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Anderson Cooper 360 Degrees

President Obama Meets With Canada's Prime Minister; Stocks Plunge

Aired February 19, 2009 - 22:00   ET


ANDERSON COOPER, CNN ANCHOR: Tonight, President Obama was up in Canada, but the big chill is back home, the markets sliding, jobless numbers soaring, homeowners who pay their bills grumbling about bailing out those who can't, new signs that, even with four rescue plans getting started, President Obama was right -- this is not going to be easy.

Also tonight, they're calling him mini-Madoff, but there's nothing small about this guy, the missing money manager the feds caught up with today, big Washington connections, big fleet of private jets, drug lords for clients, and now an alleged $8 billion fraud to answer for.

And later in this hour, the 9-year-old boy who killed two people, including his dad, today, he copped a plea. But what is a 9-year-old doing copping any plea? We will talk about adult crimes and juvenile justice with Jeffrey Toobin.

And a behind-the-scenes look at Michelle Obama's growing role as the president's eyes and ears in Washington and sometimes, it seems, his spokeswoman.

We begin, though, with new signs that all of us are in for a tough haul when it comes to the economy. The Dow industrials, after more than a week of nonstop action, including a stimulus plan, a bank bailout, mortgage relief, and help for Detroit, nevertheless closing today below the 7500 mark, down nearly 10 percent in 10 days, hitting a six-year low.

Also, record new jobless numbers, a 41-year high, nearly five million people now collecting unemployment benefits, some of whom are getting help from neighbors, too, 11 truckloads of food and household necessities handed out today in Wilmington, Ohio, to help sustain 4,400 families of laid-off DHL air freight workers.

Pictures like these, we haven't seen in years, and the president warning that we are only at the beginning of the end, which, frankly, looks like a best-case scenario.

More on all of it now from chief business correspondent Ali Velshi.

Ali, we're talking about the largest number of people ever recorded currently on unemployment. The president says it's the beginning of the end. Do we know really where we are in this crisis? ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Well, Anderson, there's a lot of uncertainty, because it depends on how people reengage in this economy. If we don't stop the bleeding and job losses, people spend less.

If we don't see housing prices firm up, they won't get back into the market. But there are some estimates. The Congressional Budget Office has done some estimates about what unemployment will look like in the longer term, now that we have a stimulus package.

And I want to share that with some of our viewers. First of all, take a look at that red line that goes across the wall. The red line is 7.6 percent. That's the current unemployment rate. The green line is a range. That's why it's a little thicker in parts. That's the range that the nonpartisan Congressional Budget Office says is where unemployment's going to go.

So, you can see, from here, we start at 7.6 percent. There's no circumstance under which the CBO doesn't think unemployment is going to go higher in 2009. But then, even by the end of 2009, it's going to start to edge lower, edge lower in 2011, cross where we are, according to them, right at the beginning of 2007.

But it will take us about until 2012 or longer, according to them, to get back to rates that we saw before this recession started. So, that is a major, major problem.

But there is some silver lining here, in that there are going to be jobs created or fewer jobs lost. Now, the White House has put out its own estimates of where these three-and-a-half million jobs that it says will be saved or created are going to be.

You can go to to see this map for yourself. But it has pointed out, let's take a look at Michigan, where we have seen so many jobs lost. According to the White House, 109,000 jobs are estimated to be in the works under the stimulus plan in the state of Michigan.

Florida, a state with -- with a lot of foreclosures, there was a lot of speculation in the housing industry, 206,000 jobs will likely be created there, according to the White House.

And, California, where we have seen many jobs lost, again, massive foreclosures, and a big budget shortfall, 396,000 jobs. In fact, if you look at the map of the United States, those countries with the deep blue, those states with the deep blue are states where the -- the most jobs are likely to be created, more than 100,000 jobs per states, the middle blue, 50,000 to 100,000 jobs, and those states in the lightest blue, less than 50,000 jobs.

You will notice that these Mountain states in here and some of these Western states haven't been doing so badly. They're likely to see less job creation, Anderson.

COOPER: Ali, I know you have been getting a lot of questions from viewers all day about the president's housing proposal. What are folks asking? And what are they saying?

VELSHI: Well, details are -- you know, we're -- we're -- we have been working through the details to find out what's going on.

But we have been getting a lot of questions. And there's actually a lot of confusion and some anger about the -- the bailout side of it.

Let's take this question from Cindy in Georgia. She asks: "Is there truly any way for President Obama to pick and choose between people who will get help from this housing bailout? There are some people that are having problems because of losing their jobs, but many are in trouble because they tried to live too high on the hog. So, do you see any way that they will be able to tell one from the other and keep these high-on-the-hog people from living off our dime?"

And, Anderson, we have heard that question so many different ways from so many different people. Ultimately, there isn't a way. There are going to be people who are in a certain position who will be able to either refinance or renegotiate their loans with the bank, depending on what situation you're in.

But it's -- you know, President Obama said this is not going to be a reward for people who were irresponsible or who were speculators. It's going to be hard to tell the difference between people who were irresponsible and who were speculators and those who legitimately got into trouble.

But, ultimately, we have got to get a bottom to this housing market, because it's affecting all of us, whether or not we paid our bills and didn't overextend ourselves or not -- Anderson.

COOPER: Ali, thanks.

We're also learning more, of course, about the fine print in President Obama's mortgage plan -- the president himself conceding it will not help everyone, and it isn't perfect, not by a long shot. But, as Ali mentioned, it is generating a backlash from homeowners, angry that they're footing the bill to bail out their neighbors.

Candy Crowley has more on that.


CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT (voice-over): Those 627,000 people filing for unemployment benefits last week point to another harsh month. That's what worries bank president E. Hunt Burke about the president's mortgage rescue plan.

E. HUNT BURKE, PRESIDENT, BURKE & HERBERT BANK AND TRUST COMPANY: My biggest fear is, the -- the job losses that will come. We -- we know what we have got to deal with right now. But this proposal, for instance, does -- doesn't take into account, you know, a lot of future job losses, which could change the -- the landscape altogether.

CROWLEY: Poring over the details of the president's plan, bankers and homeowners are finding some interesting details. For instance, unless a bank takes TARP funds in the future, the plan is voluntary, banks don't have to restructure or refinance any loan, though Burke thinks they will.

BURKE: A lot of it's self-preservation. If -- if we foreclose on an individual, we now own a house that we can't sell, because the market's bad.

CROWLEY: Also causing a "Say what?" for high-risk homeowners whose loans are reduced to a third of their income, there is an enticement: Pay on time, and the federal government reduces your principal by $1,000 every year for five years.

RICHARD BITNER, AUTHOR, "CONFESSIONS OF A SUBPRIME LENDER": Mr. and Mrs. taxpayer, you're having your cup of coffee this morning, we're talking about essentially your neighbor being compensated $1,000 for making his mortgage payment.

CROWLEY: The administration is stung by complaints that people who worked the system and defaulted when the game went sour are being rewarded. Officials note there will be strict criteria for eligibility, and, in this game, everybody wins.

SHAUN DONOVAN, HOUSING AND URBAN DEVELOPMENT SECRETARY: We believe this plan will help to raise values of houses by $6,000 on average across this country. So, this is important to do to stop foreclosures for everyone, not just those who are at risk.

CROWLEY: Burke & Herbert is Virginia's oldest bank and, Burke says, a conservative lender, no subprimes, no risky investments. Past-dues are up, Just a handful of foreclosures, but the books are solid, 20 banks, $1.7 billion in assets, no need for a government assist.

But, when customers complain the administration's plan is a handout to people with poor judgment, Hunt Burke he disagrees.

BURKE: To fix this economy, we have got to start with housing, and -- and make this right, one way or another.

CROWLEY: Maybe it's not fair, he said, but that's not a good reason not to try to fix the problem.

Candy Crowley, CNN, Washington.


COOPER: Well, coming up next, our panel, including John King in hard-hit Michigan at a Saturn dealership, the entire Saturn brand now on death row. Also, Gloria Borger and Joe Johns join us.

Let us know what you think about the housing crisis. Join the live chat happening now at

Also, check out Erica Hill's live Webcasts during the breaks tonight. Also ahead in this hour, the latest on Robert Allen Stanford. If you don't know the name, you should. He's another alleged king of con men accused of bilking investors out of $9 billion.

And this:


MICHELLE OBAMA, WIFE OF SENATOR BARACK OBAMA: Like many parts of this country, rural America is hurting economically. The president is taking steps to turn our economy around and help struggling families.


COOPER: Well, President Obama was in Canada today. We will take a look at Michelle Obama on the job as first lady and saleswoman in chief -- tonight on 360.


COOPER: President Obama with Canadian Prime Minister Stephen Harper in Ottawa, Mr. Obama's first foreign trip as president. We're going to have the latest and all the details on what the president said today in Canada.

But, first, we will continue our focus on your money, your future, with John King, who is Grand Ledge, Michigan, the home of Saturn, Gloria Borger, and Joe Johns.

John, what happened to Saturn? I mean, when it -- it was debuted, it was -- you know, the slogan, I think, was a different kind of company, a different kind of car. Maybe I have it reversed. It was supposed to symbolize the new direction of GM. It's basically now on the -- the short list to be killed, right?

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: In three years, GM will no longer carry the Saturn brand; it will no longer carry the Pontiac brand.

And, so, I'm at a dealership here just outside of Lansing. And the owner of this dealership says she wants to go on, Anderson, but she does not know, if she sells this SUV, which is built just up the street at a GM plant in Lansing, if this dealership is open in three years, will she be able to service this car? GM will not give her the answers as to whether she could keep a service agreement, even if she can't sell the cars anymore, because any dealership around the country will tell you so much of their business is not just sales, but actually service.

What Saturn dealers are doing now is, they are vowing to stay in business, but they're looking for a new partner. They're looking to India, they're looking to China to perhaps sell foreign-made cars in the United States under the Saturn name.

And the owner of this dealership, Anderson -- it's her small business -- she's invested her life in it -- she says she wants to fight on, but she's also facing the prospect of selling a car, again, maybe made in India, maybe made in China, in a town that, for more than 100 years, has been a union, American-made GM town, a tough sell.

COOPER: Tough sell, indeed.

Gloria, the Dow dropped to a six-year low today. There certainly appears to be a lack of confidence in the president's plans, all of the plans, at least on Wall Street. Does the White House care about Wall Street's reaction at this point?

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Well, when you talk to people at the White House, they say, look, you have to take the long view here. You have to have patience. As President Obama says, it took us a long time to get into this mess. It's going to take us a long time to get out of this mess.

So, they're not looking at any particular indicator on any particular day. They say they would rather take the long view. It kind of reminds me of the Reagan years. And the Reagan -- the Reagan administration also preached kind of, you know, you have to -- you have to wait. This isn't going to get fixed overnight. And this was the early '80s. And they were right. It took them two or three years.

COOPER: Joe, there have been some -- I read one writer today saying, you know, let -- that they -- that the president should be more spreading hope, trying to spread hope, that he's been doom and gloom. I think this writer said, you know, less mope, more hope.

Clearly, though, the president sees his job right now as, you know, being straight with the American people about how bad the situation is.

JOE JOHNS, CNN SENIOR CORRESPONDENT: Yes, and you have to balance that, because you don't want to talk down the very economy that you're trying to bring up.

So, the president has said that, yes, this is a very bad situation. A lot of people out there are really waiting to see the bottom. And this is a question of numbers, more than anything else. It's a question of improving the job situation, and a question of improving the situation on Wall Street and out in Detroit -- so, a lot of things the president is balancing.

At the same time, he knows that he has to be the person who sells the very same plans he's trying to push through the Congress and work through the Treasury, a double-edged sword for Mr. Obama and a pretty tough job too, Anderson.

COOPER: John, I know you have been talking to people in Michigan and their reaction to what's going on. I just want to play for our viewers some of -- of what you have been hearing.


MIKE HUERTA, GENERAL MOTORS EMPLOYEE: It's scary to see a United States senator beholden to foreign interests. We had some -- some senators from down South in particular with -- you know, that have a lot of Nissan, or Honda, or Toyota plants basically come out and say that we should go bankrupt.

And they're not talking about a -- somebody that you can't see. The -- that means me. That takes away my family's livelihood.


COOPER: I mean, do -- do people there that you're talking to have any hope about, you know, that all these packages, all these stimulus, whether it's housing or -- or the stimulus bill, that it's going to affect them?

KING: In the short-term, Anderson, not much. That gentleman there is Mike Huerta. He's going to lose his job in about five weeks. He has a 2-year-old child, a wife, and a mortgage. He will be laid off by GM, and he's not sure if he will come back.

He was talking there about Republican critics of GM's request for another $16 billion in bailout loans from U.S. taxpayers. They're grateful for the stimulus bill. They're grateful for any hope the housing plan help might give for the foreclosures. And there are so many when you drive through this community.

But, Anderson, there are two big GM plants here. One had three shifts. It used to work around the clock. It's down to one. The one we were at today used to have two shifts. It is down to one.

And as we walked along the assembly line, people would say, hey, you know, in five weeks, I lose my job. So, they know it is going to get worse here before it gets better. And they view the help from Washington as -- they're grateful for it, again, but they don't think it's enough. They think the worst is yet to come.

And they have been through a very punishing time here. This is the state with the highest unemployment rate in the country. It's 10.6 percent here in Michigan, and going up, not down.

COOPER: Gloria, this housing plan the president, you know, talked about yesterday, is this -- is this still up for negotiation?

I mean, there's a lot of anger out there -- it's not just among Republicans -- among homeowners, who feel like, look, I'm paying my neighbor, who -- who -- who was irresponsible, perhaps...

BORGER: Right.

COOPER: ... or got in over their head through no fault of their own, is getting -- you know, getting a bailout, when -- when the people who are paying their mortgages on time aren't.

BORGER: You know, they had to walk a fine line here. There's no perfect way to do this. This money is already part of the so-called TARP. So, the money has already been appropriated. I think they're going to take it as it goes and see how it works. You know, this -- this is a process that folks in the White House will tell you when you call them up, how is this going to work, they will say, you know what? We have never done this before. And, so, we're going to take it as it goes.

And if they find that there are problems with it, you're going to see them revising things.

COOPER: So, Joe, what -- Joe, what are Republicans going to do? Are they going to go to the mat on housing, like they did over the stimulus?

JOHNS: Well, they really can't, to a great extent, because, a lot of this stuff, the president can pretty much do on his own, with the exception, perhaps, of attacking the issues relating to bankruptcy court that the Congress will actually have to vote on.

So, Barack Obama can pretty much move on this, if he wants to. And I have to tell you, the reaction from members of Congress after this thing was announced, a little, I thin, tepid was one word I saw someone used. There were a few questions raised.

I remember somebody actually ended up talking about ACORN back from the last election. There was not sort of this unified message that Republicans came out with, actually, because a lot of this was very new.

But the thing you have been talking about again and again is a very good talking point that Republicans -- Republicans will probably want to seize on. And it's that idea of people who did everything right actually have to pay for people who did everything wrong. So, that's something they can talk about, but it looks like Barack Obama will be able to push a lot of this through, without even asking for the Congress.

COOPER: We're going to have to leave there.

Joe, Gloria, John King, thanks.

Up next, he said it is fun to be a billionaire. He lived large, to say the least. He gave big money to Republicans and Democratic candidates, including President Obama. But it's not so fun now. We have got new details on the financier they're calling the mini-Madoff, his big-spending life and how the feds caught up to him. You should know who this person is.

Also, what President Obama accomplished on his first official trip out of the country, a very short trip, less than half-a-day, we will talk about that.

And Mrs. Obama, the saleswoman.


M. OBAMA: It's, again, important to remember that these great leaders are only as great as the people who hold them up.


COOPER: How important has her role in the White House become? We will take an up close look -- when 360 continues.


COOPER: The search for a Texas financier accused of scamming investors out of billions of dollars is over tonight. It ended in Virginia.

That is where Robert Allen Stanford, one of the richest people in America, was served court papers in connection with an alleged massive fraud. Officials say he and his company stripped bank accounts empty. He's handed in his passport. There is more. We're learning Stanford had friends in awfully high places, especially politicians in Washington. And -- yes, you guessed it -- he showered them with millions.

Randi Kaye is "Keeping Them Honest."


RANDI KAYE, CNN CORRESPONDENT (voice-over): After two days of mystery, Allen Stanford is finally found in Fredericksburg, Virginia, in his girlfriend's car, and served with papers alleging a $9 billion fraud.

His personal fortune was estimated at more than $2 billion. So, why did this Texas mogul allegedly swindle investors out of billions more? The Securities and Exchange Commission accuses him of a scheme that promised -- quote -- "improbable and unsubstantiated high interest rates."

(on camera): The commission says, Stanford's bank also fabricated historical return data to prey on investors. Stanford boasted a unique investment strategy, which supposedly allowed for double-digit returns, no matter the market.

(voice-over): Outside Stanford's U.S. headquarters in Houston, investor shock.

UNIDENTIFIED FEMALE: I'm so just upset right now, I can't even talk about it.

KAYE: Federal investigators have frozen the company's assets and hauled away boxes of documents.

Investors around the world try to rescue their money, from Antigua, to Venezuela, to Mexico. As one SEC official put it, "We are alleging a fraud of shocking magnitude that has spread its tentacles throughout the world."

These former Stanford employees left the company in 2007 because they didn't like what they say they saw going on. (on camera): What was allegedly going on at Stanford that didn't seem right to you?

CHARLES RAWL, FORMER STANFORD FINANCIAL EXECUTIVE: Our clients were not receiving the returns that the literature says they were receiving. That was disturbing.

KAYE: Are you surprised at all by the charges now against Stanford?

MARK TIDWELL, FORMER STANFORD FINANCIAL EMPLOYEE: I'm shocked. I didn't realize the -- the depth of the problems.

KAYE (voice-over): Both were interviewed by federal agents last year.

So, "Keeping Them Honest," who was in charge of keeping Stanford's books? This tiny one-man firm in London. Just above a fish and chips shop is where Stanford's multibillion-dollar portfolio was supposedly audited.

The 58-year-old cricket fanatic once landed a gold-plated helicopter at London's famed Lord's Cricket Ground and unveiled a case full of $20 million in cash as winnings for the Stanford Cricket Cup.

Stanford also liked to mix with politicians. This video on his company Web site shows him at last year's Democratic Convention. He gave more than $200,000 to the Democrats' Congressional Campaign Committee last year. Barack Obama got nearly $32,000, John McCain more than $28,000. Both have now given the money to charities.

In fact, Stanford and his businesses made political donations of more than $2 million over the past decade.

In September, Stanford told CNBC:


ROBERT ALLEN STANFORD, CHAIRMAN, STANFORD FINANCIAL GROUP: So, I have to say it is fun being a billionaire.


KAYE: So is defending yourself in a multibillion-dollar fraud scheme.

Randi Kaye, CNN, Houston.


COOPER: Unbelievable.

Robert Allen Stanford cannot leave the country. He's given in his passport. His alleged scam is estimated at $9 billion. When you think about it, it's small change compared to the Bernie Madoff case, the alleged king of on Ponzi schemed, charged with securities fraud, $50 billion worth.

If convicted, he could face up to 20 years in prison, a $5 million fine. He's expected to be formally indicted next month.

And, Erica, Madoff and the SEC have already agreed, as you know, to this partial civil judgment, in which he could be forced to pay a fine and pay back investors, if -- if the money is still around. And, right now, as we all know, he's sequestered in his fancy New York apartment.

But I know you have found some folks who are already trying to make money off Madoff.

ERICA HILL, CNN CORRESPONDENT: It really was only a matter of time. In fact, I'm kind of surprised it took this long.

The Madoff money-making has already begun with an action figure, the Smash-Me Bernie doll. It's the brainchild of an Australian living in the U.S., apparently on display at the Toy Fair in New York, dressed in red, as you can see there, with a pitch fork. Kind of like a nod to the devil, perhaps. I wonder how that's sitting with his attorneys.

Like an investment with Madoff, this one, though, does not come cheap, Anderson, the doll apparently 100 bucks a pop. Ouch.

If that is a little too rich for your blood, there's another option, discovered by one of our producers. So, just sit back, relax, and listen to the sweet sound of the Bernie Madoff ring tone.


BERNARD MADOFF, DEFENDANT: The concept of Wall Street, which sometimes the regulators lose sight of, and as do the academics, is, it's a for-profit enterprise. Money on Wall Street is made by taking risks.


HILL: "By taking risks."

That's not creepy when it wakes you up in the middle of the night at all.

COOPER: Is that really a ring tone?

HILL: Guess whose it is?

COOPER: Whose?

HILL: Jack Gray.

COOPER: Is it really?

HILL: Yes.


COOPER: That's funny.


COOPER: All right.

All right, Erica, thanks.

HILL: Good stuff.



Still ahead: President Obama gets a red-hot reception in cold Canada, his first foreign trip since taking office. Some potentially explosive issues were on the table. We will have all the details ahead.

Plus, new details in the brutal attack that left a victim fighting for her life, the chimp attack. Are her injuries severe enough to actually require a face transplant?

And a dramatic development -- a double murder case that made headlines months ago. The defendant, just 9 years old, has pleaded guilty to a lesser charge. Will he do time in juvie? Should he have been charged at all?

When 360 continues.



B. OBAMA: I came to Canada on my first trip as president to underscore the closeness and importance of the relationship between our two nations and to reaffirm the commitment of the United States to work with friends and partners to meet the common challenges of our time.


COOPER: President Obama today in Ottawa, Canada's capital, his first foreign trip since taking office, as he mentioned. It was a short day trip to a longtime U.S. ally and the nation's biggest trading partners.

It is a traditional first stop for -- for a new president. And Mr. Obama, of course, is enormously popular in Canada. But, today, there were some thorny issues on the table.

Ed Henry reports.

(BEGIN VIDEOTAPE) ED HENRY, CNN CORRESPONDENT (voice-over): In Ottawa's bitter cold, the reception was so warm for President Obama that Canadians were chanting a familiar mantra.

UNIDENTIFIED MALE: Yes, we can. Yes, we can.

UNIDENTIFIED MALE: Yes, we can. Yes, we can.

UNIDENTIFIED MALE: Yes, we can. Yes, we can.

HENRY: The campaign phrase causing campaign confusion.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: It is a great pleasure to be here in Iowa -- in Ottawa.

HENRY: Known for being calm and cool, the president was more cautious and careful on tough diplomatic matters.

On trade, he tried to calm Canadian fears about "buy American" provisions in the stimulus law. And was gentle in his push to add labor and environmental protections to the North American Free Trade Agreement.

OBAMA: There's a way of doing this that is not disruptive to the extraordinarily important trade relationships that exist between the United States and Canada.

HENRY: Far different from his forceful comments during the campaign in key states like Ohio, where he appealed to blue-collar workers by suggesting the U.S. bolt from NAFTA.

OBAMA: I don't think NAFTA has been good for America, and I never have.

HENRY: On the war in Afghanistan, the president is sending 17,000 more U.S. troops while Prime Minister Stephen Harper is planning to bring all 2,500 of his combat troops home by 2011.

Mr. Obama went out of his way to say he did not press Harper to reconsider and dodged a question about how long U.S. troops will stay by saying he's waiting for a top-to-bottom review.

OBAMA: At that point, we will be able to, I think, provide you with some clearer direction in terms of how we -- how we intend to approach Afghanistan.

HENRY: His broader theme. The financial crisis is global. So the U.S. needs to work with allies to beat it.

OBAMA: First we shared a commitment to economic recovery. The people of North America are hurting. And that is why our governments are acting.

HENRY: Before heading home, the president soaked in more adulation at a farmers' market and did a little shopping. He was on the hunt for a snow globe and a key chain for his daughters. OBAMA: I'm looking for a key chain.

HENRY: And a local pastry known as a beaver tail, a flat donut made more popular with a ring of whipped cream in the shape of an "O" to honor Mr. Obama.

The locals couldn't vote for him last fall, but officials here say thousands of Canadians did cross the border to volunteer on his campaign. Not a bad way to make your first foreign trip go a little smoother.


COOPER: Ed, why was the trip so short?

HENRY: Well, what's interesting is that he was here for only a few hours, didn't even stay for dinner. And I'm told by officials who helped organize this trip that that was on purpose, that the president did not want to have a big ostentatious dinner, a lavish party, which would be traditional for a first foreign trip like this, while Americans are back home suffering from a recession. He realized that image would not be good, those pictures going home.

And the president, though, did say that he'd be back to Canada soon, but he'd wait until it got a little bit warmer, a little bit of a joke. But I can understand. I can tell you, it's pretty cold right now, in the single digits.

So in fact, I got one of those beaver tails. It's just out of the oven, and you can see the whipped cream in the shape of an "O." They actually call these Obama tails. So I hope, Anderson, you won't mind if I take a bite, because it's pretty cold out here.

COOPER: All right. Well, enjoy, Ed. I'll leave you to it.

HENRY: Good.

COOPER: Good? All right. Thanks very much.

HENRY: It's pretty good. it's a little frozen, actually.

COOPER: All right. Well, thanks very much. Go inside.

On a much more serious note, investigators still do not know what provoked a 14-year-old pet chimpanzee, raised and treated like a human, to viciously maul the woman he knew. Tonight, new details on the victim's injuries and her progress so far.

Also ahead, a double murder case ends in a plea deal for the 9- year-old defendant. That's right, 9 years old. You see him right there sitting in that chair. He was just 8 when he was charged with shooting his father and another man. What the deal involved and what his sentence might be. We'll find out.

Plus this...


MICHELLE OBAMA, FIRST LADY: The challenges that we face are serious and real. And it's going to take quite a long time to get this country back on track.


COOPER: First lady Michelle Obama continuing her tour of government agencies. Just how important has her role become in the White House? We'll explore that ahead.


COOPER: New details tonight in a story that riveted the nation last fall. A 9-year-old boy charged with murdering his father and another man accepts a plea deal.

First, Erica Hill, though, joins with us a "360 News and Business Bulletin" -- Erica.

ERICA HILL, CNN ANCHOR: A Connecticut woman who was mauled by her friend's pet chimpanzee three days ago transferred today to the Cleveland clinic. You may remember that clinic performed the nation's first successful face transplant two months ago. The 55-year-old Stamford, Connecticut, resident suffered massive injuries to her face and hands in that unprovoked attack. Police shot and killed the chimp.

In Pennsylvania, police arrested a 19-year-old man they say deliberately set seven fires in and around Coatesville. That's west of Philadelphia. At least 18 arsons have been reported in that county since the year began. Bail for the suspects set at $9 million.

In Kyrgyzstan, the parliament there has voted to close a key U.S. military base. It's used as a major resupply hub for the war in Afghanistan, and it is the only U.S. base in central Asia. If Kyrgyzstan's leader does sign this bill, it could complicate efforts to get more U.S. troops into Afghanistan.

And in California, the epic budget battle over tonight. Lawmakers earlier today approving a plan to close the state's $42 billion deficit through steep cuts and new taxes, Anderson.

COOPER: All right. Next on 360, Erica, a child's plea deal for killing two people, including his father. We heard the confession caught in tape, and tonight, find out if the 9-year-old will be serving time. I'll have the latest on this disturbing case ahead.

And this.


HILLARY CLINTON, SECRETARY OF STATE: Here is the problem. OK. You see all of these people? If I start to sing, they will leave.

(END VIDEO CLIP) COOPER: Hillary Clinton on the road, asked to sing. Find out how she got out of this one when 360 continues.



UNIDENTIFIED FEMALE: This is the room we talk to people and we make a promise to each other that we're only going to tell the truth. OK?



COOPER: Police talking to a little boy, asked to tell the truth, and he's 8 years old. The boy accused of gunning down his own dad and another man. The story made headlines a couple of months ago when that tape was first released. Well, tonight it is making news again.

The case against the child is over, and it ends with a plea deal. Some say it's fair. Others believe the boy is being victimized by the criminal justice system. We're going to talk to a legal expert, our senior legal analyst, Jeffrey Toobin, for that perspective. But first, let's give you the facts.

Here's Gary Tuchman with tonight's "Crime & Punishment" report.


GARY TUCHMAN, CNN CORRESPONDENT (voice-over): It is a confession from a child.

UNIDENTIFIED FEMALE: How many times do you think you fired the gun?




UNIDENTIFIED FEMALE: Do you think it could have been more than twice?

UNIDENTIFIED MALE: No, I thought it was twice.

TUCHMAN: The 8-year-old boy, his identity hidden because of his age, is interrogated by two female police officers. Earlier, on November 5, his father and a border at their home were found shot to death. The crime stunned the rural town of St. Johns, Arizona.

UNIDENTIFIED FEMALE: You shot your dad twice?

UNIDENTIFIED MALE: Yes. UNIDENTIFIED FEMALE: OK. And then how many times did that gun shoot (NAME DELETED)?

UNIDENTIFIED MALE: I think twice. Like my dad.

TUCHMAN: The boy says he killed his dad and the other man. But why? He tells the investigators they were in pain.

UNIDENTIFIED MALE: The reason I shot my dad because he was suffering, I think. He was suffering.


UNIDENTIFIED MALE: So I shot him. I didn't want him to suffer.

TUCHMAN: Police have refused to speculate as to a motive. Defense attorneys say the boy was interrogated without being read his rights and without a parent or lawyer present. But now nearly four months after the deadly incident, the boy now 9, agreed to plead guilty to negligent homicide.

JUDGE MICHAEL ROCO: Do you admit or deny?


TUCHMAN: The deal spares him of having being put in a juvenile detention facility. As part of the agreement, he will be on probation until he is 18. He will also undergo regular mental evaluations. And without court approval, he can't attend a school that's not in a secure facility.

Gary Tuchman, CNN, Atlanta.


COOPER: The child's mom says the plea's unfair, that he's too young to understand what he says yes to and what he's facing in the future. So was justice served? Let us know what you think at the AC 360 blog.

We're digging deeper, though. Joining me now, senior legal analyst, Jeffrey Toobin. It is, Jeff, an incredibly sad case. What do you make of the plea agreement?

JEFFREY TOOBIN, SENIOR LEGAL ANALYST: Well, you know, the trend in recent years has been to treat younger and younger people as adults in criminal court, 15-year-old, 16-year-old, but this would have been an absolute outrage. This, I think, is a pretty reasonable accommodation of treating an 8-year-old like an 8-year-old and protecting the community. It seems like the people came to their senses here.

Cooper: It doesn't specify, this agreement, jail time, but it places him on what they call intensive probation. What does that mean for the boy going forward? TOOBIN: It basically means, is that he will be intensely supervised by the probation department. They will keep an eye on him. There will -- there will be regular evaluations from him. So that if he is potentially a danger to the community or to himself, that the government will know that and take steps.

But I think the important thing here is that he is not being treated as an adult. Watching that, watching that tape. Remember, he had to get the Miranda warnings, the right to remain silent. You have a right to a lawyer. How could that possibly mean anything to an 8- year-old? So I think all of those issues were dealt with correctly.

COOPER: Well, also, the police obtained that confession on that tape without a parent or a lawyer present. If this actually had gone to trial, would prosecutors have even been able to use the confession?

TOOBIN: Probably not. That is not -- the real issue there is the parent. There's no way that a Miranda warning could be effective against an 8-year-old. And traditionally, the way law enforcement deals with questioning young people is to have a parent or guardian present. To have that done the way they did it.

Plus, remember, they released the tape, which is completely unprecedented in my experience, before the kid was even charged. I think we were all fascinated with it. But remember just how weird that is and how much prejudicial publicity that would have generated against him.

So, you know, maybe the defense gave up too much here by pleading guilty, but, you know, we don't know what other evidence they had. And this solution does seem to be fair to both side.

COOPER: So at 18, is his record wiped clean? I mean...

TOOBIN: I think the effect is that his record is wiped clean, as long as there are no other incidents. And, you know, I think that probably is right too. You know, for something that is done by a child, an 8-year-old child who really can't form intent the way we think of criminal intent to be, you know, if he manages to stay out of trouble for 10 years, that seems like an appropriate resolve.

COOPER: All right, Jeff Toobin. Appreciate it, Jeff. Thanks.

In a moment, Michelle Obama, she's become the eyes and ears and smiling face of the White House.


M. OBAMA: I brought a little gift to get this garden going. It's right here in this pot. It is a seedling. It will be beautiful one day.


COOPER: Coming up, the first lady's role as ambassador to Washington. Plus Hillary Clinton the rock star, sort of. Her jamming TV moment. The shot when 360 continues.



M. OBAMA: Your contributions are more important now than they have ever been. So again, on behalf of my husband, on behalf of the administration and the Obama family, I want to thank you for your energy, for your passion, and for your commitment.


COOPER: Michelle Obama continues to be on the tour of government -- government agencies in Washington, D.C. We've been showing you over the last couple of weeks her increasing role, her public face as she tries to figure out a role for herself in the White House.

The question now is how powerful has she become in the White House? How important of an adviser is she to the president? Erica Hill takes us up close.



HILL (voice-over): The first lady didn't arrive at the Agriculture Department empty handed. Rallying behind Secretary Tom Vilsack's plans for community gardens at the USDA, Mrs. Obama brought her own addition.

M. OBAMA: I brought a little gift to get this garden going. It's right here in this pot. It is a seedling. It will be beautiful one day.

HILL: Especially if it grows like the magnolia tree it came from, planted on the White House lawn 180 years ago by President Andrew Jackson.

But there is more to this seedling than history. It's tough to ignore the symbolism of this gift. The relationship the Obamas hope to cultivate with the first lady's "get to know you" tour of government agencies.

M. OBAMA: It is an honor for me to serve in this capacity. And coming to these departments like I've been doing is probably one of the -- next to hanging out with Malia and Sasha -- is probably one of the most valuable things that I think that I can do.

HILL: It is also essential to her husband's administration.

LARRY SABATO, UNIVERSITY OF VIRGINIA: The president's been focused almost entirely on the economic stimulus package and probably privately on Afghanistan and Iraq. So she's making the connections to agencies that don't always get much attention. HILL: Her message is consistent and clear. Thank you, and we need you.

M. OBAMA: It's going to take quite a long time to get this country back on track. So your contributions are more important now than they have ever been.

HILL: At each event, the first lady is also doing reconnaissance. With each handshake and hug comes a story of how real Americans are dealing with the downturn: their hopes, their fears, their dreams. Information the president needs.

SABATO: There is no more influential adviser than Michelle Obama. The trick is to be that influential adviser in private rather than in public. And in public, using those occasions to reinforce the president's agenda.

HILL: While Mrs. Obama's office tells CNN she is not visiting these agencies as a political surrogate for the president, the first lady is staying on message at each stop.

M. OBAMA: And the president's plan to address the home mortgage crisis is going to help rural families refinance their mortgages.

HILL: The White House hopes the first lady's plan will continue to help the president.


COOPER: So where does she visit next? Do we know?

HILL: It's a great question. I tried to get that answer from the White House today. I did not hear back from the first lady's office. But I also asked Larry Savage. I said, looking at the moves that she's made thus far, where do you think she'll go next? He said, well, that one's tough. But what he said -- I can tell you where she won't go, the places that don't yet have a secretary. So don't expect to see her popping up at the Commerce Department, the Labor Department or Health and Human Services until those cabinet positions have someone in them.

COOPER: All right. Thanks, Erica.

Up next tonight, Hillary Clinton's TV moment that has a lot of people talking. A little awkward. Take a look.


CLINTON: I don't feel so old. I love it.


COOPER: Hear why kids dig the secretary of state in Indonesia. It's our "Shot."

And at the top of the hour, record new job losses. When is it going to get better? Well, Ali Velshi with the numbers on your money, your future when we continue.


COOPER: All right, Erica, time for our "Beat 360" winners, our daily challenge to viewers to come up with a caption for a photo that we put up on our blog every day, captions better than the one we can think of.

Tonight's picture: a young White House guest takes a cell phone picture of Sasha and Malia Obama yesterday during an event celebrating Black History Month. He clearly knows a photo op when he sees it.

Our staff winner tonight is Joneil. Caption: "Just because you look like a Jonas brother doesn't mean I want you to take my picture."


HILL: I think this is Joneil's first win. He's new to our staff. Congratulations.

COOPER: Exactly. Our viewer winner is Dan from Lake Rantankama (ph), New York, his caption, "Taken only seconds before Timmy became the youngest photographer ever beaten up by the Secret Service."

HILL: That'll teach those kids a lesson.


COOPER: Exactly. Dan, congratulations, your "Beat 360" T-shirt is on the way.

All right. Time for "The Shot." Secretary of State Hillary Clinton is on a four-nation tour of Asia before heading to South Korea. Today squeezed in a visit to Indonesia. A lot of tension, certainly, in the region. No getting around that. Clinton held serious talks with government leaders, but also got personal on a local television program. Take a look.


UNIDENTIFIED FEMALE: What is your favorite music?

CLINTON: For me, it's really the old standbys, like the Beatles and the Rolling Stones. I'm really very...


CLINTON: Oh, good, good.


CLINTON: I don't feel so old. I love it.


COOPER: Secretary Clinton seemed to be a hit with the crowd. The interview was supposed to last for 10 minutes, went for about 20. They tried to get her to sing.

HILL: No dice.

COOPER: But wisely, she said no.

HILL: Yes. She did. She said she was afraid if she sang everybody would leave, the entire audience, which was kind of cute. She did, though, try a phrase -- they asked her to say a phrase and repeat after them, and she did. I have no idea what she said but -- nor can I repeat it, but there you go.

COOPER: All right.

All right, you can see all the most recent "Shots" at our Web site, Erica, have a good evening.

Coming up at the top of the hour, new signs the economy is still in deep trouble. New questions about the president's strategy to get it going again, next.