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Corporate America Hit Again; Madoff Money Scandal; One-on-One Interview with Obama; Octuplets Mom Setting the Record Straight
Aired February 04, 2009 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
HEIDI COLLINS, CNN ANCHOR: His bad. The president takes blame for Tom Daschle's appointment. This hour, Anderson Cooper's interview in its entirety.
Also ahead, speaking for the octuplet's mom.
UNIDENTIFIED FEMALE: The rumors and the innuendos and what I call the trade of ideas about what's going on with her and her life, you know, are just not true.
COLLINS: An effort to set the record straight.
It is Wednesday, February 4th. Hi, everybody, I'm Heidi Collins. You are in the CNN NEWSROOM.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I think this was a mistake. I think I screwed up. And, you know, I take responsibility for it. And we're going to make sure we fix it so it doesn't happen again.
(END VIDEO CLIP)
COLLINS: Is this the change we're supposed to believe in? President Obama frustrated and embarrassed by his failed nominations.
This hour, hear every word of his CNN interview and the reaction on this morning after.
Three nominees now, three sets of tax problems, one big headache for a very young presidency. What happened to the vetting process and perhaps the steps before?
CNN White House correspondent, Suzanne Malveaux, is now with us to take a closer look at all of this.
Suzanne, good morning to you.
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Good morning, Heidi. Well, obviously, the question is did the vetting process fail? To a certain degree it did. You heard the president yesterday acknowledging that he takes the responsibility for the failure in the process, but for the most part he felt that it was working fine, but a couple of these exceptions he called unacceptable and inexcusable. And I -- the question really here is, was it naivete or hypocrisy that the administration, the president, set the bar so high that they had to grant exceptions or even break their own rules to actually fill the Cabinet?
Barack Obama, the president, saying that he acknowledged mistakes were made, but he -- in kind of an extraordinary departure, Heidi, took responsibility and said they were his mistakes, in his words, that he had screwed up, that it was a self-induced, self-inflicted induced wound here, and that, obviously, they're going to take a look at the vetting process, but overall feeling very confident that they've got hundreds of people that they have hired here at the White House that certainly don't have those kinds of tax problems that Tom Daschle faced.
I want you to take a listen, Heidi. This is the president over five networks making the case here that he is the one that ultimately will be held responsible.
(BEGIN VIDEO CLIP)
OBAMA: I'm here on television saying I screwed up. And that's part of -- the area of responsibility is not never making mistakes, it's owning up to them and trying to make sure you don't repeat them.
This is a self-induced injury that I'm angry about. I think I've messed up. I screwed up. Did I screw up in this situation? Absolutely. And I'm willing to take my lumps, you know, that's part of -- part of the job here.
(END VIDEO CLIP)
MALVEAUX: Heidi, I think you get the message pretty much loud and clear what the president is saying. One thing that he did take exception with in one of those interviews when asked about the exceptions that he's making for a handful, just a handful of lobbyists who have been put in key positions in his administration.
He said that he felt those exceptions were valid and that for the most part overwhelmingly that the bar's set very high when it comes to ethical standards in this White House and that everybody, essentially, will be held to account, Heidi.
COLLINS: Suzanne, he's also placed a lot of importance on his thoughts and his policies regarding executive pay and some of these caps that they would like to put in place. Can you tell us a little bit more about that, too?
MALVEAUX: Well, sure. You're going to hear a message from the president as well as his treasury secretary, Tim Geithner, here at the White House just a couple of hours from now. They are going to go after the fat cats, they say, at least, that's part of the message to show the American people that, at least, they're holding accountable.
Where's all this money going to go? These financial institutions who have been paying out big bonuses to the CEOs? These are just a couple of things that they're going to be highlighting. One, to cap CEOs' salaries to $500,000. This is for the biggest financial institutions who receive what they are calling exceptional assistance by the government. The AIGs, the Citigroups, those type of groups.
Also, they require banks to report their expenses like flight plans and flight travel, holiday parties, entertainment, events, those type of things, that they are transparent, that they allow the taxpayers to see where are their dollars going.
Also requiring CEOs to hold on to their stocks several years before cashing out. Give shareholders some more say in terms of executive compensation. Let them weigh in on all of this. And, finally, they're going to hold an industry-wide conference, the Treasury Department sponsoring this, to take a look at the long term.
Do they need to reform executive pay, CEO pay here? Is this something that the government should even be involved in...
COLLINS: Right.
MALVEAUX: ... on a long-term basis, so those are some of the things that they're going to be rolling out today, Heidi.
COLLINS: Yes, because we're not talking about bonuses. We're talking about the actual pay, the actual salary, of these executives, though it is an interesting discussion.
All right, CNN's White House correspondent, Suzanne Malveaux. Thanks, Suzanne.
It is day 16 now of the Obama administration. Here's a look at the president's schedule. Less than two hours from now he will announce those pay limits for executives of bailed out companies. His new treasury secretary, Timothy Geithner, will join him for that, as you just heard Suzanne report.
And later that hour the president will meet with the secretary of state, Hillary Clinton, and Mideast envoy George Mitchell. That will happen in the oval office. Then this afternoon President Obama will sign into law the SCHIP program. It will expand government health care to about four million more low-income children.
And you can see CNN's entire interview with President Obama at the bottom of the hour, that's 9:30 Eastern, 6:30 Pacific.
Now to the stimulus bill in the Senate. More debate on the massive measure expected to start next hour. That price tag now topped $900 billion. That's after senators added money for medical research and tax breaks for car purchases. Today, they are talking about tax breaks for home buyers.
Meanwhile, 10 Republican senators are talking about another less expensive version of the bill different from what GOP leaders want. They say focusing exclusively on the housing crisis and tax cuts will not jump-start the economy. In fact, more job cuts to tell you about now. This time, it's electronics giant Panasonic. The company is cutting 15,000 jobs by next year. About half will come from manufacturing plants in Japan. The rest from their worldwide workforce. Panasonic says it expects losses for the fiscal year that ends in March to top $4 billion.
Professional sports also feeling the pinch. The Continental Basketball Association decided to end its season early by six weeks. They say the economic downturn is to blame. The 62-year-old league has only four teams left, though. That's down from eight just two years ago.
And a disappointing earnings report for Time Warner, the company announcing a $16 billion loss for the fourth quarter. The losses come mostly from the write-down of assets from cable, publishing and AOL. Time Warner is, of course, the parent company of CNN.
The nation's economic crisis, cities and counties feel the pinch and are cutting back. That includes law enforcement. So is it fair to spend stimulus money to fill those gaps? The debate is on.
CNN's Jeanne Meserve is in Washington now with all of the details on this.
Jeanne, good morning to you.
JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Good morning, Heidi. Tucked in the Senate stimulus bill, about $4 billion in law enforcement grants. But the question is, does the money belong there?
(BEGIN VIDEOTAPE)
MESERVE (voice over): Police protection may be an essential service, but in these tough times, even the essentials are being trimmed.
CHIEF JOHN TIMONEY, MIAMI POLICE DEPT.: Police departments all across the United States are no longer hiring. Some are laying off their police officers and the civilian support staff.
MESERVE: Timoney says fewer cops mean more crime because bad guys are less likely to get caught quickly. And some predict more people will turn to crime as the recession drags on, making the situation even more grim.
Enter the stimulus plan. It would breathe new life into two grant programs slashed during the Bush administration. The Community- Oriented Policing Services Program or COPS pays a portion of officers' salaries, allowing police agencies to staff up. In the Senate stimulus bill, COPS gets $1 billion. Another $2 billion would go to law enforcement grants used for equipment, overtime and training.
SEN. PATRICK LEAHY (D), JUDICIARY CHAIRMAN: The last administration spent billions of dollars for law enforcement in Iraq by -- and they paid for it by cutting out billions of dollars for law enforcement in America. I'd like to see the money go back to law enforcement in America.
MESERVE: Critics say the number of jobs created by these grant programs would be too few, the time frame too slow, the benefits too small.
REP. LAMAR SMITH (R), JUDICIARY COMMITTEE: Those may be worthy programs, but they're not going to be the job generators, the job creators, that we need. We're looking for money that is going to be spent to create jobs immediately this year, when the economic crisis is at its peak.
(END VIDEOTAPE)
MESERVE: These grant programs are very popular with police chiefs and mayors, particularly now when their budgets are under stress. The president and Democrats in Congress like them, too, making it likely that the programs will be brought back to life, either in the stimulus bill or outside it. Heidi?
COLLINS: Yes. Well, what about some of the other Department of Justice programs, though, that are slated to get money in this bill?
MESERVE: Yes, there's about another billion dollars of spending in there, some that goes for things like housing victims of domestic violence or housing federal detainees and the debate about all of that mirrors the debate you heard in that piece. There are some people who say these are worthy programs, they will create some jobs. Others just saying this isn't going to deliver the bang for the buck that we need from this stimulus program.
COLLINS: Yes, well, we will be watching very closely.
All right, Jeanne Meserve, thank you.
MESERVE: You bet.
COLLINS: 1-degree windchill, that's how cold it was here in Atlanta. Yes, I thought this was the south. But some of us came to work this morning, the fierce winds briefly knocked out power to about 1400 homes. Of course, that is nothing compared to what's been going on in Kentucky.
More than a quarter million people are still without power one week after the deadly winter storm hit and more snow is falling. Winter storm warnings posted from Tennessee to the Carolina coasts.
Rob Marciano standing by now in the Severe Weather Center to talk more about all of this.
Yes, freezing cold down here. But it's true, it's just nothing compared to what they are dealing with in parts of the country like Kentucky.
ROB MARCIANO, CNN METEOROLOGIST: Yes, well, they're still getting -- they still have the frozen landscape basically.
COLLINS: Tundra.
MARCIANO: And they've got, they've got subfreezing air, too, and more on the way at least for today.
(WEATHER REPORT)
COLLINS: Wow. That's something I haven't heard before, I don't think.
MARCIANO: Yes, I got...
COLLINS: Freeze warnings for the Everglades.
MARCIANO: Bundle up the gators.
COLLINS: Yes.
(LAUGHTER)
COLLINS: All right, Rob, we'll check back later. Thank you.
MARCIANO: OK. You got it.
COLLINS: Not a sure bet. What went wrong with the presidential team's vetting of the three nominees and some of the personal choices the nominees made themselves. We look inside the process.
(COMMERCIAL BREAK)
COLLINS: There are two steps to a presidential team's vetting process. First, identify the potential problems and second, decide how damaging those problems could be.
Here now CNN's Jessica Yellin.
(BEGIN VIDEOTAPE)
JESSICA YELLIN, CNN NATIONAL POLITICAL CORRESPONDENT (voice over): They say bad news comes in threes. President Obama must be hoping that's true. He's had one.
GOV. BILL RICHARDSON (D), NEW MEXICO: Mr. President-elect, this is a great honor.
YELLIN: Two.
TOM DASCHLE, FORMER SENATOR, SOUTH DAKOTA: It is a great honor to be nominated.
YELLIN: Three nominees withdraw because of legal or tax problems. The White House spokesman insists their vetting process works.
ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: The president has confidence in the system.
YELLIN: So, then, how did these nominees with flaws serious enough to withdraw make it so far?
JENNIFER PALMIERI, CENTER FOR AMERICAN PROGRESS: The vetting process does not create -- it's a (INAUDIBLE) that doesn't create perfect nominees, it just identifies the problems.
YELLIN: Teams of lawyers read every public document on the nominee, tax forms, court cases, but documents don't reveal everything. A good vet depends on a nominee being very revealing.
Recall that 63-question ethics form asking for everything from embarrassing e-mails and diary entries to the financial history. Well, in the case of Daschle, it was up to him to reveal the issue of his car taxes.
PALMIERI: There was not a record that he did not pay taxes on the car and driver because there was no record of the car and driver.
YELLIN: Senator Daschle brought it to the Obama team's attention after he was nominated.
In the case of New Mexico governor, Bill Richardson, vetters were apparently caught off-guard when it became public that the governor and his office were being investigated by federal prosecutors.
RICHARDSON: I made the decision to withdraw.
YELLIN: Experienced vetters say Obama's legal team would have no way to know this except from the nominee himself. But it was a different story with Nancy Killefer, the woman who dropped out Tuesday.
One source tells CNN she did reveal her tax issues to the Obama team of vetters. But the transition team decided her issues were not politically damaging enough to derail her nomination.
In the current political atmosphere, that was no longer true.
(On camera): So a vetting process is only as good as a nominee is honest. And that a lot of these comes down to the political climate at the moment. Maybe Daschle would have survived if Nancy Killefer's tax problems had not come out, or maybe they'd both be in if Timothy Geithner, the treasury secretary, had not had tax problems of his own.
Jessica Yellin, CNN, Washington.
(END VIDEOTAPE)
COLLINS: It is such an interesting discussion. Joining us now from Washington to talk about the Daschle fallout and who might fill his shoes, Carrie Budoff Brown. She is the White House reporter for Politico.com.
Carrie, thanks for being with us. You know, I thought that report that Jessica Yellin did was so good because it talks a little bit, you know, about character. And yes, we have the vetting process, but that could go on, you know, for days, weeks, and months, if the nominee doesn't take the president or the transition team aside and say hey, you know what, I got to let you know about this thing that happened or this issue that I'm having.
Why doesn't that happen more often?
CARRIE BUDOFF BROWN, WHITE HOUSE REPORTER, POLITICO.COM: Well, absolutely, Heidi. You have this -- you have -- the Obama transition team wrote a 63-question questionnaire.
COLLINS: Right.
BROWN: And they often, throughout the entire questionnaire, gave the candidate, the nominee, the opportunity to disclose something that may not have been specifically asked. Almost in every section it was, is there anything else that might embarrass you or might embarrass the president? And there were many opportunities in that questionnaire for these folks to put that out there.
COLLINS: Yes. And maybe even before the questionnaire, and you tell me, but I imagine that someone, if it's not the president himself, comes to these nominees and says, hey, we're thinking about nominating you for this. We're going to go public with it, you know, in two days. How do you feel about it?
Isn't that the time when the person who knows their history says, well, OK, great, thank you so much. But here's what I need to tell you right now.
BROWN: No, that's a good point. And I spoke with a lawyer involved in the transition who did the vetting on Sunday. And he told me, you know, this is a process that's extraordinarily comprehensive, but it's not perfect. And it does rely on exactly what you're talking about, which is cooperation.
They look at the questionnaire. They vet it. They also need (INAUDIBLE) out and they investigate beyond that. But there's only so far they can go. So it's not perfect and I think you're seeing in the case of Daschle a breakdown in terms of that communication.
COLLINS: Yes.
BROWN: And him coming forward.
COLLINS: Cooperation and honesty, maybe. Because we're talking about Richardson, Geithner, Killefer and now Daschle, most recently Daschle, of course, because the question today, I think, in moving forward now after all of this, no matter how you feel about it, is who is going to be the director of Health and Human Services.
I mean we have to talk about who's going to take that position because of the importance that has been placed on health care and health care policy in this country. And I think you have some intel on that. So let's talk about who some of these potential nominees might be.
The first one you have here for us is Kathleen Sebelius.
BROWN: Yes. She is the Kansas governor. She supported Barack Obama during the campaign.
COLLINS: Right.
BROWN: She is close with him. She's also was a former insurance commissioner, so she knows health care in and out. The one drawback with her is that she's not familiar with Washington in terms of her having been here and having the deep connections that Daschle had.
COLLINS: OK, Howard Dean and John Kitzhaber.
BROWN: Sure. Howard Dean, of course, is the former DNC chair.
COLLINS: Right.
BROWN: He's a doctor. He knows Washington. There might be some problem there in terms of his bipartisan appeal.
John Kitzhaber is a former Oregon governor. He's a doctor. He's doing a grassroots push out in Oregon for health care and he's been mentioned quite a bit by folks who are very intimate with health care policy.
COLLINS: OK. And finally John Podesta.
BROWN: He's an outside-the-box choice, mentioned first by...
COLLINS: Yes.
BROWN: ... the American Prospects. He was described as the only person who has the stature of Daschle in this town.
COLLINS: OK. I guess, first question for all of them would be, did you pay your taxes? I don't know.
BROWN: Absolutely. Yes. We'll see.
(LAUGHTER)
COLLINS: Carrie Budoff Brown, we sure do appreciate it.
BROWN: All right. Thank you, Heidi.
COLLINS: Thank you.
And you can see CNN's interview with President Obama at the top of the hour. Some of those questions were asked by Anderson Cooper. That's coming your way 9:30 Eastern and 6:30 Pacific.
New concerns about radiation exposure from a cardiac CT Scan. Our chief medical correspondent, Dr. Sanjay Gupta, had the screening and he's here to tell us all about it.
(COMMERCIAL BREAK) COLLINS: Are cardiac CT Scans used to detect coronary artery disease safe? Well, a new study focusing on radiation exposure found taking a scan like this was the same as getting 600 chest x-rays.
Our chief medical correspondent, Dr. Sanjay Gupta, joining us now. So, that sounds ridiculous. It's the same as 600 regular x- rays?
DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Yes, I mean, that sounds pretty scary, certainly. You know, let me put it -- a little bit of context. First of all, I don't think anybody thinks that this is a screening test, meaning that it should be given to the public at large.
COLLINS: OK.
GUPTA: Maybe only in certain rare circumstances. But also to put it in context, you know, stress tests, for example, which is another test for the heart gives off about the same amount of radiation as well. The question is how valuable is this?
I think people who are worried about heart problems, which is a lot of people out there, there are some probably more tried-and-true screening tests out there which are recommended by the U.S. Preventive Services Task Force, cholesterol check at age 35, and maybe every five years after that depending on what it shows. A baseline EKG around age 40 and a stress test, I wouldn't even assign an age to that, but more if you're having problems, if you're having chest pain or something.
So what is this CAT scan all about? I wanted to give people a chance to take a look. Here's what I found.
(BEGIN VIDEOTAPE)
GUPTA (voice over): You may wonder what condition your heart is in. I did. And for the first time ever, I got a chance to see my own beating heart. Truth is, I'm pretty healthy, but a strong family history of heart disease makes me worry.
So my doctors told me to have two types of testing done. First up, drawing blood, looking for all sorts of things like genetic markers that might put me at especially high risk for heart disease, also markers of inflammation like C-Reactive Protein. Too high a number and your risk of heart disease skyrockets.
And finally cholesterol and any other fat that might be accumulating in my arteries.
(On camera): So, most people get their blood work done as you saw I did. But another step might actually be to get my heart looked at. Actually looking at the blood vessels that go to my heart. The question is, do I have some disease right now? And the more important question is, is there something that can be done about it?
I decided to have this done because of my own family history. Let's see what we find.
(Voice over): What I'm about to undergo is called a CT Angiogram, using this sophisticated x-ray machine that takes 10 pictures between each heartbeat. The test itself doesn't take very long, just about 10 minutes. But all these x-rays are used to check out different things in my heart.
UNIDENTIFIED MALE: What we're looking for, is there any calcification in the arteries. So far there's no calcium.
GUPTA: And the health of the arteries. This is what the CT Angiogram does so well. It provides a 3D image of the heart, without having to use any invasive measures.
(END VIDEOTAPE)
GUPTA: So, again, you know, it's interesting -- it's a pretty good-looking heart there if I do say so myself. But...
COLLINS: Yes, I was going to say.
GUPTA: But you know, this is not a screening test, this is not for the public at large. In certain situations, for example, if you're going into the emergency room, you're having chest pain, is it related to your heart, is it heartburn instead? This may be a test. This may be a noninvasive quick way of sort of figuring that out. But, again, your radiation concerns that you brought up is something that always has to be balanced.
COLLINS: Yes, absolutely. Doctors always say, you know, if the benefits outweigh the risk...
GUPTA: Right.
COLLINS: ... then go ahead and do whatever your treatment plan is going to be.
GUPTA: That's right.
COLLINS: All right. Dr. Sanjay Gupta, thank you.
GUPTA: Thanks, Heidi.
COLLINS: Appreciate it.
GUPTA: Yes.
COLLINS: Revealing Madoff. The man who says he warned regulators about Bernard Madoff's alleged money scandal is set to tell his story on Capitol Hill.
(COMMERCIAL BREAK)
COLLINS: All right, quickly here, on this Wednesday, we are waiting for the opening bell, obviously, happens about this time every day. A lot of people very cheery -- there you have it -- about what's going to happen with the numbers today. So we will continue to follow that as we also continue to follow several more companies announcing significant job losses.
Most recently, as we reported here earlier today, Panasonic expected to cut about 15,000 jobs. So once again, we will stay on top of the numbers and watch that market throughout the day right here in the CNN NEWSROOM.
(COMMERCIAL BREAK)
UNIDENTIFIED ANNOUNCER: Live in the CNN NEWSROOM, Heidi Collins.
COLLINS: On Wall Street, the market moved higher yesterday, and a rare dose of good news including some upbeat earnings and a stronger-than-expected housing report. That was kind of a surprise. But today the focus once again turns to jobs. More specifically job cuts.
Susan Lisovicz at the New York Stock Exchange now with more on these numbers.
Hi there, Susan.
SUSAN LISOVICZ, CNN CORRESPONDENT: Hi, Heidi. Well, it all leads up to Friday when we get the government's big employment report for January. In the meantime, two separate readings paint one bleak picture of the labor market. Payroll services firm ADP says 522,000 private-sector jobs were lost last month alone. And outplacement firm Challenger, Gray & Christmas said the number of planned cuts announced in January rose to a seven-year high with the retail sector after that terrible holiday season getting hit the hardest.
Today, as you mentioned, moments ago, Heidi, Panasonic became the latest company to announce layoffs, 15,000 in all. At least half of them in Japan. Troubled retailer Pier One says that if it can't negotiate cheaper rent, it will close 125 of its underperforming stores and obviously lots of employees will be out of jobs. And Spectrum Brands which makes Rayovac batteries and Remington shavers has filed for bankruptcy.
On the earnings front, media giant Walt Disney and Time Warner, the parent company of CNN, posting disappointing quarterly earnings. Disney's CEO Robert Iger says this is, quote, "likely to be the weakest economy in our lifetime," end quote. Let's hope that it ends soon, at least this recession. In about half an hour, we'll get a reading on how the services sector is faring. That's the biggest part of the economy. Right now, well, we're not getting much service from the Bulls.
The Dow is off 23 points. Remember, triple-digit gains yesterday. Nasdaq is down one. And, you know, bright spot from the financial sector of all places, ringing the opening bell today Heidi was Deutsche Bank to celebrate a 100,000 gift to free arts New York City, which helps -- which has programs for low-income, homeless, abused and neglected children in the greater New York City area.
COLLINS: Right.
LISOVICZ: So, we don't hear oftentimes about good things that financial firms are doing. I wanted to throw that in.
COLLINS: No. All right, well, good. We appreciate that. All right, Susan Lisovicz, we'll check back with you a little bit later on.
LISOVICZ: You got it.
COLLINS: Meanwhile, the Madoff whistle-blower is on Capitol Hill telling his story. He says he warned regulators about Bernard Madoff's alleged fraud scheme for years and nobody listened. Now, he's pointing some fingers. Want to go live now to our CNN senior correspondent, Allan Chernoff.
Hey, Allan, good morning.
ALLAN CHERNOFF, CNN SENIOR BUSINESS CORRESPONDENT: Good morning. Let's make that nine years exactly. Harry Markopoulos, this is the man to watch. This is definitely going to be a very, very interesting hearing. Harry Markopoulos going all the way back to the beginning of the decade was warning the Securities and Exchange Commission about Bernard Madoff.
He sent detailed memos to the S.E.C., pages and pages, tons of red flags in here. Detailed instructions to the S.E.C. Call the derivatives expert at Citigroup, call the derivatives experts at Goldman Sachs. They'll back me up on all the documentation I've got here. It didn't happen. I called those people. They did not talk to the S.E.C. The S.E.C. didn't bother calling them. Markopoulos calls them this just a complete failure by the regulatory agency.
He says he found that the S.E.C. was essentially financially illiterate. Not able to even understand what Markopoulos was explaining to them about how Bernard Madoff could not possibly have been delivering the returns that he was claiming to deliver to his clients. So, this is going to be a very interesting hearing.
Heidi?
COLLINS: Well, what made him want to start this investigation in the first place? What questions did he have?
CHERNOFF: Markopoulos actually was working for a competitor. He was actually running money, managing money, and the head of marketing at his firm up in Boston, said, hey, how come you can't do what Bernie Madoff supposedly is doing? He was using supposedly the same complex strategy, and Markopoulos ran the numbers. And concluded there's no way Madoff could possibly be doing what he was claiming to be doing.
So, it was really in a way, competition. Heidi, you know, we've been talking so much about the problems of regulation, the problems of investigation within the Securities and Exchange Commission. I've got an idea, let's hire Harry. This guy knows what he's talking about, what he's talking about, let's listen to this hearing. It's going to be very, very interesting.
COLLINS: Yes. All right, you keep us posted on that. We sure do appreciate it. It's really interesting. Allan Chernoff, our senior correspondent, thank you.
Cleaning up MySpace. The popular online social networking site says they booted about 90,000 registered sex offenders from the site. That's about twice as many as first estimated last year. Attorneys generals from Connecticut and North Carolina pushed for the purge. MySpace and Facebook both put new safeguards in place banning sex offenders and controlling access to users under the age of 18.
Admitting the error of his ways.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: I think this was a mistake. I think I screwed up. And, you know, I take responsibility for it, and we're going to make sure we fix it so it doesn't happen again.
(END VIDEO CLIP)
COLLINS: President Obama takes it on the chin for choosing Tom Daschle as his Health and Human Services secretary. We'll hear from the president in his own words.
(COMMERCIAL BREAK)
COLLINS: President Barack Obama's big apology. In an interview with CNN's Anderson Cooper, Mr. Obama said he screwed up the nomination of Tom Daschle as Health and Human Services secretary. Daschle withdrew because of controversy over not paying his taxes. The president's interview in its entirety. Here now, the first half.
(BEGIN VIDEO CLIP)
ANDERSON COOPER, CNN ANCHOR: Thanks very much for seeing us.
Explain what happened today, Tom Daschle. You've let one of the most important domestic issues, which is health care, get caught up in what looks to many Americans like politics as usual.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: Well, I think what happened was, was that Tom made an assessment that, having made a mistake on his taxes, that he took responsibility for, and indicated was a mistake, made the assessment that he was going to be too much of a distraction in trying to lead what is going to be a very heavy lift, trying to deliver health care.
And...
COOPER: Do you feel you messed up in letting it get this far?
OBAMA: Yes. I think I made a mistake. And I told Tom that I take responsibility for the appointees and... COOPER: What was your mistake? Letting it get this far? Or you should have pulled it earlier?
OBAMA: Well, I think my mistake is not in selecting Tom originally, because I think nobody was better equipped to deal both with the substance and policy of health care -- he understands it as well as anybody -- but also the politics, which is going to be required to actually get it done.
But I think that, look, ultimately, I campaigned on changing Washington and bottom-up politics. And I don't want to send a message to the American people that there are two sets of standards, one for powerful people, and one for ordinary folks who are working every day and paying their taxes.
COOPER: Do you feel you have lost some of that moral high ground which you set for yourself on day one with the ethics reform?
OBAMA: Well, I -- you know, I think this was a mistake. I think I screwed up. And, you know, I take responsibility for it. And we're going to make sure we fix it, so it doesn't happen again.
COOPER: Let's talk about the economy, the stimulus. Every day, you get an economic briefing, along with an intelligence briefing. Which, to you, is -- is more sobering, the economic news you get or the national intelligence?
OBAMA: Well, look, the national security briefing is always sobering, because my most important job is obviously keeping the American people safe. And we have to remain vigilant. The threats are still out there.
But I will tell you, in terms of what is alarming right now, is how fast the economy has been deteriorating. I think, even two or three months ago, you -- most economists would not have predicted us being in as bad of a situation as we are in right now. And...
COOPER: It keeps a lot of Americans right now up at night.
OBAMA: Absolutely.
COOPER: Does it keep you up at night?
OBAMA: It keeps me up at night, and it gets me up...
COOPER: Literally?
OBAMA: Literally, because -- because we have got a range of different problems, and there is no silver bullet. We're just going to have to work our way through the problem.
So, number one, we have got to have a recovery package that puts people back to work and ensures that states that are dealing with rising unemployment can deal with unemployment insurance, can provide health care for people who have lost their jobs. So, that's one set of problems. Then, you have got a banking system that has undergone close to a meltdown. And we have got to figure out, how do we intelligently get credit flowing again, so that small businesses and large businesses can hire people and keep their doors open and sell their products?
And, you know, part of the problem, unfortunately, is, is that the first round of TARP, I think, drew a lot of scorn. You know, we learned -- you know, we have now learned that, you know, people are still getting huge bonuses, despite the fact that they're getting taxpayer money, which I think infuriates the public. So, we also have to set in place some rules of the road. And, tomorrow, I'm going to be talking about executive compensation and changes we're going to be making there.
Even after we get that done, we still have to get a financial regulatory system in place that assures this crisis never happens again. And we have got to do this in the context of a world economy that is declining, because, in some ways, the Europeans are actually doing at least as badly as we are.
You have even seen China, which has been growing in leaps and bounds over the last two decades, starting to decline. So, trying to do all those things on parallel tracks, at a time when people are scared -- and legitimately so -- I think, is going to be a -- a big challenge.
I think we're up to the challenge. But it's going to take some time. And I think the American people recognize that.
(END VIDEO CLIP)
COLLINS: President Obama looks ahead to his legacy, and the financial crisis happening right now.
(BEGIN VIDEO CLIP)
OBAMA: The only measure of my success as president, when people look back five years from now or nine years from now, is going to be did I get this economy fixed.
(END VIDEO CLIP)
COLLINS: Coming up, the second half of President Obama's interview with our Anderson Cooper.
(COMMERCIAL BREAK)
COLLINS: President Obama moving on his promise to limit the pay of executives whose companies are receiving federal rescue funds. He'll announce those compensation guidelines a little bit later today. The president talked about those plans and his economic stimulus with CNN's Anderson Cooper.
(BEGIN VIDEO CLIP)
COOPER: On executive compensation, Paul Krugman suggested in "The Time" on Sunday that your tough talk may be just for show. What can you really do?
OBAMA: Well, I think -- you know, we will talk about it tomorrow, but we're going to be laying down some very clear conditions in terms of where...
COOPER: Do you support Claire McCaskill's idea of capping...
OBAMA: Well, I -- I -- again, I don't want to completely preempt my announcement tomorrow.
COOPER: You could here.
(LAUGHTER)
OBAMA: But the -- but I think there are ways -- there are mechanisms in place to make sure that institutions that are taking taxpayer money are not using that money for excessive executive compensation.
And I think that, when you see the announcement that we make, people will say, this is a reasonable approach. It's not a government takeover. Private enterprise will still be taking place. But people will be accountable and responsible. And that's what we have to restore in the financial system generally.
COOPER: On the stimulus plan for you, what is non-negotiable with -- with Republicans?
OBAMA: The unemployment insurance, health care for people who have lost their jobs, you know, providing some relief to the states on those fronts, and providing families relief, that's very important.
Infrastructure investments that lay the groundwork for long-term economic growth I think is critical. You know, so, for example, when we say we're going to weatherize two million homes, that's not just make-work. First of all, you can employ people weatherizing those homes. We are also then saving families, individual families, on their energy bills. But the third thing is, it's making this country less dependent on foreign oil.
So, the same is true for health I.T. The same is true when it comes to education. We want to train thousands of teachers in math and science, and invest in science and technology research. All those things will make us more competitive over the long term.
What I do think is negotiable is some programs that I think are good, good policy, but may not really stimulate the economy right now.
COOPER: But how did they even get into the -- the bill in the first place?
OBAMA: Well, Anderson...
COOPER: I mean, why did they get this far?
OBAMA: ...you know, there are 535 members of Congress who have their own opinions about...
(LAUGHTER)
COOPER: Do you think some of the House Democrats went too far?
OBAMA: You know, I think that, if you look at -- first of all, I think, to -- in fairness to the House Democrats -- and this hasn't been talked about enough -- if you tally up all the programs that have been criticized on A.C. 360 or anywhere else, that amounts to less than one percent of the total package. So, they actually were remarkably disciplined, considering the size of this package. We have -- they left out, at my request, all earmarks, so there aren't private pet projects. And by the way, many of the critics of the current package can't say that about any of the budgets they passed over the previous six or eight years.
COOPER: But this is what American people are hearing about, whether rightly or wrongly. And, I mean, did the -- did the Republicans beat you on selling this, on selling the message? Did you lose the message?
(CROSSTALK)
OBAMA: Well, no, no, I don't think we've lost the message. That's why I'm here with you. Everybody is going to be watching me talk to you today.
But I think that the American people understand something has to be done. They want to make sure that we're serious about it and that we're not using this to promote politics as usual. And that's what I'm insisting on.
You asked earlier, do I lose sleep? Look, the only measure of my success as president, when people look back five years from now, or nine years from now, is going to be, did I get this economy fixed?
I have no interest in promoting a package that doesn't work, because I'm not going to be judged on whether or not I got a pet project here or there. I'm going to be judged on, have we pulled ourselves out of recession?
I think that the members of Congress understand that as well. I don't question the sincerity of some Republican critics, who may think that they can do better on this. And I'm happy to negotiate with them. If they have got better ideas, I'm happy to do it.
What I won't do is, in some cases, some of the criticism has suggested that the better approach would be to do exactly what we did over the last eight years that got us into this problem in the first place.
There is going to be some differences ideologically or in terms of, you know, recipes for how to fix the economy. And, you know, those differences, we can live with.
(CROSSTALK) OBAMA: But I think -- I -- I still think we can arrive at a package that works for the American people.
COOPER: You say five years or nine years. Which one are you hoping for right now?
(LAUGHTER)
COOPER: Based on what you've seen so far?
OBAMA: You know, listen, you want to be president when times are tough, because, you know, I -- I didn't do all of this just to occupy this fancy office. I did -- I came here to change things.
COOPER: I've noticed you don't use the term "war on terror." I think I read an article that you've only used it once since inauguration. Is that conscious? Is there something about that term you find objectionable or not useful?
OBAMA: Well, you know, I think it is very important for us to recognize that we have a battle or a war against some terrorist organizations. But that those organizations aren't representative of a broader Arab community, Muslim community. I think we have to -- you know, words matter in this situation because one of the ways we're going to win this struggle is through the battle of hearts and minds.
COOPER: So that's not a term you're going to be using much in the future?
OBAMA: You know, what I want to do is make sure that I'm constantly talking about al Qaeda and other affiliated organizations because we, I believe, can win over moderate Muslims to recognize that that kind of destruction and nihilism ultimately leads to a dead end, and that we should be working together to make sure that everybody has got a better life.
COOPER: Final questions, just a quick lightning round, just a couple of fun questions. What's the latest on the dog search?
OBAMA: We're going to get it in the spring. I think the theory was that the girls might be less inclined to do the walking when it was cold outside.
COOPER: Portuguese Water Dog?
OBAMA: You know, we're still experimenting.
COOPER: Coolest thing about your new car?
OBAMA: You know, I thought it was the phones until I realized that I didn't know which button to press. That was a little embarrassing.
COOPER: Have you had a cigarette since you've been to the White House?
OBAMA: No, I haven't had one on these grounds and, you know, I -- sometimes it's hard, but, you know, I'm sticking to it.
COOPER: You said on these grounds. I'll let you pass on that. Final question. You read a lot about Abraham Lincoln. What is the greatest thing that you've learned from your studies of Lincoln that you bring in to the office right now?
OBAMA: You know, when I think about Abraham Lincoln, what I'm struck by is the fact that he constantly learned on the job. He got better. You know, he wasn't defensive. He wasn't arrogant about his tasks. He was very systematic in saying, I'm going to master the job and I understand it's going to take some time. But in his case, obviously, the civil war was the central issue and he spent a lot of time learning about military matters even though that wasn't his area of experience.
Right now, I'm learning an awful lot about the economy. I'm not a trained economist, but I'm spending a lot of time thinking about that, so that I can make the very best decisions possible for the American people.
COOPER: Mr. President, thank you very much.
OBAMA: Thank you. Appreciate it.
(END VIDEO CLIP)
COLLINS: Putting into analysis on how President Obama fared in his first round of U.S. television interviews. So joining us in our next hour, Tony Blankley, a one-time press secretary to former Republican House Speaker Newt Gingrich. So stick around for that.
We know she had eight babies and has another six at home. Well, now, we have answers to questions inquiring minds really want to know.
(COMMERCIAL BREAK)
COLLINS: Everybody is talking about that California woman who had octuplets, and also has six other young children at home. Now, that woman, Nadya Suleman has a publicist telling her story.
(BEGIN VIDEO CLIP)
JOANN KILLEEN, PRES. KILLEEN FURTNEY GROUP: It's not true that she is being paid multiple millions of dollars for going on the media. She is not doing a talk show in London. She is not going to have her own reality show about how to be a mom. I mean, all those stories that people are making up are just not true.
LARRY KING, HOST, "LARRY KING LIVE": How about "People" magazine?
KILLEEN: Larry, everybody's called me. I have been retained as of Friday night. I have multiple packages and proposals to review. I told everybody that's called me -- and of course, everybody wants me to make a decision yesterday, what are we going to do. So I'm looking through every single proposal and I am going to sit down with my client this week and say, here are the pros and cons. You know, where do you want to go? How do you feel most comfortable? And you know, which one of these media do you want to go to and tell your amazing story?
KING: Now, of course, television doesn't pay. Although some might, right? I don't...
KILLEEN: Well, none of the major studios pay. This is a news story. So nobody's made any kind of offers for money.
KING: Is monetary part of her goal here?
KILLEEN: Absolutely not. And she wanted me to set the record straight.
KING: Please.
KILLEEN: She is a working professional. She was able to provide for her six children on her own prior to being pregnant with eight children. Now, she was a health care professional before these new ones came.
She wants everybody to know that she's not on welfare, has no plans on being a welfare mom, and really wants to look at every opportunity that she can to make sure that she can provide financially for the 14 children that she's responsible for now.
(END VIDEO CLIP)
COLLINS: The spokeswoman says Suleman can't wait to personally tell her story.
Well, they got a bailout, they won't get a payout. The president putting caps on company heads.
And small victories: An autistic girl gets tools to cope. Her family, a chance to hope.
It's Wednesday, February 4th. I'm Heidi Collins. You are in the CNN NEWSROOM.
