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Changing the Rules in Wall Street; American Terrorists in Pakistan; Angry Reactions in Cuba; Swine Flu Kills 10,000 Americans

Aired December 11, 2009 - 10:00   ET

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

HEIDI COLLINS, CNN ANCHOR: Issue number one, still the economy. And we're following new developments this hour. The retail sales numbers for November are just out. They rose 1.3 percent last month. More than doubling expectations.

And happening this hour on Capitol Hill, a House panel holdings its fifth hearing now on the Bank of America, Merrill Lynch acquisition. FDIC chair Sheila Baer is scheduled to testify and the Obama administration pay czar Kenneth Feinberg today plans to outline a new set of restrictions on executive compensation for companies that took bailout funds from the government. Something we were talking about with Christine Romans, just a little while ago.

Meanwhile a final vote due in the House today on a bill designed to address the conditions that led to last year's financial crisis. CNN's Felicia Taylor is joining us from Wall Street now to explain a little bit further. So Felicia, how big or wide reaching should we say is this legislation?

FELICIA TAYLOR, CNN CORRESPONDENT: This is massive. This pretty much covers any institution, large or small, that has anything to do with money. This has been a long-awaited financial overhaul and it's called the biggest in financial regulation literally since the great depression. It does have President Obama's support but the bill is very complex.

Some Democrats are not necessarily in favor of certain portions of it. It's about 1,200 pages long and the goal is to fix problems that led to last year's financial collapse. So I'm talking about banks, homeowners, borrowers, credit card holders, hedge funds, derivative traders. It's literally anybody that has anything to do with money.

COLLINS: So an overhaul this big probably isn't an easy sell, I imagine. Some of the obstacles that they'll be facing?

TAYLOR: Yes, absolutely. There are two crucial parts to this bill that need to be resolved before they actually take the vote. The first is an amendment that deals with the consumer. It would create what's called the Consumer Financial Protection Agency, the CFPA. They must decide whether to keep or scrap it. And as I mentioned, some conservative democrats are not in favor of this because they believe that it will hurt small businesses.

It's a central feature of the legislation and if it fails, it will be a huge loss for the Obama administration and the Treasury. But there are some conservative Democrats that, like I said, are looking for this to fail. It would consolidate consumer lending regulations which are currently split among different agencies, like the Fed, the FDIC and the SEC, the Securities and Exchange Commission.

But these new regulations would cover credit cards and mortgages and crack down on hedge funds, which we saw a lot of abuse in the last couple of years. It also puts more oversight onto the Fed. Mortgage overhaul would be the second one. And this is crucial, though, for individuals because we've seen so many foreclosures this year. This takes a look at wanting to let bankruptcy judges rewrite mortgages that would eventually lower monthly payments to individual homeowners and, again, prevent the additional foreclosures.

Like we've seen 300,000 in just the last month. So all of this comes as the government set to announce what you mentioned, payrolls for Wall Street firms. We saw earlier that Goldman Sachs is now only allowing its bonuses to be given in the form of stock and those executives aren't going to be able to cash in on that stock for five years. So they're getting creative on that. I'll have more on that crackdown in about 30 minutes. Heidi.

COLLINS: All right. Felicia, we'll be watching all of it. It makes your head kind of spin, that's for sure.

TAYLOR: It does.

COLLINS: Thank you. Yes.

Also this morning we are watching the situation in Pakistan. New details on five young men who seemingly vanished from their Washington, D.C., suburbs. Today they are jailed in northeastern Pakistan and accused of plotting terror attacks. Well, now investigators from both Pakistan and the U.S. are trying to unravel this web of intrigue, if you will.

CNN's Arwa Damon is tracking down the very latest details.

(BEGIN VIDEOTAPE)

ARWA DAMON, CNN CORRESPONDENT (voice-over): The city of Sargodha has become known as a stronghold of radical Islamists groups. And now police here say they thwarted a major terror plot.

This is the room where Wednesday, they arrested five men who vanished from their homes in the U.S. at the end of last month. Sargodha police chief Usman Anmar says a few minutes later and they would have been gone.

Anwar tells us they found maps highlighting known terror hideouts and then e-mail accounts the men used to contact their militant hampers.

CHIEF USMAN ANWAR, SARGODHA, PAKISTAN POLICE: They were giving specific - extra specific instructions, I would say, and the telephone usage was prohibited. DAMON: Now the five as well as the father of one of them are behind bars. Two are of Pakistani descent, one Egyptian, one (INAUDIBLE) and Ethiopian. Pakistani officials say all are Americans.

(on camera): Behind these doors are where the six are being held, interrogated by both Pakistani officials and according to the Pakistanis, by the FBI as well.

(voice-over): None has yet been charged but Police chief Anwar claims they could have posed a serious threat.

ANWAR: They were mercenaries. They were there for jihad. They could have done anything. They had U.S. passports. They could have access to many, many points which another person could have access to.

DAMON: Also, in Sargodha, we meet the mother of one of the men. She doesn't want to appear on camera for religious reasons. She says she came to Pakistan two months ago to look for a wife for her son. Then he disappeared from their home.

SUBRIA FAROUK, MOTHER: And one day he told he will come back. Monday, the whole day is gone, he didn't come back. He didn't pick up the phone. The next day again, the other parent told that all are missing. Then I told that now it's a serious thing.

DAMON: Miss Farouk doesn't believe her son could be involved in a terror plot. She thought he had been kidnapped and alerted the authorities. A few days ago her son and his friends turned up in Pakistan. He told her he wanted to surprise her. Now she says her family is caught in the middle of this complex Pakistani-U.S. web.

FAROUK: They are making a story because they are fighting each other and involving other family. The people family are coming over here to visit, marry, enjoy their home country. This is not meaning that we are terrorists.

DAMON: Now a provincial town in Pakistan is suddenly the focus of an investigation spanning continents.

(END VIDEOTAPE)

COLLINS: Also this morning we learned that a police interrogation report says the men planned to go to Afghanistan. By the way, a short time ago Arwa conducted an exclusive interview with Pakistan's interior minister who oversees the police. You'll hear his insights into these arrests coming up later in the hour.

Also under the microscope today a Muslim cleric accused of lying to agents about a domestic terror plot. (INAUDIBLE) is accused of withholding information about an alleged plot to bomb New York subways and buses. He's also charged with tipping off the alleged mastermind of the plot, Najibulah Zazi. You may remember this case well. Prosecutors say Zazi received explosives training in Pakistan and drove from Colorado to New York with bomb-making instructions on his laptop. So cold, it stings. You know what I'm talking about. If you've been outside today, especially in Buffalo, New York. The snow was coming down sideways there yesterday. In Lincoln, Nebraska, I- reporter Josh Holexa sent us this video of a neighbor who turned his four-wheeler into a snow plow. And in Placerville, California, utility crews are working around the clock to get the power back on just as another storm gets ready to hit.

Rob Marciano standing by watching all of it for us this morning. This next storm that's coming could be as bad as the last one?

ROB MARCIANO, AMS METEOROLOGIST: I don't think it will be quite as bad. They're kind of a series of storms, one coming in right now that's not terrible and then one coming in Saturday night that's got a little bit more punch to it. That one will probably get into the Rockies and into the plains like the last one did but I don't think it's going to be an all-out blizzard by any means.

The back side of this blizzard certainly is bringing in lake- effect snows across parts of upstate New York and northern parts of Ohio. These are some of the tallies. And this is up early this morning so some of these numbers will certainly be higher than this come later this afternoon.

Middlebury, New York, 21 inches. East Aurora 16 inches, over a foot. In Alma and Lancaster and the forecast is a little bit more as we go through time. Nice lake effects, snow bands setting up right now. They got a long fetch because the west winds pretty much will just parallel the coastline of Erie and Ontario and the water temperature pretty warm for this time of year and very cold air moving over them. So one or two feet in some of these more favored locations.

And then on top of that, you've got - not only that but cold temperatures. As far as temperatures that are there right now in the teens, winds blowing 20, 30 miles an hour, that certainly makes for a miserable conditions to say the least. Los Angeles to San Francisco, we saw some rain earlier. Now some of that rain has moved up into the mountains and that is causing some problems as far as snows in the Sierras. Winter storm watches or warnings posted. Could see a couple more feet of snow by this time tomorrow or actually this time on Sunday.

It will be 41 degrees in Denver, 38 degrees in Seattle. That's going to be a problem because as this next storm comes in, some of that moisture will get up to places like Portland, which have seen record-breaking low temperatures into the teens and they'll probably see some wintery precipitation.

All right, a quick check on what's going on with the airports. La Guardia seeing an hour and 40 minute delays. That's mostly because of wind and Newark seeing 1:15. San Francisco two hour delays with that system that's coming on shore right now.

Here is a live shot from our affiliate KGO out there in the bay area. Temps will remain in the 50s with breezy and wet conditions at times. Generally speaking, the next storm coming in tomorrow night with heavy mountain snows happening right now up there around Lake Tahoe way. So that's your forecast from coast to coast. Heidi, record-breaking high temperatures across southern Florida.

COLLINS: I know.

MARCIANO: So that is the one and only place in the lower 48 to escape these frigid temperatures.

COLLINS: Yes. Or get a really, really big jacket. Love that. Thank you, Rob.

MARCIANO: You're welcome.

COLLINS: We'll check back later.

A clash on the streets of Cuba. It's protester versus protester in a fight over Fidel Castro.

(COMMERCIAL BREAK)

COLLINS: New information on a growing demographic in the U.S., Latino youths. A recently released study by the Pew Hispanic Center says two-thirds of Latinos ages 16 to 25 are native-born Americans. In 1995, only half were born in the U.S., about 22 percent of Hispanic youths are unauthorized immigrants. Latinos now make up about 18 percent of all youths in the U.S. and most are optimistic about their future. 72 percent expect to be better off financially than their parents.

Human rights protesters touching a nerve in Cuba. Yesterday a small number of marchers sparked outrage among a much larger group of pro-government demonstrators. It happened in the capital of Havana.

CNN's Shasta Darlington was there.

(BEGIN VIDEOTAPE)

SHASTA DARLINGTON, CNN CORRESPONDENT (voice-over): The message is loud and clear. The streets of Cuba belong to Fidel, Fidel Castro. Between shoves and insults, more than 100 of Fidel's supporters surrounded what had been a silent march to commemorate international human rights day. The target of their wrath was the damas de blanco or women in white, the mothers, sisters and friends of jailed dissidents.

(on camera): Things have gotten a lot more confrontational. We've basically seen dozens of government supporters come out. We have the women in white shouting liberty (INAUDIBLE) and the pro- government supporters shouting this street belongs to Fidel, out with the worms.

Luckily there hasn't been a whole lot of pushing (INAUDIBLE)

(voice-over): For government supporters this march was orchestrated by an enemy government. They're mercenaries, one man shouts. They're paid by the United States of America, the same country that has a blockade on us who threatened our children, who killed more than 2,000 Cubans. The women in white have marched in silence every weekend for six years, rarely meeting resistance. To demand the release of men they say are jailed for their political beliefs.'

LAURA POLLAN, CUBAN DISSIDENT (through translator): This is an intolerant totalitarian government.

DARLINGTON: Says Laura Pollan.

POLLAN (through translator): They don't want democracy. They don't want other people to express their ideas. They don't want freedom of movement.

DARLINGTON: Across town a handful of protesters were shoved into cars when they tried to stage a separate human rights march, and a British diplomat was mobbed by government supporters as he talked to the foreign press.

CHRISTOPHER STIMPSON, BRITISH DIPLOMAT: I'm here from the British embassy just observing what's going on today. We saw lots of people. People being carried off (INAUDIBLE).

DARLINGTON: After more than two hours, the women in white make it back to the home where their march began, leaving the street to Fidel Castro's ardent supporters.

Shasta Darlington, CNN, Havana.

(END VIDEOTAPE)

COLLINS: A pregnant woman coming to the aid of a police officer under attack. And it's all caught on camera. The police officer was responding to a disturbance call in Alton, Texas, when a group of teenagers knocked him down and started beating him. That's when Angela Gutierrez jumped in to help the officer. That's her there in the pink. Gutierrez is nine months pregnant, due to give birth in just two weeks.

But she said it was just a gut reaction to help the fallen officer. The teenagers are now in custody being held on $3 million bond each. The officer suffered only minor injuries.

Amazing. Well, we want to know what you think about this. Do you think you'd do the same thing or do you think she took too big of a risk? Go to my blog, cnn.com/heidi and post your thoughts there. I'll read some of them coming up a little bit later in the hour.

One in six of us has had the swine flu. New numbers on their way up.

(COMMERCIAL BREAK)

COLLINS: Checking our top stories this morning, new details about the role of Blackwater security guards in Iraq and Afghanistan. "The New York Times" reports private Blackwater guards actually worked with CIA to capture suspected insurgents. Blackwater now known as Z was hired to provide security for CIA agents.

But according to former employees and intelligence officials, the private contractors instead played a more active role in what amounted to snatch and grab operations. A U.S. official tells the "Associated Press" that Blackwater guards did not perform CIA missions. The House Intelligence Committee is already investigating other claims that Blackwater was used in the CIA assassination program.

In Orlando, a court hearing this morning for a woman accused of willing her two-year-old daughter. Attorneys for Cayce Anthony are asking a judge to stop prosecutors from seeking the death penalty. Anthony has pleaded not guilty to first degree murder in the death of her daughter Caylee last December. Her death was ruled a homicide but a specific cause was never determined.

Leaders from the European Union wrapping up a meeting this week with a $3.5 billion pledge. They say that's how much the EU nations are ready to contribute to a global fund to help poorer countries fight global warming. They will donate $3.6 billion a year through 2012. The announcement coincides with the climate summit going on in Copenhagen.

Quickly pinpointing the source of tainted food during a contamination outbreak or bioterrorism attack. A new report says the government program responsible for doing that critical job is seriously flawed.

Under the program, food manufacturers and processors have to submit their address and contact information to the FDA. That enables investigator to follow tainted food through the supply chain. Federal auditors found nearly half of the companies surveyed failed to give the FDA accurate contact information.

New estimates of swine flu are out, and they show a big jump in the number of people infected and those who have actually died of the disease.

Joining us now with some of those new numbers, CNN medical correspondent, Elizabeth Cohen. So, Elizabeth, yes, these numbers are different than most people are aware.

ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: Absolutely. When I saw the jump in the number of deaths, I was really stunned. Take a look at this. As of mid-October, this is how many people had died of swine flu. We're talking about 3,900 deaths from April to mid-October. But then when you go April to mid-November, so one month more, it jumps to 9,820. So it more than doubled in just that one month.

COLLINS: Well, yes, that's a huge jump. Do we expect to see these fatality numbers to grow at the same rate?

COHEN: No, we don't expect to see them grow at the same rate and I'll tell you why. Since approximately the end of November, the number of H1N1 cases has gone down. It sort of hit a peak and it appears to be going down. So when the number of cases go down, of course, you expect to see the number of deaths to go down. So likely won't see that kind of jump again when they do these numbers in a month or so.

COLLINS: Well, when it's all said and done, and I know that's kind of an impossible thing to say because you never really know when it's going to be done, but is it going to turn out that swine flu or seasonal flu will actually be more deadly?

COHEN: You know, it's interesting. Some estimates show that H1N1 won't be as deadly as just like a regular seasonal flu. Yet other estimates show that it might be somewhat larger. Probably not hugely larger, but somewhat larger. But the real difference is in who dies of these flus. Seasonal flu usually kills the elderly. H1N1 flu has been killing kids and young people.

For example, let's look at these pediatric flu deaths. From seasonal flu, 88 deaths in the 2007-2008 flu year. That's one of the more recent ones that's available. So 88 kids died during a given flu season. H1N1 flu has already killed more than a thousand kids. So you can see those are two very different numbers. And that's why you see public health folks so concerned about H1N1 flu because it does attack kids in such large numbers compared to seasonal flu.

COLLINS: Yes. Is there a percentage that's been given on how much of the population as a whole has been affected?

COHEN: Yes. It's very interesting. If you sort of assembled six random Americans, chances are one of them has been infected with swine flu. That's right, one in six Americans has now been infected with this virus that didn't even exist before April, which is pretty interesting.

So if you're one of the five out of six Americans who has not been affected, the Centers for Disease Control urges you to get vaccinated. There's more and more vaccine on the market now. It's not nearly as hard to find it as it used to be. 12 million doses went on the market last week.

COLLINS: Yes. All right. Well, we are continuing to watch those numbers. Thanks so much. Our senior medical correspondent, Elizabeth Cohen.

One year later now and Bernard Madoff sits in prison. Most of his victims, though, sit in limbo. We'll take a look at where the investigation stands right now.

(COMMERCIAL BREAK)

ANNOUNCER: Live in the CNN NEWSROOM, Heidi Collins.

COLLINS: Checking issue number one, stories that matter to you. A positive snapshot on the economy this morning. November retail sales were up 1.3 percent, more than doubling economists' expectations. Happening now on Capitol Hill, a House panel holding its fifth hearing into the Bank of America Merrill Lynch acquisition. Lawmakers are looking into how a private deal turned into a federal bailout.

Also on the hill today, the House expected to vote on a sweeping financial regulations bill. The legislation is aimed at correcting conditions that led to last year's Wall Street collapse.

Next hour on Capitol Hill, lawmakers will look at the home foreclosure crisis, specifically whether modifying loans will prevent more Americans from losing their homes. A new report shows that only about 4 percent of troubled homeowners are getting mortgage help through banks and a federal rescue program. The government now plans to pressure the banks to help more people.

The government has pumped hundreds of billions of dollars into the financial system, saving it from collapse. But all that T.A.R.P. money comes with major strings attached. Today, the government's pay czar is set to announce new rules for Wall Street.

Felicia Taylor's at the New York Stock Exchange with details on this. Felicia, didn't the government already crack down on executive pay?

FELICIA TAYLOR, CNN CORRESPONDENT: Absolutely, Heidi. The pay czar, Ken Feinberg announced new rules last October. And that was aimed at the top 25 earners at Wall Street firms that took government T.A.R.P money.

His job, however, is to oversee the top 100 earners. So, Feinberg is set to announce new rules for the remaining 75. It will affect companies that took those exceptionally large bailouts such as AIG, Citigroup, General Motors, Chrysler, Chrysler Financial and GMAC. There are reports Feinberg will impose a salary cap of half a million dollars. Heidi, you well know, that's a fraction of what some of these guys make on Wall Street.

COLLINS: Yes, yes, definitely. In fact, I imagine the reaction there, people on Wall Street, not very positive.

TAYLOR: Well, you know, you have to look at it from both sides, right. This has been a major bone of contention. The biggest complaint is that the pay caps will prompt top talent to leave in search of higher pay at a time when many of these firms are still struggling and need to keep their top-level employees. For the government's part, it's trying to quell public outrage, but without hurting the industry.

Not surprisingly, some of the firms affected are trying really hard to pay back the bailout money under time. Citigroup is reportedly close to a deal to receive -- some of its $45 billion. Bank of America made it just under the wire. It paid back its bailout on Wednesday.

So, you know, it remains to be seen. There's two sides to every situation and every question. On the one hand, can you really limit the pay that these people make and will they leave and hurt the firms even more? So we'll see how it plays out.

Stocks, though, having a great day so far following a rally overseas. A report showing retail sales jumped last month, the consumer is out spending money.

The Dow Industrials are up about a half a percent. The NASDAQ is up a quarter of a percent, and the S&P is also up about a half a percent. I should mention, again, retailers across the board are trending higher. Macy's stock right now is up almost 4 percent. Not bad.

COLLINS: All right, very good. Felicia, thank you.

TAYLOR: Thank you.

COLLINS: The next hot jobs. The Labor Department projects financial examiners and compliance officers are expected to be two of the fastest growing occupations over the next ten years, growing by something like 30 to 40 percent. They're the guys who ensure that banks, insurance companies and other firms follow state and federal rules. Home health aides are expected to jump by 50 percent, due mostly to the aging population.

Car dealerships in danger of being shuttered may have a new lifeline coming from the government. The House approved a new appeals process as part of the massive spending bill. 1,350 GM dealerships are expected to be closed next year. 789 Chrysler dealers closed their doors earlier this year. Well, the new bill allows arbitration panels to review each closure on a case-by-case basis.

It was one year ago today Bernie Madoff was arrested. The government is still trying to untangle his web of lies and deceit. Madoff swindled billions from investors. Now those investors are at odds with each other over who should get paid back and how much.

(BEGIN VIDEO CLIP)

JUDY RAFFERTY, DENIED COMPENSATION: They changed the rules in the middle of the game, which I don't think is fair at all.

BENNETT GOLDWORTH, MADOFF VICTIM: The net winners should be at the back of the line, that's all. You know, the first thing that should be addressed is that everyone get back everything they invested.

RAFFERTY: He got his money back. Why wouldn't he feel comfortable? It's the people who haven't gotten their money back that are not happy.

(END VIDEO CLIP)

COLLINS: The government is still trying to determine just how many people were taken by Madoff. More than 1,600 claims have been approved, but there are still many more being processed. The total haul from the scam, about $20 billion.

Andrew Christman is the author of "Betrayal: The Life and Lies of Bernie Madoff," and he joins us now to talk about where things stand.

Andrew, thanks for being with us. We appreciate your time. Let's start with who's been punished here. Where are we at on that front?

ANDREW CHRISTMAN, AUTHOR: Well, I think everyone or a lot of people expected that Bernie Madoff's family would end up going to jail, you know. People felt, oh, they must have been in on it.

Well, it's a year later, and the only indictments have been people who worked under Bernie Madoff. The wife, Ruth, hasn't gone to jail, the two sons who worked for him haven't gone to jail. None of these people have been even been indicted. The brother, who helped him found the firm, hasn't been indicted. I think it raises the question about whether or not they were culpable as opposed to just turning a blind eye.

COLLINS: Yes, yes, certainly. A lot more to go there by way of questioning, I imagine.

CHRISTMAN: Sure.

COLLINS: In fact, we of course know that Madoff is in jail. But what do we really know about him? There are some reports out there that he is not well and he's certainly not doing any big jailhouse interviews. What do you have on that?

CHRISTMAN: Right. Well, you know, I'm sure there are a lot of journalists looking for a jailhouse interview with Bernie Madoff. Bernie Madoff is a pathological liar. You know, whatever he says is going to be awfully suspect.

Meanwhile, he's living in a medium-security jail and from all reports he's kind of the king of the con artists there. He's got an open jail cell. He's not having the hardest time in prison. But he's going to spend the rest of his life there.

COLLINS: Yes, certainly. In fact, let's look at the victims for just a moment here. We have a graphic, too, that we can put up for everybody.

We've got a number on the claims against Bernie Madoff. That's 16,000 that have been filed here. Something like 11,563 to be exact have been processed, but 1,647 are determined to be valid here. This is our source at CNNmoney.com. Why were so many of thee claims turned away?

CHRISTMAN: Well, it's really tragic. There's so many victims who were living off of money that they thought they had, because Bernie Madoff would feed them a little at a time, but it turned out that Bernie Madoff statements were basically fiction.

So, there was one person I interviewed in my book who sold his kind of -- his chain of furniture stores, retired, moved to Florida, and then refinanced his house and put all of that money into his Madoff accounts because he trusted Bernie Madoff. Well, all of that money evaporated and suddenly there are people like this gentleman who want all the money that they thought they had back from the government, and that's not the government's point of view at all. They're basically saying we'll give you back what you put in and that's it because the rest of it was invented.

Well, you know, a lot of people think that these victims are aristocrats and wealthy people from Palm Beach. But in truth, there are people who are now scavenging through garbage bins. That's a true story. Another one that I interviewed is driving people to the airport just to afford his food. And these are the people who are, you know, desperate for money from the government. It's an agonizing situation.

COLLINS: Yes, agonizing also because it's taking a long time...

CHRISTMAN: Right. It's taking a long time.

COLLINS: ... People continue to question that. Hey, can't we get this figured out so that I can, as you said, that person you interviewed, so that I can eat.

CHRISTMAN: Sure. I don't understand why it's taking such a long time.

There's a -- there's someone who's been appointed whose sole job it is to disburse this money. The rules say that victims are entitled up to half a million dollars in compensation, yet it's dragging on.

Meanwhile, in addition, this monitor is also suing the feeder fund, suing people who benefited from Madoff, hoping to get even more money back. But these people deserve to live, and right now, they're having a very, very hard time because this is taking so long.

COLLINS: Yes, yes, certainly. When you've lost that much, boy, you certainly want it to go as fast as possible.

CHRISTMAN: Sure.

COLLINS: We appreciate your time. Andrew Christman, we'll continue to follow this story as long as it takes. Thank you very much.

CHRISTMAN: Thank you.

COLLINS: Paying less but trying to keep the lights on. But don't get used to it. A rare price drop could soon go the other way.

(COMMERCIAL BREAK)

COLLINS: Checking our top stories now.

A man accused of stalking ESPN reporter Erin Andrews plans to plead guilty in court next week. Michael Barrett is accused of videotaping Andrews through hotel room peepholes while she was nude. Barrett's attorney says his client is also apologizing to Andrews. Andrews plans to speak at the hearing next week. Barrett faces a maximum penalty of five years in prison for the interstate stalking charge.

A warning of titanic proportions in Australia. There's an iceberg headed their way. Here's a satellite photo for you. Experts say it is 12 miles long, five miles wide, and is heading toward western Australia with a fear that once it hits warmer waters, it will break into smaller pieces. And those pieces could be disastrous for ships. So, sailors are being told to keep an eye out if they are in the area.

Snow plows and snow blowers getting a workout in Iowa. Nearly a foot of snow fell there this week, making it the snowiest storm in almost 39 years. And in southern California, sandbags are piling up as the rain moves in there. People living in areas burned by wildfires a few months ago are now, of course, worried about mudslides.

Rob Marciano is watching it all for us.

ROB MARCIANO, AMS METEOROLOGIST: You know, so far we've been pretty lucky with the last couple of rain events that we haven't seen many big slides.

COLLINS: Yes, true.

(WEATHER REPORT)

COLLINS: Boy, that sounds good, doesn't it?

MARCIANO: I'm breaking a sweat just thinking about it. It sure does sound warm and cozy.

COLLINS: All right, Rob, thank you.

The government says the average cost of electricity will be about 1 percent lower in 2010 than it was this year. Now, that would be the first decrease in eight years. Despite that, some power companies are raising their rates for 2010. Stephanie Elam has our "Energy Fix" from the CNNMoney.com newsroom in New York.

Stephanie, what's up with that?

STEPHANIE ELAM, CNN BUSINESS CORRESPONDENT: It doesn't sound like it makes sense, Heidi, but power companies say they need the extra money to upgrade their infrastructure, basically to make their systems more energy-efficient, and regulators tend to agree.

State regulators approved rate hikes for Duke Energy and Excel Energy that will add an average of $4 a month to residential electric bills in both North Carolina and Colorado, respectively. Customers in Minnesota and South Carolina can also expect rate hikes. Cases are pending approval in at least seven other states and the District of Columbia.

Now Excel Energy said it spent nearly $2 billion already to upgrade its grid. Now it needs customers to help kick in for the improvements, Heidi.

COLLINS: OK, stay with me here. If the goal was to make the system more efficient, can we expect to someday pay less to power our homes even if we're paying a little more over the next year or two?

ELAM: Yes. And that's a reasonable way to look at it. The power companies basically use that argument to get rate hikes approved in the first place.

Now, the problem is that it's still pretty hard to sell a rate hike in a recession. Pending rate hikes are facing opposition from officials who say companies just can't burden cash-strapped Americans with the added expense.

But the U.S. Department of Energy estimates that implementing smart-grid technologies could save businesses and consumers over $20 billion over the next 20 years. It also says new technology will create tens of thousands of new jobs.

So, pay now and it will help you in the long term. So, it's feasible to think of it as an investment in new technology, Heidi.

COLLINS: What about the government's investment in new technology? The economic stimulus. The Obama administration has been pushing for new smart-grid technology for a long time, more efficiency. Is there money behind that rhetoric, then?

ELAM: Well, apparently there is. The DOE says about $4.5 billion from the Economic Recovery and Reinvestment Act have gone to the power companies for grid improvement, and government funds in many cases have been matched by private companies, cities and the power companies themselves.

But these are big projects, so utilities are forcing their customers to contribute as well. So, it's one of those things to see how these rate hikes go up, but I'm sure a lot of people will wait to see if the rates come back down after things get more efficient, Heidi.

COLLINS: Yes, they will. No question about it. Stephanie Elam, thank you.

ELAM: Sure.

COLLINS: The mayor of Kabul. A potential poster boy for Afghanistan's corruption problem. He's still running the city, even though he's been sentenced to prison.

(COMMERCIAL BREAK)

COLLINS: I want to quickly get to today's blog question, but first we want to show you the video of what we're asking about today. Take a look at this now. Caught on camera, a woman who is nine months pregnant comes to the rescue of a police officer in trouble. She says she couldn't just stand by and do nothing, so we asked you the question. You see her there in the pink. Would you do the same thing or do you think she took too big of a risk, being nine months pregnant? Here now are some of your responses.

Rafael writes this: "This woman was very brave, but she did the right thing. If it was me, I would have done the exact same thing."

Jenny writes, "Do you think this woman would still be called a hero if her baby was killed in the struggle? I have children and would never put them at risk, no matter if it was a cop -- I was saving or not."

Yolanda writes this: "I would have had to think about the well- being of my baby and myself. She did a great thing, but I would have moved out of harm's way and beared witness if the teens got away."

Remember, we always love to hear from you. Just go ahead and log on to CNN.com/heidi to share your comments, and we always appreciate them.

Corruption in Afghanistan. It's a persuasive problem that the Obama administration is demanding president Hamid Karzai tackle head- on. But Karzai's critics say he is not. And they say proof of their claims can be found right in the capital of Kabul. CNN's Frederick Pleitgen was there.

(BEGIN VIDEOTAPE)

FREDERICK PLEITGEN, CNN CORRESPONDENT (voice-over): This is Kabul's mayor at work. That might not seem like news, except that Abdul Ahad Sahebi has just been convicted for corruption.

MAYOR ABDUL AHAD SAHEBI, KABUL, AFGHANISTAN: It's baseless, without any foundation, without any evidence.

PLEITGEN: Sahebi was sentenced to four years in prison after being judged guilty of awarding a city construction contract without bidding.

But the mayor is not in jail, and he's still running the city. That makes Afghanistan's deputy attorney general angry.

The court has ordered his dismissal, he says, so everything he's doing now is illegal. The matter goes to the heart of NATO's new strategy in Afghanistan. Additional soldiers can bring short-term security, but the U.S. says Afghanistan' government needs to crack down on rampant corruption as well.

In his inaugural address, Afghanistan's president said he'd make it a top priority. He created a new anti-corruption task force. Their first high profile case: the mayor of Kabul. This case was investigated and then forwarded to the attorney general, then to the court, and then the court issued its verdict, the chairman says, and still, you take our action as a show.

Both a show and a farce, says Kabul's mayor. He shows me documents he says prove Afghanistan's attorney general was trying to get him to illegally evict people from land plots in the city. When he refused, he was busted on what he says are totally baseless claims.

SAHEBI: It is clear there are some people, some groups who their personal benefit is in danger.

PLEITGEN: The U.N.'s envoy to Afghanistan seems unimpressed with the efforts to clamp down on corruption.

KAI EIDE, U.N. REPRESENTATIVE IN AFGHANISTAN: I fear a situation where the discussion of new commissions and new structures will lead to postponement of actually addressing the problems that exist.

PLEITGEN: Afghanistan's government says it's trying to address those problems. The results so far: a mayor convicted of corruption, still in office, accusing the country's anti-corruption body of being corrupt.

Fred Pleitgen, CNN, Kabul.

(END VIDEOTAPE)

COLLINS: I also want to let you know General Stanley McChrystal will sit down with Christiane Amanpour to lay out his plan for Afghanistan. You can see that entire interview Sunday, 2:00 p.m. Eastern, on "AMANPOUR."

Color barriers broken down on film as Disney casts its first black princess.

(COMMERCIAL BREAK)

COLLINS: Disney is diversifying its royal lineup. after years of featuring Caucasian princesses in its animated blockbusters, it is breaking new ground and making history with its first African-American princess. Here's CNN entertainment correspondent Kareen Wynter.

(BEGIN VIDEOTAPE)

CARTOON CHARACTER: One more time! It doesn't matter what you look like. It doesn't matter what you look like.

KAREEN WYNTER, CNN ENTERTAINMENT CORRESPONDENT (voice-over): Or does it? Check out Disney's new leading lady, Tiana.

CARTOON CHARACTER: I suppose you want a kiss?

WYNTER: She's the studio's first black princess, and many are taking notice. Even students at Los Angeles' Clover Avenue Elementary.

(on camera): Did you see anything at all that was different, that stood out from perhaps other Disney movies?

UNIDENTIFIED CHILD: Tiana was African-American?

WYNTER (voice-over): The third and fourth graders we spoke with had no problem sharing their thoughts about Disney's new film "The Princess and the Frog," which they screened inside their classroom.

UNIDENTIFIED CHILD: There's a first time for everything, and I think this was a really good start.

UNIDENTIFIED CHILD: I think it's a good diversity.

WYNTER: When it comes to diversity, Disney's come a long way since "Snow White" in the 1930s.

Since then, there have been just three ethnic princesses, the Native American Pocahontas, Chinese Mulan, and Arabic Jasmine from "Aladdin."

Question is: in the fantastic world of fairy tale...

(on camera): Does skin color really matter?

UNIDENTIFIED CHILD: It kind of isn't fair, because they should have had one a little earlier. It took them forever to figure out, oh, maybe we should have an African-American princesses.

WYNTER (voice-over): One of the film's own animators agrees.

ERIC GOLDBERG, SUPERVISING ANIMATOR, "THE PRINCESS AND THE FROG": It's about time, I think. It's absolutely about time.

WYNTER (on camera): What took so long since introduction of "Snow White"?

GOLDBERG: I don't know what took so long. I'll be honest with you. We were there with different ethnicities before this film. Maybe we need to do those other films before we could actually do Tiana.

WYNTER (voice-over): And like some princesses before her, Eric Goldberg says Tiana is already a marketing machine.

GOLDBERG: Everybody is buying African-American Princess Tiana dolls, you know? It doesn't matter what their background is. It's like this is a great, popular character.

WYNTER: Some students note the princess' popularity shouldn't be lost on the film, that there's a deeper message here.

ROMAN, 3RD GRADE: People that wanted to be princesses but their skin color wasn't white, they say, "Well, if she can do it, then I'm sure I can do it."

UNIDENTIFIED CHILD: Tiana's actually inspiring them.

CARTOON CHARACTER: Only thing important is what's under the skin.

WYNTER: Kareen Wynter, CNN, Hollywood.

(END VIDEOTAPE)

COLLINS: I'm Heidi Collins. CNN NEWSROOM continues now with Betty Nguyen. Hi, Betty.