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American Morning

Obama to Address Congress on Health Care Reform; SEC Inspector General Criticizes Agency over Mishandling Madoff; Volatile Months Possible for Stock Market; Wildfire Rages in California; North Carolina Amends Abstinence-Only Education Policy

Aired September 03, 2009 - 07:00   ET

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

JOHN ROBERTS, CNN ANCHOR: Crossing the top of the hour now. Thanks for joining us on the Most News in the Morning. It's Thursday. It's the 3rd of September. I'm John Roberts.

KIRAN CHETRY, CNN ANCHOR: I'm Kiran Chetry. Glad you're with us. We have some big stories for you this morning. We'll be breaking them all down for you in the next 15 minutes.

First, the president is taking his health care plan straight to Capitol Hill and straight to you. We now know this morning that he'll be giving a major speech where he'll outline his make or break reform plan to both chambers of Congress Wednesday night in prime time.

So what can we expect to hear? We have some answers from president Obama's senior adviser David Axelrod, next.

ROBERTS: They're supposed to keep an eye on Wall Street, so how did the SEC miss Bernie Madoff's multimillion dollar Ponzi scheme? Even he thought he was going to get caught and was surprised when he wasn't.

A brand new report from the agency's own watchdog. The inspector general says obvious leads and red flags were overlooked not just once, not twice, but for years. Find out why. Our Christine Romans is here to break it down this morning.

CHETRY: Also, Washington has cut the funding for abstinence only education, sex education, that is. And across the country more and more schools are changing their programs as well. But are teachers in some cases telling your kids too much? Should schools offering things like free STD testing?

We'll hear from both sides of the debate in our "Educating America" series.

We begin the hour, though, with the White House trying to take back the debate on health care. After weeks of these fiery town hall meetings and months of political deadlock on Capitol Hill, CNN has learned that President Obama will make a major speech to Congress next Wednesday. It's just a day after lawmakers come back from the August recess.

So what can we expect to hear? Our senior White House Correspondent Ed Henry took that question straight to the president's senior adviser David Axelrod. It's an interview you'll see only on CNN.

(BEGIN VIDEO CLIP)

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Why the speech? Did it feel like the debate was slipping away from you?

DAVID AXELROD, OBAMA SENIOR ADVISER: No, I think we've gone through months and months of debates and discussions. All ideas are on the table now. It's a new season, it's a new phase of this debate.

And it seems appropriate as we enter the final weeks for the president to address the nation and talk about how we're going to provide stability and security to people who have health insurance and help those who can't afford insurance get the coverage they need.

HENRY: Can you clear up, where is the public option? Still on the table or off?

AXELROD: The president embraced the public option because he believes that we need to have competition and choice in the insurance system and in this pool that will be created for uninsured workers and small businesses that can't afford insurance to buy it.

And he believes that would be a boom for consumers, help them get the best deal, keep the insurance companies honest. He still believes that competition and choice is important.

HENRY: But does that mean a public option still alive?

AXELROD: I won't deal with details of the president's speech. Otherwise there would be no point in giving it.

(END VIDEO CLIP)

CHETRY: There you go.

Now, for more on the president's take on this make or break push for health care, we bring in our Jill Dougherty at the White House. And Jill, we know that the president is making this big speech to Congress.

Tell us more about what's going on behind the scenes and also about the poll numbers on his handling of health care. They are actually down considerably right now.

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: Yes. Kiran, you know, if you look at the poll numbers, new ones coming up from CNN and the Opinion Research Center, there are problems with the poll numbers, specifically in how the president is handling health care reform.

Look at the numbers. The latest ones showing back in March 57 percent of Americans thought the president was doing a good job. They were approving of how he is handling health care, and now down to 44 percent. Interestingly, the majority of Americans still want the Congress to continue working on health care reform, but about nearly half of them want Congress to start from scratch or not change the basic system of how Americans get health care.

When you are talking about some of the back, behind the scene things that are going on, the White House is talking to Senator Olympia Snowe. She's a Republican and a moderate.

And it's important, because they want to bring her on board to try to do a deal with her with the idea that they might bring other moderate Republicans along.

How will it work? It's actually her idea they're talking about. What she's saying is initially they would give the insurance companies a chance to reform and change things like preexisting conditions.

If they did not, and if -- that period the public option would be off the table. If that didn't happen, if the insurance companies didn't change things, then they could introduce the public option. So it was kind of putting it on hold.

Interesting idea. Will it work? We'll have to see. It could also alienate some of the president's own Democratic supporters - Kiran.

CHETRY: Absolutely, a lot of people in that category pushing for a public option, and especially when it comes to the preexisting conditions issue.

All right, well, we'll see how it all shakes out. We talked about these behind the scenes negotiations and we'll hear from him himself, the president on Wednesday night. Jill Dougherty, thanks so much.

ROBERTS: There's been a lot of information, some of it good, some of it bad going around. So just what exactly is this public option, and how would it lower costs?

Here's more in an "A.M" extra. Right now, private insurance companies run under government rules. The public option would add another choice, a government run insurer.

The White House says it will be cheaper by getting rid of red tape and nixing the need for marketing, none of those ads and commercial the private companies use to try to sell you their plan.

Critics say it's going to put private insurers out of business.

White house officials also say you will still have your choice of doctors and plans. But if you like the private insurance you have now, you can keep it.

How do you miss a $60 billion scam? A new report is now blaming the Securities and Exchange Commission for not spotting Bernie Madoff's obvious multibillion dollar Ponzi scheme. The SEC's inspector general calls investigations into Madoff "incompetent," citing "more than ample evidence, including six complaints, some dating back to 1992, that should have set off maybe one or two red flags."

Our Christine Romans minding your business this morning, and she has got details of all of this, a lesson in how not to do things.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: It sure is. This is proof that the SEC failed regulating 101. This is the inspector general report for the Securities and Exchange Commission. This is the group that's supposed to watch these people who are managing money, watching your money.

And in fact, they had numerous, numerous times when they could have come in here and investigated this guy. And only one time they did serious investigate him, that was a complaint that he was operating a massive Ponzi scheme, a specific complaint that he was operating a Ponzi scheme, and they investigated him for something else.

So this is just an example of how these regulators did not do their job, and this was allowed to go on from 1992 until December 11th, 2008, when he was ultimately arrested -- by the way, not with the help of the SEC, but because his two sons turned him in.

The report shows delays and inexperienced staff. It shows six complaints that raised substantial red flags they said, including two media reports all of the way back to 2001 that this report says the SEC knew about, had been alerted to, had read two media reports that specifically said that he was too good to be true and that these returns could not be possible, including it looks as if there was also a complaint from someone that had money with him that pulled $5 million out and said I'm pretty sure this is a scam. I got all my money out.

So from investors, from another firm actually, some people and e-mails of people in another firm who were investigating or looking into their own investments with Madoff, and then realized it couldn't be possible, moved their money out as well and alerted the SEC. Nothing happened.

CHETRY: If it weren't so serious it would almost be funny. But this is unbelievable. Will there be a shake-up at the SEC because of this?

ROMANS: The SEC chair Mary Schapiro says yes, and she says they have already been implementing these lessons learned, and that they're going through all of these processes to make sure some like this couldn't happen again.

They have shut down a bunch of different suspected Ponzi schemes, and they have been out there, but nothing on this scale. This was just such a huge scam.

And all along the way -- in 2006 he sat down with the SEC, sat down with them. They started to question him about his trading volumes and like, saying for as big as he was, he wasn't really trading all that much, because it wasn't real.

And he said the next Monday he sat down and thought for sure he would be -- it was done. Nope. It wasn't. It went on for two more years after that.

ROBERTS: Lessons in how to miss the obvious. Christine, thanks so much. Christine Romans minding your business this morning.

CHETRY: A lot of people are asking will fall equal a recovery, or are we in store for a double dip recession, as some have called it? We're going be joined by two of the best economic minds out there, Christie Hefner and William Cohan.

It's 19 (ph) minutes after the hour.

(COMMERCIAL BREAK)

ROBERTS: A year ago the financial crisis swept through Wall Street and shook the nation. And since September and October are traditionally volatile months for financial markets anyway, is this fall going to follow that trend, or will the economy continue along the road to recovery?

Here to talk about that is Christie Hefner. She's the former chairman and CEO of "Playboy" enterprises, and William Cohan, contributor "The Daily Beast" and author of "House of Cards, a Tale of Hubris and Wretched Excess on Wall Street."

Good morning to both of you, it's great to see you. Before we get into what may happen this fall, I wanted to ask you this question about bank CEO compensation news, that the top five CEOs, or the top five executives at the biggest banks between 2006 and 2008 averaged $32 million in compensation and in 2008 made $13.8 million.

You talk about hubris and wretched excess on Wall Street, what do you think about this?

WILLIAM COHAN, CONTRIBUTING EDITOR, "FORTUNE" MAGAZINE: There you have it, John. It's beyond outrageous.

ROBERTS: They got the bailouts, too, right?

COHAN: They go the bailouts. And if you subtract out losses and add the losses to the profits, they probably made very little money during that period as well.

What we need to do is begin to think like the Europeans and the European Union which is putting caps on executives' salaries. Where's the U.S. backbone on that front?

ROBERTS: Christie, you were a CEO. Is this outrageous? CHRISTIE HEFNER, FORMER CHAIR AND CEO, PLAYBOY ENTERPRISES: I think what we have is misalignment of the interest of shareholders and employees from the interests of the executives. In other words, if everyone is doing well, I think there's less backlash.

And I'm encouraged by the compensation czar. I know he doesn't like that name, but this ability to start looking from a third party perspective on what makes sense in evaluating risk as well as reward.

ROBERTS: Let's talk about where the markets are headed -- Dow Jones industrial average down 262 points in the past five days. Stock Traders' Almanac has surveyed all of the months of years going back a long way and found that September traditionally one of the worst trading months of the year. We saw what happened last year.

Where do you think we're headed this year?

COHAN: You have to put it in perspective. We were at 6500 in March. Now it's around 9500. That feels pretty good to most people. The last two years have been awfully rocky in the market.

I suspect that this September and October will be a lot more calm than previous Septembers and Octobers. I don't think this is going to add to the overall fear that occurs in September and October. I think we're going to be on the upswing now, feeling better.

But not completely out of the woods by any stretch of the imagination, but psychologically feeling better.

ROBERTS: Christie, some analysts think that maybe after six months of steady gains in the stock market that we're in for some sort of correction, probably mild, not severe. What do you think?

HERNER: I agree with that and I agree with Bill. There may be some pullback, but I don't think you're going to see a major adjustment, because I think using March as the benchmark, which is a good place to start, we're talking in that timeframe of a major liquidity crisis and a lack of confidence in the financial system.

And I think policies that have been put in place have addressed both the psychology and the financial measures. And I think that the Fed is going to be cautious about pulling back the fiscal and monetary freer availability of capital that they put in place so that landing will be a softer landing.

ROBERTS: And what about arguments that the recession is over and the recession is not over. Where are we with that, Bill?

COHAN: The recession is how many quarters of growth in a row and things like that. We have unemployment still hovering near 10 percent. Until that number comes down, people aren't going to feel like things are getting better in any stretch of the imagination.

There are still pockets of trouble out there. Commercial real estate mortgages, $3.5 trillion of potential land mines there. That is a problem. Leverage loaned, big leveraged buyouts, that is a potential problem.

People are feeling better about the stock market, yes, and there is a lot more liquidity in the market than there was, and that's a big part of it.

So on balance, not so bad, not so great. We've got -- time will tell where we go from here.

ROBERTS: Christie, do you think we have at least hit the bottom here?

HERNER: I do, but I think that the point about unemployment is critical here. It's one of the reasons why I'm such a strong advocate for getting the energy bill passed because I really believe, as Tom Friedman and John Podesta believe, that the green economy is going to be a driver for jobs creation.

And there's a green bank provision that Center for American Progress developed in that that I think can help be a stimulus not just for the economy but job creation.

ROBERTS: All right, as the former CEO of "Playboy" enterprises, what do you think of Levi Johnston posing for "Playgirl"? Just kidding.

(LAUGHTER)

(CROSSTALK)

ROBERTS: Let's not tell too many secrets this morning, Christie, shall we?

Christie Hefner, Bill Cohan, great to see you this morning. Thanks.

COHAN: Thank you, John.

ROBERTS: Kiran.

CHETRY: Well, still ahead, we'll check in with Rob Marciano. He's been right on the fire lines down in Los Angeles since they tried to get a handle on this enormous station fire.

They have a humongous new weapon in their arsenal. He's going to take us inside that 747 known as the "Big Kahuna" for fighting fires, and show us how it to works.

(COMMERCIAL BREAK)

CHETRY: Welcome back to the Most News in the Morning. It's 19 1/2 minutes after the hour right now.

It's the biggest fire extinguisher in the world. It's a converted 747, and it's now helping firefighters push back the flames north of Los Angeles. In fact, more people are back home this morning after the station fire -- they've been able to get a handle on it in some ways, now 28 percent contained. But it is still burning into some remote areas of the Angeles National Forest.

Firefighters says that the containment is going well, but they are still worried the flames could spread to communities like Pasadena and Arcadia.

Rob Marciano has been monitoring things and is in Sacramento this morning because that's where this huge supertanker jet is. As we said, it's a converted 747. It's amazing that they can fly it low enough to really put a dent in some of those flames.

ROB MARCIANO, AMS METEOROLOGIST: These guys are good, and they're highly trained, that's for sure.

And it's all been developing over several years because recently, you know, guys, firefighters they just have been getting bigger. And common sense would tell you if the battle is getting bigger, well, you need a bigger gun.

(BEGIN VIDEOTAPE)

MARCIANO: Fighting the fire from the air -- choppers, turbo props, even jets. But this is the Big Kahuna.

CAPT. CLIFF HALE, EVERGREEN SUPERTANKER: We have more excess horsepower than any tanker out there.

MARCIANO: Captain Cliff Hale hit the California wildfires hard this week flying this modified 747 supertanker right into the fire zone.

HALE: He arms it, and that gives me control up here or the other pilot as well. We have a drop button here on the switch.

MARCIANO: Flying low at 300 feet, Captain Hale has to focus on his target.

MARCIANO (on camera): You have to be a pilot and a bit of a marksman. How good a shot are you?

HALE: Pretty good at this point.

MARCIANO (voice-over): A touch of pilot bravado, but at his core, he's a firefighter.

HALE: To me it's all of the pilots that are doing this are just like the regular firefighters that you see anywhere. It's just we do it in air.

MARCIANO: But nothing compares to this jumbo jet.

MARCIANO (on camera): If you were a passenger on a 747, this is where you would be sitting. Instead, on this plane they have ten tanks carrying 20,000 gallons of fire retardant and/or foam, 90 tons of firefighting artillery.

MARCIANO (voice-over): And these cannons also have control.

MIKE HARKNESS, EVERGREEN SUPERTANKER: They can meter it to any distance and any thickness that the firefighters on the ground want.

MARCIANO: Adjustable power and precision which reduces wasted ammunition.

MARCIANO (on camera): This stuff is not cheap.

HARKNESS: It's not. It will run from $2 to $3 a gallon.

MARCIANO (voice-over): All of this unleashed in the back of the plane.

MARCIANO (on camera): Some fancy looking bomb bay doors.

HARKNESS: These are the exhaust ports for the retardant. And the flight engineer is going to choose the proper air pressure and number of exhaust ports to vary the concentration depending on what the firefighters on the ground need.

MARCIANO (voice-over): On the ground or in the air, it's one big team.

HALE: All of the guys that do this are the best and it's an honor to be a part of that group.

MARCIANO: No doubt this massive supertanker is a welcome weapon in the war against wildfires.

(END VIDEOTAPE)

MARCIANO: Not many people have a customized private 747 jumbo jet. I guess the president does. But I can guarantee you this, Air Force One doesn't look like this thing.

There are stairs to the upper deck and the cockpit there. We'll take threw in you there in the next hour.

But here is where all the artillery is. The ten tanks carrying 20,000 gallons on either side. They can split this up in two ways.

The deal with this that makes it different is it's pressurized. They use air pressure, and that is what controls that stream. That's what gives them the precision and that's what allows them to really lay down the lines in an accurate way.

But in order to fly this plane that lowly and fire that accurately, you need good visibility. That's the problem with this fire. They hit it good the first couple days. And this is the first time they ever used it in this States, and they had great success with it.

The other issue on whether you go or no go is cost. At two to three bucks a gallon, you do the math. It's like $50,000 just to drop. That doesn't include the rental of this plane or the gas.

So it's a high priced number, but when you talk about how much coverage they can get out of one drop, John and Kiran, it's definitely worth the money. Back to you.

CHETRY: And that's the part I was wondering. How much dent can they put in it? How much area can they cover when they do a full drop like that?

MARCIANO: Quite a ways. And the key is they're out ahead of the line. They're trying to get the fire before it gets to homes.

So while the smaller planes and the choppers are dousing flames right at the heart of the fire, these guys are basically trying to help lay down a containment line.

So they're not dropping water. They're dropping foam or fire retardant so that when the flames get to the line that they provide, that stops the fire in its tracks.

So it's all part of a grand plan. It's just one of the many players here in fighting this station fire, which has grown well over 100,000 acres and continues to burn today.

ROBERTS: You figure every time that 747 comes over and drops about the equivalent of two backyard swimming pools of that stuff on the fire, you got some pretty good firefighting ability there.

Rob, a fascinating look at that. Thanks so much for bringing it to us this morning.

MARCIANO: You got it.

ROBERTS: So when it comes to sex education in schools, how much is too much? Our Carol Costello continues our series on "Educating America" coming up next.

It's 25 minutes after the hour.

(COMMERCIAL BREAK)

ROBERTS: Welcome back to the most news in the morning. This song may have given you a little clue as to where we're going.

Congress has scrapped a lot of funding for abstinence only sex education in schools. And while some people are happy with the changes, critics worry that teachers are telling your kids too much about the facts of life.

Our Carol Costello joins us now live from Washington with the latest installment in our series "Educating America." Good morning, Carol.

CAROL COSTELLO, CNN CORRESPONDENT: Good morning, John.

It's sort of like going from zero to 100 miles an hour. School districts like some in North Carolina have not taught kids about how to use birth control or how to control sexually transmitted diseases, or prevent them, I should say.

And now they're trying to come up with a more comprehensive sex education class. It's challenging.

(BEGIN VIDEOTAPE)

COSTELLO: For more than ten years it was the law in North Carolina. State House Bill 834 required teachers to tell teenagers they were expected to abstain from sexual activity outside of marriage.

But the law didn't have the lasting effect on teenagers officials had hoped.

COSTELLO (on camera): What has happened to the teenage population in North Carolina?

COLLEEN BRIDGER, GASTON COUNTY HEALTH DEPARTMENT: They have gotten pregnant more often. Imagine that? Our STD rates are going up. Our pregnancy rates are going up.

COSTELLO (voice-over): According to North Carolina's health department, from 2003 to 2007, the teen pregnant rate rose more than 12 percent. North Carolina now has the ninth highest teen pregnancy rate in the nation.

UNIDENTIFIED MALE: It doesn't give them all of the information they might need.

COSTELLO: These young men and women lobbied lawmakers to allow high school teachers to tell students about contraception. They decided to do that because of their experience in abstinence only classes in high school.

GABRIELLA MAGALLANES, STUDENT: I remember sitting in my class among my peers and hearing my teachers say, abstinence only wait to have sex until you get married. Condoms won't work. If you have sex, you'll get an STD and die.

COSTELLO (on camera): She said you'll get and STD and die if you have sex?

MAGALLANES: Ultimately. And when kids hear that, they shut their ears off. They just stop listening.

COSTELLO (voice-over): Jere Royall, an advocate of abstinence- only education, says the key is to get the truth out. He says if taught properly, abstinence only is the best sex education.

HERE ROYALL, NORTH CAROLINA FAMILY POLICY COUNCIL: They need to understand that sexuality is an important part of life, but what they also need to understand is what the possible consequences are if they engage in sexual activity outside of marriage. COSTELLO: In the end, lawmakers listened to both sides. They amended the original law to allow teachers to first instruct students about abstinence, and then about what they can do if they decide to have sex.

It's a challenge health officials are willing to take on.

BRIDGER: The starting point is getting people transitioning from saying we expect you not to have sex, but if you do, here are some things you can do to protect yourself. Here are some things you can do to reduce your risks.

(END VIDEOTAPE)

COSTELLO: So the new curriculum will go into effect in the 2010 school year in North Carolina. And by the way, the University of North Carolina did a study on how many parents want their kids to learn things about, like how to put a condom on and how to take birth control pills, how to prevent sexually transmitted diseases.

Ninety-one percent said yes, tell my kids about those things. Still, at least 8 percent of parents don't want their kids to learn about such things in school, and that's why abstinence will be an important part of comprehensive sex education classes and why students will still be allowed to opt out of sex ed if they wish -- John.

ROBERTS: It was shocking to see they are trying to scare kids into abstinence. Is it successful abstinence education, you know, this idea of confidence and empowerment, showing people that there are choices out there, that you don't have to give in to pressures?

COSTELLO: Well, you know, it's tough for parents to talk about sex with their kids and it's tougher to even believe that their child is thinking about having sex especially when they're 14, 15 and 16 years old. So that's why these abstinence only programs went into effect in North Carolina schools and some school districts now health officials say we got to like change the mindset here and go slowly at first and tell kids everything they want to know because you know, teenagers are curious about sex.

ROBERTS: Sure.

COSTELLO: And there's so much sex around them and you know, they know some stuff. But they don't know it quite correctly. So they need someone to ask and maybe a teacher is the best person to ask.

ROBERTS: All right. Carol Costello with us this morning. Fascinating part of her series. Tomorrow, in our "Educating America" series, Carol is looking into the seedy side of things. The business of buying and selling counterfeit essays and reports. Why do the homework yourself when the internet can do it for you.

That's tomorrow on the most news in the morning.

CHETRY: I always say be a totally different world compared to when we were writing papers back in the day. The card catalog, the Dewey decimal system, now you can see, find everything on-line.

ROBERTS: There was no such thing as a computer when I was going to school.

CHETRY: Yes, those word processors that could fit.

ROBERTS: I used to walk to the school in the snow in our bare feet.

CHETRY: A lot of whiteout, right?

All right. Well, it's 32 minutes past the hour. And the top stories this morning. Some economists are speculating the recession is over. But it appears that most Americans don't see it that way. There's a new CNN opinion research corporation poll that just came out about an hour and a half ago saying that nearly seven in 10 people believe things are still going badly in the country today.

ROBERTS: NASA is keeping a close eye on a large piece of space junk that is heading in the direction of the space shuttle "Discovery" and the International Space Station. NASA says the debris is from an old European Arian rocket and is expected to pass within two miles of the outpost on Friday morning. That's five miles closer than they first thought. And since the trajectory is changing just a little bit, mission control may decide today whether astronauts need to maneuver the shuttle and the space station out of the path of the debris.

CHETRY: Well, in a little more than a week we'll be remembering the terror attacks of September 11th, 2001. Which is why this next story is pretty alarming. A few miles north of where the Twin Towers once stood, two guards hired to protect New York's George Washington bridge were caught sleeping on the job. The photos were taken by a biker who commutes daily over the bridge from New Jersey and says that he actually saw one of the guards asleep twice before.

Now, CNN wanted to contact the guards but the security company who manages those guards fired them and refused to release their names. But joining me now to discuss these pictures and also the current state of America's security is Pat D'Amuro. He is the former assistant director of the FBI here in New York. Right now he's the chairman and CEO of Giuliani Security and Safety.

Pat, thanks for being with us this morning. So when you saw those pictures and we heard the story from the biker who said he wasn't, you know, it wasn't a game of gotcha. He was really, genuinely concerned. He lost cousins on 9/11 and he said that he witnessed this happening again and again and finally he had to say something.

PAT D'AMURO, FORMER ASSISTANT DIRECTOR, FBI-NEW YORK: Yes, and it's a good thing that he did. Because one of the things you look at with these security guards is they're supposed to be there looking for suspicious activity. My understanding is they were looking for workers who come in and work on the bridge making sure they had the necessary credentials but they're also supposed to look for different types of activity that might be alarming and notify the Port Authority Police. Obviously they weren't doing that.

CHETRY: And also we were talking before the break about why this is so vital. Anybody that is looking to target an area wants to know how big of a problem is this going to be for me. Is this worth my while? So when they see or when they hear and drive by and can tell that perhaps people are being lax about it, how does that then turn into a particular terror attack?

D'AMURO: Well, we know that terrorists, especially al Qaeda will go and test the security of their location before they decide to attack it. Even in the East African bombings they went and backed a truck up against an arm that was supposed to prevent vehicles from entering the embassy. And what happened was nobody reported that. So there is activity that is questionable that should be reported to the authorities. My other question in this situation is where were the supervisors of these security people?

CHETRY: Yes, I mean, this is we're not talking middle of the night in some of these cases. One was taken - one photo was taken I believe at 7:15 in the morning. And another around 10:00 in the morning. There you see pictures the pictures there. He said he walked I mean, right up. You know, they were just literally out. Sound asleep. Well, the other question is this isn't the first incident also. Apparently, somebody else lost their job, one of the guards, for playing canned laughter over the police radio. It was actually preventing the police from communicating with one another and there was another guard who was asleep sadly when a man walked by and actually jumped off the bridge killing himself.

So we see these instances. Are we just as we get further away from 9/11 becoming a little bit more complacent? Too complacent when it comes to this type of stuff?

D'AMURO: Well, there's no doubt. In my opinion and talking to a lot of other security professionals, the recession has taken the toll also on security services that are being provided. So we have to make sure that we have a long way to go to protect the security in this country. We have to do it with technology. We have to do it with training our people and we have to make sure that we secure our borders and we secure our ports and we secure our bridges and tunnels as best as possible.

CHETRY: When you say the recession is affecting security, how?

D'AMURO: Well, from the people that I know in the industry, there's not as many contracts coming out. People are looking at money in the security guard area they're always looking for the cheapest security guard service. That doesn't necessarily always get you the best product.

CHETRY: Got you. I was thinking the opposite that because people were losing their jobs there would be more qualified people who really want to work that would be wanting to do this.

D'AMURO: You would think that would be the situation but still they don't want to pay. CHETRY: I got you. Well, it was great talking to you this morning. Pat D'Amuro, former assistant director of the FBI here in New York. Thanks for being with us this morning.

D'AMURO: My pleasure.

ROBERTS: We should point out that PD, one of our floor managers drives across the bridge every morning. When he drove across at 2:30 this morning, he said security guards were out in front of their stations like this. Words have been passed.

CHETRY: Yes.

D'AMURO: They'll be awake for the next couple weeks at least.

ROBERTS: I'm sure they will. Pat, it's great to see you.

So Michael Jackson is going to be finally laid to rest tonight at Forest Lawn Cemetery. Randi Kaye joins us in just a couple of moments with all of the preparations. It's 37 minutes after the hour.

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ROBERTS: Welcome back to the Most News in the Morning. It's been 10 weeks since Michael Jackson died suddenly at his home in Los Angeles.

CHETRY: Yes, 10 weeks but tonight that the pop icon's body will finally be laid to rest. Our Randi Kaye has details for us now from Los Angeles this morning.

RANDI KAYE, CNN CORRESPONDENT: Good morning, John and Kiran. Michael Jackson is finally going to be laid to rest in a private burial service tonight at 10:00 Eastern at the Great Mausoleum at Forest Lawn Glendale Memorial Park. Very few details coming out but I can tell you that Gladys Knight will be performing during that service. The media won't be allowed inside. We'll actually be outside the main gate, which I'm told is the largest wrought iron gate in the world.

A production crew will be inside taking video of arrivals. We'll have some of that for you. We won't have any aerials because it's a no fly zone overhead. Regarding the mausoleum, it has 20 foot arch ways, lots of marble. It's 11 levels, plenty of mazes inside as well. Jackson's crypt is supposedly directly to be under a massive stain glass window called the Last Supper window. There are pictures of it on Forest Lawn's web site. And the Last Supper window is actually a recreation of Leonard Da Vinci's masterpiece. It's really something to see. And it's interesting because Michael Jackson had actually reportedly commissioned his own Last Supper painting which he hung over his bed at Neverland Ranch. Now, most of the mausoleum requires a pass key to get around. There's very tight security there. Visitors can see the Last Supper short film but that's about as far as they can go. We interviewed a man who had been inside the mausoleum and he told me there are guards everywhere. Gatekeepers, he actually called them crypt keepers. He said that those are the folks who keep people who shouldn't be going inside from going inside. He said there's plenty of security cameras around as well.

Now, overall just a few facts here. Forest Lawn is 300 acres. A quarter of a million people are buried there including many celebrities including Michael Jackson's very good friend, Sammy Davis Jr. along with Humphrey Bogart, Jimmy Stewart, Walt Disney, George Burns, Gracie Allen, just to name a few. But if you go there, don't expect to find the celebrities graves because the Forest Lawn does not provide a map of celebrity graves because they don't want to encourage star struck visitors. They probably won't be able to avoid them now that Michael Jackson will be buried there because a lot of his fans are probably not ready to let him rest in peace.

John, Kiran, back to you.

ROBERTS: And CNN will have special coverage of Jackson's burial tonight on "AC 360" live from the Forest Lawn Cemetery. That's tonight at 10:00 p.m. Eastern, 7:00 Pacific only on CNN. It's 43 minutes now after the hour.

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CHETRY: Forty-four minutes past the hour. Welcome back to the Most News in the Morning. Well, it looks like a big frat party. There are new photos surfacing showing independent contractors in Afghanistan drunk, in some cases, half naked, some pointing at each other's privates all while they're supposed to be protecting the U.S. embassy. It comes at a time when military experts say that we're already losing the war and that U.S. casualties are at an all-time high.

Tom Foreman has the pictures and the fallout.

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TOM FOREMAN, CNN CORRESPONDENT (voice-over): In a summer of growing attacks near the Kabul embassy and growing fatalities among American troops, these pictures, private embassy security guards holding what appear to be wild half-naked drinking parties while away from the embassy and off duty. Hugely inflammatory in a Muslim country. The independent watch dog group Project on Government Oversight or POGO for short, say the photos came from guards who say supervisors pressured others to join in.

UNIDENTIFIED FEMALE: And then if they don't engage they sort of hold it against them which is ripping apart the fabric of the whole chain of command.

FOREMAN: The guards surrounding the embassy are employed by armor group owned by Wackenhut Services under a $190 million state department contract, which has been under fire.

SEN. CLAIRE MCCASKILL (D), MISSOURI: At time the security of the U.S. embassy in Kabul may have been placed at risk.

FOREMAN: At a hearing in June, Senator Claire McCaskill brought up a laundry list of concerns and that watchdog group, POGO, is now adding more. Foreign guards who speak so little English they can't understand their bosses. Acute understaffing causing massive turnover and missing guards.

One inspection this spring found 18 absent from their posts. The State Department said in June it was working on the problem and...

UNIDENTIFIED MALE: At no time was the security of American personnel at the U.S. embassy compromised.

FOREMAN: But POGO says these pictures were taken just last month so a State Department delegation will soon head over to investigate.

UNIDENTIFIED MALE: It's clear there were things going on in Kabul which we were not aware of but frankly we should have been aware of them.

FOREMAN (on camera): At this point, however, that may not be enough. Senator McCaskill clearly wants full disclosure, wants to know why the State Department defended Wackenhut in front of her committee despite all of these problems.

CNN has reached out to Wackenhut officials asking them to explain these photos. So far they have not.

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CHETRY: Yes, what are they supposed to say? The pictures speak for themselves.

ROBERTS: They pretty much tell the story. I guess, the real issue though is whether security was ever compromised at the embassy and the State Department is saying no but there are other organizations like the Project on Government Oversight that says clearly there's a huge problem going on.

So if you want to have the best doctors but they're a long way away from where the patient is, what's the best way to get them into the patient's room? How about a robo doc. Our Dr. Sanjay Gupta shows you this fascinating new technology that the army is using to put its doctors anywhere they need to be. It's 48 minutes after the hour.

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CHETRY: What do you get when you mix a real doctor with a Mr. Roboto. You get doc-bot. It's a live doctor and it's a TV monitor on wheels. If you think that sounds bizarre, wait until you see it making rounds. We're paging Dr. Sanjay Gupta this morning. Our chief medical correspondent is inside an Army hospital with injured soldiers getting treated by the wireless, tireless, doc-bot.

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DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT (voice-over): An explosion in Iraq, and combat medics are among the first to arrive. The clock is ticking and they have less than an hour to stabilize the wounded.

UNIDENTIFIED MALE: One, two, three, go.

GUPTA: Doctors on the front line know the challenges in emergency medicine, and now they're using lessons on the ground to advance medical technology.

(on camera): So we're here at the Brooke Army Medical Center in the burn ICU and I'm making rounds with a very unusual rounding partner today. It's the Chung-bot. Actually, it's Dr. Chung there on the screen. And he makes rounds just like this in an ICU just like this. We're going to get an idea of how this all works.

DR. KEVIN CHUNG, BROOKE ARMY MEDICAL CENTER: So Jeff (ph), how's the patient doing?

JEFF: We're adjusting his fluids to match the TPN increase.

CHUNG: OK. Sergeant Hill?

SGT. HILL: Yes, sir?

CHUNG: What are his vent settings right now?

SGT. HILL: He's on tidal volume of 450.

GUPTA (voice-over): Dr. Chung regularly sees patients via the wireless robot. He can porthole inside a patient's room from just about anywhere.

(on camera): We are here controlling this robot in Santa Barbara, we're here in Texas. Dr. Chung does this all the time. You can be here controlling the robot in this hospital or controlling the robot about really anywhere in the world right?

CHUNG: Anywhere around the world.

GUPTA (voice-over): The robot moves freely and pretty fast with three motorized wheels. There are sensors around the torso that signal any obstacles in the way and a high-quality camera allows the robot to move its head from side to side and record images from all angles. There's a laptop and a remote joy stick that lets the doctors zoom in and check a patient's pupils, vital signs, even examine their brain scans remotely.

(on camera): I had a situation when I was in Iraq and I was the only neurosurgeon out there, and they asked me to take off my journalist cap and put on the surgeon's cap and perform operations, but could a robot have helped in situations like that? CHUNG: Absolutely.

Let me take a look at the vent real quick. Again.

GUPTA (voice-over): A surgeon could essentially talk someone through an operation, as if they were doing it themselves, in real time. Chung used the robot while deployed in Baghdad to fetch updates on critically injured soldiers he treated and who had returned to the United States.

(on camera): It's big moral booster?

CHUNG: It sure was. To visually see that patient in a bed with stable vital signs halfway around the world. That did wonders just to be able to see that for all the staff.

GUPTA (on camera): The patient was in Baghdad, two days later you're looking at the patient on a robot in a hospital in the United States?

CHUNG: Right.

GUPTA: Pretty remarkable.

(voice-over): But to be clear, this technology isn't quite ready for prime-time just yet.

(on camera): Here's a problem that happens sometimes, I think we may have just lost wireless connection.

CHUNG: Hit a dead spot.

GUPTA: Hit a dead spot in the hallway, which happens sometimes. And you can see again, it just went into standby mode. And that's probably one of the limitations of a robot like this even in a big hospital.

Dr. Chung? Hello?

(voice-over): Chung says despite the occasional hiccup in technology, he has successfully treated over 200 patients thanks to the robot.

(on camera): Based on what you know, are we going to see robots everywhere within 10 years? At hospitals like this?

CHUNG: As we try to stretch our expertise, our assets to different places around the country, this type of technology will help you.

GUPTA (voice-over): Dr. Sanjay Gupta, CNN, reporting.

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CHETRY: Fascinating possibilities ahead with that. Wow. Well, as the president announced his plans for his big prime-time address to both Houses of Congress and the American people on health care, a big question, is he willing to say goodbye to one of the centerpieces of his plan? We talked exclusively about that to one of his top advisers. That's next.

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