Return to Transcripts main page

CNN Newsroom

Did Government Ignore Warnings About Madoff?; President Obama Sets New Restrictions on CEO Pay

Aired February 04, 2009 - 15:00   ET

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

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: One of those principles is what the president and the secretary spoke about today, which was, how do the American people feel confident in a financial system where they become, through extraordinary assistance, a lender to a bank in order to stay healthy in this financial system?

The -- the president and the -- and the secretary spoke about the need to ensure that confidence of the American people by ensuring that, as these banks come hat in hand to the American taxpayers, that the American taxpayers are reasonably assured that executive compensation isn't excessive.

As the administration officials that briefed you all earlier said, obviously, there are a few tiers to this program and that the correct balance they believe was struck in ensuring that banks that need that extraordinary assistance will -- will get that, where we will not see catastrophic changes in our financial system, but when they do that, that there's a responsibility that they have to ensure to the American taxpayers that they're not wasting their money or that it's not going to line the pockets of people or executives that might have gotten a bank to the point that it is now.

At the same time, we want to ensure that access to greater capital ensures that banks that are more healthy can lend money to the American people and to small businesses and that that not be overly punitive.

The policy, I think, struck that right balance and we believe will give the American people the confidence that they need in the financial system and as it relates to executive compensation.

We've -- we've all seen reports, we've all seen news stories even in the last 24 hours about banks that as they -- and the practices that they undergo.

QUESTION: But are you worried about it backfiring? I guess that was your original (OFF-MIKE)

GIBBS: No, I think we've -- I think we've struck the right balance. I think the American people will have confidence. But I also think we've -- we've given banks the responsibility, but also underscored the ability for them to continue to do what they do and not be scared away.

I think that was a balance that had to be struck. We don't want -- we don't want to -- we want to strike that right balance. QUESTION: Robert, in some of the interviews last night, the president seemed to back off earlier commitments to "buy American" provisions. Is he in favor of "buy American" provisions in the stimulus, yes or no?

GIBBS: Well, I mean, obviously, we've got laws on the books relating to "buy American" and thinks that those provisions are important. But he also, as he said in these interviews, wants to ensure that -- make sure that we're -- that any legislation that passes is consistent with -- with trade agreements and doesn't signal a change in our overall stance on trade in these economic times.

QUESTION: But you were just talking before about how these times are so important, leaders need to step up. So the American people are listening. Where's the president on this? What balance does he want to strike then? What -- what does the president want?

GIBBS: The balance he wants to strike is to continue to get our economy going by -- without -- without unnecessarily starting something with trading partners all over the world and global partners that will hinder getting our economy moving again.

The president believes we can strike that balance in this legislation. You've heard the president speak any number of times about -- we -- we have to be coordinated in -- in the strategies that we undergo, whether it's recovery or stability or regulation, not just here, but throughout the world, in order to meet those collective global challenges.

Obviously, the president has heard concerns, but believes that a balance can be struck that ensures the laws of our country are upheld, but we can also do that in a way that's consistent with the WTO and -- and trade agreements.

(CROSSTALK)

QUESTION: I still don't know where you are then. Does that mean he wants a buy-America provision in this bill or not?

GIBBS: Again, I think -- I think a provision can be struck that...

QUESTION: And the current one does not strike that?

GIBBS: Well, I -- I'm not a trade lawyer. But I think that whatever bill passes the Senate and is ultimately conferenced and signed by the president will strike a balance that ensures that we meet our commitments in global trade agreements.

QUESTION: Robert, two questions, one on the stimulus and one on the executive compensation rules. On stimulus, Democratic Congressman Jim Cooper said that the White House wants to keep the speaker happy and the traditional Democratic leaders, but they have let them know privately they're not interested in all the pork. Have you guys let...

GIBBS: So, I have said -- so repeat that question one more time?

QUESTION: The whole thing?

GIBBS: Yes.

QUESTION: OK.

Congressman -- Democratic Congressman Jim Cooper of Tennessee...

GIBBS: Right.

QUESTION: ... recently said the White House wants to keep the speaker happy and the traditional -- traditional Democratic leaders, but they have let them know privately -- the White House has let the Democrats in the House know privately they're not interested in all the pork. Has the White House conveyed to the Democratic leaders of Congress that you're not interested in all the pork?

And then I have a follow-up.

GIBBS: Well, I think the -- the president continues to meet with members of both parties to try to get the very strongest bill possible. I think he said yesterday in these interviews that -- no doubt that this legislation will undergo changes in order to get the strongest bill possible.

I'm not going to get into private conversations, every private conversation the president has. But suffice to say, he wants a bill that will get the economy moving again and get the strongest bill possible.

QUESTION: OK. And then about the executive compensation rules, the Merrill Lynch bonuses, the Citigroup jet, the Wells Fargo retreat, these rules would not prevent any of those from happening.

GIBBS: I think that the -- and I will get ultimate clarification on this from -- from Treasury officials, but there are provisions in the rules that ensure that some of the items that you mentioned are disclosed or are transparent.

And I think, in each one of the instances, you mentioned the -- you mentioned jets. You mentioned the...

QUESTION: The retreat, the Wells Fargo retreat.

GIBBS: ... the -- right.

QUESTION: The Merrill Lynch bonuses. The point is, you're saying that the transparency will -- will...

GIBBS: Well, I think -- I have to check on the Merrill Lynch bonuses, but I -- Citigroup's jet or planned jet purchase and the Wells Fargo retreat at the Wynn both didn't happen because of the diligent work of many in the reporting of these and the outcry that ensued. You don't have to have a rule or a regulation to ensure that the American people know what to get mad at. You don't need a regulation to have that transparency and accountability put pressure on the actions of companies and executives that change their actions.

That's why the president put forward and -- and talked about today a provision that gives shareholders an active voice in the pay and the compensation structure of the companies with which they hold stock.

You know, 24 hours ago, we were talking about this retreat at the Wynn for Wells Fargo. The reason we're not actively talking about that today is because that outcry, without a regulation, killed the retreat, that by doing -- by having that accountability and that transparency, by putting those expenditures up on a Web site for the news media and for the American public to see, I think will have a great impact on the behavior of -- of many in business.

Chip.

QUESTION: Thank you, Robert.

On the stimulus, do you -- do you agree, and does the president agree, that if the vote were held today, he would lose, he would not get the 60 votes he needs? And is he now in a position of trying to -- with these one-on-one meetings -- trying to eke out a 60- or 61- or 62-vote victory?

GIBBS: You know, I don't -- I don't -- you know, I -- there's people hired here to count votes differently than -- a job description that's different than mine. And I don't, you know, know hypothetically what might happen at any given moment.

The president, as he's done throughout this process, and even before he was sworn in, wants to hear from members about any idea or any concerns they have about what's in any specific package.

But I think the thread of what you hear and see from the president is that we have to have a stimulus package and a recovery plan that meets the size and the scope of the challenges that this economy faces. To do less would result in continued, far greater job loss than what we're experiencing now.

My hunch is, on Friday, we're going to get job statistics that show -- without prejudging the numbers that I don't know yet -- you're probably going to see numbers similar to what you saw in November and December. That would be 1. 5 million jobs in a quarter, over a three- month period of time.

Our failure to act and stimulate this economy to create the jobs that are necessary, to lay down those long-term investments, and to provide people with the money they need to meet and pay their bills, if we don't do that, then we're going to see, month after month after month, continued hurting and pain of the American people. We have to work and act now to ensure that doesn't happen.

QUESTION: What inning are we in now? And what are the chances...

(LAUGHTER)

QUESTION: What are the chances of extra innings?

GIBBS: You know, I actually practiced that answer a few days ago, and I forget what I came up with. I would say -- I'm going to say bottom of the fifth, right?

QUESTION: How many outs?

GIBBS: Unclear yet if we, you know, if we're...

QUESTION: I didn't see clean the infield, though...

(CROSSTALK)

GIBBS: The sausage race is the beginning of the next inning, so just stay tuned, and we'll -- we'll get...

(CROSSTALK)

GIBBS: Absolutely. Starting pitcher's in there and still throwing -- still throwing nice curveballs and still got a lot of heat on the fastball.

(CROSSTALK)

GIBBS: He set me up for that. I didn't do that on my own, guys.

QUESTION: On the executive compensation, most -- most -- you keep talking about accountability and transparency, and then you just brought up the examples of -- of how the media seemed to shame these folks then, And we heard this phrase "name and shame" quite a bit today.

That seems as if people that the president called shameless last week are being allowed to go on the honor system. I mean, what is the accountability? You said accountability. What is the teeth? I mean, what happens if these people violate it? Do we yank the money back? Do we bankrupt the firms? Do we fire the executives?

GIBBS: Right.

QUESTION: What is the -- what is the teeth part of this executive compensation?

GIBBS: Well, let me get -- I will get clarification from Treasury on that, but I don't -- I mean, first of all, the beginning and the end of these is not just putting something on a Web site.

There are real discernible limits in executive compensation for CEOs and the top management, for banks that accept an extraordinary amount of assistance from the taxpayers. It caps their compensation.

Any additional compensation would have to come in the form of restricted common stock that couldn't be cashed in unless or until the taxpayers are paid back with interest. That's a real deal.

But...

(CROSSTALK)

QUESTION: ... I mean, that's what I mean...

GIBBS: Yes, I will -- I will check on whatever -- what the underpinnings of the policy are. But, again, let's not minimize -- I don't -- I don't want to minimize also, as you said correctly, the "name and shame" provisions of this.

Again, I go back to Jake's question. You know, the actions of CEOs coming from Detroit to testify about the help that they needed from the taxpayers in the auto industry, their behavior was changed not by some rule or regulation, but by the transparent viewing of their practices, the transparent viewing of their -- of the practices of businesses that are involved in receiving assistance from the federal government I think will have a tremendous impact, as it already has, in changing the behavior of individuals, the top management, and banks in general.

QUESTION: Do you feel like there's the regulatory -- I mean, because there's not going to be any additional regulatory aspect. It's the same regulators that are monitoring things...

GIBBS: Well, I think -- I think they said that, you know, they'd point you toward the regulators specifically on that.

But, again, the steps that were taken will have real discernible results. Allowing shareholders to have a say in the compensation of CEOs, I think there's a reason that that has never gotten through both houses in Washington before.

I think people understand -- the rich and powerful understand that it's likely to have a meaningful effect on their compensation.

(CROSSTALK)

QUESTION: ... retroactive, there's a bipartisan Senate bill that is already supposedly making its way through the Senate that would make these rules retroactive to the first part. If that gets to the president's desk?

GIBBS: I would -- I will check on that.

QUESTION: Robert, how would you compare the -- the president's public tone on economic stimulus, the reference to the word "catastrophe," the reference to the elections, with the private tone that he's using in his jawboning with the senators who have been coming down here?

GIBBS: I don't -- I mean, his -- he doesn't say a lot to us or to others that he doesn't say publicly. I mean, there -- there always has been a consistency in what he says. I -- I think he has walked members through and senators through the price of that inaction, that, in addition to the job -- additional job loss you'd see over a three-year period, that likely you'd see our economic output at $1 trillion less in each of those three years than what our economy is capable of.

You know, we -- we have talked about the size and the scope of economic stimulus packages, but a $3 trillion gap over a three-year period in what is possible and what is -- what will -- what is possible and what will happen in our economy means millions of jobs lost.

I think he's been very frank with everybody about the failure to act, the consequences that are involved, and the expectations that the American people have related to the action that he expects Congress to take and something -- give him something that he can sign.

QUESTION: How do you plan to deploy these unemployment numbers, the overall number and the state-by-state numbers, at the end -- between now and voting time?

GIBBS: Well, you know, they're -- they'll -- I would trust that many people in this room, Friday at or around 8:32, will write stories based on the release of the numbers at 8:30.

QUESTION: I mean, do you plan to target specific states...

GIBBS: There's not a governor -- there's not a governor that comes to the White House, there's not a senator that comes to the White House that doesn't understand what's going on in their state.

You know, I don't know if you all saw the interview that Charlie Crist gave to -- on TV yesterday. I mean, he understands -- he has an unemployment rate that exceeds the national number.

And he has a difference between what -- no Republican has a different viewpoint than what you hear in this town about what's necessary to get this economy moving again, what's necessary to avoid laying off teachers and police officers, and sacrificing education and public safety, cutting back on health care, and ensuring that the investment in a state like Florida leads to long-term economic growth.

I think he's -- he mentioned in the interview what the unemployment number was in Florida. I think everybody's aware. And if you look at -- if you look at unemployment numbers and -- and see the change in those unemployment numbers over the course of the year, it's a pretty stunning thing.

I was on my computer before I came out here. I may have the numbers slightly off, but unemployment has risen in the last year in 363 of 369 metropolitan areas that are observed by the Bureau of Labor Statistics, 363 out of 369. If I was a -- if that was a baseball metaphor, that player would likely be in the Hall of Fame.

QUESTION: Yes, just on executive compensation, is the $500,000 -- is that going to be indexed to inflation? And then... GIBBS: I saw that question asked during the background briefing, and we'll -- we'll look into it.

QUESTION: OK. And the second part I'm just trying to clear up, is it -- you know, for the people in that exceptional -- exceptional category, for the executives that come there, how many of them will be covered by the $500,000 limit? And who will decide how many executives? Is it more than five? Is it less than five?

GIBBS: So I don't make a mistake, I will get the answer to that. I -- don't remember if that's broadened or not to the top 20, but we'll -- I will get those administration decisions.

(CROSSTALK)

QUESTION: OK. That will be firm; it won't be an ad hoc...

(CROSSTALK)

GIBBS: I believe that's in the numbers. I just don't remember precisely what it is.

QUESTION: Thank you, Robert. One on the stimulus and a follow- up on SCHIP after that in (INAUDIBLE)

GIBBS: What if I said no?

(LAUGHTER)

(CROSSTALK)

GIBBS: Fair enough.

QUESTION: You talked about the cost of inaction. I would like to ask you a question about the cost of action. The CBO has come out with an analysis of the job-creating potential of the Senate bill.

QUESTION: You might regard these numbers as the upside of that, 2. 8 million to 8. 2 million jobs over three years. The cost side -- that depends on the multiplier effect the CBO uses on the stimulative effect of the bill. It also says the cost on a per-job basis would range from $100,000 to $300,000 for jobs created. How valid a...

(CROSSTALK)

GIBBS: Is that also over a three-year period?

QUESTION: Yes.

GIBBS: That's divided by a three-year period?

QUESTION: According to what I have -- what I have read in the CBO report, yes.

GIBBS: OK. QUESTION: So do you consider that a valid metric? And is that a worthwhile cost to the American people to evaluate, as they look at the -- not only the cost of this bill, but in the context of the cost of inaction?

GIBBS: I would -- I will go back and look through -- I have not seen that CBO report. And I have seen different people do different math to suit the rhetoric that they said either before or after using those figures.

The legislation that is going through, went through the House, is going through the Senate, the president believes is the basis for creating more than 3 million jobs, more than 90 percent of which would be in the private sector.

And I think, obviously, we have advocated and previous administrations have advocated, for instance, using tax policy to spur job creation. So I think, obviously, that's -- without getting into the exact numbers, I think obviously using that to create jobs and to lay down the important, long-term investments is critical.

But, again, I would go back to -- I don't -- I don't know that the CBO estimates precisely the cost of inaction. I do know that one of their reports said that you -- you would have a significant -- the economic downturn would be even more significant with the absence of -- with the absence of a significant stimulus package. And that's what the president believes has to happen quickly to get the economy moving again.

QUESTION: Robert, on SCHIP, the president will sign the bill turning it into law later this afternoon. The funding mechanism is a 68-cent-per-pack increase in the federal cigarette tax. Two different government surveys show that that disproportionately falls on those who make less than $75,000.

Since you obviously believe it's important to have a stable funding mechanism for SCHIP, how concerned is the White House that, in a recessionary time, those who make less money will not buy cigarettes, which may have positive healthful effects, but may undermine the funding mechanism for the very program you're trying to expand?

GIBBS: I mean, obviously, this is a program that we have -- that is expanding. It's not -- it's not a new program. It's something that we've seen work. I think the genesis of this is as far back as the mid- to late-'90s, the balanced budget agreement from 1997.

So, obviously, mechanisms that are in place, policy-makers are understanding of the ups and downs of these things, and we believe have calculated accordingly.

The president looks forward to signing that legislation. You'll hear him speak about the importance of the individual act today in expanding the coverage for -- for children. You'll hear the president underscore the need that we have to make health care more affordable and the need to invest in that affordability to ensure our long-term economic growth.

QUESTION: No concern about the ability to continue to fund this program with a tax of just...

(CROSSTALK)

GIBBS: I think bipartisan -- strong bipartisan majorities in the House and the Senate have -- have spoken to the importance of this legislation and the soundness of the proposal.

QUESTION: The president talked yesterday in his interviews about not wanting there to be two standards for people (OFF-MIKE) there shouldn't be. How then should people understand why it was OK for Timothy Geithner to go ahead in his job, but not Tom Daschle?

GIBBS: Well, as I said yesterday, obviously, Senator Daschle made a decision to withdraw his appointment. And as I said yesterday, Mr. Geithner has gone through a process in the Senate that included passage through committee and passage through the full Senate by -- with bipartisan support and is now the secretary of the treasury.

So I don't -- I don't...

QUESTION: Is there not a double standard there? I mean, isn't...

GIBBS: No, I -- again, I -- I mean, there's a lot of -- we can look a lot at rear-view mirroring and different decisions. But I think the president -- I think the president probably did what many people don't hear in this town a lot, and that's take responsibility and set -- set a very high standard for himself and for -- for this administration.

QUESTION: (OFF-MIKE) the president, he said several times in those interviews that he screwed up or he messed up. What exactly does he believe that he screwed up?

GIBBS: Well, I think that taking, for example, the -- the appointment for HHS, that obviously making health care more affordable is a -- as you've heard him talk about a lot, for many years, a very important issue to him.

He worked on it in Springfield. He talked about it on the campaign trail and hopes to make a significant impact on that important issue as the president of the United States.

He found Senator Daschle, he believed, uniquely qualified to pursue health care reform that would meet many of the goals that he shared, despite making a mistake. I think in the interest in getting those appointments, the president trumped the principles that he laid out in the campaign, and he took responsibility for that.

QUESTION: So, going forward, has he outlined any new objectives or imperatives or ways for the advisers to find a replacement for this position? Will any of the fundamentals change in the job search, basically, for the new health and human services secretary? GIBBS: Well, again, I spoke yesterday to the president's confidence in -- in the process. Obviously, members of the team in this building and across the administration are undertaking the -- the task of looking for a replacement.

Look, I -- the president has set exceedingly high standards for himself and for this administration. You've heard me talk about from this podium the executive order that he outlined -- not my opinion, but the opinion of those that watch -- is a higher -- higher ethical standard than any group that's worked in this building in the history of this country.

I don't doubt that there are times that -- that we might not live up to those lofty standards, and I can assume that, when that happens, I will come in here, and you can get the sticks, and I will be the pinata. I think that's safe to say.

But I will say this: The president believes that setting that standard and reaching high for that standard each and every day is far, far, far better than continuing the way this town has worked and continuing the politics as usual that we've seen for so long.

So he is going to -- he outlined those standards. He asks us every day to meet them. There are days that we won't. But to -- to try to meet those every day far exceeds never trying at all.

(CROSSTALK)

QUESTION: Let me ask about the trip tomorrow, if I may, to Williamsburg.

Presidents often say something with their first out-of- town presidential trip. President Clinton went to Detroit and did a town meeting. President Bush went to a military base. What's President Obama telling us about his priorities tomorrow?

GIBBS: Well, you know, Williamsburg is -- has a lofty place in our country's history. I think what he's -- what he's -- what he is saying, whether it's this trip to Williamsburg or whether it's a trip to Capitol Hill to meet with Democrats or Republicans, that he's -- he's willing to go anywhere and talk to anybody in order to get a financial -- to get a recovery and reinvestment plan that moves this economy forward. That's his main priority right now.

I don't know that there's any great symbolism in -- in this one in particular, except that he's working tirelessly each and every day to get a consensus between the parties and to get something that -- that will put the American people back to work, will meet the size and the scope of the challenges that we face, and live up to those expectations.

QUESTION: He's spending a lot of his time on this issue talking to lawmakers.

Is he planning to take it on the road and talk to average Americans outside of Washington yet? GIBBS: Well, you know, I don't -- I think he spoke to average Americans last night sitting here. I think he'll continue to do that.

I don't -- I don't have a travel schedule for the next couple weeks. I know we will go to Canada and we may take a trip before that.

I don't think -- the president doesn't believe you has to go to any certain place to talk about a problem that faces each and every American wherever they live and regardless of where he is.

Ann?

ANN: When the -- is there still an Obama transition staff vetting potential members of the administration or is that White House Counsel's office?

And are they going back and looking again at anybody who might still be in the vetting process to see whether there are real concerns...

GIBBS: I don't know the current -- the current confines of that process and whether it's housed -- where it's housed or whether it's in the Counsel's office or not. As I said, yesterday and today, the president has confidence in that process.

QUESTION: So many of -- several of these individuals have had problems erupt after they've been nominated and after they've been seen by Capitol Hill.

Is he still satisfied that each and every nominee that goes before the Senate for confirmation or walks into the White House as a new appointee has been adequately vetted?

GIBBS: Well, obviously I won't -- I won't speak to the myriad of qualified appointments that have been -- gone through the rigorous Senate confirmation process and spat out the other end and placed hands on bibles and occupied jobs. I would refer you to any of the committee chairs which with that process has gone through. Again, I would reiterate that the president sets a very high bar for anybody that works in this administration, that works in this building or works throughout it. I think he expects nothing less from us.

Peter?

(CROSSTALK)

QUESTION: Robert, given the -- given that the hardest work of this administration lies ahead, in terms of energy and health care legislation and the snags that we've seen with respect to the stimulus plan, does the president need to retool or rework his legislative teams?

Does he need to come up with a different legislative approach?

I mean, are there any lessons learned... GIBBS: You know, you guys are -- it's like I just said it was the fifth inning and you guys want to change pitchers or something. No, I...

(CROSSTALK)

GIBBS: Well, as I said, I mean, you know, we -- the president -- the president didn't think that we were going to come in here and change everything about the way Washington worked in such a short period of time. You can rest assured that we understand that we've not yet marked off all of our to dos.

But I think the process that the president is undertaking, whether it's stimulus, recovery, financial stability, re-regulation, energy, health care -- any number of issues that are going to land on his plate -- that the process that he's used in reaching out to those, regardless of party, regardless of political philosophy, have served him well throughout his political career. And he means that in what he does right now.

Again, you know, I -- we've found that the process has worked and is going forward. I don't -- Mark should be here. He'd tell me the exact day of this administration.

But...

QUESTION: Sixteen.

GIBBS: Sixteen?

There you go. You know, I mean I've -- the amount that's already been done, particularly on a recovery plan, to get it to the process of being through the House and partly through the Senate in a 16-day period, I think, is something that's rather extraordinary.

No doubt, much work remains. Some of the priorities that you mentioned -- some of those long-term investments are contained within the recovery plan. And I think that the president will work -- continue to work on each of those over the course of the next four years.

But I don't -- I would reject, I guess, overall the premise that somehow something's broken.

(INAUDIBLE).

QUESTION: Thanks, Robert.

I just wanted to follow on Jeff's question, because the president said in one of his interviews last night that he intends to fix a mistake that he made and make sure it doesn't happen again.

What does that mean?

What is he going to fix? GIBBS: Well, I think he's going to fix -- to build off of what I said to Jeff and others -- in taking responsibility and ensuring that what you may do in this town doesn't trump the principles that he talked about before he got here. The standards that he set out for ethics and accountability are ones that mean a lot to him and that he'll continue to ensure each of us meets throughout this process. I think that's -- that's important to him and it's important to us.

QUESTION: Was it an bad political judgment or was he just getting overeager to get somebody (INAUDIBLE)?

GIBBS: Well, I think I've laid out the -- pretty rigorously what the president was thinking when he made those statements. And what he meant.

Yes, sir?

QUESTION: Robert, the James A. Baker Institute is recommending that the Obama administration defer another lunar shot and instead focus on energy and climate change.

Does the White House have a reaction to that?

GIBBS: I don't have anything particularly from -- I would point you to -- to folks over at NASA. I don't have any particular guidance on that.

(INAUDIBLE)?

QUESTION: Robert, just to get back one more time to the question of what would be fixed, without belaboring it, but -- is it a...

GIBBS: Why would the third question belabor it?

(LAUGHTER)

QUESTION: Is it a sort of you know it when you see it kind of issue with respect to whether there's a particular problem with a potential nominee?

Or has the president given specific instructions to staff that there may not be any taxes that haven't been paid ever (INAUDIBLE)?

GIBBS: I don't...

QUESTION: I mean is there anything...

GIBBS: I don't think the president has to enumerate what he expects of us. Many of us have been with the president for quite some time. And I think those that -- those that have only been with him for a short period of time can understand the standards that he's set out for them and for us and for all of this administration. And I don't -- the president doesn't need to write his staff a memo. We -- we understand.

QUESTION: (INAUDIBLE) how to come to understand it, though, when...

(CROSSTALK)

QUESTION: ...that it was OK.

(LAUGHTER)

GIBBS: Thanks, guys.

SANCHEZ: And there we go.

Another news briefing there by Robert Gibbs. We've been following it for you, diligently, as have most of you. We appreciate that. And we appreciate many of the comments that you make. We understand that sometimes the questions that are being posed by some of the correspondents and reporters there are not excruciatingly exciting but, nonetheless, they need to be asked.

Let's bring in Patricia Murphy, someone who is -- from CitizenJanePolitics.com.

Also, Susan Lisovicz is going to be joining us.

She's there on Wall Street watching the reaction of some of the decisions that the president has made today.

This is amazing -- Barack Obama, essentially today, prior to this news conference that you watched right now, stealing a page from Teddy Roosevelt. I mean this is the first time that this president has used what is called the bully pulpit to scream, holler, use some real strong words like "shameful," talking about American CEOs during the last year.

As a matter of fact, let's take this piece of sound and then we'll start this conversation.

Everybody at home, listen to this.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: This is America. We don't disparage wealth. We don't begrudge anybody for achieving success. And we certainly believe that success should be rewarded.

But what gets people upset -- and rightfully so -- are executives being rewarded for failure, especially when those rewards are subsidized by U.S. taxpayers.

(END VIDEO CLIP)

SANCHEZ: I mean, this is a bully pulpit if we've ever seen it. He's coming down hard on him.

Murph, here you've got the president of the United States telling CEOs -- businesspeople, essentially -- what they should do with their businesses, how much money they should make. Is he the man to do this?

PATRICIA MURPHY, EDITOR, CITIZENJANEPOLITICS.COM: Well, he's the man to do it in certain instances. And he laid out what those instances are. He said it's for companies that took the TARP -- or, rather, that are going to take the TARP. Let me clarify that. Any company that comes to the government in the future for extraordinary assistance. And that means any company that takes a huge amount of TARP money.

We've already seen numbers of $10 billion, $20 billion, $30 billion -- something more than that. So far, about three or four companies qualify there.

So he's saying if you come to us for extraordinary assistance, we're going to tell you how much you're going to pay your executives, what their bonuses are going to look like and who those bonuses are going to go to.

SANCHEZ: But, you know...

MURPHY: So he's (INAUDIBLE) in that case.

SANCHEZ: ...I was just listening to Robert Gibbs trying to explain this to reporters and I'm not sure I heard any answers. And people at home want to know, OK, fine. This sounds like a good idea in principle, although some people are saying it skews somewhere in between socialism and communism.

But the bottom line, how does it work?

How is it actually going to work?

How do they know who's making what?

How do they get punished?

Who's going to call them on it?

How is it going to work?

MURPHY: OK. Here's how it's going to work. And, again, a lot of details still have to be fleshed out here.

Basically, there will be two kinds of companies that they're dealing with -- companies that take a little bit of TARP money, companies that take a lot of TARP money. For the ones that take a lot of TARP money, there will be limits to their executive compensation, but only for some executives.

And you heard Robert Gibbs. He couldn't say if that was the top five, 10 or 20 executives. They don't exactly know right now. But we know there will be some limits.

Now, for the other companies, that take a smaller amount of TARP money, there will be transparency and accountability, but no real limits. They're saying you have to tell us what you're paying people, you have to put that to a vote of your shareholders.

So they're creating this culture -- again, you said it's the bully pulpit. They're going to limit it strictly for a handful of companies.

But in the future, they're creating this culture that says you are you're not going to be rewarded for failure by the American people. So if you do something like Wells Fargo -- plan something very lavish in Las Vegas -- when you just reported a $2.3 billion quarterly loss, the American people will shame you. So he's creating this culture where there won't be reward for failure.

SANCHEZ: Again -- and that goes back to the term we were talking about just moments ago -- it's all about the bully pulpit.

MURPHY: Yes.

SANCHEZ: It's all about being in control and using the presidency to create a mood in the country that will then cause the action to happen. It's a different way of legislating, in this case.

By the way, you just used the word shaming. He uses that word, "shameful," several times.

Let's take a quick break.

When we come back, I want you to listen to the word that the president uses when he's talking about these CEOs. I mean he was as direct and as strong as he can be, as a man who's usually on the D.L. down low, as they say.

Also, this...

(BEGIN VIDEO CLIP)

HARRY MARKOPOULOS, MADOFF WHISTLEBLOWER: I gift wrapped and delivered the largest Ponzi scheme in history to them. And somehow, they couldn't be bothered to conduct a thorough and proper investigation, because they were too busy on matters of higher priority.

(END VIDEO CLIP)

SANCHEZ: This is probably the most amazing story that we watched today. That man you just listened to right there, he's a whistleblower. You are about to hear from him. He says he told our government about Madoff -- Bernie Madoff and all the shenanigans that go on on Wall Street.

And he says, look, your government didn't listen to me. Eight years ago, I went to them with this.

Here's the question -- are too many foxes being chosen -- even by Barack Obama -- to run the henhouse?

That's what my guest, David Sirota, will be saying about Wall Street and the president's picks to watch over it.

Stay with us.

We're going to be right back.

SANCHEZ: Some of you are downright critical of Robert Gibbs as the press secretary and the press briefing that he gives every day.

Listen to this. This is coming in on MySpace right now: "Yes! Bringing out Patricia Murphy just made that Gibbs conference worth watching."

We thank you for your comments.

All right, let's talk about this now. You know, I think -- and I think a lot of us who are watching the news today as it developed, prioritizing things -- thought that maybe this was one of the most important stories we watched today. Talk about a news story evolving.

This is a story about a whistleblower -- a man went to the United States government and said, about the SEC -- the people who were supposed to watch the people on Wall Street -- hey, that Bernie Madoff character, you know what he's doing?

He's got a Ponzi scheme and you need to stop him.

And you know what he says that the government did?

Nothing. He says they ignored him. And he says it's because the people who watch Wall Street are often like the fox watching the henhouse.

I want you to hear him for yourself now.

This is Harry Markopoulos.

(BEGIN VIDEO CLIP)

MARKOPOULOS: I gift wrapped and delivered the largest Ponzi scheme in history to them and somehow they couldn't be bothered to conduct a thorough and proper investigation, because they were too busy on matters of higher priority.

If a $50 billion Ponzi scheme doesn't make the SEC's priority list, then I want to know who sets their priorities.

The Troubled Asset Relief Program was funded to the tune of $700 billion company by this -- by the previous Congress. Therefore, I can think of 700 billion reasons why the American public deserves answers from the SEC about its refusal to tackle the big cases and why all five major investment Wall Street banks under SEC supervision either failed, were forced by the government to merge with commercial banks or became bank holding companies propped up by the Federal Reserve and U.S. Treasury.

When an entire industry that you were supposed to be regulating disappears due to unregulated, unchecked greed, then you are both a captive regulator and a failed regulator.

(END VIDEO CLIP)

SANCHEZ: When an entire industry that you are supposed to be regulating disappears -- listen to the words that this man is using.

David Sirota is my next guest.

He's a frequent guest on this show.

He's also an author and a columnist.

And just last night, he happened to write a column about this very thing.

Let's start with this. I've got a graphic that I've decided to make for you, because I have a feeling that you're going to be able to put this in perspective after you watch this graphic.

This is a graphic that shows the following people -- all part of Barack Obama's administration -- Geithner, Summers and Volcker.

What do you think are wrong with these guys?

DAVID SIROTA, AUTHOR, "THE UPRISING": Well, what I think is wrong with a lot of them is that they represent the economic ideology that got us to this place. Barack Obama campaigned on a promise of change and what we've gotten in his administration is more of the same.

These are people who, for instance, are pushing against putting in provisions into the stimulus to buy things in the United States.

SANCHEZ: So are you saying...

SIROTA: These are people who are...

SANCHEZ: Are you...

SIROTA: ...pushing...

SANCHEZ: I'm going to stop you for a minute, David.

Are you saying that guys like Geithner -- like Geithner and like Summers and like Volcker are the types of people that this whistleblower we just heard would have gone to and said, you've got to fix this mess, and they said nah, we're OK with it, it will work itself out?

SIROTA: Well, we that that happened, in fact -- a very similar situation.

Back in the late 1990s, when Summers was Treasury secretary, there was a lot of meetings between the FDIC, the Commodities Futures Commission, trying to see whether they should better regulate the banks. And we know that Summers -- and his deputy, of course, was Geithner -- pushed against that, said no, we should not better regulate the trading derivatives.

SANCHEZ: So if...

SIROTA: So he knows that this has happened.

SANCHEZ: So let me take the next question, then. And I think people at home are following this (INAUDIBLE) with us now.

If these guys, who supposedly were supposed to be keeping a check on Wall Street, did a lousy job of doing, who should be doing this, then?

If not them, whom?

SIROTA: There's -- there's not a shortage of people who could do it. I mean I could give you -- you know, Brooksley Born was the head of the Commodities Futures Commission, who was pushing for the regulation. She could be there.

Robert Reich, who is a former Labor secretary, he could be there.

Nobel Prize winning economist Joseph Stiglitz. He could be there.

SANCHEZ: So those...

SIROTA: Look, we've got 300 million people in this country and we don't have a shortage of talent to fix the situation.

SANCHEZ: But you...

SIROTA: The last people who should be fixing the situation are the people who created it.

SANCHEZ: So why would Barack Obama, a man who is the president of the United States and seems earnest and wants to fix the situation, go with people who apparently have been part of the problem, as you explain?

SIROTA: That's the big question. Look, I -- there's no one answer to this. I mean, Washington is hard to change. The culture of Washington -- I talk about it -- it's a zombie culture. No matter what you do, if you're in the club, your career can't be killed. So I think there's some of that.

I think the other part of it is that Barack Obama has taken a huge amount of money from Wall Street. And so he has moved to put a lot of people in place in his administration that make those political donors comfortable. I mean that's really...

SANCHEZ: Yes (INAUDIBLE)...

SIROTA: ...it's a mix of a lot of things.

SANCHEZ: I guess. You know, there's an expression I learned from my old football coach when I used to play ball in the -- in Miami. And he used to say well, you have a tendency to dance with the one that brung you. And I guess in this case, he's dancing with the one that brung him.

My thanks to you.

As usual, good stuff, good segment, good columns.

David Sirota.

SIROTA: Thanks.

SANCHEZ: Eighteen billion dollars -- now that's how much CEOs gave themselves in bonuses in one of the worst years ever economically.

Obama has called it "shameful." You heard what he said today.

But does he have a right to control their pay?

Again, we ask -- an there's Richard Quest, of whom we will ask that question. He's across the pond.

We'll be right back.

(COMMERCIAL BREAK)

SANCHEZ: There's Richard Quest. He's coming up.

Susan Lisovicz, she's with us, as well.

And we're talking about the president of the United States telling businesspeople how much money they can make.

Further, the president uses words today when describing some of those businesspeople and their $18 billion of bonuses -- ready -- "height of irresponsibility," "shameful," "disregard for costs and consequences," "narrow," "self-interested," "bad taste."

Big, nasty, mean words -- Richard Quest, Susan Lisovicz.

What do you make of it?

Is the president right?

Richard, let's start with you.

RICHARD QUEST, CNN CORRESPONDENT: You can't have it both ways, Rick, much as you would like to. Just 10 minutes ago, you were talking about communism and nationalism -- and nationalizing the banks.

Which is it, Rick?

The president can't be on both sides of this fence. And that's the problem. The moment these fat cats -- the moment these pigs had their noses in the trough, snorting away at the money, well, it was inevitable that something had to be done. And that's what the president did.

But remember, you know, you can't have it both ways on this one -- Rick.

SANCHEZ: Well, right-wing radio -- and I listened to some of it today. They're going crazy with this -- Susan Lisovicz.

They're saying this is the beginning of the end -- the end of America. Communism begins today -- Susan, your reaction.

SUSAN LISOVICZ, CNN CORRESPONDENT: Well, I can understand their concerns. I mean, after all, it's pretty conservative on Wall Street. You know, the traders I talk to are concerned when Uncle Sam says it's going to step in and put pay caps.

Having said that, these are extraordinary times we live in and a lot of financial firms are getting assistance from Uncle Sam.

But really what's happening, though, it really just seems like a few companies -- the extraordinary assistance are the ones where you're going to see this. I think, really, what's happening is, is Big Brother is watching you, be careful with what you do (INAUDIBLE)...

SANCHEZ: Well, but there's a...

(CROSSTALK)

LISOVICZ: ...planes or your perks.

SANCHEZ: But here's the question that was asked today.

And I -- will this thing have teeth to it?

Does it need to have teeth to it -- Richard?

QUEST: Of course it won't have teeth to it. It's window dressing and public relations of the most vacuous sort. We know, for instance, that between 2003 and 2008, an obscene amount of money was paid in bonuses -- more than the GDP of the Philippine. That gives you some idea of the amounts involved.

So we have already had in the TARP -- remember, Rick -- in the TARP -- the TARP itself had restrictions on executive pay. But now, of course, the wind is behind the president's sails. It's making a lot of sense. And I don't know whether Susan would agree with me, but the real people who need to ask about their morality and their ethics are the investors -- the pension funds, the institutional investors. Those are the ones that have let it get away for so long.

SANCHEZ: Richard Quest, Susan Lisovicz, we're out of time.

A great segment.

We'll do it again.

Always, always a pleasure.

Listen to this.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It is my position and one that I went to, that he was a gentle and kind person. He never ever had anybody that was -- that would do anything like this to him that we knew.

(END VIDEO CLIP)

SANCHEZ: Well, he may have been a gentle and a kind person, but that doctor he's describing headed out to work today, got to his car and -- boom -- his new Lexus exploded. Something sinister is going on here.

A car bombing in West Memphis, Arkansas.

Here's Mike Brooks.

He's going to be taking us through this. He's made some phone calls.

We'll have that for you on the other side.

Stay with us.

(COMMERCIAL BREAK)

SANCHEZ: All right. Let's bring in our law enforcement analyst, Mike Brooks, into this story.

Take a look at the video -- Mike, as we -- as you watch this with us.

This is the doctor in West Memphis, Arkansas.

MIKE BROOKS, CNN LAW ENFORCEMENT ANALYST: Right.

SANCHEZ: He gets up in the morning, 8:00. Walks to his car -- kaboom, part of the car explodes.

Police officials say ah, it looks like it was just a problem with the car.

Now it's looking like it was a bomb.

BROOKS: That's right. ATF is on the scene. They got there. So they apparently found some -- a piece of detonator, some explosive residue or some kind of power source that's used to make an improvised explosive device like this, Rick.

SANCHEZ: Why would...

BROOKS: But it doesn't look that big -- like it was that big of a device.

SANCHEZ: But a bomb is a bomb.

BROOKS: It is. SANCHEZ: I mean this -- this means somebody was trying bring harm to this guy.

BROOKS: Absolutely.

SANCHEZ: Is he an abortion doctor?

BROOKS: No. No. That is -- that was the first thing I thought. He's just, apparently, a general -- a general practitioner. In fact, he's even the personal physician to the chief of police there in town.

SANCHEZ: How...

BROOKS: So, you know, and they said he doesn't have any enemies. You know, he's a pillar of the community. But what they're going to do -- he is chairman of the Arkansas Medical Board.

So was there a ruling?

Was there something involving that case...

SANCHEZ: Is that -- is that what you do in a case like this, you go back and start...

BROOKS: Absolutely.

SANCHEZ: It's hard to find fingerprints on a bomb, I imagine. But at least you can find motive for possible suspects.

BROOKS: Right. There are two investigations going on right now. The post-blast investigation -- agents are working that scene to try to get all -- to try to reconstruct the bomb, if they can. And then other agents are interviewing the people closest to him -- personal, professional -- to find out if there's anything -- anyone had any vendetta...

SANCHEZ: Got it.

BROOKS: ...against him.

SANCHEZ: Well, we'll keep checking on it.

And we'll get you back and we'll talk about this.

BROOKS: Yes.

SANCHEZ: Meanwhile, Wolf Blitzer is standing by in "THE SITUATION ROOM" -- Wolf, what you got?