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Geithner Nomination in Trouble?; Bailout Plan Details; Cold in the Eastern U.S.
Aired January 14, 2009 - 12:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
TONY HARRIS, CNN ANCHOR: And hello again, everyone. I'm Tony Harris in the CNN NEWSROOM. And here are the headlines from CNN for this Wednesday, the 14th day of January, 2009.
A little bit of Alaska invades the lower 48. The Arctic air puts the Midwest on ice and will soon filter into the East and Deep South.
An Indiana businessman who tried to disappear in a plane crash turns up alive, but barely, after an apparent suicide attempt. Now he is answering to police.
Another day of confirmation hearings for Barack Obama's cabinet nominees. For one, his shoo-in is in doubt today thanks to a bit of a tax problem.
The scrutiny begins again. Senate committees questioning President- elect Barack Obama's nominees. Those taking a grilling today, retired General Eric Shinseki, Obama's choice to head Veterans Affairs.
Also appearing, Lisa Jackson. She has been nominated to head the Environmental Protection Agency.
And former Iowa Governor Tom Vilsack being considered for agriculture secretary.
Expected to take some heat later on, Timothy Geithner, Barack Obama's choice for treasury secretary. He's got a rather interesting tax problem. Let's talk about that.
Geithner didn't pay payroll taxes when he worked at the International Monetary Fund. The IMF requires employees to pay their own Social Security and Medicare withholdings. We're talking 2001 to 2004. Geithner is now up to date on the back taxes, but because of this revelation, his confirmation hearing set for Friday has been pushed to next week.
Martin Kady is congressional correspondent for Politico.com.
Martin, good to see you. A couple of questions for you.
MARTIN KADY, POLITICO.COM: Yes.
HARRIS: All right. First one first here.
Is Timothy Geithner's nomination in trouble? KADY: Right now, we don't think that he's in danger of withdrawing or getting rejected. But what this is, is an embarrassing episode for Geithner, himself, for the vetting team, the Obama transition team. And now that they have put off his confirmation hearing from Friday until next Wednesday, the day after the inauguration, we've got another week to stew over this, to investigate this. The Republicans have time to sort of let this air out, which is why they objected to the hearing so quickly.
HARRIS: The treasury secretary-designate, nominee, who doesn't take care of his taxes.
KADY: Yes.
HARRIS: Come on, the appearances on this are absolutely lousy.
KADY: Yes. I mean, this looks bad. And in previous administrations, in previous transitions, this type of thing has derailed nominees.
HARRIS: Yes. Yes.
KADY: You know, we all remember Kimba Wood and Zoe Baird, the nominees for attorney general who had problems with taxes and illegal immigrant domestic help. But here is the pushback. The PR push by the Obama people -- and even some Republicans are accepting this -- that the stakes are too high on the economy.
Geithner is seen as too much of a rising star and a critical component to the Obama economic agenda. They are not going to let this derail him, even though everyone is admitting that it's an embarrassment. But remember, it's not income taxes, it's payroll taxes. And IMF has a curious situation where they define themselves as self-employed. So he didn't cover that end of the Medicare and Social Security taxes.
HARRIS: OK. So final question here, does the Obama team believed he can be saved?
KADY: Absolutely. They were ready for this.
In fact, the Senate Finance Committee released a 30-page report with all the details minutes after this broke. The Obama sent all of us covering this detailed talking points with all the numbers.
So the vetting process did reveal this back in December. It just came out yesterday. But they think they can save him as long as a few Republicans get on board.
HARRIS: OK.
Martin Kady, congressional correspondent for Politico.
KADY: Thank you.
HARRIS: Martin, as always, great to see you. Thanks for your time.
KADY: Thank you. Thanks. HARRIS: Timothy Geithner's tax trouble getting a lot of buzz. Here's the discussion on "ANDERSON COOPER 360."
(BEGIN VIDEO CLIP)
ANDERSON COOPER, "AC 360": David, on the Geithner story, I mean, do you think this is a make-or-break situation for Geithner, or do you think this thing will pass?
DAVID GERGEN, CNN SR. POLITICAL ANALYST: I think it's an embarrassment, Anderson, but I do not think it will derail him. It's embarrassing because here is a man who is paying back taxes, over $42,000 he had to pay, and he's going to be in charge of tax enforcement at the Treasury Department.
The IRS works for him. You know, so he's got to get people to pay their taxes.
That's why it's an embarrassment. And it shows, you know, he wasn't quite paying enough attention.
But I don't think it's derailing because, you know, working at the IMF, as he was, it was a 24-7 job. Normally your employer takes the tax out for you, Medicare and Social Security. These were payroll taxes.
And in this case, the IMF that he was working for did not take those taxes out, and he was expected to do it himself and he didn't do it. He paid all his other taxes, but he didn't take the payroll taxes out. And that's what he got nailed for.
So I think it is an innocent error. I don't think it will derail him. But it is embarrassing.
COOPER: It's interesting, Errol, that the Obama team knew about it before today, but it wasn't until today that it came out.
ERROL LEWIS, CNN CONTRIBUTOR: Well, that's right. And I think they reckoned, as the explanation we just got from David, right on point. But, you know, it's strange. I'm trying to think of any employee I've ever heard of who is an American who didn't have these payroll taxes taken out, or didn't know up front some of the taxes are out, some are not.
You know, it's no excuse by any means. But I think they probably understood in the Obama camp that this was not something that's going to resonate all the way down to Main Street, where people would say, well, I have to do this all the time, why can't he? Most people don't have to go through this.
GLORIA BORGER, CNN SR. POLITICAL ANALYST: But here is the point that is really embarrassing for Geithner, which is that he was flagged about this. He worked at the International Monetary Fund for four years. He was flagged about this by the IRS and paid two years in back taxes but not all four years in back taxes. So folks are going to be asking the question in the Senate, they are going to say, gee, if you paid two years because you made a mistake, and you didn't do it for four, why didn't you just pay all four? Of course all of that has now been paid.
(END VIDEO CLIP)
HARRIS: Timothy Geithner's confirmation has been postponed -- we mentioned it just a moment ago -- until next week.
The historic inauguration of Barack Obama now just six days away. And the nation's capital preparing for an unprecedented crowd.
The story now from Homeland Security Correspondent Jeanne Meserve.
(BEGIN VIDEOTAPE)
JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT (voice-over): Porta Potties, side by side, row upon row on the National Mall in preparation for a big inaugural crowd. A poorly managed crowd can be destructive, even deadly. Just a few weeks ago, a Wal-Mart security guard was trampled by shoppers on the hunt for a bargain.
Inaugural officials have consulted a crowd management expert who has studied events like the Hajj, the annual pilgrimage to Mecca.
HANI MAHMASSAN, NORTHWESTERN UNIVERSITY: People have learned from the mistakes that had been made in terms of massing very large number of people there, in terms of having hard starts where you simply open the floodgates and then you get these stampedes through.
MESERVE: Washington is used to big gatherings like Fourth of July celebrations, and the police know how to handle a crowd. But the challenges on Inauguration Day could be unprecedented.
CHIEF CATHY LANIER, D.C. METROPOLITAN POLICE: Information is my best friend.
MESERVE: Text messages, jumbotrons and loudspeakers will all be used to communicate with the crowd in an emergency. If long waits lead to frustration and anger, officials have plans to diffuse it.
LANIER: We actually have customer service folks that will be walking up and down lines of people, giving them maps and telling them where to go and kind of being ambassadors to make people feel a little bit more comfortable with what they want to do.
MESERVE: Officials are already publicizing the basics. Screening checkpoints will open at 7:00 to let the first 300,000 or so people on to the parade route. Backpacks, coolers, strollers, large umbrellas will all be band. Restrictions will be looser on the Mall, where the overflow will be sent. Spectators who choose can stake out a Mall spot early, though camping is prohibited.
Officials deny they are trying to discourage people from attending. MALCOLM WILEY, SECRET SERVICE: It's quite to the contrary. Our efforts are to make sure that people are safe. We would like for as many people to come as want to come.
MESERVE (on camera): Some experts say the number of portable toilets, estimated at 5,000, is grossly inadequate for the crowd. Others are worried about food and drink. Planners believe they are about as ready as can be, but warn this will not be your average day out. People should plan carefully and dress for the weather.
Jeanne Meserve, CNN, Washington.
(END VIDEOTAPE)
HARRIS: So if you're planning to go to the inauguration, plan to leave your car behind. An elaborate transportation plan will ban private cars from two major routes into Washington, and a large area of downtown will be closed to cars. Another challenge, how to get people out of the city.
(BEGIN VIDEO CLIP)
DEP. MAYOR DAN TANGHERLINI, WASHINGTON: We've been working with the Secret Service, the Homeland Security agency, as well as our surrounding jurisdictions to come up with a plan to deal with the possibility that we may have to evacuate the Mall and other areas.
(END VIDEO CLIP)
HARRIS: Wow.
The Senate passes a bill making it a crime to scalp tickets to Barack Obama's inauguration. The bill passed by voice vote late yesterday. The measure would make it a crime to resell or counterfeit tickets. The punishment, a fine and/or a year in prison.
A Chicago company famous for its cheese cake is adding a sweet touch to the inauguration. Check this out.
Employees have been hard at work assembling a 500-pound cheese cake for the celebration. The ingredients include 100 pounds -- do you want to hear this? -- 100 pounds of cream cheese, 126 eggs, and 30 pounds of, yes, sugar. The finished product will travel by refrigerated truck to Washington.
And coming up in just a few minutes, a member of Barack Obama's inner circle talks everything from playing basketball with the man to attending Harvard. Close friend and actor Hill Harper of "CSI New York" fame joins me. That's coming up in just a couple of minutes.
And again, we will have special live coverage beginning this weekend of inauguration preps and reflections on the new president, "The Obama Express." That's Saturday, beginning at 10:00 a.m. Eastern.
So take a look at this. Nothing says shivering cold like Cleveland in January. Even the hardiest Midwesterners would have to admit this cold blast is a real -- oh, my goodness. Look at these pictures. Wow.
Temperatures across the region are plunging into the danger zone. The Arctic air will soon have a grasp on the East and South and will linger through the week.
Oh, man.
Why don't we talk to chilly reporter Blake Chenault. He is with -- is he OK?
Hey. How are you, sir? Are you OK, Blake?
BLAKE CHENAULT, REPORTER: Yes, I'm great. It's a balmy 10 degrees out right now, but with the wind-chill, a slight wind-chill, it feels more like 0.
Now, the high this morning was 4. Or that was the low. We were expected to make it all the way up to 15 degrees. But, you know, folks in northeastern Ohio, we're used to this kind of thing.
We're used to this kind of cold weather. We just dress in layers and we get about our job, and that's exactly what some of these folks are doing right now.
Can you imagine working with running water when it's this cold? Well, that's exactly what these road crews are doing right now, trying to repair this water main break.
Now, this cold weather that we're expecting right now, the really cold stuff won't hit us until tomorrow. Now, this particular front that we're talking about came in around noon yesterday, when the high was 32. And believe me, that was great, a high of 32, a balmy 32.
But since then, the temperature has taken a dive all the way down to where it is right now with the slight wind-chill repeating. It feels like 0. But it's not cold enough to cause any school closings, at least not yet here in Cleveland.
But further to the south, about 150 miles in Dayton, schools started there a little bit late this morning so kids wouldn't be exposed to the brutal temperatures. But again, we're expecting the really cold stuff to come tomorrow.
Back to you.
HARRIS: Hey, Blake, just a quick question. Are you factoring in any more snow, any high winds? Are we going to crank up the Lake Erie snow machine here soon?
CHENAULT: Well, I don't think we need the Lake Erie snow machine.
HARRIS: No.
CHENAULT: Part of the lake is frozen over, so that cancels out that particular concept.
HARRIS: Wow. Yes.
CHENAULT: But, yes, we're expecting up to five inches more additional snow tonight. And coupled with the fact that we're dealing with a slight wind-chill, anywhere between five to 15 miles an hour, and that will take a 10 degree temperature and make it feel like 0. Yes, the worst is yet to come.
HARRIS: So what's the wind-chill?
CHENAULT: The wind-chill right now, factoring it in, is 0. The normal temperature is 10, but we're dealing with a slight wind-chill of five to 10 miles an hour, so it makes it feel like it's 0.
HARRIS: Yes.
Blake Chenault with us from our Cleveland affiliate WOIO. I believe that's Channel 18 in Cleveland.
Blake, good to see you. Thank you for your time.
CHENAULT: Thank you.
HARRIS: The high temp for Indianapolis tomorrow looks like a teeth- chattering 2 degrees. Reporter Julie Pursley joining me now live.
Julie, you're with affiliate WRTV; correct?
JULIE PURSLEY, REPORTER: WRTV: That's right, Tony.
HARRIS: How cold is it today and what are you bracing for?
PURSLEY: Well, right now, it's 22 degrees. But we're expecting to get much lower than that, minus 5 to 10 within the next couple of days. So far this morning, the temperatures aren't the problem, it's been the snow that's coming down.
(BEGIN VIDEOTAPE)
PURSLEY (voice-over): The snow looked picturesque as it started falling just before 6:00 this morning, but that beauty quickly faded once drivers hit the street.
(on camera): How hard was it for you to get around today?
UNIDENTIFIED FEMALE: You know what? I was on 465, and we -- like, honestly, the traffic, we were going 10 miles an hour. It took me about a half an hour just to get to the next exit. It was really bad.
PURSLEY (voice-over): Rush hour traffic was at a crawl around the region, like here on Interstate 70 in Morgan County. The same was true on most main roads, especially leading into downtown.
(on camera): Are you going to try to take the interstate?
UNIDENTIFIED FEMALE: No, I'm going to drive down 21st Street, because I heard the interstate's backed up. And I'm not going to take the chance.
UNIDENTIFIED MALE: Going to drop my kids off. And they were like an hour late because of the traffic. I live on 86th Street, so the traffic was like crazy. It didn't even look like they cleared the streets.
PURSLEY (voice-over): Salt and plow trucks were out, but conditions were still tricky. Plenty of people also had shovels in hand trying to clear a path for those on foot. To make matters worse, colder temperatures are on the way.
UNIDENTIFIED MALE: I need to get as much of this deiced as I can before it freezes back over or anything so it would make it safe for my residents and stuff to get in and out.
PURSLEY: Those who do work outside say they are bundling up as much as they can.
UNIDENTIFIED FEMALE: And nobody wants to be out in this weather. It's so bad.
(END VIDEOTAPE)
PURSLEY: And what we're getting ready for is the wind-chill warning. That is expected to kick in sometime on Thursday and last through Friday. Again, with temperatures negative 5 to 10 below.
That is not a record. But I'll tell you what, it's sure going to feel that way -- Tony.
HARRIS: It ought to be.
Julie, we appreciate it. Thank you so much.
PURSLEY: You're welcome.
HARRIS: My goodness. Julie Pursely is in Indianapolis for us, where our affiliate there, WRTV.
(WEATHER REPORT)
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
PROF. ELIZABETH WARREN, CHAIRMAN, CONGRESSIONAL OVERSIGHT PANEL: Financial institutions failed the American people. And how those whose jobs it was to monitor and regulate those institutions also failed us. Now with the country in crisis, the American people must not only bear the broken promises of Wall Street and the regulators who were supposed to hold deception and risk in check, they must also bear the double burden of spending their tax dollars to bail out those who failed.
(END VIDEO CLIP) HARRIS: A congressional panel in charge of overseeing the $700 billion bailout looking at ways to reform how the financial industry is regulated.
Let's get the latest on the oversight hearing and on what happens next with the bailout money. Our Senior Congressional Correspondent Dana Bash joining us live now from Capitol Hill.
Dana, just days to go. Look, the focus was the economic stimulus package. Now eyes are on the TARP and the tough sales job ahead for the president-elect and his financial team.
DANA BASH, SR. CNN CONGRESSIONAL CORRESPONDENT: That's right. And, you know, make no mistake about it, they are hard at work on both of those issues here. But it is TARP, or the next chunk of money, a big chunk, $350 billion, that's the thing that's in front of senators, in particular, first.
In fact, we expect a vote on this first tomorrow. And that is why there is such high drama on this.
Now, you know, we've been talking about the fact that since yesterday, we talked to so many Democrats, Barack Obama's fellow Democrats, who said, hold on a minute. This has been such a disaster, from their point of view, and so unpopular, that it doesn't matter if Barack Obama is going to be president, it doesn't matter if he is the one asking a first big political ask of them, we're not so sure we can give it to him.
Now, today, there's another really interesting dynamic, Tony. And that is Republicans.
Republicans smell political blood in the water here. And I have talked to several Republican senators already today who voted yes last time and said, "You know what? I just I don't think I can do it again." And so that is the dynamic here.
Republicans are really seeming to shift more towards making this a Democratic problem and a Democratic issue. So, you know, yesterday, the Senate majority leader, Harry Reid, he said he was confident that they have the votes to give Barack Obama what he is asking for. But then afterwards, one of his top aides say, "You know what? We're hearing some things out of the Republican Caucus. We're not so sure that that's going to happen."
So we are watching this and we are talking to senators, and it is very clear this is incredibly wrenching from them.
HARRIS: So this is interesting, Dana. Have you heard from the Obama team sort of the rational for the release? A triggering event is another way to put it, that would require the money, that we need the money urgently or this will happen, because these events are taking shape?
BASH: Well, I'll tell you what Democratic senators coming out of a private meeting with Barack Obama here on Capitol Hill told me. They said that that is the argument that he personally made. It was his plea to them.
He said, look, I need this. We need this as a country. And that was his argument, that the money still needs to go from the government to these financial institutions to get the economy back up and running again.
But, I will tell you, I think -- to speak to some of the skepticism that was in that question of yours, Tony...
HARRIS: Yes.
BASH: ... Republicans -- I just talked to Republican John Ensign of Nevada, for example. He said that he doesn't think he's going to vote for this again, primarily because he doesn't see that it is as such a crisis level as it was back in the fall. And that is part of the problem, in addition to the very real, very raw politics here, and that is, especially from Republicans, they are hearing from their constituents back home who are very angry, who are saying, don't let this happen. And, you know, it has the political bonus of allowing them to make a little bit of mischief for an incoming Democratic president.
HARRIS: That's so interesting.
All right. Our Senior Congressional Correspondent Dana Bash on Capitol Hill.
Dana, appreciate it. Thank you.
BASH: Thank you.
HARRIS: You know, he plays ball with the man who will be leader of the free -- hey, there he is. Close friend and actor Hill Harper goes inside the mind of Obama with us. It's not that dramatic. That's coming up next, right here in the CNN NEWSROOM.
(COMMERCIAL BREAK)
HARRIS: He plays a crime scene investigators on the hit show "CSI New York." There he is. But six days before we inaugurate a new president, this close friend to the President-elect, actor Hill Harper, is counting the minutes.
Hill joining me now from Los Angeles with some reflections on his Harvard Law School buddy.
Hill, good to see you. Thank for your time, man.
HILL HARPER, ACTOR: Hey, Tony. How are you?
HARRIS: Yes -- outstanding. Boy, not as good as you, I would imagine.
Look, you met at Harvard Law School. Did you actually meet on the basketball court? Will you tell the story? HARPER: Yes. Well, you know, I always say this. When I met him, the funny thing about Harvard Law School is that the library is full but the gym is empty. So you're always looking for someone to play basketball with.
And in walked this tall, skinny guy from Chicago. And I looked up to him not just because he was taller than me, I looked up to him because he had been out in the world working for -- you know, doing community organizing and a lot of work for five years before he came to Harvard Law School.
And those of us that were a little younger, who just went straight from undergrad to grad school looked up to people who had been out in the world, in the workforce. And he's just a great, intelligent, committed human being.
HARRIS: Well, you know, we're going to come back to this video of you guys playing some ball in just a second.
HARPER: Oh, no. Don't do that. Oh, please don't show it. My skills have eroded over the years.
(CROSSTALK)
HARRIS: Yes, we're going to -- were they ever there, is the question.
HARPER: Oh, come on, Tony.
HARRIS: Here is another one for you.
You know, what were the early connections that sort of made this friendship, that made this connection?
HARPER: Well, I think that there's a bonding when you're at a place like Harvard Law School among everybody. There's somewhat of a solidarity, certainly during the time at Harvard Law School, during this particular time.
There was a lot of student activism around diversity as far as the tenured professors at the university. Professor Derrick Bell (ph) was leading a charge for more diversity for African-American women becoming professors. And I think a lot of the African-American students talked a great deal about diversity.
There was talk during that time about divestment from South Africa during -- you know, the apartheid divestment. So there was a lot of student activism and a lot of people talking.
And you'd meet and run into people and talk about issues of the day and what was going on around campus, and the issues regarding Harvard Law School. So I think that's where people connect. And you also connect doing extracurricular activities to blow off steam, like basketball.
HARRIS: Well, that's the early connection. What's made it a lasting connection? Talk to us about your friendship here and what it's based on moving forward, through the years now.
HARPER: Well, I think that people who are committed to doing the best they can and making some type of impact or difference, you want to support people you that respect and friends that you respect. So he has been in politics for a long time. And certainly, I would say that his tightest, tightest friends are certainly his friends from Chicago, the people who have supported him and been around him on a daily basis.
And some of those friends, I'm friends with from a completely different connection. And so there's a lot of overlap, so to speak.
But when you support someone, you know who they are and you know what their mission is. And you know that no matter what elected office this person would be in, they would make a great impact on whatever they are doing. So I'm so happy that he's going to be able to paint on such a big canvas with his intelligence and his work ethic and just who he is.
HARRIS: Hill, are you ready for some questions here?
HARPER: OK.
HARRIS: Let's get to some real stuff here.
HARPER: OK.
HARRIS: What are people going to find out about Barack Obama over the next few years? We know about the cool, the swagger. But, for example, you know, is he R&B or smooth jazz? Is he Chi-Lites or Neo (ph)? Is he David Sanborn or Wayman Tisdale?
HARPER: OK. First of all, I don't think that you can pin him down. You know, all of those artists you mentioned are outstanding, so how can you say that? We live in a time of technology where with your iPod you can experience David Sanborn, Wayman Tisdale, Ne-Yo, and the Chi-Lites, all within the same workout.
HARRIS: Yes, that's a good point.
HARPER: So I don't think that one has to choose from greatness.
HARRIS: I've got to ask one more question. Let's roll in the pictures of the basketball game one more time. And I'm trying to add to my own mind to his black man playing basketball, Chicago bona fides here. Is he a trash talker on the court?
HARPER: No.
HARRIS: Oh come on!
HARPER: No. That's the one thing. I'll tell you, the way someone plays ball, Tony -- the way someone plays any team sport, to me, tells you a lot about who they are as a person. And he has always been the type of person who wants to make the team better, even though he may be the best person on the court at the time. You know, he's tall, he has got long arms, he has got a good jump shot, he's left-handed, which is somewhat deceptive. And that's important. And that's important. So he doesn't talk trash.
You know, he has a swagger because he's good. And but he doesn't talk trash. He wants to make the team better. He wants to make everyone better and have everybody win.
HARRIS: And what's up with your game, man? You OK?
HARPER: Well, you know, since I did the movie, "He Got Game" with Spike Lee and was playing with all pros, my game has slowly eroded over time. You know, I have to tell you, don't let the youthful looks fool you, my knees don't do what they used to do.
HARRIS: Amen, brother.
HARPER: But one final point...
HARRIS: Yes.
HARPER: One final point, Tony, about the inauguration. I want folks to really think, those folks who can't actually make it to D.C., think about the day of service that Monday and what you can do in your home community to actually serve.
And that's a big call that I think everyone who is involved in the campaign and this Inauguration is making. And that day of service is critical. Many Americans get Dr. King's day off.
And what can you do? Can you go into a school or to an old folks home? Could you go to volunteer at a soup kitchen or a church? What can you do on that day, if you have the day off, to actually make it a true day of service?
HARRIS: Hill Harper, friend to Barack Obama, also an outstanding actor. Man, you're doing it, "CSI: New York," it's...
HARPER: Tony, I wish I was doing it like you're doing it. I mean, I watch you every day...
HARRIS: If I had your hand, I'd -- you do?
HARPER: I wake up to you.
HARRIS: You do?
HARPER: I wake up to you and you do such an outstanding job.
HARRIS: Say more. You got more?
(LAUGHTER)
HARPER: Ted Turner, Tony Harris needs a raise, please.
HARRIS: There you go. All right, Hill, it's great to talk to you. Have a great day, man.
All right. Still to come, you know, we haven't heard from him in a while. What's the latest on Osama bin Laden? We will pass along the latest information in just a minute. You're in the CNN NEWSROOM.
(COMMERCIAL BREAK)
HARRIS: Very quickly, you are taking a look at the gate just outside of Bernard Madoff's apartment building in New York City. And, of course, Bernard Madoff has the penthouse suite, at least one of them. And why are we showing you this? Because Bernard Madoff's attorney is telling us that he will be present today at a hearing on the prosecution's appeal of Monday's ruling upholding Madoff's bail.
Now that hearing is scheduled for 2:30 p.m. Eastern time. So we will just monitor this picture for you and bring you the latest, of course, on this story right here in the CNN NEWSROOM.
Let's take you to the New York Stock Exchange right now for a look at the Big Board. Look, we have been in negative territory all day long, three hours into the trading day now. And as you can see, the Dow is down 255 points off of session lows, but just slightly. The Nasdaq, we understand, is down 48 points as well. We'll be following the markets for you throughout the day right here in the CNN NEWSROOM.
The strange saga of Marcus Schrenker, the financial manager accused of defrauding investors and trying to fake his own death by jumping out of a plane. He's in custody in Florida where his story is taking another bizarre turn. Our Drew Griffin is there.
Drew, good to see you, what's the latest?
DREW GRIFFIN, CNN SPECIAL INVESTIGATIVE UNIT CORRESPONDENT: Yes, Tony, after trying to fake his own death in that elaborate scam, jumping out of the airplane, he's now in a hospital behind me here in Tallahassee, found last night in a tent next to his motorcycle basically bleeding to death according to federal agents.
He had slit his wrist, was bleeding profusely, incoherent when they found him. But they did find him in time. Marcus Schrenker now recovering to face some serious charges back in Indiana involved with all his financial dealings. He faces two felony counts there.
This all began Sunday night when he took off from Indiana in a plane, you recall. That plane crash-landed in coastal Florida without him in it. We later learned that he parachuted out, trying to fake his death, reconnoitered with a pre-placed motorcycle, and was on the road for the last couple of days until the U.S. Marshals was able to find him, capture him, per se, in this campsite, Tony.
A very bizarre story and somewhat the end for this financial adviser who his investors say was a very smooth-talking, outwardly successful pathological liar.
(BEGIN VIDEO CLIP) MIKE KINNEY, SCHRENKER INVESTOR: I've never in my life seen anybody that could tell the dishonest untruths that he told over and over again, and expect you to believe them. I've just not -- I guess that's one thing that caught me by surprise in my dealings with him. I've never dealt with anybody with that level of dishonesty.
(END VIDEO CLIP)
GRIFFIN: He was living a very lavish lifestyle in Indiana, flying around to meet clients in his own private airplane. I think we even have pictures of his home in Indiana that now the insurance commission there may try to seize as this case will move eventually from here in Tallahassee, Florida, back to Indiana now where he's not only facing these civil charges, but also felony charges.
And we're not really sure if, in this faking death and all, he's going to face even more charges. But the word is he is recovering from this apparent suicide attempt and all legal action on hold until he gets well enough, until they can decide what to do with him -- Tony.
HARRIS: Boy, you're absolutely right. The twists and turns, this thing gets more bizarre every day. Drew Griffin for us. Drew, appreciate it, thank you.
You know, the most serious part of all of this is that people could have been killed by that crashing plane. Our Josh Levs is joining us now to show us how close it actually came -- Josh.
JOSH LEVS, CNN CORRESPONDENT: Tony, one second. That's what officials told me this morning. They said to me that if that plane had continued going one second more it very likely could have crashed into homes. And that's what I want to show you right now.
The area that it hit, you're going to see this for the first time, is here in Milton, Florida, it's actually on the east side. Let's zoon in on Milton, Florida, there is a road called that is called Lakeside Court (ph). We're able to zoom in thanks to Google.
Check this out, this is a road right here -- there are some homes right here. You can see that pretty clearly. This right here is where the plane landed. Let's go back to the map for just a second, because I want you to see how close it was. Check it out, road, homes, boom.
This right here is where the plane landed, Tony. They are telling me 50 to 75 yards from these homes right here. And again, thanks to Google we're able to see what the street looks like. Let's go to the imagery here.
Check this out, I mean, this is a normal, residential quiet road with cul-de-sac in little this corner in the panhandle. And in the middle of the night, this plane crashes about 50 to 75 yards. That's how close it came -- Tony.
HARRIS: And authorities say he may have planned for it to actually land in the Gulf? LEVS: Right. I mean, authorities are saying that if he hadn't left the cockpit door on that aircraft open, which created drag, the plane could have maybe gone even farther and might have potentially gone as far as the Gulf. So it's possible that that was his goal. But where it ended up was right near these homes.
HARRIS: And this pilot allegedly went on quite a journey. I understand you can actually trace this through his flight path.
LEVS: Yes. Let's take a look at that. Let's zoom out. We're going to see a map of the country, and the critical cities where they were. Check this out. I'm just going to take you really quickly. He took off here in Anderson, Indiana. Let's pull out and I'll show you some of the key locations.
He flew over Alabama. It's in there that he ended up pulling out. He was spotted here in Childersburg, dealing with some people. Then he was brought over here to Harpersville. Finally he was found 250 miles southeast. That's where they ended up getting him, right here, Tony, Quincy, Florida, that's where they got him last night.
HARRIS: Wow. What a mess...
(CROSSTALK)
LEVS: It's amazing.
HARRIS: Yes, it really is amazing. All right. Josh, appreciate it. Thank you.
LEVS: Yes, thanks a lot.
HARRIS: Recovering from grief, Oscar-winning entertainer Jennifer Hudson is returning to the stage. She will sing the National Anthem at this year's Super Bowl in Tampa, Florida. Hudson hasn't appeared in public since her mother, brother, and nephew were killed in Chicago last October. He estranged brother-in-law is charged with the killings.
It has been a while, but he's back. The latest from Osama bin Laden.
(COMMERCIAL BREAK)
HARRIS: A disgraced financier, Bernard Madoff is in court again today. Federal prosecutors again are trying to get his bail yanked. Senior correspondent Allan Chernoff now live in New York.
And, Allan, if you would, tell us what the court is considering today.
ALLAN CHERNOFF, CNN SR. CORRESPONDENT: Well, Tony, Bernard Madoff is not Downtown here at the courthouse just yet. We're waiting for him to leave his apartment up on the Upper East Side. But what is going to happen here today is that the government is trying to make sure Bernard Madoff is out of his penthouse apartment, and they want him in jail. They have already had that request refused by a lower court judge. Now today they have got an appeal inside of this courthouse. The appeal to try to get Madoff in jail because they argue Madoff has violated the terms of his bail by mailing, on Christmas Eve, more than a million dollars worth of gold and diamond jewelry to friends and family.
The government says that basically Madoff was trying to give away his assets, assets that victims of the alleged fraud should be able to claim down the road -- Tony.
HARRIS: And, Allan, the judge in that initial ruling said that Madoff was not, in his view, a flight risk and that he had made efforts to get back the jewelry and other things that he mailed away to friends.
CHERNOFF: Right. The issue here is not so much whether Bernie Madoff is a flight risk. There's a guard outside of his apartment 24 hours a day. He's wearing an electronic monitoring bracelet on his ankle. The question more is should Bernard Madoff be given bail? Should he be allowed to be out on bail if he already tried to give away some of his assets?
The government, in its papers, is saying Bernard Madoff should not be given a second chance to give away, to dissipate his assets, assets that his victim lay claim to.
HARRIS: OK. Our Allan Chernoff for us. Allan, appreciate it. Thank you.
Oh, I'm just being told that we need -- do we have additional pictures? Can we go back to the apartment and show scenes? OK. Let's move on. We haven't heard from him in a while.
Allan Chernoff, are you still with us?
CHERNOFF: I'm here, Tony.
HARRIS: All right. Allan, I guess we're going to stay with you and maybe loop in some of the pictures, because we understand that Bernard Madoff may be leaving soon. We understand that there have been some attempts made to conceal the windows on the vehicle that he'll be driven to the courthouse in. That those efforts are under way and that perhaps we will see him soon.
COOPER: Yes. No surprise. I mean, look, there's a crush of media over here. And everybody wants to get a picture of Bernard Madoff. Not so easy these days. Let's remember also that Madoff is charged right now with one count of securities fraud for which he could face a potential penalty of 20 years in prison.
Madoff allegedly ran the biggest Ponzi scheme ever in the history of the U.S., $50 billion potentially. Now that $50 billion, that amount came from Madoff. Madoff told his sons and then confessed to FBI agents -- two FBI agents according to the criminal complaint. It -- basically, Madoff has made the claim, made the confession to FBI agents. The prosecution has said that they have a strong case and they say it's getting stronger as investigators try to comb through his records, try to dig up everything they can and figure out exactly how this alleged scam operated.
HARRIS: And in the reality here, Allan, is that if the government is not able -- we see someone getting in the car, but I have no idea who that is. We have got a gate opening. And we'll watch this picture as I ask you the question, Allan -- boy, that's going to make you a little sea sick.
But the reality here is that if the court can't convince the judge to revoke the bail, Bernard Madoff could be out of prison for months until this case is made, correct, before it gets to court?
CHERNOFF: Right. Yes, Tony, as we reported yesterday, if the government cannot put Bernard Madoff in jail, have that bail revoked, then this could easily drag on for months and months and months because Madoff's attorney is engaged in plea negotiations with the government.
There's back and forth between him and the government. That can take a very long time. Now, if Madoff actually fingers other people involved in this alleged fraud, what happens typically is that the government will then do after them, prosecute them, and not until those prosecutions are all done with will they actually sentence Bernard Madoff.
So it's theoretically possible that Mr. Madoff could be out of prison for years, even if he confesses to this fraud.
HARRIS: All right. So, Allan, you weren't able to see the pictures. But I'll just -- as, once again, we can probably re-rack this and show folks again, we believe that -- Allan, that Bernard Madoff entered that vehicle. He is on his way to your location now. And the hearing, once again, is scheduled for -- is it 2:30 p.m. Eastern time?
CHERNOFF: Yes, that's right, 2:30 Eastern time. He's leaving from the Upper East Side. With traffic it's probably going to take him about 40 minutes or so to get Downtown. So it will be a while before he actually arrives here at the U.S. District Courthouse.
HARRIS: And Allan Chernoff for us. Allan, thanks for the play by play. We appreciate it.
CHERNOFF: Thank you.
HARRIS: We'll take a quick break. We're back in the CNN NEWSROOM in just a moment.
(COMMERCIAL BREAK)
HARRIS: Osama bin Laden apparently speaking out about Israel's assault on Gaza. The al Qaeda leader telling Muslims to wage jihad or a holy war against the Jewish state to stop its aggression against Palestinians, an audio message posted on an Islamist Web site known for carrying statements from bin Laden. It refers to the U.S. financial crisis saying America is bleeding humanly, politically, and financially.
(BEGIN AUDIO CLIP)
OSAMA BIN LADEN, AL QAEDA (through translator): America won't be able carry on its war against for several decades longer. Reports indicate that 75 percent of Americans are happy to see the current president leave office because he dragged them into unnecessary wars and drowned them into a financial abyss.
Bush leaves his successor with the worst inheritance: two long guerilla wars and no options. He either withdraws and faces military defeat or carries on to fight and drowns his nation in financial trouble.
(END AUDIO CLIP)
HARRIS: Well, CNN has not independently confirmed the authenticity of the recording. It's covered with graphic images if victims in Gaza.
Israel's assault on the Palestinian territory is now in its 19th day. The military says its air force struck about 60 targets overnight, including rocket-launching sites at Hamas police headquarters. But Hamas still able to fire off rockets today. Palestinian medical sources say the death toll now exceeds 1,000. Hundreds of women and children among those killed.
U.N. Secretary-General Ban Ki-moon is in Egypt for talks. He is, again, calling for a cease-fire.
(BEGIN VIDEO CLIP)
BAN KI-MOON, U.N. SECRETARY-GENERAL: In the strongest of possible terms that both sides must stop the fighting now. We don't have any time to lose. Then we can discuss and elaborate the terms and conditions, as the Egyptian government will lead that initiative, how to make this truce last.
(END VIDEO CLIP)
HARRIS: The U.N. chief will take his cease-fire message to Jordan, Israel, and Syria.
And come Tuesday a new day begins in America. For the first time a man of African descent will lead the country. Two generations from the civil rights era offer their perspective. CNN's Kyra Phillips spoke to the Reverend Joseph Lowery, and I talked with Reverend Bernice King, daughter of Martin Luther King Jr.
(BEGIN VIDEOTAPE)
HARRIS: Did your father, through his sermons, through his writings, did he see this day as even being possible, an African-American president of the United States of America? Did he see this as a possible, as likely? REV. BERNICE KING, DAUGHTER OF MARTIN LUTHER KING JR.: Because I believe my father was a prophet, and when I look at the last words out of his mouth where he said God allowed him to go up to the mountain top and he looked over and saw the promised land, he said, I may not get there with you but we as a people will get there.
I think he was speaking at that particular point to the African- American community, the black community, the negro community at the time. And I think this was one of the things that he saw coming down the pipeline, perhaps not knowing when but saw it.
REV. JOSEPH LOWERY, CIVIL RIGHTS LEADER: When I stand on the Capitol steps next Tuesday, God willing, they tell me if you look down the Mall, you can see a portion of the Lincoln Memorial. If I do see it, and I hope I do, I believe I'll also see the profile of a young preacher, 34 years old, who in 1963 stood at the Lincoln Memorial and called the nation to move beyond the restriction, the barriers of color, to the higher level of character and competence and so forth.
And when we see Barack Obama accept and make the oath, take the oath, to be the 44th president of the United States, this is -- represents the nation's response to that challenge that Martin gave on the Lincoln Memorial in 1963.
For indeed, in this election, America has moved beyond the restriction of color to the high level of competence and character and hope and change.
(END VIDEOTAPE)
HARRIS: Whoa. Sorry. A little choked up. Sorry. Bernice King will be at the Inauguration Tuesday -- Kyra, you may have to take this.
KYRA PHILLIPS, CNN ANCHOR: I will be happy to. You're actually going to see Reverend Lowery there at the Inauguration. Also he's going to give the benediction. That's why we interviewed him yesterday. And you know what's really fantastic -- well, we're also going to have special live coverage obviously beginning this weekend at the Inauguration prep, and reflections of the new president, "The Obama Express," that's Saturday beginning at 10:00 a.m. Eastern.
But talking about Reverend Lowery...
HARRIS: Yes.
PHILLIPS: You all right there?
HARRIS: Yes, I am. Thank you. Thank you. You saved me. You saved me. Thank you.
PHILLIPS: He says that he usually leaves his -- what he writes to the last minute.
HARRIS: I heard that.
PHILLIPS: Yes, to like the night before. And I said, so, have you been working on the benediction? He said, yes, I have got a couple of thoughts of putting it together, but I'll probably finish it the night before.
HARRIS: Leaving room for that divine intervention at the very end, right?
PHILLIPS: He'll have that spiritual moment that will come to him. And then that will -- but you know, Bernice brought up a great point, too. I mean, her father, I think, knew he wasn't going to see it in his lifetime but he knew it would happen at some point. Well, here it is.
HARRIS: Well, I thought that was a terrific interview with Joe Lowery. And I just wanted to put that together.
PHILLIPS: And I was watching your one with Bernice King.
HARRIS: Have a great show.
PHILLIPS: All right.
HARRIS: CNN NEWSROOM continues right now with Kyra Phillips.
(BEGIN VIDEOTAPE)
BIN LADEN (through translator): They're now drowning in a global financial crisis. They are even begging all nations, small and large, for help.
PHILLIPS: And that's music to the ears of Osama bin Laden. In a new address, the world's most wanted terrorist revels in America's recession, and demands revenge for Gaza.
A surreal moment in Springfield, the scandal-ridden Illinois governor ushers in the senate that will be his judge and jury in less than two weeks.
