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Working on the Auto Baliout; Anarchy in Greece; Blagojevich Arrested on Corruption Charges

Aired December 09, 2008 - 10:00   ET

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

HEIDI COLLINS, CNN ANCHOR: Not a done deal. White House and congressional negotiators try for traction on an auto bailout. What's keeping the plan stuck?
And Athens, in anarchy. Three days of riots after a police killing. Now the victim is buried. A live report ahead. It's Tuesday, December 9th, I'm Heidi Collins, you are in the CNN NEWSROOM.

Quickly we want to get directly to the breaking news we have this morning coming out of Illinois. Governor Rod Blagojevich is taken into custody by federal agents now on corruption charges. The U.S. attorney's office says the investigation is linked to the governor's authority to choose the senate replacement for President-elect Barack Obama. We heard the governor talking about the investigation a little bit on Monday when he spoke at Republican Windows and Doors, that closed factory in Chicago that we've been reporting on here at CNN where the workers are staging a sit-in. He said he's done nothing wrong and everything he has done is lawful. A news conference scheduled for noon eastern. We, of course, are going to bring that to you live right here on CNN.

Meanwhile, want to try to get more information as we continue here. We have Ross Rice, he's an FBI spokesman on the line now with us from Chicago. Thank you for being with us, Ross. I'm just wondering if you can give us sort of the overall scenario as to how all of this happened.

VOICE OF ROSS RICE, FBI SPOKESMAN: What I can tell you, Heidi, is about 6:30 this morning, Illinois Governor Rod Blagojevich and his chief of staff, John Harris were arrested without incident by FBI agents here in Chicago. Both men were charged in a criminal complaint that was filed in U.S. district court here in Chicago on Sunday with two violations of federal law, one solicitation of a bribe, and the second is mail fraud. The complaint alleges three separate and distinct areas of corruption that the two were allegedly involved in. One, as you mentioned, was the selling of President-elect Obama's senate seat. The second was financial dealings involving "The Chicago Tribune." They were going to try and get assistance to them from the state for the sale of Wrigley Field in exchange for a purge of their editorial board. The third was the solicitation of campaign funds from people that want to do business with the state of Illinois.

COLLINS: Wow. So this is an investigation according to our notes here that's been going on for quite a while, for three years, in fact, correct? RICE: The overall investigation which was code named operation board game has, in fact, been on going for several years. A number of people have been arrested, charged and even convicted up to this point. But today was pretty much the culmination of that case.

COLLINS: Can you tell us anymore about why it began in the first place, the investigation?

RICE: Obviously there were allegations of wrongdoing in the governor's administration. I don't think we have enough time to go through all the cases and the evidence that's been presented. It's been a pretty extensive investigation.

COLLINS: All right. So what happens now? We know that we're going to be hearing from him or at least seeing him coming up in a couple of hours actually.

RICE: A press conference is scheduled for 11:00 central time by the U.S. attorney's office here in Chicago to detail the charges and formally announce the arrest. Mr. Blagojevich and his chief of staff are scheduled to appear before a federal judge here in Chicago later today. I don't think a time has been set yet. It will probably be early afternoon.

COLLINS: All right. We sure do appreciate your time here, Ross Rice, spokesman from the FBI there in Chicago.

RICE: My pleasure.

COLLINS: Thanks again.

I also want to take a minute to bring in our senior legal analyst, Jeffrey Toobin, he is also on the phone with me now. Jeff, have you ever seen anything like this before?

VOICE OF JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: I have to say, I think what you said, "wow," is the operative phrase here. Keep in mind how unusual it is in any kind of white collar investigation to have a suspect arrested in his home rather than allowed to surrender.

COLLINS: Yeah, by federal authorities, nonetheless.

TOOBIN: By federal authorities and this guy is the sitting governor of one of the biggest states in the union. It's not like it would be easy for him to flee. So the fact that they thought it was necessary to arrest him in his home rather than call his lawyer and ask him to surrender his client, which is the customary way in a white-collar investigation, shows that this is a very fast-moving investigation and, again, to understate the obvious, this investigation now is pointed at the president-elect's senate seat. As far as I can tell, and certainly there has been no suggestion that Barack Obama was involved in this at all or knew anything about it or is implicated in any way, but the fact that his senate seat has now led to the arrest of the governor is just completely extraordinary and unprecedented in American history. COLLINS: Yeah and it's interesting, too. I don't know if you've had a chance to look at some of the comments or hear some of the comments that he made yesterday. I'm looking at this one that says, "I should say, if anybody wants to tape my conversations, go right ahead, feel free to do it," he said. "I appreciate anybody who wants to tape me openly and notoriously. Those who feel like they want to sneakily and wear taping devices, I would remind them that it kind of smells like Nixon and Watergate."

TOOBIN: Well, taping people who are the subjects of criminal investigations is a very typical law enforcement technique. It really has nothing to do with Nixon and Watergate. It has to do with how white-collar crime is investigated every day by the FBI around the country. That statement reminded me of Gary Hart's famous statement, go ahead, follow me around, right before he was found to be having an affair. This investigation, as you pointed out, has been going on for a long time. The so-called pay-to-play scandal, trading campaign contributions for state contracts. There have been many convictions connected with that investigation. Blagojevich has been implicated in that, though never charged. The two parts of this that are brand new are the part of the charges involving "The Chicago Tribune" which declared bankruptcy yesterday, the company did, and, of course, the part which is the most sensational of all, involving some sort of sale of Obama's senate seat, which Blagojevich has the sole authority to name, one of the many --

COLLINS: Not anymore.

TOOBIN: One of the many interesting legal questions that's going to come out of this is, if Blagojevich is arrested and not able to perform his duties in a normal way, and should he be allowed to name Obama's successor. I don't know the answer to that --

COLLINS: There's nothing in the books about that. He is in federal custody now as we speak.

TOOBIN: He is in federal custody. I have to say I, and a lot of other people are now going to have to research the issue of how does a state deal with a governor under indictment. Now, in the great Illinois tradition, it is, of course, worth noting that his predecessor, George Ryan, also went to prison and is currently in prison.

COLLINS: What's going on in Illinois?

TOOBIN: They have some experience with this.

COLLINS: Also we had heard, I believe, it was Paul Steinhauser, our deputy political director here, who was talking about the role of the lieutenant governor at this point, Pat Quinn. So whether or not he will be able to now be the one who takes over that responsibility of the selection process and then ultimately naming the successor to President-elect Barack Obama's seat. Yeah, interesting questions, Jeff. I know we're going to be talking a lot more with you and trying to get to the bottom of exactly what happens next. Appreciate that, Jeffrey Toobin on the line with us today. Also want to take a moment to talk with CNN anchor and correspondent Don Lemon who is on the telephone. Don, I know you spent a number of years working in Chicago prior to coming to CNN. You were supposed to actually interview Governor Blagojevich within the last couple of weeks. Tell us what you know in all of this.

VOICE OF DON LEMON, CNN ANCHOR: Heidi, how are you? We were there during the election. One person that was on our list of people to interview was Governor Rod Blagojevich because he is the person who was going to decide we think, or at least he was, going to decide who was going to be the senator that was going to replace Barack Obama. We had an interview set up with him. It just so happens that we didn't have time to get to him. The interesting thing was, is that he was and his spokesperson obviously very aware of all of these corruption allegations in this probe into him and wanted to do the interview according to his spokesperson because they wanted to deflect attention away from the bad news and talk about the big decision that Governor Blagojevich had to make, was he going to pick someone who was a minority to keep the minority at least one African-American in the senate? Or was it going to be Tammy Duckworth or a number of other people in Chicago who did not have national names, but people knew them inside of Illinois and inside of Chicago. But it did not work out that way.

Anyone who is familiar with Governor Rod Blagojevich, anyone who has worked in Chicago and spent any time studying the politics there, they're not surprised at least that this one thing has come out of this. We all knew something was going to happen, we didn't know exactly when it was going to be or exactly what it was going to be. But this probe has been going on for quite a while, as Jeffrey said, trading favors for state contracts. That has been in the news in Chicago for years. Everyone including the governor had been waiting for the next shoe to drop.

COLLINS: Yeah and this is quite a shoe, quite an explosive way for it to all come down. Hey Don, I wonder if you may know, according to "The Chicago Tribune," I'm still going through some more things and reading in front of me. Apparently the last person that he spoke with was Jesse Jackson regarding the possible discussions that they had about the selection process and who would end up replacing President- elect Obama in the senate.

LEMON: Jesse Jackson, Junior, right, Congressman Jackson. Yeah, supposedly Congressman Jackson. Congressman Jackson was a front- runner in that position, as I said, as with other people who were mentioned, Tammy Duckworth and the state's attorney as well in Chicago, also mentioned for that position. He had been having conversations with Jesse Jackson, Junior even when we were there, when we were at the house, calling his spokesperson, someone from the governor's office was on the line talking to Jesse Jackson Junior about that. Now, as far as the details of the conversation, I don't know. I'm learning this just as you guys are learning it. It's very interesting, if you know about Chicago politics, they say all politics is local. It's even more local in Chicago. And it's even more family-oriented. Governor Rod Blagojevich is married to Dick Mell's daughter, who is one of the most powerful aldermen in Chicago. His political rise came from Alderman Dick Mell. Dick Mell helped him out and then they fell out. A lot of the things that Governor Rod Blagojevich was involved with, at least him becoming governor or what have you on his way, had to do with Dick Mell. Dick Mell's daughter, Governor Rod Blagojevich's daughter-in-law is also a politician in Chicago. Politics run very close to that family. None of this corruption has anything to do with Dick Mell. Just to give our viewers an idea of how tangled the politics are in Chicago. Dick Mell was said at one time to be one of the most powerful people in Chicago outside of Mayor Daley. These are characters who are in the news every single day with some sort of something that's going on in the news, whether its corruption, whether it's hired trucks, whether it's trading contracts for favors for state contracts, always in the news, just so you know, just to give you an idea.

COLLINS: I think nationwide we're about to be learning a whole lot more about those Chicago politics in the days and potentially weeks moving forward in all this. Wow, what a story. Sure do appreciate all the insight. CNN anchor and correspondent Don Lemon for us on the line. We're going to have more on this story. Once again reminding you, in case it's the first time you've heard it, breaking news here at CNN. We've been able to confirm that Illinois's Governor Rod Blagojevich is now in federal custody. We'll bring you the very latest after a quick break here.

(COMMERCIAL BREAK)

COLLINS: Staggering numbers, an important new report on cancer coming out this hour. We'll break it down for you in just a moment.

(COMMERCIAL BREAK)

COLLINS: A new report on cancer coming out right now. Some of the numbers are very troubling. CNN medical correspondent Judy Fortin is here with us now to talk a little bit more about it. The numbers are huge.

JUDY FORTIN, CNN MEDICAL CORRESPONDENT: They are huge and unfortunately, Heidi, the news is pretty grim. If trends continue, in another year cancer will be the number one killer in the world surpassing heart disease. In a report released just a few minutes ago from the International Agency for Research on Cancer, scientists believe the number of cancer cases and deaths could more than double in 20 years. Here are some of their predictions. By 2030, 27 million new cases of cancer worldwide will be diagnosed. 17 million deaths will result in those cases. 75 million people will be living with cancer after five years of diagnosis. Now, compare those with numbers that came out in 2007. There were 12 million new cases reported that year, and 7.6 million deaths. If things don't change, it's projected there will be a one percent increase in cancer each year. And China, Russia and India will see the biggest increases. A real warning this morning coming out.

COLLINS: Oh boy, that's for sure. Is there any way to sort of pinpoint what is causing these increases in cancer cases?

FORTIN: Well, the researchers say definitively it has to do with lifestyle changes, particularly western lifestyle behaviors. And the major culprit is tobacco. 1.3 billion people around the world smoke. That's a staggering number. That makes tobacco the number one avoidable cause of death and disease worldwide. In developing countries we've also learned that more people are eating high-fat foods, especially fast foods. There's decreased activity, they're exercising less. Researchers say there's a worldwide need for more cancer registries, because less than 20 percent of people with cancer are actually registered. It's interesting to note, if you want to know some of the top cancers that are being diagnosed around the world, breast cancer, lung cancer, of course the number one, cervical cancer which may be prevented by a vaccine. Also they're talking about stomach cancers in some of these low-wage, poverty stricken countries. So some real issues. One of the big problems, Heidi, is that many of these countries don't have the resources to deal with the problems to try and address them.

COLLINS: Absolutely. What's being talked about by way of what to do about it? Obviously awareness always an issue.

FORTIN: Absolutely.

COLLINS: We talked about tobacco.

FORTIN: Absolutely. Some of the biggest names in cancer research and action groups are taking an aim on this today. The American Cancer Society, the Lance Armstrong Foundation and Susan G. Komen for the Cure organization are recommending that the U.S. take a stronger lead in fighting the global cancer epidemic. They say the U.S. must promote a comprehensive approach to tobacco control for instance and include increased tobacco taxes to discourage people from smoking. They also recommend smoke-free workplace laws to protect workers from hazards of secondhand smoke. Expanding access to cessation tools and programs. They also want congress to grant the Food and Drug Administration, the FDA, the authority to regulate the manufacture, the sale and distribution of tobacco products. And of course they want more money to invest in cancer research and expand access to prevention. There are so many things out there they want. No easy fixes to a huge health problem.

COLLINS: You know it's really hard to find someone who doesn't have a loved one or a close friend --

FORTIN: I know, we're all affected, here in the workplace and at home, absolutely.

COLLINS: No question. All right, Judy, thanks for giving us the numbers. We'll continue to watch that story very closely.

Meanwhile, breaking news to get back to, in Illinois, Governor Rod Blagojevich taken into federal custody on corruption charges. We want to get over to Elaine Quijano who is standing by for us this morning at the White House because -- I'm sorry, you are in Chicago, pardon me. We want to find out if there's been any word from President-elect Obama's camp on this. Because in case people are just tuning in, this has a lot to do with, of course it's been a three-year investigation now because the governor of Illinois had the sole responsibility of replacing the senate seat that the president-elect vacated. Are we hearing anything from them?

ELAINE QUIJANO, CNN CORRRESPONDENT: It's interesting. I just got off the phone with a senior democratic source, Heidi, who said that the Obama transition team is very much aware that Governor Blagojevich was taken into federal custody. It really is impossible to ignore, Heidi, I have to tell you sitting here in the Chicago bureau, you look up, it is big news. All the local stations are reporting it here. This is interesting because, as we've been hearing earlier in the hour from some of your guests, what is new now is "The Chicago Tribune" reporting that there's been an expansion of this investigation to include a look at this vacant senate seat, the seat that was vacated by Barack Obama. The senior democratic source saying they have no comment at this time other than that the Obama transition team is aware of this, this person went on to say they certainly don't want to step into the middle of something right now until they have all the facts. No word, Heidi, on when or if at all we will have any kind of comment on this.

One other thing that's interesting to note is that there are supposed to be cameras allowed in to a meeting that's scheduled to take place today between the President-elect Barack Obama and former Vice president Al Gore. It's also going to be attended by the vice president elect Joe Biden. The topic is supposed to be energy issues. No surprise there. Certainly climate change, energy issues at the forefront. Al Gore, of course, won the Nobel Peace prize for his work to try and raise awareness of global warming and his documentary on the subject as you recall, "Inconvenient Truth" won two Oscars. Around this meeting has certainly been quite a bit of speculation about whether or not there might be a role for the former vice president in an incoming Obama administration. The democratic sources insist that President-elect Obama is not looking to tap the former vice president for any kind of role, cabinet level or otherwise. However, Heidi, there are still some high-profile appointments yet to be made. We still don't know who the president-elect is going to name for the EPA administrator for energy secretary. So certainly a lot of raised eyebrows surrounding that meeting. But, of course, now with this news about the governor of Illinois, Blagojevich, being taken into federal custody, cameras were supposed to be allowed into that meeting with the president-elect today. We'll see if that still remains the case. Perhaps there will be some questions posed at the president-elect. But for now no comment officially from the Obama transition team on this. Heidi?

COLLINS: I just want to clarify something you said earlier, when you said that there is an apparent expansion of the investigation into the senate seat. Are you talking more about the selection process? Or are we talking about looking closer at some of the people who have emerged as potential successors for that senate seat?

QUIJANO: I have to tell you, I'm not really in the weeds on this one, Heidi. What I can tell you is what "The Chicago Tribune" has been reporting. Apparently there were some phone conversations that were recorded that we know of in which Governor Blagojevich's voice is on those recordings, according to "The Chicago Tribune." Now, at the same time what is different in the reporting from what I understand is that this investigation that's been going on for three years now is also, is also taking into consideration the process of filling that vacant senate seat. So that is where things stand now. It's very much sort of a moving target, Heidi. We're going to wait to see how the day shakes out. Certainly that's what -- the sense that we're getting from the Obama transition team, is they're waiting to find out as well. I think it's interesting to note here, Heidi, this is sort of an aside, if you will, but Governor Blagojevich just recently joined a call from senator Dick Durbin to commute the sentence of another Illinois governor. This is sort of an unrelated story, but very interesting. The former Illinois governor, republican Governor George Ryan was convicted on federal corruption charges.

COLLINS: Yeah, we were just talking about him.

QUIJANO: He had asked President Bush to commute the sentence of the former governor, Governor Ryan. And it was interesting to watch. Governor Blagojevich recently joined that call. Well, I can tell you that I got off the phone a little while ago with the senior aid to Senator Durbin who said, look, we learned about this just as everyone else is learning about this. It's not as though the senator and the governor are close. Perhaps that request for commutation for Governor Ryan is about the only thing these two politicians have in common. Certainly not a lot of support out there at least that we could tell privately. Heidi?

COLLINS: Boy, it is certainly the story in Chicago today. You are there in the middle of it all. Elaine Quijano, we sure do appreciate that. Let us know if the Obama camp has anything to say coming up a little bit later. We sure do appreciate it.

The plans still in progress for an auto bailout loan. But stock trading goes on as you would imagine. We're going to see if the delay in Washington is actually having an effect on those numbers there.

(COMMERCIAL BREAK)

COLLINS: Continuing now some breaking news we have been following coming our way through Illinois. The governor there, Rod Blagojevich is now in federal custody. We want to go ahead and get over to Kate Bolduan, who was actually originally covering a completely different story for us this morning, but is joining us now because, Kate, I understand that you talked with a woman who is actually up for the senate seat, obviously recently held by President- elect Obama. This has been a three-year investigation. Now it is sort of expanding if you will, into the selection process for who will replace that seat. Tell us a little more about who you spoke with.

KATE BOLDUAN, CNN CORRESPONDENT: Absolutely. I was able to just speak with Congresswoman Jan Schakowsky from the Chicago area. She does represent parts of Chicago as well as the suburbs. She is in her fifth term. I was able to grab her and speak with her just a few minutes ago, asking for her initial reaction and kind of get a little more information from her, if she's heard anything. She, herself, said it was shocking. She's just learning about the details as well. As you mentioned, she is one of the candidates that has tossed her hat into the ring to be considered to replace President-elect Obama in his senate seat. She talked about that just a few minutes ago. Listen hear.

(BEGIN VIDEO CLIP)

REP. JAN SCHAKOWSKY, (D) ILLINOIS: Well, I guess one of the reasons it was a big shock to me that it involved the senate in any way is that I've talked to the governor about that, I'm one of the names that's in possible consideration. Certainly nothing untoward came up at all in that conversation. And so all of it is very surprising to me and how this will actually unfold now over the next couple days, what the real implications will be for filling Barack Obama's seat are yet to be known. The one thing I do know is I don't think it has any particular implications for senator -- for President- elect Barack Obama or any reflection on his integrity at all. And so I just don't know.

(END OF VIDEO CLIP)

BOLDUAN: I did push her again, saying, During your conversations with the governor about the potential of you possibly taking on the Senate seat, did anything come up, any pay to play, any discussion of selling of the Senate seat? And she said absolutely not. She, herself, was never -- had never heard anything about that during the conversation. She said she was very surprised and is just now trying to figure out what this really means, who will be the person deciding, who will be the next senator from Illinois. Many of the questions that we are all asking as well, Heidi.

COLLINS: Yes, absolutely. There has been some talk already about the lieutenant governor, of course, who often assumes responsibility when something does happen to the governor. So we are trying to look into all of that, obviously.

Kate Bolduan, sure do appreciate that.

And once again, everybody, we are following this story now breaking out of Illinois. The governor there, Rod Blagojevich, is now in federal custody. We're going to bring you the very latest coming up in just a minute.

(COMMERCIAL BREAK)

COLLINS: With each passing day, the government appears to be inching ever closer to a bailout of the Big Three automakers. But investors aren't reacting with the same enthusiasm today as they did yesterday. Susan Lisovicz is on the New York Stock Exchange now with more on the possible deal and a look at how the market is faring right now.

Looks like we're down about 50 points there, Dow Jones Industrial Averages.

SUSAN LISOVICZ, CNN CORRESPONDENT: That's not too bad at all, Heidi. The market is pulling back, when you consider that the Dow Industrials in the throes of this ferocious bear market have been up triple digits in four out of the last five days. Wall Street, of course, continues to keep close watch on the progress in Washington. And we do expect a financial rescue of the Big Three automakers. The legislation would give the U.S. government substantial ownership in the industry. The terms continue to evolve. But the program would likely be overseen a car czar, if you will. Exactly who that is would ultimately by chosen by the president.

The latest version would give a short-term loan to carry the car makers through March. It would keep them afloat and out of bankruptcy. And of course, bankruptcy would be very tough, even though we've seen airlines continue to fly and passengers continue to use them, it's a different story, apparently, when it's with automakers because there have been lots of studies that show that consumers simply just wouldn't buy a car that was made by a company in bankruptcy protection, Heidi.

COLLINS: Yes, public perception always a factor there, obviously.

But not all three of these car makers are looking for the short- term loans, right?

LISOVICZ: That's right. It's not a question of equals here.

Ford says it doesn't need a loan. It's in better health than its two peers, but Ford is throwing it's support behind G.M. and Chrysler saying a failure of one of our competitors would affect us all. No question about it because they have such an infrastructure, a shared infrastructure, of partsmakers, for instance, who would also be affected. So even though Ford is in better shape, a bankruptcy by one or two of the others could affect Ford in a very detrimental way.

Ford and G.M. shares, by the way, have gained about 20 percent each yesterday. They're down today, but not substantially.

And by the way, we continue to get signs of just how deep this recession is. Sony and Wyndham, which is in the hospitality business, announcing job cuts today totaling 12,000.

And we did receive a report at the top of the hour on pending home sales, it slipped to 1 percent. That was actually better than expected for a change.

Right now the Dow is down just 25 points, or a quarter of a percent. The Nasdaq and the S&P are higher. The Nasdaq is up 1.5 percent. So not too bad at all, Heidi.

Back to you.

COLLINS: OK, we're watching it closely. Thank you, Susan.

LISOVICZ: You're welcome.

COLLINS: Other financial worries under discussion on Capitol Hill right now. Lawmakers are looking into the collapse of mortgage lenders Fannie Mae and Freddie Mac. That, of course, helped send foreclosures spiraling out of control. Some live pictures there for you. Right now the former chief executives of both companies are facing some pretty tough questions from the House Oversight Committee. We, of course, are monitoring that for you.

Employment concerns at Sony. You just heard Susan Lisovicz mentioning this. The company is cutting 8,000 jobs, that is about 4 percent of its workforce. Sony says that move, in fact, will save it about $1 billion. Then the Tribune Company, it, too, filed for bankruptcy, but says it will keep operating its media operations. The Chapter 11 filing does not affect the Chicago Cubs.

And according to AAA, the average price of regular unleaded gas has dropped to $1.69. That is down almost two cents from yesterday.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Don't breathe this stuff. It's an F-18, it'll kill you.

(END VIDEO CLIP)

COLLINS: Investigators still sifting through the debris looking for clues after an out of control F-18 crashed into a suburban San Diego neighborhood. A mother, a grandmother and an infant child were all killed. Another child believed to be at the home at the time is still missing. Two homes were completely destroyed, another one was severely damaged.

(BEGIN VIDEO CLIP)

CHRIS MORROW, IREPORTER: Right when I arrived I saw about four or five cars that were completely involved (ph) in flames and everything, and then just a tremendous amount of black smoke. There's a whole bunch of neighbors that were just getting out their garden hoses and spraying it on their roofs to try and prevent the flames from getting to their structures. And they were doing that for as long as they could.

(END VIDEO CLIP)

COLLINS: CNN i-Reporters have some of the images of the crash site after it went down.

Ali Lai was home studying when she heard the crash. She took some of these pictures with her cell phone.

Boy.

Another night of rioting in Athens. Our reporter caught right in the middle.

(BEGIN VIDEO CLIP)

PHIL BLACK, CNN INTERNATIONAL CORRESPONDENT: There is an old tradition here that says police -- let's move back, let's move back. They're rioting -- riot police are coming through now. (END VIDEO CLIP)

COLLINS: That's our Phil Black. We have some of his reporting coming up. Young men, angry over the police killing of a teenager, destroy property and set fires.

(COMMERCIAL BREAK)

COLLINS: Breaking news to tell you about. Illinois governor, Rod Blagojevich, is in federal custody this morning. His chief of staff also under arrest. They are facing federal charges of conspiracy to commit mail and wire fraud and solicitation of bribery. The FBI is saying some of the charges stem from the process of Blagojevich choosing a replacement for President-elect Barack Obama.

CNN senior legal analyst, Jeffrey Toobin, told us a little bit earlier here the fact that Blagojevich was taken into custody and not allowed to turn himself in highlights just how serious these charges are. Blagojevich spoke a little about the investigation yesterday at a workers' protest in Chicago.

(BEGIN VIDEO CLIP)

GOV. ROD BLAGOJEVICH (D), ILLINOIS: I don't believe there's any cloud that hangs over me.

QUESTION: Well, getting back to that --

BLAGOJEVICH: I think there's nothing but sunshine hanging over me.

Let me answer that. True (ph) question is -- and by the way, I should say, if anybody wants to tape my conversations, go right ahead, feel free to do it. I appreciate anybody who wants to tape me openly and notoriously. And those who feel like they want to sneakily -- and wear taping devices, I would remind them that it kind of smells like Nixon and Watergate.

But I don't care whether you tape me privately or publicly. I can just tell you that whatever I say is always lawful and the things I'm interested in doing are always lawful.

(END VIDEO CLIP)

COLLINS: Blagojevich is serving his second term as Illinois governor. In 1996 he was elected to the U.S. House of Representatives. I also want to let you know and remind you, a news conference is scheduled for noon Eastern time. We, of course, will bring that to you live.

This is the protest Blagojevich spoke at yesterday. Republic Windows and Doors closed its doors last week. But workers aren't leaving. Their sit-down protest now in its fifth day. Talks with the company and Bank of America representatives went nowhere last night. But they are meeting again today.

(BEGIN VIDEO CLIP)

ARMANDO ROBLES, PRESIDENT, UE LOCAL 1110: We are still and we're going to stay into the factory until we get a satisfactory answer.

UNIDENTIFIED MALE: That's right.

ROBLES: Since we don't have that, we don't want to move from here. Thank you.

(END VIDEO CLIP)

COLLINS: The company blames Bank of America for not giving them the money to pay severance and benefits.

Imagine capturing waste energy from dirty industrial smoke stacks and turning it into clean power. Well it's not a fantasy; it is reality. CNNMoney.com's Poppy Harlow has our Energy Fix from New York this morning.

Hi there, Poppy.

POPPY HARLOW, CNNMONEY.COM: Hey there, Heidi.

You know, the waste that power plants and other factories send right into the air, it can actually be recycled into clean energy and (INAUDIBLE) today. A typical American power plant, it's only about 33 percent energy efficient. So a lot is wasted. Building an on-site facility that actually reprocesses, captures that wasted energy, turns it into clean energy, can make those factories about 90 percent efficient. That saves the company money and it cuts, of course, greenhouse gases at the same time.

Take a listen.

(BEGIN VIDEO CLIP)

ROGER BALLENTINE, BOARD MEMBER, CHINA ENERGY RECOVERY: Generally, the least expensive unit of energy and certainly the cleanest unit of energy is the unit of energy you don't have to use, because you've become more efficient. So there is another source of energy.

Is it by itself a fix? No. But I think by and large, energy efficiency is the first thing we should fix.

(END VIDEO CLIP)

HARLOW: He is a top resource on this. That's Roger Ballentine, a former Clinton administration adviser. He is now on the board of a company called China Energy Recovery. The company works right in this sector. Ballentine says it's really the Europeans, the Danish and the Dutch that are leading this. But he says, listen, China is catching up. The United States has an opportunity, Heidi, to do so as well.

COLLINS: Yes, so why aren't more American companies doing this? Is it hard? Is it lengthy? Expensive? HARLOW: It is a bit expensive. But it really comes down to regulation.

There's a company in Illinois called Recycled Energy Development, or R.E.D. We asked them that question. Right now, they're working on a $100 million project to do just this, to recapture energy at a silicone plant in West Virginia. And they also have some other deals in the works. But the company says the main obstacle is not the money, it's not financial; it's regulatory. That's because in most states only the local utility can provide power to customers, so the energy recyclers can't even sell all that excess power that they generate.

Rewriting the rules, that could be a big game changer. R.E.D. says if it is successful, ultimately, this could generate -- recycled energy -- could generate about 40 percent of the power that we use in this country. It could, Heidi, cut greenhouse gas emissions by 20 percent. That's the same as taking all the vehicles off the road. So it could be a big game changer. The question is, will it happen or not?

Heidi --

COLLINS: CNNMoney.com's Poppy Harlow for us this morning.

Thank you, Poppy.

HARLOW: You're welcome.

COLLINS: Want to get back over to meteorologist, Rob Marciano now, who is actually watching some severe weather for us.

Hey there, Rob. What's going on?

ROB MARCIANO, AMS METEOROLOGIST: I've got a tornado watch that was just reissued, or extended. This one in effect until 11:00 Central time. And then this one just popped up, and that's good until 5:00 Central time as well. So a lot of action here on the radar scope.

Should I continue? Or are we going to break at this point?

COLLINS: Go ahead, Rob.

MARCIANO: We'll talk more about it in just a few minutes.

CNN NEWSROOM with you, Heidi Collins. We'll be right back.

(COMMERCIAL BREAK)

COLLINS: Quickly want to give you some information also coming into us here in the CNN NEWSROOM. This coming from President Bush actually saying today that he thinks Zimbabwe's president, Robert Mugabe, should step down as the leader of that impoverished nation.

Here is an actual quote, it says, "It is time for Robert Mugabe to go. We urge others from the region to step up and join the growing chorus of voices calling for an end to Mugabe's tyranny."

As you may well know, the Bush administration long been a critic of Mugabe. The country now is suffering major food shortages, cholera outbreaks, hyper inflation. Many attribute the actions to President Mugabe who has led the country since its independence back in 1980.

We'll stay on top of that story for you as well.

This is the scene now in Athens. Unrest after the police shooting of a teenage boy. Greek police spent hours fighting off angry mobs. The boy was actually laid to rest today in front of thousands of mourners. And after the funeral, there was some clashes with police again outside the cemetery. The riots, protests an destruction of property continued across many streets in Athens, and in Greece's second largest city.

CNN's Phil Black was actually on the streets of Athens during last night's violence when even a symbol of Christmas was burned.

(BEGIN VIDEOTAPE)

BLACK: Anarchy in the birthplace of democracy. The setting sun marked the start of Athens' third consecutive night of violence, and locals say its most destructive in memory.

It started in front of the country's parliament, where rioters taunted police calling them murderers and pelting them with debris. The police responded with tear gas, lots of it. But it didn't stop some from torching buildings and other public property.

(on camera): That was the city's Christmas tree.

(voice-over: Angry young men, many hiding their faces, moved through central Athens in packs, smashing windows and looting. On some streets no shop was left undamaged.

"No words describe what I'm feeling tonight," says this store owner.

But those taking part insisted their actions were justified revenge for the death of the 15-year-old boy allegedly shot by police.

UNIDENTIFIED MALE: When you draw your gun, you mess with the whole system of our society.

BLACK: The most defiant rock-throwers were gradually pushed back into the grounds of Athens University.

(on camera): The rioters have barricaded themselves here in the Athens Law School. There is an old tradition here that says police or security forces -- let's move back, let's move back. They're rioting -- the riot police are coming through now.

There is an old tradition here that says police security forces don't enter learning institutions. That's the Athens Law School. It appears that that tradition may no longer apply. (voice-over): But the police didn't go in after them. Instead, they said, their strategy was containment, trapping the rioters to stop them doing more damage on the streets.

The stand-off lasted hours. But in the end, the angry young men got bored and left.

Throughout the riot, other people placed candles and messages on the spot where the 15-year-old boy died, stopping to reflect on what has happened to their city and whether it can be fixed.

Phil Black, CNN, Athens.

(END VIDEOTAPE)

COLLINS: Some dangerous weather to talk about now, headed to parts of the south and southeast. Meteorologist Rob Marciano has been watching it for us very closely.

So Rob, what's the latest now?

MARCIANO: Two tornado watches out now, Heidi.

This one to the east has just been posted, and that is in effect until 5:00 this afternoon. There it is, in the last couple frames of this. Obviously this line of thunderstorms has been rolling through the Ark-La-Tex region, moving very slowly and actually getting a little bit better organized as it heads towards Memphis and just to the east of Shreveport. So that's why this storm prediction center says, hey, this could get a little bit nasty here.

We've had a couple of tornado warnings, but nothing confirmed on the ground. All associated with this huge system that drives all the way down to the Gulf of Mexico. There is your severe weather. The back side of this is certainly a cold weather threat. And we've already seen several inches of snow pile up.

A little bit of snow moving through the New York metropolitan area in some of the bigger cities. But that's gone (ph). It's actually the leading edge of slightly warmer air. Look at the temperatures rebounding nicely here into the upper 40s.

Live shot quickly of New York. I doubt we'll see much in the way of snow on the ground there. But there's Central Park live from our -- high atop the Columbus Circle Time Warner Center there. Temps will stay in the 40s. You will see all rain until this system really gets through the area.

Chicago, all rain for the most part. But you go north of that town in through Milwaukee, Sheboygan, back through Mason City, anywhere from 6 to 12 inches possible there. Nice powder in the mountains of northern New Mexico. Tows (ph) getting hit with some early snowfall. And winter storm warnings still posted for the San Juans as well.

But look at the sizes of this thing. From the Great Lakes all the way down to the Gulf of Mexico we just have about every form of weather involved in this particular system.

Thirty-seven for a high in Chicago. So that will be warming up to sustain rain until it moves through, and then we'll get a little bit of snow.

And then 50 in New York.

And then looking ahead towards Thursday, you see everybody begins to cool off as we get the system out and off to sea. And until then we get a mixed bag of just about every type of weather you can imagine.

Heidi, back over to you.

COLLINS: All right. Well we'll be following that throughout the day here.

Thank you, Rob.

MARCIANO: You bet.

COLLINS: High school marching band members get the invitation of a lifetime, good enough to play the inauguration. But what might stop them from going.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: You have been selected to play in the inaugural for President Barack Obama come January.

(END VIDEO CLIP)

COLLINS: Cool. Lots of excitement in Colorado. Windsor High School Band got the phone call they will be going to Washington to march in the 56th annual inaugural parade for President-elect Barack Obama.

(BEGIN VIDEO CLIP)

MATT DRASE, BAND DIRECTOR: It's just -- oh, my gosh -- this is insane. It's ridiculous.

UNIDENTIFIED MALE: It's like the biggest parade there is really. This and Macy's.

(END VIDEO CLIP)

COLLINS: This and Macy's.

Not too long ago there was concern, though, there wouldn't be enough members in the band after a tornado hit the town. So Windsor is pretty thrilled by what they've been able to accomplish.

I'm Heidi Collins. Join us again tomorrow morning beginning at 9:00 a.m. Eastern.

For now, CNN NEWSROOM continues with Tony Harris.