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Anderson Cooper 360 Degrees

Obama Expresses Outrage Over Wall Street Bonuses; Illinois Governor Rod Blagojevich Removed From Office

Aired January 29, 2009 - 22:00   ET


ANDERSON COOPER, CNN ANCHOR: We're going to have more on Ted Haggard and his family tonight.

But we begin with breaking news that affects us all.

Today, President Obama blasted Wall Street executives for paying out big bonuses. And now, this evening, we're learning the White House plans to crack down on the fat payouts. A new plan is supposed to unveiled next week -- the president today expressing outrage that banking executives gave themselves nearly $20 billion in bonuses last year, at the same time they were asking the government for billions to bail them out, the president's anger triggered by a new report showing Wall Street's bonus pool for 2008 is the sixth biggest on record.

Mr. Obama had one word for that, "shameful."

Ed Henry is at the White House -- Ed.

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Well, Anderson, what's going on here is a president that is trying to connect with Americans, who are feeling very anxious about the economy, obviously. There's no easier way to do that than to rip into some of these Wall Street bosses over these bonuses, as you mentioned.

But, beyond the talk, CNN has learned that the president is planning to unveil a major financial reform package and that, specifically, senior officials say, there will be a provision in there cracking down on some of these bonuses moving forward.

And the man who's working furiously behind the scenes right now on all of this is Tim Geithner, the president's new treasury secretary. He met in the Oval Office today with the president, who absolutely teed off on Wall Street executives.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I saw an article today indicating that Wall Street bankers had given themselves $20 billion worth of bonuses -- the same amount of bonuses as they gave themselves in 2004 -- at a time when most of these institutions were teetering on collapse and they are asking for taxpayers to help sustain them, and when taxpayers find themselves in the difficult position that, if they don't provide help, that the entire system could come down on top of our heads, that is the height of irresponsibility. It is shameful. And part of what we're going to need is for the folks on Wall Street who are asking for help to show some restraint, and show some discipline, and show some sense of responsibility.

The American people understand that we've got a big hole that we've got to dig ourselves out of, but they don't like the idea that people are digging a bigger hole even as they're being asked to fill it up.

And so, you know, we're going to be having conversations as this process moves forward directly with these folks on Wall Street to underscore that they have to start acting in a more responsible fashion if -- if we are to, together, get this economy rolling again.

There will be time for them to make profits, and there will be time for them to get bonuses. Now is not that time. And that's a message that I intend to send directly to them, I expect Secretary Geithner to send to them.

And, you know, Secretary Geithner already had to pull back one institution that had gone forward with a multimillion-dollar jet plane purchase at the same time as they're receiving TARP money.

We shouldn't have to do that, because they should know better. And we will continue to send that message loud and clear.


HENRY: Now, the president -- the president right there referencing the fact that, earlier this week, his administration pressured Citigroup to not accept delivery on that $50 million corporate jet that caused so much controversy.

Also, yesterday, the president had some CEOs here. We are told by White House officials that he told them they need to start leading by example. And, also, the president's personal credibility is on the line here. That's why he's getting involved.

In his inaugural address, you will remember he talked about ushering in a new era of responsibility. He obviously realizes he needs to get involved to try to hold some of these executives accountable and keep them honest -- Anderson.

COOPER: It's -- we played that extended clip because it's fascinating to watch the president. I think it's very rare to see a president kind of visibly angry or frustrated. I'm not sure exactly how to categorize his emotion there.

But it's very revealing to watch. Do we really know, though, what he can do about bonuses that are being paid out?

HENRY: Well, that is being worked out right now behind the scenes by the treasury secretary, because, obviously, it's -- it's -- it's going to raise even more concerns by critics on the other side, who will say, look, the government is now getting even more involved; this is even more towards socialism, in terms of dictating exactly what executive pay should be.

So, it's got to be done very carefully. Another reason why this is -- is being looked at, though, very carefully by the Obama administration is, you will remember, back in September, as a senator, then Senator Obama came off the campaign trail to vote for that big bailout in September.

At that time, senators in both parties said they voted for it because it had tough provisions that were going to crack down on -- on these kind of bonuses, executive pay. There have been a lot of loopholes in there. And it actually -- actually has not cracked down on that executive pay.

So, again, his personal credibility is on the line. And that's why they're looking at it very closely, to see how they can make it actually work this time, so there are no loopholes -- Anderson.

COOPER: Just from a public-relations standpoint, these people on Wall Street are completely blind and -- and deaf to what's going on. I mean, they just seem completely, from a public-relations standpoint, of -- of basic decent facts and -- and things that they should do.

I'm also hearing tonight -- Ed, I know you are -- that President Obama is closer to choosing a commerce secretary, and that he may be a Republican. What are you hearing?

HENRY: Some interesting names circulating.

My colleague Dana Bash on the Hill hearing it in fact now on the record from Senate Majority Leader Harry Reid that the name of Republican Senator Judd Gregg of New Hampshire is now floating around as a possibility. That's intriguing, though I want to caution that I have also heard from two Democratic officials that John Thompson, a high-tech executive in California, also a candidate for commerce secretary.

Just got off the phone, literally two minutes ago, with a senior administration official, insisting to me the president has not yet made a decision. So, you can't go with either one of these yet, but that there are various candidates.

Here's why Judd Gregg is so intriguing, number one, a Republican. That would give this president another Republican in his Cabinet, when he's talking about so much bipartisanship. But, also, more importantly, there's a Democratic governor in New Hampshire.

If Judd Gregg resigns from the Senate, you have got 59 Senate Democrats right now. All of a sudden, if that governor appoints another Democratic, you have got the magic number of 60 Senate Democrats, enough to break filibusters, to put off debates, something Democrats have been desperately trying to do, so they can push through more of this president's agenda.

Very fascinating. There could be a lot of pressure from Republicans on Judd Gregg not to take a position like that -- like this in the Cabinet, just to make sure that Democrats don't get 60 votes -- Anderson.

COOPER: All right, Ed Henry at the White House -- Ed, thanks.

President Obama insisting the $819 billion bailout will create jobs and jump-start the economy. But not one member of the GOP voted for it in the House. Here is why. They think much of that money is going to be wasted, spent on programs that have more to do with advancing a Democratic agenda than fighting the recession.

We asked Tom Foreman to look at the items that they are opposing, the ones that Republicans are most concerned about. And he's "Keeping Them Honest."


TOM FOREMAN, CNN CORRESPONDENT: Anderson, for supporters of the stimulus bill, it is a critical step to get money moving again, to spur buying and selling, and, most of all, jobs for many Americans.

But, for opponents, it is something else. What they believe this is, is actually a complex plan that will spend a lot of money and not create many jobs.

Provisions include -- look at this -- $335 million for education about sexually transmitted diseases, $420 million to prepare for a possible flu pandemic someday, $100 million to get rid of lead paint on homes in the United States.

In the arts, it's got something there, too, $50 million for the National Endowment For the Arts, $650 million more to help in that transition from analog to digital TV that we have been working on for months and months now.

In the sciences, well, there's something there too, $200 million to improve our geological study facilities, including better volcano monitors, $600 million to help improve our climate-watching capability, important work, but, still, this is what they're raising question about.

Transportation, $800 million for Amtrak. And the government itself, this is really a whopper here, almost $8 billion to modernize federal buildings.

Even the critics say, many of these are laudable goals; they just don't have much to do with stimulating the economy. And they ask, how will the Democrats tell all those government agencies that get this money that they can't have it again next year?

Democrats point out that there are direct job-creation measures in this bill. And they say, again -- and some economists share this theory -- that this is mostly about getting money moving through the economy, and that will create jobs, too -- Anderson.


COOPER: All right, Tom, thanks. So, do you think the stimulus bill will boost the economy? Let us know. Join us live chat happening now at And check out Erica Hill's live Webcasts during the breaks tonight.

Our panel, David Gergen, Dana Bash, and Roland Martin, are standing by to weigh in just a moment.

Also tonight, Rod Blagojevich gets the boot. The Illinois governor was removed from office late today. He's out of a job, but not conceding anything.


ROD BLAGOJEVICH (D), FORMER ILLINOIS GOVERNOR: I love the people of Illinois today now more than I ever did before.




And the fight goes on. Just because I'm not governor anymore doesn't mean I'm not going to keep fighting for you.


COOPER: Citizen Rod Blagojevich.

Also ahead, Ted Haggard is going public with his continuing struggles over sexual identity. We will hear from him and his wife, and also from a therapist who says Haggard is -- may still not be fully honest.



OBAMA: I know that, if we stay focused, as Lilly did, and keep standing for what's right, as Lilly did, we will close that pay gap, and we will make sure that our daughters have the same rights, the same chances, and the same freedoms to pursue their dreams as our sons.


COOPER: President Obama is talking about the woman he is embracing, Lilly Ledbetter there. He spoke of her plight during the campaign, how the former factory worker made less than her male co- workers.

Today, her case became law, the first bill Mr. Obama signed in office, called the Lilly Ledbetter Fair Pay Act, giving employees more time to sue for discrimination.

Our breaking news tonight: Ed Henry reporting the president planning to somehow crack down on big bonuses in a plan to be unveiled next week.

Let's talk about that in a "Strategy Session."

Joining me now, senior political analyst David Gergen, senior congressional correspondent Dana Bash, and political analyst Roland Martin.

David, it stuns me how tone-deaf these CEOs, these companies are on Wall Street. You would think, after the -- the -- the outrage of -- of auto executives flying down in corporate jets, that -- that, you know, P.R. people would at least advise some of these CEOs about these bonuses and these jets. And it's just -- just, I find it stunning.


I -- Anderson, you know that book "Why Smart People Do Dumb Things..."


GERGEN: ... this could be a whole three or four new chapters that we have seen here in recent weeks.

And it's -- and it's causing -- and, you know, to add insult to injury, there was a poll taken of people in the financial industry. Forty-six percent said their bonuses last year were not big enough -- were not big enough.

So, we...


GERGEN: We have got a real disconnect here from reality. And it's causing -- you know, it is causing some heartburn in -- in the Obama White House, not only with what he said today.

I talked to people, folks at the White House today. Their -- their issue is this, Anderson, their central issue. Remember the TARP money, the $700 billion bailout that was -- has been so controversial? Well, the first $350 billion were spent under the Bush administration plan. And there's been all hell to pay for the way that has been administered.

But the next $350 billion are going to be spent under the Obama administration. And that's why they're scrambling to come up with a plan for next week, to completely revise this program, rebrand it, and to bring much more accountability and transparency, so they don't have to continue dealing with this, because they may have to come back for more money, beyond that next $350 billion, for the banks before this is over.

COOPER: Dana, what are you hearing about all this on the Hill? I mean, are Wall Street bonuses something that lawmakers, particularly Republicans, want to deal with right now?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: You know, I have got to tell you, there is breaking news. And that is, I have found bipartisanship on an issue.


BASH: And that is the reaction to this particular story, these bonuses for CEOs.

I was just talking to senators. They were working late tonight. And here are some words I got: "disgusting, outrageous, unconscionable." And those are the words I can repeat. And guess what? Those are Republican senators I was talking to.

The outrage is definitely bipartisan. Chris Dodd, the chairman of the Banking Committee, he told me that he's going to do whatever he can to embarrass them, legally or otherwise. As David said, the -- the bailout was a huge, huge issue for especially members of Congress. They are still hearing from their constituents, who are saying, why did we bail out Wall Street?

I will tell you, though, there were some words of caution I got from some Republicans. They want to see how Barack Obama does this, because of the concern about the government telling private companies what to do, even though they are using public money.

COOPER: Roland, it is a fine line. It's a difficult thing for the president to do.

ROLAND MARTIN, CNN CONTRIBUTOR: No, I don't really think it's a fine line.

I think, look, if you file for bankruptcy, the bankruptcy judges tell you what you can and cannot go out and spend money on. I think the American people are sitting at home, saying, why is this so hard? If you choose to come to the public trough and pick up a check, you must agree to these conditions. You're not going to hand out bonuses.

And, so, President Obama's response today was the right response. And we need to see this kind of anger, if you will, coming from the White House, to tell these guys, hey, you want to get bailed out, agree to these conditions. If you don't want these conditions, fine. Don't sign the deal. You're on your own.

They should live up to that.

COOPER: David, how is -- you know, this -- this quest for bipartisanship, this quest to change the -- the tone and the rhetoric of Washington, how do you think it's going? I mean, no -- no Republican signed on to this. We saw this cocktail party last night that President Obama had, inviting some Republican lawmakers to the White House.

What is your take?

GERGEN: Anderson, my sense is that sense of euphoria that the country had just after the inauguration that a new day has arrived evaporated yesterday with this vote. It's now apparent that this is going to be -- we're back to, maybe not politics as usual. We have still got a lot of partisanship in Washington. To the president's credit, I think he is helping to change the tone some. One major Republican senator told the White House in the last couple of days, you know, you didn't get the votes this time, but, believe me, down the road, this kind of approach is going to pay off.

What the White House is hoping is that, when this goes to the Senate, and especially in conference, they can scrub out a lot of this nonsense that Henry -- that Tom Foreman was reporting on a while back, and that, when it gets back into the House, they actually can get Republican votes on the final passage.

Some Republicans -- one Republican told me today he thought they could get as many as 50 votes in the House on a final passage. We will have to wait and see. But there is a sense in the White House that this approach is worth doing, it was worth doing, and it will have payoffs over time.

COOPER: Dana...

MARTIN: But, Anderson...

COOPER: Go ahead, Roland.

MARTIN: ... I think we have got to understand something. I'm not shocked by what happened yesterday.

There was an ideological issue here. And that is, Democrats are all about spending. Republicans say, we want more tax cuts.

Yesterday's vote by the Republicans was about emphasizing what they are going to be saying over and over and over again, getting back to core Republican principles. So, it wasn't a shock. The difference is that you have a president who is reaching out to the other side, making a real effort.


MARTIN: That, to me, is the difference. We shouldn't be shocked by that people are going to be split on an ideological issue.

COOPER: Dana, if you could, just take me behind the scenes on the Hill. You have been there a long time. You have talked to these people over the years. Is there a difference tone, I mean, from Republicans and Democrats, or is this just kind of politics as usual, and everyone puts on a good face when they're in front of cameras?

BASH: No, there's definitely a difference in tone.

But, as we saw really clearly yesterday, there's a big difference between tony and actually taking a vote that, as Roland says, in many cases, really is counter to somebody's philosophy.

But I will tell you that, in the Senate, moving forward, it could be different. And I'm talking to Republican senator who are more moderate, who are saying, "I want to vote for this."

And they are saying that they do have problems with it that Tom Foreman was pointing out. Olympia Snowe, probably one of the most gettable Republican senators, moderate from Maine, she just told me: "The question is, does this pass the straight-face test? Can I vote for things with this kind of spending that really doesn't stimulate the economy?"

COOPER: We're going to have to leave it there. Good discussion.

Thank you, Roland Martin, Dana Bash, David Gergen, as always. Thanks.

GERGEN: Thank you.

COOPER: Next: Blago down and out, governor-turned-private- citizen disgraced, removed from office today, convicted of abusing his power, and still pleading his case tonight. Hear what he said at his first news conference as a private citizen.

And, later, candid confessions from a shamed preacher -- Ted Haggard speaking tonight about his sexuality and his faith and his wife, about why she is standing by him. You will also hear from a therapist who talks about what he has been going through, what Ted Haggard has been going through, and how he has counseled people similar situations.

We will be right back.



BLAGOJEVICH: So, I believe, in all of the evidence that has been presented to you -- in fact I know -- there hasn't been a single piece of information that proves any wrongdoing. You haven't proved a crime and you can't because it hasn't happened. You haven't given me a chance to disprove a crime. But so far a crime has not been proven here in this impeachment proceeding.

How can you throw a governor out of office with insufficient and incomplete evidence?


COOPER: Rod Blagojevich at his impeachment trial today. Those are some of the last words he spoke as governor of Illinois.

Just hours ago tonight, in a unanimous vote, the Illinois Senate booted him from office and also barred him from ever holding public office again.

Just after being ousted, Blagojevich, not known for being camera- shy, made his first public remarks as a private citizen.

Take a look. (BEGIN VIDEO CLIP)

BLAGOJEVICH: I'm obviously saddened and disappointed, but not at all surprised, by what the state Senate did today.

It was something that I knew they would do a long time ago.

And the fight goes on.

Just because I'm not governor anymore doesn't mean I'm not going to keep fighting for you and for the causes that I have fought for my whole life.

And I also want to say that I'm going to keep fighting to clear my name. I'm disappointed in the state Senate actions, because they deprived me of an opportunity to bring witnesses and prove my innocence.

I wanted to do that sooner, rather than later. I guess I will just have to wait until I have my day in court.


COOPER: Well, since his arrest nearly two months ago, Blagojevich has insisted he has done nothing wrong. He skipped the first three days of his impeachment trial, as you know. And, when he finally showed up today, he didn't even mention the pay-to-play charges that led to his downfall.

"Raw Politics" does not get much bloodier than this.

Senior legal analyst Jeffrey Toobin joins me now.

What do you make of it?

JEFFREY TOOBIN, CNN SENIOR ANALYST: Well, I -- I think this was really much more a psychological issue for him than a legal issue.

He kept talking and talking about how unfair this case was. But, as you said, he never addressed the issues. He never actually responded to the charges against him. His lawyer quit. He was completely on his own. And he had literally no support at all -- 59-0 was the vote in the state Senate.

COOPER: And -- and what happens to him now? He's a private citizen. He still gets his pension.

TOOBIN: For the time being, unless he's convicted. And I think that's really what happens now, is that he is...

COOPER: So, if he's convicted, his pension is taken away? Because, with congressmen and senators, as we all know, they get it no matter what.

TOOBIN: They get it no matter what.

But Illinois being Illinois, there's precedent for governors being indicted.


COOPER: Uh-huh.

TOOBIN: And George Ryan, the predecessor, has lost his pension, after he was -- after he was convicted. But he had to wait for his conviction -- his conviction to happen.

He hasn't been indicted yet, but he certainly will -- that is Blagojevich -- and he's going to have to fight those charges.

COOPER: What kind of timeline before he actually starting going on trial?

TOOBIN: It looks like the indictment will be some time before April. Federal cases don't move that quickly. The trial will probably start some time before the end of the year.

But he's got no one to defend him. He's all by himself now. He doesn't have the infrastructure anymore.

COOPER: He also can't have that much money to -- to hire a huge legal team.

TOOBIN: He doesn't. I mean, this guy has a world of trouble. And, you know, he's got that poser bravado, but I can't see much of what it's based on at this point.

COOPER: All right. Jeffrey Toobin, thanks. Appreciate it.

A lot ahead.

During Rod Blagojevich's media blitz this week in New York, he stopped by CNN to talk with D.L. Hughley. Their conversation turned to a mix of politics and food. That's right, food.

Watch this.


D.L. HUGHLEY, HOST, "D.L. HUGHLEY BREAKS THE NEWS": This is probably no great endorsement, but none of them sounded criminal to me.


HUGHLEY: They sounded political.

There is a process that -- that is involved in politics, where it gets a little dirty. A lot of times people, want a steak. Nobody wants to see the cow get butchered.


(LAUGHTER) HUGHLEY: And I think, like, they got a chance to see how it got butchered. And I think that there's perhaps a little bit of that.

BLAGOJEVICH: Well, if you want a good steak, then you -- then that cow has to get butchered...


BLAGOJEVICH: ... because, otherwise, you can't get the steak. Unfortunately, that's how the political process works. And, unfortunately, that's how the government works, through a legislative process.


COOPER: Wait. Is the cow butchered, and then the steak? I missed that.


TOOBIN: I think that is true. My understanding of steak is that it's after the cow is butchered.

COOPER: After the cow is butchered.



COOPER: All right.

Well, don't miss D.L. Hughley's interview with Rod Blagojevich this weekend on "D.L. HUGHLEY BREAKS THE NEWS," Saturday at 10:00 p.m. and Sunday at 11:00 p.m. Eastern.

We have more headlines from Illinois: unemployment there now at a 15-year high. John King is live in Peoria, the headquarters of Caterpillar which is cutting 20,000 jobs. We are going to talk to him about how quickly relief may come for those workers. We will see him on the other side of this break.

And Sarah Palin comes to Washington for the first time since losing. She is going to be in D.C. with President Obama. We will tell you why they will be sharing a stage.

And Ted Haggard, he was once an important evangelist before his double life came crashing down. We are going to talk to a noted therapist about Haggard's claims. And you will hear from Ted Haggard and his wife -- ahead.


LARRY KING, HOST, "LARRY KING LIVE": Still get attracted to men?

TED HAGGARD, FORMER NEW LIFE CHURCH PASTOR: I have thoughts from time to time, but not compelling thoughts. (END VIDEO CLIP)



OBAMA: I'm confident that, with the recovery package moving through the House and through the Senate, with the excellent work that's already been done by Secretary Geithner in consultation with Larry Summers and Paul Volcker and other individuals, that we are going to be able to set up a regulatory framework that rights the ship and that gets us moving again.


COOPER: President Obama trying to remain optimistic in the face of today's job market meltdown.

Unemployment claims reached record highs, with the Department of Labor reporting 4.8 million claims in the week ending January 17. Now add extended benefits approved by Congress last summer, and the number is closer to 6.5 million -- this -- this, of course, all before Ford, Eastman Kodak, and others announced massive layoffs.

John King joins us tonight from Peoria, Illinois, where Caterpillar said today it plans to cut 20,000 jobs worldwide.

We're talking about your money, your future.

John, a lot of these workers thought the company was actually doing well.


Last year, when the auto industry was being hit, so much of American manufacturing was being hit, here in Peoria and elsewhere, Caterpillar was doing quite well, because so much of its business is dependent on exports overseas. But this is now a global recession, and Caterpillar and Peoria now feeling the pain.

As you noted 20,000 jobs will be eliminated globally by the end of March, by the end of the first quarter, many of them right here in Peoria.

We were down on the factory floor today to see the giant tractors being made: the farming equipment, the mining equipment. Some of the workers working today will lose their jobs over the next few weeks. And when you talk to them, they are the numbers now behind those -- the faces behind those unemployment claims you were just talking about.

One woman we met today, Christy Williams, she had worked at Caterpillar. She received a two weeks notice. She's a single mother with five children between the ages of 5 and 14. She says she didn't tell her children until the very last day of her two-week notice because she didn't want them to see how worried she is.


CHRISTY WILLIAMS, FORMER CATERPILLAR WORKER: I don't let them see that I'm stressed out about things. That's why I waited. I didn't tell them right away. The two 5-year-olds, I didn't think they would understand what that meant anyway. So I just waited until I was done working, and then I said, "Things are going to be a little bit different. I'm going to be home in the morning and when you go to school and when you get home from school." And we have just kind of gone that route.


KING: And the story Christy Williams tells us is a story you'll hear over and over again. She's been looking for work. She's on unemployment. She has about 10 weeks of benefits left. She's hoping the stimulus package being debated in Washington extends her lifeline of more unemployment benefits if she needs it.

And Anderson, the most frustrating part, she says she has a four- year college degree. She's been out looking for work. She can't find a job that takes her anywhere near what she made at Caterpillar. And she says now, because she needs to feed her five children, she's starting to look into retail sales or something that would pay her a lot less. But it would at least give her, perhaps, at least a part- time job.

COOPER: How does she know there's a look at the stimulus plan? Are they hoping that the plan is going to help them in a quick timeline?

KING: It's a mixed report you get when you talk to some of these workers either just thrown out of work or about to be thrown out of work. Most are blue-collar union workers here who voted for Barack Obama. And they remain incredibly hopefully that he will eventually be part of turning the economy around.

But they're skeptical when they hear about politicians going to spend $800 billion or more. They're skeptical it will actually reach that. They do think, at a company like Caterpillar -- again, they make those big earth movers and things like that -- that, if you're building roads and highways and bridges, that some jobs will come back to Caterpillar.

One thing they worry about, Anderson. There's a buy American clause in both proposals, the House and the Senate. Caterpillar is reliant on -- so much on exports. They worry that could set up a trade war and China and elsewhere might stop buying American products. And in the short term, they could actually lose more jobs because of those provisions.

So most of them are hopeful but a tad skeptical.

COOPER: All right. John King live in Peoria. John, thanks. A job change for a different reason next. Ted Haggard was an evangelical superstar with a thriving mega church until a sex and drugs scandal forced him into exile. Tonight, he talks about the new allegations against him and how he defines himself now. We'll also talk to a therapist about some of the claims that Haggard is now making.

And later, a strange story. Dead man breathing. Nearly two decades after reportedly drowning, this man was found during a traffic stop, alive and using a fake name. The bizarre tale coming up.



LARRY KING, HOST, "LARRY KING LIVE": What do you consider yourself, Ted?


KING: Are you bi? Are you gay?

KING: It's a great question. And I went through -- I went through a year of seriously asking that after the scandal. And different therapists have said different things to me.

My first therapist said, "You are a heterosexual with homosexual attachments," and I wasn't sure what that meant. Now that we've processed this through, my current counselor says, "You're a heterosexual with complications."


COOPER: Ted Haggard talking about his sexuality, a very private matter that he is making public.

The former evangelical leader talking about the allegations that drove him from the evangelical church he founded. Haggard, who preached against gays and lesbians, admits to buying meth and to seeing a male prostitute and a young male church volunteer. He says he still struggles with, quote, "same-sex attraction" but says he is not gay.

Haggard wants you to know what he did, why he did it and why he deserves to be redeemed. Here's Ted Haggard on "LARRY KING LIVE" earlier tonight in his own words.


KING: What you called an inappropriate relationship between you and the young male church volunteer back in 2006 -- that was Grant Haas. He told CNN about what happened.


GRANT HAAS, FORMER CHURCH VOLUNTEER: I came back to the bathroom, back from the bathroom, and got into bed with Ted, ready to go to sleep. And he pretty much asked me if it was OK if he masturbated in front of me or masturbated in the bed next to me. And I told him no, that would make me really uncomfortable. But, you know, he grabbed a bottle of lotion and just started masturbating.

At that point, I was just -- I was frozen. I couldn't really believe that this was happening, that this man was doing this.


KING: True?

T. HAGGARD: Fundamentally true. The specifics aren't quite right, but it doesn't matter. What matters is that -- that is an indicator of the compulsive behavior that was going on in my life during that time.

KING: How long ago was this?

T. HAGGARD: Over two years ago. Since that time I met with him and one of the church organizers and Gayle, and asked for his forgiveness. And all of our children, when he decided to come out and talk about that, as our kids came in the other night, I said, "Grant Haas is going to go public."

And every one of them knew about it and they said, "Oh, really?" And then went on about their evening.

KING: Did that get you in more trouble with the church?

T. HAGGARD: No. They knew about it. They knew about it two years ago. And I wasn't involved in their dealings with that. I was already out. But, you know, that's all over two years old.

KING: You could have spoken two years ago, right? It was just the church that stopped you?

T. HAGGARD: Yes, the church. And I think they wanted to protect me from myself. They knew I was confused, disillusioned, disappointed in myself. And they did the best they could.

KING: Grant Haas released a recording of what he says was a phone conversation with you at a time he was considering a lawsuit. Let's listen.


T. HAGGARD: Just move on. Drop this thing.

HAAS: I know.

T. HAGGARD: Move on.

HAAS: I know.

T. HAGGARD: Let it go. Forgive it. HAAS: It just hurts so much.

T. HAGGARD: I know it hurts. Think how I've hurt. Think about my little boy and trying to go to football practice without the other kids calling his dad a (EXPLETIVE DELETED). And if you stir it up in the headlines again, then it all happens again.


KING: Is that an accurate...?

T. HAGGARD: Yes. Yes, that happened. And we were so vulnerable. That's when we were in Phoenix. And I was really speaking to myself then, too. Forgive everything, let -- including myself. Forgive yourself, forgive others. Move on in life.


COOPER: A lot of people talking about this on the blog. You can join in at AC360. A live chat happening now. Is Ted Haggard in denial? We'll talk to a psychiatrist, see what he thinks.

And we'll have more from Haggard in his own words.


KING: When you have the dark thoughts, what do you do with them?

T. HAGGARD: I just dismiss them. Where before they were so compulsive, I couldn't just dismiss them. Where now I can.


COOPER: Later, Sarah Palin and the president. They'll be together this weekend on the same stage in Washington. Why? The story, coming up.



T. HAGGARD: I'm not giving it as an excuse, but I knew -- I knew that the Bible thought that sexuality is -- I felt like God's plan was for sexuality to be in a monogamous heterosexual marriage. And I wanted that for myself. I wanted to please God. At the same time, I had these other things going on, and I ended up violating my wife and family and everybody.


COOPER: Ted Haggard finding faith, seeking understanding and asking for forgiveness tonight. An anti-gay crusader from the pulpit, the once powerful evangelist is now trying to rebuild his life.

Haggard sat down with Larry King tonight. He was joined by his wife, Gayle, and their son, Marcus. They have five kids in all. They talked about his ongoing struggles with his sexuality, his relationship with a male prostitute and more.

We'll talk to a therapist coming up to see what he thinks about some of Haggard's claims. But first more from Larry King's interview with the fallen pastor.


KING: What you called an inappropriate relationship between you and the young male church volunteer back in 2006. That was Grant Haas. He told CNN about what happened.


HAAS: I came back to the bathroom, got back from the bathroom, and got in the bed with Ted, ready to go to sleep. And he pretty much asked me if it was OK if he masturbated in front of me, or masturbated in the bed next to me.



COOPER: Clearly that's a piece of video we already ran. We're going to actually play the one we wanted to right now.


KING: We reached out to Mike in advance of this interview. He e-mailed us a couple of questions. One thing Mike wanted to know was whether Ted Haggard is prepared to state absolutely if Grant Haas is the only other young man with whom he engaged in inappropriate conduct during his leadership of the New Life Church.

T. HAGGARD: Yes. I have thoroughly discussed all of my sexual history with my wife and my therapist and, to some degree, the family. And - and we think that's an appropriate boundary for that.

KING: So you're not going to comment?

T. HAGGARD: And so it wouldn't be right. And so -- but it's certainly not secret. We have discussed that thoroughly with the whole sexual history with my counselors, and I've had very good counselors and with Gayle.

KING: What do you consider yourself, Ted? Are you...


KING: Are you bi? Are you gay?

T. HAGGARD: It's a great question. And I went through a year of seriously asking that after the scandal. And different therapists have said different things to me. My first therapist said, "You are a heterosexual, with homosexual attachments," and I wasn't sure what that meant.

Now that we have processed this through, my current counselor says, "You're a heterosexual with complications."

And -- and so I don't think the boxes work for me. I think I have -- I have some thoughts in my life and some processes in my life that just don't fit neatly into the boxes, which I think is true for a lot of people.

And I know that I am in a process, I'm changing and so I know I went through -- I was different in college than I was in my 20s and 30s. And then this happened in my 50s and -- but I can tell you this. Today, I am 100 percent satisfied with my relationship with my wife, and I have no compelling things in my life toward others.

KING: And we're going to meet her in a couple of minutes.

Let's take a look at a clip from HBO's "The Trials of Ted Haggard." It debuted tonight. It will be playing frequently. This is Ted commenting about some people's views of homosexuality. Watch.


T. HAGGARD: If you Googled me, you would think I was Adolf Hitler or Idi Amin.

Or worse, gay.

That's worse in some circles. In some circles, I'd rather be a murderer than gay. So, yes.


KING: Do you think this whole story would have been different if Mike Jones were Michelle Jones?

T. HAGGARD: Oh, yes.

KING: If it were a woman?

T. HAGGARD: I do. I do.

KING: Your wife might have left you.

T. HAGGARD: I don't know. I thought Gayle would leave me over this. Actually, I recommended that she leave me over this.

I do know with this homosexual, heterosexual, bisexual discussion, when there is a homosexual man that has something go on with a woman, people don't demand that he come out and admit that he's really a heterosexual. And I've had a very satisfying relationship for 30 years with my wife.


COOPER: Up next Ted Haggard admits he still has feelings for men. The question is, is he being honest with himself about his sexuality? A therapist weighs in, ahead. And later, why both the current president and the next potential Republican presidential candidate, Sarah Palin, will be sharing the spotlight this weekend in Washington. Be right back.



KING: These feelings about men, were these feelings you had for a long time?

T. HAGGARD: Well, the first I remember them is in high school. And -- but I never acted on them. I married Gayle in college. It was a wonderful relationship with Gayle through the years and -- but I would wrestle with it, and I would have to deal with them. And struggle with them.


VELEZ-MITCHELL: Ted Haggard from his interview tonight with Larry King. Also interviewed Gayle, his wife, and their son, Marcus. They also joined them.

Before the news about the male prostitute and the crystal meth, Haggard was a religious superstar, really, one of the most widely recognized evangelists in the country. He had his own mega church and gained a reputation as a fierce opponent of gay rights.

But then came the truth, and Haggard confessed to his double life, his same-sex attraction. Humiliated, exposed as a hypocrite, Haggard became a pariah in the religious world, and the kingdom he built crumbled around him.

Today, Haggard says he's not gay, but in the midst of what he calls homosexual attachments. Let's dig deeper with Dr. Paul Dobranksy, a noted psychiatrist and relationship counselor who's treated many evangelicals struggling with their sexuality.

I'm curious, Doctor, as you watch Ted Haggard speak, what do you think -- what came to your mind?

PAUL DOBRANSKY, PSYCHIATRIST: Well, the first thing that came to mind is that I feel bad for the situation he's in. He's very conflicted. You'll notice that the word choice he uses -- and I've not heard of that phrase, having homosexual attachments.

COOPER: He said -- he said one therapist called him heterosexual with homosexual attachments and then another one said he was heterosexual with complications.

DOBRANSKY: Yes. I think the bottom line is the conflict that this guy is in is that he has a belief system that he needs to maintain for his constituents, his fans, and certainly for his own spiritual beliefs, he needs to keep that part up.

But when we're talking about gender identity and sexual orientation, we're talking about something that's biological. It's not something that you choose, and there's plenty of research about that.

COOPER: It also seems sad because his belief system, I mean, there are plenty of gay Christians...


COOPER: ... who are happily gay and happily Christian and have fulfilling lives. They're not mutual exclusive.

DOBRANSKY: Absolutely. Absolutely. We are in this country entitled to our opinions. We're entitled to voice them. And at the same time, we all have an animal nature inside. We have an unconscious. We have a sexual identity inside, and it's OK to have both.

COOPER: Every person -- we've had a number of people on the show who say that they have been cured of homosexuality, that they went through, you know, whatever reversion therapy.

But every one of them basically admits that they still are sexually attracted to a member of the same sex. They're just forcing themselves to repress those feelings.


COOPER: That can't be a healthy thing.

DOBRANSKY: Yes. I mean, if you would imagine, maybe, you know, a Buddhist monk on a mountain, being an ascetic and depriving themselves of earthly pleasures.

Or imagine a metaphor of -- what if you were a cat born in a dog kennel? You know, it might feel dangerous. It might feel threatening. And you might pretend you're not a cat, but you're still a cat. You might pretend you're a dog. It's that kind of forcing oneself to portray an identity that's different from what you really biologically are.

COOPER: I want -- I want to play something, an interaction between Reverend Haggard and his wife. Let's listen.


KING: Gayle, when you hear him say, as he said five minutes ago, he still has those tendencies, he still has those feelings, he still sees men. He doesn't act on them. But he might. I mean, I'm not sure he won't.

GAYLE HAGGARD, TED HAGGARD'S WIFE: Well, I do know he's a human being, and I know that every one of us has struggles in our life. And every one of us are going to mess up, and we are all sinners.

But what I also know is that we have a great sexual relationship in our marriage. We had a growing intimate relationship in your marriage, throughout our marriage.


COOPER: You were saying before the break that he has a lot of work ahead of him.

DOBRANSKY: He does. He does. It's possible to love one's spouse and not currently have sexual passion for them. It's possible to be committed to one's spouse and love them and not have sexual passion for them. These operate in different parts of the brain.

If somebody is homosexual in their orientation, it's still possible to love their spouse. I've actually had plenty of patients who have been homosexual and yet also married to a woman. And they work through a process of figuring out their true identity and where they want to go forward with their life in the future.

COOPER: Doctor Paul Dobransky, appreciate your perspective tonight. Thank you very much.

DOBRANSKY: You got it, Anderson.

COOPER: We're following several other stories tonight. Erica Hill joins with a "360 News and Business Bulletin" -- Erica.

ERICA HILL, CNN ANCHOR: Anderson, how's this for a double bill? President Obama and Governor Sarah Palin. The unlikely duo will be appearing this Saturday at the 96th annual Alfalfa Dinner. It's a roast of sorts for Washington's political elite.

But they're not exactly appearing together. Some say, though, this could be a preview of the 2012 race. A little early for that.

In North Carolina, a traffic stop raises the dead. After giving police a false name, Bennie Wint admitted he'd actually forced faked his own drowning death 20 years ago, saying drugs and paranoia drove him to abandon his fiance and young daughter at the time. No word on whether he's now contacted his daughter, who is 24.

After rallying Wednesday, stocks falling again today. Unemployment claims reached record highs, and new home sales hit record lows. So you can thank that. The Dow lost 226 points. The NASDAQ dropped 50. The S&P 500 off nearly 30 -- Anderson.

COOPER: All right. Up next, I don't know if you saw this on YouTube. Aretha Franklin let loose, both in song and in style at the presidential inauguration, of course. You can try to imitate her, and this guy really did try. Do we have the video?

There he is. Online, wait until you hear him. It's our "Shot of the Day."

And at the top of the hour, President Obama signs his first bill into law. He talks tough, warning Wall Street the big bonuses are sending the wrong message to taxpayers. Breaking developments when 360 continues. (COMMERCIAL BREAK)

COOPER: So Erica, for tonight's "Shot," you knew it was bound to happen. Someone got around to poking fun at Aretha Franklin's head ware and the version of "My Country 'Tis of Thee," also called "America."

First, here's the original from the inauguration. Watch.




COOPER: All right. Now let's take a look at the YouTube version of the moment, a reinterpretation, if you will, of the Queen of Soul. We saw this first on Take a look.




COOPER: That's very good. The guy is a comedian named Greg Scarnici. He specializes in parodies and music videos. Let's see a side-by-side comparison.

HILL: Yes.

Impressive. I wonder if he made the hat himself?

COOPER: I don't know.

HILL: It looks like it was made by a professional.

COOPER: We should -- there's many -- there are many imitators. The best, we think, is our own Bob.

HILL: Right here in the studio.

COOPER: Right here in the studio with his -- yes.

HILL: And if you were tuned into the Web cast on Friday, as part of Floor Crew Friday, you actually saw him doing a little singing, as well, in that head gear, which he made himself.

COOPER: I don't think that's the last we're going to see of Bob in that hat.

HILL: I would hope not. Maybe tomorrow. Bust it out with Beyonce, if you catch my drift.

COOPER: Have you guys been practicing? Yes? Good. All right. Coming up at the top of the hour, brace yourself, Wall Street. There's a big crackdown coming down the pike. Breaking news tonight on what the White House plans to do about those multibillion-dollar bonuses that Wall Street cannot seem to resist.

Be right back.