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Romney's Stance on Health Care?; New Info on Libya Killings

Aired September 24, 2012 - 22:00   ET


ANDERSON COOPER, CNN ANCHOR: Good evening, everyone. It's 10:00 here on the East Coast.

And we begin tonight "Keeping Them Honest" on the campaign trail, President Obama and Mitt Romney in as close as you can get to a preview of next week's first debate. Each appeared on "60 Minutes."

Mr. Obama made news for what some are calling a gaffe, and Romney certainly did, and we will talk about that shortly.

First, though, Mr. Romney's big headline getter on health care.


QUESTION: Does the government have responsible to provide health care to the 50 million Americans who don't have it today?

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Well, we do provide care for people who don't have insurance. People -- if someone has a heart attack, they don't sit in their apartment and die. We pick them up in an ambulance and take them to the hospital and give them care, and different states have different ways of providing for that care.

QUESTION: That's the most expensive way to do it, in the emergency room.

ROMNEY: Again, different states have different ways of doing that. Some provide that care through clinics, some provide the care through emergency rooms. In my state we found a solution that worked for my state. But I wouldn't take what we did in Massachusetts and say to Texas, you have to take the Massachusetts model.


COOPER: He points to the emergency room as a viable alternative for the uninsured, yet that's precisely the expensive alternative that his Massachusetts model and the president's model try to eliminate by providing universal coverage. That's President Obama's rationale for health care reform now and it was Mitt Romney's rationale for his own plan back in 2010.

Here he is back then on MSNBC's "Morning Joe."


QUESTION: You believe in universal coverage? ROMNEY: Oh, sure. Look, it doesn't make a lot of sense for us to have millions and millions of people who have no health insurance and yet who can go to the emergency room and get entirely free care for which they have no responsibility, particularly if they're people who have sufficient means to pay their own way.


COOPER: That was 2010, and as you can see this clip from three years before, what Mitt Romney says about health care seems to depend on who's asking him about it. Here's what he said in 2007 to Glenn Beck.


ROMNEY: Actually, what we have right now is the road to socialism. What we have right now in health care is creeping socialism with more and more people going on Medicaid and Medicare, and those who don't have insurance, when they show up at the hospital, they get care. They get free care paid for by you and me.

If that's not a form of socialism, I don't know what is.


COOPER: Three occasions, over five years, three very different takes on health care.

As we said, Mr. Obama made news as well.

Joining us tonight to talk about it, Paul Begala, advising the leading pro-Obama super PAC. Also Republican strategist Alex Castellanos.

Paul, even though it seems like Romney has pretty much been all over the map when it comes to people without insurance in turning to the emergency room for basic care, does a flip-flop or change in position on an issue like this really resonate with voters?

PAUL BEGALA, CNN POLITICAL ANALYST: I actually have never been one as a Democratic strategist and as you know I advise the super PAC that's trying to defeat Governor Romney and reelect the president, so I have a dog in this hunt. We never attacked him for the flip- flopping not because we think he's not, but because we think it's more important to show the damage he would do to the middle class.

I think that's the problem here. Once again he seemed to be really out of touch, really callous about people who don't have health insurance, who might have a heart attack and die. He says, well, they don't die in their apartment.

Well, actually, they do sometimes, Governor. There was a Harvard -- I think it was Harvard -- might have been Kaiser -- study that said 40,000 Americans a year die because they don't have health insurance. That's the problem, is he looks once again like he's not on the side of middle class people. COOPER: Alex, does he seem out of touch on this issue?

ALEX CASTELLANOS, CNN POLITICAL CONTRIBUTOR: Oh, I don't think so. I think -- first of all, when you have lost as many races as I have, I have ended up in a lot of emergency rooms.


CASTELLANOS: And there is a problem with American health care, and everyone will acknowledge it, and that is that doctors in America don't tell anybody no. Hospitals are required by law not to tell anybody no.

So we do provide care, but there are some people out there who do split their pills in half because they can't afford it. There are some people out there who don't go to get care because they feel responsible to pay for it and they know they can't.

But I think Romney's point here was that we have a health care system that is providing a lot of care that we are not paying for, and that's what he was addressing.

COOPER: Paul, another sound bite from "60 Minutes" last night, something the president said the Romney campaign has been all over today. Let's play what the president said.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I was pretty certain and continue to be pretty certain that there are going to be bumps in the road. There will probably be some times where we bump up against some of these countries and have strong disagreements, but I do think that over the long term, we're more likely to get a Middle East and North Africa that is more peaceful, more prosperous and more aligned with our interests.


COOPER: Now, Mitt Romney today has been all over the phrase bumps in the road. Was that a poor choice in words on the president's part as Governor Romney is saying? Because does it sounds like he's downplaying thousands of deaths in Syria, the assassination, the killing of our ambassador and three others?

BEGALA: I think that's the risk that comes with this president's extraordinarily low blood pressure. He's a very cool customer.

And there's a lot of good in that, though. You don't want a president talking about a international crisis who looks like a hothead or goes off half-cocked. I think part of why Governor Romney looked bad responding to the tragedy in Benghazi is he seemed like he was too political and too opportunistic. It could be here that the president was a little too cool.

I don't think in his defense for a minute he would say that the murder of an ambassador and other American personnel, much less all the other folks who have died in that region, is just a bump in the road. I think what he's trying to do is show everybody that we're on this, the United States is doing well, and, you know, I think that's a kind of typical no-drama Obama response.

COOPER: Alex, is that what it is, just the cool head of the president?

CASTELLANOS: I think there's something to that, but I think there's also a little more, and that is that this president's great strength is his intellect.

He lives inside his head and his ideas. And part of it is he doesn't really feel your pain like Paul's former boss, Bill Clinton, but he can memorize a study about it, you know. People are distant from this president.

There's a certain sense of arrogance to this White House that they're just detached from it and I think that's a vulnerability. We have two elite candidates running for president. We have an academic elite, Barack Obama, running against financial elite. So the middle class is up for grabs here.

COOPER: Alex, I want to ask you about something I saw you tweet over the weekend. You said, "When I see Romney, he looks like a candidate. When I see Obama, he looks like a president. This should not be hard to fix, so fix it."

What do you mean? Wasn't one of the governor's big selling points during the primary season the idea that he did look presidential?

CASTELLANOS: You know, as a candidate -- as the person himself, yes, I think Mitt Romney looks very presidential but he's out there on the trail now and every time I turn on my TV, it's the same political rally with Paul Ryan and the same crowd around him state after state after state, and it looks like a political beauty pageant.

It looks like politics, not like governing. You don't want to run for president looking like a candidate. You want to run for president looking like a president.

And I think doing some more important things, for example, go where the problem is, Mitt Romney, go to an inner city and find out what's happened to the American family that's falling apart. Go where the problem is. Go to an unemployment line, talk to some people, but quit having political events.

COOPER: Alex Castellanos, Paul Begala, thank you.

Let us know what you think. We're on Facebook or follow me on Twitter @AndersonCooper. I will be tweeting tonight.

Up next, latest developments on Libya and how some of the story came to light.

(COMMERCIAL BREAK) COOPER: "Keeping Them Honest" now on a story involving the death of four distinguished Americans in Libya involving how well or how poorly the U.S. government handled its responsibility to protect them, involving government transparency or the lack of it and lastly involving ourselves.

360 and CNN has become part of the story, and that's the last place I or anyone in this profession ever want to be. We as a program and CNN as a network have believed from the beginning that the focus should be on four key points, on the killing of Ambassador Christopher Stevens and three others in Benghazi, Libya, on 9/11, on what the State Department and others may have known about the security situation the days and weeks leading up to their killing, on what leading members of the government have said about their circumstances of the tragedy and whether their statements have lacked clarity or transparency, and, of course, on who killed these four dedicated Americans.

That's where we have always believed the focus should be. However, because CNN discovered Ambassador Stevens' seven-page journal in what remains of the consulate in Benghazi three days after the attack and because it became one source for some of our reporting, questions about the use and handling of that journal have been raised, as you probably heard.

As you probably heard this weekend, the U.S. State Department spokesman blasted CNN, calling the network's behavior "disgusting" and our handling of the journal "indefensible."

Now, no one likes to be called disgusting, particularly by a spokesperson for the United States State Department. But we do invite you and them to hold us to the same standards that we hold others and try every night to meet ourselves.

Out of respect for his family, we have not quoted from his journal, not once, Ambassador Stevens' journal. It was not e-mailed around the newsroom, as the U.S. State Department spokesman said it was. Remember, CNN discovered the journal three days after the assault.

Arwa Damon, one of the best war correspondents I have ever worked with who has reported for years at great personal risk to herself, discovered the journal. Why was the journal significant? Well, at the time that CNN discovered it, the Obama administration, remember, was still downplaying the possibility that this was a deliberate terrorist attack, but was instead part of the violent reaction all over the Arab world to that anti-Muslim YouTube video.

This is what they were publicly saying then.


JAY CARNEY, WHITE HOUSE PRESS SECRETARY: This is a fairly volatile situation and it is in response not to United States policy, not to obviously the administration, not to the American people. It is in response to a video, a film, that we have judged to be reprehensible and disgusting. That in no way justifies any violent reaction to it.


COOPER: Now, even in that early stage, many in the foreign policy and global security community doubted that explanation. The journal certainly raises questions about that.

Neither 360 nor CNN rushed to air with details from the journal. We didn't publicly announce we had found it and within hours of finding it, we informed the family of Ambassador Stevens. CNN did not publicly announce we had found it out of respect for the family.

Instead, as CNN does with every story, our correspondents and our producers sought as many other sources as we could find and in fact, we found three other sources, including one who had a detailed conversation with the ambassador which confirmed much of what we felt important in the journal. This is how we reported it on Wednesday on this program.


COOPER: A source familiar with Ambassador Stevens' thinking says that in the months before his death, he talked about being worried about what he called the never-ending security threats in Benghazi.

This source telling us that the ambassador specifically mentioned the rise in Islamic extremism, the growing al Qaeda presence in Libya and said he was on an al Qaeda hit list.


COOPER: Now, no mention there of the ambassador's journal.

On Friday, CNN received inquiries from other media outlets who had somehow had gotten wind of the existence of the journal, and mistakenly believed that CNN had not turned it over to the family. CNN had already done so.

And so to be transparent, on Friday's broadcast, I briefly mentioned the journal. Now, throughout all of this, we have tried to minimize the anguish the ambassador's family is obviously feeling, balanced against our journalistic duty to inform.

Ambassador Stevens held a very prominent and public position and as a news organization, it's our job to inform you of information that's important. This was not broadcasting gossip from the pages of someone's diary. This was not reporting salacious details of someone's private life.

This was reporting information that could impact the national security of the United States and the safety of U.S. installations in other countries. We have just learned, for instance, that the Benghazi mission was operating under a security waiver at the time of the attack.

That means that typical security standards did not apply, mainly because the compound was temporary in nature. We don't yet know who made that decision or who was in on it, but we do think that people need to know where the process broke down, if it broke down.

We think you need to know what happened to U.S. personnel in Benghazi.

We have got a lot to talk about tonight with former homeland security adviser Fran Townsend. Fran, as we often mention, serves as a member of the CIA External Advisory Committee, and she recently visited Libya with her employer, MacAndrews & Forbes. Also joining us is former CIA officer Bob Baer.

I don't want to get into the journalistic details with you, but there's no doubt -- what do you make of the fact that this consulate in Benghazi three days after the attack apparently wasn't being guarded and journalists are wandering all over the place, and anybody could have been wandering all over the place?

FRANCES TOWNSEND, CNN NATIONAL SECURITY CONTRIBUTOR: Anderson, lost in the dispute over the journal is the fact that this calls into question the integrity of what is now an FBI investigation.

One of the first things law enforcement officers do when they begin an investigation is secure the crime scene. First and foremost, this is the consulate. Now, they were going to be challenges to that. The FBI couldn't get in because of security conditions. U.S. personnel, nonessential personnel had been sent home. There were fewer to do that.

But the FBI, frankly, once they open an investigation, ordinarily should have and may have, we don't know, but should have coordinated with their U.S. government agency counterparts. If they couldn't secure it, you ask the host government. If the host government is incapable, we did fly in additional Marines to guard the embassy in Tripoli.

Was there military U.S. personnel available to help secure it? Obviously that didn't happen. It's one of those unanswered questions we don't know but what we do know is the consequences of failing to secure the crime scene absolutely will call into question the integrity of the information that's gathered there.

COOPER: Bob, what does this say to you, that this site was not secured?

BOB BAER, CNN CONTRIBUTOR: Anderson, I think the whole thing's just outrageous. I completely agree with Fran.

Look, that consulate was overrun and we don't even begin to understand what was lost there. We have lost crypto, files, money, personal documents. We don't even know. This administration is not telling us.

The fact that the diary was found in the consulate, and the fact that there wasn't -- I have heard that there's a quick reaction force tried to get to the consulate but was attacked at the airport, Benghazi Airport. This hasn't been confirmed, but what's happened in Libya, we have lost complete control of this.

In every investigation I have been involved in, whether it's an assassination or blown-up embassy, there's always been a local force or marines to secure the site. Otherwise, the FBI can't do its work. It just can't.

If it's completely wrecked like it was in Benghazi -- and I think the reason that the State Department is so sensitive about your finding the journal is because they have lost control.

COOPER: And pivoting now, the actual attack, particularly destruction of the so-called annex where U.S. officials were operating sensitive government programs, how important was that mission, you think, to U.S. intelligence?

BAER: Oh, absolutely vital. That was, as I understand, is where they were buying up weapons, trying to buy up chemical weapons, trying to buy up surface-to-air missiles.

It was -- U.S. intelligence was just getting started in Libya. That's where they kept their files and as I said the communications gear, which apparently no one can explain what's happened to it. This has never happened to an American Embassy since Tehran in 1979. It's really a catastrophe, it really is.

COOPER: I just read another report by a journalist who was able to get into the annex also and basically walk around relatively unfettered.

Bob said this operation really hurts the U.S. in Libya. Do you agree with that?

TOWNSEND: No question it really hurts us.

Look, we don't rely on any single installation or capability in the U.S. intelligence community, and so what you have to do now is rely more on all the other capabilities, so you will have signals intelligence, you will rely on the local force.

But let's remember, the local force was decimated after the fall of the Gadhafi government and so they're just rebuilding. You're not the only intelligence service in Libya so you're going to have allies who have intelligence networks there, you're going to have to rely on them.

So all of this, but you're going to have lost this critical foothold in an area, as we have all discussed the rising, you know, extremism in the east of Libya, you lose this piece at a critical time.

COOPER: There is certainly -- the good news, in terms of on the ground in Libya is this rising up against militant groups in Benghazi that we saw last week.

TOWNSEND: Absolutely. Look, Anderson, as I said to you, when I was there at the end of August, I had raised these militias inside Tripoli. I can only imagine how much worse they were because everyone talked about to the east, the growing problem, and so if this tragedy has been the impetus to have the Libyans act themselves against the militias, that is a good outcome. It has to be sustained over paired of time. They will have to be able to fill that vacuum but this is a good development.

COOPER: Bob, though, what I think a lot of people don't understand about the intelligence community is just how dangerous the work of intelligence operatives is overseas. You can't do this from behind the walls of an embassy. You have to get out there and mingle, right?

BAER: Look, Anderson, intelligence is always collected one-on- one.

You can't go out with an armored convoy, with contractors and the rest of it. It's supposed to be clandestine. So what we have now is a country and this is in other countries in the Middle East where intelligence officers are not allowed outside of compounds.

On the other hand, the locals are loathe to come inside an American compound because they have to pass through local guards and nobody in their right mind is going to take that risk to have a local look at their I.D., be identified as a potential American contact.

And what this is leading to, if the Middle East continues to get worse, is a blindness about what's going on there and I cannot emphasize enough how serious this is, if this should all turn against us like it did in Libya.

COOPER: You say, Fran, though, it is possible to work with other nations' intelligence services?

TOWNSEND: That's right. You just have far less control than you do over your own assets and you have much more difficulty in tasking them against what we call our requirements. That is, we have priorities that we want to have filled. They're not going to fill our priorities. They are going to fill theirs.

Our closest allies will share what information they gather, but, again, it's sort of, as Bob describes it, you become one more step removed and you become a recipient and far less control of your assets.

COOPER: Fran Townsend, appreciate it. Bob Baer, thank you very much.

All this week, we're focusing on the top five social issues that keep Americans up at night. We have been doing this for weeks looking at various issues, the issues that could decide the election. Just ahead, same-sex marriage, where the candidates stand and how that could help or hurt them on Election Day -- details next.

(COMMERCIAL BREAK) COOPER: Fall arrived over the weekend. The election is now just 43 days away. Tonight, we are continuing our look at issues in 2012, the ones that matter most to voters.

We have polled registered voters to identify the top five social issues this week that keep you up at night. Tonight, we start with number five, which is same-sex marriage. According to CNN/ORC polling, more than half of Americans support same-sex marriage, but the issue of course still divides the country.

Zach Wahls gave a speech at the Democratic National Convention about growing up with two moms.


ZACH WAHLS, DNC CONVENTION SPEAKER: My name is Zach Wahls. I'm a sixth-generation Iowan, an Eagle Scout, and I was raised by my two moms, Jackie and Terry.


WAHLS: Now, people always want to know what it's like having lesbian parents. So, I will let you in on a little secret. I'm awesome at putting the seat down.


WAHLS: Otherwise, we're like any other family. We eat dinner. We go to church. We have chores.


COOPER: Wahls has also written a book, "My Two Moms: Lessons of Love, Strength, and What Makes a Family."

The issue of same-sex marriage is obviously very personal for him.

Here's what he told us concerns him most.


WAHLS: What keeps me up at night about this issue of gay marriage is that other people stay up at night thinking about gay marriage.

Now, I identify as somebody who, you know, is very kind of concerned with how things affect me, how they affect my family. But in terms of how this affects other people, you know, I don't get it.

A lot of times we hear, well, you know, they don't have family values or they're not, you know, a traditional family, because they don't value the same things we do, or think that the same morals we think are important matter, and that's just not true.

My moms are two of the most loving and committed people I've ever had the pleasure of knowing. And there are nights I remember Jackie holding Terry, who's six, seven inches taller than she is, as Terry just laid on the bed whimpering in pain from her multiple sclerosis. And watching that, and you know, my moms taught me once that love is giving somebody the power to destroy you and trusting them not to. And my moms taught me that, not just by saying it, but by showing it to me, to my sister.

When I hear that folks are staying up at night worried about the scourge of same-sex marriage, I wonder who these people are. And I wish they could come over and have dinner with me and my moms and just get to know us on a personal level, because I think fundamentally, love is love.

And the idea that we should be recognizing, you know, one kind of relationship between straight people but say that well, gay love, that's not real love, you know, it doesn't really deserve our recognition, is not what America's about. And I think that, at the end of the day, Americans are going to recognize that the power of love is greater than the power of fear.


COOPER: Joining me now is chief White House correspondent Jessica Yellin, also chief political analyst, Gloria Borger, and chief national correspondent, John King.

John, the polls show increasing support for legalizing same-sex marriage, particularly among younger voters. How important is that electorally?

JOHN KING, CNN CORRESPONDENT: It's a big question, Anderson, because the issue is not as big as it was, say, back in 2004 when George W. Bush closed every speech at the end talking about his support for a constitutional amendment banning same-sex marriage. He was trying to gin up conservative support.

We can look at the polling data, and there is no question, no question at all, public opinion has changed in recent years. This is our most recent CNN/ORC poll. And you see here a majority of Americans, 54 percent, say marriage between gay or lesbian couples should be recognized as valid. So a majority of Americans support same-sex marriage.

And if you look at these numbers from Gallup, you can see how public opinion has changed over time. Yellow line is those who say it should not be valid. The green line is those who favor same-sex marriage. And you notice right here, sometime in late 2010, 2011, those lines crossed to where you have, even in the Gallup numbers now, a majority saying yes. Country's split, though, 50-48 saying no in the Gallup numbers.

Here's the interesting part. Does it help the president gin up turnout on college campuses and the like? If you look at states where -- the six states -- let me move this out of the way -- if you look at the six states where same-sex marriage are allowed -- those are the very light green states here -- two of them, Iowa and New Hampshire are presidential battlegrounds. So we might get a sense on election day if it helps on the margins.

COOPER: Jessica, has the president's shift -- I mean, it's one of the largest shifts on an issue socially or otherwise. Has it had an impact on his campaign?

JESSICA YELLIN, CNN CORRESPONDENT: Well, he highlights his move on gay marriage and on gay rights in general regularly, and they've embraced it as a positive. So in two different ways, he talks about his work overturning "Don't Ask, Don't Tell," extending federal benefits to same-sex partners, and opposing the Defense of Marriage Act as a sign of promises kept from the 2008 campaign. So you can see that as an outreach to the 4 percent of gay and lesbian voters who we saw turned out in the 2008 elections.

But then also, he talks about gay marriage to some extent as a sign of, I think it's the difference with Mitt Romney and the kind of social agenda Mitt Romney would embrace if he were elected, a stark difference between the two campaigns.

COOPER: It is really interesting, Gloria, because I mean, the two campaigns could not be any more different on this issue, and even in the rhetoric that they use. I don't think I have heard Mitt Romney in a stump speech, and certainly not at the RNC, say the word "gay" or talk about gay Americans, who are citizens in this country, or lesbian Americans, who are citizens in this country. You just don't hear it.

Obviously, he opposes same-sex marriage. He also opposes, I guess, civil unions, although he has shown some support for some -- some kind of domestic partnership arrangements. Yet he doesn't really say it in the speech.

In 1994, when he was running for U.S. Senate in Massachusetts, he pledged that he would be better on equal rights for gays and lesbians than Ted Kennedy.

BORGER: Right. He did, and if you recall during that race, he was also pro-choice, which he has flipped his opinion on.

Look, it's -- this is a very difficult issue for him, but it's an issue I would say, Anderson, on all the social issues, it's the one at which he has been the most consistent, because he has always said that he is opposed to gay marriage. Even when the state of Massachusetts approved gay marriage in 2003, when he was governor, he said, "You know what? We don't want to become San Francisco." So at least on this social issue, he has been more consistent.

When I asked him, for example, about flip-flopping on abortion and how he's changed his position on that, his answer was, well, President Obama has changed his position on gay marriage.

So again, you know, this is at least one area he's been consistent, but he also doesn't like to talk about social issues very much. It's not his comfort level. He likes to talk about the economy. He wants to make this race about the economy and of course, he doesn't want to alienate younger voters who overwhelmingly support gay marriage. COOPER: Interesting. Jessica Yellin, Gloria Borger, thank you. John King as well, thanks.

Well, we're following a lot more tonight. Susan Hendricks joins us right now with the "360 Bulletin" -- Susan.

SUSAN HENDRICKS, CNN CORRESPONDENT: Anderson, what to do about Syria's civil war is a key issue, as diplomats from around the world gather in New York this week for the U.N. General Assembly. Opposition activists say at least 123 people were killed in the country today. A top U.N. diplomat says their goal is to increase pressure on the government to stop the violence.

Two U.S. Marine staff sergeants are facing a court martial for urinating on dead Taliban fighters and posing for photos like this one. Video of the July 2011 incident was also posted on YouTube in January. Three other Marines have also been disciplined for it.

Check out these incredible photos from Brazil, where a truck spun out of control and teetered over a bridge. Amazingly, the driver was not hurt. It took 25 minutes, though, for rescuers to free him from the dangling truck by rope.

And a four-foot-long seafood storage bin from Japan was found off Oahu, Hawaii, last week 18 months after it was swept out to sea when the tsunami hit the Asian country.

Anderson, back to you.

COOPER: Wow, that's amazing. Susan, thanks.

We've been reporting on the Disabled National Veterans Foundation which sounds very legitimate, right, and its chief fund-raiser, which is Quadriga Art, for months. What we've uncovered has triggered a lot of outrage and multiple investigations. Tonight, the stakes are climbing higher. Just ahead, Drew Griffin's report on what he found.


COOPER: Day two of rescue attempts on one of the world's tallest peaks following a deadly avalanche. We'll have that story when we continue.


COOPER: Another "Keeping Them Honest" report. For months now, we've been telling you about the Disabled National Veterans Foundation, how it's been under investigation by the Senate Finance Committee as a result of our reporting showing little, if any of the millions, tens of millions it's received in donations over the years, actually went to help disabled veterans.

Well, tonight we now know that the DVNF is part of even larger investigations involving its chief fund-raising company, Quadriga Art. That's a company based right here in New York that says it's one of the world leaders in servicing charities. But so far, no one from Quadriga Art will appear on camera to answer our questions.

Drew Griffin has asked repeatedly. Take a look.


DREW GRIFFIN, CNN CORRESPONDENT: I understand that, but what I want to know is am I going to get an on-camera interview? All right. OK. So the bottom line is you're not going to give me an interview. It's Drew Griffin, G-R-I-F-F-I-N.


GRIFFIN: I'm trying to reach Mr. Schulhof. Oh, he's not in.


COOPER: Now, Quadriga Art has called our reporting biased. They say we've ignored the good they're doing for their clients. But they will not go on camera. Tonight they may have a lot more than CNN to worry about. Drew has been investigating the trail of donated money and is reporting the stakes have just gotten a lot higher.

Drew, what have you learned?

GRIFFIN: Anderson, we have learned that the Charities Bureau of New York state attorney general's office has begun its own investigation of Quadriga Art. So, too, has California's attorney general. Now we've learned the state of Florida also looking into all of this. The investigations beginning after CNN exposed the Disabled Veterans National Foundation, this charity that's raised $70 million since 2007 in the name of disabled veterans and as far as we can tell, Anderson, has given very little, if any, money to the actual disabled vets. It's gone mostly to Quadriga Art, this fund-raising company.

COOPER: And I mean, almost from the very beginning, this whole charity was in some sort of trouble. I mean, you've known that.

GRIFFIN: This is a very complex story that my producer, David Fitzpatrick, and I have been digging into. But what really happened is they're accused of trying to jump-start itself by making them look like another charity. You might consider it identity theft of a charity.

Back in 2005, before there was a Disabled Veterans National Foundation, DVNF, there was another charity with a very similar name. The Disabled Veterans Living Memorial Fund, DVLMF. Its sole purpose was to raise enough money for a memorial on this site near Capitol Hill in Washington.

The executive director of that group was this guy. His name is Larry Rivers. He's a retired Marine officer. The memorial foundation, Anderson, raised enough money to build the memorial and essentially stopped raising money. But here's what happened next.

The president of the newly-formed DVNF in 2007 went to that Marine officer for advice. Larry Rivers was being paid by Quadriga Art as a consultant. He referred DVNF to his private company, who was being paid by Quadriga Art. Soon thereafter, according to documents obtained by CNN, the newly-formed charity DVNF and Quadriga were accused of, in effect, stealing the identity of that charity that wanted to build the memorial by using the mailing list of its donors and the logo of the DVLMF.

We're learning all this from the state of Florida, which is nearing an end to its own investigation of the DVNF. There was a threatened lawsuit from the memorial fund charity against DVNF, which it claimed its, quote, "intellectual property rights had been violated," unquote, by Quadriga Art and the DVNF. To fend off that lawsuit, the Disabled Veterans National Foundation paid the memorial fund $325,000, agreeing to the payment because they'd already used the mailing list.

DVNF then sent an e-mail to CNN, saying that, quote, "The agreement speaks for itself," denied any wrongdoing. And since then, as we've been reporting, has gone on to raise $70 million, almost all of it going straight into the coffers of Quadriga Art.

You know, despite that, the DVNF considers itself a success because it's increased their donor list from zero to some two million dollar -- two million donors in just five years.

COOPER: That's what's so crazy to me and upsetting to me, is that for DVNF, it seems like this is all about increasing the mailing list to get more donors. They can raise more money and so forth, because this contract, a lot of the money seems to be going to Quadriga Art.

The Senate's investigating. Is -- is there still money out there? What do we know?

GRIFFIN: The root problem here, Anderson, is the money that Americans are giving to many, many charities are not going to the people that they' re believed going to. In other words, if I gave money for disabled vets, it's going to go to Quadriga Art. I don't give that money because it's going to be used to build a mailing list.

If you said to me, "Give us $10 so our charity can eventually build a mailing list that in ten years from now, we might give money to disabled vets," that's the problem.

We went to Roger Craver, who's a nonprofit fund-raising expert in this field, and we asked him what he thought about this. Here's what he had to say.


ROGER CRAVER, NONPROFIT FUNDRAISING EXPERT: The fact that a company puts forth money for this purpose is not unethical, per se, and it's not illegal per se. What -- what is problematic is if you're promising -- the charity is promising to do something with the money a donor sends and there's no money going to it, which is what you said, Drew. If no money is going to the charitable purpose, then that's fraudulent. (END VIDEO CLIP)

COOPER: And to me, you know, if you're not doing anything wrong, have an interview. Quadriga Art, it's a huge company. They've got tons of P.R. people, I'm guessing. You have probably been dealing with them for years. DVNF. Submit to an interview if you want to be transparent. What have we learned about Quadriga Art?

GRIFFIN: We've been hearing from a lot of charities that quite frankly had no idea what they were getting into with this company. They are upside down.

Tomorrow night we're going to come back on your show. We're going to report about nearly a dozen of these charities that are in debt. None of them have gotten very much money, if at all, for their charities.

And you mentioned, you know, Quadriga Art not talking to us. Mark Schulhof is the CEO of this company. He works down the street, Anderson. He lives up the street. He must pass by Time Warner Center every single day. He won't talk to us on camera, but he did release this Web video to his clients over the weekend. We're going to give you a snippet of it right here.


MARK SCHULHOF, CEO, QUADRIGA ART: The irony here is CNN has reported that we have made millions of dollars taking advantage of veterans or the DVNF. Nothing could be further from the truth. At the start of this year, my board asked me to have an independent audit done to see how much money we've made serving the DVNF and to date, my company has not made a profit.


GRIFFIN: We've been accused of -- of not telling the whole truth about Quadriga Art. We've again asked them for interviews. We're going to put his entire unedited statement up on the Web site. Anybody who wants to see his entire statement that he put on his Web site, you can get the link right there. Meantime, we'd like him to come down and talk to us.

COOPER: Right. There's a lot of detail. The devil's in the details. I mean, what does that mean, you didn't make a profit? What are salaries, what are costs that you're paying out to -- to...

GRIFFIN: Exactly. Keep in mind this is a privately held company. We had strong limitations on what we could learn. We have got a lot of inside information from sources, quite frankly, inside that company.

COOPER: To me, the bottom line, any charity, it's all about transparency. And, you know, anybody who is donating money has a right to know where that money is going.

GRIFFIN: The good ones open their books. Others don't. COOPER: Drew Griffin, a lot more on it tomorrow. We'll see if the DVNF responds. I got into, like, a Twitter battle with them last time we were on and -- and -- but even then, then all of a sudden they just went silent because they stopped responding. Because they got nothing to say, it seems like. More tomorrow.

New developments in the mysterious killing of a couple in St. Maarten. Police make an arrest in that. We have details ahead.


HENDRICKS: More from Anderson in a moment. First a "360 News and Business Bulletin."

Two parking garages are shut down at Dulles international airport at Washington. Several flights were delayed, because crew members were held back by the police activity there.

A suspect will appear in court in St. Maarten tomorrow in the case of an American couple found stabbed to death in their home on the island. Authorities are not certain of a motive in the case.

In Nepal, three people are still missing in an avalanche that killed at least eight people. Authorities say the avalanche was most likely caused by a large piece of ice that fell from a glacier.

And a federal appeals court has reversed its decision earlier this year and now has ruled the U.S. Army Corps of Engineers is not liable for the massive flooding in New Orleans in the Lower Ninth Ward in St. Bernard's Parish following Hurricane Katrina.

How about this? A new sales record for the new iPhone 5. Apple has sold more than 5 million phones since they went on sale on Friday. Demand is so high that some people who ordered them over the weekend will have to wait until October to get them -- Anderson.

COOPER: Time for "The Shot." The -- this comes from the Calibray (ph) Zoo where gorillas seem quite captivated by, of all things, a caterpillar. One of the gorillas looks especially transfixed by the crawling caterpillar, but several of them come in for a closer look. You can see the caterpillar there on the little fence there.

HENDRICKS: and Anderson, can you think of anything else that is compelling to certain types of primates? You knew this was coming. We can never resist any excuse to show you...

COOPER: I did not know this was coming.

HENDRICKS: It wasn't my idea. In the bunny costume, entertaining apes, we're thinking maybe a caterpillar will do.

COOPER: This -- for those of you who don't even know what this is, it requires so much explanation I don't even know how to begin to explain it.

HENDRICKS: I apologize.

COOPER: No, I know we have -- we have time. You know, 20 seconds will not -- It was at the Great Ape Trust. And apparently, they like rabbits. I don't know. I was told...

HENDRICKS: They made you do it.

COOPER: The scientist said it was legitimate. They said the apes wanted me to, and they said -- there's an ape that does sign -- I don't know. It's...

HENDRICKS: Blame the scientists. They made you do it.

COOPER: I know. I kept expecting Ashton Kutcher to jump out any minute and say I was punked. Anyway -- Susan, thanks.

Coming up, would you vote for a mayoral candidate called Tuxedo Stan? "The RidicuList" is next.


COOPER: Time now for the "RidicuList." And tonight while the presidential campaign heats up here in the United States, we don't want to neglect a very important mayoral race that is going on right now in Canada.

Now, we usually don't take sides politically, but I think we'll make an exception. Go ahead and give our unofficial endorsement to one candidate for mayor of Halifax. His name is Tuxedo Stan. He's 3 years old, and he's running to raise awareness about the stray cat problem in Halifax.

Now, sounds like it's a pretty big problem. As a matter of fact, Tuxedo Stan's owner says it's a veritable cat explosion in the city. You thought I was going to say catastrophe, didn't you? Yes. No. It's not going to happen. That is my solemn promise to you, the viewer, tonight. This is a serious story about a serious mayoral race in Halifax. But yes, there's totally a cat explosion.


HUGH CHISHOLM, HALIFAX RESIDENT: The problem is we have an explosion of cats. We've got literally hundreds, thousands of cats that are living on the street.


COOPER: So Tuxedo Stan's campaign is all about raising awareness about spaying and neutering. But we wondered how exactly did Stan's owners come up with the idea for him to actually run for office?


KATHY CHISHOLM, HALIFAX RESIDENT: It's a great idea and I don't know exactly where it came from. We were just sitting around a table one night and people said, "Well, how about Tuxedo Stanley?" (END VIDEO CLIP)

COOPER: That settles it. I want to go to a Canadian dinner party as soon as possible. Just sitting around the table with some people, next thing you know your cat is running for mayor.

Of course, Tuxedo Stan is not going to win. Municipal law bans animals from holding office. Unfortunately, if he's serious about politics, maybe Tuxedo Stan should come to the United States.

Just look at the mayor of Talkeetna, Alaska, Stubbs the Cat and has been the mayor for 15 years. I'm not kidding. Residents elected him as a write-in candidate when he was just a kitten. The rest is history.

Not only that, right now as we speak, there is a cat running for Senate from Virginia.


UNIDENTIFIED MALE: Hank is an accomplished independent leader, and he fights for you. Not a partisan agenda. Vote Hank for U.S. Senate.


COOPER: Now, I don't want to start anything, but I'm fairly sure that the 360 staff is made up of more dog people than just cat people. But there -- there's no dog in this fight, so we have no choice. We got to vote for the cat.

Hey, that's it for us. Thanks for watching. "ERIN BURNETT OUTFRONT" starts now.