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Detroit's Last Chance?; Fargo Authorities Still Worried
Aired March 30, 2009 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: GM is announcing today that Rick Wagoner is stepping aside as chairman and CEO.
(END VIDEO CLIP)
RICK SANCHEZ, CNN ANCHOR: Is the president of the United States essentially firing the CEO of GM? And how many dealerships are going to disappear?
(BEGIN VIDEO CLIP)
POWELL: I can screw you over. I would rather not do that.
(END VIDEO CLIP)
SANCHEZ: The officer who didn't use common sense. An update. You'll see it. Has he done this before?
Two grown men, senators. Did he really say that? About his wife? The inside story of how politicians and Wall Street got together to destroy our economy, from one of the few who tried to stop it.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: I wanted to, you know, display my patriotism.
(END VIDEO CLIP)
SANCHEZ: Should he be allowed to fly his flag anywhere, even if his homeowners association says no, he can't? What's your HOA let you do, or not do? Have you even read it? Your national conversation begins right now.
(END VIDEO CLIP)
SANCHEZ: And hello again, everybody. I'm Rick Sanchez.
We're going to be getting a news conference. We are monitoring as we speak. This is from North Carolina. This is about yesterday's nursing home massacre that you may have heard of. It's now turning out as we are getting the information that the suspect was married to one of the women who worked at the nursing home.
So, as we monitor this development and as we wait for them to introduce some of the guests, some of the panelists and get some of the preliminary information out of the way, we're going to be dipping into it and bringing you the latest information as it comes out of that news conference in Carthage, North Carolina.
The president of the United States has fired, fired the CEO of General Motors. No, this is not a real firing, but it may as well be. The company under the leadership of Rick Wagoner has lost money now four straight years and the only reason it's breathing right now is the billions that they got last December from the government, and the prospect of tens of billions more that they are going to be getting.
So, just how bold is this move by the president? And why is he doing it? First, I want you to hear from Mr. Obama himself today.
(BEGIN VIDEO CLIP)
OBAMA: I'm absolutely confident that GM can rise again providing that it undergoes a fundamental restructuring.
As an initial step, GM is announcing today that Rick Wagoner is stepping aside as chairman and CEO. This is not meant as a condemnation of Mr. Wagoner, whose devoted his life to this company and has had a distinguished career, rather, it's a recognition that will take new vision and new direction to create the GM of the future.
Let me be clear, the United States government has no interest in running GM. We have no intention of running GM. What we are interested in is giving GM an opportunity to finally make those much- needed changes that will let them emerge from this crisis a stronger and more competitive company.
(END VIDEO CLIP)
SANCHEZ: There is probably no better guest to talk to about this story than Virg Bernero. He's the mayor of Lansing. This is a gutsy guy who says it like it is, has in the past on this program.
Mr. Mayor, thanks for being with us, sir.
VIRG BERNERO (D), MAYOR OF LANSING, MICHIGAN: My pleasure, Rick. Thanks for having me.
SANCHEZ: The president says, look, he doesn't want to run General Motors, but he just fired their CEO and he is edging out the board of directors.
Is -- is there a disconnect here from between what he's saying and what he's doing?
BERNERO: Well, we got a dose of tough love from the president today.
And, you know, leadership calls for that at times, Rick. You know, this -- Rick is on his way out. And he's a good man. He helped start the historic transformation of General Motors. As you know, my dad retired from GM. And I can tell you that the plant that my dad retired from 20 years ago looks a lot different from the new plants that we have in Lansing that make things like the Cadillac CTS "Motor Trend' car of the year last year.
so, General Motors has been undergoing a transformation, but not quick enough, some would say, for the market or for the president. And I'm not going to second-guess the president. I, for one, am grateful and I am encouraged that this president, albeit with some tough love, has invested in the industry and the working people who stand behind this industry.
We're talking about really millions of jobs that will be affected from the auto industry. These are high-wage, top-of-the- manufacturing-pyramid-type jobs, so it's certainly worthy of our investment. And I think the president understands how high the stakes are.
SANCHEZ: Well, here's the problem, though. Look, this company, with all due respect to your family that's been associated with it for so many years, they didn't meet their deadline. And rather than cutting them off, what the president seems to be doing is firing the CEO and giving them really new life, right? Is that about it?
BERNERO: Well, in a way, yes, Rick. It is a new -- sort of a second lease.
And, look, these are tough times. I mean, I'm not making excuses. The company is phenomenal, the CTS, the Chevy Malibu today, the Pontiac G6, but the competition is fierce in this market.
SANCHEZ: Yes.
BERNERO: And, in this recession, it's tough for any company. It's tough for any manufacturer.
And my point, Rick, is, if you look at how we have lost manufacturing in this country, by God, electronics, furniture, textiles, you name it, we hardly make anything anymore. Can we really afford to say goodbye to the auto industry as well?
I mean, I'm afraid that we are outsourcing our standard of living in this country. So, I'm grateful that the president has taken a stand, that his automotive panel is digging in. They're in the trenches. And, hopefully, we will continue the transformation of General Motors and Chrysler and help move us to making the cleaner, greener cars of the future.
These are productive Americans. These are productive people who to have a great talent, have made great products and I think have a great future.
(CROSSTALK)
SANCHEZ: I don't think anybody would disagree with you on, that but I'm interested in kind of the politics of this as well. Does the average Detroiter, the average joe autoworker out there, people like members of your family, do they like Wagoner? Will they stand up and say, you know, this Obama guy means business now? Will they admire the fact that it's kind of a gritty move, kind of like a Detroit move? How's it going to play?
BERNERO: Well, Rick, I really think that -- I mean, that's like saying what would happen if Bernero was forced out as mayor.
SANCHEZ: Exactly.
BERNERO: Some people would cheer, and some people would lament it, I hope.
But, look, I think...
(CROSSTALK)
SANCHEZ: But he big -- was this guy big with the workers, big with the average guys, the guys who were putting in eight, nine, 10 hours at the plant?
BERNERO: I think almost, almost no CEO is big with the guys at that level. I think because of the job that it requires him to be all over the world, he's not going to be in slapping -- but he was respected as a car guy, Rick.
Now, he was seen as a car guy, somebody who worked at GM a long time, came up through the trenches. He wasn't a finance guy who came over to do cars. He knew cars, and he loved cars, and he had a feel for that part of the industry. And, so, I would give some...
(CROSSTALK)
SANCHEZ: The opposite of the Wall Street guys I hear you...
(CROSSTALK)
SANCHEZ: I'm just going to say, and I know we got a little time problem with the satellite. But I hear you busting these guys on Wall Street all the time. You're saying Wagoner wasn't one of those guys. That's what I'm hearing you say.
BERNERO: I don't think he -- I think you're absolutely correct, Rick. Wagoner was not one of those guys.
Wagoner was a roll up the sleeves, get the job done kind of guy. He was a car guy. He didn't -- and, look, his salary certainly was bigger than mine, but it wasn't -- it wasn't high -- outrageous, like these Wall Street people. And he made real things.
No, he was in touch with the company. He understood the company. He could roll up his sleeves and be comfortable in any factory setting, no question about that. There's no question I would draw the line between him and Wall Street. Wall Street and Washington, as you know, got us into this trouble. And now they want to blame the car guys and kick them and throw them under the bus.
(CROSSTALK)
SANCHEZ: I agree with you. And I think most people would, too, especially people who watch this show, because that's who we have been nailing all the time and talking about.
Mr. Mayor, thanks so much for being with us, sir. We appreciate your insight on this story.
BERNERO: Thank you. Appreciate it.
(BEGIN VIDEO CLIP)
RYAN MOATS, NFL PLAYER: My mother-in-law is dying right now!
ROBERT POWELL, POLICE OFFICER: Listen to me. Listen.
R. MOATS: You're wasting my time.
POWELL: If I can't verify you have insurance, I'm going to tow the car.
(END VIDEO CLIP)
SANCHEZ: We have got an update now from the driver denied his time with a dying relative. This is a brouhaha that won't let up.
And now we are learning another NFL player's family -- you are going to know this NFL player, by the way; he's a household name in the NFL -- he's got a beef with that same officer.
How ugly is it getting between Democrats and Republicans in Congress? Ugly enough for Senator Chuck Grassley to insult another senator's wife in the halls of Congress? Really? We will let you hear this one for yourself.
(BEGIN AUDIO CLIP)
UNIDENTIFIED MALE: Hey, Rick, (INAUDIBLE) from St. Joe.
And I love the idea that that guy's gone. It's about time we see action. I love it. Whether they like it or not, change is here.
(END AUDIO CLIP)
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
POWELL: I can take you to jail.
R. MOATS: Yes, sir.
POWELL: I can tow your truck. I can charge you with fleeing.
R. MOATS: Yes, sir, you can. POWELL: I understand. I understand...
(CROSSTALK)
POWELL: I can make your night very difficult.
(END AUDIO CLIP)
SANCHEZ: And there's an update on this story. Welcome back. I'm Rick Sanchez.
Linebacker Zach Thomas is one of the most popular players in the NFL, so what does he have to do with a Dallas officer who is getting hammered for pulling a gun on a man trying to spend a final moment with a dying relative?
His wife. Yes, according to "The Dallas Morning News," Maritza Thomas was stopped last year by Robert Powell, who gave her five tickets and then hauled her off to jail. It's an action that even a Dallas judge is calling a reach. Judge Victor Lander is calling the five-ticket arrest -- quote -- "relatively rare for an officer to arrest someone on the spot."
Well, this is likely not to help Powell's attempt to keep his job, nor is the fact that the other football player that he offended was on ABC's "Good Morning America" today.
(BEGIN VIDEOTAPE)
SANCHEZ (voice-over): This is police officer Robert Powell chasing down an SUV that he just saw slowly run through a red light. The car has flashing hazard lights turned on. And inside is NFL running back Ryan Moats, who's racing to the hospital to see his dying mother-in-law.
When Moats pulls into a parking space, police says Powell draws his gun and the confrontation quickly gets heated.
ROBERT POWELL, POLICE OFFICER: Get in there. Get in there. Let me see your hands. Get in there. Put your hands on the car.
SANCHEZ: Ryan Moats' wife, Tamishia, tells "Good Morning America" that the gravity of the moment was impossible to miss.
(BEGIN VIDEO CLIP, "GOOD MORNING AMERICA")
TAMISHIA MOATS, WIFE OF RYAN MOATS: Honestly, he could have shot me. He pointed the gun at me and he basically said, you know, don't take another step, don't move, get back over here. Like that was kind of like a threat, like don't move. Basically, and in my mind I'm thinking or else he will shoot. So, I was thinking in my mind I'm going to go in this hospital. I will be by my mom's side, no matter what.
(END VIDEO CLIP)
POWELL: Do you understand?
SANCHEZ: From the officer's dashboard video camera, you can hear Moats try to explain the urgency of the moment. His wife and another relative ignore the officer. They go inside. The officer asks for Moats' insurance and says he's being ticketed for running a red light.
It's then that Ryan Moats tells ABC's "Good Morning America" he realizes that this surreal moment just got more so.
(BEGIN VIDEO CLIP, "GOOD MORNING AMERICA")
RYAN MOATS, NFL PLAYER: Once I got out, I realized it was pretty serious and then I was afraid for her, because he was pointing the gun at her.
UNIDENTIFIED FEMALE: He had the gun...
R. MOATS: He had the gun out.
UNIDENTIFIED FEMALE: Drawn?
R. MOATS: Drawn.
UNIDENTIFIED FEMALE: He maintains he didn't point it. He said he did have it out of his holster, but he didn't...
R. MOATS: Yes, he pointed it at her.
(CROSSTALK)
T. MOATS: So, my first reaction was just to not react, just put my hands on the car. And then, once he saw me get out, his attention came towards me.
(END VIDEO CLIP)
POWELL: I need your insurance.
R. MOATS: I don't know where it's at. I don't have insurance.
(CROSSTALK)
R. MOATS: My mother-in-law is dying right now!
POWELL: Listen to me. Listen.
R. MOATS: You're wasting my time.
POWELL: If I can't verify you have insurance, I'm going to tow the car. So, you either find it or I'm going to tow the car. Stop talking. Stop talking. You can either (INAUDIBLE) cooperate or I can take you to jail.
(CROSSTALK)
R. MOATS: You asked for insurance and registration. So, there you go.
POWELL: Shut your mouth. Shut your mouth.
(CROSSTALK)
POWELL: You can cooperate and settle down or I can take just take you to jail for running a red light.
R. MOATS: Go ahead.
POWELL: Is that what you want to do?
R. MOATS: Whatever. Go ahead.
POWELL: OK. I can screw you over. I would rather not do that. Your attitude will dictate everything that happens. And, right now, your attitude sucks.
R. MOATS: Yes, sir.
POWELL: OK. I turned my red and blues on as you were going over the bridge. Why didn't you stop?
R. MOATS: You think I'm going to stop when my wife's mother is dying?
POWELL: You are required to stop. What you are doing does not matter.
R. MOATS: OK. Yes, sir.
SANCHEZ: The Dallas police chief ripped his officer's handling of the situation. Powell has been put on paid leave until an internal investigation is complete. He could be fired.
UNIDENTIFIED MALE: I want to issue a personal apology and also an apology on behalf of the Dallas Police Department to the family of Jonetta Collinsworth. I'm embarrassed and disappointed by the behavior of one of our police officers, officer Robert Powell.
SANCHEZ: And now listen as another police officer, even a hospital nurse, try to help get Moats inside the hospital.
UNIDENTIFIED MALE: Hey, that's the nurse. She says the mom is dying right now. And she was wondering if we can get him up there before she dies.
POWELL: All right. I'm almost done.
UNIDENTIFIED MALE: OK.
SANCHEZ: After almost 15 minutes, Ryan Moats finally is allowed to walk away, but not in time to say goodbye to his mother-in-law. She died as officer Powell finished writing the ticket.
(END VIDEOTAPE)
SANCHEZ: By the way, the Dallas police officer, Robert Powell, who I have been telling you about, did issue this statement, as reported by the Associated Press.
Here we go: "I wish to publicly and sincerely apologize to the Moats family, my colleagues in the Dallas Police Department, and to all those who have been rightfully angered by my actions on March 18, 2009. After stopping Mr. Moats' vehicle, I showed poor judgment and insensitivity to Mr. Moats and his family by my words and actions."
Has your homeowners association kept you from doing something that you want to do to your home? What if you wanted to fly a flag in your yard, for example, but the rules say that you can't? Well, this guy says he will do as he wishes. There's his flag. Is he right? He's going to join me and you are going to hear his story.
Also, in Fargo, North Dakota and Moorhead, Minnesota, leaders are telling their citizens to expect even more levees to leak. But just how bad is the flooding going to get? I'm going to be taking you there. You don't want to miss this massive water, ice and snow cocktail. That's Hollywood it is.
(BEGIN AUDIO CLIP)
UNIDENTIFIED MALE: Hey, Rick, it's Joe from Freehold.
I'm all for the bailout of GM and all this other stuff, but who's buying these cars? If everybody's getting laid off, who's buying these cars? I don't get it. People are out of work. Who is buying the cars?
Thanks, Rick.
(END AUDIO CLIP)
(COMMERCIAL BREAK)
SANCHEZ: The president of the United States in signing ceremony for land management. Let's dip into this.
(JOINED IN PROGRESS)
OBAMA: ... rehabilitation services for paralyzed Americans, helping develop better equipment and technology, that will allow them to live full and independent lives free from unnecessary barriers. And it will work to improve the quality of life for all those who live with paralysis, no matter what the costs.
That's the mission of the Christopher and Dana Reeve Foundation. In the lobby of their facility in New Jersey sits Christopher's empty wheelchair. And his son, Matthew Reeve, was once asked if the sight of it ever saddened him, and he replied, "No." He said, "Empty chairs, that was dad's goal," he said."We hope there will be many more of them."
Matthew's here with us today. And the legislation I'm about to sign makes solid progress toward the realization of that hope and the promise of a brighter future.
All in all, this legislation is that rare end product of what happens when Americans of all parties and places come together in common purpose to consider something more than the politics of the moment. It's the very idea at the heart of this country, that each generation has a responsibility to secure this nation's promise for the next. And by signing this bill into law, that's what we're doing today.
So is Matthew here, by the way?
UNIDENTIFIED FEMALE: Right there.
OBAMA: Matthew, come on up here.
(CHEERING AND APPLAUSE)
OBAMA: Thank you.
All right. Let's sign this bill.
(CHEERING AND APPLAUSE)
There we go.
OK, I have got a bunch of pens to sign here. I have gotten good at this.
(LAUGHTER)
Because I'm a lefty, it always looks funny.
(UNKNOWN): (OFF-MIKE)
REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE: (OFF-MIKE) more bills, more bills.
OBAMA: There we go.
(CHEERING AND APPLAUSE)
SANCHEZ: And there you go, the president of the United States in the spirit of Teddy Roosevelt signing the long promised Land Management and, interestingly enough, making mention of someone in the audience who was there, Christopher Reeve's son, Matthew, who came up and shook the president's hand.
The president, there he is again, shaking his hand, as a matter of fact, the president making mention of the fact that he looked an awful lot like his father as he called him up for the impromptu handshake with the president.
As is customary, the president will now meet with some of the folks in the Department of Interior, shake some hands as well, a story that we will no doubt continue to follow for you. I want to bring your attention now to something else. These are some of the comments that we have been getting from you. Let's start over here with MySpace, if we can, Robert.
And, on MySpace, we see that there is plenty of comment on this dash-cam story we brought to you just moments ago. "These dash-cams are the best. The police thought they could nail more DUIs with them. And all they do is get caught being jerks or roughing people up."
Turning it around, go over to Twitter. Tourlife says: "I think all police conversation caught on dashboard camera should have been transcribed and analyzed. Keeping them honest" -- stealing a line from "A.C. 360."
I want to show you something else now. This is a piece of sound we got just moments ago. There's a lot of developing news that we're following for you right now. We told you about the eight people killed in this massacre at this nursing home in North Carolina.
Just moments ago, as promised, we were monitoring the statements that were being made by officials there. Here's what some of -- here's what one of the officials had to say.
(BEGIN VIDEO CLIP)
MAUREEN KRUEGER, MOORE COUNTY DISTRICT ATTORNEY: Many people have asked about the details of the case.
As you probably know, it would be imprudent for us to be releasing details of the investigation at this time. One thing that was released yesterday, for example, was the age of the victim, that she was 85. She was in fact only 75. For family members, small details like this mean a lot.
It's imperative that when details are released that they're completely accurate. We don't want to jeopardize the investigation and we certainly don't want to cause more trauma to the family.
(END VIDEO CLIP)
SANCHEZ: One of the details that we have been following, in fact, that a lot of folks have been talking about, is the fact that the gunman, the suspect in this case apparently was married, was an estranged husband, to one of the women who worked at that center, again, eight people killed.
By now, you probably know that Fargo, North Dakota got through the weekend without the devastating flood that people had feared. Unfortunately, that doesn't mean that Fargo can let up its guard. The red River, one of the few that flows north in the United States, still very high, still very powerful, it could still punch holes through the sandbag levees protecting Fargo, just like it did yesterday, when it flooded two school buildings.
National Guard troops are using plastic sheets now, we understand, to try and protect the levees as a snowstorm moves in. Now, that's a problem because remember, snow melts, and that creates more flooding. Forecasters aren't particularly worried about the snow itself, but they do say at this point that there is a good chance of a meltdown.
What they are worried about is the wind, though, which could top 25 miles an hour. That could create huge waves, making the river even more powerful and even more dangerous as it starts to mess up some of those levees that they built.
This could be a week, we're told now, before life along the Red River at least in this area gets back to anything approaching normal. And we are going to follow it for you.
All right, let's do this now. There is one senator says, "You are good." Another senator replies, "Your wife said the same thing." This is no punchline, folks. That actually happened in the halls of U.S. Congress. "Your wife said the same thing." In most places, those are insulting words. Talk about partisan politics. We are going to tell you who said it, how he said it, where he said it. You will hear it for yourself.
Also, deregulation is taking a large share of the blame for the current economic problems. Senator Byron Dorgan was one of the leading voices against it almost a decade ago. And if we had only listened to him. He's my guest. Stay there. You will hear his story.
(COMMERCIAL BREAK)
SANCHEZ: Welcome back. I'm Rick Sanchez here in the world headquarters of CNN.
Most guys learn early on you don't talk about another man's mother, daughter and/or wife, right? Certainly not in public. Certainly not if there are TV cameras rolling at the time.
Well, tell that to Republican Senator Chuck Grassley, who actually responded to a fellow senator's comment about him being good, as in sneaky good, with the retort, "Your wife said the same thing." Ouch. Here it is.
(BEGIN VIDEO CLIP)
SEN. CHARLES GRASSLEY (R), IOWA: So, I did not ask for a vote on it, and you said it was a very statesmanlike thing for me to do at that particular time. And, so, I would hope you would return the favor.
(LAUGHTER)
SEN. KENT CONRAD (D), NORTH DAKOTA: You know -- and I used to like you.
(LAUGHTER)
CONRAD: Let me just say, oh, you are good. GRASSLEY: Your wife said the same thing.
(LAUGHTER)
(END VIDEO CLIP)
SANCHEZ: In the benefit of the doubt category, it does appear as though Senator Conrad was amicable about the comment, the retort, as we called it before. Good for him.
Now, in some neighborhoods, though, like the one I grew up in, comments like those end up leading to blows. I'm just saying.
Then there's Congress and how they treat kids on voucher programs, like the kids who would otherwise have to go to crappy schools. Are congressional Democrats not willing to give these kids a break, an extension, something? We're asking. And then Senator Byron Dorgan, he said 10 years ago that deregulating the banks would lead to a disaster. Guess what happened? Guess how much money had to do with it? Guess who joins me next. Senator Byron Dorgan.
(BEGIN AUDIO CLIP)
CALLER: Hey, Rick, this is Daniel in Oklahoma. We the people of the United States want our country back. For the politicians listening having a hard time understanding what I'm saying, go read the Constitution. It should have been mandatory before you took office.
(END AUDIO CLIP)
SANCHEZ: Social media is where it's at. We'd promise we would always be checking in with you. Let's start with Twitter, if we could, Robert. Dolphincrest in the middle. I see her picture. She is watching, she says, "Excellent show. Thanks for sacrificing time to see this historic signing," referring to the president's signing of the Land Management Act. "Look forward to what we should have listened to."
We will try to get it all in for you. Let's go to Facebook, if we can. Jennifer Miller Kluchar says, "I certainly hope that President Obama means what he says about fighting for the auto workers. My family's future depends on it, as my husband is now laid off from GM after 13 years of service." We appreciate hearing from all of you. Keep it coming.
Disturbing new information about two American journalists detained in North Korea. This one has a personal connection to us. The official news agency there says that the government plans to put Laura Ling and Una Lee on trial. The two reporters work for Current TV based in San Francisco. Laura Ling spoke to us last before she was taken into custody by the North Koreans. The North Koreans are now saying they entered the country illegally and intended hostile acts. The U.S. State (ph) Department is saying today that a Swedish diplomat met with Ling and Lee over the weekend but so far, we're working to get the details out of there. Here's another commitment we made to you, following up on this commitment to continue to drill down on how we got here, how this economic meltdown fell in our laps. I want you to look at a moment in time to understand this. I want to show you this. I want you to see it. In theory it's pretty simple. Wall Street paid $5 billion to politicians who weakened or eliminated the regulations that had been put in place to prevent a financial crisis in this country. You know, the ones that were put in after the Great Depression to make sure that it didn't happen again. Yes. Those.
No one was more adamant about getting rid of those rules and those regs than one senator, Phil Graham, who said at the time the reason we needed to do this was freedom. Nobody, on the other hand, tried harder to stop it than North Dakota Senator Byron Dorgan. Here he is, in fact. You want proof? 1999. We're going back in time, when he was trying.
(BEGIN VIDEO CLIP)
SEN. BYRON DORGAN, (D) NORTH DAKOTA: We are with this piece of legislation moving towards greater risk. We are almost certainly moving towards substantial new concentration and mergers in the financial services industry that is almost certainly not in the interest of consumers and we are deliberately and certainly with this legislation moving towards inheriting much greater risk in our financial services industries.
I think we will in 10 years' time look back and say we should not have done that.
(END VIDEO CLIP)
SANCHEZ: Wow. Prophetic. That was 1999. It's now ten years later. Just about everybody is saying, if only we had listened to that guy.
That guy joins me now. Senator, you were one of only eight who voted against that measure. Are you that smart or are the rest that conflicted by campaign contributions?
DORGAN: Well, it's not a crystal ball. It's more common sense, it seems to me. I was so concerned back then to allow the big banks to merge, to pass a piece of legislation that took apart what is called the Glass-Steagall Act that was put in place to protect the banks so the banks would not have to deal with real estate risks and securities risks. To do all that, to bring them all back together, create holding companies, I thought was just nuts. And I said back then as well that I think we will see massive taxpayer bailouts in the future. That's exactly what we see.
SANCHEZ: We got Glass-Steagall and then there was the Commodities and Futures Modernization Act, if I'm quoting that one correctly, but then there was the Gramm-Leach-Bliley Act. Make the viewers understand what these were and what they intended to do or do away with, maybe a better way to ask the question. DORGAN: Well, you know, the Glass-Steagall Act was put in place after the Great Depression to say banks have to be over here because they have to be safe and sound, and they can't be involved in real estate and securities and other risky enterprises. The so-called Gramm-Leach-Bliley, what was called the Financial Services Modernization Act, said you know what, that's old-fashioned. Let's get rid of all that, let's allow the big banks to merge, become one- stop financial shopping centers. They can be involved in all of these other things, riskier enterprises, real estate securities, and we'll put together these big firewalls. It appears they were made out of tissue paper because the result now is about $9 trillion of the American tax payers' money that's been guaranteed or pledged by the Fed, Federal Reserve Board, Treasury and others. This is a spectacular and dramatic failure and the fact is it didn't have to happen.
SANCHEZ: Failure and then some. By the way, speaking of Senator Gramm, whose name we mentioned in that, the fact he ended up becoming vice president of UBS's investment banking division, investment banking division, coincidence here?
DORGAN: I don't know. I don't know.
SANCHEZ: Does that trouble you? Shouldn't that trouble the average taxpayer?
DORGAN: It should. There's lots that should trouble the average taxpayer. A lot does. Back in that debate I also said to the big banks, you want to gamble, go to Las Vegas. Don't gamble with taxpayers' money. But you watch now. But let's watch this administration, watch my colleagues in Congress. Are they willing to turn back the clock a bit and restore Glass-Steagall? Are they willing to get rid of this so-called dark money that I call dark money, stuff that's unregulated? Are they really willing to bite the bullet and do what's necessary to fix what's right?
We need, it seems to me, a financial crimes prosecution task force right now in the Justice Department. And there ought to be a select committee in the United States Senate with subpoenas that finds out exactly what has happened. What's the master narrative here?
SANCHEZ: But wait a minute. You're saying financial crimes. Most of these things, because of the deregulation that you're talking about, or the re-deregulation, were legal. It was unethical. It was wrong. They knew they were screwing the system and most taxpayers but it was really legal. How could you get at it with a criminal division?
DORGAN: Well, I think Andrew Cuomo in New York, the attorney general, is asking the right questions. It also ought to be the U.S. Justice Department and the congress. What about Merrill Lynch, for example? Just before they got married up to Bank of America in January of this year, in December of this year, this is a company that lost $27 billion and they gave out $3.6 billion in bonuses, 694 of them got more than $1 million each, and then Bank of America took them over weeks later, got $20 billion of the taxpayers' money. Is that an arrangement that ought to ask some authorities to take a hard look with subpoenas? I think so. The American taxpayers deserve that.
SANCHEZ: Senator Geithner - Senator, Secretary Geithner last week came out and talked about what he wanted to do. He's talking about some of the things similar to what you were talking about. He doesn't only want to re-regulate, some people are saying he wants to go too far. Do you agree with his proposal, the one he unveiled last week?
DORGAN: It doesn't go far enough. Some of it's fine. He talks about these derivatives. Some of them would be regulated, traded on exchanges, others perhaps not. But just watch and see. Is someone going to suggest we reconnect Glass-Steagall, begin to take apart big bank holding companies? The fact is, this too big to fail notion, I think we ought to run these banks through a banking car wash, run them out the other side, keep the good assets and get rid of the bad assets, rename them and get rid of this too big to fail concept of banks because that puts the taxpayer at great risk.
SANCHEZ: I'm just sitting here thinking, I'm talking to one of only eight people in the entire U.S. Senate who had the vision to know that we were about to screw up our economy. Shouldn't you be one of the people making these decisions, given the fact that your track record's one of the few that's right?
DORGAN: Well, I'm trying to help make these decisions. I went down and talked to President Obama a week ago today at the White House about them. I'm going to speak on the floor of the Senate at 4:30 today.
SANCHEZ: Is he listening to you? Is the president listening to you?
DORGAN: The president has been in office two months. I mean, he inherited this unbelievable amount of trouble and you know, I think he and Secretary Geithner and others want to do the right thing. But my point is, it can't be half steps. You have to do big steps in the right direction. But I'm confident they are going to get there.
SANCHEZ: Senator Byron Dorgan, my thanks to you, sir. And my thanks for what you had to say even 10 years ago.
DORGAN: Thanks a lot, Rick. Good to be with you.
SANCHEZ: Likewise.
One of my producers says a man should be able to do whatever he wants in his front yard. Well, he's right, unless that man signed a homeowners' association covenant. Still, this one's about the American flag. There's the man. There's his flag. He's going to talk to you directly, that man. I want you to hear what he has to say about this.
And then what happens to the kids when a school voucher program ends in the nation's capital, they're about to be tossed back into the very schools that made the voucher program need in the first place. Is that fair? We'll let you decide. (COMMERCIAL BREAK)
SANCHEZ: Welcome back. I'm Rick Sanchez. Look at Bruce over here. He just sent us this on the Twitter. Bruce says, "Finally, finally, you're talking about banking meltdown in the proper context. What took CNN so long?"
Bruce, we have been talking about this for several weeks. Then let's go to MySpace. "This story about Laura Ling just gets worse and worse. It's getting very frightening now." We agree.
It's more than $400 billion. That's what President Obama is spending to keep America, i.e., the federal government running for the rest of this fiscal year. But you know who's being left out of this spending bill? Not the banks, not the auto companies, as we learned earlier in our report, not a bridge in Delaware or another one in Alaska. What's missing is money for kids. Seventeen hundred kids in the nation's capital, they are poor kids, they are underprivileged kids. As I once was. And they are recipients of school vouchers, something the teacher unions are not fond of.
Oh, well. Here's a question to you. Let's suppose that priorities and politics have changed and the voucher program has to be shut down. All right. Can't they at least come up with a way for letting these kids who are already in the program now stay at least until they graduate?
I mean, the president's daughters go to a school, Sidwell Friends, where some of those voucher kids also attend. Next year, if things stay as they are, those kids on vouchers are going to be gone. Is it fair? Maybe? Mr. President, you should ask Sasha and Malia about this one. Kids tend to stick together, you know.
Go to my blog at cnn.com/ricksanchez, tell me what you think about this one.
Speaking of the president, he says American cars are some of the best in the world. He's serious about it. And you know what, he's right. Now, how does he get people to buy into that and how many dealerships are going to be closing near your home? Stay with us. We'll be right back.
(COMMERCIAL BREAK)
SANCHEZ: Welcome back. I'm Rick Sanchez. When GM and Chrysler got $17 billion from the government last December, the understanding was that they had until tomorrow, tomorrow, to get their houses in order or start giving back the bailout money.
So did the president take back the money? No. He did something else. He fired the CEO of GM. That's the big story in the news today. Joining us now is Rick Newman, "U.S. News and World Report." Rick, good to see you again.
RICK NEWMAN, "U.S. NEWS AND WORLD REPORT": Hey, Rick. SANCHEZ: So Rick Wagoner failed to turn in his assignment. He didn't just get an "F," he got expelled from will school. Obama didn't really make good in the original threat though, right?
NEWMAN: That's correct. And I think part of this got wrapped up in the change of administrations. This seems like ancient history when we went from the Bush to the Obama administration but if you remember, the original idea was to have a car czar, that dated back to the Bush administration and of course, the original bailout for Chrysler and GM came in December, before Obama came in. So in just about two months, he decided he's not going to have a car czar, he's going to have this automotive task force and you're right, they did not do what they were supposed to do by the March 31st deadline but they really did lay out the groundwork for what these two companies need to do going forward. And I think by saying Rick Wagoner's out, they basically said GM's plan is not good enough, they don't restructure fast enough, they don't cut fast enough, they're going to have to do it a lot better.
SANCHEZ: Yes. They're going to have to rework the plan.
By the way, I was reading your column and you know what I found interesting? And I suggest people read this because you delineate what these companies are going to have to do. For example, you talk about dealerships. How many dealer -- They're going to have to get rid of a bunch of dealerships, right?
NEWMAN: GM as an example, GM has over 6,000 dealers right now. That's way too many. GM says it wants to go back to about 4,700 by 2012. That's about a 15 percent cutback and that's symptomatic of everything GM's been doing. They've been cutting relatively slowly. If you're inside GM, it seems like a revolution. They've closed I think 12 factories since 2000. That's a huge change inside GM, but obviously, it hasn't come nearly fast enough.
SANCHEZ: You know what's interesting about all of this, Rick, and we've run out of time and I want to get you back because I want to continue to talk about this conversation about what the plan as we move forward so we see it concretely. But here they are having to do all that, they're going to have to lay off workers while making the best cars right now in the world. Some of the best cars.
When the president said that today, he wasn't exaggerating. The big mags, the people who know about this are saying the exact thing. So there's an irony here that's almost troubling. Rick, I've got to let you go. We'll do this again.
NEWMAN: Sure thing. Thanks, Rick.
SANCHEZ: There it is, folks. It's the flag pole in the yard in the yard of Mr. Ron Tripideau (ph). That is what all the fuss is about. His homeowner's association says look, a rule is a rule. He says no, that's Old Glory you're talking about. This is patriotism, this is constitutional. He's going to be sitting right here in just a bit and he and I are going to have a discussion about this. You're invited. (COMMERCIAL BREAK)
SANCHEZ: We welcome back. There is not a single community in America, whether it's a condo or block of homes, with a homeowner's association that hasn't had a squabble over something. You know how it goes. There's the owner who wants to park a boat in the driveway, there's the gal who wants to paint her home lime green. Add your own story here.
As even (ph) as these arguments often get, turning neighbors into enemies and backyard picnics into battle plan gathering sites. Look at this. Imagine how much worse it would be if the argument revolved around something patriotic. A symbol like Old Glory. Look how tastefully done that is. That's the man who's proud of it. That's the man who put it in front of his house. He's got lights on it. He's proud to be putting that flag and displaying it, but his homeowner's association says nope, rules are rules, you've got to take it down.
Ron Tripodo is good enough to join us. Ron, thanks for coming in here.
RON TRIPODO, SUED BY HOA OVER FLAGPOLE: Thank you for having me.
SANCHEZ: That looks beautiful. Who's not going to like that and say it's tastefully done. You spent a pretty penny on that.
TRIPODO: I did. I did.
SANCHEZ: But they're saying you know what, and I'm going to read to you their rules, we talked to your HOA. They say "flags and similar items must be approved in accordance with the provisions of article VII hereof, which means you had to get this permitted." They only want them to be on the walls or hanging -- They're going to tell you a rule is a rule to which you say what?
TRIPODO: Originally, when I put the pole up, the idea was to be able to show my patriotism and love for America. I had my house. When it gets wet and you don't have the proper lighting on it, I just wanted to do it the right way. The way that we are supposed to present the flag. And that's by putting it on a pole, shining a light at night, and I'll be able to do half mast, do the things I want to do.
SANCHEZ: That's the way the military wants it done, the way the Constitution says that we should have it. Right?
TRIPODO: Right. And never thinking for one minute that this would be a problem. I can really say I never thought it would be a problem.
SANCHEZ: Let me just play devil's advocate and the guy across the street decides he wants to put up a bigger flag, and wants it to be as big as the flags we see on the interstate, 100 by 300 and put it in the middle of his yard. Can you see where they need some kind of rule that has to be in place? TRIPODO: I understand but President Bush, in 2006, signed the Freedom Act, giving us the right as Americans to fly the flag in a reasonable manner with the pole not being more than 20 feet. I am below that and I believe it's reasonable.
SANCHEZ: So you're going to fight them on this. You're not going to take it down.
TRIPODO: Absolutely.
SANCHEZ: You're being fined. You're going to pay the fine?
TRIPODO: Well, I'll pay the fine for not asking permission first. I ...
SANCHEZ: You're going to get a lawyer and you're going to work ...
TRIPODO: I already have one.
SANCHEZ: You going to stay in touch with us and let us know what's going on?
TRIPODO: Absolutely. Rick, thanks for your time.
SANCHEZ: I appreciate it. You want to meet Wolf Blitzer?
TRIPODO: I'd love to meet Wolf.
SANCHEZ: Say here's Wolf Blitzer, Wolf, what do you got?
TRIPODO: Wolf, what do you got today for us?
SANCHEZ: Thanks very much. Guys, yeah, THE SITUATION ROOM coming up at the top of the hour. Rick, you're going to be really interested. I think a lot of our viewers as well. We're going to be hearing from Seymour Hersh, the Pulitzer Prize winning writer for "The New Yorker" magazine, has a brand new piece out on Syria and Iran, Afghanistan, what's going on.
We're also going to talk to him about Iraq and Afghanistan. We're going to talk to him about what he recently said about saying that the former Vice President Dick Cheney was responsible for an assassination ring out there. And we're also going to be speaking with John Hannah who was Dick Cheney's national security adviser. Seymour Hersh and John Hannah. They're both going to be here in THE SITUATION ROOM. Rick, I think you're going to want to see this.
SANCHEZ: I will. Sy Hersh, his stuff always is eyebrow raising. We appreciate it, Wolf. Look forward to it.
Guess how many people have joined Facebook as of now? A milestone. My how social media has grown. Who knew? Well, we did. The exact number when we come back. Stay with us.
(COMMERCIAL BREAK) SANCHEZ: Welcome back. Facebook is about to cross an important milestone. This week, they're on track to have 200 million subscribers. That's a crazy number when you consider it's about two thirds the population of the United States. Congratulations. Susan Lisovicz is standing by to let us know what's going on with the closing bell. Susan, what you got?
SUSAN LISOVICZ, CNN CORRESPONDENT: Well, Washington's getting tough with Detroit. And investors got tough on Wall Street. No question about it. A very tough day on Wall Street. GM shares down 25 percent, the three major averages down three percent. Rick?
SANCHEZ: Susan Lisovicz, there when it's good, there when it's bad. Today, Wolf Blitzer standing by now. Here's THE SITUATION ROOM.
BLITZER: Rick, thank you. Happening now, President Obama's blunt warning to GM and Chrysler. Do more to help yourselves or the federal government may pull the plug.
