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Fed Plans to Curb Credit Card Rate-Jacking; UNICEF Ambassador Mia Farrow tells Atrocities Endured by Refugees in Congo Camps; Big Three Workers Get Prolonged Time Off
Aired December 18, 2008 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEOTAPE)
KYRA PHILLIPS, CNN ANCHOR (voice over): Riding the jobs roller coaster. Somehow, an improvement in unemployment claims. Even as auto workers prepare for an unwanted vacation. The Big Three idling dozens of plants.
Taking personal responsibility. Revealing personal tidbits. An exclusive exit interview with Secretary of State, Condi Rice. Our Zain Verjee joins us live.
UNIDENTIFIED MALE: There are still a lot of good people around.
PHILLIPS: Yes, there are, but not a lot of them are named Abe Lincoln, honest.
(END VIDEOTAPE)
PHILLIPS: Hello, everyone. I'm Kyra Phillips live in the CNN World Headquarters in Atlanta. And you are live in the CNN NEWSROOM.
All right. We have a lot to talk about around issue #1 right now. Chrysler announcing it will shut down all 30 of its plants beginning tomorrow. Workers are being told not to come back before January 19. The company says it just can't seal the deals with the customers, because of the credit crunch.
The number of Americans who filed new claims for unemployment actually fell last week. The previous week that figure hit a 26-year high.
And mortgage rates also fell this week as the Fed slashed interest rates. A 30-year fixed is now at 5.19 percent and it has not been that low in 37 years. Let's talk about what is going on with your credit cards. The Fed is supposed to vote this hour on new rules to protect you from some of those fine-print practices that the credit card companies do. You know, the ones you know and love.
Here is Drew Griffin from the CNN's Special Investigations Unit.
(BEGIN VIDEOTAPE)
DREW GRIFFIN, CNN INVESTIGATIVE CORRESPONDENT (voice over): It arrived in Rich Steven's mailbox a few weeks ago, the notice that he and his wife were being rate-jacked on their Citibank VISA cards. RICH STEVENS, CONSUMER: In my case from 9.5 to 16.99, or 15.99. And in her case, I'm not sure what her initial rate was, but it went up to 18.99.
GRIFFIN: Stevens doesn't know why, he's got great credit. But like thousands of credit card customers, he has been notified that his rate is skyrocketing.
STEVENS: It almost borders on loan sharking from my perspective.
GRIFFIN: In the blogosphere writers are livid about the instant skyrocketing rates, now dubbed, rate-jacking. And Citigroup seems to be the target of most blogger venom. Partly because Citigroup issues so many credit cards and also because Citi began sending the notices right around the same time it was getting a huge government bailout, a $20 billion investment from you, the taxpayer.
(on camera): We couldn't find a single person at Citigroup, not one in that whole building, who would come out to talk to us on camera.
(voice-over): Instead, Citigroup sent us a statement saying, "that to continue lending in this difficult credit and funding environment, Citi is repricing a group of customers. Citi told us anyone unhappy with the new rates can opt out and continue paying the lower interest, but they must close their account when their card expires. It is all in the fine print.
New York Congresswoman Caroline Maloney says she is sick of the fine print.
(on camera): The problem has been credit card companies get away with whatever they want as long as they put it in the fine print, right?
REP. CAROLINE MALONEY, (D) NEW YORK: Exactly. They all have this provision that says they can raise the rate any time, any reason.
GRIFFIN (voice over): In September, she got the house to pass the credit cardholders bill of rights that would have stopped rate jacking and other fees that she says that banks have been getting away with. It passed by 200 votes.
(on camera): Yours was the first House vote that went against these banks and the credit card companies.
MALONEY: First in history.
GRIFFIN: First in history? You passed overwhelmingly, like you said, with a huge vote. It goes to the Senate, it goes nowhere. Why?
MALONEY: We have to keep working and we have to pass it. There is a lot of pushback from the financial industry.
GRIFFIN (voice over): Critics say that the pushback is because of greenbacks, money, donated to politicians who pass -- or don't pass -- laws that regulate credit cards. Keeping them honest, we contacted the Senate Banking Committee where Maloney's bill has just sat since September.
The chairman of the committee is Connecticut Senator Chris Dodd. His staff told us that the senator has his own credit card bill with tough language to stop things like rate jacking and shortening the billing cycles, all the things that make consumers angry. But, even his own bill seems stuck in his own committee. No action since July.
Maloney won't criticize fellow Democrats, but does say that the pressure from the financial sector is intense. And Dodd took in more than $4 million from that financial sector during his in the last campaign. Dodd's office didn't respond to our questions about that, but did say that he has tried repeatedly to protect consumers but legislation has been met with stiff opposition by the credit card industry.
Drew Griffin for CNN, New York.
(END VIDEOTAPE)
PHILLIPS: And we're going to hear more about this a little later. Personal Finance Editor Gerri Willis will join us in about 25 minutes.
Well, thousands of workers at more than two dozen auto plants will have a longer Christmas holiday than planned. Ford and Chrysler are extending the time that the plants will be shut down. Those plant closings are raising concerns among auto parts suppliers. Even if one automaker goes bankrupt, well, it could have a domino effect on suppliers. CNN's Chief Business Correspondent Ali Velshi joining us live now.
All right, Ali, do we -where do we even begin. Should we start with the pros, the cons?
ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Well --
PHILLIPS: It could be a good thing, right, if they saved enough money, but workers here aren't too thrilled.
VELSHI: Exactly. Look, typically over Christmas and for a couple of weeks in the summer, two weeks each time, the automakers do shut down. That is normal. What is happening with Chrysler is they are shutting down for two extra weeks. Ford is shutting down for one extra week than it would have. And GM actually won't be doing it over the holiday, but is doing it in the first three months of 2009. Thy are adding two to four weeks per plant shutdown.
So what this is, this is time that the automakers say that they can preserve some of the money that they otherwise are running out of. Good for the automaker, but the problem is it does endanger some of those parts suppliers. And about 44 percent of the parts are shared, the parts manufacturers are shared by the three automakers and by other automakers in the U.S.
So the danger is take a company like Ford, Kyra, which is otherwise healthy, they are worried that if somebody causes a part supplier to fail, because the parts supplier is not getting paid, that could have a domino effect to start to put Ford into trouble. So that is why it is sort of a part of the story we don't think about as much. And that is, it is just the automakers, it is everybody else that depends on them. These are just shutdowns. Nobody says they are failing yet, but General Motors said it doesn't have enough money to get to the end of the year. Clearly, they are planning to get to the end of the year, because that is coming up in a couple of weeks.
PHILLIPS: And workers are still going to get part of their salaries, right?
VELSHI: Yes.
PHILLIPS: Not full salaries --
VELSHI: That's correct.
PHILLIPS: OK, all right.
VELSHI: They get some of it and in some cases they will file for some unemployment benefits. Again, part of this is normal. Two weeks off at Christmas is normal, it is the extensions that are not normal.
PHILLIPS: Got it. Ali, thanks.
VELSHI: OK.
PHILLIPS: Well, new jobless numbers are in, also. They are still big, but not as big as the previous record week. The Labor Department reports that 554,000 new claims for unemployment benefits, and that is a smaller figure than economists had expected. Filings are still near a 26-year high though.
And when it comes to the job front, American autoworkers have really taken it on the chin. Ten of thousands have already been laid off this year. And now, as you heard, GM and Ford and Chrysler, they are extending their normal holiday shutouts. President Bush was asked today about that and a possible bailout for the auto industry. And he once again emphasized that a failure could hit each and every one of us.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I have concluded that these are not ordinary circumstances, for a lot of reasons. Our financial system is interwoven, domestically and internationally. And we got to the point where -- if a major institution were to fail, there is great likelihood that there would be a ripple effect throughout the world and the average person would be really hurt.
(END VIDEO CLIP)
Well, despite that, the Big Three are still waiting for a bailout from the government. Let's get straight to Susan Lisovicz, the New York Stock Exchange to see how Wall Street is taking all of this.
Susan, what do you think?
SUSAN LISOVICZ, CNN CORRESPONDENT: Well, it is like water torture, Kyra.
I mean when you see what is happening to the stocks. GM shares are down 15 percent right now, below $4 a share. This is a stock that at the all-time high was $90. It is just has been a great American company, an influential worldwide innovator. And it is just being eviscerated. Ford shares, meanwhile, are down 11 percent, under $3 a share.
President Bush was talking about why a failure of one or more of these automakers could affect the broader economy. There is an oft- quoted number that one in ten jobs in the U.S. are related to the auto industry.
Certainly Wall Street is waiting to see if there is some sort of temporary bridge loan, an emergency bridge loan. It has not been coming. Today Dana Perino, the spokesperson for the White House, said there is an orderly way to do bankruptcies, and that bankruptcies that provides more of a soft landing, so there is that option, too, meaning a bankruptcy organized by the federal government.
This is something that could happen, but it takes time, because you have a lot of parties that would have to sign on, it is complex, automakers and labor unions and suppliers and equity holders. And the market opened lower. That is Ford and GM opened lower, because of already this ominous sign that Chrysler and Ford are going to extend their shutdowns. But then when you have something like this, like, you know, another possibility, and still no action, the damage is even greater. And that is what you are seeing -- that you know, just a little bit of pressure on these two stocks and now they're really getting crushed.
The overall market has turned as well. The Dow right now is down nearly 100 points, or 1 percent. The Nasdaq, meanwhile, is off .50 percent -- Kyra.
PHILLIPS: All right. Susan, thanks.
LISOVICZ: You're welcome.
A meeting of men who answer to the title Mr. President; it will be an historic luncheon at the White House. We will tell you who is invited.
And the president-elect says federal regulators have dropped the ball. He says he's going to change that and he's naming more people to his oversight team.
(COMMERCIAL BREAK)
PHILLIPS: Well, President Bush plans to host President-Elect Obama and the nation's three former living presidents for a White House luncheon next month. Former Presidents Carter and Clinton and Bush will join Obama and the current President Bush on January 7. Let's talk about it with Special Correspondent Frank Sesno.
Frank, why don't we go ahead and talk about what the meeting means for Obama. I guess, the symbolic value, first.
FRANK SESNO, CNN SPECIAL CORRESPONDENT: Well, it is mostly symbolic value. He sends a signal, here in the country of course, that the baton has been passed. The he has got the hands on of his predecessors. Really the powerful symbol is one that is sent worldwide that there can be and there is a tradition of peaceful and democratic transfer of power in this case, to a new generation, and an African- American, on top of that.
That picture of those former presidents, and the new president, or the president-elect, standing side by side is going to speak volumes about the American democracy and change, and the change that is coming.
PHILLIPS: All right. So, let's talk about each president that will be there. Carter, Clinton, Daddy Bush and the current President Bush, OK. And maybe there are -- maybe he will learn what not to do by with meeting with some of these presidents. But if you were to choose, all of them, or maybe just one or two of them, what can he gain from these one-on-one discussions?
SESNO: Well, I have to tell you something, I mean, having experienced some of these presidents up close and personal, I am reminded, as I think of Barack Obama and his team putting his inaugural together -- in the midst of this economic crisis -- of something that the first President Bush said when he came to office, in his inaugural, where he talked about -- and there were big deficits at the time -- and a lot of talk about some of the limits placed on government spending. He said, there is more will than wallet. And that was his way of saying, we won't be able to pay for everything.
Well, there is a lot more will than wallet now, but the wallet has been opened up wide because of need and these deficits that are going to be run are off into the stratosphere for the time being because of the acute nature of the economic crisis.
Think of Jimmy Carter. And Jimmy Carter, got into trouble because of in the midst of economic crisis he talked about the age of limits and he talked about the things that Americans would have to sacrifice on, and give up. So there are lessons that Obama can take. History lessons of what to do, and how not to do address crises, from each of these presidents, as well as what to do. And I think that is going to be the really interesting thing to see how he navigates some of these lessons.
PHILLIPS: Well, an in an economic crisis, like you mentioned, the one that we are in, I mean, all four former presidents could be a pretty powerful signal to the nation, right?
SESNO: They are a very powerful signal about coming together, about respecting the next leader. You know there is an unspoken thing among former presidents. They don't speak out directly and criticize one another. Occasionally it got pretty close with former President Clinton, in the nature of this political campaign, because his wife was running, right?
But former presidents have this pact about supporting their successors regardless of the party. And if they have criticisms, they are very veiled. And when they leave, they tend to leave, and then find a new life. You know, Bill Clinton goes off and does the Clinton Global Initiative, it is about AIDS and HIV, and malaria and things like that worldwide. So that, too, is a powerful part of the passing of the baton.
That there is a sort of pledge of noninterference, of support for the new guy, and as that new person goes, because certainly Barack Obama is going to have more than his share of challenges. What he is likely not going to do is going to be to enlist these predecessors unless he really breaks the mold in doing something substantive, in terms of policy or governance.
PHILLIPS: Frank, appreciate it. Wish we could be at that lunch.
SESNO: Wouldn't that be fun?
PHILLIPS: Yes, it would.
SESNO: I'll serve.
PHILLIPS: Exactly. And I will cleanup.
SESNO: OK.
(LAUGHTER)
PHILLIPS: See you later, Frank.
SESNO: See you, Kyra.
PHILLIPS: All right.
Well, President-Elect Obama continues to add more members to his financial team. Today he named three veteran players to assist him when he takes office. The group includes Mary Schapiro who would be the first woman to head the Securities and Exchange Commission, by the way.
Also, Obama promised that he'll waste no time cleaning up the mess on Wall Street.
(BEGIN VIDEO CLIP)
BARACK OBAMA (D), PRESIDENT-ELECT: In the past few weeks I have announced key members of my economic team, who are now crafting a 21st century economic recovery plant that will create 2.5 million jobs. But as I said throughout the campaign, what will be just as important, to our long-term economic stability, is a 21st century regulatory framework to ensure that a crisis like this can never happen again.
(END VIDEO CLIP)
PHILLIPS: Also today, words of another Cabinet appointment. A major union official tells CNN's John King that Obama plans to nominate California Congresswoman Hilda Solis to be his Labor secretary. She is a democrat from East Los Angeles, just elected to her fifth term in the House.
Meanwhile, Obama is drawing fire for his decision to include influential pastor, Rick Warren in the inauguration. Warren, will give the invocation. He attracts about 20,000 people to his Lake Forest, California church every week, by the way. Critics say that many of them, Obama's strongest campaign supporters on the left are asking him to reconsider that choice. They disagree with Warren's strong stance against abortion and gay marriage. The president-elect, however, isn't backing away from his choice.
(BEGIN VIDEO CLIP)
OBAMA: We are not going to agree on every single issue, but what we have to do is to be able to create an atmosphere where we can disagree without being disagreeable, and then focus on those things that we hold in common as Americans.
(END VIDEO CLIP)
PHILLIPS: President-elect Obama also says his inauguration is going to present a wide variety of views.
Well the brutality of the war in the Congo where rape is used as a weapon. Actress and goodwill ambassador Mia Farrow just back from there bearing witness to those atrocities. She is going to join me live in the NEWSROOM.
And an entire nation torn apart by a murderous rampage; now for the first time the masterminds of the genocide in Rwanda faces justice.
(COMMERCIAL BREAK)
PHILLIPS: Snow in Arizona and Las Vegas, even Malibu, California. And earlier this month in Houston, New Orleans and Mississippi. It isn't even winter yet and already places that haven't had a real snowfall in years and years are getting it.
So, what the heck is going on here? Chad Myers, explain. What is up?
CHAD MYERS, CNN METEOROLOGIST: Well, we have one of our meteorologists do a little digging, because it's Vegas. You know, the digging, and the odds and stuff like that. The chance of getting a snowfall in Vegas on any given December day is the same as getting dealt a flush in five-card stud. No, no draw, but five cards, one, two, three, four, five and same suit and same odds for that to happen. Well, now the storm has driven itself on up toward the north and it is going to put down a lot of snow from Omaha through, and north of Chicago.
How does it all play out? Well, the storm came down from the north; it drove itself down here in Southern L.A., all the way down to almost to northern Mexico. It spun for a while and made all that rainfall. Not too many mudslides, thank goodness. It was really touch and go for a while, but now it has moved into the mountains and tonight it will move into the Plains. Then we will get ice into Kansas City, maybe all the way up to Omaha. And that ice will get into Chicago, late, late tonight and into tomorrow.
Chicago, I don't you see that much snow. It is going to be more of a sleet kind of accumulation, maybe that much. North side of town, you could see 10 inches of snow around Waukegan and Milwaukee. This is where the snow will be. If you take the line here, see where the red changes to pink? That is where you will have snow, and then it will get packed down by sleet, or these little grapple, little things, they are ice -- kind of snow, but not all snow, because they are not big flying things. They kind of come down and hit the ground and bounce. Kind of like hail, but not made the same way. That is what we are expecting there across Chicago.
But when you get south of Chicago, Peoria and Kankakee, it is a total ice storm, that means the ice that accumulates on the trees and power lines, and the power lines come down.
In Detroit, you will get five or six inches of snow. Then it moves into the Northeast for tomorrow. Could be quite a bit of snow across Ottawa and Toronto, back up into Montreal. And we have a couple of warnings still for Upstate New York. New York City, and Newark and Newberg, you are right the edge for late tomorrow night, and again, all the way -- not quite through the weekend.
But you could be right on the edge of an ice event for your. Too far for me to stick out my neck just yet, because I like my neck where it is, Kyra.
(LAUGHTER)
PHILLIPS: All right. Chad, thanks.
Well, if you are buried under a pile of credit card debt, you are going to be glad to hear this. Uncle Sam is about to kick some of those fine-print rate-jacking surprises to the curb. We are all over that story.
Plus, he's probably wearing the nicest most expensive ankle monitor device that money can buy. An investment guru accused in a $50-billion scheme. You have to hear Donald Trump going off on this guy, folks.
(COMMERCIAL BREAK)
PHILLIPS: Well, right now hundreds of thousands of people are living in makeshift camp in the Democratic Republic of Congo. And they are escaping fighting between rebel groups within that African nation.
Not only that, but you should see how the children are being treated, even the women. Raped day after day. A use by the military as a weapon against women. Actress and UNICEF Goodwill Ambassador Mia Farrow has just returned from a mission there to see first hand the families and especially the children who are caught there in the middle.
Mia, good to see you.
MIA FARROW, GOODWILL AMBASSADOR, UNICEF: Thank you very much, Kyra.
PHILLIPS: You and I, this is something close to both of our hearts and we were even talking in the break there, that I don't think that people here can even understand how brutally raped the women are. I mean, we are talking about worse actions than Saddam Hussein and what he did to people in Iraq.
FARROW: Really indescribable. Women I have talked -- the youngest I have spoken to was 10, but I know that children as young as even under one-year-old are being raped. Hundreds of thousands of women and children, and when we say rape, I mean, I am talking about with bayonets and stuff. The little -- one of the few remaining health centers was just overflowing with cases of women and children with their insides literally ripped out.
And there souls, you know, it was just really, really hard to even behold. But I'm trying to transmit it here. So thank you for giving me this opportunity. I promised the women there that I would tell the world what is happening to them.
PHILLIPS: Yes, how did they react to you and respond to you? Did they realize who you were and what you do? How did they come to know you and how did you bond with them?
FARROW: Well, I came with UNICEF. And UNICEF -- our team is on the ground there everyday. And they knew from my T-shirt, they knew from the vehicle I was in, that we were there to help.
And women came holding children who were literally dying, stick children. I will give you one image -- outside of the U.N. Peacekeeping compound, probably 10,000, or more, people had pressed themselves against the outside of the compound seeking safety from the peacekeepers and wandering among the people. They had been dispersed by a rebel group and at least half of them had returned at that point, probably double that now. The children were literally starving to death. And they were vulnerable to attacks from, as you pointed out, these militias that are raging through the region.
It's a complete vacuum (ph) of rule of law. There's -- people -- rebel groups are just tearing civilians apart with complete impunity.
PHILLIPS: You know, this one picture of you with this child, I know you are giving -- is it him or her -- Vitamin A? I'm --
FARROW: Right. PHILLIPS: It -- tell me --
FARROW: It was a little girl. And I went to one of the few functioning health centers where UNICEF and others are trying to sustain people. Because, people, you know, in that region more than one million people have been displaced and are living in these makeshift shelters. But they are on the move.
And I talked to people who had been moving 10, 12 times. So they leave and they have nothing and they are living in very, very close quarters just under -- either in the forest or under sheeting. And disease is spreading rampantly; cholera epidemic now. The doctor I spoke to there said he was finding 300 to 400 cases a week of cholera in just one of the camps. So --
PHILLIPS: And Mia, this is what amazes me -- within the brutality and the poverty and just listening to all of the horrible things that you saw and you experienced, yet you go into a classroom, and I think this proves just the power of an education, you went into the classroom, and all the students did was talk about hope.
FARROW: Yes. I asked them, what do you want to be when you grow up? And I have been into conflict zones where kids just stared at me. And these kids just popped up their hands up, I want to be a doctor, I want to be a nurse, I want to be a priest, I want to be a shoemaker.
One little boy said, I want to be the president. So the kids were hopeful. They had a vision of one day that there will be peace.
PHILLIPS: Well, it's great to see you going over there and bringing it to everyone's attention --
FARROW: Thank you. And to tell people, sustain the aide workers who are there, UNICEF and others, who are just putting their lives on the line to keep people alive. And to say to governments, pursue a peace process.
If it was a community of gorillas, honestly, we would have found a solution and stopped the slaughter long ago.
PHILLIPS: Well, you're taking your blessed life and you're giving back and you're bringing attention to this. And I appreciate it, and so do a lot of other people, Mia.
FARROW: Thank you so much, Kyra.
PHILLIPS: Great seeing you.
FARROW: Thank you.
PHILLIPS: If you want to learn how you can help those children, even go to the Congo, get involved, just go to our Web site, cnn.com/impact. And there you will be able to find a link to UNICEF and other charities helping children just like the ones you see in this video with Mia Farrow that are caught in the crisis.
2:33 Eastern time right now. Here are some other stories we are working on in the CNN NEWSROOM.
An extended winter shutdown by the Big Three. Chrysler, now joining GM and Ford in suspending operations later into January to save money. Tens of thousands of autoworkers will be affected.
Meantime, the White House saying for the first time managed bankruptcy is an option to save the Big Three. Saying, we've been asleep at the switch.
President-elect Barack Obama puts forward three financial watchdogs. He has tapped Mary Schapiro to head up the SEC, Gary Gensler to join the Commodities Futures Trading Commission, and Dan Tarullo to fill a seat on the Fed's Board of Governors.
And some last minute protections for health care providers. The Bush administration has issued measures that prevent backlash against providers who withhold service on religious or moral grounds.
Now a lot of us know this feeling, you open up your credit card bill, and even though you pay on time, and surprise, you've been rate jacked. The Federal Reserve is meeting right now to vote on rules that would rein in some of those practices.
CNN's personal finance editor, Gerri Willis, has the latest -- Gerri.
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Hey there, Kyra.
Yes, the Fed is meeting right now to discuss these credit card rule changes. Let me tell you a little bit about what is going to happen for you as a consumer.
First off, it ends any time, any reason rate hikes. Your rate would only be raised if you were 30-days late, or your card comes up for renewal. A big change there. 45 day notice for interest rate changes. A reasonable amount of time to pay -- regulators are interpreting that to mean 21 days, sometimes it is far shorter right now. It would end retroactive rate hikes. This is important. Instead of rate increases applying to old debt as well as new debt, it can only apply to the new debt.
Don't expect any immediate changes though, Kyra, because these rules are likely not to go into effect for another year and a half. And these rules would also apply to thrifts (ph) and credit unions -- Kyra.
PHILLIPS: So, will this ultimately make a meaningful impact for consumers?
WILLIS: Well, the reality is right now it's coming amid a very bizarre time for credit card holders. As you know, interest rates are going down, but for many credit card holders out there their interest rates are actually going up. Terms are getting more difficult for people who have credit cards. These new rules have been on the table for months. 60,000 consumers have written in and said, we need rule changes, pressing the Fed to do something here. But the reality is terms are getting worse not better. The thinking when these rules were first discussed is that they would make terms worse because the industry would have to raise money they were losing from these fees.
So, the devil is in the details here. We'll stay on top of the story, let you know how it impacts consumers as it gets put into place.
But I have to tell you, people are still struggling with that credit card debt, even now, even with these rules about to change.
PHILLIPS: Yes, it is tough.
WILLIS: Sure is.
PHILLIPS: Thanks, Gerri.
WILLIS: My pleasure.
PHILLIPS: Investment guru, Bernard Madoff, is under house arrest in his $7 million Manhattan apartment with a new piece of jewelry, an ankle monitor. Madoff is accused of ripping off investors of up to $50 billion in a Ponzi scheme that authorities said went on for years.
You think Donald Trump would shake his hand now? Nope, he went off on Madoff on CNN's "AMERICAN MORNING."
(BEGIN VIDEO CLIP)
DONALD TRUMP, REAL ESTATE MAGNATE: The people in Palm Beach, many of those people have been just ripped off by this sleazebag. And they'll never see the kind of money that they've seen.
You have some people that gave 100 percent of their net worth to him, in trust, because they trusted him, they trusted his family, they trusted everybody. And now they literally are selling their houses in order to live and some of them mortgaged their houses in order to give that money to this Madoff. And it's really a terrible thing.
I'd see him around Mar-a-Lago, I'd see him around Palm Beach. And he's a disgrace.
(END VIDEO CLIP)
PHILLIPS: Well, Madoff had wanted to go free on $10 billion bail, but he couldn't even get four people to sign his bail request.
The Illinois attorney general says that Governor Rod Blagojevich is not entitled to have his legal defense paid for by taxpayers. He says the state is not responsible for his legal costs in his criminal case, or his possible impeachment.
Meantime, the governor's attorney told the state house impeachment hearing today that the wiretaps used against his client were illegal. Prosecutors say they caught the governor on tape trying to auction off the Senate seat vacated by Barack Obama.
She is one of the world's most powerful women, but Condoleezza Rice won't be secretary of state much longer. We're going to hear what she told our Zain Verjee about her job and about her life away from work.
(COMMERCIAL BREAK)
PHILLIPS: Well, it was a case that shocked the entire world. Hundreds of thousands of people killed in a nationwide bloodbath. Now, one of the masterminds of the genocide in Rwanda faces justice.
(COMMERCIAL BREAK)
PHILLIPS: Condoleezza Rice unfiltered. Just one month from Saturday, the secretary of state gives up her job as one of the world's most powerful women.
She sat down with our State Department correspondent, Zain Verjee, to talk about her service to the country and one of her most trying times, the 9/11 terror attacks.
(BEGIN VIDEO CLIP)
ZAIN VERJEE, CNN STATE DEPARTMENT CORRESPONDENT: The worst breach of national security in the history of the United States came under your watch.
CONDOLEEZZA RICE, U.S. SECRETARY OF STATE: Absolutely.
VERJEE: Did you ever consider resigning?
RICE: I believe --
(CROSSTALK)
VERJEE: -- Taking this with responsibility --
RICE: I do take responsibility, but this was a systemic failure.
The United States of America had experienced terrorist attacks in 1993, in 1998, in our embassies abroad, in 2000 against the Cole (ph) and then finally in September of 2001. But the fact of the matter is that we had not thought of this -- we, the administrations before us -- had not thought of this as the kind of war against the terrorists that we were going to have to wage.
(END VIDEO CLIP)
PHILLIPS: Well, the other powerful woman in Washington, Zain Verjee, she joins us live to talk about her interview.
Zain --
VERJEE: I wish, Kyra.
PHILLIPS: Oh, you have lots of power. You have --
VERJEE: Well, I wouldn't have power if I were sitting here.
PHILLIPS: Well, here is what you have the power of doing, getting people to open up because Secretary Rice rarely opens up or reveals much about herself.
So tell me how you did it. What did she talk about? What struck you as interesting?
VERJEE: Well, she talked about the war in Iraq, her hardest moments as secretary of state. She also talked about 9/11.
But at the end of the interview, Kyra, here is what I asked her.
(BEGIN VIDEO CLIP)
VERJEE: On a personal note --
RICE: Yes.
VERJEE: What about you? What have people got wrong about you?
RICE: Oh, I don't know and I really don't --
VERJEE: Oh, come one.
RICE: -- really don't care.
VERJEE: Well, what is it that --
RICE: Look, all right. I'm not a Type A personality, how's that?
VERJEE: No?
RICE: No, I'm really not. I'm really not.
I actually like to do other things.
VERJEE: You do?
RICE: Yes.
VERJEE: Like what?
RICE: I like to play the piano and I like --
VERJEE: We know that --
RICE: -- and I like to play golf and I like to watch football and I like to workout and I like to be with my friends. And I have terrific and supportive family.
There are often many things I would rather be doing than working. VERJEE: Well, you know, we look at you, people look at you, and they think, wow, she is so disciplined, she's so successful and -- Soviet studies and ice skating and she's so disciplined in playing the piano and she wakes up at 4:30 every day and works out.
RICE: Yes, that's true. That's true.
VERJEE: Do you ever let loose?
RICE: Of course, I do. And I have never been somebody who was so disciplined as to not have fun in life.
VERJEE: Come on. Really?
RICE: Really.
VERJEE: People would be surprised to hear that, because they think you are so disciplined, which is a good thing.
RICE: Well, I am disciplined, but I am sure you are disciplined, too, because anybody who is successful in life --
VERJEE: I don't wake up at 4:30.
RICE: Well, no, that's because you probably don't have to be at work at 6:30 like I do.
But of course, anyone who is successful has to have discipline. But I also have a lot of fun in life. And I care about things other than just working. Friends and family and taking care of yourself, and a chance to enjoy your advocation. And for me, I'm a person of faith, and I have to have my time with my faith.
That makes a well rounded person, and I think I'm a well-rounded person.
(END VIDEO CLIP)
PHILLIPS: All right.
Zain, you didn't ask about the love life. Come on. We all want to know what is going on there.
VERJEE: I almost did. I almost did.
PHILLIPS: Yes, can you be secretary of state, really successful, well rounded, play the piano, have great faith, OK -- what's up with the love life.
You of all people --
VERJEE: I was this close.
PHILLIPS: I was this close.
VERJEE: I was this close. PHILLIPS: Chicken.
VERJEE: I know.
PHILLIPS: Actually, really, that is the most relaxed I think I have ever seen her in an interview. And everybody was even saying in the control room, wow, this is great stuff. Zain knows how to go there, except for the love life. We're going to have do part two.
VERJEE: I know, I will have to remember that for next time.
PHILLIPS: Yes, but you know, really people are fascinated by her on a number of levels. She broke a lot of barriers, and people want to know a lot about her. And it is hard, you really can't live a private life. But she's done a good job on a number of levels.
What about Barack Obama? Did she vote for him, or not? A lot of people were wondering that as well.
VERJEE: Well, we asked her that. I asked her, did you or didn't you? Just put us out of our misery and answer the question. But she refused to say.
And you know, Kyra, while she is not going to tell, at least for now, she has clearly in the past expressed a lot of excitement at Obama's election, and her own personal admiration for him.
The fact that she just refuses to say, I don't know, Kyra. Sounds like maybe she did.
PHILLIPS: She didn't say no.
VERJEE: And do you know what the other thing was, Kyra? Is that she also -- I asked her whether she liked or disliked all the scrutiny that she was under.
You know, when you go on these trips with her, it is like the motorcades and the press and the ministers and all of us and the security, and she is the focal point of everything. And she says that she didn't really and doesn't really like the scrutiny, and it's going to be hard for her to turn the clock back. But she says it comes with the territory of what she did.
PHILLIPS: All right. I know you asked her about Iraq.
VERJEE: Yes, I did.
PHILLIPS: And?
VERJEE: I did. And she said -- she defended the decisions to go to war in Iraq. She says she has absolutely no regrets about the decision to go to war, and in fact she said she was proud of it.
The only thing, Kyra, she said that she would do differently would be to focus less on Baghdad, on rebuilding Baghdad first, and more on all the provinces and building relationships with local governments and building the country from the bottom up, instead of hoping that once Baghdad is sorted, it would spread to the rest of the country.
That was the only thing. There were a lot of things that I asked her about that, but she was insistent that it was the right decision, and history would be the judge.
PHILLIPS: Well, great job. We enjoyed the interview.
VERJEE: Thanks, Kyra.
Me, too.
PHILLIPS: Thanks, Zain.
Well, over a decade ago, the world was shocked by the genocide in Rwanda. In an organized mass killing, almost one million Tutsis and moderate Hutus were slaughtered. None of the masterminds of the genocide had been brought to justice until now. CNN's David McKenzie reports from Nairobi, Kenya.
And I just want to caution quickly that his report does contain a lot of images that you will find disturbing.
(BEGIN VIDEOTAPE)
DAVID MCKENZIE, CNN CORRESPONDENT: Neatly stacked skulls bear witness to the madness. 14 years ago during 100 days of slaughter even sanctuaries were unsafe. Tutsi men, women and children fled from Hutu militia to the (INAUDIBLE) Catholic Church in Rwanda. They padlocked themselves on these walls, but the locks wouldn't hold. They were all killed, and they were not alone.
In 1994, 800,000 Tutsis and moderate Hutus were murdered in an orchestrated genocide carried out by militia army and their neighbors.
The killing began after a failed peace agreement to end the civil war and the assassination of Rwanda's president. But the genocide was planned for years.
The chief instigators of the killings have never faced justice, until now. Theoneste Bagosora convicted as one of the masterminds of the genocide, sentenced with two others with the maximum penalty.
Bagosora stood accused of inciting ethnic hatred, arming the notorious (INAUDIBLE) militia, and giving the orders to kill. The case against him was damning.
JUDGE ERIC MOSE, PRESIDING JUDGE: Bagosora was the highest authority in the Ministry of Defense and exercised effective control over the (INAUDIBLE) army (INAUDIBLE) when the Ministry of Defense returned (INAUDIBLE).
For the legal reasons given in the judgment, he is therefore responsible for the murder of the prime minister, the full opposition politicians, the 10 Belgian peacekeepers, as well as the extensive military involvement in the killing of civilians in Kigali during this period.
MCKENZIE: Bagosora and the two others accused were convicted of genocide, crimes against humanity and war crimes.
The trial took over five years to complete, but in the end, sentencing was swift.
MOSE: The chamber sentences Bagosora (INAUDIBLE) and (INAUDIBLE) to life imprisonment.
MCKENZIE: Their punishment won't bring the victims of the Rwandan genocide back, but perhaps it will help deter future atrocities. And for the dead, which lie preserved in schools and lined in churches as memorials, some justice is finally done.
David McKenzie, CNN, Nairobi.
(END VIDEOTAPE)
PHILLIPS: Well, he doesn't wear a stove pipe hat and he is not on the five spot, but this Abe Lincoln's got a lot in common with his namesake. We will explain.
(COMMERCIAL BREAK)
PHILLIPS: Well, electric cars may be the future, but the advanced batteries they need are pretty hard to come by in the United States, at least so far. Stephanie Elam has our Energy Fix from New York.
Steph, I'm not used to seeing you.
STEPHANIE ELAM, CNN CORRESPONDENT: I just lost hearing you, Kyra.
PHILLIPS: You just lost me?
ELAM: I can see you're talking to me, but I can't hear you now.
So, I'm just going to start talking.
PHILLIPS: Hi, Steph.
ELAM: Yes, hi.
PHILLIPS: Love you.
ELAM: Because I heard you start.
I love you.
All right, let me tell you a little bit about batteries here. When it comes to producing the next-generation batteries for electric cars, U.S. companies are playing catch up with their Asian rivals. Both GM and Ford are planning to roll out plug-in cars, like the Chevy Volt, in 2010. But there is very limited capacity in this country to make the lithium ion batteries those cars will need.
Now, 15 American companies are joining forces with one of the nation's largest laboratories to help change that. Their new alliance, which includes 3M and Johnson Controls, plans to ask the Obama administration for $1 billion in federal aid to build an advanced battery plant, and there's no question the United States is way behind here.
The "Wall Street Journal" reports China is building more than four dozen advanced battery factories. But there is not even one in the United States, Kyra.
OK, I hope I can hear you now. I'm thinking -- I can't --
PHILLIPS: Can you hear me?
ELAM: I can't, so I'm going to tell you --
PHILLIPS: OK.
ELAM: This is -- I am really sad, I was looking forward to my Kyra moment today.
Anyway, let me tell you why --
(CROSSTALK)
ELAM: OK. I will keep going. I like this. Mime TV.
It can be a game-changer because alliance members believe this technology could eventually be as important as oil is today and we'll be trading dependency on foreign oil for foreign batteries if we don't get in the game.
Plus, with the U.S. economy in a recession, making next generation batteries domestically could mean new manufacturing jobs, creating a domestic supply chain.
President-elect Barack Obama says he wants to create five million new jobs in the next 10 years by investing $15 billion a year in clean energy technology. A home grown advanced battery industry could actually fit in with those plans.
Of course, if you need another hit (ph) or if you want to just check out mime TV here again where we are just talking and not hearing each other, you can go to cnnmoney.com -- Kyra.
PHILLIPS: Well, it is good that my mom is a teacher for the deaf.
So thank you, Steph.
ELAM: I love it. I love it, and I love you. Merry Christmas.
PHILLIPS: What would you do if you found a wallet full of cash? Well, we're going to tell you what Honest Abe did, and yes, that is his real name.
(COMMERCIAL BREAK)
PHILLIPS: Well, honesty is always the best policy, right? But when you've got a name like Abe Lincoln, you must really feel the pressure to do the right thing.
Kelly Morris of our affiliate, WPTZ, introduces us to one New York man who lived up to the reputation of his namesake.
(BEGIN VIDEOTAPE)
KELLEY MORRIS, WPTZ CORRESPONDENT: He's often told he looks like Jerry Garcia. But his name is Abe Lincoln, just like the president and, yes, he's heard the jokes.
ABE LINCOLN, HONEST ABE: Everywhere I go.
MORRIS: And there will be more because of what happened this weekend while Lincoln and his girlfriend were shopping.
(on camera): Lincoln's girlfriend was walking through this parking lot when she saw the man run by and drop a wallet just like this one. She picked it up, but they couldn't catch up to them.
(voice-over): The two opened it and saw it belonged to a 61- year-old man named Raymond Hudson. They started making calls and tracked down the man Hudson worked for, Mason Forenz (ph).
UNIDENTIFIED MALE: He was just devastated.
MORRIS: Devastated, because the wallet had all of Hudson's cash in it, nearly $3,000.
UNIDENTIFIED FEMALE: He was just happy. He hadn't slept since he had lost his wallet.
MORRIS: Hudson will have to wait a while for his wallet and money. He's on a bus headed to Miami. When he gets home to Jamaica, Hudson can give all the credit to that other Abe Lincoln.
UNIDENTIFIED MALE: It's a great story. And it's a great -- refreshing for humanity. You know, that, they're still a lot of good people around.
LINCOLN: In the name, honest Abe, isn't it?
MORRIS: Well, it's honest Abe, isn't it?
LINCOLN: That's what usually comes out.
MORRIS: So, are you? Are you honest, Abe?
LINCOLN: Well, yes.
(LAUGHTER) LINCOLN: (INAUDIBLE) his wallet back, but I'm glad we did it.
(END VIDEOTAPE)
PHILLIPS: Well, the happy ending was especially happy and meaningful for the man who lost the wallet. According to his boss, the worker lost his wife to cancer recently and has had a really rough year.
The next hour of NEWSROOM starts right now with Rick Sanchez.
