Return to Transcripts main page
American Morning
Obama Honors Fallen Soldiers; Radical Islamic Leader Killed; H1N1 Flu Outbreak; How Many Jobs Created by Stimulus Funds?; Financial Aid to American Samoa Lost; Ships Equipped with New Security to Avoid Pirate Attacks; U.S. Economy Grew in Third Quarter of 2009; Wall Street Execs Continue to Enjoy Lavish Pay
Aired October 29, 2009 - 08:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ALINA CHO, CNN ANCHOR: Good morning, everybody. Welcome to AMERICAN MORNING. It's just about two minutes before the top of the hour. It's Thursday, October 29th. I'm Alina Cho. John Roberts has the morning off.
KIRAN CHETRY, CNN ANCHOR: That's right. Some well-deserved time off. Alina Cho is with us. I'm Kiran Chetry, and here are the stories we're going to be telling you about in the next 15 minutes.
Seeing the realities of war firsthand - President Obama flying to Dover Air Force Base overnight to witness the return of 18 Americans killed in Afghanistan. This comes as new reports hint at what his strategy for that country might be going forward. We're live at the White House.
CHO: An alleged radical Islamic leader goes down shooting during an FBI raid in Michigan. Court documents say he wanted to create a Muslim state in the United States and that he may be part of an extremist network born and bred right here in this country.
We're live in Detroit with new details this morning.
CHETRY: Also, hundreds of schools across the country shutting down their doors because of swine flu. Tens of thousands of students are home sick. In fact, some parts of the country are now being forced to ration what little H1N1 vaccine is available to them.
In just 10 minutes, we're going to be joined by the director of public health for Los Angeles County where millions qualified for needing a swine flu shot but only a few thousand people have been able to get one.
But first, on the same day that President Obama reportedly is getting closer to making a decision on just how many troops to send to Afghanistan, he witnessed firsthand the sacrifices being made by US service members. Overnight, he flew to Dover Air Force Base in Delaware where the bodies of 18 Americans killed in Afghanistan came home.
Our Dan Lothian is live at the White House this morning with more on the solemn scene that played out at Dover Air Force Base this morning. Good morning, Dan.
DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: Good morning.
You know, White House officials telling me this morning that this was something that the president had wanted to do for some time: to go to Dover Air Force Base and to meet the bodies of returning U.S. troops. They started planning for this particular trip on Tuesday, according to a senior administration official, and then made the final call yesterday at noon. And then shortly before midnight, President Obama taking off from the White House here on Marine One and headed to the Dover Air Force Base, not only to meet those returning bodies of the 18 Americans, but also to meet with their loved ones.
And most of the dignified transfers -- as the military calls the solemn moment there -- happened off-camera. That is the wishes of the family members there, with the exception of Army Sergeant Dale Griffin from Terre Haute, Indiana.
(VIDEO CLIP)
LOTHIAN: Fifteen of the dead were U.S. troops, but three of those who returned last night were DEA agents who were killed in an aircraft crash -- rather, a helicopter crash on Monday in Afghanistan. They were returning from a firefight with insurgents who were believed to be involved in drug trafficking in Afghanistan.
Now, this is not the first time that a U.S. president has gone to retrieve those bodies or meet those bodies at Dover, Delaware, but the last time a president did do that was in 1996, when former President Clinton went to meet the body of his commerce secretary, Ron Brown, and others who had died in that airplane crash.
Now, one other thing, this going out and getting a chance to see the pictures of returning bodies at Dover Air Force Base is something that had been banned for some 18 years, but the Obama administration lifted that ban earlier this year if family members agree to have cameras there.
Back to you.
CHETRY: And, Dan, in terms of Afghan strategy going forward, when could we expect an announcement from the White House on what is next for U.S. troops? We've been hearing, you know, some reporting trickling out about perhaps the White House getting closer to a number to add in terms of additional troops.
LOTHIAN: That's right. You know, that is the question that we keep asking the White House time and time again. And we're told that a decision will come in a number of weeks. As you know, the president has been holding these high-level meetings inside the Situation Room here at the White House; about a half dozen or so meetings they've held so far. Another meeting planned for this Friday with his Joint Chiefs, again, looking at the assessment of moving forward in Afghanistan and Pakistan, but no specific time yet, given -- no understanding yet as to whether or not the president has indeed made up his mind, but we're told that a decision will be made public in a couple of weeks.
CHETRY: Dan Lothian for us this morning, thank you.
Well, the health care spotlight is going to be shifting to the House side of the Capitol this morning, because in just a couple of hours, Democratic leaders are going to be unveiling their long-awaited version of health care reform. Again, this bill will include a public option and it would extend health coverage to about 95 percent of Americans. Speaker Nancy Pelosi wants to get the measure to the House floor next week. She wants a final vote by Veterans Day.
CHO: The Senate has agreed to extend a popular tax credit for first-time momentum buyers. The $8,000 credit was set to expire at the end of next month. Senators are also offering a reduced credit of $6,500 to repeat buyers who have owned their current homes for at least five years.
CHETRY: Five people are under arrest now and four of them charged with gang-raping and assaulting a 15-year-old girl in California, outside of the school homecoming dance. Three of those four suspects who have been charged are minors, and police say that more than a dozen people witnessed that attack Saturday night and did nothing. A friend of the victim is telling CNN that police and security officers at Richmond High School failed to keep the area safe.
(BEGIN VIDEO CLIP)
KAMI BAKER, FRIEND OF RAPE VICTIM: At the dance, there were four officers, none of them patrolling the area. I look outside of the gym and I saw 12 to 15 guys, sitting there with no I.D.s. The officers, not only did they not check the I.D.s of those students or men sitting outside of our campus, but the security officers who were employed here did no job checking either. The assistant principal looked outside and actually saw those men and did nothing about it.
(END VIDEO CLIP)
CHETRY: Well, there were no lights or surveillance cameras where that assault took place. School board officials confirm that they have been ordered.
CHO: Also developing this morning, the feds say a radical Islamic leader is dead after a shoot-out with authorities at a Michigan warehouse. The man allegedly was on a mission to set up an Islamic state within the U.S.
Our Susan Candiotti live for us in Detroit this morning. Good morning, Susan.
SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT: Good morning, Alina.
The question is, was this group ready to take on the FBI? And did it have an attack in mind?
Well, the FBI says there is no terror plot alleged in this case. These suspects are charged with matters that include fencing what they thought were stolen goods, but there is some chilling detail included in a criminal affidavit.
(BEGIN VIDEOTAPE)
CANDIOTTI (voice-over): FBI agents hit two locations trying to round up about a dozen men said to be heavily armed. Prosecutors say the ring leader, an imam, directed a local wing of a radical fundamentalist Islamic group bent on setting up a separatist state here in the U.S.
Inside this warehouse, authorities say the alleged ring leader refused to surrender, fired his weapon. There was an exchange of gunfire, and 53 year-old Luqman Abdullah, also known as Christopher Thomas, was killed. So was an FBI dog.
Authorities say Abdullah was the imam at a Detroit mosque where he preached an offensive jihad, including violence against the government and law enforcement. A criminal complaint says he repeatedly told three confidential informants he would never be taken alive, saying, "If they are coming to get me, I'll just strap a bomb on and blow up everybody."
The criminal complaint says the group had target practice in a mosque basement, blowing holes in cement walls. But they are not arrested for any of that. They are charged with conspiracy to fend stolen goods, including laptops and TVs, illegal firearm sales and tampering with motor vehicle I.D. numbers.
An FBI complaint says they belong to a nationwide group called Ummah, mostly African-Americans, some of who converted to Islam while in prison.
Ummah is led by this man, Jamil Abdullah Al-Amin, formerly known as H. Rap Brown, a 60s radical and former member of Black Panthers who once said violence was for blacks as American is cherry pie. He's currently serving a life sentence in Colorado's supermax prison for killing two Georgia police officers.
(END VIDEOTAPE)
CANDIOTTI: Now, the alleged ring leader allegedly told some of his police informants that he would never be taken alive and it would appear, Alina, that he got his wish. Back to you.
CHO: Susan Candiotti, live in Detroit for us -- Susan, thank you.
CHETRY: Also new this morning, President Obama signing a bill, making it a federal hate crime to attack someone in this country because of their sexual orientation. After signing the measure, he said, quote, "No one in America should ever be afraid to walk down the street holding the hand of the person they love."
CHO: First lady Michelle Obama, one of the many high-profile guests at game one of the World Series last night in Yankees Stadium. The Philadelphia Phillies beat the New York Yankees 6-1. Before the game, the first lady, Jill Biden and Yankee Hall of Famer Yogi Berra -- take a look at this -- took part in a pre-game ceremony paying tribute to the nation's veterans. That's something you don't see every day. They presented an Iraqi war veteran with a baseball so he could throw out the ceremonial first pitch. Game two is tonight in the Bronx.
CHETRY: What are they wearing? And they're not rooting on a particular team there, right? Oh, it says World Series?
CHO: They're keeping nice and diplomatic, right?
(CROSSTALK)
CHETRY: If you want to keep your kids trim and fit, you might consider letting them sleep in on the weekends? Researchers in Hong Kong found that children who get the most sleep were the least likely to become obese. When comparing kids who get less than eight hours of sleep at night, the ones who made up for it by sleeping more on the weekends were also less likely -- significantly less likely to be overweight.
CHO: I hate to say -- what about the adults? The same is true, probably, for adults as well. We could use more than four or five hours of sleep tonight.
CHETRY: Yes, exactly.
CHO: Not that we're complaining.
CHETRY: No, not at all.
CHO: Hey, you know, there's a lot of fear about swine flu, the president, of course, is now calling it a national emergency, and now there's a vaccine shortage. And it's actually forcing doctors and government officials to play the role of vaccine police. Some people are reportedly lying to cut the line and get vaccinated right now.
We're going to be talking to the director of public health for Los Angeles County, Dr. Jonathan Fielding, after the break.
It's nine minutes after the hour.
(COMMERCIAL BREAK)
CHO: Welcome back to the Most News in the Morning. Eleven minutes after the hour.
The latest now on the swine flu outbreak. Forty-six states are now reporting widespread flu activity. They're colored red on the map there. The virus is sickening so many students that 208 schools in 11 states had to shut down just yesterday.
On Monday of this week, 26,000 kids stayed home with H1N1 symptoms. And by yesterday, that number nearly tripled.
And a shortage of swine flu shots has created a need for rationing, forcing local officials, hospital workers, doctors to play the role of vaccine police.
So joining me now from Los Angeles is Dr. Jonathan Fielding, the director of public health for L.A. County.
Thank you, Dr. Fielding, for joining us.
Before we get to what's happening on the ground...
DR. JONATHAN FIELDING, DIRECTOR OF PUBLIC HEALTH, LOS ANGELES COUNTY: good morning, Alina.
CHO: Good morning.
Before we get to what's happening on the ground there, I do want to remind our viewers, and some people may not know, you're vaccinating people on what's being called a priority list right now. So, remind everybody, who should be standing in line to get the vaccine right now and who should wait.
FIELDING: Yes, well, the ones who should be in the priority groups are pregnant women or anybody caring for a child under six months of age, health care workers, emergency medical service workers, children and young adults from 6 months up through 24 years, and those 25 to 64 who have underlying conditions who would put them at higher risks for the complications of this H1N1 novel strain.
CHO: I want to talk a little bit now about the situation on the ground there in L.A. County. I know that there's a shortage and there are reports that people are begging to get the vaccine, that they're lying about being pregnant to get the vaccine.
What have you experienced there on the ground?
FIELDING: Well, I've been working the lines. So, we've had -- we have had certainly more people than we have vaccine. And that's obviously of great concern and frustration to a lot of people.
But when you explain to people who would usually be getting the vaccine on a priority basis, those over 65, for example, for most other kinds of seasonal flu, and you explain to them that right now, it's the kids and pregnant women who are at the highest risk, and if they take a shot or if they don't provide accurate information because they want to get one, they're taking it away from somebody, from a child or a pregnant woman who is much more likely to have a serious problem.
And when you say it that way, people usually say, you know, I can wait. And we say there's going to be plenty of vaccine, you just have to wait a bit.
CHO: Well, that is -- that sounds rational. But in the reality is that in some cases, that people are panicked about this. Some, you know, a thousand people in the United States alone have died from swine flu. So, you know, some have suggested that policing is really next to impossible, you know? For example, you look at somebody, a woman comes in and says that she's pregnant, you really have one of two choices. Either you're going to believe her and vaccinate her or call her a liar.
So, what do you do in those types of situations and how, really, can you police people?
FIELDING: Well, our job in public health is to protect the public's health. Everybody in my department is an emergency public health first responder and we want to help people. But we also want to make sure those in the priority groups get the vaccine.
So, we're asking people, if they said they have a chronic condition, what is it, what kind of medicines are you taking, giving what does you doctor say. And a number of people have kind of fallen out on that. Obviously, we're not going to -- most women who are pregnant actually show that they are -- that they are pregnant. But there are some that come and say, "I'm pregnant," and we have to take their word for it.
And I don't think that that's been a major issue. But there are certainly some of that. We're not the police. We're here to help people.
CHO: Right. Well, well said. You know, you talk about these chronic conditions, these health conditions, but it's a little vague. I mean, what kind of conditions are you talking about that would allow someone who otherwise might not qualify in the priority group to get vaccinated right now?
FIELDING: Well, we have a whole list of them and our people working the line, our doctors and nurses, have that. But, you know, cardiac problems, certainly serious lung disease, people on immunotherapy getting chemotherapy, people with HIV, people who have other very serious underlying problems, kidney problems, liver problems -- the kind of things that would more likely put them in harm's way if they got the flu.
CHO: I do want to talk a bit about your son. Because I know that he was recently diagnosed with swine flu. When was he diagnosed, how's he doing right now, and how'd you handle it?
DR. FIELDING: Well, a couple of weeks ago, he had very, very -- he was very sick, he had very bad coughing, and a terrible headache, and throwing up a lot, which is something we do see sometimes with this, got very dehydrated, needed a lot of intravenous fluid, and then wound up in student health and then the emergency room, but recovered very well. Let's remember, the average case of this flu is no worse than the average case of other seasonal flu. The only difference is there is a small percentage of a person who get very sick and obviously we're concerned about those and that's why we're working very hard to get high-risk groups immunized.
CHO: You have said before, I know most cases can easily be treated at home, as you found out firsthand. Dr. Jonathan Fielding, we thank you for waking up early in Los Angeles and joining us. Thank you.
DR. FIELDING: Thank you, Alina. Very nice to be with you. CHO: Thank you.
CHETRY: When we talk about the stimulus, a lot of people ask, how many jobs have been created, how many jobs have been saved by the stimulus money and the stimulus dollars.
CHO: A lot of debate about that.
CHETRY: Right. There is some debate about that. And now it looks like in some cases how many jobs were created was actually overstated by the White House. Our Christine Romans is going to be joining us to explain. 16 and a half minutes past the hour.
(COMMERCIAL BREAK)
CHETRY: Nineteen minutes past the hour. Christine Romans is here minding your business. And today, right now, at least, we're talking about stimulus jobs and the numbers. How accurately can we really say how many jobs were created or saved because of the stimulus?
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: It's so difficult to put our finger on the exact number. We've talked about this so many times. The White House has tried to do that and said that more than 30,000 jobs have been created by just taking a look at certain data that have been coming in from the state so far. And we're getting a bigger picture about how this money has been spent and how it is stimulating jobs growth.
We're going to know tomorrow how about 100,000 different recipients of this money have spent it and what kind of job creation that spurred. You can see that red chunk there, on October 15th, we learned how that money had been spent, and the estimate, official estimate was some 30,000 jobs have been created. But the AP has released an analysis saying that mistakes in the reporting of how many of these jobs have been created mean that it wasn't really 30,000 jobs have been created with that little chunk of money. And the White House actually coming back pretty strong and saying the recovery office, coming back pretty strong and saying, no, no, no, we know that there were some mistakes in how the data had been reported, but jobs are being created and tomorrow on Friday, we're going to have a very accurate count of those jobs. There were five specific examples that the AP gave that I wanted to just -- we have talked about some other examples before, as you know. You know, jobs that were only for a couple of days or jobs that were counted twice.
The AP talks about, you know, an FCC commission, an FCC report that showed that stimulus money paid for 4200 jobs, but actually only 1,000 were produced. Or some jobs were only for 5 weeks or something. This is what the AP says. The AP says that - or I'm sorry, the White House says that these were misleading conclusions from just a handful of examples. And as I said, tomorrow, they'll have a very good gauge of how many jobs have been created. Virtually, all of the errors found by the AP had already been found by our review and were already corrected in an update to be loaded on to recovery.gov this week. So, they say they caught some of these mistakes and indeed they'll have a better gauge tomorrow. But it all brings right square to the fore that we don't know how many jobs have been created. We don't know what the overall impact of the stimulus has been. And it becomes a little bit of a political hot potato. Because conservatives and some people who don't support the stimulus have been very critical, saying that it's not doing enough.
CHETRY: So the GDP numbers are coming out and some other economic numbers are coming out. So what should we be watching for?
ROMANS: Well, so the recent, the economic growth is measured by GDP. At 8:30 we are going to find out, did we finally have economic growth in the quarter? And many people are saying that all this stimulus spending, this job creation we are talking about right now, helped lift that number and we are going to see if the economy actually grew for the first time in a year.
CHETRY: If we see that, can we no longer say recession?
ROMANS: We can say, if we see growth in the economy, we can say it looks like the recession is ending. But we can't say for certain yet that the recession is over. Some people think it ended in the summer. Some people think...
CHETRY: At least a few months of that.
ROMANS: You want to see a couple of quarters of positive economic growth and some other things as well. But the National Bureau of Economic Statistics are the people who, or Economic Research, are the people who actually say when it's over.
CHETRY: We'll be looking for those numbers in about ten minutes from now.
ROMANS: And I'll bring them to you. I'll just give you a quick update in what happened in the economy in the third quarter and what it means for us going forward.
CHETRY: Christine, thanks.
ROMANS: Thank you.
CHETRY: You know millions of dollars in US aid is missing. It was originally sent to American Samoa for tsunami relief. Remember there was that devastating tsunami just in September. But our Drew Griffin, of our CNN investigations unit, has an exclusive report that may surprise you. That's coming up. 23 minutes after the hour.
(COMMERCIAL BREAK)
CHETRY: Twenty-five minutes past the hour. Welcome back to the Most News in the Morning. We have a CNN exclusive now. When a devastating tsunami hit American Samoa at the end of September, the U.S. rushed in to help. The south pacific island has been a US territory for more than a century, so Washington was quick to send millions in aid and emergency equipment using your tax dollars. But as Drew Griffin of CNN's special investigations unit found out, very little of that money is actually reaching its intended target. Drew joins us now with more on this investigation. Yesterday, you talked a little bit about the millions that went to get those tsunami predictors that never made it there either.
DREW GRIFFIN, CNN INVESTIGATIVE UNIT CORRESPONDENT: Yeah, Kiran, the tsunami warning sirens, which weren't in place for this tsunami, even though they were supposed to be. You know what's interesting about this story? The people in American Samoa were practically begging us to tell it to you, because for years this territory has been on the receiving end of literally billions of dollars in federal money, tax dollars, and over and over, we heard the same thing from the people who lived there. Where is it?
(BEGIN VIDEOTAPE)
GRIFFIN: In village after village, recovery in American Samoa is a do-it-yourself operation. On this day, a church group has come to hand out water. Workers at a fish cannery are clearing debris. College students clean clogged streams. For most of those devastated by the tsunami waves, like this boy picking through rubble in search of furniture, the cleanup and recovery will be purely self-help. The government of this island of just 65,000 people seems to be absent.
WILLIE TANU, SAMOAN VILLAGER: I don't know what happened to the government. They said they were going to be here pretty soon, but not even coming.
GRIFFIN: It's been a couple of weeks.
TANU: Yes.
GRIFFIN: And they haven't showed up?
TANU: Nope.
HEINRICH TAVAI, SAMOAN VILLAGER: The government gets a lot of money from the US federal government. Every year, they get millions and millions of dollars. As you see, we look like a third world country when we should be looking more like a US territory.
A.E. PULU, SAMOAN VILLAGER: And this is my old village.
GRIFFIN: A.E. Pulu is a former lawmaker here. He points to an area where a federal grant was to build a gym. Where's that?
PULU: Nothing.
GRIFFIN: It's not here.
PULU: Not here.
GRIFFIN: A creek that had a $2.9 million grant for upgrades. It never happened. The money, he says, just seems to vanish. Remember, Samoa is an American territory, so we're talking about your money. And while there have been some federal investigations, many government agencies that send money here, he says, don't seem to care. PULU: They need to come down and look, make sure that -- follow-up the report.
GRIFFIN: This is you -- you were a member of this government and you are telling the federal government, you need to come here and look at where you're throwing money.
PULU: Exactly right.
GRIFFIN: Because it sounds like you're telling me they're throwing it away.
PULU: Well, that's what I'm saying.
GRIFFIN: The one person who should know where the money is going is the person who takes much of the credit for getting it here. The Web site of Samoa's longtime congressional delegate, Eni Faleomavaega, is filled with notices of government grants he has won for this tiny island. But he told us his responsibility doesn't include making sure it's spent correctly.
ENI FALEOMAVAEGA, AMERICAN SAMOA DELEGATE TO CONGRESS: I'm very much aware of the fact that, yes, we do have a lot of federal funds that come here in the territory. And I make no excuses it's the American taxpayers' money, the public's entitled to know how this money should have been spent or should be spending.
GRIFFIN: And in the meantime, you are about to send even more. $24 million in emergency housing funds just announced and, yes, even stimulus money for an island of just 65,000 people. Among the $68 million in stimulus funds heading to this island, $7.4 million from the Department of Energy to develop, among other things, solar power, on an island that receives 200 inches of rainfall a year.
(END VIDEOTAPE)
GRIFFIN: The money, Kiran, just seems to evaporate. That's the only thing evaporating on that island. So what is happening? Number one, the federal investigators are thousands of miles away in Washington and literally told us on background that it's too far to keep track of this money. They'd have to send too many people there, would take too long. Also, what American Samoa does is it basically survives on federal tax dollars. The big prize is to get a government job. Which our sources tell us, are handed out as a way to control the political power there. There are more than 6,000 government workers on American Samoa getting a tax-funded paycheck. But as we saw in the aftermath of this tsunami, we just didn't see any of those government workers working -- Kiran.
CHETRY: As a result of your reporting, is anything going to change?
GRIFFIN: It's rattled a lot of cages down on American Samoa. The FBI, as we reported yesterday, has opened up an investigation into where that tsunami warning system money is going. But I think internally there's a lot of people now in American Samoa beginning to talk about this, at least question, where was the money for that gym? Where are the moneys to clean up that creek, you know, trying to follow their own money if these federal investigators in Washington, these agencies that hand out the money aren't going to do it for themselves.
CHETRY: Drew Griffin, some great reporting there. Thank you.
CHO: It's 31 minutes after the hour. Here are this morning's top stories.
A solemn visit by President Obama overnight to Dover Air Force Base in Delaware. The president was on hand to pay personal tribute as the remains of 18 Americans killed this week in Afghanistan returned home. October is now the deadliest month for U.S. forces in the entire eight-year war.
CHETRY: The president may soon decide on troop increases for Afghanistan. Sources are telling the Associated Press he's considering a large number of additional troops, not as many, though, as his war commander, General Stanley McChrystal, wants.
That plan being dubbed "McChrystal-light" because it's lower than the 40,000 the general recommended.
CHO: And we have this just in to CNN. Within the past hour the British Navy has just found an empty yacht belonging to the couple feared kidnapped by pirates.
But a bit of a mystery -- there's no sign of the couple. And according to the European Union Navy, pirates hijacked another ship today, this time a Thai fishing vessel. This means the pirates are now in control of a total of eight ships.
CHETRY: And these violent episodes at sea show just how dangerous pirates can be and just how vulnerable the waters are in the region, as we've seen.
But ships may have a new defense, a pirate-proof ship. In this exclusive report, Brian Todd takes you on board the ship that's designed to keep a pirate attack from ever happening in the first place. CNN has had exclusive access as we put this ship to the test.
(BEGIN VIDEOTAPE)
BRIAN TODD, CNN CORRESPONDENT: Using the crudest tactics, they've hijacked the shipping interest. With grappling hooks, AK-47s and rocket-propelled grenades, they brazenly clamor on board tankers and cargo ships, taking crews hostage.
Pirates off the eastern coast of Africa have cost the industry billions of dollars in recent years. Military officials tell CNN they don't have the resources to cover the vast areas of those hot zones. And with monsoon season ending in that region, the pirates are back at it. But this is what they could now encounter. A security team helps the crew get into a blast-proof bridge. A sniper takes position on deck, scans the perimeter. It's a drill on board the S.S. Horizon Producer, a cargo ship making a run into San Juan harbor.
The vessel is equipped with a new multi-layered security system called Triton Shield. It starts with long-range surveillance cameras to detect pirates further out, and if they do get close, loudspeaker alarms.
A few feet away, trained guards patrol the deck under simulated fire. At sea and in port, with the help of the San Juan bay boat pilots, CNN has exclusive access as the captain and crew are trained how to scramble into their secure bridges and engine room.
It's not always smooth.
TODD: But the captain says his crew needs this.
CAPT. STEVE PROCIDA, S.S. HORIZON PRODUCER: Well, you saw the drill, guns going off and that kind of stuff. And there was a realism about it, and I think it woke up a lot of guys.
TODD: This is the brain child of a company called International Maritime Security Network, IMSN. The firm provides everything, security teams, fortification of bridges, sniper nests, training the crew how to react if pirates breach the vessel.
I spoke to an IMSN professor, who asked that his name and face not be identified because he conducts training in high-risk regions.
UNIDENTIFIED MALE: We show them how to detain that individual and how to use handcuffs. We also in the course train the crew on how to be a hostage.
TODD: But there's another part of the system aimed at never letting it get that far.
TODD (on camera): This is a crucial part of the deterrent, a wall of water that blasts down from the tunnel to knock the pirates off as they try to scale the ship. It can also flood the pirates' boats. They can mix in bleach, pepper, oil, even soap to try to distract them even more.
TODD (voice-over): I'm repeatedly blasted, and when I try to look up alongside the hull, I can't see a thing. Back on deck, I press the instructor about the effectiveness of all this.
TODD (on camera): How confident are you that this wall of water, the blast-proof bridge, the loudspeakers, will really keep pirates from coming on this ship?
UNIDENTIFIED MALE: We're 99.999 percent sure that we've got the answer here.
TODD: That certain, because the pirates and the criminals always stay one step ahead of the law? 99.9 percent -- why?
UNIDENTIFIED MALE: Well, back in our factory, we're already making next version of the next step up. We're going to one step them. Every time they make a move, we'll be ready for them.
TODD (voice-over): What they're really aiming for is a true deterrent.
UNIDENTIFIED MALE: The whole point is they see this from the water and they say these guys are ready for something. It's not worth hitting this ship. Let's go somewhere else.
TODD: This is the only vessel IMSN have outfitted so far, but we're told more are in line. In the coming months, this system is going to be deployed on another merchant vessel off the coast of Africa for a trial by fire.
Brian Todd, CNN, San Juan.
(END VIDEOTAPE)
CHO: We have this just into CNN. What could, could be a key turning point for the economy. Christine Romans has the just-released GDP number. So read the tea leafs for us.
ROMANS: The tea leaves are pretty clear. The economy grew 3.5 percent in the most recent quarter, driven by cash for clunkers, driven by government support for the housing market, driven by government support in the economy after four brutal quarters of the economy shrinking, a very painful situation for main street and for the American economy, the economy actually grew 3.5 percent.
The question here now is, how much of this going forward is going to be government support and how much of this is going to be an economy that is actually healing?
What this signals to us, it is more evidence, more evidence that the recession may be ending. The recession may be coming to an end. We won't know for sure until after it has been declared. It will be rearview mirror by then, of course, but this is more evidence that the economy got back up on its feet.
We're looking at exports increased, imports also increased. We saw motor vehicles almost -- just shy of half of this gain for the overall economy was because of the cars, cars being sold.
CHO: Cash for clunkers.
ROMANS: Cash for clunkers. You can see, that's the government support. Without all this government support, we may not have seen growth in the quarter. We don't know exactly how much of the government support is this 3.5 percent, but it is a green -- it is the economy grew, folks, for the first time in five quarters.
And that is a feat considering what we've been through.
CHO: That's good news.
CHETRY: That's right.
CHO: We'll have to see whether it lasts. That's the big question, right?
ROMANS: Right. Once you start to pull back the government part of it, can the economy grow and heal on its own? That's the next key.
CHO: Christine Romans, thanks.
CHETRY: Still ahead, we'll be speaking to Steve Gandel from "Time" magazine about the divide between Main Street and Wall Street widening. "Time" did a poll, and it is shocking how many people are angry -- maybe it's not so shocking, but for the first time in many, many years, the disconnect seems to be even wider. So we're going to explore all of that in just a moment. It's 38 minutes past the hour.
(COMMERCIAL BREAK)
CHETRY: It's 40 minutes past the hour. Welcome back to the Most News in the Morning.
The divide between Wall Street and Main Street is massive and it seems to be growing. The numbers tell the story. In a new "Time" magazine poll, 75 percent of Americans expect Wall Street to revert back to business as usual, 67 percent want the government to force pay cuts, and 59 percent want more government regulation.
Well, today, we may just get that. Hearings begin on Capitol Hill over legislation that would make the financial industry pay for its mistakes, not taxpayers.
"Time" magazine takes all of this on in its newest issue, "Why Main Street hates Wall Street." And Stephen Gandel is a senior writer at "Time." He interviewed pay czar Kenneth Feinberg for the issue. Stephen, great to see you this morning.
STEPHEN GANDEL, SENIOR WRITER, "TIME" MAGAZINE: Thanks for having me on.
CHETRY: I want to start with the hearings on Capitol Hill and this special fund, this is part of Barney Frank's legislation. And basically what this would be is it would call for businesses and especially the quote/unquote "too big to fail" institutions to take on a little bit more of its responsibility for success. How would that work?
GANDEL: Well, they'd be taxing -- the more assets you had, and it always has been this case, you pay for a percentage of your assets, the more assets you have, you pay -- but it's going to be graduated. So as you have more assets, you pay exponentially more.
And we think that makes sense. We think that it's the too big to fails we should get rid of, that we should enact laws that break up some of these really big banks. But short of that, it's a good idea to put in a systemic regulator, someone special that if you're big, you have to pay extra money for this special regulator to look over your shoulder.
CHETRY: And that would be so that if, indeed, something would happen, like the floor would drop out from under you like what happened with AIG, there would be a plan in place for that company to be able to pay for it?
GANDEL: A special pool of money. The small banks say, why should we pay for this problem? They have their own issues, but we didn't cause the financial crisis, the stuff we saw last September, right? So they say, we'll make the big guys pay for it, and that make sense.
CHETRY: You had a chance to interview pay czar Kenneth Feinberg. This is one man who's sort of responsible for looking at the pay packages of 700 or more people at some of the biggest bailed out places and decide how much they should make.
And he's under fire and under a lot of pressure from both sides, you know, from people saying, why are these bonuses even happening in the first place? And trying to balance that with keeping some of this talent at companies that could use all the help they can get right now.
So what did he tell you about how he's striking that balance?
GANDEL: He said it's a very tough balance. And this is someone, when you talk to him and spend a little time with him, you know generally he feels there's a problem.
He worked for Ted Kennedy for a number of years. He generally thinks there's a problem between the pay gap between Main Street and Wall Street.
But he also feels like his hands are tied. He wants them to succeed. They have to be able to recruit and maintain their top executives. And so he's got a balance there to kind of rein in pay, but also continue to make these companies competitive.
And so he thinks he struck the right balance. Some people think he should have reined in pay more, other people think he's doing too much. It's a hard balance.
CHETRY: And in fact you explore the controversy over these bonuses. Six out of the seven companies who have not been able to repay their TARP money as of this point actually asked Feinberg to approve raises for their top guns. How can that be?
GANDEL: Well, because they're lobbying their best. They're saying, listen, you can't hobble us. We need to be able to pay as much as we can. We need to be able to pay as much as Goldman and J.P. Morgan, which are very healthy companies.
And Feinberg said, no, you can't be. He looked at all the pay across the industry, and he said the most I'm going to give you is the average pay for these positions, which is still a lot of money.
CHETRY: Absolutely.
GANDEL: For many of these guys, it's more than $5 million. A few of them, it's $9 million.
But what Feinberg's tried to do, and this is how he strikes the balance. He's paying these people a lot of money, but what he's done is he's taken down the cash portion of it. No one's getting more than $500,000 in their cash guaranteed salary.
Some others are getting guaranteed some stock, but they can't cash it out for two years later, three years later. So Feinberg thinks this is going to lower risk, they're going to think about the long-term.
And then there's a small portion on the end that's a kind of stock bonus.
CHETRY: I got you.
And just, really quickly, tapping into some of the anger out there on Main Street versus Wall Street, as Ben Bernanke and others talk about green shoots in the economy, one of your article points out, the only green shoots we're seeing are the ones sticking out of these abandoned store fronts.
A lot of people are very upset that they think it's Main Street who has borne the brunt of the financial meltdown.
GANDEL: This is the divide we're talking about. Wall Street, by all accounts, has had a pretty good year, and so they think they should get paid. But Main Street's still having a bad year, and so they're saying why should Wall Street get paid before us? And that's the divide.
And it's unfortunate in the way it works. Wall Street's the ground zero. So they felt the brunt earlier and they'll going to feel the recovery first. It's a question of how do you divide that recovery? How do you divide the spoils?
And right now, we think, too, the spoils are still a little bit too heavy for Wall Street. The goodness is going to -- the recovery comes to them first, and it's a little bit unfortunate.
CHETRY: Stephen Gandel, a great cover and a great bunch of articles from "Time" magazine on this very issue. Thanks for joining us to talk about it today.
GANDEL: Thank you.
CHETRY: It's 44 minutes after the hour.
(COMMERCIAL BREAK)
CHO: Forty-seven minutes after the hour. Welcome back to the Most News in the Morning.
We have put a little away every week or two. You hope it'll be there when it's time to retire. But guess what, do you know how much of your 401(k) is actually going to fees?
CHETRY: Yes, the answer is probably no. If you're like most people, you have no clue how much you're losing to fees, administrative costs, other hidden costs.
Gerri Willis is here with part two of our series "Nickel and Dime," to explain a little bit more about how much we're losing without even realizing it in what's supposed to be our nest egg.
GERRI WILLIS, PERSONAL FINANCE EDITOR: A lot is the short answer. Good morning Kiran and good morning Alina.
With the average 401(k) losing more than 30 percent last year, you may have a hard time persuading yourself to look at your statements. But there's a good reason to take a long look now. Now, a factor you may not know about, as important to the health of the stock market that could make the difference between retiring early and not retiring at all.
(BEGIN VIDEOTAPE)
DWAYNE LUTZOW, CEO, DLA ARCHITECTS: We have a big hole to dig out of from where we are.
WILLIS: Dwayne Lutzow, is an architect who designs school buildings in Hinesville, Illinois. He employees 42 people; people he likes to think of us as family.
But the hole he is talking about is a financial one; the result of years of paying sky-high fees for his and his employees' retirement plan.
LUTZOW: We're talking tens of thousands of dollars in that program. And if you multiply it time the entire staff, I mean, conceivably it could be $100,000, $200,000; and that's significant dollars to everybody.
WILLIS: It was a cost that Dwayne never saw on his statements and a number his investment adviser repeatedly refused to provide.
LUTZOW: There were several times where I was just at point blank, what are your fees? And oh, don't worry about it. It's rolled into the plan.
WILLIS: And Dwayne's not the only one who's in the dark. In a Government Accountability Office study, 83 percent of respondents didn't know how much 401(k) fees they were paying. More telling, 65 percent of respondents didn't think they were paying anything at all. In this case, ignorance is not bliss.
David Loeper is a financial adviser and author. DAVID LOEPER, AUTHOR, 401K RIP-OFF: I'd estimate that probably 90 percent of all 401(k) participants are probably getting ripped off in their 401(k) plan to the tune of massive, excessive fees.
WILLIS: The fees sound small. Lutzow eventually determined that he and his employees were paying three percent. But those small charges add up.
So imagine you're a 45-year-old worker with $20,000 in your 401(k). If you're paying half a percent in fees by the time you retire, your nest egg will be $70,555. But double those fees to one percent, here's what you'll have in your 401(k) at 65, just $58,400.
RIC EDELMAN, FINANCIAL ADVISOR: Picture that the stock market itself since 1926 has earned on average about 10 percent a year. If the fee is three percent, you're paying a three percent -- 30 percent of your profits go to fees. When was the last time you tipped a waiter 30 percent?
WILLIS: Lutzow fired his manager and got a whole new 401(k) program. His fees this time, just under one percent.
LUTZOW: I think everybody's been pretty happy for the last, you know, six, seven months because their 401(k) is coming back.
(END VIDEOTAPE)
CHETRY: And so as we take a look at this and we don't even know what we're paying, what, if we do find out, what's considered normal?
WILLIS: Well, you want to pay less than three quarters of a percent but let's look at some rules of thumb here. According to Loeper you should pay no more than $30 to $35 a year in administrative fees.
S&P 500 funds, the plain vanilla of that in the investing world, you should pay no more than one tenth of one percent. You've got to dig in and look at these fees.
CHO: Yes, I mean, I was asking it before, I mean, how do you -- They're so hidden, how do you find them?
WILLIS: You've got to call HR to get started. They will provide you with documents where you can really look at the fees on these funds. It's not just funds for the money for the management of the funds themselves; it's also money for the administration. There's all kinds of service fees. All of this adds up.
CHETRY: Yes, but it's like the phone bill. You see all these fees, it's like, where's it all going to?
CHO: You get nickel and dimed here and there and it adds up to a lot of money by the time you retire.
WILLIS: It's really enough that would make the difference between retiring and not retiring. And I wanted to tell you there's a great Web site out there. If you want to know what your fund is paying, it's called brightscope.com. Doesn't have every company in the country, but it has many.
CHETRY: Oh, wow, brightscope.com. There is your answer.
CHO: That's right.
CHETRY: There it is and we thought we were going to make money off of it.
WILLIS: Yes, you're too late.
CHETRY: Thanks Gerri.
CHO: It's hard to believe it's been nearly a year since the presidential election. A lot of people are still wondering, what's next for Sarah Palin and her political future.
But guess what, the father of Palin's grandson, Levi Johnston, could be a big wild card. We're going to have the latest greatest chapter in their family feud, next.
(COMMERCIAL BREAK)
CHO: Fifty-four minutes after the hour. Welcome back to the Most News in the Morning.
Well, Sarah Palin's in another war of words with her daughter's ex- boyfriend, Levi Johnston -- surprise, surprise. You know, things are getting pretty ugly, again. But if you're one of those people who just loves politics and gossip, it can be fun to watch.
CHETRY: There are some, though, that are asking, is this very public feud hurting Sarah Palin's political future?
Our Candy Crowley is breaking down the brand-new poll numbers for us this morning.
(BEGIN VIDEOTAPE)
CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT (voice-over): In some ways, the majority of Americans view Sarah Palin positively: 64 percent consider her a good role model for women; 56 percent say she cares about people; 55 percent call her honest and trustworthy.
Is she qualified to be president? Just short of a year since the McCain/Palin ticket was defeated, a CNN Opinion Research Corporation Poll found only 29 percent of Americans think that John McCain's vice presidential pick is qualified to be president. A whopping 71 percent say she is not; A number that is both stunning and not.
ANNE KORNBLUT, "THE WASHINGTON POST": I think that was always going to be the steep hill for her; it was to prove her credentials. And that's something that if she's going to run, she's going to have to do after the book comes out
CROWLEY: That's another number Palin will like. Her book, due out next month, is second on Amazon's bestseller list. Palin suffers from disconnect. While many Americans find positive attributes in her, they don't think she has the right stuff to sit in the Oval Office. Fewer than half say she is a strong leader, shares their values, or agrees with them on issues.
Political reporter Anne Kornblut, author of a soon to be released book, "Notes from the Cracked Ceiling" is surprised her numbers as high as they are.
KORNBLUT: I think that certainly any candidate who's in the high 40s on any of those attributes obviously room to grow, would need to grow. But that's really not that far outside the ballpark of where you would expect somebody who's that controversial to be.
CROWLEY: Certainly Palin still has a home in politics in the heart of the GOP. She ranks number two in the Republican-only presidential preference poll.
The problem is, her disapproval rating, 51 percent, is higher than any of her fellow Republicans on that list. So though a good majority of Americans find reason for positive feelings about Sarah Palin the person, Palin the politician remains a divisive figure.
Candy Crowley, CNN Washington.
(END VIDEOTAPE)
CHO: And there's the big question about Palin, the politician, whether that will happen again. She just got $1.25 million for an advance for her memoirs.
CHETRY: Yes. Her memoirs are coming out this month, "Going Rogue," so we'll see. Again, it's funny her -- what was going to be her son- in-law, Levi Johnston, is sort of making a name for himself in many ways as well. He's been on a lot of different shows. He said he could dish if he wanted to, but he's not going to go there. But he is going to go there when it comes to posing for "Playgirl".
CHO: And talking to "Vanity Fair" and the list goes on.
CHETRY: Exactly.
CHO: Fifty-six minutes after the hour.
(COMMERCIAL BREAK)
CHETRY: And that's going to do it for us. We're going to say goodbye. Hope to see you back here tomorrow on AMERICAN MORNING.
Great having you with us this morning.
CHO: And great to be here, as always.
CHETRY: Here's "CNN NEWSROOM" now with Heidi Collins -- Heidi.
