMALE: Take my TARP money, please.
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MARCIANO: Why are banks saying thanks, but no thanks to free money? And should you be worried?
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UNIDENTIFIED MALE: The average person in the street is going to wonder what was really up.
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MARCIANO: You're watching the Most News in the Morning.
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MARCIANO: The bank bailouts, not too popular with taxpayers and lawmakers, and now it looks like a growing number of banks want to do nothing with it as well. In fact, they're going to give back their bailout. CNN's Carol Costello "Minding Your Business" joins us now live from Washington this morning.
Who wants to give away free money, Carol? What's the story here?
CAROL COSTELLO, CNN CORRESPONDENT: It's strange, isn't it? But many banks do. They don't want that TARP money anymore. You know, when the bank bailout plan was approved back in October, banks across the country were required to take millions of dollars of your taxpayer money so they would not fail.
Well, a few weeks ago, Congress decided to allow banks to repay the money when they could raise sufficient private capital. And guess what? Turns out a lot of banks didn't even want the money in the first place.
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COSTELLO (voice-over): If you thought the banking industry was going completely belly-up, not so. A growing number of banks is telling Uncle Sam, "Take my TARP money, please." IBERIABANK Corp. is giving back nine $90.6 million. TCF Financial is returning a whopping $361.2 million. And Signature Bank will say bye-bye to $120 million in bailout funds. Analysts say, "What?"
LARRY SABATO, POLITICAL ANALYST, UVA: The average person in the street is going to wonder what was really up, because if they are giving the money back so quickly, did they really need it?
COSTELLO: Confused because last October, President Bush convinced the country America's banks needed taxpayers to fork over $700 billion so the government could buy up bad assets and unfreeze credits, and they need that money now.
GEORGE BUSH, FORMER PRESIDENT OF THE UNITED STATES: We're facing a choice between action and the real prospect of economic hardship for millions of Americans. For the financial security of every American, Congress must act.
COSTELLO: So while the infusion of cash helped keep many banks afloat, many of them now want to take their chances without government backing. In part, because they're concerned the government might change the rules, and also because of, um, public humiliation.
REP. BARNEY FRANK (D), MASSACHUSETTS: It's simply unacceptable for people to be holding federal taxpayer dollars and engage in this kind of maverick behavior.
COSTELLO: Northern Trust, the target of that zinger, for its sponsorship of a golf tournament, says it will repay its $1.57 billion in bailout money ASAP.
Financial institutions are also finding it difficult to make sound business decisions in partnership with the federal government.
JERRY ELLIG, ECONOMIST, GEORGE MASON UNIVERSITY: The past few months, a lot of banks have come to realize that when you have the federal government as a non-silent partner, every business decision becomes a political decision.
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COSTELLO: Doesn't it? Well, what does this all mean anyway? Well, Jerry Ellig, the economist you just saw, told me it could in fact be good news, at least brighter news, that some of the banks are thinking, gee, we don't need the money, we can get along without it, we're stronger than we thought we are. We thought we were, rather. And of course that might signal a bit of a turnaround. We'll just have to wait and see.
MARCIANO: I feel more confident already, Carol.
COSTELLO: Don't you?
MARCIANO: Yes, exactly.
COSTELLO: Doesn't it make you wonder? It's like, what is going on?
MARCIANO: Yes, it just certainly has much more to do than just pry it alone. It's nice to have that money back to the government, at least, adding -- decreasing the deficit somewhat. Carol Costello, thank you very much, live from Washington -- Kiran.
CHETRY: All right. Thanks, Rob. You're looking at live pictures right now of the area outside of Bernard Madoff's Upper East Side apartment here in New York. Of course, he's the accused money manager who many say built them out of billions of dollars.
Well, today is the day that many of those victims have anxiously awaited for. He's expected to go to the courthouse today and to plead guilty. Then it's up to a federal judge to decide whether he's going to be led away in handcuffs to possibly spend the rest of his life behind bars, or will he maybe be allowed back to that multimillion dollar apartment pending sentencing later this year.
A lot of those built investors are planning to show up because they want to be able to lobby the judge and explain just how their lives have been shattered by this gentleman. We are watching this and we will be back in just a moment with the latest on the Madoff case.
Also still ahead, President Obama's been busy for the first 52 days of his administration, but he's not the only one with a lot on his plate. We're taking a look at first lady Michelle Obama and her busy schedule as well. It's 49 minutes past the hour.
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CHETRY: OK, again, we want to show you live pictures right now. This is outside of Bernard Madoff's Upper East Side apartment. We're expecting any minute that he is going to walk out. He's due in court later on this morning, where he's expected to plead guilty to the charges of running the biggest Ponzi scheme in American history.
MARCIANO: We think the car that just turned on its light may very well be the vehicle that's going to be taking him down to the courthouse. You see the gates being opened up there. Obviously, they're trying to keep it -- him as covered as possible with the entourage of press awaiting his departure. But we believe this car that's about to be rolling out of there will be taking him down to the courthouse for his hearing. CHETRY: Yes. And this really could be the last time he sees his multimillion dollar apartment. There's a chance that the judge could decide to keep him behind bars, pending sentencing which is expected to take place later this year. He could instead though allow him to return home until the sentencing date.
MARCIANO: And, you know, home is a modest word, or an understatement, I should say. A lot of folks not feeling a lot of sympathy with where he's been held up the past few weeks during the judicial process. A very nice Upper East Side apartment to say the least. So we'll see what happens as he makes his way downtown to the courthouse.
Will he be able to return back to, basically, a house arrest until his official sentencing which could be a couple of months away, or will he never see that residence again, one of many residence, I should add, that he's acquired over the years of his empire.
CHETRY: And, yes. And so, again, if you're just joining us, that is the car that we believe to be carrying Bernard Madoff to his court hearing today, where he is expected to plead guilty to charges against him.
Also appearing at the courtroom will be dozens of alleged victims in the New York area. They want to converge on this courthouse to lobby the judge. There are people that are coming all the way from California in some cases. They say that they want to explain to the judge just how affected their lives have been, how destroyed their lives have been because of this individual who they say tricked them into basically giving up their entire life savings. So again, there's going to be a lot of action at courthouse. CNN is going to be following all of it for you today. The latest developments on the Bernard Madoff case still ahead.
Meanwhile, it's 54 minutes after the hour. We'll be right back.
The Bernie Madoff money trail.
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UNIDENTIFIED MALE: What would you say to all of those people who lost money, Mr. Madoff?
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CHETRY: The biggest con man in America facing 150 years, but where is all that cash?
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UNIDENTIFIED FEMALE: The justice for me would be restitution to all the victims.
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CHETRY: Plus, man over the falls. One of the few to survive the plunge. And the pictures to prove it. You're watching the "Most News in the Morning."
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MARCIANO: Welcome back to the Most News in the Morning. Drugs, guns, and trunkloads of cash. It's the stuff of Hollywood heist flick. But just south of the border, it's real, it's deadly, and the violence is getting worse. Now pressure and worry is growing on Capitol Hill. Just hours from now, Congress is launching new hearings.
Joining me now for more, California Congresswoman Loretta Sanchez to talk more about this hearing.
Good morning, Congresswoman. I want to start with what Vice President Biden had to say yesterday during the nomination of the new drug czar. Have a listen.
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JOE BIDEN, VICE PRESIDENT OF THE UNITED STATES: Violent drug trafficking organizations are threatening both the United States and Mexican communities.
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MARCIANO: All right, so this is happening south of our border, but obviously close neighbor. Is what's happening down there threatening U.S. security?
REP. LORETTA SANCHEZ (D-CA), VICE CHAIR, HOMELAND SECURITY COMMITTEE: Well, it certainly has always been a problem at the border, but in the last couple of decades, it's gotten even worse. Now we see some spillover, just a little bit coming into the United States. And I think it's time that we make a comprehensive plan to figure out, not just what do we do about the violence at the border, but it's all tied together with the economy down there, with our economy, people moving back and forth, commerce routes between the two countries. So I think it needs a comprehensive look.
But today's hearing, the one that I'm holding is as the chairwoman of the committee that looks at border issues is the whole issue of violence there, in particular. The guns that are purchased in the United States and brought down to arm these cartels. And --
MARCIANO: What's the solution to that? I mean, 90 percent of the guns that are found down there either during a shooting or a seizure of some sort are from the U.S.? What do we do to prevent those arms from getting south of the border?
SANCHEZ: Well, you know, it's actually a crime to be selling some of these guns from gun stores within the United States to be trafficked across to Mexico. And when we take a look at where these gun stores are, most of them are within a mile of the United States border with Mexico.
So we really need to take a look at what types of guns are being sold. What we're going to do about that. Maybe institute again something about assault weapons. I mean, these are not handguns being bought and taken across the border. As well as maybe we need to begin checking cars before the exit, the United States to go into Mexico. Or maybe Mexico needs to have the type of resources and knowledge so that they check cars as they come into Mexico.
MARCIANO: Let's talk about the larger issue here, which is drug, drug dependency, drug addiction. I want to get to this quickly. The economist this week, of all things, argues that legalizing drugs would diminish this gang violence and addiction. Here's what it said, briefly. "Legalization would not only drive away the gangsters, it would transform drugs from a law and order problem into a public health problem which is how they ought to be treated. Government would tax and regulate the drug trade and then use funds raised in a billion save on law enforcement to educate the public about the risk of drug taking and treatment of addiction. What do you think? I mean, should we legalize drugs?
SANCHEZ: Well, certainly there is one drug -- it's called alcohol -- that we prohibited in the United States and had such a problem with as far as underground economy and cartels of that sort that we ended up actually regulating it and taxing it. And so, there has always been this thought that maybe if we do that with drugs, it would lower the profits in it and make some of this go away.
MARCIANO: Is that realistic, or is this a political hand grenade?
SANCHEZ: Well, certainly I have seen in my own state in California people over and over voting in a big majority the whole issue of marijuana and possession of that. So, we haven't unfortunately been able to see if maybe that particular drug, what the effects of that would be, because of course the federal law says no while the state law says, yes, let's regulate it. Let's allow people to carry it, et cetera. So, maybe it would be a good pilot program to see how that regulation of marijuana might happen in California since the populace, the majority of Californians believe maybe that should happen.
MARCIANO: Well, it certainly has been talked about for a while. I suppose it will be talked about further. Good luck in your hearing later this morning. Congresswoman Loretta Sanchez from California, thank you -- Kiran.
