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Oakland Police Shootings; More AIG Bonuses
Aired March 21, 2009 - 19:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
DON LEMON, CNN ANCHOR: Good evening, everyone. I'm Don Lemon.
We start with breaking news. It is out of Oakland, California, where a massive manhunt is going on right now. And we warn you, the pictures you're about to see are disturbing. There's blood -- there's blood that you're seeing right now on the streets there. We're now hearing that four Oakland police officers have been shot and an army of cops are now looking for the shooter after roping off several streets.
Again, this is all unfolding right now in Oakland, California. There is no word on the condition of the victims or what sparked that shooting. We're going to keep on top of this story tonight and bring you the latest details. But so far, we're hearing that four Oakland police officers have been shot. Details to come in this broadcast.
We turn now to another developing story that is sure to make many of you very angry. There are new claims today that AIG has underreported its bonus payouts. The Connecticut attorney general tells CNN he has documents that show the company paid out $53 million more in bonuses than first thought. A total of $218 million instead of the $165 million we have heard about all this week.
Connecticut is one of at least 20 states, one of at least 20 states in blue that you see there which have announced official investigations into the AIG bonuses. An AIG spokesman calls this report old news and tells CNN that the confusion apparently surrounds $55 million in bonuses paid out in December.
Connecticut's attorney general says he wants AIG to clarify the apparent discrepancy. Richard Blumenthal joins us now by phone.
Mr. Blumenthal, thank you, first of all, for joining us. But have you heard anything back from AIG explaining all of this since we found out this information?
VOICE OF RICHARD BLUMENTHAL, CONNECTICUT ATTORNEY GENERAL: We've heard a few explanations, but quite honestly, none of the apparent justifications hold water with me. Because whether the payments were made in December or March, I want to know how much they were. Because we deserve back every dollar of those $218 million apparently now that they acknowledge -- the company acknowledges were paid in bonuses. Most people understood that number to be $165 million -- most public officials, congressmen, and the public in general. And the company let stand about this understanding.
LEMON: Mr. Blumenthal, what about the people who say, you know, that there is -- that legally, these people were entitled to this money and had the companies, had AIG and other companies not paid out these bonuses, that would have left them exposed to lawsuits and possibly being sued for even more than they paid out?
BLUMENTHAL: These contracts were contingent on the company remaining in existence. This company would have ceased to exist but for the bailout with our taxpayer money. So there are various grounds on which the contracts could be made unenforceable or voided. I'm not saying they are illegal contracts, but the company, on the grounds of unconscionability or impracticality, could have made valid defenses to any lawsuits. And of course, anybody's free to sue, but these payments were to the people who totaled the corporation.
LEMON: And this -- what about this -- this is just the tip of the iceberg because all of these big companies pay out bonuses, we just don't know about it. This is the culture on Wall Street. This is business as usual. Why are people upset about it now?
BLUMENTHAL: They're upset about it because these particular bonuses are paid with taxpayer funds that are used to bail out this corporation. Sure, other corporations may pay bonuses, but primarily bonuses are paid to individuals who succeed.
LEMON: We're talking about bonuses, as well, to other companies who have received bailout money as well. That's what I'm speaking about.
BLUMENTHAL: And those should be stopped as well. They ought to be taxed ...
LEMON: OK.
BLUMENTHAL: ... at 90 percent or higher, if the Congress passes this law. If not, I believe the state should fill the gap and recover that money. But if the company want us to know exactly how much was paid, they need to come clean and acknowledge it was $218 million in taxpayer money that we deserve back.
LEMON: OK. Connecticut's attorney general, Richard Blumenthal, thank you very much. If you want to stick around, we would really appreciate your input, because we're going to be talking about this a lot on this broadcast, trying to get to the bottom of this. Connecticut, of course, one of at least 20 states looking for a way to try to figure out, at least legally, how to get some of this money back and to get to the bottom of all of this. Thank you so much, Mr. Blumenthal.
BLUMENTHAL: Thank you.
LEMON: About 20 people took a bus ride today to the homes of two AIG executives in Connecticut and they were there to vent their anger over all of these bonuses.
CNN national correspondent, Susan Candiotti, rode with them, and she joins now us live from New York.
Susan, do they think their messages were heard today by these folks? SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT: Don, I think they would tell you that, yes, they think that their message was heard. And what is their message? That they think that the salaries of many of these executives, in particular at AIG, seemed way out of whack with a country that is knee-deep in recession. And they think that, furthermore, that these executives ought to be willing to pay higher taxes. Not only executives of AIG, but of companies across the land.
In fact, this organization -- this rally today was staged by Connecticut Working Families Party and they had a lot to say during this tour of the AIG executives' homes. Here's part of it.
(BEGIN VIDEO CLIP)
JON GREEN, DIR., CONNECTICUT WORKING FAMILIES: And most of the people on this bus could never imagine what it would be like to be able to give back $6.5 million in compensation. People can't imagine ever earning that kind of compensation.
(END VIDEO CLIP)
CANDIOTTI: Now, only about 20 people were on board their bus. Frankly, they were outnumbered by the news media, but about 20 more joined them at that rally. What they did is they drove past the homes of two AIG executives who had given back their bonuses and they tried to deliver a letter, but naturally, they were stopped by security guards. It's no surprise that these people were coming to these homes.
Instead, they read a letter, actually applauding the executives for giving their bonuses back, but again saying that they think that salaries need to be brought in check. Not going as far as saying that the U.S. government ought to get involved and try to keep a lid on these salaries, but still, they say that so many people need help these days to keep their homes from foreclosure, that they are paying so much money in health care or don't have enough money to pay it, and they added this.
(BEGIN VIDEO CLIP)
MARK DZIUBEK, PROTESTOR: Eight years ago, this would have been a 20- second clip. And that would have been the end of it and nobody would have gave their money back.
(END VIDEO CLIP)
CANDIOTTI: Now, AIG tonight is saying that, in fact, the bonuses that were paid out were contractual in nature. And in a statement from AIG, they said, "These were not discretionary money. The plan that we had for them expressly provided that unless you are terminated for cause or resign without good reason, the payment is mandatory and there is no discretion involved."
LEMON: All right.
CANDIOTTI: Thank you, Don. LEMON: All right. Susan Candiotti -- Susan, we appreciate it. Thank you very much.
And make sure you stay with us for our conversation on AIG and all the outrage over Wall Street bonuses. It continues here. Our outspoken players are standing by to take your questions this hour. And later, Ali Velshi and the CNN Money team search for the truth inside the AIG scandal. See what they found in "AIG: Facts & Fury," tonight at 7:00 p.m. Eastern only here on CNN, right after this broadcast.
President Barack Obama is trying to move beyond the anger over AIG and return to his top priorities. But his proposed budget is already taking hits on Capitol Hill. The Congressional Budget Office says the president's plan will cause $9.3 trillion in deficit over the next decade. In today's weekly address, the president defended his spending plans.
(BEGIN VIDEO CLIP)
PRES. BARACK OBAMA, UNITED STATES: This budget must reduce that deficit even further. With the fiscal mess we've inherited and the cost of our financial crisis, I've proposed a budget that cuts our deficit in half by the end of my first term. That's why we're scouring every corner of the budget and have proposed $2 trillion in deficit reductions over the next decade. In total, our budget would bring discretionary spending for domestic programs as a share of the economy to its lowest level in nearly half a century.
(END VIDEO CLIP)
LEMON: Republicans see political gain in the potential red ink. They used their weekly response to pounce on the president's budget.
(BEGIN VIDEO CLIP)
GOV. HALEY BARBOUR, (R) MISSISSIPPI: President Obama's budget spends too much, taxes too much, and borrows too much. It's breathtaking. The new administration's budget for next year alone calls for $1.2 trillion deficit, nearly triple any past federal deficit. While families are cutting back, President Obama's proposed a massive government spending spree.
(END VIDEO CLIP)
LEMON: President Obama says he realizes critics accused him of taking on too many issues at once, but he says, quote, "The challenges we face are too large to ignore."
Iran's supreme leader is dismissing President Obama's call for a fresh start in relations. President Obama this week reached out to Iran in a videotaped message, but Iran's supreme leader says Iran will -- change, I should say -- its policies if the U.S. changes its policies. President Obama's video marks a dramatic shift in tone for the U.S. Former President Bush once labeled Iran part of the axis of evil.
In Eastern Pennsylvania, 5,000 people have been evacuated after a tanker truck overturned with a toxic load, a load of toxic acid. It happened over night near Wind Gap when the driver apparently swerved to avoid hitting a deer. The accident blocked the highway in both directions. Crews currently are trying to get the tanker righted so it can be towed.
High above the earth this afternoon, two astronauts did some weekend chores outside the International Space Station. They did routine maintenance to prepare for a future mission. They also attached a GPS antenna and an infrared camera. Alarms sounded towards the end of the space walk, but mission control called the problem, "nothing to worry about." Another space walk is planned for Monday.
The growing outrage over the AIG bonuses. How did Congress miss them? And are lawmakers actually hurting the economy by lashing out at AIG? We're digging deeper with radio host Neal Boortz and David Sirota; also, Roy Sekoff of the "Huffington Post" and Rick Newman of "Newsweek." These guys won't hold back. We'll take your questions as well.
We want you to log on to Twitter, Facebook, MySpace or iReport.com. That is how you can get your questions on the air and to our voices here. We'll answer them for you.
(COMMERCIAL BREAK)
LEMON: So we are continuing our focus here on AIG tonight with our very outspoken national voices. They are taking your questions. So we want you to weigh in.
But meantime, we want to get to the bottom of all of this. Let's get to the bottom of who voted on the loophole that makes AIG's multimillion dollar bonus payout perfectly legal. There's finger- pointing galore, and our Dana Bash is getting to the bottom of this mystery for you.
(BEGIN VIDEOTAPE)
DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT (voice-over): All this outrage about AIG's bonuses from the White House ...
OBAMA: People are right to be angry. I'm angry.
BASH: ... to Capitol Hill.
SEN. MAX BAUCUS, (D) FINANCE CHAIRMAN: The country is angry. Individual Americans are angry. I am angry.
BASH: Yet Congress passed the bill last month that the president signed into law allowing AIG to keep its bonuses. And for days, no one would fess up about who was responsible for a mysterious loophole that let that happen.
But CNN solved the mystery. It was the Obama Treasury Department and Senator Chris Dodd. Here's what happened. Last month's massive stimulus bill included a Dodd measure to strictly limit executive bonuses, but slipped inside at the last minute, an exemption for bonuses agreed to on or before February 11th, 2009. That allowed AIG to go ahead with its controversial bonuses.
On Tuesday, Dodd adamantly denied to CNN that he was responsible for the exemption.
SEN. CHRIS DODD, (D) BANKING CHAIRMAN: When I left the Senate, it was not in there. So when I wrote the language, there was no such language like that. I can't point a finger at someone who offered the change at all.
BASH: But the next day, an official at the Treasury Department flatly contradicted Dodd, telling CNN his office did know and that it was Obama treasury officials who pressed him to make the change, because they worried that his measure to limit executive bonuses in pre- existing contracts like AIG's would face a legal challenge.
CNN took that information to Dodd. He reversed course and admitted he did make the change.
(on camera): You did agree to modify this to put that clause in?
DODD: The alternative was losing in my view the entire section on executive excessive compensation. Given the choice, this is not an uncommon occurrence here, I agreed to a modification in the legislation, reluctantly. I wasn't negotiating with myself here. I wasn't changing my own amendment. I was changing the amendment because others were insisting upon it.
BASH (voice-over): Dodd insisted he made the change at the behest of the administration, but admitted he was wrong in initially denying his role.
(on camera): You were very adamant yesterday, very adamant that you didn't know how this change got in there. And now you are saying that your staff did work wit the administration.
DODD: Well, going back -- going back and looking, and obviously, I apologize.
BASH: Senator Dodd says he was not trying to protect AIG. In fact, he insists, when this was negotiated a month and a half ago, no one had any idea, quote, "We would be sitting here talking about AIG and the bonuses."
Dana Bash, CNN, Capitol Hill.
(END VIDEOTAPE)
LEMON: All right. Millions of dollars in bonuses after a bailout from all of you, the taxpayers, and I don't need to tell you, you know, it really rubs it in here, that is obvious.
So joining me tonight, conservative talk radio host, Neal Boortz. Thank you, Neal, for joining us. Author and journalist and columnist, David Sirota -- thank you, sir. Rick Newman, as well. He's the chief business correspondent of "U.S. News & World Report." And Roy Sekoff, editor of the "Huffington Post." Again, thanks to all of you for joining us.
Neal, are you buying it ...
NEAL BOORTZ, HOST, "THE NEAL BOORTZ SHOW": No.
LEMON: ... that he didn't know what the language was and no one stuck this in? Do you think it was put in there on purpose?
BOORTZ: OK, he's a politician, they lie. You know, I'm so -- I am so uninterested in the role Chris Dodd played. What bothers me here, and I've never been more afraid for our country than from this idiotic little brouhaha we have going on.
LEMON: But why do you say it's an idiotic little brouhaha?
BOORTZ: Because this is nine one-hundredths of 1 percent of the bonus money -- I mean of the bailout -- nine one-hundredths of 1 percent.
LEMON: I see David shaking his head. He's on the monitor next to you.
David ...
DAVID SIROTA, AUTHOR AND COLUMNIST: Yes.
LEMON: ... you don't believe that -- everyone's saying, here's -- everyone saying, you know what, we need to stop focusing on this. It's only a drop in the bucket. But every little drip, doesn't that fill the bucket?
SIROTA: Exactly. And there's two things here. First of all, since when did $200 million become no big deal? Especially something ...
BOORTZ: Wait, wait, wait. Hold on. Hold on.
When Chuck Schumer a couple of weeks ago said, we don't need to be quibbling about two -- when government, when government spends it on some pork, Chuck Schumer says, we don't need to be quibbling over $200 million. But then when somebody earns that money legally by a legally -
SIROTA: Earned it? Earned it? They earned the money? They earned the money?
(CROSSTALK)
SIROTA: That sector of AIG drove this economy into the ground.
LEMON: All right, David and Neal ...
SIROTA: They did not earn that money. They did not earn that money.
LEMON: David and Neal, hold on. I want Rick and Roy to get in.
BOORTZ: Well, I know leftist hate the word "earn."
(CROSSTALK)
SIROTA: Those people did not earn taxpayer money. They did not earn my taxpayer money.
LEMON: Rick, as a chief business correspondent for "U.S. News & World Report," I mean, you heard them talking about earning the money. This is all part of contracts whether or not -- I mean, it can be disputed whether or not they could have sued in all of this, but was it earned? Is it legal -- for them to do this?
RICK NEWMAN, US NEWS & WORLD REPORT: (INAUDIBLE). Well, again, we could have a distracting conversation, I guess, about how you define "earn." I mean, you know, Don, I'm actually not angry about these bonuses. I'm angry that they happened, but I think this is turning into a fairly cleansing, something like a cleansing process.
I think we're learning a lot about the mechanisms for how these bonuses get determined in the first place. I think that's very important. I mean, obviously, there's some chicanery involving that. I think this is, obviously, kind of a venting moment for the nation. And what I think, I hope happens is that we sort of digest all this ...
LEMON: Yes.
NEWMAN: And we get on with -- which really, a much bigger question is: what are we going to do about AIG?
(CROSSTALK)
LEMON: Not only AIG, but others.
Go ahead, Roy. Hang on, Neal. Not only AIG, but others, Roy.
ROY SEKOFF, EDITOR, HUFFINGTON POST: Yes. Since when does capitalism, let us say that we reward extreme failure? I mean, that's what we're looking at. And you know what? And, Neal, we can deal with this on more than one level. This thing stinks on so many levels.
Yes, you're right -- it's a drop in a bucket. So, let's talk about the bigger picture about the whole bailout and what we really did. I mean, we had an insurance company that turned into a casino, right, and made these horrible bets. And now they want us, the taxpayers, to pay off these bets, to pay off Goldman Sachs, to pay off Deutsche Bank.
BOORTZ: Roy, just a question.
SEKOFF: Yes.
BOORTZ: Tell me how the heavy equipment and aircraft leasing portion of AIG was a casino, since you know all about what AIG, tell me about that.
(CROSSTALK) SEKOFF: That's not what we're talking about. We're talking about the credit swap derivatives. You know it. You know what brought us here.
(CROSSTALK)
LEMON: Hang on, hang on. We all have to speak one at a time here. Let Roy.
Roy, what were you saying?
SEKOFF: You know what we're talking about. We're talking about the credit swap derivatives. We're talking about the financial arm of AIG.
LEMON: OK, Neal, respond to that.
SEKOFF: It was the hedge fund on top of the insurance company. And that's what brought this down. Not heavy the machinery.
BOORTZ: Let me tell you -- let me tell you what has happened here, OK? We have the Congress of the United States that has now voted to punish some people, whether it's for good reason or bad reason, to punish some people that they do not like by seizing from them property that they legally obtained.
LEMON: Neal, hang on, go ahead. Go ahead.
SIROTA: It's our taxpayer money, it's our taxpayer money.
BOORTZ: Oh, would you give that a rest? Give that a rest.
LEMON: What the Congress has done -- what the Congress has done is that it has intervened and said ...
(CROSSTALK)
SIROTA: It's our taxpayer money. It is our taxpayer money.
LEMON: There is something about -- Rick, there is something to say about it, that it is retroactive and it feels like someone is coming back and taking something from you that was already in your pocket or already earned.
NEWMAN: Yes, well, it happens.
SIROTA: But, Don, the key is here, it's our taxpayer dollars. It's our taxpayer money.
(CROSSTALK)
LEMON: Let him -- let him finish. Go ahead. David, let him finish. Hang on. Go ahead.
NEWMAN: Well, let me go back, I think Roy was actually hitting upon something and he's talking about something that involves a lot more money than $165 million in bonuses. LEMON: OK.
NEWMAN: And it's actually way more important, which is -- why is Goldman Sachs basically getting bought out at 100 cents on the dollar when they took risks going with ...
LEMON: OK.
UNIDENTIFIED MALE: Right.
NEWMAN: ... this is an enormous -- we're talking about $50 billion or $70 billion involved in that.
LEMON: All right, guys. Hang on.
NEWMAN: That's the real question.
(CROSSTALK)
LEMON: We're going to get back to this. We've got to move on. I'll let you guys answer just in a little bit. But we need to move on now. We've got to get some other news in.
So, thank you, guys. Neal, David, Roy, all of you, Rick, stick around because up next, we're taking a closer look at President Obama's role in the AIG blame game and what exactly he is taking responsibility for.
More from our panel, including answering your questions as well.
And we don't want you to forget about this. On next hour, Ali Velshi and our CNN Money team, they're going to join you. They're going to search for the truth, inside "AIG: Facts & Fury," coming up at 8:00 o'clock Eastern only here on CNN.
(COMMERCIAL BREAK)
LEMON: We started this broadcast with some breaking news and we want to update you now. New details on the breaking story, it's coming out of California. Four police officers have been shot and wounded in an Oakland neighborhood today in what police describe as two related shootings.
Now, a suspect has also been shot and captured and a female bystander was shot and wounded as well in this. No word on what sparked the shootings or the condition of these officers. We're going to keep on top of this story for you tonight and we're going to bring you the very latest. Of course, we wish the officers well. Again, breaking details as soon as we get them.
Meantime, back to our conversation about the economy. When President Barack Obama takes responsibility regarding AIG, what does all of that mean? We are continuing our focus on AIG tonight with our outspoken national voices. They are taking your questions.
President Barack Obama has been on the job fewer than 100 days, but this economy is his responsibility now, and it's really his number one priority. So, how responsible is President Obama for this AIG bonus loophole mess?
CNN's Jessica Yellin did some digging
(BEGIN VIDEOTAPE)
JESSICA YELLIN, CNN NATIONAL POLITICAL CORRESPONDENT (voice-over): In the face of the AIG mess, President Obama accepted the blame once ...
OBAMA: Listen, I'll take responsibility, I'm the president.
(CHEERS)
YELLIN: Twice ...
OBAMA: We are responsible, though. The buck stops with me.
YELLIN: Three times ...
OBAMA: Just go ahead and talk to me, because it's my job to make sure that we fix these messes, even if I don't make them.
YELLIN: Sounds noble. But when you listen closely, it's not clear what part of this mess he's willing to own.
OBAMA: Nobody here drafted those contracts.
YELLIN: True. But many contract law experts think his administration should have told AIG to delay or refuse to pay those bonuses.
OBAMA: So we find ourselves in a situation where we're having to clean up after AIG's mess.
YELLIN: But that's no surprise. The government started bailing out AIG last September. Treasury Secretary Tim Geithner helped negotiate AIG's first bailout plan when he ran the New York Fed. That's why so many critics accuse the administration of dropping the ball on these bonuses.
OBAMA: And I know Washington's all in a tizzy and everybody's pointing fingers at each other and saying it's their fault, the Democrat's fault, the Republican's fault.
YELLIN: OK, it's true. Cable chatterers can get overheated playing the blame game. But isn't it also fair to ask who in Washington knew and why didn't they act? After all, the president supports accountability.
OBAMA: I'll make our government open and transparent.
YELLIN: Could the president be ever so slightly redefining what it means to take responsibility? Remember when Tom Daschle withdrew his nomination?
OBAMA: I think I made a mistake. And I told Tom that. ANDERSON COOPER, CNN ANCHOR: What was your mistake, letting it get this far?
YELLIN: He never said what the mistake was.
(on camera): Critics say this isn't accountability, it's the appearance of accountability. On the other hand, administration insiders believe the press is out for blood and the president is taking the most open position he can in a tough situation.
Jessica Yellin, CNN, Washington.
(END VIDEOTAPE)
LEMON: All right, Jessica.
Our guests are back. Neal Boortz, David Sirota, Rick Newman, and Roy Sekoff.
OK, Neal, start with you. What is the Obama administration's role in this? What are the Republicans are saying or conservatives saying? How much -- you know, for the -- eight years before that, the Bush administration responsible for the economy. President Obama in office less than 100 days, but what is his role in all of this, the administration at least?
BOORTZ: Well, actually, I think his role is absolutely minimal in all of this. The initial -- the initial bailout of AIG was under President George Bush. And if somebody wanted to do something about bonus payments then, they could have asked for and sought a modification. It would take both parties to this contract to get that modification.
LEMON: So, then, why all the criticism about which venue he's going to, you know, should Geithner resign -- all of this, why is this when less than 100 days in office?
BOORTZ: Because the public has been whipped into an absolute frenzy over these bonuses and one has to wonder if this is being done in order to stop them from really thinking about the original bailout plan, the stimulus plan, and then this pork-filled budget they passed a couple of weeks ago.
LEMON: It looks like all of you are agreeing on this. But hang on. Before you guys start talking, I want to play this. I'm going to get to you, I promise.
BOORTZ: Yes.
LEMON: I want to play this, because -- maybe your minds will change about responsibility and all of this. I'm going to play Timothy Geithner as he was meeting in a hearing, a panel, on March 3rd, talking about the bonuses and saying, I didn't know about it. And then later saying he didn't know about it.
Let's play it and then we'll talk about it. (BEGIN VIDEO CLIP)
REP. JOSEPH CROWLEY, (D) NEW YORK: A multibillion dollar bill for American taxpayers -- $56 million in bonuses and are slated to pay an additional $162 million in bonuses to 393 participants in the coming weeks.
TIMOTHY GEITHNER, U.S. TREASURY SECRETARY: It's very important that we make sure that we are providing exceptional assistance to these firms. But that assistance is going again to achieve the objectives of these programs. Not to reward the kind of executives that got us in this mess.
(END VIDEOTAPE)
DON LEMON, CNN, ANCHOR: All right. That was March 3rd. And Representative Joseph Crowley, questioning him about it. Talking about, specifically, about the payments in December, the ones to come in March. This is Thursday with our Ali Velshi. Take a listen.
(BEGIN VIDEO CLIP)
GEITHNER: I was informed by my staff of the full scale of specific things on Tuesday, March 10th.
(END VIDEO CLIP)
LEMON: Roy, do you still agree that there's really very minimal responsibility here? The question is, when did they know it.
ROY SEKOFF, EDITOR, "THE HUFFINGTON POST": No, not at all, not at all. I mean, Geithner is coming out of this looking very bad. You know, you asked in the piece, who dropped the ball. Well, Geithner's dropped more balls than a drunk juggler on this one. He's been in it from the beginning. As they said in the piece, he was there back when he was part of the New York fed at the original bailout.
And then we saw, there was a story that there was a battle within the Obama administration about the people like Geithner who didn't want any limits on executive compensation or bonuses. And he won that fight against people like David Axelrod. And we're seeing now what happens.
LEMON: OK.
SEKOFF: And so for him to act like he didn't know and like he didn't have -- like he's shocked is very disingenuous.
LEMON: Rick wants to get in on this. Go ahead, Rick.
RICK NEWMAN, U.S. NES & WORLD REPORT: Yes, it is disingenuous. But I think back to last September when you know, what they thought they were looking at back then was certainly the collapse of this huge financial firm, possibly this sort of industrial-strength run on all the banks. And you know, they thought the whole global economy was at stake. And probably it's plausible that it never even occurred to anybody that these companies that were basically insolvent and would otherwise be bankrupt would be paying bonus money to executives. And not just to any executives, but to the very people who caused the problem!
LEMON: David, why are you shaking your head?
DAVID SIROTA, INDEPENDENT RADIO HOST: Well, first of all, we know that there's been a fed branch that has said that the crisis was overstated at the time that they passed all of these bailouts. The second thing that's important to know is that Timothy Geithner's chief of staff in the Treasury Department is a Goldman Sachs lobbyist, who was given a waiver to go into the administration, who had been previously lobbying for Goldman Sachs against executive compensation limits.
And now we find out that that same Treasury Department staff was the one that made Senator Dodd water down that executive compensation situation to create this crisis. So I think what we're seeing here is an Obama administration where the president's saying one thing and his administration aides are doing another.
LEMON: Are you saying they watered it down to create this situation on purpose?
SIROTA: No. What I'm saying is the president has said one thing about being tough on executive compensation and the people he's put around himself are Washington insiders and Wall Street insiders who are doing exactly the opposite of what he said he wants done.
LEMON: And David, when I was about to set up - when I was setting up the Geithner sound bite there, you were, it seems like you were in disagreement about whether or not Geithner, what he knew and when he knew it. What was that about?
SIROTA: Well, I think Tim Geithner knew about this. One of two things are going on, whether Tim Geithner's lying or he's incompetent. There was a January 23rd Bloomberg news piece, January 27th Bloomberg news piece that said that these bonuses were going to be paid out. So for the Treasury secretary to come before the people and say that he's not reading business news is absolutely absurd. Either he's lying or he's incompetent.
LEMON: OK. John, I've got to move on, but real quickly, because I want to get Neal, and get all of you. Do you think that he didn't know or he's not telling the truth?
NEAL BOORTZ, HOST "THE NEAL BOORTZ SHOW": Just one quick point. This is an opinion. Timothy Geithner is a willful, conscious tax cheat. Why would anybody by surprised that he would lie.
SEKOFF: You know, the biggest problem, Don, is he's opened the door for conservatives who are against all caps on executive pay to suddenly become born-again populists, you know. They're storming the barricades. They're so upset. And that is the height of hypocrisy and that is what Geithner is allowed to happen. They're now taking pot shots at Obama, saying it happened on his watch. LEMON: Rick?
NEWMAN: You know, I think both the Bush administration, the Clinton administration has been coddling Wall Street and at the same time they've been trying to act tough. There's this whole thing that we can't let the Wall Street talent slip away. Because they're the guys who know how to fix the problem.
LEMON: OK.
NEWMAN: You let the Wall Street talents slip away I have a feeling they'll find some other talent -
LEMON: We know your opinion, David said either he's lying or extremely incompetent. We're going to talk more about this thing. So all of you. Neal, David, Roy and Rick, stick around. Up next, AIG isn't the only company that accepted bailout money and has paid out bonuses or will pay out bonuses. Which company is the next AIG? You'll find that out.
Also Ali Velshi and the CNN money team working over time to get at the truth. Inside the AIG scandal. See what they found out "AIG Facts & Fury," tonight 8:00 p.m. Eastern, only on CNN.
(COMMERCIAL BREAK)
LEMON: All right. We have some new developments to tell you. This one just came in within the last few minutes. It's on AIG bonuses. I'm just kind of reading the story now. CNN has received a new statement from AIG, just minutes ago, responding to the Connecticut attorney general's claim that AIG has underreported its bonus payments. The attorney general was on our air at the top of this show. Now, according to Mark Herr, AIG spokesman, here's the quote.
Attorney general Blumenthal's claim that he has discovered additional AIG retention payment is incorrect. The payments he appears to be referring to were made months ago, have been widely reported on and were specifically disclosed to the Treasury. As we told you earlier, the Connecticut attorney general has documents that he believes - thank you very much for that - that he believes show the company paid out $53 million more in bonuses than first thought.
He says the total is $218 million instead of the $165 million we heard about all this week. The company and its new statement says the payments he's referring to were paid out before the current controversy erupted. So just getting the latest information from here and the actual statement so that I have it when I talk to these guys.
OK, so Neal, David, Roy, and Rick, those are the comments that you hear from AIG about what exactly happened. So I'm going to start with David, first, about that. What do you - they're saying these are ones that are from December and they're older ones. Did we know that to be true? And can we trust that at this point?
SIROTA: I don't think we can trust anything coming from AIG. I mean, they're trying to clean up their image. Look, this is an issue of what is the government prepared to do to stop this moving forward? Frankly, if there is one point that Neal and the right as made, and again, I think Neal and the right complaining about executive bonuses is about as credible as Bill Clinton saying that he didn't have sex with that woman, Monica Lewinsky. But one thing, I think, that there's been credibility on here is that these are unacceptable bonuses and that the entire bailout culture, the whole bailout culture has created this.
LEMON: Let's talk about the whole culture, the whole Wall Street culture. Because we're saying, who's going to be the next AIG? So who's the next AIG?
Because a lot of these companies, many of these companies are paying out bonuses, they're not just reporting it and we haven't heard about it. So who's the next AIG?
We already know the answer to that question with regard to bonuses. It's NEWMAN: Merrill Lynch. We know that Merrill Lynch's bonus pool was $3.6 billion. That's 20 times the amount we're talking about with regard to AIG. And Cuomo, the New York attorney general has the list of -
LEMON: Citigroup, Wells Fargo, JPMorgan.
NEWMAN: Absolutely. And others.
SEKOFF: And Rick, that's the problem with the tax bill that the house just passed. It only starts in January. And don't forget, Merrill Lynch rushed through $2.5 billion in December. So if we let that go down the way the way that's going to go down, then John Thayne will be rewarded for the trickery of giving the bonuses before January.
LEMON: OK.
SIROTA: The other point going forward, we can't keep dumping money on corporations like AIG and like other banks. We need actual structural reform. If we're going to nationalize the banks which I support, let's nationalize it. Let's stop throwing taxpayer money at them.
LEMON: I'm sitting here just reading Neal's face. Because I can see him in the monitor the whole time. He's like I can't -
BOORTZ: Are you listening to this language?
LEMON: I'm listening to it.
BOORTZ: Just listen to it. Listen to this language. That when a company pays a bonus pursuant to a contract, it's trickery. I can't wait to see that little blog on the "Huffiington Post."
SIROTA: Neal, they were supposed to be paid in January. They were supposed to be paid in January but when they knew they were going to merge with B of A, he rushed them out. That's what the trickery was.
BOORTZ: You know, I have to say-
LEMON: I see the points on both sides here. Because we're going to talk about that a little bit later.
BOORTZ: Let me say something about Rick, I think it was Rick who said, and I want to support his stance. From now on and we've learned this through practice in this country, everything that the private sector says is a lie. Everything that government tells us it's the truth. Let's just go on that policy from now on.
LEMON: Rick, did you say that?
SEKOFF: No one's saying that, Neal.
(CROSSTALK)
SEKOFF: And we saw that Chris Dodd just prove that that wasn't true and we saw that Tim Geithner said that that wasn't true. No one is sitting here saying everything the government is saying is true, and all business is bad.
(CROSSTALK)
LEMON: Hey, guys. Hang on. We have to ask you a little more. Real quickly. How much time do we have, Emily? We have 30 seconds. I wanted to get some of the responses in here. One which I thought was really important, why are AIG bonuses causing such outrage? We loosened this shadow banking credit default swap FIN system on the world. Then why such controversy then, David?
SIROTA: That's the whole point is that we've created a culture that says it's completely OK to turn the financial industry into a big casino that pays out huge bonuses, paid for by taxpayers to the people who caused the problems. And Neal's laughing. You want to talk about these contracts. These contracts were fraudulent.
BOORTZ: I'm laughing because -
SIROTA: These contracts were - we are expected to believe that the government can't invalidate these contracts, but can go into GM and Chrysler and invalidate contracts for union workers?
LEMON: David and Neal, hang on. David and Neal, hang on, both of you. Neal, I mean, you can disagree with his argument. I don't know if you can call the man asinine.
BOORTZ: I call him (inaudible)
I can. I mean, you can disagree with me.
LEMON: Hang on. We're going to have to do this after the break. I really have to get to the break here. You guys are on television, so you know exactly how that is. We're going to talk to you a little bit more and get some more questions in.
So Neal, David, all of you, Roy, make sure you stick around, and we're going to get and Rick as well. So stick around. Up next, President Obama on the road this week on a two-day campaign-style swing through California. He's really all over, touting this, you know, this economic recovery that he's selling to the American public. And also trying to figure out who is responsible. Is he spreading the right message in the right platforms? We're going to talk about that.
And coming up at the top of the hour, our Ali Velshi and the CNN money team, they search for the truth, inside the AIG scandal. See what they found in "AIG: Facts and Fury" 8:00 p.m. Right after this. Back in a moment.
(COMMERCIAL BREAK)
LEMON: All right. We turn now, our attention now to President Barack Obama with our outspoken national voices. They are taking your questions tonight. The president has an ambitious agenda. Critics say a little too ambitious. When he heard of, you know, he was going to be on "The Tonight Show" this week, he took some hits from critics who said he should be back in Washington focused on the bigger issues. When the president heard about that, he kind of laughed it off.
(BEGIN VIDEO CLIP)
SEN. JON KYL (R), MINORITY WHIP: He flies off to Los Angeles tonight to be on the Jay Leno show. My suggestion is that he comes back, since he's taken the full responsibility to get his people together and say, all right, I want to know exactly what happened, who did what when, and how are we going to prevent this from ever happening in the future.
PRES. BARACK OBAMA, UNITED STATES: Somebody was saying the other day - today, I think, that I shouldn't be on Leno. I can't handle that and the economy at the same time.
(END VIDEO CLIP)
LEMON: All right. Neal, David, Rick, and Roy. They both join us. So you know what, Rick, the President said, the American people at this point, they need someone who can walk and chew gum at the same time. I happen to think that that's absolutely true. But, possibly, is he biting off more than he can chew?
NEWMAN: I think it's a question of how he handles all the leadership issues. Accountability, he's talked about transparency. We really - this couldn't -
(CROSSTALK)
LEMON: Is he doing that? Is it a misconception that he's not doing that? Is he doing that? Is he concentrating and focusing on --
NEWMAN: It sort of seemed like he was a slogan at the beginning and he's figuring out what the slogan actually means. I mean, one of the things about AIG, is to go back to that, this has been the most opaque spending or $170 billion, probably in American history. We have not known until this week where this money is going, what it's been spent on, and these things are just one after, kind of been spinning out of control. And he definitely needs to get ahead of these things. And by the way, fixing the economy is not just a matter of pushing some buttons in Washington. This is going to take months whether he does everything absolutely right or does it wrong.
LEMON: And Neal, there was lots of criticism from conservatives. I was on a couple of conservative radio shows this week and they were talking about wrong venue for this, why did he go on "The Tonight Show," he shouldn't be doing that. Shouldn't he be everywhere, trying to get the message out about what's going on what he's doing.
BOORTZ: First of all, for the record, I'm a libertarian, not a republican, but at any rate -
(CROSSTALK)
BOORTZ: Barack Obama gets to decide how he feels he can best deliver his message to the American people. And it's not up to us to go sniping against him on that issue. If he felt that Leno was appropriate and he wanted to do it, fine. The only concern I might have is the cost. And by the way, we're not discussing this, but his remark about his bowling score, come on, folks, can we stop that.
Can we give that a rest, too? I kind of thought it was funny myself.
LEMON: I thought - I was surprised, Neal. I thought that you would be outraged by it. Because I know you're not a conservative you say but you're more conservative than the rest of the folks on the panel. I would have to think that.
But the so-called liberal shows that I was on this week talking about what's going on said not a big deal. Conservatives oh, this was a gaff, we shouldn't be doing it. Sarah Palin statement, blah, blah, blah. Go ahead.
BOORTZ: He decides how he wants to get the message to the American people.
LEMON: Go ahead, Roy.
SEKOFF: We don't have to make that decision for him. I mean, Don - Senator Kyl, it was that the most ridiculous grand standing you've ever seen, you can't do Leno and work on fixing the problem? It was absolutely absurd. And by the way, if you watched what he did on Leno, it was one of the more substantive discussions about the economy than I've heard in a long time. I thought it was a great spot.
LEMON: All right. David.
SIROTA: Don, a lot of the criticism has been that Obama can't do all of the policy issues. He can't tackle energy and health care and the financial crisis all at the same time. That's another part of the criticism. And I think, again, that's not right, because so many of these crises are interconnected. The health care crisis is connected to the wage crisis. It is connected to the economy. If he doesn't tackle all of these issues at the same time, which I think he can - if he doesn't, though, then he will not be a success and the economy will not bounce back.
LEMON: Hey, Rick, I want to move this forward with your reporting and I know you've been doing lots of excellent reporting on this. You know, the last thing we talked about was the next AIG. And you sort of pointed out. But where is this going to go? I see more bonuses, news about bonuses coming out, trickling out and then people saying, OK, wait, it's a drop in the bucket but wait a minute. All of a sudden the bucket is going to get filled when you start looking into this.
SEKOFF: I think the next possible turn of the screw is are we going to learn the names of these people at AIG and at Merrill Lynch. Andrew Cuomo, the New York attorney general, has these names. It's about 620 people total. Are we going to learn those names or is he going to be satisfied that the bonus money has been given back and maybe it's not a security thing. What I hope comes of this, Don, is that we sort of get this venting out of our system. Everybody pretty much agrees at this point it's outrageous -
LEMON: Let's focus on -
SEKOFF: We really need to get to $70 billion that went to AIG counter parties not even asked to take a haircut on that money. Is that a good use of taxpayer dollars or not? And really dig into some of the meat of this.
It's a much more complicated issue, it's much harder to focus on those.
LEMON: I've got to end it here but you are all invited back. You're such great panelists. I really got a lot of insight from you. On your day off, we already had this conversation, on Neal Boortz. Thank you for coming in.
BOORTZ: Sure.
LEMON: I know you live in Florida but CNN is there. You can come on the show as well.
BOORTZ: Just when it's cold up here.
LEMON: David, thank you. Rick, thank you and also, Roy. We really appreciate. We'll all be watching all of your platforms to see what you've come up.
UNIDENTIFIED MALE: All right, Don. See you next time.
LEMON: And make sure you stick around. Coming up at the top of the hour, Ali Velshi and the CNN money team search for truth inside the AIG scandal. See what they found out at "AIG: Facts and Fury" on the job right there. Getting to the bottom of the situation. That's coming up at the top of the hour for you.
(COMMERCIAL BREAK)
LEMON: We're following breaking news here on CNN. We heard just minutes ago from police in Oakland, California, where four police officers had been shot in a neighborhood. The suspected gunman has been killed and all four officers are in critical condition tonight. That information just coming out of a press conference that's being held there now. Police say the suspect shot two officers, then shot the other two as police were responding. A female bystander was shot and wounded as well in this. No word on what sparked the first shooting. We're going to keep on top of this story for you and bring you the very latest here on CNN. So stay with us.
Ali Velshi and the CNN money team working overtime, and digging deeper into, to try to get to the bottom of this AIG bonus story. The bottom of this mess as we call it. Tonight, they're taking a closer look at the outrage, the fallout and who is responsible for this. It is called "AIG: The Facts and the Fury." Our CNN Money team are working on it. It airs 8:00 tonight 8:00 p.m. Eastern, only on CNN.
(COMMERCIAL BREAK)
LEMON: Make sure you send your comments to us, Twitter, Facebook, myspace or ireport.com. I'm Don Lemon. I'll see you back here at 10:00 p.m. Eastern. "AIG: Facts and Fury" starts right now.
ALI VELSHI, CNN HOST: three letters, the source of quite a controversy this week, AIG. Outrage, over $165 million in executive bonuses as the insurance giant receives billions in bailout cash. Anger over the lack of accountability on Capitol Hill and from the White House but we know the story, we know the players and tonight, it's about to become -
