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Campbell Brown
President Obama Gets Political; Some AIG Executives Fight to Keep Bonuses
Aired March 25, 2009 - 20:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAMPBELL BROWN, CNN ANCHOR: We have a lot ahead tonight.
But we want to get you right to President Obama. He has just started speaking right in Washington, speaking right now to a room full of people who bought tickets for a Democratic Party fund-raiser. So far, he's only been thanking many people in the crowd. Let's listen in.
(JOINED IN PROGRESS)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: They're doing it because they believe in this country and are willing other commit to it.
It's those efforts that help me hear the concerns of ordinary Americans from all across this country, their struggles and their hopes, their worries about whether they will have a job and a paycheck that they can count on, whether they will be able to pay their medical bills or their child's college tuition, or whether they're going to be able to retire anytime soon.
These are the concerns I heard last week when I traveled to California and I spent time talking with ordinary Americans in town halls and in the places where they work. They're the same concerns that I read about when I look through the letters that I have taken to reading every night, letters from constituents all across the country.
And all of them ask the same simple question. What are you going to do in Washington about the problems that we're facing out here? Do you hear me? Do you remember me?
Over the past two months, we have been working to answer that question with a comprehensive strategy to attack the current economic crisis on all fronts. And I know it can be easy, especially in Washington, to get caught up in the day-to-day chatter of cable television, to be distracted by the petty and the trivial, and to fall into the trap of keeping score about who's up and who's down.
And there will be days where we may be declared winners. And there'll be days where the umpires say, oh, they lost that one. There'll be days when the markets go up. There'll be days when the markets go down. But you and I, we measure our economic recovery in a different way.
And we're already starting to see signs of progress, that we're making a difference in the lives of the American people. (APPLAUSE)
OBAMA: We measure our recovery by how many Americans can bring home a paycheck that lets them make ends meet. That's why the first part of our strategy was to pass the recovery plan to jump-start job creation and put money in people's pockets.
And because we did, all across the country, there are teachers that are still in the classroom and police officers that are still on the beat and construction crews that are breaking ground, rebuilding America's infrastructure for the future.
Because of this plan, as early as next week, 95 percent of all Americans are going to receive a tax cut, a tax cut that we promised during the campaign. It's going to be in their paychecks.
That's how we measure success. We measure our recovery by how many families own their own piece of the American dream. That's why the second step of our strategy was to launch a plan to stabilize the housing market and help responsible homeowners stay in their homes.
That's why the recovery plan included an $8,000 tax credit for first-time homebuyers. Already, mortgage rates have fallen to near historic loan, encouraging Americans to refinance their mortgages. And we have begun to see signs of increased sales and stabilizing home prices for the very first time in a long time.
We measure our recovery by how many small businesses can keep their doors open and how many families can afford the promise of a college education.
And that's why the third step that we took was to restart the flow of credit to families and businesses by generating car loans and student loans and small-business loans. It's a program that Secretary Geithner worked with the Federal Reserve to design. And it's already generated more lending in the last week than we saw in the previous four months combined.
And, ultimately, we're going to measure our success based on whether we can create an economy the builds a lasting foundation for our shared economic growth, so that we don't face another crisis like this 10 years from now or 20 years from now.
You see, what's happened over the last six months is the result of an economy built on years of reckless speculation and overinflated housing prices and maxed-out credit cards and overleveraged banks. And that approach doesn't create lasting wealth. It creates the illusion of prosperity.
And it's endangered us all. And that's why the most critical part of our strategy is to build our economy on a stronger foundation. And that's what the budget I submitted to Congress is designed to do. It's more than just a budget. It's a blueprint for our economic future. It's a vision of what the Democratic Party stands for that boldly and wisely makes the choices we as a nation have been putting off for too long. Because we know that we have got to reduce our dependence on foreign oil, we're going to invest heavily in renewable sources of energy that will lead to new jobs and new industries and put America at the forefront of a clean energy future.
Because we know countries that out-educate us today will out- compete us tomorrow, we're going to invest in childhood education, in high standards and accountability for our schools. We're going to reward teachers for their success. And we're going to invest in affordable college educations for anybody who wants to go.
It's time to demand excellence from our schools, so we can finally prepare our work force for a 21st century economy and inspire our children to come out of school saying they want to be scientists and engineers and doctors and teachers.
And because we know that the crushing cost of health care is punishing families and businesses and bankrupting the federal and state governments, we're going to invest in reforms that bring down those costs, while improving care and guaranteeing Americans their choice of doctors and hospitals.
Now, the choice isn't between health care reform and fiscal discipline. We have to invest in health care reform in order to achieve fiscal discipline. And...
(APPLAUSE)
OBAMA: And because we have inherited a historic fiscal mess, this budget makes the tough choices necessary to cut our deficit in half by the end of my first term.
Even under the most pessimistic estimates, we have proposed $2 trillion in deficit reductions over the next decade. We will continue making these tough choices in the months and years ahead, as our economy recovers.
In the end, the best way to bring down this deficit is to grow our economy. It's not with a budget that continues the very same policies that have led us down the path of narrow prosperity for few and massive debt. It's with a budget that leads to broad economic growth and shared prosperity, moving from an era of borrow and spend to saving and investing.
That's what clean energy jobs and businesses will do. That's what a highly skilled work force will do. That's what an efficient health care system can do. That's how we're going to control costs of entitlements like Medicare and Medicaid.
And that's why this budget is inseparable from this recovery. Because it is what lays the foundation for a secure and lasting prosperity, the groundwork for future that reflects what we know this country can be.
Now, there are those who will tell you that all this is too much, that the plans in this budget are just too ambitious to enact. We should only focus, they will tell you, on one problem at a time.
But we know that the challenges we face are too large to ignore. The cost of our health care is too high to ignore. Our dependence on foreign oil is too dangerous to ignore. Our education deficit is growing too wide to ignore.
I said this at a town hall meeting the other day. The American people don't have the luxury of choosing to handle one problem at a time. They can't say, well, you know what, I'm not going to pay my mortgage this month, because I have got medical bills to pay. We're not going to save for our retirement. We're going to do our child's college tuition.
They have got to do it all at the same time. They have got to confront all of these problems. That's why we have to confront all of these problems. To kick these problems down the road four years from now, eight years from now for the next president, for the next generation, that would be to duplicate the irresponsibility that led us to this point.
That's not why I ran for office. That's not why you worked so hard during this election. You didn't send me here to pass on problems to somebody else. You sent me here to solve them. And, with your help, that's what I intend to do.
(APPLAUSE)
OBAMA: So, we know -- we know that the road to our future is going to long. We're going to hit our share of bumps and our setbacks before it ends.
We know that there's going to be a lot of sniping. We know that. That's how this town work.
(LAUGHTER)
OBAMA: But we also know this. We will only get there if we travel down this road as one nation, as one people. We will only get there if we remember that what has always built America is unflinching faith in the future and unshakable confidence that new and better days lie ahead.
And if we take the smart steps right now to create lasting economic growth, if we look beyond our own short-term self-interests, to the wider set of obligations that we have to each other, if we band together with resolve and clear purpose to take care of business right here and now, we succeed. That's when we prosper. That's when the United States of America cannot be stopped.
And, seeing all of you here tonight, I believe that the future's going to be very bright for all of us. So, I thank you. And I hope you're ready to continue rolling up your sleeves. Our work is not yet done. It's not yet time to celebrate.
But we're going to get it done. I'm absolutely confident.
Thanks to you.
(CHEERING AND APPLAUSE)
BROWN: That was President Obama there sounding very upbeat about his plans, no big surprise, since his speech was at a Democratic Party fund-raiser.
We will have a lot more on this with our political panel, how close his claims are to reality.
And, speaking of reality, there are also some glimmers of economic hope tonight. Chief business correspondent Ali Velshi is standing by to tell us about that as well.
(COMMERCIAL BREAK)
BROWN: Just a few moments ago, you were watching President Obama speak at a Democratic Party fund-raiser.
Tonight, he is attending two big Democratic Party fund-raisers, his first round since taking office. This one was taking place in Washington, D.C., at the National Women in the Arts Museum, big-ticket event, $30,400 per couple to attend that event. He was going from that, that you just saw, where he gave the speech, to a second fund- raiser in Washington where Tony Bennett is set to perform tonight, tickets for that event ranging anywhere from $100 to $1,000, as the Democratic Party tries to refill its coffers with the president as its draw.
We want to bring in our political analysts to talk about all this. We have got Roland Martin with us, Republican strategist Kevin Madden as well, and national political correspondent Jessica Yellin.
Welcome, guys.
Jessica, let me start with you on this.
A friendly audience here for the fund-raiser obviously, a little more friendly perhaps than last night at his press conference. One big challenge for him, though, is getting Democrats on board with what he's trying to do right now. And there has been, to a certain extent, open rebellion from moderate Democrats in his party.
What's his challenge?
JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: His challenge is finding a middle way, where he can convince enough people to come along, Campbell, on the major initiatives.
One of the things Barack Obama did here, President Obama, delivered a budget that had everything and the kitchen sink in it. It had everything from cap in trade to health care reform, almost four- year agenda in one budget. So, he's able to, then, have a very strong negotiating position where he can take pieces out and that's what he's in the process of doing. As he said, it will get ugly. But in the end, watch. I bet you he gets what he wants, number one, health care reform, this middle-class tax cut, and an overall package that works.
BROWN: Kevin, you know, he's trying to make the case tonight you don't have to choose between fiscal discipline and health care reform, I mean, maybe a good argument for a roomful of Democrats, but a much tougher sell for the broader audience on Capitol Hill, especially moderates right now. It's not just about Republicans, is it?
KEVIN MADDEN, REPUBLICAN STRATEGIST: No, that's right.
And I think Republicans see an opportunity with what you described as the open rebellion among many congressional Democrats against the size and scope of the spending that is involved in the president's budget. I mean, there is a very strong degree of sticker shock, not only from Republicans up on Capitol Hill, but from Democrats.
And I think what Republicans see an opportunity there is there's this growing gap between the president's personal popularity, which is very high, because many Americans are still, again, putting their -- their hopes and their dreams in him, because there is so much anxiety out there, but, again, that growing gap between his personal popularity and the popularity of his policies, which many Americans are starting to see as a blueprint for very progressive Democrat policies, more spending, more taxation.
BROWN: So, what does he need to say, Roland, to get Democrats on board, to sort of unite the team, and put a united front out there?
ROLAND MARTIN, CNN CONTRIBUTOR: Well, frankly, I think what he has to do is make clear how this is going to affect their very constituents.
And so you have Democrats who are looking at reelection. And they're saying, OK, I have to go back and talk to my folks.
That's one of the reasons why I think the president keeps coming back to the whole issue of health care, because he recognizes that people filing for bankruptcy, that is the main reason why they're filing. People out there who are losing their jobs, one of the biggest concerns is that they're going to lose their health care. And so he is targeting it that way.
But I think one of the areas he has to be extremely careful with, it deals with this whole issue of the deficit, because, again, it's very easy to say, I inherited a deficit. It's very easy to say, Republicans, they were spending money like mad.
And even Kevin will admit they were going crazy with the checkbook. But if you say that we're going to raise it even more so, you're going to diminish that argument. And, so, somehow, he has to convince people that this all makes sense now, as opposed to what it's going to mean 10 years from now.
(CROSSTALK)
BROWN: OK, Kevin, go ahead.
MADDEN: No, Roland's exactly right.
Look, the argument that I'm rubber, you're glue, that many -- that Democrats make when it comes to spending...
(LAUGHTER)
MADDEN: ... is not going to work.
And I have got to tell you, there are more Republicans on Capitol Hill -- and you saw Judd Gregg saying it tonight -- many Republicans on Capitol Hill who are more than willing to admit that we were not as vigilant as we should have been during the Bush presidency on the issue of spending.
And we have learned our lesson. We took our beating at the polls in November. And we're ready to hold our ground now and make sure that we do post up against Obama, President Obama, and congressional Democrats when they start engaging in reckless spending.
YELLIN: But, bottom line, Campbell, the president's popular; Congress is not. You look at those numbers and it helps you know who's going to get their way.
(CROSSTALK)
BROWN: All right, guys, we have got to end it there.
To Roland, Kevin, and Jessica, many thanks.
And we should mention, too, we're keeping track of the president tonight as he bounces around from fund-raiser to fund-raiser. He's on his way right now to the Warner Theatre. As we mentioned, Tony Bennett is going to be playing at this event. We will keep an eye on it and check in as he speaks there as well a little bit later in the show.
We have got a whole lot more to tell you about.
Tonight, new details about AIG executives who are not giving back their big fat bonuses. We think you will want to hear why. That's coming up.
(COMMERCIAL BREAK)
BROWN: We are "Cutting Through The Bull" tonight and taking a look at the other side of what many believe has become a witch-hunt for executives who have received bonuses from AIG.
For nearly two weeks, they have remained in the shadows, as everyone from the president to everyday people feeling ripped off have painted them as villains. But now one of those who took the money, took those bonuses, is taking a stand. We are finally hearing from this person, from one of those who took his share of the $165 million retention payments again from the bailed-out financial giant. He is not apologizing. He is, however, quitting, turning his letter of resignation into an op-ed piece into today's "New York Times."
This is from Jake DeSantis, an executive V.P. of AIG's Financial Products unit. He writes -- quote -- "I am proud of everything I have done. I was in no way involved in or responsible for the credit default swap transactions that have hamstrung AIG. Most of those responsible have left the company and have conspicuously escaped the public outrage."
He goes on to say: "After 12 months of hard work dismantling the company, during which AIG reassured us, many times, we would be rewarded, in March 2009, we in the Financial Products unit have been betrayed by AIG and are being unfairly persecuted by elected officials. I was asked," he continues, "to work for an annual salary of $1. And I agreed out of a sense of duty to the company and to the public officials who have come to its aid. Having now been let down by both, I can no longer justify spending 10, 12, 14 hours a day away from my family for the benefit of those who have let me down" -- end quote.
Now, DeSantis goes on to say he will donate his bonus to charity, or at least what's left of it, if the Senate approves that whopping 90 percent tax hike that the House slapped on the AIG bonuses last week.
So, are people like Jake DeSantis really victims here? Well, it's hard to feel sorry for somebody who's getting $742,000 and may end up with the final say on where it goes, charity or otherwise, as taxpayers spend $170 billion to save the company.
Still, it is worth asking, did AIG's chairman, Edward Liddy, who came in to clean up the mess, leave some loyal employees twisting in the wind by waiting until after the bonuses had been paid to ask for the money back?
DeSantis says he and some of his colleagues gave up job offers at more stable companies after AIG repeatedly assured them the bonus agreement would be honored. It was only in the hours before Liddy appeared before Congress last week that he made the request to return the bonuses.
It is also worth asking whether Congress might have gone completely overboard here, like Congressman Barney Frank demanding the names of all those taking the money, with no promises of keeping their identities confidential -- New York's attorney general going even further, promising to name names.
Well, today, we learned from NBC's Connecticut affiliate details of the threats against AIG employees. And one e-mail reads -- quote -- "Get the bonus, we will get your children." Another one reads -- quote -- "All the executives and their families should be executed with piano wire around their necks." I mean, come on, what is wrong with people? I still think the bonuses were a mistake. But letting the hysteria reach a point where people may actually be in danger is insanity. And, again, fanning the flames of this kind of hysteria is totally, totally irresponsible.
So, is this op-ed the start of an AIG revolt? He's not the only one saying, not so fast.
Our Joe Johns is in Washington with more tonight.
And, Joe, I know you talked to a lawyer who says his clients who work for AIG don't want to give the money back. After all the uproar, why would they even want to put up a fight?
JOE JOHNS, CNN SENIOR CORRESPONDENT: Well, Campbell, this attorney, Kenneth Thompson, represents 20 employees who received bonuses, those so-called retention payments.
All week at the AIG Financial Products division. That is the division that almost single-handedly killed the insurance giant. But the attorney general points out that not everyone in the Financial Products division, certainly not everyone at AIG, should be punished for the disaster.
In terms also of amounts of these bonuses, among the 20 who this attorney represents, some got a few thousand. At least one got over $1 million. The main point the lawyer makes is that all criticism of AIG has been like a witch-hunt. But it's a huge company. There are only a few people responsible.
And, in fact, he says, people who are still there, his clients who don't want to return their bonuses had nothing to do with the toxic credit default swaps that almost crashed the company. And so now he says his clients feel they're being doubly penalized, first, for receiving a bonus and, second, for not giving it back. Now he says they're afraid, they're worried about their own safety and the safety of their families.
(BEGIN VIDEO CLIP)
KENNETH THOMPSON, ATTORNEY FOR AIG PAYMENT RECIPIENTS: Now they are afraid to walk down the street. The last thing you want to be now is identified as an AIG employee publicly. That's unfair.
There have been tens of thousands of e-mails sent to AIG threatening these employees. Many of those e-mails threaten acts of violence. I mean, this is a real serious situation.
And that's why I think that some of the commentators, some of the elected officials need to really step back and see what we're doing, because what we're -- AIG is today, what company is tomorrow? We need to have level-headed elected officials in this country that will stand up and say what's right.
People may not like the fact that some employees might have been given retention payments, but they were given those payments pursuant to contracts. And those contracts should be honored.
(END VIDEO CLIP)
BROWN: Joe, though, you have got to ask, I mean, doesn't he get this idea that there are a lot of people out there who don't think people working at a place that nearly went up in flames should get these huge payouts? Doesn't he get that?
JOHNS: Well, Campbell, he says he gets it. He also says most of those responsible for the AIG disaster have already left the company, which he says is why it's so ironic those being punished and vilified are actually still there trying to rescue the company.
(BEGIN VIDEO CLIP)
THOMPSON: Joe, they did all types of -- they had -- held all types of positions, from being computer people, being accounting people.
They did not work on the credit derivative swaps. There are other businesses in that unit. There's an equities desk. There's an interest rates desk. There's a commodities desk. It's not just the derivatives.
People think that these are, you know, fat cat executives who awarded themselves this money. They earned every dime. They were told over and over that the contract would be honored. And then they're put into this very difficult position, where people are portraying them as if they're some type of bank robbers, as if they don't care about the American economy.
(END VIDEO CLIP)
JOHNS: Now, he's not threatening a lawsuit. After all, his clients are keeping the money. But he says he will protect their rights -- Campbell.
BROWN: All right, Joe Johns for us tonight -- Joe, thanks very much.
So, the question is, is this a lot of manufactured outrage, or do politicians just not get it? We are going to talk to our panel about that when we come back.
(COMMERCIAL BREAK)
BROWN: More now on the AIG employees sick of being public punching bags and speaking out. One AIG employee, Jake DeSantis, vented on the op-ed page of "The New York Times" today, saying AIG essentially sold him out by asking him to forfeit his bonus. Well, that has pretty much gone viral.
"The New York Times" online comments section got so overloaded it had to shut down, but not before nearly a thousand outraged readers had their say.
One complains, "Nice try DeSantis, but isn't an $800,000 bonus a bit obscene, especially during a world financial crisis?
Another writes, "The phrase I agreed to work for one dollar should read, I agreed to work for $1 plus $700,000 after taxes."
And there's this from a man in Connecticut. "Mr. DeSantis, my heart bleeds for you. Now you can take time off during the outbreak of spring and sip cocktails at your mansion."
Mr. DeSantis shouldn't expect a whole lot of sympathy from Congress either. Earlier I spoke with Representative Paul Hodes, a Democrat from New Hampshire, who has been particularly outspoken about the bonuses. And here's what he had to say about the DeSantis op-ed.
(BEGIN VIDEO CLIP)
REP. PAUL HODES (D), NEW HAMPSHIRE: We have families in America who are losing their jobs, losing their homes, seeing their 401(k)s and life savings disappear because of mismanagement, incompetence, arrogance and greed on Wall Street. And, as badly as you might feel for Jake DeSantis who's giving back his bonus, which is a good idea, really, we're here to represent the people of this country who are angry, and justifiably so.
(END VIDEO CLIP)
BROWN: So how long will this political firestorm continue? Let's bring back our panel, CNN political analyst Roland Martin, Republican strategist Kevin Madden, and national political correspondent Jessica Yellin.
Jessica, DeSantis, who obviously wrote the letter, can afford to give away an entire year's pay over $700,000 after taxes to charity. Do you think this guy is going to get any sympathy from Main Street here?
JESSICA YELLIN, CNN NATL. POLITICAL CORRESPONDENT: No. He's not going to get sympathy from Main Street. Your heart breaks for a guy who's watching his life's work be publicly disemboweled in front of the entire nation. So, sure, he's a human being. You can understand why he's in pain.
But you know, I interviewed Jennifer Granholm, the governor of Michigan, who says the exact same thing is happening to autoworkers in her state and they're making, you know, $40,000 to $100,000. So it's happening to everyone. It's hard for your heart to break over the rich guy suffering.
ROLAND MARTIN, CNN POLITICAL ANALYST: But, Campbell, there's a difference here.
BROWN: Yes.
MARTIN: And I think, and this is not a question of, well, who you're siding with. Here's the deal. Words do matter. We heard it all throughout the campaign last year. When we term these as bonuses, I think to the average person, and how I perceive this, and that is I simply thought here are employees who are getting their regular salaries and all of a sudden, they got additional money at the end of the year. This guy says, wait a minute, I agreed to do a dollar right now, and I'm going to get paid basically deferred salary later in the year.
Now we can argue about the $700,000. But it is a problem, I believe, when you have people who are saying I'm going to work for $1, but I'm going to get the rest of my money later. We can't simply ignore that.
Now when the governor of Michigan says people are making $40,000 to $100,000, how would somebody feel if they say, hey, we're going to give you $40,000 now, and you're going to get your owed (ph) $30,000 at the end of the year. At the end of the year, they say, guess what, you're not getting your $30,000. I'm sorry, it's the same thing.
BROWN: Kevin, you know, the House passed this bill. They're taxing these bonuses theoretically 90 percent. And you heard Congressman Hodes, or we may not have played this portion, but he made the case that them passing that bill is what convinced many of these employees to return the money. Do you think that's true? Is that the way it's supposed to work, the legislative process anyway?
KEVIN MADDEN, REPUBLICAN STRATEGIST: Well, I do think that there is a lot of fear in some of these folks that have been targeted by this larger population of people who are so angry. But I think -- I think the most important point to remember is that anger is not what's going to help us out of this economic malaise that we're in right now.
Cooler heads have to prevail, and we have to recognize fundamentally Republicans and Democrats on Capitol Hill have to remember that the private sector and the public sector are going to have to be partners here if we're going to move out of this economic distress that we're in, and that we have to let businesses get back into the business of doing business. And employees of places like AIG have to be encouraged to stay in their jobs and help right the ship at that company and get back to the business of growing the economy, creating jobs, and putting more liquidity back into the market because that, in the end, is going to help everybody, whether you're making $20,000 a year or whether you're making $20 million a year.
BROWN: And it does seem, Roland, like it has gotten out of control. I mean, DeSantis did make this point that politicians have been ginning up this public outrage in a potentially dangerous way. We read some of those e-mails and talked about the death threats they've been getting. Does he have a point about that?
MARTIN: He has an excellent point. I think people need to calm down, these ridiculous death threats. I mean, look, they're not -- to target people in that way makes no sense.
But let me remind the American people who are watching, we own 80 percent of this company now. We put $160 billion in. We need these employees working their butts off every single day or that money is going down the drain. So we might want to calm down attacking the folks at AIG because we need them going to work every day doing their best. You may not like it that we're having to spend this amount of money. Now that we own it, deal with it.
BROWN: All right, guys. We got a quick point, Jessica? We're almost out of time. Go ahead.
YELLIN: It's unusual for a company in AIG's situation, for insolvent companies to give bonuses the way they did. What this all speaks to is the need for greater transparency. We own AIG. We need the government to be telling the public what they're doing with it.
BROWN: All right. And we're ending on that note. Jessica Yellin, Kevin Madden, Roland Martin, thanks guys. Appreciate it.
Another big story we are covering tonight, the war next door. Anderson Cooper is going to join us live when we come back. He is on the border where war between the drug cartels and the Mexican government is threatening to spiral out of control. How it is spilling into the U.S., we will talk about that as well when we come back.
(COMMERCIAL BREAK)
BROWN: More than 6,000 people, citizens, soldiers and police were murdered in Mexico last year. It's the result of the Mexican government crackdown on drug cartels and the drug lords' increasingly violent counterattacks. It is this carnage the Obama administration vows to stop from flooding into the U.S.
Just hours before Secretary of State Hillary Clinton arrived in Mexico City, Mexican authorities claimed at least one victory, the capture of a suspected drug kingpin in Monterrey, just one of the places Clinton will visit.
(BEGIN VIDEO CLIP)
HILLARY CLINTON, SECRETARY OF STATE: The Mexican government made clear to us its urgent need for additional helicopters to take on the drug traffickers, and we are responding. And I am pleased to announce that the Obama administration working closely with Congress intends to provide more than $80 million in urgently needed funding for Black Hawk helicopters for Mexican law enforcement.
(END VIDEO CLIP)
BROWN: And my colleague, "AC 360" anchor Anderson Cooper on the border tonight for us in El Paso, Texas.
And, Anderson, just try to give people a sense of how out of control the situation has gotten down there.
ANDERSON COOPER, CNN ANCHOR, "AC 360": Well, you know, we're just across the border. Juarez is right over there. They've sent in about 9,500 troops in the last couple of weeks, Mexican troops. That's in addition to the thousands of Mexican troops which have been deployed over the last two years as Mexican President Felipe Calderon declared war on these drug cartels. And this war has just been getting worse and worse over these last few years.
Each year, the murder rate, the drug-related homicide rate, doubling, more than doubling. You just said it, 6,500 people killed last year alone. And we're seeing -- it's not just the number of people getting killed, it's the nature of the killings. And we're seeing beheadings, very public executions, increasing kidnappings. It is these drug cartels, as they are being targeted, they are fighting for turf and fighting for control over these drug trafficking routes, Campbell.
BROWN: And, Anderson, you're talking to people there in El Paso. How frightened are families living on the American side of the border?
COOPER: You know, El Paso is actually, for a city its size, one of the safest cities in America. Law enforcement does a very good job in trying to keep the violence from spilling over. But in all these border states, you're seeing the increased concern. There's no doubt about that.
You're seeing home invasions increasing in Tucson, Arizona, kidnappings as well. But you know, it's not just the border states which have been focusing on this and dealing with this over the last two years. This is something that affects all the United States.
Justice Department estimates drug cartels, the Mexican drug cartels are operating in some 230 American cities, all the way in Anchorage, Alaska, Atlanta, Georgia, Duluth, you know, South Dakota, it's all over the United States.
The Justice Department now says that Mexican drug cartels are the largest organized crime threat in the United States. We're talking about heroin, methamphetamine, marijuana, cocaine -- all of it comes from Mexico.
BROWN: All right. Anderson Cooper for us tonight. I know you're going to be back, 10:00 Eastern time. We've also got CNN's Michael Ware who is, of course, known for his reporting from the war zone in Iraq, but one of his most dangerous assignments was much closer to home from the Mexican drug wars.
Hundreds of police have been targeted by the drug cartels, and Michael went out on patrol with some of them. I want to warn you some of the images in his story right now are graphic.
(BEGIN VIDEOTAPE)
MICHAEL WARE, CNN INTERNATIONAL CORRESPONDENT (voice-over): We rode on patrol with police officers out on the streets. The entire force on high alert. The cartel war grinding on.
(on camera): And it's going to be a long war with most of the advantages in the cartels' favor. Their gunmen outnumber these police and they're better armed. And the body count continues to rise. (voice-over): Now, the mayor's family is being targeted. A cartel threatening to behead them wherever they are. Police in the U.S. suspect the cartel is planning to cross into Texas to get to the family where they're hiding.
Over the past year, the Mexican army has moved in. Over 7,000 soldiers sent to Juarez, as part of a huge operation that has 45,000 troops combating the cartels across Mexico.
"This is not going to be won quickly," says Mexican government spokesman Enrique Torres.
ENRIQUE TORRES, MEXICAN GOVT. SPOKESMAN (through translator): While we know the monster is big, we don't have any idea just how big it is.
WARE: Officials on both sides of the border privately agree. The war as it's fought now cannot be won.
(END VIDEOTAPE)
BROWN: Michael Ware with me now in the studio.
And, Michael, there's a new report out that's calling Mexico the next Iraq or Afghanistan. The comparisons --
WARE: Yes, they don't really apply. A lot of people ask me about this, and I don't think that they're easy comparisons to make.
From the very nature of these conflicts, for example, there's a huge difference between a holy war and a drug war. There's also a huge difference in the way they're being fought. I mean, this is a criminal conflict that America is deeply involved with and ultimately is responsible for. In fact --
BROWN: But I think what they are referencing in part is some of the tactics...
WARE: Right.
BROWN: ... that you saw used on the ground in Iraq and Afghanistan are being employed.
WARE: Right. As I was about to say, is that when -- in Juarez, all right, this border city, I mean, this is said to be the most dangerous city in Mexico, 1,600 people were whacked there last year. They're well on their way to 2,000 already this year. And no Americans go there anymore.
The tourists have stopped. Even the GIs based on the other side of the border are banned from entering Juarez where they used to go and party.
BROWN: Right.
WARE: Now, although it's a totally different kind of conflict, I couldn't shake the feeling of familiarity. It's like I know an insurgency when I see it. And in so many ways, these cartels can operate in the ways that, say, the militias operate in Iraq.
BROWN: Right.
WARE: They own the streets. They're the ones who are able to maintain power bases through intimidation and fear. And they're so well organized and they're so well armed, it's just that they're driven by an entirely different agenda which is enormous profit, rather than religious zeal.
BROWN: And are you seeing or beginning to see, given, you know, the intensity with which the Mexican army's trying to deal with this, authorities there and the help they're starting to get from the U.S., signs of hope?
WARE: No. No, I'm not. Not yet.
BROWN: Long way from that?
WARE: Oh, yes, a long, long way from this. I mean, let me put it this way. As it exists right now, this so-called war isn't going to be won. OK. There's not enough resources on either side of the border that's been applied to it.
We're not striking at the true cause of this war, which is America's demand for illicit drugs.
BROWN: Demand, right? Obviously.
WARE: Legalize all these drugs, regulate them, and most of this disappears. Now, that may not be palatable to a conservative American, you know, constituency.
OK, your other alternative is, well, let's fight this war. Now, Calderon is trying to do that, the Mexican president, but his local police are corrupted.
The federal police you can't count on. All he's got is the military. You essentially need a Baghdad-style surge in just Juarez alone, and I don't think we're going to see that.
BROWN: A story we're going to be covering a lot more certainly. Michael Ware for us tonight. Michael, thanks so much. Appreciate it.
WARE: Thanks, Campbell.
BROWN: And as we mentioned before, Anderson Cooper is down there. We're going to have much more from Anderson on "AC 360" tonight.
We've also got an interview with Secretary of State Hillary Clinton. Be sure and watch "AC 360"'s special report, "The War Next Door," live from the U.S./Mexican border, that's tonight, tomorrow night, 10:00 p.m. Eastern. And tonight, there are some signs that there may be still life in the economy. Ali Velshi spent the day keeping track of what he's calling glimmers of hope. He's got them for us next.
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BROWN: Tonight, we've actually got some good news to tell you about the economy. Don't adjust your television set. You heard me right. Chief business correspondent Ali Velshi at the wall to break it down for us.
And, Ali, you did promise glimmers of hope earlier. What do you know?
ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Well, there's some real stuff going on in the market. Some of it it's not where you think it would be. There have been great gains in the stock market over the last several weeks. In fact, we could be on track to have the best month on the S&P 500 in the percentage gain in, you know, quite a lot of time. So we're looking at that.
But let me tell you what's going on behind the scenes. It's not the market. We saw -- you and I discussed this -- the Federal Reserve injected some money into the economy last week, and that sent mortgage rates down in the U.S. to 4.63 percent. That's the lowest for a 30- year fixed mortgage that we have seen in more than 65 years.
Now, that is spurring home buying. Now, we've seen some of that already. But take a look at it in February compared to January, the increase in existing home sales, up 5.1 percent. They are still very low and home prices are still very low because a lot of people are taking advantage of these mortgages and buying homes that were previously in foreclosure, where the bottom line is people are buying homes.
The other problem is new homes. They have been piling up. We've had about nine months worth of stock of new homes. They haven't been moving. They're up too.
February compared to January, up 4.7 percent. The good thing here is once you get rid of a lot of those new homes and the demand starts growing, we can build new homes and construction workers who've been laid off might be able to get back to work.
There's also another thing. They're called durable goods. Durable goods are the measure of those things that we buy that last more than three years. That's anything from sort of power tools all the way to industrial machinery. They have been down for six months in a row.
Take a look at that, up 3.4 percent, and we were expecting those to be lower. So that's good news too. Whether it's businesses or individuals who are starting to buy some things, that's resulted in some very strong moves on the stock market.
We are looking at an S&P 500. That's the broader market, Campbell, that is higher today than it was on inauguration day -- Campbell.
BROWN: All right. Ali Velshi for us tonight. Ali, thanks.
People taking drastic measures in North Dakota tonight. Find out why they're actually using explosives to try to stop a flood there. We'll explain after the break.
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BROWN: Lots of news out there to talk about today. Joe Johns has it all in "The Briefing" -- Joe.
JOE JOHNS, CNN SENIOR CORRESPONDENT: Campbell, ice may not have caused last month's commuter airline crash near Buffalo. Federal investigators say there was some ice build-up on Continental Flight 3407's wing, but flight data recorders show the plane was responding to cockpit control. Fifty people were killed when the plane hit a house five miles short of Buffalo's airport.
Breaking news out of North Dakota -- parts of the state, including Fargo, face the worst flooding on record. Thousands of volunteers are laying down sandbags to hold back the Red River. In Bismarck, a demolition team tried to blast through an ice jam that caused the Missouri River to rise. President Obama has declared the state a federal disaster area.
And finally in Upstate New York, a pool prodigy in a pint-sized package. Meet Keith O'Dell (ph), a 22-month-old baby who can clear the table with combo shots, bank shots and kick shots. Pretty amazing there. I wonder how long ago he started walking, Campbell.
BROWN: How is that possible? I now realize how far behind my toddler is, truly.
Joe Johns, thanks, Joe, very much, appreciate it.
We'll be back in just a moment.
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BROWN: California First Lady Maria Shriver told an intensely moving personal story today on Capitol Hill about her father, Sargent Shriver's ongoing battle with Alzheimer's. She was testifying before the Senate committee on aging. Shriver talked about her father's ongoing battle with Alzheimer's.
(BEGIN VIDEO CLIP)
MARIA SHRIVER, DAUGHTER OF SARGENT SHRIVER: Sargent Shriver was an idealistic, intelligent, optimistic public servant, sharp, witty, a walking encyclopedia. His mind -- a beautifully tuned instrument that left people in awe. That was then. Today, he doesn't even know my name.
As the disease unfolds, you have no idea what to expect. As a doctor once said to me, once you have seen one case of Alzheimer's, you have seen one case of Alzheimer's. In fact back then, there was so little information about the disease that I wrote a book myself called "What's Happening to Grandpa." At the time, I wrote it to help my children understand what was happening to their grandfather but in truth, I actually wrote it to explain it to myself.
At the age of 93, he still goes to mass every day. And believe it or not, he still remembers the Hail Mary. But he doesn't remember me. Maria. I'd be lying if I didn't admit that that still makes me cry. But even so, in the past six years, I have gone from hopelessness to hope.
So I hope you will get busy right now and do what we have to do to spare millions of Americans the future and the pain of watching someone they love and feeling powerless. If you do, I'm convinced, truly convinced, that we baby boomers will be the generation who gets to tell our grandchildren that, believe it or not, there once was a time when there was no cure for Alzheimer's.
(END VIDEO CLIP)
BROWN: Maria Shriver on Capitol Hill today. We'll be right back.
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BROWN: That's it for us.
Larry King right now.
