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Anderson Cooper 360 Degrees

President Obama to Travel to Copenhagen; Special Forces Rescue American Hostage

Aired December 17, 2009 - 22:00   ET

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

ANDERSON COOPER, HOST: Larry, thanks so much.

Tonight, time running out for President Obama on two key issues. With the president on his way to Copenhagen right now, climate and healthcare reform are on rocky ground. And with his poll numbers plunging, his agenda appears in serious trouble. James Carville and Bill Bennett square off tonight.

Also tonight, video you'll only see here on "360," Special Forces rescuing an American held hostage in an underground cell for nearly a year. We're going to hear from the man they saved and from our own Michael Ware who also had a very close call being held hostage.

And later, an international custody nightmare. An American dad just wants his son back, but the boy's Brazilian stepfather is fighting that. It's been five years now. When we lost talked to David Goldman last night, his flight was taking off for Brazil. He was hopeful he would be reunited with his boy today and return home with his young son, Sean.

But a stunning blow to those hopes a few hours ago. His custody battle not over, not by a long shot. What is going on in Brazil's courts? We're keeping them honest tonight.

But first up, President Obama in trouble, record-low approval ratings, and his promises and healthcare and climate change possibly out of reach. The president is right now on his way to Copenhagen for the final day of the U.N. climate talks.

He boarded Air Force One earlier this evening and took off around 7:00 p.m. eastern. That's him headed for the flight.

Yesterday, talks broke down after Chinese delegates rejected U.S. demands that they commit to transparency. As you see, there have been violent clashes in the streets as well.

And today, Secretary of State Hillary Clinton warned participants that they are running out of time. Right now, just hours remains to deliver a deal, and a lot is riding on it for President Obama.

Also of course with health care. The battle has taken some new turns. Former DNC Chairman Howard Dean, a medical doctor also, saying he would not vote for the current bill.

(BEGIN VIDEO CLIP) HOWARD DEAN, FORMER DNC CHAIRMAN: The fact of the matter is I wish this bill were a better bill, because I think we need health insurance for all Americans. I'm still a huge supporter of the president and a huge supporter of all those senators who are upset with me, but the fact is this has now become an insurance company's bill. With the loss of the public option, the loss of Medicare, this bill really does more harm than good.

(END VIDEO CLIP)

COOPER: The president's top adviser David Axelrod shot back at Dean. Take a look over here at the wall. He said that Dean's objection to the current bill is, and I quote, take a look, "It is predicated on a bunch of erroneous conclusions," he said.

He also had this to say about all the heat that Joe Lieberman is taking for forcing Democrats to drop expanding Medicare from the bill. Some are now threatening to withdraw their support. To them, Axelrod said, "The notion that we let our personal feelings about one person defeat a bill that would deliver insurance to people at a price they can afford is insane. It shouldn't be about Joe Lieberman. It should be about people who need help."

As of now, Lieberman seems onboard, but now Democratic Senator Ben Nelson is the biggest obstacle. They're trying to work out a compromise, but so far, no go. Today Nelson told a radio station KLIN in Nebraska. Listen.

(BEGIN VIDEO CLIP)

SEN. BEN NELSON, (D) NEBRASKA: As it is right now, without further modifications, it isn't sufficient. There's a lot of improvement on the legislation, but the basic question about funding of abortion has not been fully answered yet.

(END VIDEO CLIP)

COOPER: Without his vote and Lieberman's, the Democrats do not have enough votes, and with poll numbers like these, take a look. In early in December, just 48 percent approved of how he is handling his job. That was down from 55 percent in mid-November.

For the president, it is essential he is able to get some health care reform bill passed because on so much else the momentum does not seem to be moving in his favor.

Earlier I spoke about it with CNN political contributors James Carville and Bill Bennett. Both have decades of experience as political strategists on opposite sides of the aisle.

(BEGIN VIDEOTAPE)

COOPER: James, let's start off with you. How bad are things in the Democratic Party right now? How much trouble is President Obama in? JAMES CARVILLE, CNN POLITICAL CONTRIBUTOR: You know, look, the health care debate has been long. It's coming to a conclusion here, and you've got people disagreeing. The problem, as David Axelrod can count to 60 and so can Harry Reid. And if you can't get to 60 votes you can't get anything.

But it looks like they have a good shot to get 60 votes and this thing could be very historic. But you're right, there are so many unions and so many people angry. That's part of what happens when you govern and you've got a big party like we do. There's going to be some discontent, and we're seeing that right now, no doubt about it.

COOPER: Bill, how much damage has been done to President Obama and his agenda?

BILL BENNETT, CNN POLITICAL CONTRIBUTOR: I think a fair amount. There was an article in the "Washington Post" today Anderson that said pass the tea to the left. There may be some tea parties on the left brewing, excuse the pun.

There is a lot of criticism, Howard Dean, very tough, said kill this bill, start over. A lot of the commentators are weighing in on that M channel, it begins with M. I won't say the name of the cable channel. But there's a lot of criticism. And as James says, you've got to get to 60, and they're not there yet.

And the whole thing, one wonders, talking about creating a huge debate over the course of a year, moving mountains and producing a mouse. I mean, maybe they'll produce more than a mouse, but this was not the highest priority of the American people. A lot of bodies here on the side of the road, and they don't have victory yet.

I don't think they're going to get it. I just don't think they're going to get it. The longer this debate has gone on, the more and more opposition there has been from the American people. We're talking about CNN polls of upwards of 60 percent opposed, 30 percent in favor.

And look at the criticisms now -- what is it you're actually producing? It doesn't seem to satisfy anybody.

CARVILLE: You're producing according to CBO covering 94 percent of people, and you're $600 billion in long-term savings. I don't know, that seems like pretty good to me. Maybe you're not at 100 percent, but 94 percent is a heck of a lot better than where we are.

And let's wait and see. They may not get there. I know people are predicting that they won't, but if they do get there, it's going to be a remarkable victory.

And once they get there and people see it, I suspect these numbers are going to turn around. But sometimes to create a narrative, the press and the people -- you know, some people in the Democratic Party, all the people in the Republican Party said this thing is not going to pass, there's no way. They may be right. Let's see. BENNETT: Well, but again, think of where we started. You have a Democrat in the White House, you have Democrats controlling the Senate by 60, and you have Democrats in big control of the House. This is no miracle.

If they get it through, you know, what took so long? And the miracle will be they've done this in the teeth of the American people who are opposed to this thing.

(END VIDEOTAPE)

COOPER: We're going to have more with Bill and James in just a moment. You can log on to chat at ac360.com. I just logged on myself.

Coming up on "360," a daring rescue by Special Forces. There is exclusive video you're only going to see here on "360." You're also going to hear from this American who was saved, literally he was being held underground with cement covering him. It was like a tomb. We'll also talk to Michael Ware who was a hostage in Iraq as well.

Later, a huge setback for an American father we talked to just last night as he was headed for Brazil. It looked like his five-year custody battle over his nine-year-old son might be over. In came a new ruling by Brazil's highest court today. How can a foreign court keep an American dad from his American son? We're keeping them honest, ahead.

(COMMERCIAL BREAK)

COOPER: We're talking raw politics with CNN's political contributors Bill Bennett and James Carville.

President Obama on his way right now to Copenhagen where climate talks fell apart yesterday. Tonight the healthcare mess is messier than ever here at home. Senate Democrats do not seem to have the votes they need.

That's where we pick up with Bill and James.

(BEGIN VIDEOTAPE)

COOPER: If the president doesn't get this and he's expended a lot of capital and with nothing show for it, what happens then?

BENNETT: He's in trouble.

CARVILLE: It won't be good. That's for a fact. If this thing doesn't come through, it will be viewed as a setback for the president.

But presidents have setbacks, and I suspect that he'll be able to recover from that. It was certainly a setback in 1994 when we lost the health care fight. We lost an election and we came back pretty good. So we'll see where it goes. I'm not totally convinced that they're going to lose. I do think the expectation game somewhat favors them and they will look better if they win. But I don't know the answer. I don't think anybody does, and that's the truth.

COOPER: Bill, you now have the president going over to Copenhagen. Things don't look good there or don't seem to be going well over there. What happens if he goes over there and nothing happens?

BENNETT: Well, it will be the second time he's gone to Copenhagen and come back empty-handed. The disgrace of Copenhagen was on display yesterday. Hugo Chavez took the floor, denounced capitalism to thunderous applause, standing ovation, wants to end capitalism.

We know a big part of the agenda at Copenhagen is anti- capitalism, anti-big countries, anti-the west, and of course, anti-the United States. And you're not going to get a big agreement because many of the major countries have pulled out of it.

Again, these are things that he's brought upon himself by setting these priorities when these are not the priorities of the American people, which are about economic recovery and jobs and ending the deficit spending. So these are not problems you had to have.

CARVILLE: First of all, I was very gratified as a Roman Catholic to see the Pope talk about the ecological crisis that going on and very supportive of action in Copenhagen. I think Catholics can rejoice that our religion is embracing science as we so often and we're doing it again here. So I was delighted to see that.

On the other hand, I don't know if maybe I didn't read the jobs report. When President Obama took office, we were losing 400,000 or 500,000 jobs a month. Now we're down to losing 11,000. The confidence in the economy has gone up. The federal government was able to save the banking system in the United States.

And I suspect that in the next five or six months we're going to start seeing some real positive job growth here, and that's going to be a large part a result of this president's policies.

So everybody is doom and gloom on the economy. Let's wait to see next summer as we go into the election and we start seeing some growth in this economy, and he'll be able to take credit and be able to play all the people that said what he was doing would never work. Let's see what happens. I think they've got a pretty good hand going into 2010 on this.

BENNETT: We shall see. I hope that the economy does recover. That may not serve the narrow interests of the party, but I do hope the economy does recover for the sake of the country. I don't think these policies are what will bring it about, though.

COOPER: Bill Bennett, James Carville, guys appreciate it. Thank you very much. CARVILLE: Thank you.

BENNETT: Thank you.

(END VIDEOTAPE)

COOPER: A quick not about Bill -- he has a new book out. It's called "The True St. Nicolas, Why he Matters to Christmas." It's all about Santa's back story. It's an interesting book. You should get it for Christmas. It's a good one for the holidays.

An American held hostage for nearly a year and freed in a daring Special Forces rescue. We have exclusive video that we want to show you for the first time. It's an amazing story, what this man went through. He talks about his life in an underground cell. I can't imagine it. That's coming up next. Michael Ware joins us for that.

And later, Sarah Palin on a beach in Hawaii. Was seen this photo? She's wearing a McCain visor, but looks like she's working hard to hide the McCain name in it. It looks like it has been blacked out. Why is the question, a lot of folks reading a lot into this picture. What's her side of the story? We'll have that for you coming up.

(COMMERCIAL BREAK)

COOPER: Up close tonight, we have some extraordinary video to show you. It's the rescue of an American held hostage in Iraq for nearly a year. His name is Roy Hallums, an American contractor.

And take a look at this exclusive video. You'll only see it here at CNN. And we're going to show you much more in a moment. It's Special Forces rescuing Roy, and the ordeal he went though is simply stunning.

Our Michael Ware has spent years covering the war in Iraq, was briefly himself held captive. He joins us now. Michael, the conditions that Roy Hallums was held in, it's unthinkable.

MICHAEL WARE, CNN INTERNATIONAL CORRESPONDENT: Honestly, it's mind boggling, Anderson. I mean, I've been grabbed a few times by different people in different places. I had not had to endure the long-term captivity that Hallums and others have experienced.

But even compared to other people, what Hallums went through -- I'm the only person who's been able to go back to the house where he was held and go into the house...

COOPER: And this is the underground cell?

WARE: Literally, literally. It was in a farmhouse. There was a block you would lift up and climb down, and there would be this space. You couldn't even stand up in it. There were no lights, no ventilation.

And for the last three months -- he was held there for ten months, always tied, always masked. For the last three months when they would close the lid, they would cement it over.

COOPER: They would close it up?

WARE: They would cement it over.

So if you take a look here, you can see this was a space. It had a lid that they would then cover and a family lived above. They were the cover story for the kidnap gang.

COOPER: Unbelievable.

WARE: But for the last three months, they would trowel over with concrete and every three days chip it over to feed him again. That's a nightmare I can't even begin to fathom.

COOPER: Let's take a look at this piece.

(BEGIN VIDEOTAPE)

WARE: Three months after Roy Hallums disappeared in Baghdad in 2004, this proof of life video appeared.

ROY HALLUMS, KIDNAPPING SURVIVOR: My name is Roy Hallums, I'm an American national.

WARE: Hallums was an American contractor, building mess halls and providing food to the U.S. military, and his kidnappers were demanding $12 million for his release.

HALLUMS: You're just basically in shock. And you're moving and you're walking but it's almost like an out of body experience. You can see what's going on, but you don't believe it.

WARE: Before it was over, Hallums would be held nearly a full year by Iraqi insurgents -- 311 days, something I know a little about having been taken by Al Qaeda myself.

WARE (on camera): When I was grabbed by Al Qaeda and pulled from my car, I mean, they were just going to cut my head off. But it was like it was someone else. At that moment, it felt to me like it was happening to someone else even though I was completely or even hyper- aware of the moment.

HALLUMS: You're right. It's like it's almost third person, that I can sit there and tell the story. I can answer any question anybody has. It doesn't bother me, and what's for lunch, you know?

WARE (voice-over): This is Hallums at the end of his ordeal. He lost 40 pounds but says he never lost hope. For most of the time, his kidnappers kept him in a secret and cramped underground cell, the entrance sealed shut.

HALLUMS: You could hear them trawling this concrete over the door, and then they would shove a freezer over the top of that to hide where the door was. You're buried in there, and if they decide, well, it's just too dangerous to go back to the house and they never come back, then you're in your tomb.

WARE (on camera): Dead men tell no tales.

WARE (voice-over): Eight months after his proof of life video had appeared, U.S. special forces received a crucial tip on his whereabouts. Worried Hallums would be moved, they instantly launched a daylight rescue, four helicopters sweeping into a village south of Baghdad.

This video shot on a soldier's helmet camera and beamed back live to headquarters. The men smashed their way into the house. They knew to look under the freezer, under the rug, and then under the concrete.

HALLUMS: I heard Special Forces pounding on this little door in the room where I was, and the guy jumps down in there and says, "Are you Roy?" It's like, well, this can't really be happening, because after all this time, they actually found where I was, you know, which was a miracle.

WARE: Two days after Roy Hallums was rescued, I joined a U.S. hostage team gathering information and I shot this video as they returned to the Iraqi farmhouse and Hallums' hell hole.

It gave me a sense of what may have awaited me or any other of the westerners kidnapped in Iraq. And now talking with Hallums, it's forcing me deal with things I would rather forget.

My experience began here. I was grabbed in late 2004, not far from where you see this burning American Bradley fighting vehicle. Al Qaeda had just taken over the neighborhood. Like Hallums, I was taken at the height of Al Qaeda's campaign of their videotaped beheadings, like this one, the last images of one contractor Nicolas Berg alive.

I actually videotaped my own capture. My camera catching one of my abductors pulling a pin on a grenade before they pulled me from the car.

Unlike Hallums, for me there was to be no imprisonment. This was Al Qaeda, and I was going to die. They readied me immediately for beheading, to be filmed with my own camera. I was only saved by Iraqi insurgents I knew who resented Al Qaeda's takeover.

Meeting Hallums, sharing our experiences, flushed up in me a mix of emotions. I can't even bear the thought of being held months on end like he was.

HALLUMS: You're laying there in this little hole in the dark. You're tied up, hands and feet, and every little noise, every little bump -- is this it? Is this when they're going to do it?

WARE: And as with much in war, you gain a new perspective on life. We both know nothing is ever going to be the same for us again. WARE (on camera): Is it the little things? Like for me, with all the conflict I've been in, it's the tiny things. It's a smell or a sound, or it can be a certain texture or color or word that triggers or evokes memory. What is it for you?

HALLUMS: Usually little things. I had nylon zip ties on my wrists 24 hours a day for 10.5 months. The other day I was out walking my dog and my neighbor had brought something home from the store and he was cutting the zip ties off of the bundle, and I looked down at his yard, and there's these zip ties laying there that had been cut off.

And it's just one of those things, you remember, you had a different relationship with that zip tie than he has.

WARE: In the end, though, it's those who love us waiting back home, often unknowing, who suffer the most, while survivors like Hallums barely able to walk or talk after not being able to do either for so many months, know just how lucky we are to be alive.

(END VIDEOTAPE)

WARE: And yet as luckily as we are, Anderson, the Roy Hallums of the world know all of this comes with a price that we'll just keep paying forever.

COOPER: It's unbelievable how calm he is describing it.

WARE: He's such a stoic individual. He is so understated. What I fear is so much is buried.

COOPER: It's great that he's made it this far. Michael appreciate it, Michael Ware.

WARE: Absolutely.

COOPER: Coming up next, an international custody dispute, and a father's fight for his son. Take a look -- that's a picture of David Goldman, his son Sean. They were supposed to be reunited today in Brazil. Sean was taken by his mom five years ago. Now local officials are standing in the way of a Brazilian court order.

What right does an American dad have in a case like this? We're keeping them honest.

And a massive shootout on the streets of Mexico leaving one of the most notorious drug cartel leaders dead. The dramatic video was caught on tape. We'll have the latest in the war next door. We'll be right back.

(COMMERCIAL BREAK)

COOPER: Yet another delay for David Goldman, who saw hope only yesterday that after five years he would finally be able to bring his son home from Brazil. The question is, how can a Brazilian court keep an American dad away from his American son. Tonight, we're keeping them honest.

(NEWS BREAK)

COOPER: The fate of a nine-year-old boy caught in an international custody battle. Sean Goldman was taken to Brazil by his mom. You may remember that. She died. And now his stepfather refuses to return him to his real dad in America. Tonight, they were supposed to be reunited, but the law in Brazil is trickier than you might know. We're "Keeping Them Honest."

Also later, a Mexican immigrant beaten to death. Tonight, prosecutors are calling the killing a hate crime, and they say three cops protected the victim's attackers. 360 investigation coming up.

(COMMERCIAL BREAK)

COOPER: Tonight, a devastating setback for an American dad who flew to Brazil last night, hoping to bring back his child. And frankly, this last-minute development came as a complete surprise to a lot of people.

This is 9-year-old Sean Goldman. He's been at the center of a bitter five-year international custody battle. And the whole thing started when Sean's mom told her husband, Sean's father, that she was taking Sean on a trip to her native Brazil. She never came back. She remarried there but died last year.

Sean stayed with his stepfather, but his dad has desperately been trying to get him back.

Yesterday there was good news. David was heading to Brazil after a court ruled that Sean belonged to him and ordered him returned to his dad. In an interview on 360 last night, David was on the plane, and he expressed hope that he would soon bring his son home. Listen.

(BEGIN VIDEO CLIP)

DAVID GOLDMAN, FATHER OF SEAN: I can only do the best I can, follow the advice of my attorneys, follow the rule of law and, hopefully, everything else will this time work out. That the rule of law, God, nature, human decency will be followed and Sean will come home to reunite with me, his only parent and his family.

(END VIDEO CLIP)

COOPER: Today, he and we learned that Brazil's highest court ruled Sean would stay in the custody of his stepfather for the time being. So how is that possible?

David was hours away from taking his son home, but then a very surprising decision from the bench. Why was that made? Tonight we're Keeping Them Honest. Let's talk about it with senior legal analyst Jeffrey Toobin, former federal prosecutor Sunny Hostin, and with us on the phone, CNN senior producer Adam Reiss, who flew with Adam [SIC] Goldman to Brazil and has been with him on the ground. First of all, Adam, you were with David Goldman on the plane over there. He says the trip felt different from other times he'd been to Brazil when his hopes had been dashed. What happened?

ADAM REISS, CNN SENIOR PRODUCER: Well, it did feel different. He was slightly hopeful this time, and it did seem different. There was a feeling of momentum. Something decisive had happened in court this week.

But when he landed, he was surrounded by an unusually large mob of cameras, which could have been a hopeful sign. Police were forced to rush him to his motorcade. It did seem like something was imminent. Then this afternoon, it felt like the air came out of the room. Word came down. The decision that Sean stays here in Brazil. You could feel the air leave the room. Everyone here clearly dejected, Goldman clearly upset, Anderson.

COOPER: Jeff, how is this possible? I mean, he was supposed to have been returned long ago. Multiple courts have ruled this. And yet every time he goes down there, something new comes up.

JEFF TOOBIN, CNN LEGAL ANALYST: Well, you know, we've covered a lot of these cases, and you know, the tragic truth is possession is 9/10 of the law. And these foreign courts don't like to give up these kids, whether it's Japan, Korea, here in Brazil. It's very tough to get them to give up.

Here, they introduce the idea of, well, we need to get the feelings of the child, we need to interview the child. Well, if that's the rule, then the lesson to be learned is you should kidnap a child as young as possible so that they identify with their captors and ask to stay.

COOPER: Right. Is this -- should a 9-year-old who's been held down there for five years be the one being the judge of this?

SUNNY HOSTIN, FORMER FEDERAL PROSECUTOR: Well, I think the question is, and Jeff, you know this, the question in the U.S. is what is in the best interest of the child. And I think that we do have to take into consideration, what the child's will is. What does the child think? And this child...

COOPER: So why not, then -- do you're -- I mean, does that justify being kidnapped?

HOSTIN: It certainly doesn't. No.

COOPER: It seems to reward that.

HOSTIN: It does seem to reward that. And I'm not suggesting that what happened here is OK. But now we are dealing with a different set of circumstances. We're dealing with a 9-year-old -- almost a 10-year-old child that is saying, "This is my life. I am happy. I am content. This is the only life that I know and I want to stay."

And are we prepared as a society to say that will does not matter, that opinion doesn't matter? I don't know.

TOOBIN: I think the answer is yes.

HOSTIN: And I don't -- I don't know that.

TOOBIN: I think, when you're dealing in circumstances where you have a clearly illegal kidnapping, where extending the legal process has been solely at the instigation of the people who did wrong in the first place...

COOPER: Right.

TOOBIN: ... when you have a father, someone with the absolute -- the only surviving parent seeking custody, I think the answer is yes.

COOPER: Adam, how is this playing in Brazil? I mean, is there a lot of sympathy for the Brazilian family who's keeping this boy? Or is there more sympathy for Mr. Goldman?

REISS: Well, I can tell you from the people that I've spoken with, universally, they are in support of the father, David Goldman. They say he should go home. That's just an unscientific survey.

I can tell you, though, he's going to stay here for another couple days or three.

COOPER: And is he able to see his son?

REISS: Go ahead.

COOPER: Is he able to see his son?

REISS: The Brazilian family has said all along that David can see him whenever he wants. He -- by the last court decision, can see him six out of seven days, but I believe under counsel he has decided not to visit him. He will wait until that day when he gets full custody.

And what happens now to him? I mean, you say he's going to stay for a couple days. Is there another court hearing schedule scheduled? Or are there just an endless number of courts that can kind of weigh in on this? At some point, isn't there, like, a final say?

REISS: It certainly seems that way, Anderson. It's been like a ping-pong match. His attorneys will certainly study the decision from today. They will appeal, which we're told could take months now that the holiday season is upon us.

And just when we thought we were in the finish line here with the Goldman family, another stumbling block. Everyone thought the Brazilian family had seen the last one of their options run out. But apparently, they pulled one more rabbit out of their hat. Certainly, frustrating David Goldman once again, Anderson.

COOPER: Does this -- Jeff, does it seem hopeless for him? TOOBIN: I don't think it's hopeless. I mean, Brazil is a civilized country. The legal process does work. But it's very hard to get a court to turn over a child in their country.

I don't know how the case will turn out. The next deadline I read is February 1. So, you know, kids grow up. The time is not unlimited. So -- but he's already lost...

COOPER: Five years.

TOOBIN: ... five years of a 9-year-old's life. So, you know, he's -- his passion is to be admired, but time passes.

COOPER: Got to leave it there. Sunny, it's great to have you on the program. Jeff, as well. And Adam, thanks very much. He'll continue to follow it.

Coming up next on 360, allegations of a hate crime cover-up. Three police officers stand accused right now of trying to hide the truth about the fatal beating of an immigrant. Late details -- late developments in this story ahead.

Also tonight, visor-gate. That's the kind of silly name some have given this next story. Sarah Palin photographed -- you see right there -- with a hat with the name "McCain" blocked out. A lot of folks are reading a lot into that. What does she have to say about it? We want to hear from all sides in this program. So you'll hear Palin's explanation.

And tonight, the CNN Challenge. Erica talked about it just 13 minutes away. If you consider yourself a news junkie stick around. While see how much You see how much you know. Be right back.

(COMMERCIAL BREAK)

COOPER: A police chief and two of his officers stand accused of covering up a brutal hate crime, a crime that ended with the death of a Mexican illegal. Authorities say the victim was killed by three white high school football players. None of them were convicted of murder.

And tonight federal prosecutors say the police chief and the other officers coached the defendants and helped them change their story. Now, this is all unfolding in one Pennsylvania community that tonight is under a microscope for what many believe is a shocking case of injustice.

Soledad O'Brien reports in tonight's "Crime & Punishment."

(BEGIN VIDEOTAPE)

EILEEN BURKE, EYEWITNESS: It was getting louder and louder. The ethnic "F" this, Mexican that, spic this. The whole nine yards.

UNIDENTIFIED FEMALE: It's not a racial issue; it's not a hate crime. SOLEDAD O'BRIEN, CNN ANCHOR (voice-over): There are two sides to every story. But here, one side may have been covered up, possibly buried under years of racism and corruption.

It all began 18 months ago in Shenandoah, a small town in western Pennsylvania.

CRYSTAL DILLMAN, FIANCEE OF LUIS RAMIREZ: Fully in my heart, I believe they beat him up because he was Latino.

O'BRIEN: Crystal Dillman's fiance, Luis Ramirez, was an undocumented immigrant from Mexico, looking for work. He was walking down this street in July of 2008 when he came across a group of six white high school football players. From her house across the street, Eileen Burke heard the young men fight.

BURKE: I heard this screeching voice. She said, "Stop kicking him. Stop beating him."

O'BRIEN: When it was over, Ramirez lay on the ground unconscious. In court, a doctor would testify that Luis' brain oozed out of his skull.

DILLMAN: He looked horrible. I've never been so scared in my life.

O'BRIEN: Two days later, Luis was dead.

Two teens stood trial in state court. Derek Donchak and Brandon Piekarsky were charged with aggravated assault and ethnic intimidation. That's a hate crime in Pennsylvania. Piekarsky was also convicted with murder. They were looking at decades in prison.

The trial lasted five days, and the all-white jury convicted the teenagers on only the least serious charge against them: simple assault. Piekarsky got 6-23 months in prison. Donchak got 7 to 23 months.

Crystal Dillman was distraught.

DILLMAN: This is destroying me. This is not justice. Not even a little, little bit.

O'BRIEN (on camera): What would you like to see? What would be justice, you think?

DILLMAN: Them to go to jail for a lot longer than 23 months.

O'BRIEN: The boys? And what else?

DILLMAN: They're not boys. They're murderers.

O'BRIEN (voice-over): That was six months ago. The community has been trying to move on, but federal investigators have not. On Tuesday, just weeks before the teenagers could have been released from prison, the Department of Justice announced they were being charged with a federal hate crime. They now could face life in prison. The young men have yet to enter a plea.

The FBI arrested three Shenandoah police officers, including the chief. The indictment charges all three of them with obstruction of justice, creating false and misleading reports. It says the boys were told to, quote, "get their stories straight" and told to dispose of the sneakers they wore the night Luis Ramirez was kicked to death.

All three officers have pled not guilty. And the chief's lawyer says his client will be exonerated.

District attorney James Goodman.

JAMES GOODMAN, SCHUYLKILL COUNTY DISTRICT ATTORNEY: The case wasn't investigated properly. The crime scene wasn't handled way it was supposed to be. The witnesses weren't interviewed properly.

O'BRIEN (on camera): Is that incompetence or is that corruption?

GOODMAN: This rose past incompetence. I mean, it was clear that they -- they were trying to help these boys out.

O'BRIEN (voice-over): Crystal Dillman left Shenandoah after the trial, taking the children she had with Luis.

DILLMAN: He was the man that I loved. He was the father of my children. He was a human being. He deserved, you know, to have somebody stand up for him and, you know, show that he wasn't a piece of garbage.

O'BRIEN: In this small town, a wound reopened. But some feel justice may yet be served.

Soledad O'Brien, CNN, Shenandoah, Pennsylvania.

(END VIDEOTAPE)

COOPER: Disturbing case. The question is, can federal prosecutors prove the beating death was a hate crime and that the officers worked with the three defendants to cover it up? Let's dig deeper now with CNN legal analyst Jeffrey Toobin.

It's pretty intriguing that, I mean, they are serving time already. But then, just as their sentences were about to end, these federal charges were added on. How common is that?

TOOBIN: It's -- the whole case is very uncommon. Because -- the real key is not the two guys who did the assault. It's the law enforcement. The question here is was this town corrupt, racist, not in terms of its citizens, but in terms of the people who were in charge?

COOPER: And is it possible -- the two people who were charged originally could be used to testify against the officers?

TOOBIN: Certainly. Or the lesser officers could be used to testify against the chief. I mean, certainly in a case like this, what the Department of Justice is going to try to do is flip somebody and say...

COOPER: The police chief is also charged in an extortion case, a separate extortion case.

TOOBIN: Well, a separate extortion case, and there's a civil case where he's charged with essentially saying that a Hispanic guy named Vega committed suicide in prison when, in fact, the officers killed him.

So, I mean, the storm of allegations regarding this small town is really astonishing. Now, that's just a civil case so far. The Justice Department has not brought that fake suicide case.

COOPER: How quickly does something like this move? A federal...

TOOBIN: Not very quickly. But I mean, they are indicted now, so there probably be an arraignment shortly and a trial maybe in the spring.

COOPER: All right. Jeff, thanks very much. Have a good weekend.

TOOBIN: An amazing case.

COOPER: Yes.

Coming up, let's take a look at this. A shootout on the streets? Take a look.

(BEGIN VIDEO CLIP)

(GUNFIRE)

(END VIDEO CLIP)

COOPER: Gunfire right there. A big-name drug lord is dead in a shootout. What does this mean for Mexico's war against the cartels? We have details and more of the dramatic video ahead.

And what is Sarah Palin hiding? The name McCain is blacked out on that visor she's wearing. Is it a political statement or, well, is there another explanation? We have her answer, coming up.

And drum roll, please. We are just minute ace way from the "CNN Challenge." Excuse me. At home, you can quiz your news knowledge. I think Erica is going to quiz mine.

ERICA HILL, CNN ANCHOR: ... there, Anderson.

COOPER: Getting a little nervous. I'm a little verklempt. We'll be right back.

(COMMERCIAL BREAK)

COOPER: The moment has arrived, time for me to submit to the "CNN Challenge," which is actually a game, I guess, you can play online.

HILL: Yes.

COOPER: And it's at CNN.com/challenge?

HILL: CNNchallenge.com. You were close. You were close. You were all about this, because you had to be a part of it.

COOPER: Yes.

HILL: So the beauty of this game at CNNchallenge.com -- in case you didn't catch it the first time, we'll say it about 18 more times in this segment -- is you can pick one of the many CNN anchors to help you out. You've got a whole cast of characters here. Larry, John King, myself, Anderson, Sanjay. I'd like to start with Mr. Wolf Blitzer.

WOLF BLITZER, CNN ANCHOR: Wow. You chose the best person for the job. No doubt about that. Not that Anderson Cooper guy. He was too chicken to dance with Ellen DeGeneres.

COOPER: Wow.

BLITZER: Hopefully, you're not too chicken to do your best on the quiz.

HILL: Well, he's giving you the throw down. Wait. Do you mean this moment on "Ellen"? Do we have that tape?

COOPER: Oh, great.

Yes, yes, thank you. OK.

OK. I didn't dance.

HILL: You didn't dance. We said it once or twice. OK, so you can pick anybody. You can pick me.

It's all right. You don't have to choose right away. Trust me. I'm used to waiting. Normally, it's waiting for Anderson Cooper to finish coifing those silver locks. So really, take your time.

COOPER: Nice. Nice.

Is this game all about dissing me?

HILL: It's not, it's not.

COOPER: You don't want Blitzer in the situation room.

HILL: All right. So once you choose your host, then you're going to move on to the challenge. And here's where we test your knowledge, Anderson Cooper.

COOPER: OK.

HILL: This is the lightning round.

COOPER: Wow.

HILL: See the clock. Ninety seconds. OK. Which world leader's nose was broken during an attack in a rally? Click it and drag it down here. Now hit submit.

COOPER: Oh, OK.

HILL: Next question.

COOPER: That's cool.

HILL: What organs did doctors at two Washington hospitals transfer between 13 donors and 13 recipients? You have to move the letters all around.

COOPER: Oh, you're kidding.

HILL: Do it quickly. Sixty eight. Sixty seven. If we play the "Jeopardy" music would that help you? There we go.

COOPER: How do I spell...

HILL: I don't know what you're spelling, baby.

OK. There you go. Now hit submit if that's your final answer.

COOPER: All right.

HILL: OK. No. 3, here we go. Fifty seconds left. A Copenhagen report on climate change could replace the Kyoto Protocol. When was that enacted?

COOPER: What are my options here? What are my three options?

HILL: Eighty-seven, 97, 93.

COOPER: It was -- I'm guessing '97. All right.

TOOBIN: You said '93.

HILL: You didn't move it properly, so I'll give you that one.

COOPER: Was it '97?

HILL: Brian Kelly will coach football next year at Notre Dame. In which U.S.? Come on, football. This is your -- you love sports.

COOPER: Notre Dame is -- Notre Dame.

TOOBIN: Indiana.

COOPER: It is? OK.

HILL: Yes. Do you know where Indiana is? COOPER: I don't think I do.

HILL: Do you want me to help you?

COOPER: I panicked.

HILL: Here's Indiana right here.

COOPER: OK.

(CROSSTALK)

HILL: Final questions -- oh, I think you're out of time. You're out of time.

COOPER: I'm terrible with geography.

HILL: And everyone in Indiana hates you, but other than that, it's fine. So you actually did have the correct answer. See, it will give you a breakdown here. We didn't have time for the last one.

COOPER: OK.

HILL: But you can play the challenge round.

COOPER: Wow. So anyone can do this online? That's pretty cool.

HILL: And normally at the end they talk to you. I don't know if they're going to talk. There you go.

COOPER: OK, that was pretty good. But you do need to spend a little more time, I think, watching "AC 360," every weeknight, 10 p.m. Eastern, 7 p.m. on the West Coast.

HILL: Maybe you should watch your own show a little bit more. There you go.

COOPER: OK.

HILL: You can try it again.

COOPER: Let me just say, I've had a very long day. I'm very tired. I was down in D.C. earlier. I've done interviews all day. I'm making excuses.

HILL: Is that an excuse, getting old (ph)?

TOOBIN: Indiana, Illinois, Iowa, who can keep them straight. Right?

COOPER: All right. Erica, I know you're also...

HILL: Right.

COOPER: ... following some other stories happening with the "Bulletin." HILL: Yes. How about a "360 Bulletin"?

COOPER: Yes.

HILL: Play close attention, Anderson.

A major strike against one of Mexico's most violent drug cartels. Drug lord Arturo Beltran Leyva and six other traffickers killed in a shootout with authorities. Leyva was one of the Mexico's most wanted criminals.

A Pakistani court issued a second ruling preventing the deportation of five Americans arrested there last week. The men are suspected of plotting terror attacks.

And Italian Prime Minister Silvio Berlusconi -- Anderson got that one right in the quiz -- his face heavily bandage, leaving a Milan hospital today. Berlusconi...

COOPER: ... it wouldn't have been a problem.

HILL: Right. Yes, because nothing ever goes down in a football game in Indiana. He spent the last four days there, of course, being treated for injuries after an attacker threw a souvenir replica of Milan's cathedral at him. That probably doesn't happen so much in Indiana. The Milan cathedral replica.

Jeff, thanks for playing along.

Erica, as well.

Time now for "The Shot." Erica, tonight, Sarah Palin caught in what might look like a major dis of her former running mate. Take a look, the one-time V.P. candidate on vacation in Hawaii, wearing a McCain campaign sun visor, except Senator McCain's name is kind of blacked out.

Now, a lot of people are making a lot of this online, saying it was a dis of Senator McCain. Palin told Politico.com she meant disrespect. She was just trying to be, quote, "incognito" and protect her family from paparazzi. Palin said she supports McCain 100 percent.

Politico also reports Palin has cut her vacation short due to the ruckus, which seems unfortunate.

HILL: It does. It seems a little crazy.

TOOBIN: She stayed away from the paparazzi, you can tell from the paparazzi photos.

COOPER: Well, you know, that's not her fault.

HILL: Yes. But they won't stay away. They're relentless.

COOPER: All right. Have a great weekend. Thanks for watching. Up next, a CNN special hour. Watch how the sparks flew at a heated YouTube debate at the climate change talks in Copenhagen. Experts took a range of questions from YouTube users all over the world. They didn't always agree. That's next.

(COMMERCIAL BREAK)

UNIDENTIFIED MALE: Have you not wondered why it's so-called mother earth? Throughout all of history, it has given birth. This bluish green ball floating through space has potential for life quite like no other place. It gives and gives and has nothing to ask. To treat it with love and respect is our task. For the moment, the future we can't comprehend, as the world as we know will soon come to an end.