Return to Transcripts main page

CNN NEWSROOM

Thousands Protest G-20 Summit; Dow Climbs

Aired April 2, 2009 - 15:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: The lord is my shepherd.

UNIDENTIFIED MALE: That's right.

(CROSSTALK)

UNIDENTIFIED MALE: He makes me to lay down in green pastures.

(LAUGHTER)

RICK SANCHEZ, CNN ANCHOR (voice-over): Yes, green, as in money, as in on the take, a reverend and a sheriff. And one of them is busted. Which one do you think it is? You will see the secret recording of how this all goes down.

Thousands taking to the streets again in London during the G-20 summit. You will see...

UNIDENTIFIED MALE: What do we want?

SANCHEZ: ... and hear from them.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: But our citizens are all hurting. They all need us to come together.

SANCHEZ: The president tries to get an angry world to work with the U.S., while Mitt Romney tells other Republicans to stop wanting the president to fail.

What's right? What do you want to say? Expanding citizen journalism again. You chat in real time. Your national conversation begins right here, right now.

(END VIDEOTAPE)

SANCHEZ: And hello again, everybody. I'm Rick Sanchez.

For the first time since early February, the Dow Jones industrial average has crossed back over the 8000 mark. Now, I want you to look at this chart that we have put together for you, simple enough. Remember back in February, it was February 10, when the market was crashing?

That's when it went below 8000, and headlines were screaming, economic collapse, economic collapse. Then it got even worse. Watch the arrow, when, on March 9, it hit just below the 6500 mark. Now look at what happened since. Look at that line of steady progression to today.

How important is this? Maybe nothing. Maybe something.

It is important to note, though, that this is happening as the president completes his first overseas trip, where he's tried to twist world leaders' arms into buying into his stimulus plan.

Now, here's what the president said just about an hour ago.

(BEGIN VIDEO CLIP)

OBAMA: You know, at home, I have often spoken about a new era of responsibility. I believe that this era must not end at our borders. In a world that's more and more interconnected, we all have responsibilities to work together to solve common challenges.

And although it will take time, I am confident that we will rebuild global prosperity if we act with a common sense of purpose, persistence, and the optimism that the moment demands.

(END VIDEO CLIP)

SANCHEZ: All right. So, the market's been showing a steady climb. The president of the United States is talking to world leaders.

Joining us is Susan Lisovicz.

Let's get through this, because here's my question to you. Is this one of those deals where, look, the president's actions overseas may not have made the market go up, but he certainly could have forced it down, couldn't he have?

SUSAN LISOVICZ, CNN CORRESPONDENT: Oh, sure.

I would make the argument, Rick, that what happens at the G-20 could force the market up or down. The fact is that it appears to be a unified front with lots of fiscal firepower, to the tune of $1 trillion plus.

Meanwhile, we are getting slow, but steady signs that this economy is showing signs of a pulse, and what's happening is the bulls are running.

SANCHEZ: I want you to listen to something, because this is interesting, what's going on. And we have covered this on this hour from 3:00 to 4:00 every day on CNN in-depth. Back in March, when we were talking about those arrows that I just showed the viewers, when things were looking really bad, I mean, you remember, Susan. It was pretty dismal.

(CROSSTALK)

SANCHEZ: People were talking about -- seriously talking economic collapse and worse. Listen to my conversation back then with Bob Lenzner. And then I want you to react on the other side. Here it is.

(BEGIN VIDEO CLIP)

SANCHEZ: Let me ask you a tough question, Bob. I know...

(CROSSTALK)

ROBERT LENZNER, NATIONAL EDITOR, "FORBES": Yes. All your questions are tough.

(CROSSTALK)

SANCHEZ: I know. But this one's kind of -- really, I'm cutting right to the chase, man.

LENZNER: Go ahead.

SANCHEZ: I'm hearing this all the time now. I'm hearing people use the D-word again. They're just putting the word mild in front of it.

LENZNER: Well...

(CROSSTALK)

SANCHEZ: There were two reports yesterday that thing may not actually be a recession, that it may not be a recession; it's going to be a mild depression. Talk real skinny with us. We're adults. What's this going to be and what does it mean?

(CROSSTALK)

LENZNER: I'm afraid that I might excise the world mild, OK?

I think we are facing the real threat of a real depression.

(END VIDEO CLIP)

SANCHEZ: A real threat of a real depression. He's a smart guy and a guy we trust and we have listened to in the past.

And I know it's easy to second-guess. That was then. This is now. Can we now say, are you hearing, Susan Lisovicz, people now say that what we're looking at now is not necessarily a depression, mild or otherwise?

LISOVICZ: Well, what we know, we have, Rick, is we have a terrible reception. It's already the longest since World War II.

SANCHEZ: Right.

LISOVICZ: What's happened since Bob and you spoke that day was that we have had the first real details about a bank bailout package. We have the G-20 making this extraordinary commitment to try to solve the world's economic woes. We have signs of life, as I mentioned, some banks, Citigroup and Bank of America, saying they have made money in the first couple months of the year.

SANCHEZ: So? So?

LISOVICZ: So, I think we may have dodged a bullet, maybe. But, you know, there was an op-ed piece recently in "The Wall Street Journal" where a Harvard professor said there is a one in five chance that the U.S. economy will go into a depression.

SANCHEZ: All right. Just because the signs are good right now doesn't mean that we're not necessarily going to be in trouble. Nonetheless, we will take what we got when we get it.

Thanks so much. Susan Lisovicz, great stuff. We will be checking with you throughout the show. And, of course, what do you call it, the bewitching hour at the end of this hour?

LISOVICZ: It's the witch -- 3:00 is the witching hour. But so far this rally is holding. Maybe it will even build. That would be nice.

SANCHEZ: All right. We will look forward to talking back to you. Thanks so much, Susan.

LISOVICZ: You're welcome.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: This is for the money that I sent off the other day. That's $2,000.

(END VIDEO CLIP)

SANCHEZ: This is amazing to watch, a reverend and a sheriff doing a drug deal. This is a bribe that you're looking at right there. Which one is busted? Have you figured it out yet? You're going to see this entire secret recording as it plays out.

Former presidential candidate Mitt Romney is lecturing Republicans. He's offering them some direction. Will they listen?

(BEGIN AUDIO CLIP)

UNIDENTIFIED MALE: Yes, hi. It's Larry from Hamilton, Ontario, Canada. I called before. I'm calling back to say you guys are doing a great job.

And to tell you the truth, what's happening out there is happening down here, or up here, too, in Canada. So, keep her going, boys. Thanks, Rick. Bye.

(END AUDIO CLIP)

(COMMERCIAL BREAK) SANCHEZ: All right. I'm going to show you somebody, and then you tell me if you recognize him. You see him right there? You see? Because that is Maurice Greenberg. His friends call him Hank.

He is responsible at least in some measure for the collapse of AIG. That's why he's important. Now, remember -- remember those default stock swaps that I have been telling you about so much, the schemes that kick-started the economic disaster? Yes, it was in large measure under his command that it happened.

He was forced out as CEO in 2005. But today he's testifying before Congress, and saying, essentially, it's not my fault.

What would you expect him to say?

Joining us now, Patricia Murphy, columnist for PoliticsDaily.com.

PATRICIA MURPHY, POLITICSDAILY.COM: Hey, Rick.

SANCHEZ: She's been at the hearing. Murph, it's always good to see you.

Murph, it's always good to see you.

MURPHY: Always good to see you.

SANCHEZ: So, how did Hank do?

MURPHY: He did OK.

If I had to grade him, I might give him a C. He came to this hearing prepared to say what he thinks AIG ought to do to get out of its mess, what the government ought to do to make it better. And the tables really turned on him.

And the members at this committee started asking him a lot of questions and asking him his role was here. At one point, one congressman said, do you take any responsibility at all? And he said, no, I don't.

SANCHEZ: This is the guy who was at AIG in 2005. Remember that number, 2005? That's about the same time that those default stock swaps were taking place. Here he is now, ironically enough -- I want you and our audience to listen to this -- explaining how it's the government's job to rebuild the company that he in part screwed up.

(BEGIN VIDEO CLIP)

HANK GREENBERG, FORMER CEO, AMERICA INTERNATIONAL GROUP: It seems to me that the role of government should be to get a company that's in need of help back on its feet as soon as possible, so it can become a taxpayer again and an employer.

(END VIDEO CLIP)

SANCHEZ: Let me ask you a question as we watch him. I want to ask you about Darrell Issa out of California. He's the ranking Republican on this committee. And he's been adamant about not hearing from this guy.

Why -- I mean, he actually sent a memo to other members of this committee saying, we shouldn't be -- we shouldn't listen to this guy. We shouldn't even invite him. We shouldn't take his testimony.

I don't get that, Murph.

MURPHY: I don't really get that either. But Mr. Issa was at the hearing and he did ask several rounds of questions of Mr. Greenberg, and...

SANCHEZ: Was he tough on him? He should have been.

MURPHY: Yes, he was tough on him. He certainly was. He also asked him if he agreed with his legislation that he wanted to pass to have something like this not happen again. And Mr. Greenberg did basically endorse that legislation.

But all of these members were very tough on him, Democrats and Republicans. They all just weren't buying the line that none of this was his fault. And he was the CEO for 35 years. And he said it all hit the skids after he left.

SANCHEZ: Hey, do we have Susan Lisovicz down on the floor at the stock exchange, Chris? Did you say yes? Let's split the screen, if we can. Let's put Murph and Susan up.

Susan, let me ask you a question about, is there a feeling down there? I know you and I had a conversation a moment ago about the market suddenly starting to look kind of good. What are they saying on the floor, the guys who trade for a living?

LISOVICZ: Well, the market, you have to remember, Rick, tends to overdo things on the buy and sell side. It's always extremes. It's not a nuanced creature, unfortunately.

But I think there's clearly a couple things going on. Very simply, stocks are cheap. I mean, you're looking at Bank of America, the biggest bank in America, it's trading for around $7. That's cheap. But, secondly, over the last few weeks, while the first quarter, the first three months of the year were terrible for stocks, don't look at your 401(k), the month of March was terrific, because we started to get signs of encouragement, the housing market and the financial sector or even in the auto sector yesterday.

We got auto sales yesterday, Rick. They were terrible, but they weren't as terrible as they were in the first two months of the year. And that's encouraging.

SANCHEZ: Let me take your information over to Murph now.

Murph, you have got to feel for Republicans. I mean, they're opposing everything. They're the opposite party. But yet these things that we're hearing from Susan reporting on Wall Street, it's got to be a bit of a tussle for them right now, isn't it?

MURPHY: Well, they're really between a rock and a hard place here. They want very much to be able to take credit for any success. But they're not in charge right now. And they were in charge when a lot of the problems started to happen. And there was a lot of talk today about the huge amount of deregulation that happened under President Bush and under Republican watch.

It actually started under Democrats. But they're starting to get toward the end of finger-pointing and starting to figure out what to do. And I think maybe the markets are starting to respond to that. The panic is basically over.

SANCHEZ: Well, why not -- but given -- and I know it's too early to say, but if we do see this upward trend that Susan's reporting to us about, why not start to at least buy into the Obama plan in some measure?

MURPHY: Well, that's the problem.

How do you be the loyal opposition to somebody who is succeeding? How do you make -- how do you hook your wagon onto something that's working without giving credit to the person who is in charge?

SANCHEZ: Yes.

MURPHY: This is why they're having a really hard problem, even within their own caucus. What do you take credit for? Who do you blame?

They haven't quite gotten their feet underneath them. And as the markets continue to go up and down, I think we will see the Republican Party kind of struggle about how to deal with it. Basically, at the end of the day, everybody wants their constituents to be happy. Congress doesn't want any more blame for this mess. So, everybody wins if we can get ourselves out of this.

SANCHEZ: Fascinating conversation, great information from both of you. Murph and Susan, my thanks to you. We will do it again.

MURPHY: Thanks.

SANCHEZ: You drive your SUV into a lake. Well, how did it happen? And how do you get the driver out now? Look at the expression on her face as they were taking her out of there. We're going to show you this. It's next. Wow.

And you're not going to believe what Rush Limbaugh said about President Obama and Prime Minister Gordon Brown. I mean, I'm serious. You're not going to believe that he actually said this, I mean, really.

Look, if you're a kid, and you said something like this in public, hell, if you were my kid, and you said something like this in public, there would be hell to pay. We have got the tape.

(BEGIN AUDIO CLIP)

UNIDENTIFIED MALE: Yes, Rick, my name is Bob, and I'm from Bourbonnais, Illinois.

And I called to show you the kind of intellect we're dealing with. You have got a caller that thinks it's wonderful that Barack Obama's there and making a good impression and not being embarrassed. Meanwhile, the police are getting the crap kicked out of them and they're destroying private property, but it's OK because Bush didn't embarrass us.

Kind of ridiculous, isn't it?

(END AUDIO CLIP)

(COMMERCIAL BREAK)

SANCHEZ: Welcome back. You're watching our national conversation at this 3:00 p.m. hour Eastern time every day. We're getting information that there may be a tornado on the ground.

Chad Myers is standing by. Chad, what do you have?

CHAD MYERS, CNN METEOROLOGIST: Well, you know, it's very close to Bay St. Louis. And then it through moved through Waveland and also kind of on up toward Gulfport. It was on ground by trained spotters on the ground there right along the Gulf Coast, right here just east of New Orleans, moving to the northeast.

So, Gulfport, Mississippi, you need to be taking cover right now. We will keep you advised.

SANCHEZ: All right. Thanks so much, Chad. We will check back with you.

In the meantime, we want to involve you in this national conversation as well. Let's go to our Twitter board, if we possibly can.

Look at the name this guy uses on his profile, Obama bin Laden. That should tell you exactly how he feels about Barack Obama, doesn't like him. "Rick, I have bagged Obama. But I have to admit praise when I can. I think he held himself OK today."

We always thank you when our viewers are talking to us and responding fairly from either side of the aisle.

Now, check this out. This is a woman with a medical emergency. She's driving her SUV and decides she's going to go right into a lake. Apparently, it happened somewhere in the South Lubbock area. Emergency crews show up. They try and get her out. She's having a tough time. She's not only dazed but confused at the time.

Finally, they were able to get her out of the lake. We're told now that she's going to be OK.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Let me show you something. I have a present here, a Christmas present here.

UNIDENTIFIED MALE: I will put it in my Bible, so nobody (INAUDIBLE)

UNIDENTIFIED MALE: It's loaded and ready to go, OK?

(END VIDEO CLIP)

SANCHEZ: A gun, money, Christmas presents. This is a bribe. You're watching it go down. Somebody is setting a trap. And somebody's falling for it. It's a reverend. The other guy's a sheriff. You're going to see this bust go down for yourself.

Now, here's something you need to know. Tens of thousands of American homes have been built with a Chinese-made drywall. If your home is built with this Chinese-made drywall, you may have to start tearing it down. I'm serious.

(BEGIN AUDIO CLIP)

UNIDENTIFIED MALE: Hey, Rick.

I think the president is being -- I think the president is doing a fine job. If you don't like anything that's going on here, they need to run our steel and our factories, and our plants back to this country.

(END AUDIO CLIP)

(COMMERCIAL BREAK)

SANCHEZ: We're back. I'm Rick Sanchez here in the world headquarters of CNN in Atlanta. We're involving you, so let's go to your comments now.

To Facebook, and in Facebook, Jane is watching our show. There she is with a picture of one of her friends or her daughter or her mom. Don't know. "Hey, Rick, love your show. Watch it when I can. Keep up the good work from a fan in Vancouver, Canada." Isn't that nice?

Bill is watching, too, just below that. He says: "If we all just ignored Rush," referring to Rush Limbaugh, "do you think he would just go away? I would like to think so."

Now let's turn it around and go over to the Twitter board if we can. And there we're going to read from Dobos. He's talking about what's going on, on the stock market today. As we have been reporting, it's up again. "I'm glad I left my 401(k) alone and let it ride. Got some good cheap stocks, and they're growing fast."

Good for you, Dobos. Well, some folks are naturally graceful, some not so much. By that measure alone, radio yacker Rush Limbaugh is the polar opposite of our commander in chief, Barack Obama. Now, you can disagree with Barack Obama on his leadership, perhaps his policies. But it's hard not to at least acknowledge the ease with which America's 44th president has handled himself in London on a global stage, even among royalty.

British Prime Minister Gordon Brown puts it this way.

(BEGIN VIDEO CLIP)

GORDON BROWN, BRITISH PRIME MINISTER: I want to thank you for your leadership, your vision and your courage, which you have already shown in your presidency, and congratulate you on the dynamism, the energy and indeed the achievements that you have been responsible for.

Your first 70 days in office have changed America, and you have changed America's relationship with the world.

(END VIDEO CLIP)

SANCHEZ: Then you have Rush Limbaugh, who doesn't like the fact that Gordon Brown was impressed with the U.S. president, didn't like the compliment. In fact, Limbaugh was so upset about it, he made what may be one of the most disgusting comments anybody could possibly make.

I mean, this is the type that would make me wash out my kids' mouth, the type that even for Rush Limbaugh seems beyond the pale. Some of you no doubt will find Limbaugh's comments offensive.

(BEGIN VIDEO CLIP, "THE RUSH LIMBAUGH SHOW")

RUSH LIMBAUGH, RADIO TALK SHOW HOST: The slobbering, the slobber. This guy, folks, I'm telling you, he -- if he keeps this up throughout the G-20, Gordon Brown will come down with anal poisoning and may die from it.

(END VIDEO CLIP)

SANCHEZ: Anal poisoning. Think about what he is saying there. Maybe -- no, better yet, don't.

Consider instead what Mitt Romney is saying. The former governor of Massachusetts is telling Republicans they need to stop wanting Obama to fail. Romney, who's a huge critic of Obama's policies, by the way, says -- quote -- "It's important to nod to the president when he's right."

The walls of your house are supposed to protect you, but what if those walls are dangerous? What if they are destroying your house and you? Could this be your house? You will have to watch this one to see.

By the way, who should this -- who should this man you're seeing right there, who should he listen to? Should he listen to Rush Limbaugh or should he listen to Mitt Romney? That's Tennessee's own Republican favorite son Zach Wamp, a regular guest on this show. We like him. But what's he going to say when having to answer that question? You will find out.

Stay with us. We will be right back with that.

(COMMERCIAL BREAK)

SANCHEZ: It's funny. We keep -- I keep showing you that video about that bribe as it's taking place. And I'm asking, which one is the guy who's on the take, the sheriff or the reverend? Hard to tell. We're getting a lot of people weighing in on this and guessing.

"I'm betting the reverend is the clean one, and the sheriff is the crook. Laugh out loud."

Hmm. Well, you have got to stick around to find out, folks.

We're seeing an intersecting crosscurrent within the Republican Party. Have you noticed the "party of no" label, it is beginning to sting a little bit. And now Mitt Romney, as we told you just a minute ago, is saying, look, Republicans shouldn't say that they hope Obama fails, as Rush Limbaugh has repeatedly said.

Joining us now from Washington, Republican Zach Wamp, a member of the House Appropriations Committee.

Congressman, thanks so much for being with us, sir.

REP. ZACH WAMP (R), TENNESSEE: Thank you, Rick.

SANCHEZ: You have got to hate this stuff, right?

Here now, I'm put in a position where I have to ask you about which one you're going to agree with or which one you're going to back, Rush Limbaugh or Mitt Romney.

WAMP: Well, I think, from time to time, you can find some good in what anybody says.

But, frankly, we need to listen more to the people back home, and not so much just the voices out there. There's not much difference between entertainment and journalism on some fronts...

SANCHEZ: Yes.

WAMP: ... and, frankly, the voices that always chime in from the outside.

We're here in the battle. About the only pretty thing coming out of Washington this week is the cherry blossoms. The budget is not too pretty here. It's way too much spending and too much taxing and too much borrowing. This is important for us to listen to the people back home. SANCHEZ: But you heard what I just read that Limbaugh said. Is that offensive? I mean, if you could come up to him as his friend -- and, listen, I have been with Rush. You know, he and I have sat around and watched football together.

Would -- would you say to him: "You know, Rush, don't go there, man. That's a little too much. That's not going to play with the Church of God folks in that region of Tennessee that you want to be the governor of.

WAMP: Now, how did you know the Church of God folks are from my region of Tennessee?

SANCHEZ: Because I...

WAMP: You're right.

SANCHEZ: Because I covered many a story up there.

WAMP: You're right. Listen, I don't want to get in the crossfire here. But the fact is entertainers sometimes say things. We really need serious-minded policy people to help chart this ship of state out of these rocky waters right now. And so we shouldn't spend so much time caught in what others are saying. We need to really focus on what does it take to get our country back on the right track. And I really think we've got big problems now. And it's getting worse, not better.

SANCHEZ: A lot of my buddies in Tennessee say the good betting money has you be the next governor of the state. And that's probably a pretty good bet, I would imagine, given your reputation.

But as a member of Congress right now, you voted against the stimulus.

WAMP: Yes.

SANCHEZ: I mean, as the guy who may be the next governor of Tennessee, wouldn't you want that money?

WAMP: Well, I would have even turned down the unemployment insurance piece of it, because it, frankly, is an unfunded mandate beyond the years that the stimulus funds. And so the vast majority of it I would have accepted as governor. But then again, it was just too much spending.

Listen, Rick, about 15 percent of the stimulus was very effectively spent. The rest of it really grows the government and it's too much. I mean, at home, the budgets are being cut to get through tough times. Local governments are cutting the budget. State governments are cutting the budget. Only in Washington is there this mindset that we can spend our way into prosperity.

So, no, it was just too much. There's a lot of things coming out of Washington today, Rick, that are just too much. And the people are with me back home. And I'll probably be outspent in this campaign. But I think I'll win, because the people there are wanting leaders, not rich people, not the elite, not Wall Street, not big business, big oil, big pharmaceutical, but regular folks to represent them. That's important to them.

SANCHEZ: No, I know. And, listen, one of the things we've always liked about you on this show is your spunk. You said something, though, recently that I've got to ask you about.

WAMP: Yes?

SANCHEZ: You were talking -- you were asked about -- about health care. And you said something that makes me wonder.

Do you really think that Americans can only get health care or should only get health care if they can buy it?

WAMP: No...

SANCHEZ: Do you believe that?

WAMP: No. I was interrupted in the middle of the sentence, because access to health care is a right.

And the debate was is health care a right or is it a privilege?

And they still ask that question of college students. Both of my kids are students at the University of Tennessee, my tie today. And they still have that debate.

And it's important, as we look at health care, to make sure that people have access to health care. But we also don't necessarily guarantee to everybody, no matter what, food. And food is just as essential as health care.

So, at some point, you've got to say what's the proper role of the government?

And I think access to health care ought to be the goal. I think there's, frankly, a way that we can keep a free market model and extend health care to everybody in this country. Everybody should have access to health care. I agree with that 100 percent.

SANCHEZ: OK...

WAMP: But some of what I was taking -- was saying was kind of taken out of context.

SANCHEZ: I get that.

Zach Wamp, thanks for being with us.

WAMP: Rick Sanchez, thank you.

(LAUGHTER)

(BEGIN VIDEO CLIP, COURTESY FBI)

UNIDENTIFIED MALE: What have you got?

UNIDENTIFIED MALE: This is for the money that I sent off the other day. That's $2,000.

(END VIDEO CLIP)

SANCHEZ: So you've decided to take a bribe. Now, that's bad. You meet somewhere to take the bribe. That's worse. You're caught on camera by the FBI stucking -- stuffing money in your pocket. That's good TV.

We'll show it to you, when we come back.

(COMMERCIAL BREAK)

SANCHEZ: We've got a lot of comments coming in. A lot of folks had something to say about Congressman Wamp. They kind of like him. Some didn't.

We'll start here. Hawkeye says: "My parents would make me and my brother wash our mouths out with soap if we ever said something like Rush said."

Whoa.

Let's go over to Facebook. Jason Noel is watching. He said: "There is nothing positive that Limbaugh brings to the table. Romney has it right. The big picture is if the president fails, we all fail. Look at the big picture."

And then Nyree Matthews, she's -- well, she's the one that helped me produce my show: "Why are you still allowing Rush Limbaugh to disturb you? The reason I ask is this is what he wants."

Thank you for the scolding, Nyree.

Why the walls in your house may need to come down -- it starts with China, it ends with the destruction of your house. You have got to see this one.

(BEGIN VIDEO CLIP, COURTESY FBI)

UNIDENTIFIED MALE: What you got, Kruger (ph)?

UNIDENTIFIED MALE: This is for the money that I sent off the other day. That's $2,000.

(END VIDEO CLIP)

SANCHEZ: You're watching the deal go down. One of these guys is a minister. The other is a sheriff. They're being secretly recorded. One of them is about to go down for taking a drug bribe.

Which one is it?

You've all been answering, but you haven't all got it right. The whole thing unfolds. And you'll see it next.

(COMMERCIAL BREAK)

SANCHEZ: And as we come in, we're getting a lot of comments from you.

Let's go to Twitter first, Robert, if you could.

"The Republicans," says Trent: "are really in the woods now. It's looking like Obama may have turned this thing around."

Some would say not so fast, Cato.

All right. Let's go over to MySpace now. And here we get a comment on the sheriff and a reverend walk into a bar: "Where's the Fryer's Club when you need them?"

Yes, it does start -- it does start to sound like the beginning of a joke, doesn't it?

Welcome back, everyone.

I'm Rick Sanchez here in the world headquarters of CNN.

This news hour is committed to exposing public corruption. We do it all the time -- maybe now more than ever, though, given what's going on in this country.

All right. Let me set this one up for you.

Are you ready?

The guy on the left of your screen is a reverend who's posing as a drug dealer. The guy on the right is the sheriff who's being offered protection money. Essentially, he's about to be offered a bribe for his silence to let the drugs and the laundered money go through.

This prosecution occurred last year.

Watch now as the sheriff -- the guy on the right -- is told about how the Mexican drug cartel needs his help to launder drugs and money.

Play it Roger.

(BEGIN VIDEO CLIP, COURTESY FBI)

UNIDENTIFIED MALE: They're doing dope big time, sheriff. But here's the only problem. They know how to get it out of the country.

UNIDENTIFIED MALE: Right.

UNIDENTIFIED MALE: I know how to get the money back in. And I said well now, you need me.

And he said, how can you get the money back in?

I said the funeral home there. That is you and I.

UNIDENTIFIED MALE: Yes.

UNIDENTIFIED MALE: Nobody but God you and I.

UNIDENTIFIED MALE: Yes. And that body there.

UNIDENTIFIED MALE: No, an urn.

UNIDENTIFIED MALE: Oh. Ooh, cool.

UNIDENTIFIED MALE: An urn.

UNIDENTIFIED MALE: Yes.

UNIDENTIFIED MALE: They can send $50,000 and I can get a funeral home in Mexico. Send me the urn and I'll pick up the body. You can't do it too often. Send $300,000 in there and with the ashes. Nobody checks the urn.

UNIDENTIFIED MALE: And they're going to give you $4,000 for each one of those?

UNIDENTIFIED MALE: $4,000 for each one of those. Next week, we will have $42,000. And all I've got to do is take this outside -- this right here -- take this outside when you get that off (ph) and he's got a snatcher who comes. I'm going to put it in that box, tape it up, leave it right out there.

UNIDENTIFIED MALE: Yes.

One at a time do you mean?

UNIDENTIFIED MALE: No, all of them.

UNIDENTIFIED MALE: I hope the -- I hope the guy gets it.

UNIDENTIFIED MALE: Oh. They've got -- they've got a runner.

UNIDENTIFIED MALE: Yes.

UNIDENTIFIED MALE: All day.

UNIDENTIFIED MALE: I don't know. I'd still be worried about it, because if the wrong person get a hold of it, my God almighty.

(END VIDEO CLIP)

SANCHEZ: So there he's making the explanation about how they make the drop, how the money is collected, how the money is distributed, how the drugs are distributed.

And here comes the money shot.

You ready? This is the smoking gun used in his conviction that he is now appealing. You're going to see the sheriff hand a loaded gun to this fictitious bad guy, the reverend, while he counts the dirty drug money that he has just been handed.

(BEGIN VIDEO CLIP, COURTESY FBI)

UNIDENTIFIED MALE: Let me show you something. I got you a present here -- a Christmas present.

UNIDENTIFIED MALE: I'll put it in my bible so won't nobody (INAUDIBLE).

UNIDENTIFIED MALE: It's loaded and ready to go, OK?

UNIDENTIFIED MALE: Oh. Oh, well...

UNIDENTIFIED MALE: You didn't get that from me, Rev.

UNIDENTIFIED MALE: Oh.

UNIDENTIFIED MALE: I don't know nothing about it.

UNIDENTIFIED MALE: Sure. This is a cute little old baby.

UNIDENTIFIED MALE: Oh yes. And it's loaded. Be ready. Don't be -- you know, when you pull the trigger, it's -- it will pop (EXPLETIVE DELETED).

UNIDENTIFIED MALE: I would -- I would not. If they come in here (EXPLETIVE DELETED), that's just what -- excuse me, that's just what's going to happen.

UNIDENTIFIED MALE: That's right. (EXPLETIVE DELETED).

UNIDENTIFIED MALE: I'm going to shoot them right (EXPLETIVE DELETED).

UNIDENTIFIED MALE: Really, son. (EXPLETIVE DELETED).

(END VIDEO CLIP)

SANCHEZ: And he's giving him the gun while he's counting the money.

Joining me now is Attorney Jerry Summers.

You're the attorney for Sheriff Billy Long, who we just saw on that tape.

How are you possibly going to explain this?

(AUDIO GAP)

SANCHEZ: Counselor?

JERRY SUMMERS, ATTORNEY FOR BILLY LONG: I can't hear him.

SANCHEZ: Oh, you can't hear me?

Let me try one more time.

Can you hear me, Counselor?

SUMMERS: Yes.

SANCHEZ: Apparently, we're -- I'm going to try it one more time and then we're going to save you and then do this at the end of -- at the end of the break.

Can you hear me now?

It's Rick Sanchez.

SUMMERS: Yes, I can.

SANCHEZ: Perfect.

We just watched the video of your client counting money and giving the fellow who was the I.O. In this case a gun.

How can you possibly explain this?

What's the defense?

SUMMERS: Well, the -- there really wasn't a defense in the case because it was a cooperating individual who, because of his involvement with the government, made certain overtures to Sheriff Long. And, unfortunately, Sheriff Long went for what we called the bait.

And so early on, he admitted his guilt. He wanted to accept responsibility. And it was primarily a sentencing case that -- which we emphasized the fact that he was a 31-year veteran of law enforcement, a veteran of Desert Storm, had an impeccable record as a law enforcement officer, but went bad.

SANCHEZ: So you're copping to this.

What's the appeal about then?

SUMMERS: The appeal is about the sentence. He received a 14-year sentence. We felt that there were certain factors, and particularly in the changing development in the federal sentencing guideline laws, that there are several points on appeal.

We certainly -- we got a very fair hearing from the district judge, Judge Mattice. But we certainly felt like that there are some things that he should have been given some consideration in the sentence, which would have reduced it from the 168 months that Sheriff Long got.

SANCHEZ: It's amazing to watch. Our viewers are obviously very interested in this, as well. That's why many of them have been writing to us.

I'm curious, when did he find out that he had been secretly recorded and what did he tell you?

What was that like?

SUMMERS: He found out the day he was arrested. This individual -- what was happening is the government was investigating another case of public corruption in the Chattanooga area, which they were primarily pursuing. And the cooperating witness, the mortician and preacher who became a cooperating witness, they were interviewing him. And there's a difference as to whether he was involved in another public corruption trial or they were merely trying to develop him as a witness.

And he immediately -- what happened is while they were interviewing him, two FBI agents, Sheriff Long called in and they made an inquiry as to why are you dealing with the sheriff of the Hamilton County?

And so at this point, the cooperating individual proceeded to develop his relationship and then develop it even further. And they set the sheriff up. And, unfortunately, Sheriff Long was receptive to it.

SANCHEZ: But when he got the call, when the police call your house and they say, we're coming over to your house, sheriff, we've got you on tape giving a gun to a guy who was a convicted felon and taking a bribe, I mean did he...

SUMMERS: Well, this (INAUDIBLE)...

SANCHEZ: Did he fall on the floor?

Did he -- did he cry?

What did he do?

SUMMERS: The call came from the cooperating witness' funeral home to -- the sheriff called him in, because this individual had been active in Sheriff Long's campaign. And he had put out that he was very active for the sheriff, solicited voters for him, worked in his campaign and developed a friendship that then turned into this other relationship.

Now, bear in mind, this cooperating individual was a con -- had been a drug -- cocaine user in other states -- a $3,000 a week habit. He had a rather checkered past.

SANCHEZ: Yes.

SUMMERS: But he was a very convincing individual. And then he got Sheriff Long into it a little bit and just kept on going and going. And, unfortunately, Sheriff Long tried to get out, but he had got in too deep. And then finally the FBI, they arrested him and they said we've got you on tape. He admitted it. And then from that point on, it was pretty much a trying to reduce the sentence, which, to this point, we've got a great record...

SANCHEZ: Yes, it's...

SUMMERS: ...but it's not been heard in the Sixth Circuit yet.

SANCHEZ: Well, that -- you know, people always say, well, entrapment, this and that. And they used this guy who apparently wasn't a good guy in the past. Unfortunately, if you get a bad -- if you're going to get a guy doing something bad, you've got to use people who've done something bad. You're not going to do it with a, you know, a Boy Scout troop leader or something.

But you've been very informative...

SUMMERS: You sound like a former -- you sound like a federal prosecutor. That's what their common story is. And there's a certain amount of reliability to that.

SANCHEZ: Yes.

SUMMERS: But Sheriff Long had an -- had an exemplary record. But he had never been at the top of the heap. And I think the combination of this individual was very persuasive and he was weak and he went for it. We thought it wouldn't -- wouldn't support an entrapment defense because he had the predisposition to commit it.

SANCHEZ: Right.

SUMMERS: And, therefore, we relied on sentencing. We put in a very extensive record of numerous -- he had a personnel file with numerous citations...

SANCHEZ: No, look...

SUMMERS: ...and citations and...

SANCHEZ: And, in the end, Counselor, in the end, you and him are basically saying you got us. We did it. And there's certainly some honor in that.

My thanks to you, Attorney Jerry Summers, for taking us through this story after watching this video.

Thank you, Jerry.

SUMMERS: Well, there's another chapter left.

SANCHEZ: We'll get back to that chapter.

Drywall is one of those things in your home you don't think much about. But hundreds of homeowners are thinking about it now. That's because -- you're not going to believe this -- drywall that's made in China was used in their homes. It's so toxic, it's actually ruing the wire inside the walls -- meaning all the walls may have to come down. Think about that -- down. Yes.

(COMMERCIAL BREAK)

SANCHEZ: Ding, ding, ding, ding. We've got the whale.

You know what the whale means?

Let's go to the Twitter board. When you get the whale, that means you are essentially over capacity -- too many tweets. Please wait a moment and then try again. That happens from time to time in our newscast, because there's so many people trying to get into the conversation. So, let's take an alternative.

Let's go to MySpace, all right?

Have you got the camera flipped over there?

There it is. This is one comment from a viewer who just watched that segment on the sheriff: "The sheriff is appealing? Not in my book. He is appalling."

There you go.

And now this out of China. The list of defective products that we import from China is long and it keeps growing -- key, defective is the term there.

We know the litany all too well -- poisoned pet food, toys laced with led, tainted tooth paste, fish with antibiotics and now this -- this one really hits home.

Here's CNN's John Zarrella.

(BEGIN VIDEOTAPE)

JOHN ZARRELLA, CNN CORRESPONDENT (voice-over): The last time Alana and Joel Consolo saw their home like this...

ALANA CONSOLO, HOMEOWNER: This is a linen closet.

ZARRELLA: ...was four years ago, while it was being built.

CONSOLO: This whole room here was one of the reasons why we fell in love with the home, is that you could have the kitchen with the bar here.

ZARRELLA: It was their dream house -- where they'd raised a family, put down roots. That was before they discovered many of the interior walls had been built using Chinese drywall.

UNIDENTIFIED MALE: Every sheet of drywall in this room was the Chinese drywall.

ZARRELLA: Hundreds of homeowners from Florida to Louisiana started finding their air conditioning system coils corroding, along with copper wire and electric outlets.

(on camera): You rub your hand over it and you get black that comes off of it -- a little bit.

CONSOLO: It's a black soot.

ZARRELLA: Yes, like a soot.

(voice-over): Some people complained it made them sick. Many homes even had a pungent rotten egg odor. A study by the Florida Department of Health found the odor coming from "the emission of volatile sulfur compounds." According to the study, those gases led to the copper corrosion.

Already, dozens of lawsuits have been filed against various Chinese manufacturers. Lennar, the builder of the Consolo home, has sued the manufacturers and everyone in the supply chain -- 24 defendants.

CHRIS MARLIN, VICE PRESIDENT, LENNAR HOMES: And there's no question that the defective Chinese drywall is absolutely an inferior product.

ZARRELLA: Knauf, a German company with affiliates in China, that's being sued, says it's product is good.

KEN HALDIN, SPOKESMAN, KNAUF: There are just a lot of worldwide products in place functioning fine. So we believe that we put out a very excellent product in the marketplace.

ZARRELLA: The Consolos' is one of at least 80 Lennar Homes that were built using some at least some defective Chinese drywall. Lennar is putting the homeowners up in rentals while it rebuilds their homes, floor to ceiling.

CONSOLO: I mean, there's other things -- lead paint, asbestos, radon, but drywall?

ZARRELLA: The drywall was imported primarily in 2006. There wasn't enough U.S.-made product to satisfy the demand for rebuilding following the hurricane seasons that brought Charlie, Katrina and Rita. The Gypsum Association says enough drywall to build at least 30,000 homes came from China between 2006 and '07.

(on camera): Several state and federal agencies are looking into whether this defective Chinese drywall can cause health problems. But because drywall is something they've never looked into before, it's unclear how long it will be before there are answers.

John Zarrella, CNN, Estero, Florida.

(END VIDEOTAPE)

SANCHEZ: And lo and behold, we've got a development on this story, just as we were watching that. Robert Wexler, a Congressman from Florida, around Hollywood, Florida, better queen as Fort Lauderdale to most people, is introducing legislation to both study this issue and possibly now, as a result of -- you heard the number -- 30,000 people could be -- or 30,000 homes could be affected by this -- to possibly order a ban on Chinese dry wall coming into the United States.

He's also asked Governor Crist of Florida to perhaps use his state of emergency authority for the areas where the dry wall is being removed because it is so toxic that it could affect and hurt that many people.

So, again, new legislation being introduced on this amazing story that we just shared with you.

Wolf Blitzer is standing by to bring you all the stories coming out of Washington today, as they await the president of the United States, on what most are considering to be, at least, a successful trip abroad -- Wolf.

WOLF BLITZER, CNN ANCHOR: We're going to take an in-depth look at all this. We've got Madeleine Albright, the former secretary of State; William Cohen, the former secretary of Defense; Tom Friedman, the foreign affairs columnist for "The New York Times," the best- selling author. We're going to take a very close look at what happened, what didn't happen.

Also, Tina Brown of TheDailyBeast -- she's going to take a closer look at the first lady.

How did she do in Europe?

We've got a lot coming up right here in "THE SITUATION ROOM" -- Rick.

SANCHEZ: Wolf Blitzer.

I can't wait to see it, man.

Thanks so much.

By the way, when we come back, we'll check on the Dow again. It's been teeter-tottering up and down around the 8000 level. It did cross already today, for those of you joining us late. We'll take you back to Wall Street when we come back.

Stay with us and we'll watch it together.

(COMMERCIAL BREAK)

SANCHEZ: Welcome back.

Look at this tweet that we're getting right now, because, again, the Dow is up. We've been telling you about it: "Rick, everyone should do a Dow is up dance."

All right.

Ready?

Put the camera on me. I'm going to do the Dow is up dance.

Angie, should I?

What do you think -- what do you guys think this is, "Jon Stewart?"

Susan Lisovicz is standing by.

She's the dancer in this show -- Susan, take us...

LISOVICZ: Oh.

SANCHEZ: Take us to the finish.

(STOCK MARKET REPORT)

SANCHEZ: Susan Lisovicz, thanks so much -- Wolf Blitzer, take it away.

BLITZER: Happening now, the powerful leader of the free world can't always get what he wants -- President Obama sees some success at the G20 Summit.

But what hope to stimulate the economy could go bust? Timothy Geithner warning if CEOs don't do more to give you credit they could lose their job.