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President Obama, King Abdullah Meet; President Obama on Interrogation Memos; Red Flags on the Bailout; No-Gas Cars on the Way; Red Flags on the Bailout; President Obama on Interrogation Memos; Craigslist Killer Suspect Arraigned; The Help Desk

Aired April 21, 2009 - 12:00   ET

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

TONY HARRIS, CNN ANCHOR: The $700 billion federal bailout program is six months old now and getting a congressional checkup today. President Obama's treasury secretary answered questions for the watchdog panel overseeing TARP, the Troubled Asset Relief Program.

(BEGIN VIDEO CLIP)

TIMOTHY GEITHNER, U.S. SECRETARY OF TREASURY: Our central objective, our obligation, is to ensure that the financial system is stable and its able to provide the credit necessary for economic recovery. But stability itself is not enough. We need a financial system that is not deepening or lengthening the recession, and once the conditions for recovery are in place, we need a financial system that is able to provide credit on a scale a growing economy requires.

(END VIDEO CLIP)

HARRIS: And, as promised, President Obama at his meeting with Jordan's King Abdullah.

(JOINED IN PROGRESS)

QUESTION: ... when do you expect that actually to happen? And how does the Arab peace initiative feature (OFF-MIKE)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Well, first of all, we have gone out of our way to compliment the efforts of those Arab states that were involved in formulating the Arab peace initiative as a very constructive step.

And, obviously, King Abdullah has taken great steps to ensure that that sustains itself in terms of Arab support, even while we have seen a breakdown in negotiations. That's a significant achievement for which King Abdullah and others deserve credit.

So we -- we want to continue to encourage a commitment on the part of the Arab states to the peace process. I have assigned a special enjoy, George Mitchell, who is, you know, I think, as good of a negotiator as there is and somebody who, through assiduous work, was able to accomplish or help achieve peace in Northern Ireland. We want that same perseverance and sustained effort on this issue, and we're going to be actively engaged.

We have obviously seen the Israeli government just form recently. Prime Minister Netanyahu will be visiting the United States. I expect to have meetings with him. I've had discussions with the Palestinian counterparts, as well as other Arab states around this issue.

My hope would be that, over the next several months, that you start seeing gestures of good faith on all sides. I don't want to get into the details of what those gestures might be, but I think that the parties in the region probably have a pretty good recognition of what intermediate steps could be taken as confidence-building measures. And we will be doing everything we can to encourage those confidence- building measures to take place.

QUESTION: (OFF-MIKE)

OBAMA: OK, the -- I actually have a list, guys. I'm sorry. We've got to be fair.

Jennifer, you always get a question, so you're not getting one today.

Steve -- Steve Collinson, AFP? Go ahead, Steve.

QUESTION: What are you -- what -- what is your comment on the rhetoric yesterday from the Iranian president directed towards Israel? And given that kind of talk and the recent imprisonment of a U.S.- Iranian journalist, do you think that will make it more difficult for you to push forward your diplomatic outreach with Iran?

OBAMA: Well, sadly, the rhetoric is not new. This is the kind of rhetoric that we've come to expect from President Ahmadinejad.

When I said during the course of the campaign and repeated after the election that we were serious about engagement with Iran, it was with no illusions. I was very clear that I found many of the statements that President Ahmadinejad made, particularly those directed -- directed at Israel to be appalling and objectionable.

As I've also said before, Iran is a very complicated country with a lot of different power centers. The supreme leader, Khamenei, is the person who exercises the most direct control over the policies of the Islamic republic. And we will continue to pursue the -- the possibility of improved relations and a resolution to some of the critical issues in which there have been differences, particularly around the nuclear issue.

But there's no doubt that the kind of rhetoric that you saw from Ahmadinejad is not helpful. In fact, it is harmful, not just with respect to the possibility of U.S.-Iranian relations, but I think it actually undermines Iranians' position as the world as a whole.

We weren't at the conference. And what you saw was a whole host of other countries walking out and that language being condemned by people who may be more sympathetic to the long-term aspirations of -- of the Iranian people.

So I think it actually hurts Iran's position in the world. But we are going to continue to take an approach that tough, direct diplomacy has to be pursued without taking a whole host of other options off the table. OK.

Is there somebody...

(CROSSTALK)

OBAMA: Go ahead.

QUESTION: I just want to follow on the previous question. You sent Senator Mitchell to the region to listen.

OBAMA: Yes.

QUESTION: Is he done with the listening now? And -- because all the signals we heard from Israeli government, basically, that they're not (OFF-MIKE) in the two-state solution.

Your position is strongly (OFF-MIKE) so I wanted to -- to ask, also, His Majesty, President Obama said that there's positive elements within the Arab (OFF-MIKE) but he didn't say what he (OFF-MIKE) about. Can you tell us if you have noticed any tangible results (OFF-MIKE) and can the Arab peace initiative be the baseline for a peace process in the Middle East?

OBAMA: OK. Well, first of all, I think it is very important to recognize that the Israelis now have had a government for a few weeks, and it was a very complicated process for them to put a coalition together.

So I think more listening needs to be done. They are going to have to formulate and, I think, solidify their position, so George Mitchell will continue to listen both to Arab partners, to the Palestinians, as well as the Israelis.

But I agree that we can't talk forever, that at some point steps have to be taken so that people can see progress on the ground. And that will be something that we will expect to take place in the coming months. And we will help, hopefully, to drive a process where each side is willing to build confidence.

I am a strong supporter of a two-state solution. I have articulated that publicly, and I will articulate that privately. And I think that there are a lot of Israelis who also believe in a two- state solution.

Unfortunately, right now what we've seen not just in Israel, but within the -- the Palestinian territories, among the Arab states, worldwide, is a profound cynicism about the possibility of any progress being made whatsoever.

What we want to do is, is to step back from the abyss, to say, as hard as it is, as difficult as it may be, the prospect of peace still exists, but it's going to require some hard choices, it's going to require resolution on the part of all the actors involved, and it's going to require that we -- we create some concrete steps that all parties can take that are evidence of that resolution. And the United States is going to deeply engage in this process to see if we can make progress.

Now, ultimately, neither Jordan nor the United States can do this for the Israelis and the Palestinians. What we can do is create the conditions and the atmosphere and provide the help and the assistance that facilitates an agreement.

Ultimately, they've got to make a decision that it is not in the interests of either the Palestinian people or the Israelis to perpetuate the kind of conflict that we've seen for decades now, in which generations of Palestinian and Israeli children are growing up insecure in an atmosphere of hate.

And my hope is, is that the opportunity will be seized, but it's going to take some -- some more work, and we are committed to doing that work.

KING ABDULLAH II, KING OF THE HASHEMITE KINGDOM OF JORDAN: I couldn't have said it better myself, Mr. President. I think we're looking now at the -- at the positives and not the negatives and seeing how we can sequence events over the next couple of months that allows Israelis and Palestinians and Israelis and Arabs to sit around a table and move this process forward.

OBAMA: Now, did I already -- are one of you Nadia?

QUESTION: That was me.

OBAMA: That was you. OK, so, Nadia, I was going to call on you anyway.

Jake, you always get questions, so I'm going to -- I'm going to try somebody else.

(CROSSTALK)

OBAMA: I'd better give an American, since there's -- you know, so that we're -- so that we're going back and forth.

And, Sheryl, you always get in, so I'm just trying to see if there's anybody unusual.

All right. You know what? I'll go back to -- I'll go back to Jennifer, because she had her hand up before Sheryl or -- or Jake.

Go ahead.

QUESTION: (OFF-MIKE) to ask you about the interrogation memos (OFF-MIKE) you were clear about not wanting to prosecute those who -- who carried out the instructions under this legal guidance.

OBAMA: Right.

QUESTION: Can you be that clear about those who devised the policy? And then, quickly, on the second matter, how do you feel about investigations, whether a special -- special commission or something of that nature (OFF-MIKE) to go back and really look at the issue?

OBAMA: Well, the -- look, as I said before, this -- this has been a difficult chapter in our history and one of the tougher decisions that I've had to make as president.

On the one hand, we have very real enemies out there, and we rely on some very courageous people not just in our military, but also in the Central Intelligence Agency to help protect the American people, and they have to make some very difficult decisions, because, as I mentioned yesterday, they are confronted with an enemy that doesn't have scruples, that isn't constrained by constitutions, aren't constrained by legal niceties.

Having said that, the -- the OLC memos that were released reflected, in my view, us losing our moral bearings. That's why I've discontinued those enhanced interrogation programs.

For those who carried out some of these operations within the four corners of legal opinions or guidance that had been provided from the White House, I do not think it's appropriate for them to be prosecuted.

With respect to those who formulated those legal decisions, I would say that that is going to be more of a decision for the attorney general within the perimeters of various laws, and -- and I don't want to prejudge that. I think that there are a host of very complicated issues involved there.

As a general view, I think that we should be looking forward and not backwards. I do worry about this getting so politicized that we cannot function effectively and it hampers our ability to carry out critical national security operations.

And so if and when there needs to be a further accounting of what took place during this period, I think for Congress to examine ways that it can be done in a bipartisan fashion, outside of the typical hearing process that can sometimes break down and break it entirely along party lines, to the extent that there are independent participants who are above reproach and have credibility, that would probably be a more sensible approach to take.

I'm not suggesting that, you know, that should be done, but I'm saying, if you've got a choice, I think it's very important for the American people to feel as if this is not being dealt with to provide one side or another political advantage, but rather is being done in order to learn some lessons so that we move forward in an effective way.

And the last point I just want to emphasize, as I said yesterday at -- at the CIA when I visited, you know, what makes America special, in my view, is not just our wealth, and the dynamism of our economy, and our extraordinary history and diversity. It's -- it's that we are willing to uphold our ideals even when they're hard.

And sometimes we make mistakes, because that's the nature of human enterprise. But when we do make mistakes, then we are willing to go back and correct those mistakes and -- and keep our eye on those -- those ideals and -- and values that have been passed on generation to generation.

And -- and that is -- is what has to continue to guide us as we move forward. And -- and I'm confident that we will be able to move forward, protect the American people effectively, live up to our values and ideals.

And that's not a matter of being naive about how dangerous this world is. As I said yesterday to some of the CIA officials that I met with, I wake up every day thinking about how to keep the American people safe, and I go to bed every night worrying about keeping the American people safe.

I've got a lot of other things on my plate. I've got a big banking crisis, and I've got unemployment numbers that are very high, and we've got an auto industry that needs work.

There are a whole things -- range of things that during the day occupy me, but the thing that I consider my most profound obligation is keeping the American people safe.

So I -- I do not take these things lightly, and I'm not in any way under -- under illusion about how difficult the task is for those people who are on the front lines every day protecting the American people.

So I wanted to communicate a message yesterday to all those who overwhelmingly do so in a lawful, dedicated fashion that I have their back.

All right? Thank you, everybody.

HARRIS: The president -- certainly King Abdullah was in the room. You wouldn't know it necessarily, but the president with Jordan's King Abdullah, talking about their shared commitment to a two-state solution for Israel and the Palestinians, and ways to get the parties there to the table. But the real news here -- and let's justice bring up our Elaine Quijano in a split here.

Because, Elaine, the real news here -- it's big news. I mean, frankly, it's big news.

The president was asked about his decision to release the Bush- era CIA documents -- we've been talking about that for the last few days now -- detailing the interrogation techniques used on selected detainees, and the president making the statement that he is leaving open the possibility that architects of the interrogation program could be prosecuted.

ELAINE QUIJANO, CNN WHITE HOUSE CORRESPONDENT: Yes, that's exactly right, Tony. Pretty extraordinary, as you noted. You know, let's be clear here, first of all. He did say that for those who carried out these methods within what he called the four corners of the law at the time, he was not interested in going after prosecuting those people. But you're absolutely right, for those, as he put it, who formulated those legal decisions, the legal basis for carrying out this policy, it sounds like that's a different story. Now, certainly that is something we have not heard before.

HARRIS: Elaine, that is a shift. That is a huge shift, because this president has wanted nothing to do with hearings and prosecutions on this matter.

QUIJANO: So the next question, Tony, is why?

HARRIS: What's happened?

QUIJANO: Well, as we know, from day one, we know that this administration has been under tremendous pressure from the left to do something and hold people accountable to try and show some accountability for these methods of which the president himself has called torture. One example of that, MoveOn.org is apparently now circulating a petition to Attorney General Eric Holder saying, look, so far there has been no accountability for the architects of Bush's torture program, as they call it in this letter. This petition says no one is above the law, it's time to appoint a special prosecute to investigate and prosecute.

So it's an example, Tony, of the climate that this debate is happening within right now as the Obama administration tries to figure out how to strike that delicate balance by saying, look, this is wrong, we're not going to do it again, but at the same time trying to figure out what to do about the fact that it happened in the first place.

HARRIS: And the difficulty of striking that balance was front and center yesterday in the president's visit to Langley.

QUIJANO: Absolutely. Yes, and a lot of what he said in the Oval Office just a short time ago was an echo, really, of what he told CIA employees.

And he said, look, I understand. I get it. Al Qaeda isn't bound by any kind of constitution, as he put it. I think he said "legal niceties."

HARRIS: Yes.

QUIJANO: And so it's not a fair fight. He gets that. That was his message.

But at the same time, as he also noted in the Oval Office, he's very set on looking forward, not backward. But again, this shift today really reflecting perhaps the tremendous political pressure again coming from the left to try and hold people responsible for what did happen under the Bush administration.

HARRIS: The officials, but not the men and women who carried out the orders.

QUIJANO: Not the men and women who carried out the orders, but it would be...

HARRIS: Who crafted.

QUIJANO: ... who crafted the policies that allowed these techniques to happen legally under the U.S.

(CROSSTALK)

HARRIS: Wow. Can you imagine -- I'm just thinking about where this takes us in terms of a discussion of these policies.

The president also saying, Elaine, and correct me if I'm incorrect here, that it will be left up to the attorney general to make the decision?

QUIJANO: He did say that it's more for the attorney general. He said he doesn't want to prejudge that. So, certainly, obviously now all eyes are going to be on the Justice Department to see what in fact, if anything, Attorney General Holder does decide to do about this.

But there is, in addition to that, I should tell you, Senator Patrick Leahy, a Democrat, has also been very vocal about getting together what he wants to call a truth commission, basically. So it's not just liberal groups. You know, there is support from some members of Congress to hold some kind of forum, perhaps, so that there can be an airing out of some of these grievances even more fully. But the news, as you noted, President Obama saying for those who formulated this policy, leaving that door open to possible prosecution -- Tony.

HARRIS: I won't ask you to play the game, but you know that the name game is now under way. Who were the officials who could be prosecuted by virtue of this statement from the president?

Elaine Quijano at the White House.

Elaine, big news. Big news.

We'll take a break and we'll come back with more CNN NEWSROOM in just a moment.

(COMMERCIAL BREAK)

HARRIS: Boy, a lot of news today.

The $700 billion federal bailout program is six months old now and getting a congressional checkup today. President Obama's treasury secretary answered questions for the watchdog panel overseeing TARP, the Troubled Asset Relief Program.

(BEGIN VIDEO CLIP)

GEITHNER: Our central objective, our obligation, is to ensure that the financial system is stable and its able to provide the credit necessary for economic recovery. But stability itself is not enough. We need a financial system that is not deepening or lengthening the recession, and once the conditions for recovery are in place, we need a financial system that is able to provide credit on a scale a growing economy requires.

(END VIDEO CLIP)

HARRIS: OK. I want to talk to our Gerri Willis now. She is part of the CNN Money team in New York.

And Gerri, first of all, what did you hear in this testimony? Because we teed it up as an important hearing, discussion between this panel and the treasury secretary, hopefully outlining with some specificity where the TARP money has been going and what the firms receiving that money have been doing with it.

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Well, you know, Tony, I think what's interesting here is that the theme of the entire hour, hour and a half, was certainly accountability. What are you doing with the money? Where is it going? How can we be sure that it's going where it's supposed to go? But the whole thing was overshadowed by the general counsel releasing this report today that he's instituted 20 criminal investigations.

HARRIS: Yes.

WILLIS: So, suddenly, this conversation takes a whole new turn, a whole new twist. And Treasury Secretary Geithner is talking about the kinds of things they're doing to make sure they have tabs on the money, like what they're doing to make sure that that PPIP program, the Public/Private Investment Partnership, doesn't go astray, to make sure that that money is being handled wisely. Remember, this is buying back those troubled assets, using private companies and private dollars to come together to get some of those assets off of bank books.

You know, he said in his testimony, hey, we're going to have competitive bidding on that, but I have to tell you, there's still big questions about, is this going to work? And how do we make sure that tax dollars are safe? And as I told you before, you know, in many ways, the questions were more interesting than the answers because they were so pointed.

HARRIS: Well, Gerri, stand by for a second. You've teed it up for me perfectly.

The man policing the bailout program says criminal investigations are under way into possible TARP waste and mismanagement.

CNNMoney.com's Poppy Harlow joining us now from New York.

And Poppy, terrific get here. What did the special inspector general Neil Barofsky have to say to you?

POPPY HARLOW, CNN MONEY.COM CORRESPONDENT: You know, he's known as the TARP cop, Tony, because he's charged with tracking the $700 billion bailout program. As Gerri was explaining, that 250-page report issued this morning outlined also 20 criminal investigations, six audits.

I want to get to what Gerri was talking about, which was that Private/Public Investment Partnership Program.

I asked him specifically about that, because in the report he talks about significant risk of fraud that could be associated with that program. I asked him, "Could you please explain it?"

And Tony, it was really this simple. He said, listen, a fund manager could want to buy some of these so-called assets. And he could go to another hedge fund, and they could agree that the assets are worth $30. But they could also agree to pay $50 and then split the difference between them, illegally profiting, and the taxpayer suffering in the end, Tony. So that was just a simple but yet very probable, possible, at least, thing that could happen if this is not closely monitored.

I want to play some sound here from our interview. The whole interview is right there online at CNNMoney.com, but take a listen to what he had to say in terms of their responsibilities.

(BEGIN VIDEO CLIP)

NEIL BAROFSKY, TARP SPECIAL INSPECTOR GENERAL: Ultimately, our benchmark is transparency, being able to bring as much information to the American people, to the media, and to the administration so they can understand and make the right policy decision. Ultimately, what we do is make recommendations. It's up to Treasury to adopt and implement those recommendations, and we're going to keep pushing for them to do so we can bring about that result.

(END VIDEO CLIP)

HARLOW: All right.

Well, he also, Tony, made some recommendations to Treasury Secretary Tim Geithner in this report, saying the government also needs to fully understand the value of the billions of dollars in assets that it now holds through the TARP program, that they need to understand that value at this point, where the market is, so they can make the most informed decision possible. And again, warning about that fraud, which Gerri was exactly right, taking a headline away from some other issues in the hearing today.

HARRIS: That is terrific. Poppy, thank you so much.

Gerri, as always, good to see you. And thanks for your help in this segment as well.

A slew of first quarter earnings reports are out today from Yahoo! to Coke. You can get the rundown on earnings any time you would like. Just log on to CNNMoney.com.

(COMMERCIAL BREAK)

HARRIS: Chrysler tells the government, no thanks. The automaker turning down additional government funding. According to one source, company execs don't like the government limiting their pay. Chrysler is already in debt to the Treasury to the tune of $1.5 billion.

Revving up to Earth Day now. Some automakers are on Capitol Hill today showing off their green cars. Most of them are still just a concept. The talk there all about the future of hybrids and electric fuel cells. One company is touting a plug in vehicle called Idea. Its maker says it gets around 100 miles a gallon. Like that.

Within just a few years, we will have cars on the market that don't require gasoline at all and they'll be affordable. That's the prediction from an expert. Oh, really? Josh Levs is here with that.

Explain. Tell us more, Josh.

JOSH LEVS, CNN CORRESPONDENT: I know. We were surprised by this, right?

HARRIS: The meeting was abuzz with this conversation from you this morning.

LEVS: It was abuzz, our morning meeting. I'll tell you something, you know, I wanted a bit of a reality check, which granted is hard to get when you're talking predictions.

But I've managed to get an interview with one of the nation's top experts on the future and on the condition currently of green car technology. And I started off asking him, is a truly green car really close?

(BEGIN VIDEOTAPE)

DERON LOVAAS, NATURAL RESOURCES DEFENSE COUNCIL: We're actually very close. Plug in hybrid vehicles that run on electricity and therefore help get us off oil and help jump-start the economy by going into technology that we can manufacture domestically are a big part of the future.

LEVS: So let's break this down because when people think about green cars they think electric. There are theories that you could have a car that runs on water, vegetable oil, ethanol. What is the future? What's the best hope at this point?

LOVAAS: Imagine that you're able to get into your car and it is what is called a flex fuel plug in hybrid vehicle. And that means that it can run on a variety of fuels, including ethanol, in liquid form, and it can run on electricity, which means you squeeze more and more miles per gallon of gasoline that you use.

LEVS: So the ideal is a combination of ethanol and electric car?

LOVAAS: That's right. That's right. LEVS: And ethanol, we've heard in the past, there have been some problems with ethanol. For example, the plants that churn out the ethanol were actually causing pollution and some people weren't sure it's even any better than gasoline. Is ethanol moving in a direction in which it will be truly green?

LOVAAS: Yes. Thanks to actually a new energy law that Congress passed in 2007, ethanol is headed in the right direction.

LEVS: How many years are we from having a car that is, in this sense, truly green? How many years?

LOVAAS: Well, we're only a few years away. That's the good news. Actually Ford has already come out with an Escape flex fuel plugable hybrid. And the Prius is going to be plugable as well. And you have the Chevy Volt out there as well.

These cars are going to be in showrooms in just a few years. I think both domestic and foreign carmakers are going to be out at the forefront because I think everyone now has seen the writing on the wall. You know, it's not just like -- it's not just groups like mine. It's most of the American public and it's also the carmakers. They realize that this is the future and to be competitive and to keep generating jobs and to stay solvent, actually, they need to invest a lot more in cleaner and more efficient technology.

(END VIDEOTAPE)

LEVS: And, Tony, we talked about affordability. He specifically told me he believes that within the next few years, there will be a car that runs that way that's affordable, particularly when you factor in not paying for gasoline over the life of a vehicle. Still, we all know what's out there, assuming it is, it could take a while to catch on.

HARRIS: Boy, what an interview. Good stuff.

LEVS: Yes.

HARRIS: Josh, appreciate it.

LEVS: Thanks, Tony.

HARRIS: A lot of scrutiny of the TARP program on Capitol Hill today. We will talk about it with Shawn Tully. He is the editor of "Fortune" magazine.

(COMMERCIAL BREAK)

HARRIS: OK. So the $700 billion federal bailout program, six months old, getting a lot of scrutiny on Capitol Hill today. Getting a bit of a checkup really. President Obama's Treasury secretary answering questions from the watchdog panel overseeing TARP, the Troubled Assets Relief Program. I want to get you to a little bit of sound from that testimony offered by Secretary Geithner a little earlier today. (BEGIN VIDEO CLIP)

GEITHNER: The lessons of financial crisis throughout history is that early action, forceful action, sustained action to repair financial systems promote the flow of credit is essential to limit the damage recessions cause and to make it possible to bring a recovery about at least cost to the taxpayer over time.

(END VIDEO CLIP)

HARRIS: OK. So Shawn Tully is with us now. He is the editor at large for "Fortune" magazine.

And, Shawn, look, I've been a little disappointed in what I've heard back in the reporting of this discussion this morning because it doesn't appear to me that the really pointed questions about what has happened to the money, $106 billion left of a $700 billion program, and what the companies have been doing with the money they've received. And was I wrong in expecting, a, those questions to be asked and then answers from the Treasury secretary?

SHAWN TULLY, "FORTUNE" MAGAZINE: Well, we know where most of the money is. It's sitting on the balance sheets of these companies in the form of preferred stock that they're paying very large dividends on that are really weakening their financial position because, in some cases, they're 8 percent, which is the equivalent of like a 12 percent junk bond because they're not tax deductible.

So the money is there and the government has put a lot of restrictions on these banks. They can't pay CEOs nearly what they were being paid previously. They can't make acquisitions. They can't pay common dividends. So the restrictions are extremely tight, which is not good for the banks.

HARRIS: Wow. So, Shawn, but the other point here is that, you know, the banks are now talking about paying back some of this money, which is interesting in at least Treasury to this point has not been inclined to just say, OK, pay us the money back. Explain that to us. I see the incentive in the banks paying back the money because they want the government out of their business.

TULLY: Right. Well, there's two issues here. One of which just came up. The first issue is, can a healthy bank that passes these government stress tests pay the money back? The answer is, not necessarily because Geithner now wants to make sure that the world financial system has a coordinated plan to stimulate economies around the world to prevent a deeper recession to make sure that banks are lending, that credit is being restored.

So even if banks have under the stress test the ability to pay it back, they won't necessarily be able to pay it back if we're still in a tough recessionary situation. If banks are weak under the stress test, we know, we've known for a while that they're not going to be able to pay the money back even if they want to because the government deems that they need that capital going forward. HARRIS: The importance of this stress test, aren't we getting close to understanding the way banks operate in a way that we've never seen before? I mean fundamentally?

TULLY: No. I don't think so.

HARRIS: We're not?

TULLY: No. The FDIC has been stress testing banks for many years. And when banks failed the stress test, when their capital gets too low, because the FDIC is insuring their deposits on behalf of the public, then the FDIC then steps in, takes over the bank -- there is no bankruptcies for banks that are insured by the FDIC -- and then liquidates the assets as quickly as possible to private buyers, keeps what's left if they have to, may have to recapitalize what's left if necessary, that's been going on now for many, many years. There's nothing new about a stress test. It's not revealing anything new about the banks.

HARRIS: Well, Shawn, is it just coincidence, just because maybe it's by suspicion about the banks, but is it just coincidence that the banks are talking about -- particularly the big ones are talking about paying back this money just weeks before the results of the stress test come in and are made public?

TULLY: Well, again, the preferred stock that they're holding makes them a lot weaker. So I don't think there's necessarily a correlation between the two. They just -- they want to get this debt, which is essentially what it is, off their books, stop paying the dividend and get out from under these restrictions.

HARRIS: Gotcha.

Shawn, good to talk to you. Thanks for your time.

TULLY: My pleasure.

HARRIS: All right. We want to get to our White House correspondent Ed Henry right now.

And, Ed, an amazing development out of the conversation just 20 or so -- no, a little longer than that -- between the president and Jordan's King Abdullah. There was a question asked -- the president was asked about his decision to release Bush era CIA interrogation documents detailing interrogation techniques used by -- used on selected detainees. And then the announcement from the president that he was leaving open the possibility that the architects of the interrogation program could face prosecution.

ED HENRY, CNN CORRESPONDENT: A major shift, Tony, because just in the last couple of days you think of how all this played out. Late last week, when the president decided to release these Bush era memos, he made clear then in a statement that he was not planning to seek prosecutions. That was certainly the signal from the White House.

Then on Sunday, on ABC with George Stephanopoulos, you saw the White House chief of staff, Rahm Emanuel, questioned repeatedly about whether they would hold Bush administration officials accountable. He said no.

Yesterday in the White House briefing room, I pressed Robert Gibbs, the White House press secretary, repeatedly. He insisted and suggested they would not be prosecuting any Bush officials and basically stuck to the line of, the president is looking forward, not backward, even when pressed on it.

And so this is a shift from the president of the United States today saying he's leaving the door open to the potential that former Bush lawyers would be prosecuted.

HARRIS: And let's chop this up. Let's spend some time. Let's chop this up. What has happened here? Why the shift?

HENRY: Well, I think, first of all, you have to look at what's happened in the last 24 to 48 hours. There have been a lot of liberals and liberal groups like moveon.org that are making a lot of noise about how they want to see a full scale criminal investigation. Some sort of outside panel. Whether it's led by the attorney general, Eric Holder, whether it's the attorney general appointing, as moveon.org is now calling for today in a letter to Attorney General Holder, sort of a special prosecute appointed, or you have Senator Patrick Leahy on Capitol Hill calling for what he calls a truth commission. So there are any number of forums where this could happen.

But you have to look at the pressure from the left on this president saying, look, you need to hold Bush officials accountable. Who could it be? It could be somebody like Jay Bybee. He's now a federal judge, a former Bush lawyer. John Yoo, a former senior Bush Justice Department official. Also Steven Bradbury, another former lawyer in the Bush administration. I think it's unlikely at this point that you would see someone like former President Bush, former Vice President Cheney dragged before a commission or any sort of outside panel, but obviously it's possible.

HARRIS: How about the former attorney general? How about the former attorney general?

HENRY: Alberto Gonzales is certainly somebody. Alberto Gonzales is somebody would could be called before such a panel. All this would be speculation now, so we want to be careful.

HARRIS: Sure. Sure.

HENRY: But it's much more likely a lot of the focus, particularly from Capitol Hill -- I just, in the last few minutes, I got a statement from Senator Russ Feingold, a Democrat of Wisconsin, targeting Jay Bybee, a former justice lawyer in the Bush years. He's somebody who's now a federal judge.

And what Senator Feingold is putting out a statement noting that back in 2003, when Jay Bybee was appointed to this federal judgeship by the Bush administration, Feingold and others were demanding that these alleged torture memos be released so that the senators could have more information before they voted him into this lifetime appointment on the federal bench -- Tony.

HARRIS: But what's interesting about this is that we've just started a little bit of the name game. And you know that when the name game -- you know it better than me because you live in that city -- once the name game starts in Washington, there's no telling where it ends, correct?

HENRY: That's right. And, you know, you have Vice President Cheney appearing on John King's program here a couple weeks ago, taking some shots at this administration on the broad issue of keeping the country safe.

HARRIS: Yes.

HENRY: Yesterday he gave another interview going after the president again. So that's not ending. You can bet Robert Gibbs is going to be asked about that in a short time when we go to the White House briefing here. And if you have a moment, I'll play you the little clip of what Robert Gibbs and I yesterday -- take a listen when I asked him this very question.

HARRIS: Please, please.

(BEGIN VIDEO CLIP)

HENRY: The people in the CIA who followed through on what they were told was legal, they should not be prosecuted. But why not the Bush administration lawyers who, in the eyes of a lot of your supporters on the left, twisted the law. Why are they not being held accountable?

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: Well, the president is focused on looking forward.

(END VIDEO CLIP)

HENRY: So, there you go. Just 24 hours ago, Robert Gibbs, here at the White House, saying we're looking forward, not back, and we're not going to be pursuing Bush officials. You can bet in the next hour or so, it's supposed to be at 1:30 Eastern Time, we're going to be asking Robert Gibbs what changed.

HARRIS: That will be hot because this is the last thing -- you mentioned the public statements from this White House. This is the last thing this administration wants. This administration has been consistently -- and you know this better than most because you've been following it so closely -- has been about moving forward. Focusing on this economy. Getting it back on track. It's the last thing this administration wants is a backward looking investigation.

HENRY: Well, you're right in the sense that this president has gone out of his way to the concern of some Democrats in this town, frankly, who think he's been to nice to former President Bush. But this was a pretty smooth transition. Not many shots back and forth. Former President Bush, it should be noted too, down in Texas, has not been taking shots at the current president. He's been careful not to do that even though the former vice president is not holding back.

But I think another thing's at work here which is that, while some say it's a backward looking investigation, there are others, particularly on the left, saying, wait a second, how else do you learn from your mistakes? How else do you turn the page unless you look back, find out what went wrong and hold some people accountable? So there are some people arguing it's not really looking back, it's eventually looking forward once you figure out what went wrong and who potentially broke the law.

Let's not also forget one last thing. The president yesterday at the CIA said that the key here is protecting the rule of law. If you're going to say that, why then are you not finding out who actually broke the law? That's why he's getting pressure from fellow Democrats -- Tony.

HARRIS: Well done. Ed Henry for us.

Ed, appreciate it. Thank you.

Let's get back to the case of the suspected Craigslist killer. The arraignment of 22-year-old med student Philip Markoff just wrapping up in Boston. Our Mary Snow was inside the courtroom for the proceeding and she joins us live now from Boston.

Mary, if you would, tell us what happened inside that courtroom?

MARY SNOW, CNN CORRESPONDENT: Well, Tony, Philip Markoff was ordered held without bail by the judge on the murder charge of Julissa Brisman. And he was in court. You might be able to see those pictures coming in now. Said nothing. And just stared at the judge.

What prosecutors revealed in terms of the charges brought against the suspect, they said that they had a search warrant at his home. It was searched last night and prosecutors say what was discovered was a semi automatic firearm, ammunition and items used to tie up the victims at a Boston hotel and also materials that were -- he attempted allegedly to tie up another victim.

What happened here, prosecutors say, is that both of the victims, one of the victims was murdered, had advertised on Craigslist. They advertised massage services and had some contact electronically with the person before scheduled meetings.

HARRIS: Gotcha.

SNOW: As we now know, Julissa Brisman was murdered. Prosecutors say she was shot three times. And, Tony, court officials identify two people in the courtroom this morning as family members. They did not talk to the media. They were taken out right away. We're now awaiting to hear more from the district attorney and Markoff's attorney -- Tony.

HARRIS: OK. Mary Snow. Mary, appreciate it. Thank you.

The CEO of Craigslist, Jim Buckmaster, will join CNN's "American Morning" tomorrow to discuss the arrest, the scandal and much more. Don't miss it. "American Morning" starts at 6:00 a.m. Eastern Time.

So you're worried about your credit cards, your investments? Experts are here to help and that's next.

(COMMERCIAL BREAK)

HARRIS: Investment and credit card advice. Those are the issues CNN's Gerri Willis is tackling today at the CNN "Help Desk."

(BEGIN VIDEOTAPE)

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: We want to get you answers to your financial questions. Let's get straight to "The Help Desk."

Greg McBride is a senior financial analysts with Bank Rate, and Donna Rosato is a senior writer for "Money."

Syed (ph) asks, "Can you please tell me if annuities are better than investing in stocks these days?"

All right, Donna, I've got to tell you, whatever happened to index mutual funds?

DONNA ROSATO, SENIOR WRITER, "MONEY": Right. Well, people are really frustrated because they've seen their portfolios go down a lot, so people are looking for security. And annuities function much like a pension. You're going to get a regular, guaranteed monthly payment, but there's a price to be paid for that. Annuities are complex. They can be very costly.

WILLIS: They're expensive, right?

ROSATO: They can be very expensive and they -- but they can make a lot of sense. But -- so it's not really a question of whether stocks versus annuities, but whether annuity fits into your portfolio.

It may make sense if you think about it this way. Are you worried about living a long time and running out of money? And if that's the case, you might devote some of your portfolio, whether it's in stocks, bonds or whatever, to -- and cash out and put that into an annuity, maybe 25 percent or 50 percent. You're going to have to put that money up front and then the payoff will be getting a regular monthly payment. But it's a complex area and it can be costly to do that.

WILLIS: All right. I say index mutual funds. They're cheap, very easy.

All right, Dave has a question. "Capital One," he says, "is raising my interest rate next month from 5.1 percent to 13.5 percent. Ouch. My credit is excellent and they said I can keep the rate I have now if I close the account. I owe $4,000. If I don't, it will cost me more than twice as much in interest. You say that you should not close accounts," which I do, "but if I don't it will cost plenty. I have other cards with little or no balance."

Greg, a lot of people are facing this very same thing. You know, lots of changes with credit cards right now. What's your advice?

GREG MCBRIDE, SENIOR FINANCIAL ANALYST, BANKRATE.COM: Well, this is a great example of where that standard caveat about closing out credit cards hurts your credit score doesn't apply to every instance. This is a great example. Putting some dollars and cents to it, a $4,000 credit card balance with that kind of rate increase could cost an additional $1,000 in interest charges.

WILLIS: Ouch.

MCBRIDE: So unless you're going to be in the market for a mortgage in the next six months, then I say close out the card. Opt out of the change. If they close out the card, keep that lower rate and pay off the balance. That impact on the credit score will be minimized by the fact that you're paying down the balance and you also have some other credit cards to fall back to as well.

WILLIS: All right. Great answers. Very tough questions.

"The Help Desk" is all about getting you answers. Send me an e- mail to gerri@cnn.com or log on to cnn.com/helpdesk to see more of our financial solutions.

And "The Help Desk," well, it's everywhere. Make sure to check out the latest issue of "Money" magazine on newsstands now.

(END VIDEOTAPE)

HARRIS: Gerri, thank you.

They're firing cannons across England today. What's going on?

(COMMERCIAL BREAK)

HARRIS: How about that. A salute fit for a king. Sounds of London's Hyde Park. Elizabeth II turns 83 today, believe it or not. The palace says she will spend the day doing paperwork. The queen may be the only person in the world who gets two birthdays a year. Today is her actual birthday, the official celebration is June 13th. The monarch's birthday has been that way since the 1700s because the weather is nicer in June. I see.

And we are pushing forward now with the next hour of CNN NEWSROOM with Kyra Phillips.