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AMERICAN MORNING

Sandusky Arrives at Court; Gingrich Takes Lead in Iowa; Drone Wars; Interview With Sen. Debbie Stabenow; AT&T Puts T-Mobile Deal On Ice; Jerry Sandusky Waives Right to Preliminary Hearing; Sandusky To Go Straight to Trial

Aired December 13, 2011 - 08:00   ET

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


(COMMERCIAL BREAK)

CHRISTINE ROMANS, CNN ANCHOR: Facing his accusers.

I'm Christine Romans.

Jerry Sandusky arriving in court. In just one half hour, he'll be right across from the men who say he sexually abused them as children.

CAROL COSTELLO, CNN ANCHOR: I'm Carol Costello.

Three weeks to go before the Iowa caucuses and Newt Gingrich is leading the pack in the Hawkeye State. How is he pulling it off? Mitt Romney says he doesn't get it, but Rudy Giuliani and Dick Cheney do.

ALI VELSHI, CNN ANCHOR: I'm Ali Velshi.

Iran's defiant response to President Obama: the U.S. spy drone that went down in Iranian territory belongs to them -- on this AMERICAN MORNING.

(MUSIC)

ROMANS: And good morning, everyone. It's Tuesday -- Tuesday, December 13th. Welcome back to AMERICAN MORNING.

COSTELLO: How many days until Christmas?

VELSHI: I thought you were going to say, how many days to the Iowa primary.

COSTELLO: Christmas over the caucus any day.

VELSHI: All right. The story we're following just moments ago, you saw it here. Former Penn State coach Jerry Sandusky arrived at court where he is likely to face his accusers at this morning's preliminary hearing. The judge in that hearing is going to decide whether there is enough evidence to try Sandusky on 52 charges related to the molestation of little boys.

Sandusky has acknowledged showering and, quote, "horsing around" with the boys. He said he has an attraction to children, but he said it's not sexual in nature.

This hearing will not be televised but reporters who are in there, including our own, will be able to text and tweet updates from inside the courtroom. And as I said, it will get under way in half an hour.

COSTELLO: Turning now to politics, with three weeks to go before the Iowa caucuses. Newt Gingrich is going gangbusters. Take a look at this brand-new poll from the American Research Group. Gingrich leading in the Hawkeye State by five points over Mitt Romney and Ron Paul.

And the former House speaker is starting to gather the support of his party's heavyweights. Rudy Giuliani and Dick Cheney both publicly acknowledging that Gingrich has a lot going for him right now.

(BEGIN VIDEO CLIPS)

DICK CHENEY, FORMER U.S. VICE PRESIDENT: He was persistent and he was tenacious. He kept it up and kept it up and kept it up. And finally by '94, he's the newly elected speaker of the House of Representatives with the Republican majority. So, I wouldn't underestimate him.

RUDY GIULIANI (R), FORMER NYC MAYOR: My gut tells me right now, as I look at it, that Gingrich might actually be the stronger candidate because I think he can make a broader connection than Mitt Romney. As I said, to those Reagan Democrats where you won't have this barrier of possible elitism that I think Obama could exploit pretty effectively.

Governor Romney has almost a perfect record for a person to be running right now. You know, experience in government, experience in business, understands the economy, but there's something missing. You're absolutely right. There's some kind of a personal connection that doesn't get me that the other candidates probably do a better job at.

(END VIDEO CLIPS)

COSTELLO: (AUDIO BREAK) Gingrich's praises. His chief rival appears baffled by the former speaker's success (AUDIO BREAK).

(BEGIN VIDEO CLIP)

REPORTER: Why is Newt Gingrich the frontrunner in this race?

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Yes, right now.

REPORTER: Why is that?

ROMNEY: Got me. I watched over the last year and you've seen various people go from very high numbers to low numbers and back down.

(END VIDEO CLIP)

ROMANS: Why is it we always do those interviews in diners?

Anyway, Newt Gingrich --

VELSHI: Having done many of them, I wondered the same thing.

COSTELLO: Or barbershop.

ROMANS: You know it's election year when the diners always get cameras in them.

All right. Newt Gingrich hit the push button on his rivalry with Mitt Romney and turned his focus to rival Jon Huntsman yesterday. The two candidates engaging in a one-on-one debate in New Hampshire and right from the start, things turned downright civilized.

Jim Acosta is not in a diner yet. He is in Manchester, New Hampshire, this morning.

Jim, you were at the debate. What's the take away?

JIM ACOSTA, CNN POLITICAL CORRESPONDENT: Hey, we get hungry out here, guys. You know, that's a good reason to hold interviews in diners. I mean, let's just get that out of the way.

You know, this was billed as a Lincoln/Douglass debate between Newt Gingrich and Mitt Romney. It was really more of a love fest, I have to say. These candidates, I don't think they disagreed once in the entire 90-minute exchange and it got so mild mannered that one of Jon Huntsman's daughters was nodding off during the debate. He actually talked about that.

Newt Gingrich tried to help him out and say, look, at least she was nodding off when I was speaking.

So, this was a good-natured discussion. It went on, you know, for a good 90 minutes and then afterwards Jon Huntsman was so pleased with how Newt Gingrich did and he said, well, I would consider Newt Gingrich a running mate should I get the nomination. That's a pretty optimistic confident view on things from Jon Huntsman.

But let's face it, the real fight for Newt Gingrich these days is Mitt Romney. And last night at a late event for the former speaker, he issued a challenge to the former Massachusetts governor saying, basically, we should have a positive campaign. Let's cut out these attacks.

It is not likely he is going to get that agreed to by Mitt Romney because Mitt Romney had his own event yesterday and he suggested that he may be hitting the former speaker pretty hard with some negative advertising soon. And basically told reporters, told the crowd there yesterday that there is no whining in politics -- Christine.

ROMANS: Can Gingrich win the New Hampshire primary? I mean, this is actually where Huntsman has been putting all the focus on there, but can Gingrich win that?

ACOSTA: Right. You know, he looks pretty good in the polls right now. He's catching up with Mitt Romney in this state. Jon Huntsman, that's a tough one for him.

But Newt Gingrich does have a chance here. You know, I talked to one of his campaign spokesman yesterday, R.C. Hammond, who said that Newt Gingrich is going to get a straight talk express-type bus out here on the campaign trail in the final weeks before the voting begins in Iowa and New Hampshire. And that is right out of the John McCain playbook.

And keep in mind, John McCain was not favored to win New Hampshire back in 2008, Mitt Romney was. He's the former governor of a neighboring state. He has a home here in New Hampshire, a second home here in New Hampshire. So, Mitt Romney was the odds on favorite and then John McCain won the New Hampshire primary.

If that were to happen, if Newt Gingrich were to suddenly knock off Mitt Romney here in New Hampshire, it would be very difficult for Mitt Romney to hang on in this race and the Romney campaign is well aware of that and that's why they're going to hit Newt Gingrich hard. And that's why I think you're starting to see Mitt Romney come up in the polls in Iowa.

They'd like to knock out Newt Gingrich in Iowa first and then ride that momentum into New Hampshire. It's going to be very interesting to watch, Christine.

ROMANS: I bet it will be. All right. Thanks so much, Jim Acosta.

VELSHI: Best answer to that diner questions I ever heard. Reporters get hungry.

ROMANS: So do the politicians.

VELSHI: So do the politicians.

All right. Former Vice President Dick Cheney has got a warning for any Republican candidate who takes Newt Gingrich lightly, don't. So far, Cheney is refusing to endorse anyone. But on CNN's "ERIN BURNETT OUTFRONT" last night, he warned that the other GOP candidates not to underestimate the former House speaker.

And he claims President Obama should consider switching running mates in 2012, if he wants to be re-elected.

(BEGIN VIDEO CLIP)

CHENEY: And the advice I'd give Barack Obama today is take a look at it because there are a lot of good people out there and it's not personal. You go out and find the best candidate you can to run. And maybe if you he goes through that process, he'd end up with Joe Biden. On the other hand, there are people like Hillary Clinton, for example, be your first woman vice president that might have a certain appeal. And so --

ERIN BURNETT, HOST, "ERIN BURNETT OUTFRONT": Has she done well over the last few years in her job?

CHENEY: I think there's a general view that she's probably the best they've got.

(END VIDEO CLIP)

COSTELLO: It is seven minutes past the hour. Time to look at other stories we're following this morning.

Four soldiers are dead after two Army choppers went down during a training exercise. Recovery teams on the scene right now. Military says it happened on training grounds inside Joint Base Lewis-McCord in Washington state.

Still not clear why these copters collided or went down separately. The commander of the base is promising a thorough investigation.

VELSHI: The Supreme Court has decided to hear Arizona's appeal of its controversial immigration law. Federal courts blocked key provisions of the law, most notably one that allows police officers to check the immigration status of people they stop or arrest.

The Obama administration says enforcing immigration laws is the federal government's job. The justices will hear arguments in April. A ruling is expected next summer and that will play into -- I mean, that will be the heart of election season. So, you could imagine this will continue as an election hot potato.

ROMANS: All right. Up next on AMERICAN MORNING: former new jersey governor, former senator, Jon Corzine, is back on Capitol Hill for what is expected to be another grilling over the collapse of MF Global. We're going to speak to Senator Debbie Stabenow, chairman of the Senate Agriculture Committee.

COSTELLO: And Iran delivers a defiant response following an appeal by President Obama for Tehran to turn over that drone.

VELSHI: And a proposed building design in South Korea is drawing fire for evoking memories of 9/11. What the architects are saying about it.

It's nine minutes after the hour.

(COMMERCIAL BREAK)

COSTELLO: It is 12 minutes past the hour.

The U.S. wants it back, but Iran says a drone that went down in Iranian territory belongs to them now. In the process, Tehran defying a formal request from President Obama.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: With respect to the drone inside of Iran, I'm not going to comment on intelligence matters that are classified. As has already been indicated, we have asked for it back. We'll see how the Iranians respond.

PRES. MAHMOUD AHMADINEJAD, IRAN (through translator): The North Americans at best have decided to give us a spy plane. Currently, we have control of this plane. Those who have been in control of this plane surely will analyze the plane's system.

Furthermore, the systems of Iran are so advance, also like the systems of this plane. In the unpiloted planes, we have made many advances, much more progress. And now, we have the spy plane.

(END VIDEO CLIPS)

COSTELLO: In the meantime, former Vice President Dick Cheney is weighing in. He says the Obama administration is wasting its time asking Iran to return the drone. On CNN's "ERIN BURNETT OUTFRONT" last night, Cheney suggested Obama's response was weak and a mistake.

(BEGIN VIDEO CLIP)

CHENEY: The right response to that would have been to go in immediately after gone down and destroy it. You can do that from the air, you can do that with a quick air strike and, in effect, make it impossible from them to benefit having captured that drone.

(END VIDEO CLIP)

COSTELLO: Cheney says if Iran sends it back at all, it will be in little tiny pieces after getting all the intelligence they can out of it.

VELSHI: Today, former New Jersey senator and former governor Jon Corzine will, once again, testify before lawmakers about MF Global's rapid collapse. Now, you'll recall this happened at the end of October. It's the eighth largest bankruptcy in U.S. history.

ROMANS: He was running the company, former Goldman Sachs executive as well.

VELSHI: Here's something you may know about its failure. It's having a big effect on farmers and ranchers in the Midwest.

ROMANS: Right, because this big financial failure is something closely tied to their money and a number of farmers had accounts with MF Global. This is a commodities derivatives firm. That means that farmers, ranchers, grain elevators, they use those accounts to buy and sell futures contracts to lock in prices for hogs, corn, soybeans.

VELSHI: So, the best example that our viewers may realize are airlines that hedge oil. So, they use oil, but they also invest in it to hedge it going up and down.

ROMANS: You can see the futures and options. And then the next place is at the exchanges where they've secured in the price of their commodity. But now, those accounts are frozen. These are the brokerage accounts of these farmers, and there's more than a billion dollars in missing client funds and a lot of farmers are having to put off now buying seed or at least commitments to early discounts for seed, land, and equipment.

Joining us now, Democratic senator, Debbie Stabenow of Michigan. She's chairman of the Senate Agriculture Committee. This is why the agricultural committee is so interested here because this is a commodities derivatives firm. Let's talk first about these farmers.

They're hopping mad because they thought they were doing business like they done business since the 1970s, and they thought they were protected, but suddenly, their money is frozen. So, what is going to happen here to get all this money back, first of all, for the farmers?

SEN. DEBBIE STABENOW, (D) MICHIGAN: Well, good morning. And first of all, let me congratulate both of you. It's a complicated subject and you just did a great job of explaining it. So, thank you for doing that.

And, in fact, we're going to have three groups of folks this morning before the agricultural committee, and the very first group are the farmers, ranchers, a grain elevator from Michigan, grain elevator operators coming in, because he's in a situation that you just described.

And they use, there's 126 firms like MF Global and folks basically set up accounts there to be able to do business, to be able to hedge their risk, and these accounts right now segregated customer funds are supposed to be kept separate from what the company does in terms of their own investments and so on.

And somehow, we have upwards of $1.2 billion in customer funds unaccounted for. So, number one question that I have is, where is the money? And why don't they know? It's been six weeks. This isn't the dark ages. They are supposed to report on a daily basis. We have computers. So, where is the money?

ALI VELSHI, CNN ANCHOR: Right.

STABENOW: We have also the trustee coming in who's been put in charge of making sure customers get back their money. Right now, they're at about 70 percent guarantee of their money coming back, and then, we want to know, obviously, from Mf Global executives, we have three, the former CEO as well as the CFO and COO, and then, we want to hear from the regulators, what happened.

VELSHI: And they had a bunch of regulators. I can't underscore the point enough because it sounds like a big Wall Street story. Some of these farmers and ranchers who you'll be talking to, and you're doing something very unusual today, you're talking to them before you talk to the more senior people. ROMANS: Like Jon Corzine.

VELSHI: Like Jon Corzine, but you know, Christine started her career covering commodities. Some of these are not big, rich farmers. These might be family farms.

ROMANS: I mean, they might not be able to buy a truck right now, because they need a truck for the spring planting season, they thought they buy it now. They might not be able to do that until they can figure out where their money is coming from.

STABENOW: You're absolutely right. I mean, I talked to one person in Michigan who's lost $17,000 and another person who's lost $30,000. Now, in the general scheme of Wall Street and millions of dollars may not sound like a lot, to them, it is a big deal. It is the difference between being able to buy the truck that they need, to be able to do the work that they need.

Now, I also have people in Michigan and one person I talked to who's out $300,000 in his business. And so, that's a really big deal for him. So, that's our focus and that's why I've asked the customers to speak first.

ROMANS: You know, how many regulators did MF Global have? There are a lot of different regulators, right?

STABENOW: Yes. The first line of defense is the self-regulatory agency. In this case, it is the Chicago Mercantile Exchange. Now, they will be with us today, and then, of course, above them, is the CFTC. We've already spoken once to Chairman Gensler and Chairman Schapiro, and we have more questions.

ROMANS: And there's a CEO, a CEO who's very savvy, CEO, former CEO now, Jon Corzine, who has been a senator and has been a governor who's also run a very well-regarded or not well-regarded depending on what time of crisis.

(CROSSTALK)

ROMANS: You know, how much -- what are you going to ask him? How much responsibility does he bear for not knowing where this money is?

STABENOW: Well, I mean, I think as any CEO of any company bears responsibility. And certainly, he signs a form saying he has internal controls in place, he and the CFO, as every company does under Sarbanes Oxley (ph). So, they've signed saying we've got internal controls in place. We've got a handle on this.

And so, what happened? And, again, it's been six weeks. What happened? What were the internal controls? What's happening in terms of the audits? What should be happening? I not only have questions for the company, but the regulators, as well.

VELSHI: Yes. STABENOW: What ought to be happening right now? Because this is about, you know, the company can risk whatever they want in their own money.

VELSHI: Yes.

STABENOW: This is about the customer's money, which is supposed to be separate.

VELSHI: That's why it sends chills up our spine when we something like this because it takes you back to 2001, it takes you back to 2008, where, you know, we think we got all these regulators and everything is in place. How do these things still happen? As you said very clearly, we have computers. We have software that can track all this stuff. How does a billion dollars or more go missing?

ROMANS: They're supposed to know every millisecond how much money they have. Another irony in all of this, too, is that there a lot of farmers and ranchers and grain elevators who were hedging their risk. They were trying to take risk out of their equation so that they knew exactly what their costs where be, so that they could produce food, could produce, you know, cattle.

STABENOW: That's such a good point. That's a really, really good point.

ROMANS: And in the end, it was risk taking that means they don't have any money -- I know that they released some of their money. Some of them are still waiting for about a third -- most of them got most of their money back, is that true?

STABENOW: Well, they've gotten -- they're on schedule to get 70 percent, about 71 percent, according to the trustee. So, that's the next question. And then, you know, the CFTC, by the way, did change the rules in my judgment way too late, but now, companies can't actually use customer for sovereign debt.

VELSHI: That's the Commodity Future Trading Commission. Senator Debbie Stabenow, thank you for joining us. We will follow the hearing closely. Senator Debbie Stabenow is the chairman of the Senate Agriculture Committee and senator for Michigan.

COSTELLO: Wow! Let's head to Atlanta now and check in with Rob Marciano. Any travel delays this morning, Rob?

ROB MARCIANO, AMS METEOROLOGIST: We got some travel delays in Baltimore and had a few in Philadelphia. There are patchy areas of fog across parts of the eastern half of the country. The other issue is out west. Here's some video out of California, just the north of Los Angeles outside there. Up in the mountains above 3,000, 4,000 feet, you got some snow on the roadways, and we had it pile up and cool showers down across the lower elevations. Here are some of the rainfall or snowfall totals across parts of Arizona.

We'll see higher amounts today and, matter of fact, the snows will drive all the way down into Mexico with the system. Winter storm warnings are posted for Arizona and New Mexico, parts of Southern California and Southern Colorado, as well. Eight to 16 inches of snow expected in some of these higher elevations and then the moisture stretching into the central plains.

We do have some pockets of cool air. There might be some freezing rain in places like Western Nebraska but just plain all rain getting in St. Louis and areas across the Tennessee and Ohio River Valleys and places, really, they don't need the rain. But most of the East Coast will be relatively quiet and dry.

Temperatures rebounding nicely after a chilly start to the day. Fifty degrees expected in D.C., 45 degrees in New York City, and 64 degrees in Atlanta. And a lot of the East Coast will see some clear skies as well the West Coast later on tonight, and that's good news if you are going to go outside and watch the meteor showers after midnight.

Going to have a fullish moon so that will damp a little bright of the bright meteors, but nonetheless, just go outside and look up and dress warm, of course. Maybe on your way into work tomorrow morning, guys, will be a good spot to do it?

VELSHI: Right time to look at the moon.

COSTELLO: You can see it like in the eastern half or everywhere?

MARCIANO: If there's clear skies, just look up, and you know, technically, they emanate from the Gemini (ph) constellation, but you'll see them --

VELSHI: Carol, I love in the middle of Manhattan. We can't see anything. All you can see is the next building.

MARCIANO: Yes. Stay away from Broadway.

COSTELLO: And I'd be afraid to go in Central Park at that time.

ROMANS: Don't look anybody in the eye. Whatever you do.

(LAUGHTER)

VELSHI: Rob, thank you, my friend. Good to see you.

MARCIANO: See you, guys.

ROMANS: All right. Newt Gingrich trying to appeal to evangelical Christians admitting to past mistakes, even pledging personal fidelity, but isn't enough to win over evangelicals? We're going to speak with an evangelical leader, a top evangelical leader, ahead.

(COMMERCIAL BREAK)

ROMANS: Twenty-six minutes after the hour. "Minding Your Business This Morning." U.S. stock futures are higher this morning, concerns that the Euro Zone deal won't do enough to address Europe's real financial problems. Slow growth pushed the Dow down yesterday more than 162 points.

Federal Reserve no doubt weighing that risk coming from Europe when it meets later today. Most analysts expect the central bank to hold off when it comes to announcing any kind of new big strategy to boost the American economy. And economists, of course, forecast the fed will keep interest rates close to zero percent because the fed, itself, has said they will until the year 2013.

AT&T putting its T-Mobile merger on hold. The wireless carrier has agreed to postpone an anti-trust lawsuit that it needed to win in order to keep that merger alive. The justice department and the FCC both opposed that deal saying that deal, if it happened, would lead to higher cell phone bills and less competition.

And in just a few minutes, we'll find out just how strong retail sales were in November with Black Friday and all that early holiday hype going on. We'll get you those numbers as soon as they're available.

Up next, tragic training exercise. Two army choppers go down killing four U.S. soldiers. We're live near the crash site with the latest. AMERICAN MORNING back right after a break.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: This is an outrage. I survived the towers and this actually looks like the explosion of the towers.

(END VIDEO CLIP)

UNIDENTIFIED MALE: Architects under fire. Their design for two new skyscrapers bringing back painful memories for 9/11 survivors. We'll tell you about it on this AMERICAN MORNING.

ROMANS: Welcome back. It's almost 32 minutes past the hour. Time for the morning's top stories.

New video this morning of Jerry Sandusky arriving in court, the pretrial hearing getting underway right now. Several of his accusers are expected to testify. The judge will decide if there is enough evidence to try him on more than 50 charges related to the molestation of children.

Earlier CNN legal contributor Paul Callan told us what to expect.

(BEGIN VIDEO CLIP)

PAUL CALLAN, CNN LEGAL CONTRIBUTOR: You're going to see most of the victims tell their story. They'll be subjected to cross- examination. It's a limited cross. They can't be attacked about, for instance, their credibility whether they have criminal convictions and things like that. But they will be questioned about their story and whether the story is true or not. so I think we'll get a good picture of what is actually involved in this case today.

(END VIDEO CLIP)

ROMANS: Or not, because Jerry Sandusky, we are just learning, waived his right in court to a preliminary hearing.

VELSHI: Which means that this hearing that will take place will not happen. He will go straight to trial. We don't know what "straight to trial" means, because this could take --

COSTELLO: Which many analysts say it is a smart move, because you don't want to lay out your case in court. And is it necessary to hear from these six to eight victims to testify in open court with reporters all over the world. Probably, maybe, Paul Callan would know better than I.

VELSHI: According to the people that are there, the judge did ask Sandusky in doing so, does he understand that he's waiving certain rights. In Pennsylvania, ask you a right to this preliminary hearing. And as we discussed earlier, some chance, remote it might be, that the judge determined there wasn't enough to go to trial with.

COSTELLO: With six to eight witnesses.

ROMANS: With all of the prehearing analysis of what to expect today, what to expect today, I didn't hear anybody say you waive this right to this preliminary hearing, which may be another crazy like a fox move from his attorney to kind of --

COSTELLO: Or just a crazy move because a lot of people have accused his attorney.

Susan Candiotti, we have her live on the phone right now. Susan, you were live inside the courtroom, what went down?

SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT: Not inside the courtroom, just out. We're hearing from all our staff that is inside the courtroom. This is amazing news. Certainly, it was always a possibility that something like this could happen, but who would have thought that Jerry Sandusky now is waiving his right to a preliminary hearing.

Certainly from his perspective, this means that he will not be able to listen nor will his defense attorney to what these alleged victims have to say about him. And they're very serious and intimate, embarrassing details what they would have to talk about on the witness stand.

But it would have given a preview to the defense, which is very important, a mini preview of what to expect at a trial. By bypassing this stage prosecutors are no longer required to present minimum evidence before this judge to prove that there is a crime that has taken place and that Jerry Sandusky might have committed these alleged crimes.

A lot of people coming out of the courthouse at this time because this was a packed courtroom with attorneys and reporters and other observers to see exactly this kind of testimony they were expecting to hear, first-hand information finally beyond the grand jury report about these allegations.

So, that means the next step is for the judge to set a trial date, go straight to that. There would first be a formal arraignment, at which time Jerry Sandusky would be entering his formal plea to these charges. That has yet to take place. Normally that is done by a defendant in person, however.

So, right now we have a lot of people with surprise look on their face, no kidding, because everyone had been expecting so much more from today's testimony.

COSTELLO: So Susan, I'm just curious, did all six or maybe it was eight alleged victims show up for this hearing?

CANDIOTTI: Well, remember, there are 10 alleged victims that were named that were outlined in the grand jury report. To the best of our knowledge, prosecutors had identified at least eight of the 10 victims. Not sure about the other two who have been discussed.

(CROSSTALK)

VELSHI: He's leaving the courthouse. Susan, I want to tell you, we're looking at pictures of the other side of the courthouse. Jerry Sandusky in front of the courthouse. Is he walking towards reporters? He's flanked by his lawyer. He's saying something.

ROMANS: Let's listen.

JERRY SANDUSKY, FORMER PENN STATE COACH: -- stay the course and fight for four quarters. We'll wait for the opportunity to present our side. We couldn't do that today.

UNIDENTIFIED MALE: Tell me why --

UNIDENTIFIED MALE: I'll come back and answer your questions.

UNIDENTIFIED MALE: Mr. Sandusky, are you looking forward to facing your accusers?

COSTELLO: That sounded like Jason Carroll's voice to me, one of our correspondents. So maybe Susan Candiotti, this is the back of the courtroom because they had heavy security here so Jerry Sandusky could enter the courthouse safely. I believe Susan Candiotti is in front of the courthouse.

But you hear Sandusky say he's going to go trial. They didn't feel like they should tip their hand in this hearing today, this presentation. They're going to wait to do that when they get to the court trial, which we assume will begin -- well, surely next year.

VELSHI: Where does he go now, Susan?

CANDIOTTI: Where do we go from here?

VELSHI: Where does Jerry Sandusky go from here?

CANDIOTTI: Well, impossible to -- I don't know if he's going back home, of course, again. He is wearing an ankle bracelet as he is house arrest at this time. So there aren't many places he can go, obviously, to and from court. The next time we expect to hear him and see him back in court anyway would be for him to, sorry, that he would be allowed to come here back to the courthouse in order to enter his plea. Sorry, getting two things at once here.

But it's not totally unexpected. This actually had been flagged to some observers that this might happen, but certainly to the vast majority of people and certainly the prosecutors, they came here fully prepared to put a number of witnesses on the stand.

An announcement is about to -- sorry, matter of fact, Jason Carroll is joining us now. Jason, I'll have you share the mic with me right now. Jason, you were inside the courthouse, of course. Tell us how he looked and what it was like in the courtroom when this announcement was made.

JASON CARROLL, CNN NATIONAL CORRESPONDENT: He looked nervous. And earlier when I reached out to his attorney Joe Amendola, he made it very clear that Jerry and his wife, Dottie, were indeed nervous, but they were ready for the proceeding. So it was very interesting when things got underway.

The moment he walked into the courtroom he spoke with his attorney very briefly, his family, his son, John, his wife, Dottie were seated in the front row. When he sat down he looked over at them. He smiled and things seemed to be very comfortable for a man facing such serious allegations. Then just as the proceeding got underway, Joe Amendola calls for a side bar.

VELSHI: Guys, we want to just listen to who is speaking right now.

MARC COSTANZO, SENIOR DEPUTY ATTORNEY GENERAL: -- will not be cross examined at this time. As a result of the waiver, the current bail conditions will remain as they are. And that is the defendant remains on house arrest with electronic monitoring, with the strict prohibitions with regard to his conduct and contact with any minors, victims, or witnesses in the case.

This development, we believe, provides maximum protection to most importantly the victims in this case. It avoids their having to testify for a second time. They will, of course, testify at trial in the case. And it will allow us to promptly advance the prosecution in this case to a just conclusion. Any questions?

(INAUDIBLE)

COSTANZO: Well, the witnesses stood ready to testify today. But they will not have to testify.

(INAUDIBLE)

COSTANZO: I would say based on some of the talk being made by defense counselor over the last weeks, their decision, I would say, is surprising based on that. However, based on our readiness, the strength of the case, I'm not that surprised.

(INAUDIBLE)

COSTANZO: There were about 11 witnesses ready to testify. I can't tell you exactly how many were going to be called. I guess it depended on how it was going to go. But if you look at the presentments, you can pretty much figure out the lineup of witnesses pretty easily.

(INAUDIBLE)

COSTANZO: I haven't spoken to the victims, but, you know, you have to show and understand that you can't forget the victims in this case. And you want to have some feelings of compassion for the hurt that they have. And, you know, I think I would imagine that they would be somewhat relieved not having to go out and testify and be cross examined.

(INAUDIBLE)

COSTANZO: No discussions regarding a plea bargain.

(INAUDIBLE)

COSTANZO: Well, it helps the prosecution in a lot of ways. And, frankly, in addition to the technical prosecution of the case, again, I want to emphasize what it would mean for the victims in terms of not creating a second record because one will already exist from the grand jury proceeding, and not having to go through the pain and suffering that's brought by a case like this I think is an important factor to consider.

(INAUDIBLE)

COSTANZO: We don't get disappointed over things like that. I mean, we're ready for anything. We're ready to proceed. If he changes his mind at the last minute, that's his prerogative. He has rights. He's giving up rights. We're not giving up anything.

(INAUDIBLE)

COSTANZO: I would imagine that he would have, yes.

UNIDENTIFIED FEMALE: Of the 11 witnesses, how many were victims?

COSTANZO: I'm not going to get how many victims and how many weren't victims.

(INAUDIBLE) COSTANZO: I think it's a natural human reaction to be, you know, somewhat nervous about a proceeding getting this kind of attention and a proceeding involving the underlying facts of this case. However, they've shown great strength and they were more than ready to be ready to tell their story and be cross examined.

UNIDENTIFIED MALE: What is your name?

COSTANZO: My name is Marc Costanzo. I'm a senior deputy attorney general, C-o-s-t-a-n-z-o, first name Marc, M-a-r-c.

(INAUDIBLE)

COSTANZO: No discussion or plea bargain.

UNIDENTIFIED MALE: Three more, guys.

COSTANZO: Thank you very much. Have a good day.

VELSHI: All right, so, we were listening to one of the prosecutors who made some very interesting comments. First of all, no plea bargain discussion, which is what Jason Carroll had heard from Jerry Sandusky's lawyers. Number two, this is, he says, very helpful to the prosecution.

Paul Callan has rejoined us. What does that mean when he says it is helpful to the prosecution that Jerry Sandusky has waived his preliminary hearing, which means he will go to trial?

PAUL CALLAN, CNN LEGAL CONTRIBUTOR: Well, prosecutors hate preliminary hearings because what it does is it gives the defense a very clear snapshot and picture of what the case is going to be. In this particular case prosecutors, of course, are going to be very, very happy that they don't have to put their victims through the turmoil of testifying and being under oath. So, it's -- it's a big advantage for the prosecution.

COSTELLO: Couldn't they have waived this preliminary hearing without physically being in the courtroom?

UNIDENTIFIED MALE: They could have. And this is really -- it looked to me like a last-minute decision by the defense to wait. You have to understand, from a defense standpoint --

COSTELLO: This is the attorney from victim one. I want to listen in to hear what he has to say.

UNIDENTIFIED MALE: It was, obviously, it became known as to the prosecution that defense would waive the preliminary hearing. And so he was not brought to the courthouse.

(INAUDIBLE)

UNIDENTIFIED MALE: I'm sorry. I knew when everybody else knew. I was sitting in the courtroom and heard the waiver.

(INAUDIBLE)

UNIDENTIFIED MALE: -- defense counsel decided to waive this hearing?

UNIDENTIFIED MALE: I have no idea. I really don't know. I hope it's an indicator that a plea deal is down the road. But I don't know. I have no knowledge that that's the case.

UNIDENTIFIED MALE: Your reaction to this news, sir?

UNIDENTIFIED MALE: Yes, I have not spoken to my client. So, I don't know what his reaction is, but I know him. And I know how stressful this day he expected this day would be. I can imagine this is terrific for -- for my client, as well as all of the other victims who now do not have to relive the horrors that they experienced up on the witness stands and they have achieved the same result as they would have had they had to testify.

UNIDENTIFIED MALE: Would you think your client would like to have (INAUDIBLE) to plea bargain and avoid pain of a trial?

UNIDENTIFIED MALE: No, I think it would -- I think he certainly would like justice served in a way that is least stressful for my client. And that means not having to testify. If a plea deal is struck in such a way that justice is served and we all view whatever the sentence is as a fair sentence, then I believe that would be optimal for victim one.

Michael Boni, b as in boy, o-n-i. Thank you.

COSTELLO: All right. You said it, Paul, that this may pave the way for a plea deal. You heard Victim Number One's attorney say that. Is it likely it will happen?

PAUL CALLAN, CNN LEGAL CONTRIBUTOR: Well, this highly suggestive that it will. Because you know I just want to emphasize how absolutely unusual it is for a defense attorney to give up his opportunity to cross examine the alleged victims in the case. To find out what the prosecutor's case is. If you're going to trial in a case, as a defense attorney, this is a golden opportunity to have a look at the case and see where you stand.

So, it really would be very, very unusual for an attorney bound and determined to try his case in front of a jury to waive this opportunity.

COSTELLO: But this defense attorney has done some, I don't know, for lack of a better term, whacky things before.

I mean, did he have a plea deal in mind the whole way through? Did he really mean he was going to trial? I mean, suddenly oh we're going to go to this preliminary hearing, but whoa -- on the day it is to happen, you just say oh, we changed our minds.

CALLAN: I don't know his -- his approach, Carol, has been unorthodox from the start. I mean, he's consented to press interviews with his client, usually defense attorneys don't allow their clients to speak to the press.

But I think something else is going on here. I think that there was sort of a -- he was afraid of a lynch mob mentality if this thing went through.

COSTELLO: Yes.

CALLAN: You know we were talking earlier this morning about how graphic the testimony would be and how gut-wrenching to hear these people talk about the abuse. That may have created a public atmosphere that --

(CROSSTALK)

COSTELLO: Right.

CALLAN: -- that would make it impossible to negotiate a plea. So this may be part of the defense thinking.

ROMANS: And we heard from Michael Boni that the attorney for Victim One that Victim One wasn't even brought to the courthouse once this -- once this became clear that he was waiving his right to a preliminary trial.

So those victims, that victim, at least, was not even brought to the courtroom. And so, at least for now, that has been delayed. That wrenching testimony has been delayed.

I want to bring in Jason Carroll, and he's with Susan Candiotti actually at the courthouse.

Jason Carroll -- Susan rather, bring us up to speed on what's happening there.

JASON CARROLL, CNN NATIONAL CORRESPONDENT: Well, let me just tell you what happened in the courthouse, first. I mean, I thought that was really interesting.

And I mean, as things got under way, Jerry Sandusky -- he walked into the courtroom and he appeared to be somewhat nervous when he first walked in.

When he sat down, he looked over at his family, his wife, Dottie was there and also his son. He smiled. And so perhaps that was some indication that things were not going to go as planned.

And then shortly thereafter, Susan, that's when his attorney, Joe Amendola, called for a sidebar. They walked up to the district judge and then shortly thereafter we all heard the news that this preliminary hearing was not in fact going to happen.

Now we also know that shortly after this proceeding ended, Jerry Sandusky himself left the courthouse. In the back of the courthouse he spoke very briefly to reporters out there and said, quote, "I look forward to facing my accusers." And I believe we do have some of that sound now. So, let's roll that so you can hear exactly what Jerry had to say in his own words.

(BEGIN VIDEO CLIP)

JERRY SANDUSKY, ALLEGEDLY RAPED YOUNG BOYS: Stay the course and fight for four quarters. We'll wait for the opportunity to present our side.

JOE AMENDOLA, DEFENSE ATTORNEY FOR JERRY SANDUSKY: And we couldn't do that today.

UNIDENTIFIED MALE: Why not today? Tell me why you couldn't do it today?

AMENDOLA: I'll be back -- we'll be -- I'll come back and answer your questions.

UNIDENTIFIED MALE: And Mr. Sandusky, are you looking forward to facing your accusers, sir?

UNIDENTIFIED MALE: Jerry so you say you're innocent?

(END VIDEO CLIP)

SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT: You know, Jason, what was that moment like in the courtroom when that announcement was made?

CARROLL: You know, there were audible gasps. I mean, as you can imagine the courtroom was packed with reporters in the middle of the courtroom on one side. You have members of the public on the other side. You had some of Jerry Sandusky's supporters, member of his church. And there were audible gasps and then you could hear furious clicking as people were texting and tweeting and writing e-mails about this most recent development.

We should also point out that now that Jerry Sandusky has decided not to have this preliminary hearing, his bail conditions will be as what they were before, meaning he is still under house arrest. He will not be able to have any contact with any victims or any unsupervised visits with minors.

But one other point I do want to bring up, because I heard Carol, I know that you mentioned a little earlier you guys were talking about possible -- this possible idea of some sort of a plea agreement that might be discussed.

Well, Sunday night I spoke to Joe Amendola, Jerry Sandusky's attorney and I specifically asked him. This was Sunday night. Have there been any discussions about some sort of a plea arrangement, plea deal and he said, no, not at this point. Because it was -- at least in his eyes that any sort of plea agreement would essentially be a life sentence if it was ten years or something for Jerry Sandusky.

CANDIOTTI: Well, certainly as so many observers have said, Joe Amendola's defense so far has been unorthodox to say the least. So this is one more example of it. And I think what else is interesting to note is what so many of the lawyers who represent these alleged victims at the point that they've been making and that is certainly a tremendous relief for these alleged victims.

I -- I communicated with one of the lawyers just before the hearing was once supposed to begin and I learned that alleged Victim Number Four was to be the first to take the witness stand. This is someone who allegedly had been gone to a few bowl games with Jerry Sandusky.

CARROLL: Right.

CANDIOTTI: Was allegedly sexually abused by him and he was ready to go, as were so many others.

On the other hand, imagine the immense relief on their part as we've been talking about because they were mentally prepared to go forward with this. They had been prepped thoroughly by the prosecutors in this case and then to stand in front of the courtroom and talk about it.

VELSHI: Susan and Jason, hang on a second for one second. I want to ask Paul Callan something here. Paul, as you mentioned earlier and as Susan and Jason know, this is an unorthodox step, this -- this hearing; in many states they don't even have this. This would have gone and would have been an indictment and he would have gone to trial.

CALLAN: Correct.

VELSHI: Does this, on the face of it, change Jerry Sandusky's chances, whatever they were one way or the other. Given that this was an extraneous thing today anyway.

CALLAN: Well, you know I think he's given up a big opportunity to find out how strong the case against him was. And let's face it, you know, if there are ten alleged victims here and five of them got on the stand and had problems recollecting exactly what happened, where or when it happened he would have come out of the hearing knowing that there only five viable claims against him.

And you have to understand this is something I think most people don't get about the criminal justice system. It's very secretive. Grand jury proceedings are done in total secrecy. Defendants frequently do not receive statements that are given by witnesses until the time of trial or very close to the time of trial.

So you're really going in blind a lot of times in a case and here a case where you can spend life in prison. That's why doing this preliminary hearing would be very important if you intended to go to trial. Amendola though is always doing unorthodox things.

ROMANS: He was going to come back -- he said, he told the cameras. He said, "I'll be right back, guys." Hold on we're going to -- I'll explain it all to you. (CROSSTALK)

COSTELLO: Let me throw out an incredibly bizarre ploy. Maybe, if Jerry Sandusky attorney's wants a plea deal and he know the prosecutors wanted because the victims, you know, to spare the victims this pain, maybe by going through all these weird mechanizations that the plea deal will somehow be a better deal for Jerry Sandusky.

CALLAN: Undoubtedly, if they're thinking plea, that's on the table because they're going to go to the prosecutors now and they're going to say, hey, we knew the victims were facing this trauma and we waived the hearing. So you have to offer us something for that.

But, what is the prosecutor going to do in this case? He has ten victims, ten alleged victims and all children. How much can he offer Sandusky? There's going to be very substantial jail sentence.

(CROSSTALK)

CALLAN: The public in Pennsylvania would be furious if they let this guy walk.

VELSHI: Let's go back to Jason and Susan who are there in Bellefonte, a town of about 6,200 people and Sarah Ganim from "The Patriot" this morning was saying to us that it is not as clear in Happy Valley and the areas around Penn State that Jerry Sandusky is Public Enemy Number One.

CARROLL: Well, I do believe that there are a number of people here who do believe that something happened with Jerry Sandusky but look, having said that, Ali, there are his supporters here as well, again in the church -- I mean in the courtroom today you had several members of Jerry Sandusky's church who were here supporting him.

Joe Amendola telling me that he oftentimes drives around and gets a thumbs-up from people saying, hey look, we think you're doing the right job. But on the flipside of that, Susan knows that there have as been threats made against Jerry Sandusky. There have been rocks thrown at his home. So, there are definitely deep feelings on both sides -- on both sides of this story.

CANDIOTTI: In fact, there have even death threats made against Mike McQueary, who is one of the important witnesses in this case.

I spent a lot of time this morning talking to some of the locals around here and, you know, they're flabbergasted by the amount of attention that this has received nationwide. On the other hand they certainly understand given the reputation of Penn State University, given the reputation of this very well-known retired coach Jerry Sandusky and given the shocking nature of the allegations about him -- against him.

That is why this has garnered so much attention in this town.

CARROLL: Yes.

CANDIOTTI: They're willing to put up with it. They get how important this is.

CARROLL: One more other point, Ali, because I know that so much has been said about this particular move today. Legally was it the right thing to do or not? I think from Joe Amendola's point of view just based on what he's told me, I think he feels as though so much has already been said in terms of allegations that Jerry really feels like at this point Jerry Sandusky is a man who feels like he's under a rock and he has to get out from under it.

And so imagine what would have happened if all of these alleged victims had come forward today and had testified. All of that would have been out in the press today. That would been the headline, that's all anyone would have heard. And so in some ways by at least postponing some of that testimony, perhaps it gives Joe Amendola and his client at least an opportunity to postpone that and get some of their point of view out there.

(CROSSTALK)

ROMANS: All right. Jason and Susan --

(CROSSTALK)

ROMANS: Thanks, guys.

You know, I want to ask -- I want to ask Paul Callan something interesting. Thanks, guys. We'll come back to you in a minute. I know you're going to keep following this story.

But Paul, I mean that's interesting because others feel like we've only heard from Jerry Sandusky. We haven't heard these kids in their own words except for that initial grand jury summary.

CALLAN: Well, that's right. I think, though, this idea that he's going to be spared public humiliation by waiving the hearing is going to turn out to be a big mistake. Because instead of having a splash over the next two days and a lot of stories this week and then the thing fading for a while, now you're going to have a series of long, slow leaks from all ten victims and their attorneys as they step forward and say, this is what happened to my client. This is what happened to my client. So, I think there's going to be a lot of pain for Sandusky as we go down the road.

The second thing that I think is very interesting and we have to look to see. Will they fast track this case now to trial? Why can't the judge now to say to the defendant, all right, you want to waive the preliminary hearing, I'm going to give you a trial date in a month and a half. Let's go. We're done with the preliminary so --

ROMANS: When does he decide that. When does a judge decide that? Now they left and so then what happens, how does a judge decide when this starts? CALLAN: Well, the next thing that happens is the defense would have the right to file motions in the case to suppress various items of evidence. For instance, there was a search warrant and things were recovered. So, there are a whole series of motions that will have to be heard by the court.

But the court could fast track it and the court could move this case to trial much more quickly than it would have moved with a preliminary hearing.

COSTELLO: So who would want that more with the events in this case? Because -- I mean they seem to have some sort of plan, right?

CALLAN: Well, you know, I really don't know. In the rare cases that I've seen in the past where a defense attorney has waived a preliminary hearing, it's usually an attempt to ambush the prosecutor and move to trial quickly because the prosecutor is not ready. You've got a lot of victims in this case, a lot of potential witnesses in this case.

So, this could be a ploy to ambush and move quickly, if Amendola has thought out a strategy in terms of this as opposed to he's just winging it. I mean really --

(INAUDIBLE).

ROMANS: He said he was going to go back to the camera. So we're going to continue to (INAUDIBLE) I mean, maybe he has to shy from the press. I mean he'll maybe he'll lay this out and explain all of this.

CALLAN: But if this was a well-considered strategy, ok, if I were the defense attorney and decided I'm going to waive the hearing. Do I want to have hundreds of people in court --

VELSHI: All of the country's media.

CALLAN: All of the media is there to trash my client for a full day and then I'm going to walk in and say I waive the preliminary hearing. I would have sent a letter to the judge a week in advance saying we're waiving the hearing and avoided all the publicity.

VELSHI: Right.

COSTELLO: Yes. But we're hearing from Jerry Sandusky, his client. You heard Jerry Sandusky himself stood there and talked to reporters as he exited the courtroom.

CALLAN: And he said something, Carol, that's absolutely false. He said, we would not be able to present our side of the case. So we'll present our side of the case in the future.

In theory, he could have presented his side of the case at this preliminary hearing. Now, no defense attorney would put his client on the stand --

VELSHI: He has a legal right to do that.

Callan: -- absolutely -- he could have testified, he could have called witnesses. He could have cross-examined. So if truly he felt this is a weak case, we can defeat this case he could have demonstrated that in a Pennsylvania courtroom today and he chose not to.

ROMANS: Again, let's bring you up to speed quickly in case you're -- Jerry Sandusky has waived his right to a preliminary hearing and this will go straight to trial. So that's the big news from this morning. We'd all been waiting for that preliminary hearing; that has been waived. He and his attorney decided they would waive it.

That's the big development in the Jerry Sandusky case.

COSTELLO: So much more news surrounding this.

So let's head to Atlanta and check in with Kyra Philips. Good morning Kyra.

KYRA PHILLIPS, CNN ANCHOR, "CNN NEWSROOM": Guys, wow, what a busy morning already.