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Change in U.S. Approach to Mexico?; Rich and Infamous
Aired March 24, 2009 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEOTAPE)
UNIDENTIFIED FEMALE: Money for the needy.
UNIDENTIFIED PROTESTERS: Not for the greedy!
T.J. HOLMES, CNN ANCHOR: Touring the lifestyles of AIG executives, some of whom are giving back their bonuses.
RICHARD BLUMENTHAL (D), CONNECTICUT ATTORNEY GENERAL: None of the apparent justifications hold water with me.
HOLMES: Connecticut's attorney general says, wait a minute. There's more to the payouts than meets the eye. I will talk with him this hour.
Twice as many boots on the ground, mobile X-ray machines, cross- trained dogs?
UNIDENTIFIED FEMALE: We want to help our colleagues in Mexico, but it does have an impact on safety and security within the United States.
HOLMES: Why the sudden change in America's approach to Mexico?
Your national conversation starts right now.
(END VIDEOTAPE)
SANCHEZ: And good afternoon, everybody. I'm T.J. Holmes, sitting in today for Rick Sanchez. Got a lot going on today, including what you're seeing there on the screen.
Timothy Geithner back in front of Congress, alongside with Ben Bernanke, yes, two very important gentleman in this whole economic mess. They're under fire again on Capitol Hill.
Also, President Obama today will be selling his economic plans again. This time, he will be talking directly to you in a prime-time press conference. You can see at 8:00 here, right here, on CNN.
But, first, we will get another question answered before we get to all that stuff. And it's about Wall Street. It's about the Dow. It's about the market. Is the worst possibly over? A lot of questions about the stock market finally bottoming out.
You see the numbers there today, hanging onto all the gains that were made yesterday. And what were those gains? They were huge, a surge on Monday of nearly about 500 points. That means it's up about 20 percent in the past two weeks. Take a look at that, a lot of traders, a lot of people saying, guessing, hoping, praying that the worst could be over.
Not everybody saying it's over, however.
Susan Lisovicz standing by at the New York Stock Exchange.
Susan, could it possibly be over? We have said that a few times in the past couple of months and then we nosedived again, but could this be it?
SUSAN LISOVICZ, CNN CORRESPONDENT: Huh.
HOLMES: Ah.
LISOVICZ: T.J., well, look, this could either be a very big rally in a bear market or the beginning of a bull market.
HOLMES: OK.
LISOVICZ: And you can never pick the highs or the lows of a market. That is a fool's game. It's certainly worth watching. And there's no question that the gains have been real in the last two weeks, T.J.
The Dow has jumped 19 percent two weeks through yesterday, yesterday's gains, point gains, the fifth best ever. Remember, two weeks ago the Dow was at 6547, right now, very modest decline after a very big jump yesterday. We're above 7700.
So, we need to see more of it, but it is encouraging in what has been described a sell-off as once in a generation.
HOLMES: All right, yes, and we saw the plan. The big jump yesterday came after the plan was unveiled by Timothy Geithner, the treasury secretary. People seemed to like it. Wall Street seemed to like it.
Is that the only thing we can point to as far as the big gain we saw yesterday? Of course, we have been seeing other gains last week. So, what are we pointing to that is causing this thing?
LISOVICZ: Well, there's no question that there has been some optimism and that investors, perhaps because stocks are at bargain- basement prices, are responding.
For instance, today, T.J., home prices rose for the first time in a year. They actually increased from January over December. Now, annually they are still down. Yesterday, we got existing home sales. These are used homes, if you will. They actually, sales of those grew last month. We had Citibank and Bank of America saying they made money in January and February of this year.
These are things that the market has responded to. So, we need to hear more of that. Obviously, they like the government intervention. We need to hear less acrimony from Washington. We're all in this together.
HOLMES: Yes.
LISOVICZ: We're all going to have to work together to get this economy going again. And we're starting to see some life from the bulls.
HOLMES: Some life from the bulls. Everything, we can't expect it to turn around overnight, but that confidence is so key, just a little more positive news day in, day out, and that's going to be a big difference.
Susan Lisovicz, as always, we appreciate you at the New York Stock Exchange. Thank you.
LISOVICZ: You're welcome.
(BEGIN VIDEO CLIP)
BEN BERNANKE, FEDERAL RESERVE CHAIRMAN: These are loans which we expect to get paid back.
UNIDENTIFIED MALE: Congressman, could I try?
UNIDENTIFIED MALE: I think that's an improper answer.
(END VIDEO CLIP)
HOLMES: All right. We're used to seeing this by now, whatever you want to call it, Q&A, and some might just call it grandstanding. But some of these exchanges, you throw these out. Exactly how did the Fed chairman, Ben Bernanke, and also the treasury secretary, Timothy Geithner, do when they faced Congress today?
We will be asking about that.
Also, the president going before a different audience tonight, us. What will the president say? And how will he try to convince you that he is right?
Stay here.
(COMMERCIAL BREAK)
HOLMES: All right. Welcome back here to the CNN NEWSROOM, everybody. All right.
This was a big day and some big names sitting on Capitol Hill today, Ben Bernanke, the Fed chairman, sitting alongside Treasury Secretary Timothy Geithner in front of the cameras and in front of Congress answering some pretty tough questions. Certainly, you knew that the AIG bonuses would come up. That's certainly inevitable. And it did come up today, and they did their best to try to answer a lot of these questions. To answer some my questions, A.B. Stoddard from "The Hill" newspaper joins me right now.
A.B., good to see you.
We know that Timothy Geithner seemed to have a good day yesterday. We saw stocks jump after he released the plan. Everybody seemed to like it. So, is he continuing his momentum today? How did he do?
A.B. STODDARD, ASSOCIATE EDITOR, "THE HILL": Well, it was a tough day, actually. And obviously the AIG bonuses came up.
And I think Secretary Geithner did come to the committee prepared to honor the outrage that the bonuses produced and to take a beating from members of Congress in both parties. But he also came asking for unprecedented authority to regulate non-banks, so that -- to sort of prevent another AIG from -- from happening.
And there's going to be some firm resistance from lawmakers and a lot of questions also about -- about his toxic asset plan and how much confidence they have in him for -- to successfully execute that plan.
HOLMES: All right. You mentioned in there, though, the outrage over these AIG bonuses. And a lot of people seem to be getting religion right about now and pointing fingers at different folks.
Well, the president is one who seems to be, one day, he's really upset about it. The other day, he's saying, everybody, calm down. Let's take a quick listen. We're going to start talking about it on the other side.
(BEGIN VIDEO CLIP, MARCH 16, 2009)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I don't want to quell anger. I think people are right to be angry. I'm angry.
(END VIDEO CLIP)
(BEGIN VIDEO CLIP, "60 MINUTES," MARCH 22, 2009)
OBAMA: we can't govern out of anger. We've got to try to make good decisions based on the facts, in order to put people back to work, to get credit flowing again. And I'm not going to be distracted by what's happening day to day.
(END VIDEO CLIP)
HOLMES: All right, A.B., help me here.
(LAUGHTER)
HOLMES: And, just last week, he said, I'm not one to quell anger. I'm angry.
Sunday, on "60 Minutes," he said, hey, we don't need to be so angry.
What is he trying to do here, and is he doing it?
STODDARD: Well, it -- it almost looks from the outside like a flip-flop.
But what's happening is that the president is at the mercy of the public sector, trying to keep the trust of the private sector, in order to use their money to successfully partner with the government to buy up these bad assets.
He needs that money. Otherwise, he's left with nothing, just another government bailout. And so when he heard from these people beginning middle of last week, the testimony on Wednesday of Edward Liddy of AIG and into Thursday and Friday, what he was hearing from Wall Street was, we don't need this. We don't need to come before Congress and take a lashing. We don't need to be retroactively taxed and punished. And we don't know what kind of arrangement we will be getting into with the government.
So, once he heard some cool heels in the industry, you saw him change his rhetoric.
HOLMES: All right. And I want to explain in Howard Bragman. And I want to explain why we're bringing in Howard Bragman. He's a longtime Hollywood publicist and a crisis expert.
And that part about the crisis expert, I don't want to say the president has a crisis just yet here, Howard. We appreciate you being here.
But you deal with all kinds of situations in your history, not necessarily with -- with politicians. But do you see a lot of parallels with this president and trying to package himself and sell his ideas, because he is such a big celebrity, that he has so much of that capital, if you will? So, how do you think he's doing trying to sell himself and trying to package a lot of things and sell them out there as a politician? But, also, he knows he's a pretty popular guy.
HOWARD BRAGMAN, FOUNDER, FIFTEEN MINUTES PUBLIC RELATIONS: Well, he is popular.
And I will tell you, as judging by the stock market the last couple of weeks, he's obviously doing something right. What we all have to understand is that there's two things going on. One is a real financial crisis. The second is a crisis in our heads or a crisis of confidence.
And he has to deal with both of these issues. So, on one, he's talking directly to the Wall Street types and saying, what do you need to buy this bad debt back? How do we handle? On the other hand, he does things like, he goes on "Jay Leno," and says, hey, we're going to get through this, and I need your help.
And I will tell you, anybody in the P.R. world has to be impressed with Barack Obama and the intelligent way that he handles his communications.
HOLMES: Now, would you say, Howard, given your experience that -- is there anything you would tell him to do differently? Or is there any -- I mean, like you said, you sound like you're giving him pretty high marks for what he's doing. But does he run any kind of risk before seeing him as talking out of both sides of his mouth?
BRAGMAN: No, I really don't, because even though he said that he was angry, he also said, I'm not going to run the country out of anger.
You can be angry, but not base your decisions on anger. And I will tell you, there's no such thing as mass media anymore, T.J. If you get somebody on "American Idol," maybe you get 25 million, or "Dancing With the Stars," around 25 million. That's not even 10 percent of the country.
So, he has to be aggressive, use every kind of media outlet he can to get his message out there in these times. And it's sort of like a diet. You want a balanced diet.
HOLMES: Yes.
BRAGMAN: And he wants a balanced diet. He wants to do some shows like "Leno," some serious shows like "60 Minutes," a press conference tonight.
He really, really gets what he has to do, because this is -- will not only define his presidency. This crisis will determine if he's going to be president for eight years or four years.
HOLMES: Eight or four.
A.B., let me bring you back in here.
A lot of people took note of the fact Timothy Geithner, the treasury secretary, when he made this announcement about the details of this plan, there wasn't a camera in the room. He didn't get a lot of high marks the first time he kind of gave some generalities about the plan a while back.
So, do you think certainly that was a calculated move? And also how important is it tonight for the president to get attention back on himself, instead -- and being the pitch man, instead of allowing Timothy Geithner to do it?
STODDARD: Well, that's right.
This is actually good timing for Timothy Geithner. He had his best day yesterday, and then he had this uncomfortable hearing. And then tonight we switch topics back to President Obama, which will be all we talk about tomorrow.
But onto Geithner's rollout, he -- specifically -- they did learn their lesson from this debacle of the first rollout in February. Timothy Geithner doesn't do well in front of cameras and he doesn't do well talking in vague terms.
He does well answering specifics, which he gave to the print media, and he did well with no cameras rolling, very comfortable, very confident. The markets reacted well. And then onto this press conference tonight, Barack Obama is happy to change the subject off of Secretary Geithner and onto the future.
He wants to talk about his budget, why it's important for Congress to pass the programs that he's promoting. He wants to talk about the hope he sees in the housing markets with this unexpected spike in existing sales. And he wants to talk about, not the stock market, but this toxic asset program, going forward, why he thinks it's going to help the taxpayer, help people on Main Street, help with lending and liquidity. And that's what we're going to see out of him tonight.
HOLMES: Well, like you said, that's what we're going to see, because he does so well in front of the camera, even though Timothy Geithner does not.
You two, however, do just wonderfully in front of the cameras.
(LAUGHTER)
STODDARD: Thank you, T.J.
HOLMES: Howard, A.B., thank you all so much for being here and appreciate the discussion. You all take care.
BRAGMAN: Thanks, T.J.
And we're certainly not done talking about the president's speech to the nation tonight. A little later, we will be talking to Jared Bernstein. That is one of the White House's top economic advisers.
(BEGIN VIDEO CLIP)
RANDI KAYE, CNN CORRESPONDENT (voice-over): It was dubbed the Lifestyles of the Rich and Infamous bus tour and organized by a group called Connecticut Working Families.
They came to see the mansions of AIG executives who collected big bonuses, first stop, affluent Fairfield, Connecticut.
(END VIDEO CLIP)
HOLMES: And those big AIG bonuses are attracting all kinds of attention, as you know. And one group of activists, as you heard there, they're going on a tour to see the homes of the AIG execs who got some of that money. Some of those execs also gave some of that money back.
Also, another story, a horrific one, out of Oakland this weekend, and now one more life claimed days later by the man who shot it out with police there in Oakland.
Stay here.
(COMMERCIAL BREAK)
HOLMES: And, as always, Rick Sanchez, Mr. Twitter himself, he always has you participate in this newscast, and no different today, even though I'm T.J. Holmes sitting in for him today.
And let's go to a couple of comments we have been getting so far about some of the stories we're covering today. We will turn to that MySpace page right over there. There it is, someone writing in, saying, "I may be wrong, but this may qualify as seeing results for the Obama team/the Obama plan."
Of course, we have seen the stock market do well in the past day, even week or so, after some of the financial plans announced by the president.
Also, right there, we will go to the -- to that Twitter page as well. There's one from Carl here saying that "I think he is going to surprise" -- he being Geithner -- "surprise a lot of people. But I think he would rather go to the dentist than deal with Congress."
Geithner of course on Capitol Hill testifying before the House Banking Committee -- House Finance Committee, rather, along with the Fed chairman, Ben Bernanke.
Let's turn to a horrible story, just horrible story we saw out of Oakland, out of the Bay Area over the weekend. A fourth Oakland police officer now dead. He's been clinging to life support since the shooting and a manhunt, as well as a standoff over the weekend. Three other policemen and the man they were trying to arrest also died.
So, this is what happened. Again, this was Saturday. Police call this a routine traffic stop. They say the driver then shot the motorcycle officers that pulled him over. And then he fled and was holed up in an apartment building. And then the SWAT team comes in. They killed the alleged suspect, but not before two other police officers die in that shoot-out.
People in Oakland remembering those officers today who were killed in the line of duty. We're also seeing memorials, would you believe it, to the man who allegedly killed those police officers? Some people in Oakland say they are sad for that man, as well, the alleged shooter.
Now, one woman interviewed in today's "San Francisco Chronicle" says people from other cities don't understand life in East Oakland and what it's like to exist around constant violence, sadness, and death.
(COMMERCIAL BREAK)
HOLMES: All right. Well, a lot of folks who are upset about the whole AIG bonus mess, they actually went to the homes of some of the AIG executives. No, they were not invited.
CNN's Randi Kaye aboard now the bonus bus.
(BEGIN VIDEOTAPE)
KAYE (voice-over): It was dubbed the Lifestyles of the Rich and Infamous bus tour and organized by a group called Connecticut Working Families.
They came to see the mansions of AIG executives who collected big bonuses, first stop, affluent Fairfield, Connecticut. AIG executive vice president Douglas Poling lives here, a senior figure in the derivatives trading that brought AIG to its knees.
The company says Poling plans to give back his $6.4 million bonus. This group wanted to ring his doorbell and deliver a letter, but, along with plenty of media, they were stopped at the driveway.
UNIDENTIFIED MALE: I need you to respect the property line.
(CROSSTALK)
UNIDENTIFIED MALE: OK?
UNIDENTIFIED MALE: OK.
KAYE: So, 24-year-old Asaad Jackson read the letter from the street. Security looked on.
ASAAD JACKSON, MEMBER OF LIFESTYLES OF THE RICH AND INFAMOUS BUS TOUR: You might have noticed that things are not going very well for the rest of us.
KAYE: Jackson earns $7,000 a year teaching music, and owes $2,000 in medical bills.
JACKSON: I would like them to come out and see our community, how we're living, what our community is like.
KAYE: In Hartford, Connecticut, where Jackson lives, 47 percent of children live in poverty.
(on camera): The point of this bus tour was not to create more anger about AIG. It was to show those who are struggling what kind of lifestyle millions in compensation and bonuses can buy.
(voice-over): But it was also something of a political stunt. It seemed the media outnumbered activists, who included members of ACORN, a controversial national group that campaigns for low-income families and organizes voter registration drives.
Next stop on the tour? This multimillion-dollar estate with a stunning view of the harbor. Its owner? AIG executive James Haas, also involved in the company's derivatives business. He earned the name "Jackpot Jimmy" from a New York tabloid because of his fat bonus check, which he says he plans to give back.
(on camera): Do you feel like some of these executives from AIG and other companies are out of touch with people like you?
JACKSON: Somewhat.
KAYE (voice-over): Though at least one of the Haas family's neighbors disagrees.
UNIDENTIFIED FEMALE: This is a very good family who's done a lot for the community. And I'm personally very sorry to see them singled out.
KAYE: Haas, Poling, and hundreds of others at AIG got more than $165 million in bonuses, after the federal government bailed out AIG with $170 billion in taxpayer dollars.
UNIDENTIFIED FEMALE: Money for the needy.
UNIDENTIFIED PROTESTERS: Not for the greedy!
KAYE: The bus's final stop? AIG's Connecticut office, at the doorstep of the company whose sudden collapse helped push the United States into its worst economic crisis for generations.
Randi Kaye, CNN, Fairfield, Connecticut.
(END VIDEOTAPE)
HOLMES: And as has been reported by New York attorney general, Cuomo says that at least 15 of the top 20 who got bonuses from AIG are going to giving those bonuses back. So, a lot of executives are going to be handing those in. And Cuomo said they might be able to recover as much as $80 million of that $165 million that was doled out in March.
Well, AIG executives who got some of those bonuses, they have been pretty quiet. But, as their CEO testified last week, many feel that their lives are threatened if they do go public. Their attorneys are speaking, however. Rick Sanchez will back in the seat tomorrow. He will be talking to at least one of those attorneys. You certainly do not want to miss that.
Now, one of the reasons AIG gave in defending the bonuses to its executives was that Connecticut law could force them to pay double the amount if they breached the contracts. We have got the attorney general of Connecticut. He's coming up with us to tell us if that's true. Also, he has some different numbers about those bonuses. We will ask him to do that math for us.
Also, a photojournalist laid off, not once, not twice, three times. And now he turns the camera on himself and tells his story.
(COMMERCIAL BREAK)
HOLMES: All right. Welcome back.
We appreciate you all, as always, being here. And appreciate you participating in this newscast. Want to keep sharing your comments you're sending in about some of the things we cover right here.
We will go to Rick Sanchez's Facebook page.
Let's go Joe Tanner there at the top. He says: "CNN should hire that publicist that was just on with T.J." He was just here a moment ago. "He was the only one smart enough to see the difference between saying don't govern in anger and don't be angry. I, for one, like a president who can be angry without using angry language. It's nice change from axis of evil."
Joe, we appreciate you.
We appreciate you all. Keep your comments coming in on any of the topics you're seeing here on CNN, whether that's Facebook, whether that's Twitter. Whatever topic you want to sound off on, by all means, send those in to us. We will share them right here.
Well, we have an I-Report we want to bring to you. We get a lot of I-Reports from a lot of our I-Reporters out there. And a lot we have been getting are from people who have been laid off, sharing their tough economic times.
But now we want to bring you one from a gentleman named Joe Cortez. He's from Columbia -- or Columbus, I should say, Ohio. He's a news photographer. He has the equipment at home, of course, to bring his -- his experience of getting let go.
(BEGIN VIDEO CLIP)
JOE CORTEZ, I-REPORTER: It's not easy being laid off on three different occasions.
It's not a whole lot of fun. The first time, it just kind of blindsided me. The second time, the writing was on the wall. And, so, I had come to expect it. And, the third time, I kind of knew before it happened. So, I have -- I have gotten pretty good at being laid off.
To make ends meet right now, I'm -- I'm keeping a close eye on my savings and watching where -- where my money is going very, very, very closely. Savings has become critically important now. There are a lot of -- of little extras that I've had to give up on. That $4 latte that I'd get at Starbucks, that's cut out now. Now I -- for pennies on the dollar, I'm making them at home.
Getting extras, like getting a hamburger or going out to dinner with my girlfriend, those are all cut out now. I no longer go out to movies. I can't afford them. You know, now I just pop in a -- if I want to watch a movie or be entertained, I watch DVDs.
In addition to everything else I've cut back on, the cable is going to be the next thing to go here.
My resume right now is the best weapon I have in being unemployed. It's everything that an employer would want to know about me. And it's my sales pitch to get back in the workforce. The worst case scenario, I guess, I will go back to California. I don't want to because Ohio is -- Columbus is where I feel at home at. It's where I feel at peace at. It's where I want to make my home at and my living at. But if I'm forced to go home, then I'm forced to go home. And that's just the -- it's just the situation and I'll deal with it.
(END VIDEO CLIP)
HOLMES: And our appreciation to Mr. Cortez for bringing that to us.
We've been telling you about the increasing levels of deadly violence in Mexico's border region with the U.S. Now the U.S. reacting by significantly beefing up security.
Is this the right move, however?
Also, coming up right after the break, Connecticut's attorney general says there's way more AIG bonus money than you've been told. He'll talk with me next. We'll check the math.
(COMMERCIAL BREAK)
HOLMES: All right. Welcome back here, everybody.
I'm T.J. Holmes sitting in for Rick Sanchez here in the CNN NEWSROOM.
We've been getting your comments in, as always, on MySpace, Facebook and Twitter -- all of these Rick Sanchez accounts, even though he is not here today. But we can continue to share them with you.
Another MySpace comment coming in about the AIG fiasco. Somebody saying here: "Who really feels sorry for these AIG execs? If they had any respect for themselves, they would return all the money. We are talking about rich, greedy execs, so it won't happen."
And that comment coming in to us and that really exemplifies a lot of the anger we've been seeing out there.
However, please note that a lot of people -- still, a lot of these execs -- at least 15 of the top 20 -- have been giving that money back, according to attorney general out of New York. So some of the money is starting to come back.
We want to take a look, also, at the markets today.
Let's -- where is that number?
Let me see this.
Where are we?
Down 55 points. Now, given what we have seen over the past several weeks and months, that's borderline flat. And that will help people sleep a little better tonight.
We've seen this market, over the past two weeks, do real -- real well, at least. And we also saw about 497 points up just yesterday. So it appears to be holding on, in large part, to those gains. Hopefully, it will hang on for the next 25 minutes, when the markets do close.
As I mentioned a moment ago, we're going to be bringing in, after the break, the attorney general of Connecticut. He says there's some funny math going on here with some of these numbers about the AIG bonuses and there's actually a lot more than has been reported. We will ask him about that math.
Stay with us.
(COMMERCIAL BREAK)
HOLMES: All right. We all thought the number was $165 million in bonuses that AIG paid off -- paid out in March to a lot of its executives, of course, after it received $170 plus billion in taxpayer bailout money.
Well, let's bring in now the attorney general of Connecticut, Mr. Blumenthal, who actually says the number was higher than the one that's being reported.
All right. Sir, you caused a bit of a stir when you came out and said that everybody is saying 165 and it's actually 218.
So please help me understand how you say that their number is correct that's being reported.
RICHARD BLUMENTHAL, CONNECTICUT ATTORNEY GENERAL: Their number, as well as ours now, is $218 million, although some of the press reports continue to use the $165 million number.
Why does it matter?
Well, first of all, it's all taxpayer money. We want it returned to taxpayers.
HOLMES: Well, explain the discrepancy first, because we really want to get this cleared up. We've all been reporting, yes, in March, they paid out $165 million in bonuses. You say that's wrong. So tell me why that number is wrong and where you got your number.
BLUMENTHAL: Our number comes from the documents that we requested and subpoenaed from the company itself. It disclosed the $218 million figure in one sum to us in those documents.
What explains the discrepancy?
They paid an additional $55 or $53 million back in December, apparently. And so the total, really, out of our pockets -- taxpayer dollars -- is $218 million. And, again, I -- I think taxpayers deserve it back. HOLMES: OK. Well, it -- I mean that certainly sounds like a bit of a hubbub has been brought up. But back in December, CNN reported, other news outlets reported, the chairman, Liddy, reported the $55 million in payments in December. So that's something we already knew about.
Are you saying that maybe you just kind of overlooked that and then came out with this number?
Because -- because you're right, the total might be that, but still, we already knew about December.
BLUMENTHAL: As recently as today, the $165 million is still used because those reports are not corrected. If we raise awareness, if we tell the general public that what's owing to taxpayers is $218 million, we will have accomplished a purpose. And I would...
HOLMES: OK, but...
BLUMENTHAL: ...tell you that Connecticut law in no way, despite what the Federal Reserve chairman said today, requires that these payments be made. We have, in Connecticut, a wage protection statute, not a bonus protection statute.
HOLMES: All right. But you and I are in agreement that $165 million was paid in March in bonuses?
BLUMENTHAL: $165 million was paid in March...
HOLMES: OK.
BLUMENTHAL: ...on top of a prior $55 or $53 million, which brings us to $218 million. We're not arguing about the total figure, only about what's been reported. And it may have been reported in segments, but no one has put the two figures together.
HOLMES: OK...
BLUMENTHAL: And I just want to emphasize to you, you know, as recently as today, in some of the major newspapers in the country, you'll see $165 million.
HOLMES: OK. All right. Well, I'm just wondering. We've got it cleared up now. You just put them together and we had reported them in December as the $55. We had reported it in March as $165, when they were two made independent of each other. I've got you now.
I want to ask you about a couple of other things. You plan on having a hearing, at least. It's supposed to happen on Thursday, I believe. And several members of AIG -- several executives and workers have been subpoenaed.
Do you expect them to show up?
And what do you help -- hope to accomplish by that hearing taking place in the state legislature there in Connecticut? BLUMENTHAL: The purpose, really, is to know what they conceivably could have done to justify these bonuses.
What are the facts here?
What were they told and what part did they pay -- play in the collapse of this company?
Are they, in fact, being rewarded for failure, which is what we think?
But we are in very intensive and lengthy discussions with AIG. We're very mindful of the security and safety concerns, as well as the privacy issues. So...
HOLMES: Will they show up?
BLUMENTHAL: Whether they will show up or not, whether they'll be here or not, really depends on the results of these discussions, because we want to make sure that the public is served by transparent, open proceedings. But at the same time, we want to avoid danger to anyone.
HOLMES: OK. Do you think it's not transparent and open enough?
I mean we have been discussing this ad nauseam, it seems like, the past week -- almost exclusively, it even seems. And the federal government and the U.S. Congress is handling this. A lot of people, as you know, are accusing you and some of the members of the legislature there of simply grandstanding.
What's the point of parading these people up there, who, quite frankly, we don't know how much -- and you don't know, as far as I understand -- how much these folks specifically got and what, really, role they had to play?
So it just seems like another big show.
BLUMENTHAL: We've made a proposal to AIG that would avoid their appearing in Hartford, in fact, would avoid entirely a public appearance by them, as long as we have the facts surrounding what they did and other relevant information relating to the bonuses. So their appearing here and all this talk about grandstanding, I think, really obfuscates the central point, that there are facts that the legislature and the attorney general, in a separate investigation, is entitled to have. And if the bonuses are returned, so much the better. We could avoid, perhaps, having any public hearing with respect to some of these employees.
HOLMES: All right. Attorney General Richard Blumenthal.
I know you've taken a lot of interview requests over the past couple of days since that came out. And everybody is trying to figure out that mathematical equation. I think we have gotten to the bottom of it finally here today. And we appreciate you walking us through that. Attorney General Blumenthal, we appreciate your time today, sir.
BLUMENTHAL: Thank you.
HOLMES: Well, his economic plans are going forward. Now, President Obama just has to get everybody on board. We'll ask one of the White House's top economic advisers how the president plans to do that when he talks to the American people tonight.
Also, more money and people on the border -- that's the White House response to increasing violence on the Mexican side of the border.
What will that accomplish?
Anything?
(COMMERCIAL BREAK)
HOLMES: All right. We've been talking about, for a while, the violence with the drug cartels in Mexico. Thousands literally killed last year -- over 6,000 by many counts.
Well, now the U.S. is going to step in and do something about it -- maybe for fear that some of that violence could trickle over into the U.S. side of that border.
Announcing today, the Homeland Security secretary did, doubling of the money that's going to border security. It's going to be $700 million, also a lot of crime prevention, law enforcement equipment, aircraft, training -- all these things to help quell some of that violence and also a lot of agents and intelligence analysts on the U.S. side. It's going to triple.
I want to bring in now from the "L.A. Times," columnist Sam Quinones.
He has covered Mexico extensively, has lived there, knows it and knows it well.
And one thing I want to ask you here first, I guess, how did you react to just hearing that the U.S. is now about to get involved?
Did you think, well, better late than never, it's about time or what did you think?
SAM QUINONES, STAFF WRITER, "LOS ANGELES TIMES": Pretty much that. I mean I've lived in Mexico for many years. I've followed issues regarding the two countries for a number of years. And it's -- you know, Mexico is never a high priority with -- in Washington, it seems, unless there's a major crisis. So I think, you know, it's -- it's about time, I guess.
A lot of people on the border are thinking -- and I know, having talked to several people -- that it's really, you know, this -- this thing should have come a couple of years ago. This violence in Mexico really kicked off, by my accounting, by my chronology, about 2005. So it's 2009 now and we're getting to this finally. And that's a good thing, I guess.
HOLMES: So what -- what do you think happened?
Did it just get so bad?
Is there a new administration?
What actually...
QUINONES: A combination of both of those.
HOLMES: OK.
QUINONES: A combination -- you know, the last year was hellacious.
HOLMES: Yeah.
QUINONES: This year is looking like up to be -- looking like it could be about the same. These -- these cartels are getting more and more savage, as well, more and more brazen. You know, there's a big number of people that have been decapitated...
LENO: Yes.
QUINONES: ...and left with their bodies in the middle of the road with notes pinned to them. It gets -- it gets the attention after a while. And now you've got a new administration who is viewing Mexico, perhaps, in a different way -- at least that's the way it seems so far.
HOLMES: And like we said, the Homeland Security secretary, Napolitano, made comments today announcing some of this.
Let's take a quick listen.
I'll ask you about it and we'll wrap up on the other side.
(BEGIN VIDEO CLIP)
JANET NAPOLITANO, HOMELAND SECURITY SECRETARY: We are doubling the number of law enforcement personnel that are working in border enforcement teams along the border. These are called BEST teams. These are teams that combine state/local with ICE and CDP personnel.
Every state along the border will now have BEST teams. New Mexico previously had not had one. But just to give you a sense of how effective they are, they have already made more than 2,000 criminal arrests and seized nearly 8,000 pounds of cocaine.
(END VIDEO CLIP)
HOLMES: And let me ask you before I let you go here, Sam, about the U.S.
Where -- I guess where does this administration -- where is the U.S. -- where should we all feel that we are -- I don't want to say enabling, maybe not the best word. But still, so many of the guns that are being used in Mexico are guns that come across the border from the U.S.
And then, also, so much of the drug cartel, the U.S. is such a market for those drugs.
So that do you think -- I mean how much of a role did that play into this decision, do you think?
QUINONES: Well, I think it's a big deal. I mean everyone knows this. It's not a secret by any means, you know?
Damping -- dampening drug demand is going to take a long time, if it ever happens. Now some people doubt that it can ever happen.
But certainly, we can do a lot about the guns. Lots of people on the border are very upset and certainly in Mexico. If you talk to Mexican officials, pretty much they don't want to talk about anything but all the guns coming down from -- drizzling down in small numbers, but huge numbers in the aggregate, down to Mexico and into the hands of cartel guys who are then killing cops, terrorizing a population and killing off each other and so on.
I mean it's a -- it's a huge, huge part of it. It's one -- this war is about the global economy, in a sense. You know, it's about the two countries have issues between them.
HOLMES: Yes.
QUINONES: They need to resolve them by getting together, sitting down, working these things out, collaborating, which they kind of have not done in a serious way, a prolonged way, up until now.
HOLMES: Well, a step forward today, possibly. Like you said, better late than never.
Sam Quinones, "L.A. Times" columnist.
Sir, we appreciate you spending some time with us today.
QUINONES: Thank you.
HOLMES: And President Obama is going before the American people tonight to sell his economic measures.
What will the president say and how will he try to convince you that he is right on this thing?
We're going to ask somebody, Jared Bernstein. There he is -- one of the White House's top economic advisers standing there on a beautiful Washington, D.C. day.
We'll talk to him right after the break.
(COMMERCIAL BREAK)
HOLMES: All right. We're six minutes away from the top of the hour and six minutes away from Wolf Blitzer in "THE SITUATION ROOM".
Good afternoon to you, sir.
What you got coming up?
WOLF BLITZER, HOST, "THE SITUATION ROOM": Thanks very much, T.J.
We've got a lot coming up -- all the major news of the day, including the effort by the Obama administration to try to regulate these non-bank financial institutions. You're going to be speaking about that shortly. We're going to have a lot more on that coming up.
Also, the announcements coming from the White House about what they plan on doing involving Mexico -- moving hundreds of additional border agents to the border. We'll get Republican reaction to all of this from a leader on the House side, Mike Pence of Indiana. A full -- a full report coming up at the top of the hour in "THE SITUATION ROOM" -- T.J.
HOLMES: All right. We will see you in just a few minutes.
Wolf, thank you, as always.
We want to turn back to the White House now and Jared Bernstein, who is one of the top economic advisers to the vice president, Vice President Joe Biden.
He's is standing there to answer some questions about another big night for the president.
Is he going to be trying to certainly sell his policies to the American people?
He's certainly going to get some questions about AIG and all kinds of things.
But let's start first with how tough is it right now -- the balancing act and trying to make sure you stay ahead of this populist sentiment and get on to Wall Street for doing wrong, but you still -- you need Wall Street to get this thing right?
JARED BERNSTEIN, WHITE HOUSE ECONOMIC ADVISER: Well, I think that's a good way to put it, T.J. Although, I think the president has been consistently in front of that very issue. You know, I remember when the president was running for office. We were on the campaign. And he talked about this difference between Wall Street and Main Street is one that you could view as somewhat artificial, in the sense that you need both. You need an economy that delivers the goods to Main Street in a way that really hasn't been the case, even predating the recession. That's one of the things the president and the vice president talked a lot about -- the way economic growth was failing to reach the middle class.
But at the same time, you obviously need a robust system -- a banking system, financial system -- that's going to help allocate capital to the most productive parts of the economy, as well as a financial system that's delivering credit. The part where that system is truly dysfunctional is some of the kinds of excessive speculation that's gone on on Wall Street, you know the bubble that got us to where we are -- bringing with it all the compensation, the very bad practices the president has been very clearly out in front against.
HOLMES: But surely you remember campaign -- campaigning candidate Obama was out there really making that split between Main Street and Wall Street.
BERNSTEIN: No.
HOLMES: I hear you saying now that certainly he wanted to -- he wanted to say they're all -- we're all interconnected and intertwined. But still, that was a big part his campaigning, was against Wall Street and some of those abuses he said took place during the Bush administration.
BERNSTEIN: Yes. I think you've got to -- T.J....
HOLMES: Yes.
BERNSTEIN: I think you ought to be careful there.
HOLMES: (INAUDIBLE)?
BERNSTEIN: No. I mean I don't think the president is, you know, quote against Wall Street. The president is very much against the kinds of abuses that have gone on in the financial markets. And what he's talking about now and what he's going to be explaining tonight -- you heard Tim Geithner actually talking about that today in some testimony -- is -- are a set of financial reforms that are going to create a framework to reel in these kinds of abuses, so that we're not back here where we are today moving forward -- a set of common sense rules and oversight that have been missing from the system that helped really promote the speculative excesses and abuses that we're talking about.
HOLMES: You talk about some of those abuses. I have to at least get one question in about some of these abuses we've been talking about lately, these AIG bonuses.
BERNSTEIN: Yes.
HOLMES: The president has said he was angry about them and said he wanted to maybe try and find a way to recoup them. But he wasn't so warm on the House bill that was passed -- on the 90 percent taxing of those bonuses.
So tell me now, does the president have another plan he wants to see implemented to get those bonuses back?
And does he still stand by getting those bonuses back?
BERNSTEIN: He totally stands by getting those bonuses back.
HOLMES: OK.
BERNSTEIN: And the president remains committed to the thing he said day one when this -- when this thing broke, which is he's going to look at every legal option or avenue to make sure that these ill- gotten and ill-conceived and really, you know, really very insulting bonuses are recouped.
But the key for him is to do this in a way that's legal and that's consistent with contract law. And that's -- whatever bill comes out of the Congressional process, that's the one he'll look at and evaluate on those bases.
HOLMES: All right. Right now, he does or doesn't support the 90 percent?
BERNSTEIN: Right now, he's waiting to see what gets to his desk.
HOLMES: All right.
(LAUGHTER)
HOLMES: All right. We will -- we will wait along with him.
Mr. Jared Bernstein, again, top economic adviser to the vice president.
Sir, we appreciate you stepping out of the House, like you said.
BERNSTEIN: Sure.
HOLMES: You've been in there working all day. So I'm glad we could help you out and get you some fresh air.
BERNSTEIN: Thanks a lot, T.J.
HOLMES: All right. You have a good one.
BERNSTEIN: You, too.
HOLMES: And we're going to wrap up here with Susan Lisovicz down at the New York Stock Exchange.
How are things -- oh, no.
LISOVICZ: Yes, that's what happens. Yes. Two steps forward, T.J. one step back.
HOLMES: One step back.
LISOVICZ: So we really did not erase yesterday's gains and the sell-off did accelerate in the final 30 minutes of trading. But, you know, a lot of folks are questioning whether what we've seen over the last two weeks is something real.
Is this the beginning of a bull market?
The market responding to some favorable news, including the fact that housing prices actually increased from January over December.
We'll follow it.
See you tomorrow.
HOLMES: We appreciate you, as always.
Thanks so much, Susan.
Now time for Wolf Blitzer and "THE SITUATION ROOM".
