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Anderson Cooper 360 Degrees

Special Report on 2012 Presidential Campaigns; Truth And Consequences; U.S. Official: Hezbollah, Iran Terror Threats; Attorney: Theater Weapons For "Protection"; Fisherman Rescued From Circling Sharks

Aired August 10, 2012 - 20:00   ET

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

ANDERSON COOPER, CNN HOST: Good evening everyone. Welcome to a special "Keeping Them Honest" hour.

We're focusing entirely tonight on the presidential campaign. Specifically on the messages both candidates and their surrogates are putting out there. Millions and millions of dollars of campaign advertising.

In recent weeks, more than 50 thousand ads and according to a leading media research group, 97 percent of the ads were negative. Only some of them stayed true to the facts. Sorting fact from fiction though, takes more than just the 30 seconds or the minute it takes each spot to play.

So tonight, we're taking some of the most factually challenged media spots and campaign claims up to this point in the campaign season and we're holding them up for a close examination. It's what we do every night "Keeping Them Honest."

And as always, we're not taking political sides here. We're simply trying to figure out what is true and what is not. We begin tonight with a Romney ad.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: In 1996, President Clinton and a bipartisan Congress helped end welfare as we know it, by requiring work for welfare. But on July 12th, President Obama quietly announced a plan to cut welfare reform by dropping work requirements. Under Obama's plan, you wouldn't have to work and wouldn't have to train for a job. They just send you your welfare check. And welfare to work goes back to being plain old welfare.

(END VIDEO CLIP)

COOPER: Well, in a moment, you'll hear from Newt Gingrich who joins us to defend that ad. But it also makes a pretty stunning admission about whether that ad he's defending is strictly speaking through the facts.

But first, I want to show you how Mitt Romney is campaigning on the claims made in that very ad. (BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: With the very careful executive action, he removed the requirement of work from welfare. It is wrong to make any change that would make America more of a nation of government dependency. We must restore and I will restore work into welfare.

(END VIDEO CLIP)

COOPER: Now, listening to that and watching the ad, you would think the White House with a sweep of the pen somehow managed to undo all your elected representatives, Democrats and Republicans, accomplished back in the late '90s in welfare reform. You get the impression the Obama administration wants an America where hardworking Americans pay taxes and lazy ones sit around collecting welfare.

And in case you miss the implications, Romney's surrogate, Newt Gingrich, today spelled it all out.

(BEGIN VIDEO CLIP)

NEWT GINGRICH (R), FORMER PRESIDENTIAL CANDIDATE: I think on the hard left there is an unending desire to create a dependent America. It's not just that Obama is radical but the people he appoints are even more radical.

(END VIDEO CLIP)

COOPER: Well, obviously, the White House, the Obama campaign, strongly disagreed. And they are not alone. A string of fact checkers have blasted the ad as false. Politifact gave us pants on fire rating. "The Washington Post" fact guy rated in with four Pinocchios. That's their rating system. What in fact, the White House and the department of health and human services proposed doing, was give governors more flexibility to tailor programs for their own states. And these were changes, by the way, requested by the Republican governors Utah and Nevada. But what about this claim?

(BEGIN VIDEO CLIP)

ANDREA SAUL, MITT ROMNEY CAMPAIGN PRESS SECRETARY: If President Obama didn't want people to think that he was going to waive the central work requirement in welfare reform, his administration shouldn't have written a memo saying it was going to waive the work requirements in welfare reform.

(END VIDEO CLIP)

COOPER: Well, "Keeping Them Honest," here's the relevant portion from that very memo from the department of health and human services. And I quote, "HHS will only consider approving waivers relating to the work participation requirements that make changes intended to lead to more effective means of meeting the work goals."

So the administration's insisting they aren't trying to waive the work requirement. They're in fact trying to make it less bureaucratic and more effective precisely what those Republican state governors asked for.

As we said, Newt Gingrich is defending the ad, going beyond to this as well in some respect. But as you will see later on in this interview, speaker Gingrich, who I talked to just a short time ago, also makes a surprising admission.

I spoke with the former presidential candidate a short time ago.

(BEGIN VIDEOTAPE)

COOPER: Mr. Speaker, so this ad says, I quote, "under Obama's plan, you wouldn't have to work and wouldn't have to train for job, they just send you a welfare check."

Now, according to pretty much every non-partisan fact checking organization, that's not true. President Clinton who signed the law that he worked on it as well said it's not true. Even Ron Haskins who worked in the original welfare law served with George W. Bush's welfare policy adviser said quote, " there's no plausible scenario under which this new policy constitutes an any kind of serious attack on welfare reform. Are they all wrong?

GINGRICH: Well, Robert Rector at the heritage foundation who was the originally developer of welfare reform, worked with Governor Reagan, and then President Reagan. He was the first person to come out aggressively and say look, this will in the end gut welfare reform. In this reason, he is pretty straight forward.

Once you start allowing states -- this is why by the way, the law itself does not permit waivers. The president actually could not waive section 407, which says there can't be any waivers to the work requirement. So he fudged and found a way to get around it which I suspect will turn out to be illegal.

Governor McDonald of Virginia came out and says this is clearly gutting welfare reform. The two governors that the Obama administration is hiding behind, the governor of Utah and the governor of Nevada, have both come out and said that is not accurate. This is not what they wanted, this is not the flexibility they asked for.

COOPER: But under - I'm just asked that under Obama's plan you wouldn't have to work, you wouldn't have to train for job, they said they just send you the welfare check. There's no evidence of that at all.

GINGRICH: Well, given that this is an administration which has maximized the increase in dependency, maximized the number of people on food stamps, maximize the effort - you get people to run the government. There's also no evidence that once the waiver system's in place that you could rely on this administration to defend work. I mean --

COOPER: It would be up to governors, as you just said. According to the governors themselves that is not their intention. You talked about Utah governor, Gary Herbert's office put out a statement. They said, Utah's request for a waiver stems from a desire for increase customization of the program to maximize employment among Utah's welfare recipients. That's almost word for word what the HHS is saying.

The HHS acting assistant secretary of HHS said that this is all about trying to create innovative strategy, flexibility, policies and procedures designed to improve employment outcomes for needy families. They're basically saying the same thing.

GINGRICH: Sure. The question you have to ask yourself is given the track record of this particular secretary of health and human services, given the general somewhere between liberalism and radicalism of the Obama appointees and remembering the part of I think led to this strong reaction on part of a lot of conservatives not a Republican was this came out in the same 48-hour period as the president's famous speech that you didn't build it. That you aren't responsible as a small business owner for what you achieve. So, it's almost as though he would psychologically attacking work and achievement at the same time as he was shifting the regulations. And candidly, this is not the administration that I think you're going to find any conservative give the benefit of the doubt to.

COOPER: But - I mean, I got to come back, then, to the wording of this ad. And again, it's under Obama's plan, you wouldn't have to work, you wouldn't have to train for a job, they just send you your welfare check. That's not saying we assume this or we think this or we worry about this. It's saying as a fact this will happen. And in fact, that's just not supported by evidence.

GINGRICH: I think if the ad makers would ask me, I would have said this makes it possible. Would have been a good way t enter to --

COOPER: So you think the wording of the ad is not accurate, that it is too straight forward?

GINGRICH: Well, I think that the ad does assert -- this is a political ad. In 30 seconds, you tend not to get all the various amendments and things.

COOPER: Right, but accuracy's important.

GINGRICH: I'm here tonight supporting the idea, and I believe, absolutely, that this administration, the Obama administration, is filled with people who do not believe in the work requirement, and this, as you yourself pointed out, even when Bill Clinton agreed to sign the bill, half the Democrats in the house, 101 representatives, voted no.

Barack Obama himself was opposed to it as a Senate senator of Illinois. There was a huge defense of dependency without work. So, if you say to me, do I think all those people who oppose the bill will probably try to gut it if they get a chance, of course I do.

COOPER: But if you were running this ad, you would change the wording in the ad to at least say I worry about this, or based on what I believe about the president, I think he will do that --

GINGRICH: If I were running the ad, it would be a much tougher ad, because I'd start by saying as the leading food stamp president in American history and the person who has increased American dependency more than anyone else in modern times and a guy who has failed totally with child poverty.

Remember, with the Clinton/Gingrich welfare plan, child poverty went down by 25 percent. The largest decline in child poverty was because we had a work requirement and people went to work and went to school and their lives got better.

So, my ad would probably have been tougher for this ad in setting is up the conditions you're looking for. But then it would have been a 60 second ad and I don't know if we could have afforded it.

COOPER: Well, I think you could have afforded it.

But, I got to come back to this because it did sound like you were saying earlier, and I want to just clarify this. You do think the actual working under Obama's plan, you wouldn't have to work, you wouldn't have to train for a job, they just send you your welfare check that is not factually correct?

GINGRICH: We have no proof today. But I would say to you under Obama's ideology, it is absolutely true, that he would be comfortable sending a lot of people checks for doing nothing. I believe that totally.

COOPER: Speaker Gingrich, I appreciate you being on, thank you.

GINGRICH: Thank you.

(END VIDEOTAPE)

COOPER: Let us know what you think. We're on facebook. . You can follow on twitter or Instagram @andersoncooper.

As I said, we are not taking sides here. Up next, a pro-Obama ad that draws a clear line between Mitt Romney and a woman's death from cancer. I confront one of the men behind this ad made by a pro-Obama super PAC when our "Keeping Them Honest" special continues.

(COMMERCIAL BREAK)

COOPER: We're focusing tonight on campaign ads, campaign claims, and the truth, not as one side or another side sees the truth, but the plain, old-fashioned truth. "Keeping Them Honest."

We begin or we began, I should say, with a factually bogus Romney ad. Now, the factually bogus ad created by the leading pro-Obama super PAC. It features the laid-off Steel worker named, Joe Soptic.

(BEGIN VIDEO CLIP)

JOE SOPTIC, STEELWORKER: When Mitt Romney and Bain closed the plant, I lost my health care and my family lost their health care. And a short time after that, my wife became ill. I don't know how long she was sick. And I think maybe she didn't say anything because she knew we couldn't afford the insurance.

And then one day she became ill. And I took her up to the Jackson county hospital. And they admitted her for pneumonia and that's when they found the cancer. By then, it was stage four. There was nothing they could do for her. And she passed away in 22 days.

(END VIDEO CLIP)

COOPER: It's a very sad story. "Keeping Then Honest" though, as heart wrenching as the loss of a job and death of a spouse obviously is, virtually nothing else about the story fits the time line or the facts. Mr. Romney was still on the books in Bain's CEO when the steel mill shut down in 2001. He had left two years before to run the Olympics.

Now, you could argue he was still the CEO and had earlier a hand in how the company was handled. But in the ad, and Mister Soptic he says his wife became ill of quote, "a short time after Romney and Bain closed the plants and he lost his healthcare". It turns out it was five years after that in 2006 that his wife unfortunately died.

In addition, CNN's Brianna Keilar spoke to Mr. Soptic. He told her his wife had other health insurance. Actually, her primary insurance was from her own job and she still had that when he lost his health insurance.

As with the Romney ad, we talked about, before the break the fact checkers are not smiling on this one either. "The Washington Post" giving this ad the same as Romney's, four Pinocchios concluding, quote, "on just every level this ad stretches the bounds of common sense and decency."

The White House and the Obama campaign are trying to distance themselves from the Priorities USA ad. Press Secretary Jay Carney saying, quote, "I still haven't seen the ad. I read about it. I don't speak for a third-party group. I speak for the president and the administration and I explain and defend his policies."

President Obama's campaign spokeswoman went further that this White House spokesman saying, quote, "we have nothing, no involvement with any ads that are done by Priorities USA." She went on to say, "we don't have any knowledge of the story of the family."

"Keeping Them Honest" though, the campaign ought to have at least some knowledge of Joe Soptic and his family because they used him in one of their own campaign ads earlier.

(BEGIN VIDEO CLIP)

SOPTIC: I was a steelworker for 30 years. We had a reputation for quality products. It was something that was American made and we weren't rich but I was able to put my daughter through college.

(END VIDEO CLIP)

COOPER: That was Joe Soptic in an earlier ad for the Obama 2012 campaign.

Bill Burton is a senior strategist for Priorities USA action, he joins us now.

So Bill, let's talk about this. "The Washington Post" says about your ad, quote, "on just every level, this ad stretches the bounds of common sense and decency, independent fact checkers have echoed that sentiment, saying it's inaccurate."

How can you say Mitt Romney and Bain are somehow to blame for that poor woman dying cancer?

BILL BURTON, SENIOR STRATEGIST, PRIORITIES USA ACTION: My goodness, we don't and we would not. I mean, those fact checks presupposed that that's exactly what we are trying to do and that's not the point of the ad. The point of the ad is to tell the story of the impact that Mitt Romney had on the lives of thousands of people. When he came to town, they lost their jobs, their lost their health care, they lost their pension benefits. And that impact is felt still today in those communities.

COOPER: But you spent - I mean, you're a smart guy. You have a lot of smart ad people in the group you're working with. Half the ad is him talking about his wife's demise. And it ends with him saying, I do not think that Mitt Romney realizes what he's done to anyone. The implication is clearly that he is responsible, or the actions he took led to his wife's death.

BURTON: No, I -- you know, the story is a very sad one. And the truth is that there are thousands of stories that are -- that happened as a result of Mitt Romney and his time at Bain. And some of them are really tragic. But just because they're really sad or tragic doesn't mean they should be off limits. Where we think it's important to tell the stories of these folks and how they're impacted by Mitt Romney. He put his business experience --

COOPER: How does a woman dying -- I mean, she had health insurance from her job after this man lost his job, and then she got an injury years later, and then lost her insurance.

BURTON: Right. To say that presupposes that we're trying to link Mitt Romney with her tragedy.

COOPER: You claim, you really claim, you really want people to believe you're not trying to link, in any way, even just subtlety or not subtlety, that there is some linkage between Mitt Romney, Bain capital, business decisions he made, and this woman's death?

BURTON: Anderson, it would defy logic to do so. The point is even to today that community is completely worn down. The whole area. The factories abandoned. People still don't have jobs in some cases. Many folks still don't have health insurance. People who do have jobs are getting paid much less. And the point is that Mitt Romney's business experience had a profound effect on the lives of thousands of people. And that effect is still being felt. And that's what this s what this ad tells a story of.

COOPER: I don't want to go back and forth on this. But I mean, this ad tell us the very specific story, more than half of the ad is him talking very detailed about his wife --

BURTON: Anderson, it's a sad story.

COOPER: It is a very sad story. It also jumped over - I mean, it truncates time in a way that makes it seem like he got fired, she didn't have health insurance, which she did from her other job, her primary insurance, in fact --

BURTON: Not at the time when she died though. She had health insurance for a very short time.

COOPER: Right, because she lost her other job.

BURTON: Right, but ultimately when Joe Soptic need health insurance for his family, health insurance promised to him by a contract Mitt Romney helped to negotiate, he didn't have the health insurance.

COOPER: Right, because under bankruptcy protection, they were able to do away with the promises they had made.

BURTON: They were able to void a contract they had are workers.

COOPER: That's bankruptcy law.

BURTON: They made plenty of money. All those workers got screwed.

COOPER: Rich. Again, you can make an ad all about that. I just -- you're implying -- I think any rational or none -- certainly nonpartisan observers look at this and say you are linking this. Otherwise, you would not put this in an ad.

BURTON: I actually think just the opposite. I think that the rational thing to take away is how on earth can you possibly imply that? What we are saying is that at a moment of --

COOPER: You made a 30-second spot about this. When you're saying how can you possibly imply that, it's totally disingenuous, come on, you know that.

BURTON: I don't think that's through.

COOPER: Bill Burton, I appreciate you coming on to talk about the ad. Thanks, Bill.

BURTON: Thanks, Anderson. COOPER: Up next, Donald Trump actually incorrect birther claims in the Romney campaign embrace the Donald Trump. Do surrogates and supporters on both sides help candidates, have it both ways, on controversial topics? We will "Keep Them Honest."

(COMMERCIAL BREAK)

COOPER: Well, no hour on bogus complain claims would be complete without a visit to birther land. Mitt Romney says, he does in doubt that President Obama was born in Hawaii. But he is very publicly and we might add, profitably for his campaign coffers Embraced America's number one birther Donald Trump. Despite report after report, investigation after investigation showing there's nothing to the birther's story, Mr. Trump is not backing down. Either the utter issues left for before tension. Either way, the Romney campaign hasn't backed away from Mr. Trump since this controversy erupted several months ago.

(BEGIN VIDEO CLIP)

DONALD TRUMP, CHAIRMAN, CEO, TRUMP ORGANIZATION: Nothing's changed my mind. And by the way, you know, you have a huge group of people. I walk down the street and people are screaming please don't give that up. Look, a publisher came out last week and had a statement about Obama given to them by Obama when he was doing a book as a young man a number of years ago in the 90s, born in Kenya and raised in Indonesia. I mean, this was a statement, this was from Obama.

(END VIDEO CLIP)

COOPER: That's not true. The publisher says it was only a typo. And for the record, President Obama has produced both a short and long-form birth certificate showing he was born in Hawaii. He made the long form version public in part to quiet Mr. Trump who claimed to have investigated in Hawaii on the case.

And when we sent Gary Tuchman to Hawaii on the same time, he found plenty of evidence the president was born there but no sign of Mr. Trump's investigators. I asked him, Donald Trump, about it months ago.

(BEGIN VIDEO TAPE)

COOPER: We've had a team in Hawaii talking to everyone from the state health department to the school where Obama's mother went to other families in the hospital at the same time when he was born, none of them say they've been contacted by anyone working for you.

TRUMP: Well, maybe they're not saying and maybe they haven't contacted the same people, Anderson.

COOPER: We've interviewed the former director of the Hawaii department of health, a Republican, one of two state officials who has actually seen the original birth certificate that you're talking about in the department of health vault. She says she hasn't been contacted by your people. Isn't that somebody they should talk to?

TRUMP: I've been told recently, Anderson that the birth certificate is missing. I've been told it's not there and it doesn't exist.

COOPER: Who told you that?

TRUMP: I just heard that, two days ago from somebody.

COOPER: Can you name even one person your investigators talked to?

TRUMP: I would not do that. It's not appropriate right now.

COOPER: You can't say anybody?

TRUMP: It's just not appropriate, Anderson.

(END VIDEOTAPE)

COOPER: He never named any names or revealed any investigator or anything they found out. As for the missing birth certificate, it was released shortly thereafter. Missing in quotes.

As for Mitt Romney, he said quote, "I don't agree with all the people who support me and my guess is they don't all agree with everything I believe in."

Donald Trump though is not just any Romney supporter. He's been aiming to raise $2 million tonight for the Romney campaign and hinted today to Wolf Blitzer that he might personally donate millions more. He's also made robo calls for the campaign and up with the Romney Web site right now, this picture of Donald Trump as Uncle Sam on one of those old-fashioned recruiting pictures next to amount you can donate for a contest. The winner gets flown to New York for dinner with Mitt Romney and Donald Trump.

So, he clearly more than the run of the mill supporter. The question is though, could his support actually cost the Romney campaign with votes?

Polling earlier this year shows what a Trump endorsement would make one in four voters less likely to vote for Governor Romney. In any case, the governor has also said he needs to get 50.1 percent support to win and he's happy to have the help of, quote, "a lot of good people."

Now, back to those remarks we mentioned at the top. He was talking tonight about President Obama's lack of business experience. Listen.

(BEGIN VIDEO CLIP)

ROMNEY: Sometimes I just don't think he understands what it takes to help people. I know he wants to help. He doesn't know what he's got to do. I was speaking with one of these business owners who owned a couple of restaurants in town. And he said, you know, I'd like to change the constitution. I'm not sure I can do it he said, but I'd like to have a provision in the constitution that in addition to the age of the president and the citizenship of the president and the birthplace of the president being set by the constitution. I'd like it also to say that the president has to spend at least three years working in business before he can become president of the United States.

(END VIDEO CLIP)

COOPER: Joining me now is Republican strategist and Romney adviser Kevin Madden.

Kevin, some people are looking at those comments that the candidate made tonight and saying that it was sort of a dog whistle, the fact he would bring up the birth requirements in the constitution on a day where Donald Trump has talked a lot about birthers with sort a dog whistle on this issue, fair?

KEVIN MADDEN, ROMNEY 2012 ADVISER: No, well, I just don't agree with that. I think it was -- the governor was actually relaying a conversation that he had had with a voter. And the voter's emphasis was on the business experience. And I think that's what governor Romney is finding as he engages voters all across the country, is that they're focused on the economy. They're focused on somebody who can turn the economy around.

And quite frankly, that's been the entire focus of the governor's -- the message told when he was out there the in Colorado, Craig, Colorado, he was talking about energy. He was talking about how important energy is to helping -- helping sustain the economy in that region of the country and how important the economy is, in turning the economy around.

COOPER: But he is holding this big event with Donald Trump tonight. And Donald Trump is up on his Web site. And Donald Trump is out there talking about birther stuff. When a supporter in a crowd said something false about then candidate Obama to John McCain, John McCain set that supporter straight.

Donald Trump isn't just an ordinary supporter. He is clearly a surrogate. Democrats are I saying the fact that Mitt Romney hasn't said that Donald Trump is wrong and ask Donald Trump stop promoting something which is factually proven false, shows Romney doesn't have backbone.

Does he have -- that's what Democrats are saying. Does he have an obligation in any way to set his surrogate straight on these birther claims?

MADDEN: Oh, he has. I think it's --

COOPER: So he's spoken -- you think he's spoken to Trump?

MADDEN: Every time this issue has come up, Governor Romney has made it clear he disagrees with Donald Trump. And he disagrees with the emphasis on the issue. He believes that the reason that we need to take - that we need to beat President Obama in November is because he hasn't done enough to fix the American economy.

Every time he's had an event, he's talked about what it is that he would do to fix the economy. What he'd do differently --

COOPER: Does he have an obligation to say something to Donald Trump?

MADDEN: Well, I think he has said. I think he said it clearly publicly. He sent the message time and time again that the focus of this campaign has to be the economy.

COOPER: You were saying it doesn't really matter what surrogates say. When Hilary Rosen, you know, a supporter of President Obama, I guess -- at the White House or according to some source I saw said something about Ann Romney, the Obama White House was very quick to distance themselves from her.

And a lot of conservatives jumped on her as speaking for the candidate. So isn't it fair, then for Democrats to do the same thing about what Mitt Romney -- what Donald Trump is saying?

MADDEN: You know, having worked on so many of these campaigns, I think all of the scrutiny is fair. I think the difference there was that was -- that crystallized the debate that we are having about the economy, about women's role in the workplace and the different -- the different visions that each party has for the economy.

That is what really crystallized that debate. I don't think there are a whole lot of people right now sitting at home with 23 million people out of work with unemployment over 8 percent, consumer confidence going down.

I don't think there are a whole lot of people talking about the issue that the media is talking about and that Donald Trump keeps bringing up.

COOPER: But it's not just the media talking about this birther stuff. I mean, in Arizona, they are just were demanding birth certificate from President Obama, proof of citizenship in order to have him on the ballot there. There are initiatives in a number of states across the country and have been since he's been in office.

MADDEN: I think that's right, Anderson. But do you think that right now voters -- that that's going to drive what their main decision is on this campaign?

I really don't think so. I think over kitchen table also now across the country there's so much economic anxiety about the state of employment, the lack of jobs. People who have one are worried about losing theirs.

People who don't have one can't find them. I think that's really what the American people want to see debated. T hat's the focus that they want to see if this campaign. A lot of these are distractions. COOPER: Kevin Madden, appreciate you for being on, thank you.

MADDEN: Always great to be with you.

COOPER: When we come back, a trip across the aisle to America's top Democratic lawmaker. A man who's made big claims about Mitt Romney and taxes without showing the slightest evidence. That's next.

(COMMERCIAL BREAK)

COOPER: Senate Majority Leader Harry Reid is from Nevada, of course, and despite his mild manner, he's a former boxer and is known to this day to enjoy landing a political punch.

Well, he has. The question is though, is it a cheap shot? Standing by unproven allegations about Mitt Romney and taxes claiming that Romney didn't pay any taxes for a decade without the chips in this case, the facts, to back it up.

Governor Romney reacted sharply to the claim.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE (via telephone): It's time for harry to put up or shut up. Harry is going to have to describe who it is he spoke with. Because of course, that's totally and completely wrong.

It's untrue, dishonest and incorrect. It's wrong. So I'm looking forward to have Harry reveal his sources and we'll probably find out it's the White House.

(END VIDEO CLIP)

COOPER: He's not backing down a bit offering no fact, no evidence, just allegations and insinuations. Now before we go any further on this story, you should know that we're not being partisan here. For weeks, we've reported on Michele Bachmann and her four Republican House colleagues who are making unfounded allegations about Islamic radicals infiltrating the U.S. government.

Making claims about relatives of, Huma Abedin, a top aide to Secretary of State Hillary Clinton. Well, the standard should be no different for Democrats, independents, libertarians or anyone. Extraordinary allegations require extraordinary proof, frankly, any kind of proof.

Michele Bachmann and company don't even have ordinary proof and neither, so far, does Senator Harry Reid. This began earlier this week when Mr. Reid told "The Huffington Post" what he said a Bain Capital investor told him.

Harry, he says this investor told him, quote, "he didn't pay any taxes for 10 years." He went on. "Now, do I know that's true? Well, I'm not certain." That was Harry Reid saying "I'm not certain." So you'd think that not being certain about the truth of an explosive allegation, you'd keep it to yourself, right? Well, instead, Senator Reid, the highest ranking Democrat in Congress, went further with some local reporters saying he had a, quote, "number of people tell me that," unquote.

So it went from one person telling him to, now, a number of people. Then today he went even further.

(BEGIN VIDEO CLIP)

SENATOR HARRY REID (D), MAJORITY LEADER: So the word's out that he hasn't paid any taxes for 10 years. Let him prove that he has paid taxes because he hasn't.

(END VIDEO CLIP)

COOPER: OK. So now this is on the floor of the Senate. He's now saying the word is out. Well, the word is out because Senator Harry Reid put it out. What he hasn't put out is anything that anyone can check.

Not the name of his source. Not anything. Here's what Republican Senator John McCain told me about this earlier today.

(BEGIN VIDEO CLIP)

COOPER: Harry Reid on the floor of the Senate today reiterated this idea that Mitt Romney has not paid taxes for 10 years. He said, and I quote, on the floor of the Senate, "so the word's out he hasn't paid any taxes for 10 years. Let him prove he has paid tax because he hasn't."

He's offered absolutely no proof at all about this. Does it surprise -- I mean, what do you make of this? Is this just politics? Is this acceptable?

SENATOR JOHN MCCAIN (R), ARIZONA: First, I've known Senator Reid for many, many years. Occasionally, he displays some rather erratic behavior. To accuse someone of doing something without a shred of proof that the allegation has any substance is really something I frankly don't understand. Politics are tough and I enjoy the give and take. But I think Harry might have gone over the line here.

(END VIDEO CLIP)

COOPER: Let's bring in our panel. Democratic strategist Paul Begala who is currently advising the top pro-Obama "Super PAC," and Republican strategist Mary Matalin. Paul, you cannot defend Harry Reid on this, can you, seriously?

PAUL BEGALA: You watch me.

COOPER: But Harry Reid --

PAUL BEGALA, DEMOCRATIC STRATEGIST: Right. COOPER: Doubled down on this. He went on the floor of the Senate and said well, you know, it's out there, that he hasn't paid in 10 years. It's only out there because Harry Reid said it two days ago without any evidence whatsoever.

BEGALA: First off, there's tons of evidence. Come on. The one release that he prettied up and turned over to the public --

COOPER: There's evidence he hasn't paid taxes in 10 years?

BEGALA: No, there's evidence of tax avoidance, incredibly aggressive tax avoidance.

COOPER: That's not what -- Harry Reid says there's evidence out there that he hasn't paid taxes in 10 years.

BEGALA: The senator is pointing out that this guy has a long -- well, incredible history of tax avoidance. Shell Corporation in Bermuda, Cayman Islands, Switzerland accounts, a blocker corporation in Bermuda whatever that is.

I mean, this guy goes to -- first of all, freshman philosophy, when you're confronted with something, you have limited information, you choose the simplest, most obvious choice.

What do you think it is, Anderson? You think he secretly like owns the bunny ranch brothel? I don't. He is a man of extraordinary personal morality. OK, I grant him that, he's got impeccable personal moral character.

So I don't think he's like secretly owning inner city liquor stores that sell to children or something. No. I think --

COOPER: But you did just put that out there.

BEGALA: Really, I'm just trying to show that it's not -- it's the most logical explanation. People should like on the Twitter machine -- give me your ideas. What other reason is he hiding his tax returns for?

MARY MATALIN, REPUBLICAN STRATEGIST: Anderson --

COOPER: Mary, Harry Reid has no evidence on this.

BEGALA: We have lots of evidence.

COOPER: Go ahead, Mary.

MATALIN: Really? You know what's -- to answer Paul's question, this is a fallacy logic. This is how they argue. They make the accused -- put the burden of proof on the accused. You really think -- does this pass the smell test, the laugh test, that this man would have been governor.

That he would have been running for president for eight years, that he has all of this money. Yes, he has a lot of money. He has a big success. He's an American opportunity inspiration. That he would not -- that he would be doing something illegal.

They've called him a felon. Now they are charging this. Here's the sad thing. The really sad thing is Harry Reid is not -- ostensibly not some goofball back bencher. He is the Democratic Senate majority leader.

Doesn't that give -- if I were a Democrat that would give me great pause, that the majority leader in the Senate, in that aghast body is behaving like McCarthy.

COOPER: It just seems hypocritical to me. I mean, when Louie Gohmert went on the floor of Congress and said some unnamed former FBI agent had told him the Middle Eastern women were coming to the United States pregnant to have babies, taking them back to the Middle East to raise them for 20 years as terrorists.

So they could then come back as American citizens and attack us 20 years from now, and that he had sources on this, though he didn't call the FBI about this, and when we called the FBI, the FBI said, what are you talking about? We never heard of this.

And when we asked him for evidence, he wouldn't give us any, what is the difference between that lunacy and what Harry Reid is saying?

BEGALA: Occam's razor. What Gohmert posited is ipso facto crazy. What Reid is positing is the most logical, simplest explanation for why this man, who is obviously, burning with desire to be president is hiding his tax returns when as Mary points out, he should have known, getting into this business.

It's not pleasant, perhaps, but these guys and women at the top level, the presidential level, they all have to release their tax returns.

MATALIN: I'll tell you what Occam's razor. Well, we know he paid $6 million -- $7 million in contributions and $6 million in taxes.

BEGALA: Wonderful.

MATALIN: May I? May? I quit imitating James. The Occam's razor is this that the Obama strategic imperative is to distract. He can't run on his record. They've announced they are going to destroy Romney. This is just a distraction.

He put out two. If he put out four years, they'd ask for six. If he put out six, they want 10 or his father is embarrassed. Look what Jon Stewart said of Reid. This is really gross too. He played the dead card. His father would be embarrassed? What has happened to your party, Paul?

BEGALA: Romney has the evidence. We can't see it. He's choosing the most sensible explanation for a puzzling political thing. Why is Romney feeding this distraction, as Mary calls it? Why, because there's something in there he does not want us to see. When politicians don't disclose their tax, it's because they can't. COOPER: We got to end it there, but before I get inundated by e- mails saying I'm a stooge of the GOP or supporting Romney on this, my point is simply for any sitting member of Congress or the Senate, Republican or Democrat or whatever party, to be making allegations, serious allegations, about somebody, without offering any evidence whatsoever, I think seems a troubling precedent.

And it surprises me more people aren't upset about it. Whether it's this or whether it's Bachmann at all making allegations against Huma Abedin and you know, infiltration of the Muslim Brotherhood without presenting direct evidence.

Anyway, we got to leave it there. Mary Matalin, Paul Begala, thank you.

So what's the strategy behind these lies by the Obama and Romney camps? We'll dig into that when this "Keeping Them Honest" special continues.

(COMMERCIAL BREAK)

COOPER: Our "Keeping Them Honest" special report continues. As we've shown this hour in the 2012 battle for the White House, both sides are using campaign ads that are heavy on attacks, but light on facts.

So what's the strategy behind these ads? Does it help or hurt the campaigns? Let's talk about it with CNN chief national correspondent John King, chief political correspondent Candy Crowley who's also anchor of CNN's "State of the Union," and "The Washington Post" Nia Malika Henderson.

So Candy, Mitt Romney had an interesting observation just yesterday. I want to play that for our viewers.

(BEGIN VIDEO CLIP)

ROMNEY: You know, it's interesting, too, the various fact checkers look at some of these charges in the Obama ads and they say they're wrong and inaccurate and yet they keep running them. You know, in the past, when people point out that something was inaccurate, why campaigns either pulled the ad. They were embarrassed. Today, they just blast ahead.

(END VIDEO CLIP)

COOPER: The interesting thing about that, Candy, is that he and his supporters are just as if not more guilty of doing the very thing that he is blaming the Obama campaign of doing.

The Obama ad, for instance, that we're focusing on tonight by a pro Obama "Super PAC," the Romney that we focused on is by the Romney campaign. Is this sort of argument? Is it just par for the course? Or do you think it's worse than usual this year?

CANDY CROWLEY, CNN CHIEF POLITICAL CORRESPONDENT: Well, first of all, I think it's amazing that he can remember a time when campaigns actually pulled ads that were deemed to be wrong because I can't remember one of those time, but OK, I'll take him at that. But first of all, I think there's a lot more watchdogs out there in this campaign.

COOPER: So we know about it more? We pay more attention?

CROWLEY: Yes, we pay more attention to it. And, you know, the rise obviously of television advertising has been out there for a while. But now it's almost a campaign unto itself.

We used to talk about the money and we certainly talk about the content, but there's so many people watching these ads now. I'm not sure there's more. But there are more ads.

So numerically perhaps there are more. I tell you, they are earlier. A lot earlier they went negative and a lot earlier they went not just stretching the truth, just plain-out lying about stuff. That happened so much earlier in the campaign that I've seen.

COOPER: John, because I guess the power of the "Super PACs" and the money involved, they're able to kind of take it to a whole new level.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: They're taking it to a whole new level. There's been more advertising in many key markets around the state, Anderson.

Last July, last month, in July, than there was in the final month of the campaign in 2008 so it's at a new level. When you call into the campaigns or the "Super PACs" and you say, that's been proven to be wrong, you going to take it down?

They kind of shrug and they say, well, the other guy's doing it too. It's like OK, the other guy is robbing a bank so you can go rob a bank or the guy is cheating on a test so you can go cheat on a test.

So the standards when you call them, it sort of numbs you a bit. But look, they believe, especially the Obama side needs to disqualify Romney, there's no question about that, so they're running these things.

This particular ad you're talking about, I asked Bill Burton of "Priorities USA" today, will you take it off the web? It's never been on pay TV. He said no.

COOPER: Nia Malika, I mean, Romney's favorability numbers have taken a tumble recently. The distorting, the falls attacks, is it possible they do more damage to him because he's more of an unknown?

NIA MALIKA HENDERSON, NATIONAL POLITICAL REPORTER, "WASHINGTON POST": Well, that's certainly what the Obama campaign and his supporters are betting. They are looking in 2004. You saw in that campaign that Bush really moved to define John Kerry very early.

He started running ads in March. This campaign has started in May. And almost, you know, a lot of what we've seen has been negative. The thing about negative ads is they've always been around and they also often work.

I think what you're seeing, particularly now in August is that each of these campaigns is really trying to generate some feeling among their base, among those voters, because if you generate some feeling, some sort of moral outrage and some anger.

Those are the sorts of feelings that really prompt people to actually act, to actually donate and actually start knocking on doors, mobilizing behind these candidates.

So that's what you're seeing these campaigns really trying to grab people by the collar and get them to feel and get them to act.

COOPER: Candy, that's behind the big expenditure behind the Obama campaign early on to try to define his opponent early on.

CROWLEY: Yes, and -- because he was undefined. President Obama, people have gotten used to him, he's been on TV every day. He has a record now in the White House that is much more difficult to redefine President Obama.

I think what's interesting to me is the Obama camp -- I'm sorry, the Romney campaign knew this early on. They admitted that the idea of making people dislike President Obama probably wasn't going to happen.

And what they wanted to do is make people like Mitt Romney. The negative ads, I totally agree, were aimed much more at Mitt Romney getting his base activated than try to drive down President Obama's favorabilities.

I mean, I think the really key question now, though, is whether Mitt Romney at this point can come back and use these big opportunities he's about to get to define himself in a positive way, and bring up the likability.

COOPER: John, do you think he can do that? Whose ads are working the best?

KING: There's no question the Obama and the Obama allies have done the most damage. They have hurt Mitt Romney over the last month. You have to say there's been the most effective so far. There have also been more of them in many of the key markets around the country.

So you'd have to say they are winning if you will in terms of moving the numbers with negative ads, some of which happen to be reprehensible. Can Mitt Romney change this? Of course, he can.

We have a lifetime left in politics. The vice presidential rollout will be part of it. He has to do his own narrative. He has to work on his economic plan. He has to convince people he will fight for the middle class.

The damage that has been done against him in the spring and summer so far has been to say he's a rich guy. He's hiding his taxes. He doesn't care about you and your community when it comes to the economy.

It's a steep hill. That's the score of the Obama people that have put on him. He has this convention opportunity. He will own the second half of August. That's how it works. He has a big opportunity to do that. The question is can he, are they up for the challenge.

COOPER: John King, Candy Crowley, Nia Malika Henderson, thanks very much. We'll be right back.

(COMMERCIAL BREAK)

COOPER: There's a lot more we're following tonight. Isha's here with the "360 Bulletin" -- Isha.

ISHA SESAY, CNN CORRESPONDENT: Anderson, the Lebanese based militant group Hezbollah and its supporter Iran continue to pose a global terror threat. That's according to the State Department's counterterrorism coordinator.

(Inaudible) comes as the U.S. Treasury places more sanctions on Hezbollah for its support of the Syrian government. Across Syria today, opposition groups say at least 160 people were killed by government forces. They say most of the deaths happened in Aleppo, Syria's largest city.

The attorney for Scott Smith, the Ohio man arrested for bringing guns ammo and knives to latest Batman movie says his client had to give his protection. The attorney claims his client feared an attack like the Colorado theatre shooting spree. Police say the items were found in a bag smith was carrying last Saturday night.

Of the two-year legal battle, anti-Muslim cries of not in my backyard, a new Islamic center and mosque opened in Murfreesboro, Tennessee, today. Security is tight with fears of vandalism and arson.

And a dramatic rescue at sea caught on video. This 49-year-old fisherman was forced to tread water for 20 hours when his boat sank off the coast of Western Australia. Sharks were circling him when a TV news crew in a helicopter spotted him.

A rescue boat finally plucked the man from the water. He's recovering at the hospital while a fellow fisherman is dead and another is missing.

That does it for this "Keeping Them Honest" special report. Anderson will be back one hour from now at 10 p.m. Eastern. Thank you for watching. "PIERS MORGAN TONIGHT" starts now.