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Burris Argues That He Is Bona Fide Appointee; Israel Clearing Out Hamas In House-To-House Fighting; Palestinians Call For Medical Aide For Thousands of Injured

Aired January 05, 2009 - 14:00   ET

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

KYRA PHILLIPS, CNN ANCHOR: Susan Roesgen joining us now, from Chicago. Chicago, now, this is your area, Susan, so you have grown up watching the Illinois politics. But I think this takes the cake.
SUSAN ROESGEN, CNN CORRESPONDENT: I think everybody thinks it takes the cake, Kyra, partly because this is an exclusive club. We have to remember in terms of a national scope of this story that who is the most powerful elected official in any state. Sometimes it might be the governor, but quite often, it is the senator. So it's an exclusive club and there's a lot going on here about whether or not this particular candidate, this particular appointment, or as he likes to call himself, this particular junior senator, should be in that club.

He did talk about this certification and there's some interesting things I would like you to think about that when we talk about certification -- what does that mean? Here's a little bit of what the junior senator, as he calls himself, Roland Burris, had to say about that.

(BEGIN VIDEO CLIP)

ROLAND BURRIS, (D) U.S. SENATE APPOINTEE: What don't you all understand, that what has been done here is legal. I mean, that's legal. I am the junior senator from Illinois and I wish my colleagues in the press would recognize that. All the drama - and you make it like, I guess it keeps you all in a job. Is that right?

(END VIDEO CLIP)

ROESGEN: You know, it's not quite keeping us in the job. In fact, as you mentioned, Kyra, in the open of your show, President- Elect Obama has a full plate. There are lots of things to cover. But, again, this is an important position. It's an important Democratic position that certainly the Senate leadership don't want to lose.

This business about the certification: Under state law, the rule is that the governor and the secretary of state must both sign off, sign on the dotted line yes, this is our appointment, our appointed senator. Now, the secretary of state's office is saying well, we don't have to sign it at all, we don't believe that's a law. In any case, we're not going to sign it, because we don't believe he is the candidate that should have been appointed.

But here is the crux, Kyra. Roland Burris is saying well, it's totally legal. If he believes it's totally legal, then why did he file a motion last week, with the Illinois supreme court, to force the secretary of state here to certify him. And not only that, Kyra, but he sent another motion to the Illinois supreme court on Friday saying, hurry up, go ahead and do it. Force the secretary of state in Illinois to sign on the dotted line and make this appointment legit. It's not as easy and clear-cut as he would make it seem to be, Kyra.

PHILLIPS: It will be interesting to continue to follow. Will he actually be able to take the seat or not? I'm assuming this is what everybody's talking about and trying to figure out. There really isn't a yes or no answer at this point, right, Susan?

ROESGEN: You know, they are, Kyra. It's really a sad situation because people in Illinois know it's an important seat but you have to know a little of the back story of Roland Burris. He's 71 years old. He was at one time the state attorney general, but since then, he has run for governor twice in the state, and twice been defeated. He ran for mayor of Chicago and was defeated. So at his age and with his current record of losses, there's a lot of strong feeling that it's not a black/white issue. It is simply an issue of who is the most viable candidate, which candidate, or appointment right now, would be the same person who could win the election outright about a year and a half from now.

It isn't that anyone doesn't like Roland Burris. It doesn't matter that he's black, white, that doesn't seem to matter so much to the voters of Illinois. It's who is the best candidate, right now, who could also go on to be elected on his own in 2010.

PHILLIPS: All right. Susan Roesgen, thank you so much.

Burris definitely goes to Washington riding a wave of support from the pulpit. New Covenant Missionary Baptist Church in Chicago hosted this big sendoff for Burris yesterday. Ministers and other leaders from the African-American community solidly behind Burris. Governor scandal be darned. Reverend Stephen Thurston is the pastor at New Covenant. He joins us from Raleigh, North Carolina.

Reverend, good to see you. So, let me just start out with all this back and forth and this controversy about he says he's going to take the seat, yet we are being told legally it's not possible. What's your take?

REV. STEPHEN THURSTON, NEW COVENANT BAPTIST CHURCH: We believe it is legal. As we understand the governor's right and responsibility to appoint the senator. And we have heard from his legal counsel that it is legal. He stands on legal grounds. And we are pushing his support and we are pushing for him to be seated.

PHILLIPS: He's not a member of your church, correct?

THURSTON: No. He is a faithful, active member of the St. John Church Baptist in Chicago and has been for many years.

PHILLIPS: So, tell me why you wanted this sendoff at your church and why so many of you, as pastors, are supporting him. THURSTON: We believe that Roland is the person that can represent Illinois. He has been the attorney general. He was the comptroller of Illinois and he served with distinction. He is totally credible. And he has all of the integrity that any candidate who will sit in that seat would have. We are supporting him totally because he's a part of the African-American community in Chicago . He is a church member, a faithful worker in the church. And we just believe it's the right thing to be done.

PHILLIPS: Tell me why you think he would be a good senator.

THURSTON: Well, he has a record of public service and again, as comptroller, he was a good steward of the money of Illinois. You know, working with money can bring out the best in an individual or the worst. For him, it brought out the best. He was also the attorney general and he stood on moral grounds in relation to his work there in Illinois and he was successful in that way. We believe he will be successful as a U.S. Senator.

PHILLIPS: Reverend, final question. I've got to ask you this because there seems to be two sides here, pretty strong. There's a side that thinks he's absolutely crazy and that he sounds crazy, and that that news conference was crazy. Then there's this other side saying no, it's legal, he's got a great reputation, everybody within the black community loves him. He's done very well in the state of Illinois. So what is it that is giving you the absolute confidence that he won't be tainted by Blagojevich? That he does have an absolute unscathed reputation? And that this is the perfect man to represent the state of Illinois?

THURSTON: Well, he has not been tainted by Governor Blagojevich and that us a fact. He has a record of public service and a record of being successful and doing on behalf of the people of Illinois a great job as a politician. We just know that he will do the same as a senator because his history proves it. He's a proven candidate that has been successful.

PHILLIPS: Reverend Thurston, pastor at New Covenant, appreciate your time.

THURSTON: Thank you.

PHILLIPS: Roland Burris talking with CNN's Wolf Blitzer. You will want to hear what he has to say directly coming up at 4:00 p.m. Eastern on "The Situation Room," It is something you will see only on CNN.

Big meetings today, big speech planned Thursday and big plans to get the economy out of intensive care. President-Elect Obama is getting down to brass tacks on his economic stimulus package. CNN's Kate Bolduan has the story for us in Washington. Hey, Kate

KATE BOLDUAN, CNN CAPITOL HILL CORRESPONDENT: Hey there, Kyra.

He sure is trying to hit the ground running, making the rounds on Capitol Hill. The president-elect met first with House Speaker Nancy Pelosi this morning. His first stop as he's making the pitch for his economic recovery package, trying to get Congress on board. This package could cost in the neighborhood of $775 billion. Listen here to a little bit of that first meeting.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENT-ELECT: Inauguration stand is being built in the background, but the reason we're here today is because the people's business can't wait. We've got an extraordinary economic challenge ahead of us. We're expecting a sobering job report at the end of the week. The speaker and her staff have been extraordinarily helpful in working with our team so that we can shape an economic recovery and reinvestment plan that starts putting people back to work.

(END VIDEO CLIP)

BOLDUAN: Now, as Obama left that meeting, he was met by, well, the media, of course. And people lining the hallways, some cheering, all trying to get a glimpse of the next president. He wished some happy new year before heading off to his transition headquarters to meet with his economic team. Obama is also meeting with Senate Majority Leader Harry Reid today and taking part in a bipartisan meeting of key lawmakers from both the House and the Senate, part courtesy call, part business.

They really are, Kyra, going to have to get down to business very soon. Congressional Democratic leaders say they want to get a stimulus package to the president's desk as soon as possible, although they have started to downplay expectations of meeting a January 20 deadline to do so. They now say they are working - it's more likely by mid- February.

PHILLIPS: All right. Kate Bolduan, thanks.

Turning to the fighting in Gaza, here's the latest. A massive Israeli military operation has so far failed to stop Hamas from firing rockets into Israel. At least 40 rockets were fired today. Israeli forces have seized control of high-rise buildings and attacked houses, mosques and tunnels used for smuggling weapons. Israel says the offensive will continue until it achieves peace and tranquility for Israeli citizens.

Palestinian medical sources say more than 530 people have been killed, most of them militants, but also civilians. Israel says four Israelis have been killed, including one soldier. Diplomatic efforts to stop the fighting are under way. The State Department says Washington is also pressing for a cease-fire.

Israel is warning Hamas the worst is yet to come if it does not stop firing rockets at Israeli civilians. CNN's Paula Hancocks joins us now on the Israeli-Gaza border.

PAULA HANCOCKS, CNN CORRESPONDENT: Hello, Kyra.

We are still seeing intermittent air strikes and shelling, but certainly what we're hearing from inside Gaza, from the senior security official, is that they have completely surrounded Gaza City and they are fighting on the outskirts of towns like Beit Hanun and Beit Lahiya in the north of Gaza. We understand from this source some of the fighting has been house-to-house. They have been trying to clear buildings to find the rocket launchers and rocket launching teams.

We understand from this source they have taken tens of Hamas operatives into custody. They have taken them out of Gaza and have special camps where they are interrogating them, trying to find out more information as to where the operatives are.

As far as the Israeli military is concerned, they have all withdrawn into Gaza City, into the refugee camps themselves. They believe that they have stopped them being able to fire short-range missiles. But we have still seen 40 rockets and mortars hitting Israel today. So at this point, they haven't stopped them being able to fire these rockets.

Certainly the humanitarian situation is something that the international community is incredibly worried about. We are hearing from doctors inside Gaza that the situation is absolutely dire, it's getting worse. Israel is allowing some food, water and medical supplies in, but we're hearing it's just not enough. And the Palestinian medical sources put the number of injured over the past 10 days at 2,700. So certainly, the humanitarian situation, we're hearing from those inside Gaza, is getting very bad, Kyra.

PHILLIPS: We will follow it with you, of course. Paula Hancocks, appreciate it.

Perhaps no president since Franklin Roosevelt has faced such daunting problems as President-Elect Barack Obama. Among the most pressing, the economic crisis and the wars in Iraq and Afghanistan, now the conflict in Gaza.

We want to hear from you, what should President-Elect Obama's top priority be after he's sworn in, the economy, or the crisis in the Middle East? E-mail us at CNNnewsroom@CNN.com. We will read some of your responses later in the show.

For extensive coverage of the Mideast crisis, be sure to watch "Anderson Cooper 360." He is reporting live from Israel, tonight, 10 Eastern, right here on CNN.

Now as Bernard Madoff heads back to court for a bail hearing a House panel grills officials with the SEC over the Madoff investment scandal. We'll have the latest.

Plus, we'll hear from a former FBI agent who spent years tracking down investment fraud.

(COMMERCIAL BREAK)

PHILLIPS: The president-elect has put together his potential Cabinet quickly but he'll have to find a new name for Commerce secretary. Governor Bill Richardson of New Mexico taking his name out of nomination. The feds are looking into a company that won some state contracts in New Mexico after it gave money to the governor's causes. Richardson talked about it earlier.

(BEGIN VIDEO CLIP)

GOV. BILL RICHARSON, (D) NEW MEXICO: As you all know, I have asked the president-elect not to move forward with my nomination at this time. I'm going to elaborate on my decision, but I want to make it clear that I will not discuss details of the CDR investigation.

However, I want to emphasize that I acted properly and my administration acted appropriately, too. A fair and impartial review of the facts will bear that out. The deal handled by the New Mexico Finance Authority with CDR was thoroughly scrutinized through a rigorous procurement process. I always fully expected that my administration would be cleared of any wrongdoing and it would be clear that nothing improper took place.

Unfortunately, the ongoing CDR investigation would have forced an untenable delay in the confirmation process. And given the gravity of the economic situation the nation is facing, I could not in good conscience ask the president-elect, and his administration, to delay for one day the important work that needs to be done.

(END VIDEO CLIP)

PHILLIPS: Again, Richardson says he and his administration haven't done anything improper.

Minnesota's expected to declare Democrat Al Franken its new senator today. A recount shows that he beat incumbent Republican Norm Coleman by 225 votes out of almost 3 million votes cast. Coleman will have a week to challenge the recount in court. Republican senate leaders don't want Franken sworn in until all legal issues are resolved. That could take months.

What caused the death of John Travolta's teenaged son? We may be close to getting answers from officials in the Bahamas.

(COMMERCIAL BREAK)

PHILLIPS: John Travolta's family doctor is in the Bahamas today. The actor's personal physician is there to observe the autopsy on Travolta's 16-year-old son. An American pathologist is also assisting in the procedure. Jett Travolta died Friday after he apparently suffered a seizure. He had a history of them. Police say he fell in the bathroom of the family's vacation home in the Bahamas. Jett had Kawasaki syndrome, which is a heart condition that primarily affects younger children. The family is working on funeral arrangements and hope to return that body home to Florida by midweek.

Eight people are dead after a helicopter carrying offshore oil rig workers crashed near New Orleans. The chopper went down in the marshlands just minutes after takeoff yesterday. One person is in critical condition. The mother of one of the victims says her son, an experienced oil rig worker, never got used to the flight.

(BEGIN VIDEO CLIP)

BARBARA BRYANT, MOTHER OF CRASH VICTIM: Thinking about him being in those marshes out there, he didn't want to fly anyway. He just took the water survival course for this company, for Shell, the week before Christmas and said how terrified he was when he did that. So the facts in my mind are that he's out there, he didn't make it.

(END VIDEO CLIP)

PHILLIPS: Federal investigators are searching the marsh area by boat today for more clues to the cause of the crash.

Take your pick. Snow, ice, freezing rain and thunderstorms, there is a lot of messy stuff on the weather map today. Chad Myers keeping track of all of it.

(WEATHER FORECAST)

PHILLIPS: The U.S. auto industry has been absolutely battered by the weak economy and ongoing credit crunch. And today, the car makers are finally putting a cap on 12 months' worth of slowing sales. Susan Lisovicz at the New York Stock Exchange with the latest damage report. y, Susan.

SUSAN LISOVICZ, CNN FINANCIAL CORRESPONDENT: Hey, Kyra.

Well, 2008 was like a head-on collision for the automakers, no fatalities, at least not yet, but lots of damage. The nation's three largest automakers all reporting December sales declines of more than 30 percent, capping the industry's worst year since 1992.

General Motors reporting a 31 percent drop in sales last month. Results are actually slightly better than expected. Helped by zero percent financing deals. Ford clocking in with a 32 percent drop in December from a year earlier. That brings its decline for the year to 20 percent. Toyota, believe it or not, fared even worse. Sales fell last month by more than 36 percent.

The weakness we're seeing from the American automakers actually comes as an opportunity for some of their overseas rivals. For so long it was the Japanese car makers we saw as the real threat to the Big Three, but "The Wall Street Journal" reports that some European car companies are poised to expand their U.S. operations in a bid to increase their share of the market here. Volkswagen and BMW expected to benefit from big marketing budgets, diverse product lines and access to nonunion labor.

GM and Ford shares are both up at least 3.5 percent. The overall averages not doing much on this first full trading week of the New Year. The Dow is off 58 points, or about 2/3 of a percent. Remember we had a nice rally on the first trading day of 2009. The Nasdaq is flat, doing nothing, as is the S&P 500.

Sometimes doing nothing is better than the alternative, right Kyra?

PHILLIPS: Amen. I follow those words. Susan, thanks.

One man, two hearings, $50 billion lost. Another chapter in the Bernard Madoff story being written right now.

(COMMERCIAL BREAK)

PHILLIPS: Hello everyone. I'm Kyra Phillips in the CNN World Headquarters in Atlanta. You're live in the CNN NEWSROOM.

It's 2:27 Eastern Time. Here are some of the stories we're working on in the NEWSROOM. It's the big question on Capitol Hill, will Illinois former attorney general Roland Burris be allowed to claim the seat vacated by Barack Obama. He says he's the legitimate appointee, but Senate Democrats disagree. They say the appointment by Rod Blagojevich is tainted, since the governor is accused of trying to sell the seat to the highest bidder.

President-Elect Obama is discussing his plans to stabilize and stimulate the economy. One major cornerstone is a $300 billion tax cut.

There's more fierce fighting in Gaza. Israeli forces are pounding Gaza from the ground and the air. Hamas is fighting back, firing dozens of rockets into southern Israel today and vowing to send more, or send it in even deeper.

Accused swindler Bernard Madoff is back in federal court this hour for a bail hearing. The hearing comes as a House panel grills members of the Securities Exchange Commission on Madoff's alleged investment fraud. CNN's Allan Chernoff joins us now live from New York. What's the latest, Allan?

ALLAN CHERNOFF, CNN SR. CORRESPONDENT: The latest, those pictures. Just about an hour ago, Bernard Madoff was picked up at his Upper Eastside Manhattan apartment, brought Downtown to the federal courthouse. He does have a bail hearing beginning just about now.

He has been out on $10 million bail, kept in his apartment, electronic monitoring, the whole deal. So let's see what develops over there, whether the bail is changed, whether the terms of the bail are changed. Of course, it has been highly controversial. A lot of people wondering why is it that Bernard Madoff, charged with swindling investors of nearly $50 billion, why would he be allowed to stay in his luxurious Upper Eastside apartment.

At the same time, starting a half hour ago, a congressional hearing in Washington looking into the question of exactly how is it that the securities regulators missed this entire scheme, this alleged scheme here. Now, the investigation is ongoing within the Securities and Exchange Commission, within the U.S. attorney's office in New York. But these congressmen now holding a hearing, the House Financial Services Committee wondering exactly how is it that the SEC missed everything, particularly when the SED had received repeated warnings from a financial analyst who had raised the questions, indeed, in these very papers, saying that Mr. Madoff was running the world's largest hedge fund, and saying that it was a fraud. That was the detailed, the detailed warning that the SEC had received but again, had failed to uncover any fraud at all -- Kyra.

PHILLIPS: All right, Allan, well, victims now, what can they do? We interviewed one within the last hour. He's really not quite sure what's going to happen to him. He lost his entire life savings. So, what's being done to help investors?

CHERNOFF: That's right. You spoke with Larry Leif, who we've been chatting with for awhile. There are many, many people like Mr. Leif. Indeed, the Securities Protection Investors Corporation says it has sent out, along with the trustee in this case, more than 8,000 claim forms.

So, Mr. Leif has lots of company, apparently. We've been hearing every single day of more and more individuals, charitable organizations, that had handed money over to Mr. Madoff or over to some of the hedge funds that were in turn handing money over to Mr. Madoff.

The SIPC, as it's known, Securities Investor Protection Corporation, they say that they will insure up to half a million dollars for people who had direct accounts with Madoff. Ironically, the firm actually was a member of this organization, SIPC. So people who are direct accounts, at least they have a little bit of insurance. But of course, we're talking about billions and billions of dollars. So, it seems at least right now that many people will not see the bulk of their money returned.

PHILLIPS: That's a lot of people, a lot of money and a lot of futures. Thanks, Allan.

Former FBI Special Agent Harold Copus has spent years tracking down investment fraud. He joins me now to talk about the latest twists and turns in the Madoff case. OK, first of all, these are the type of things that you investigated. In your career, was there ever a time that you went to the head of the SEC and said, wake up, what are you doing, where are you, why aren't you doing your job?

HAROLD COPUS, FORMER FBI SPECIAL AGENT: Well, in this case, you have to say all of those things and the answer is, they weren't, and that's the reason we have the mess we have today.

PHILLIPS: So you know, how can that happen? There's so much money. We're all very dependent on the SEC to make sure that we are protected. How is it there can be so many signs and such a huge failure at the head job? Where was Chairman Cox?

COPUS: Well, I think it comes down to the thing that happens when you're rich and powerful: You can't make a mistake. You and I make a mistake on a bank loan and they probably would put us underneath the jail. This guy was really up there at the top. He wined and dined with these people. They're not going to look at him. They're going to look some place else. That's how it happens. PHILLIPS: So, basically, nothing will happen to Chairman Cox or anybody within the SEC, but all these other people will lose their entire life savings?

COPUS: Well, they certainly will. Right now, what you have is the equivalent of a treasure hunt. You're trying to find that x on the map, where's the money.

PHILLIPS: So, is it possible to actually create an overall overhaul with regard to regulations over our financial institutions? I mean, do you wipe out the SEC and start with something else, or do you clean house and keep the same organization? What do you do?

COPUS: What you probably do is all of that, but at the same time, let me tell you, what we're dealing with are regulations that were working maybe 75 years ago. People are far more sophisticated today. We have computers, and they can do things at the speed of light that you and I never would have thought about ten years ago. Fraud can be moved. Msoney can be moved all over this globe just like that.

PHILLIPS: So, is it possible for so many years, we're talking decades, that the chairman of the SEC can actually say honestly, I had no idea this was going on?

COPUS: Well, he can say it, but I don't think he can say it honestly.

PHILLIPS: You don't believe -- OK.

COPUS: I'm not buying it.

PHILLIPS: So, what needs to happen from here? I mean, and it's also not just the SEC, right? The IRS, I mean, how could the IRS not catch this for so many years?

COPUS: Oh, you talk any of those alphabet agencies right now, and they're having to say, what are we going to do? How do we get this stuff off our face? Where do we go next?

What will they have to do? Right now, the government's playing a high-stakes poker game, quite frankly. Madoff has given them this list where he says these are my assets, this is where they are. Remember, this is the same guy that lied about where the money was invested so now you've got this information. They are having to check it out. They don't want the civil attorneys to get hold of that yet because they want to seize the money first.

PHILLIPS: Could there be more Madoffs out there? Is this just the beginning of something bigger?

COPUS: You know, there are more Madoffs. And prior to this one, without going into any detail, there was actually another fraud just like this in the Chicago area, about $5 billion.

PHILLIPS: Now, banking institutions, I mean, where was the due diligence there? You've got to look at all the banks that were involved in these investments as well.

COPUS: Well, if I'm on the civil side trying to sue this or investigate it, I would say watch out. Civil suits will start to fly here in a few months.

PHILLPS: OK, I'm trying to find something positive. Since this is all coming to a head, could this possibly trigger a huge turnover to where at one point, hopefully, we'll be able to trust the SEC and know we're being protected and know as we start to put our money back into the system that we will be OK?

COPUS: Well, you know, as taxpayers, we all are in the same boat. All of us put our money out there to be invested. So, let's hope that's what happens. We've got to gain some confidence back in this. If we don't, what in the world is left here?

PHILLIPS: Harold Copus, I don't know if I should thank you or just...

COPUS: I'm not sure.

PHILLIPS: ... go and pour myself a stiff drink. Yes, exactly.

COPUS: That's right.

PHILLIPS: Great to see you again. Appreciate it.

Well, can you imagine what the first day of school must have been like for those Obama girls today? Well, new town, new school, new teachers and friends. Everyone knows who your parents are. I wonder how it went.

(COMMERCIAL BREAK)

PHILLIPS: All right, just getting word right now, and be patient with me as I'm getting this across the printer, that we are getting word that President-elect Barack Obama has selected Leon Pannetta, the former Congressman and White House chief of staff, to take over the CIA, the Central Intelligence Agency.

As you know, Obama has criticized the CIA. He did that during his campaign, talking about interrogation methods that he decried as torture, you may remember.

Just to give you a little more background here on Mr. Panetta, apparently what critics are saying, it's a bit of an unusual choice to lead the CIA because this has pretty much been an organization that has hired from within. Obviously, Leon Panetta would be coming in from the outside. And it looks like Obama has been having -- I guess going through a number of choices, been having a bit of difficulty trying to select who would lead the CIA.

He had a hard time doing that because it was hard to find someone that didn't have a connection to the controversial counter-terrorism programs from the Bush era. So, it would be hard to pick somebody from the inside right now. Now, you remember Leon Panetta was the former White House chief of staff. He was the former chair of the National Economic Council, also former director of the U.S. Center for Civil Rights and former director for the Office of Management and Budget. So, Leon Panetta we are being told now, possibly being named to head the CIA.

Well, you might have heard him saying it right here on CNN, but Roland Burris claims he's the junior senator from Illinois, and he is going to Washington despite any scandals surrounding Governor Blagojevich. CNN's Wolf Blitzer had a chance to talk with Burris just a few minutes ago. Here's a bit of that.

(BEGIN VIDEO CLIP)

WOLF BLITZER, CNN ANCHOR: Walk us through what's going to happen. You're about to get on a plane to fly to Washington, and all the new senators are supposed to be sworn in tomorrow when the Senate convenes. Tell us what your intention is.

BURRIS: Wolf, I intend to be sworn in. I will present myself to the Senate tomorrow afternoon or tomorrow morning, and should they turn me away, I will then proceed to leave. And then my lawyers will have to assess what the next course of action will be. But in no way will we go there to try to create any type of a confrontation or scene.

(END VIDEO CLIP)

PHILLIPS: Well, there's a whole lot more where that came from. Catch the entire interview in "THE SIT ROOM" coming up at 4 Eastern right here on CNN with Wolf Blitzer.

Well, people struggling to pay their heating bills this winter have one less place to turn. CNNmoney.com's Poppy Harlow has our "Energy Fix" from New York. Hey, Poppy.

POPPY HARLOW, CNNMONEY.COM: Hi, Kyra. Yes, some troubling news coming in for a lot of homeowners. Oil giant Citgo suspending its free heating-oil program for some low-income residents.

Back in 2007, Citgo donated 100 million gallons of heating oil to thousands of households in 16 states and in Washington, D.C. But now Citgo, which is owned by the Venezuelan government, is re-evaluating, it says, all of its social programs. It's blaming that on falling oil prices, also the global economic global crisis.

The free heating program, that was started in 2005 in partnership with Citizens Energy, that's a nonprofit founded by Joe Kennedy. It was pretty controversial when it started working with Chavez's organization. Critics said Venezuelan President Hugo Chavez -- you see him right there -- was just using this as a propaganda tool in his battle with the U.S. and with President Bush.

Now Citizens Energy is urging people who have used this program to write Chavez and share their stories, Kyra. Pretty interesting.

PHILLIPS: Well, are there other places to turn to for people who need help with their heating bills?

HARLOW: They can. Citizens Energy says it's going to continue to run some programs to help those in need. If you need help, check out its Web site. That's citizensenergy.com. There's a map you can see right there. You can click on your state and see where assistance is available. There are some states that have participated in the oil heat program.

Now, there's also a low-income home energy assistance program that's implemented at the state level. Here's some information to check out if you need help. Call 1-866-674-6327. You can also e-mail energyassistance@ncat.org. Following this story, Kyra. We'll let you know what happens -- Kyra.

PHILLIPS: All right. Thanks, Poppy. Well, the nation's economic crisis or the crisis in the Middle East? We asked you which one should be President-elect Obama's number one priority. We're going to read some of your responses coming up.

(COMMERCIAL BREAK)

PHILLIPS: Let's get right to it. That means Ed Henry out of Washington. Ed, looks like we've confirmed two picks by Barack Obama on his cabinet. Leon Panetta to head CIA and also Dennis Blair, national intelligence director, correct?

ED HENRY, CNN CORRESPONDENT: That's correct, Kyra. Two Democratic officials confirmed to CNN that Leon Panetta, the former Democratic Congressman, former White House chief of staff, of course, in the Clinton days, very well known for that, very prominent role, will be heading up the CIA, an agency that since 9/11 has gone through a tremendous amount of change, obviously.

General Michael Hayden is there right now, but a lot of controversy in the Bush years about interrogation methods, whether or not it was torture. Obviously legal issues, but also a lot of political issues to deal with there. And so Leon Panetta will now be heading up the CIA, we're told. Very interesting as well because he was seen as enough of a bipartisan figure that he was also selected by President Bush to serve on the Iraq Study Group, a pivotal outside group.

He's going to be reporting to Admiral Dennis Blair, a retired admiral. We're told he will be the director of national intelligence. That means that Mike McConnell, the current DNI, will be leaving. There had been a lot of speculation about whether or not the president-elect would leave these key intelligence officials on board at least for sort of a few months of a transition so that there was some symmetry there, a seamless transition, if you will, much as he kept on Defense Secretary Robert Gates.

But in private, a lot of Democrats have been saying that the president-elect really wants to have a break from the Bush years, particularly in the intelligence community because of that controversy over the so-called enhanced interrogation methods. What's interesting is Dennis Blair is the name that's been out there for quite some time for the director of national intelligence job.

The CIA director, what's fascinating, Leon Panetta is a name that really was not in the mix for a long time. He's more of a surprise than Dennis Blair is. Again, somebody who carries a lot of weight in this city as a former White House chief of staff, a former Congressman. He was chairman of the House Budget Committee, you'll remember. Really carries a lot of heft. So, the fact the president- elect is bringing him to the table is a very interesting move -- Kyra.

PHILLIPS: Well, and at the same time as we are hearing new names and new appointments here, you've got Bill Richardson pulling himself out as secretary of commerce. Any word yet on who could be the next pick for that spot? I mean, obviously that's an important position, considering where we are here in the economy right now.

HENRY: I have not gotten any names on commerce secretary yet, in part because I'm told we should not expect it to be this week. Obviously, that can always change if some front-runner emerges quickly. But I'm told don't expect it this week because this Richardson thing kind of blew up in the last few days and they're not ready to announce that -- Kyra.

PHILLIPS: OK. Ed Henry from Washington. Thanks, Ed.

Now to our e-mail question for today: What should be president- elect barack obama's top priority when he takes office, the economy or the crisis in the Middle East? Here's what some of you wrote in to us.

This is what Richard writes: "I feel sorry for all the suffering over in the Middle East with the fighting, but we are suffering here also, and we need to take care of our own house first before we can try to help someone else's."

And Frank put it this way: "Economy is number one. We need to be strong first in order to help anyone else." And Wayne says, "The American economy is in critical condition and should have the complete attention of the new administration. Israel is handling their problems with Hamas, and we should stay completely the hell out of it for a change."

Sync writes, "He should focus 100 percent of his attention on our economy. If we can't help ourselves, how will we help the Middle East?"

Thanks to all of you for your e-mails. We sure appreciate it.

And as always, Team Sanchez working on the next hour of NEWSROOM. Boy, we had a lot of developments today, Rick. I think your hour will go very fast.

RICH SANCHEZ, CNN ANCHOR: Yes, especially the comments from Burris. I thought that was just fascinating. I know you did, too, from the way you reacted to it afterward.

So, we're going to be all over -- you know, Mark Preston's going to join us. There's a lot of questions about that story. I mean, you've got a guy who says, look, I am the standing senator. And then you have folks in Washington who are saying, no, you're not. We're not ready to accept you. Obviously, they're going to have to work this thing out.

Also, a huge story we're following for you, Kyra. Take a look at this. This broke a little while ago.

These are Google alerts that just came in -- go ahead on that, Robert -- Google alerts that just came in a little while ago about us, about Rick Sanchez and Twittering, and on and on. The reason is, I'm not going to go in and open all of them but let me get back on camera and tell you what's going on.

The accounts of Barack Obama, Britney Spears, moi and Bill O'reilly were apparently either phished or hacked. And as a result, everybody seems to be talking about it in the community, you know, with Twitter and MySpace and Facebook. I think we've gotten to the bottom of it. We're trying to figure out what happened and how it happened, and we'll be talking about that during our hour as well.

PHILLIPS: That sounds like a bad joke. So, Sanchez, Barack, Britney and Bill walked into a bar and it was a Twitter nightmare. That would definitely make the blogs, I must say.

SANCHEZ: Well, it seems to be doing so already, as a matter of fact.

PHILLIPS: OK, well, we'll tune in. See you, Rick.

SANCHEZ: Innocent.

PHILLIPS: Yes, until proven guilty. See you, Rick.

New town, new school, new friends. All in a day's work for the Obama girls. A big, big day for them. We'll find out how it went.

(COMMERCIAL BREAK)

PHILLIPS: First day of new school for the soon to be first daughters, malia and sasha obama. They started classes at the sidwell friends school this morning. Malia is in fifth grade. Sasha is a second grader. It's the same school that chelsea Clinton attended. Sidwell friends, prestigious, expensive and different. It was founded on quaker values it still holds dear, what Joe Johns explains.

(BEGIN VIDEOTAPE)

JOE JOHNS, CNN CORRESPONDENT (voice-over): They may not have chosen a dog yet or their White House bedrooms, but malia and sasha do know where they will go to school. Here it is. Sidwell friends, founded in 1883 by a quaker teacher as among the elite private schools in Washington.

SALLY QUINN, WASHINGTON POST: Sidwell friends is a quaker school, first of all, and it's really infused with quaker values. It's very much about peace and community. It's very progressive, has about 40 percent minority.

JOHNS: Michelle obama's spokesperson says a number of great schools were considered. In the end, the obamas selected the school that was the best fit for what their daughters need right now. What's so special about Sidwell? there is the philosophy. Sidwell says its students and faculty are in a search for truth and the school follows a quaker belief that of god in each of us inspires everything we do, inspires us to show kindness and respect toward one another and apply our talents in service to others.

BO LAUDER, PRINCIPAL-FRIENDS SEMINARY: I think it's a great fit for the Obama family, because the school is a very rigorous academic place that places a lot of value on intellectual inquiry. With Obama's position on war and his own commitment to hope and to the future, I think that he feels probably that the school will equip his children well for bringing about a better world.

JOHNS: Obama often seems in tune with Quaker principles, seeking consensus with others, talking rather than fighting with opponents, and at least in the case of Iraq, if not Afghanistan, opposing war even when the majority supports it. The Obama girls aren't the only first family children who have opted for Sidwell.

QUINN: Chelsea Clinton went there. Al Gore, young Al Gore went there. The Nixon girls went there. Teddy Roosevelt's children went there. The Biden grandchildren go there. They are very, very good about security. They understand about that and they also understand about children who are in the public eye a lot.

JOHNS: Sidwell isn't cheap. For the lower school, where Sasha will attend second grade, tuition is nearly $29,000 and more for the middle school, where Malia will be in fifth grade. But Sidwell can afford to ask top dollar.

QUINN: Sidwell is a happy school. I think the children who go there are children who really feel good about themselves at the end of the day. They're happy children. It can be a really magical place.

JOHNS: Joe Johns, CNN Washington.

(END VIDEOTAPE)

PHILLIPS: If one former president has his way, we could see another President Bush in the White House one day. The first President Bush, number 41, was quite blunt when asked about his political aspirations for a second son, former Florida governor Jeb bush.

(BEGIN VIDEO CLIP)

GEORGE H.W. BUSH, FORMER PRESIDENT OF THE UNITED STATES: I would like to see him run. I would like to see him be president some day, or maybe senator, whatever. Yes, I would. Right now is probably a bad time. We have enough Bushes in there. But no, I would. I think he's as qualified and able as anyone I know in the political scene. You got to discount that he's my son. He's my son that I love. (END VIDEO CLIP)

PHILLIPS: Jeb Bush is mulling over his chances for a run at the Senate seat being vacated next year by mel martinez.

3:00 p.m. Edition of CNN NEWSROOM starts right now with Rick Sanchez.