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Rangel Walks Out of Hearing; Congress Returns for Lame Duck Session; How Tax Cuts Affect You; Ethics Committee Denies Rangel A Delay; Millions Gone in Vets Charity "Scam"; How to Rebuild After A Disaster; President Bush and Kanye West Feud

Aired November 15, 2010 - 10:00   ET

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

KYRA PHILLIPS, CNN ANCHOR: All right. It's the top of the hour. Legendary congressman Charlie Rangel faces one of the greatest challenges of his long, storied career. He's accused of violating tax and campaign rules but just minutes ago, big drama derailed the House ethics committee at least temporarily. Lawmakers decided to meet behind closed doors in executive session. Why? Well, Rangel had an impassioned plea. He wanted to delay the trial-like hearing. He says that he needs more time to gather money and replace the legal team that he fired.

(BEGIN VIDEO CLIP)

REP. CHARLIE RANGEL (D), NEW YORK: I just hope that the history of this committee in terms of fairness will be judged for what it is. So, with all due respect, and recognizing how awkward it is for the members of this committee, as colleagues and someone that could like to preserve the right of members to be judged by their peers with council, I respectfully remove myself.

UNIDENTIFIED MALE: Madam chair -

(END VIDEO CLIP)

PHILLIPS: All right. Let's get to the latest on this rapidly developing story. CNN congressional correspondent Brianna Keilar joining us from Capitol Hill. So, Brianna, I mean, John Avalon and I were even talking and saying, no, it's not going to be postponed. It's going to keep going. The likelihood of anything, you know, getting closed down is pretty high. It will go forward and then the next thing we knew, boom, Charlie Rangel is walking out of the ethics hearing, and he's got a bit of a break.

BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: He's saying with all due respect he has to excuse himself. That doesn't necessarily mean that these proceedings are not going to continue but it's unclear. Could they continue without the defendant there. And Rangel has been saying this hearing shouldn't proceed.

I don't think he would take issue with the assertion that his legal team was fired, that he fired them, but what he did say in his statement, Kyra, was that this cost him $2 million. He said that he was told to go through this additional proceeding could cost $1 million more, and basically when he told his team he couldn't guarantee that he would be able to pay for it, they withdrew, and then he says a couple of weeks ago, this ethics committee let him know that he could put together a legal defense fund.

But he's saying I don't have enough to do that. You didn't give me enough time. What's so interesting here is he's really thrown a wrench into the works and he says that he's been screaming and begging for a timely proceeding and now he's being denied really this opportunity to have council. But there's a history here with this committee, with the ethics committee.

And they have been so secretive in their process that it struck me so much months ago when they came out with what's called the statement of alleged violation. That whole thing that just detailed everything that they say there's reason to believe Rangel did and all these rules that they say he may have violated, and one of the things they pointed out in there was that he has been saying I want things to move quickly, and he pointed specifically to one example that really stuck out in my mind.

Back when it turned out that he hadn't paid taxes on that rental property that he had in the Dominican Republic. He came out and it was very public, very Rangel-nesque and he said, "I'm going to put all of my finances before a forensic accountant. I'm going to pay for this accountant. I'm going to have that accountant turn over all of this information to this committee." That document showed that Rangel publicly said this, "I'm out in front of this. I'm being honest" and then it took - I think it was six months before he turned it over.

So they have pointedly said to him in the past, you say you that you want things to move quickly but you have done a lot to slow down this process as well. It makes you wonder what's going on behind closed doors because this is such a secretive committee but I wonder if that isn't one of the things they may be discussing here, Kyra.

PHILLIPS: Well, I know you'll find out and you'll tell us, Brianna. That's for sure. And Rangel is very well known for his flamboyance and that has been on full display. Here's a bit more of the emotional speech we saw within the last 25 minutes, right there before the House ethics committee.

(BEGIN VIDEO CLIP)

RANGEL: I'm asking for time to get council. I have lawyers from Washington, D.C. and New York who are willing to give me free counsel, to be able to come here because they don't think I've been treated fairly, and yet they say that if they do it, it's a gift and violates all of the laws. I heard that perhaps they can do if at reduced fees or fair fees, if only we had time to develop the committee.

You tell me that I don't have time to do that. And so while you tell me that, yes, I can hire anybody, get anybody, not have a lawyer, you're also saying - and that's the third part of your letter - that time does not permit this matter to be concluded before the end of this session.

(END VIDEO CLIP)

PHILLIPS: John Avlon, our CNN contributor, also senior political columnist for the dailybeast.com. Well, we weren't expecting that one, I guess, but, of course, anything is expected when it comes to Charlie Rangel. So now what, John?

JOHN AVLON, CNN CONTRIBUTOR: Yes, what a bizarre twist to this opening stage of his ethics trial. Really unexpected what Charlie Rangel is doing is embracing delay and denial. But I think it does strain credibility to say he's been blindsided by this process when it's been going on for at least two years, the investigation.

Now, he's saying that he only had a week to put together a legal defense fund. That the crux of his argument that he's there defending himself but he shouldn't be. He really wants counsel. He wants this trial to move forward but he needs time to put together a legal defense counsel.

Now, the eight-member ethics panel is going to convene, four Republicans, four Democrats to consider his motion for a delay but he previously said that he would walk out with the process if he wasn't granted the stay. So this is a pretty high wire act on Charlie Rangel's part and it strains credibility. Delay and denial at this stage of the game seems to have a lot of diminishing returns.

And I imagine, a lot of people at home are saying, "look, if I get called in front of an ethics investigation or trial, can I just say that I want more time or I'm going to walk out of the room. If I get in trouble with the IRS, can I say, you know, look I was just negligent but really there is nothing criminal or improper going on? There's a lot of, you know, special requests going on here that I think might rub people the wrong way at home.

PHILLIPS: Don't you think that's odd? I mean, OK, he's been in service for 50 years. He was just re-elected. He is a popular guy, but we're talking about 13 allegations of ethics violations and he just got what he wanted on national television because one representative came forward and said I used to be a judge, and I can understand where he needs counsel, and that was kind of it, they closed shop and now they are behind closed doors. I mean, he's like sort of - he's dictating his own trial.

AVLON: Well, we'll see if he succeeds in outfoxing and gaming the system this way. I think it's a pretty high hurdle to clear considering that there are four Republicans and four Democrats. I think a deadlock is likely as any acquiescence to this, but as you say, look, he just won re-election with 80 percent of the votes. He has confidence that his constituents don't care about this continuing stream of ethics allegations against him and some of them are quite severe.

And you got to remember that you know, hypocrisy is the unforgivable sin in politics. For the guy who is the chairman of the House Ways and Means committee, in charge of overseeing the U.S. tax code to consistently fail to report his own taxes, failed reporting four apartments in his home district of Harlem, where he was getting a discount on the rent, the steady stream of allegations, 13 of them, well, that is a pretty high hurdle and it may not impact his constituents at home, because he is a beloved congressman, 40 years of service but the high standard, the clear standard of public service to be equated with public trust and for accountability to be in place, the facts are not going his way here. So delay and denial may cause him to live to fight another day but I wonder how long he'll be able to play or try to game the system in this regard.

PHILLIPS: Well, we will definitely follow it. That's for sure. John Avlon, thanks so much.

Well, Congress is back and lawmakers have a long to-do list, tax cuts, military policies, spending bill. But this is a lame duck session, and a lot of unseated lawmakers are cleaning out their desk as the freshman class gets the lay of the land.

Senior congressional correspondent Dana Bash live in D.C.. Dana, they're going to be learning a lot about things, including ethics, and they're getting their first lesson right here with the Charlie Rangel trial or not so much of a trial today.

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: They were. They would be. It's too bad they don't have much time to watch. But what's interesting is while they're getting ready, the lame duck Congress is preparing, and they do have a lot on their plate, as you mentioned, everything from unemployment benefits to trying to approve a nuclear arms treaty with Russia.

Everybody that we talk to say that that's not likely to happen. The most likely things to happen, you see up there on the screen, dealing with the Bush tax cuts which expire at the end of the year, and something really important, it's probably the Congress' number one function, which is keeping the government running, making sure that that happens, Kyra.

PHILLIPS: All right. And what exactly are they learning at this orientation?

BASH: So much. This place was flooded with nearly 100 new members. It is a huge, huge freshman class. I want to show you some video just to give you a sense of what is going on behind the scenes. It's actually happening behind me. And that is that these new members are getting photographs for their voting cards. They're going to need to have these cards in order to cast a vote, which again is a pretty primary function for these members.

They are not going to be able to use them until they're sworn in in January. But that's the kind of thing that these new members are doing, the nuts and bolts of the day but then, of course, there's the substance, what these new members, particularly the Republicans were elected on.

I talked to Allen West, who is a newly-elected Republican from Florida. He grabbed the Tea Party mantel and ran with it. I talked to him about what he expects and what is expected of him here in Congress. (BEGIN VIDEO CLIP)

ALLEN WEST, FLA. REPRESENTATIVE-ELECT: They have to follow through or else they will be thrown out on the ash heap. So when you start talking about the earmarks, that's something that, you know, people talk about and doesn't make a big difference but it is the idea of it that the American people are against. When you start talking about raising the debt level, we cannot raise the debt level.

We have got to start, you know, I don't care if we have to burn the midnight oil on both ends of the candle. We have got to look at the redundancy and duplicitous programs and agencies up here in Washington, D.C. so that we can cut this growth and cut the spending.

(END VIDEO CLIP)

BASH: Across the board, these newly-elected Republicans are telling me they're already talking to one another to try to figure out the best way to achieve that number one goal that they promised in the campaign, which is to slash spending and also slash the federal deficit.

PHILLIPS: Dana Bash, thanks.

Well, the first official single from the late king of pop Michael Jackson has debuted on line, but are the vocals really his? Well, play a little bit. You get to weigh in.

(MUSIC PLAYING)

(COMMERCIAL BREAK)

(MUSIC PLAYING)

PHILLIPS: Millions of people clicking download on that song right now. That's a bit of the new Michael Jackson song "Hold My Hand" which was released just hours ago. The duet with Akon will be the first single off his upcoming album set to debut next month. And it's already poised to rule the charts. But here's the thing. When another track from the album was released earlier this month, the Jackson family and fans actually cried foul saying that the voice on the song wasn't really Michael's.

Show business tonight host A.J. Hammer joins me now. So, A.J., are there still concerns that these songs are fake?

A.J. HAMMER, "SHOWBIZ TONIGHT" HOST: Well, not this one, Kyra. This one that we just played for you and that people are downloading is definitely the real deal. Some members of the Jackson family have been telling CNN they have no doubt this is an authentic Michael Jackson song. It was apparently recorded back in 2007, and back then an unfinished version of the song actually leaked onto the internet.

The year before Jackson passed away in 2009. Now his duet partner, Akon said the two of them were devastated by that leak but now that he has had a chance to re-work the vocals, it is ready to be released and that's the version you're hearing today. The duet is the first song of this controversial posthumous album called Michael. And while fans are still pretty split about the authenticity of some of the songs in the album. They did seem pretty excited for the release of this song, Kyra. It is expected. This song is going to shoot right off the chart very quickly. Anticipation obviously has been high since the artist's death back in 2009 for some new music from him.

PHILLIPS: Well, there is an interesting story behind the song, right? Being chosen as the first single.

HAMMER: Yes, as if it was meant to be. Epic Records says there was a hand written note that was found after Michael died. In the note, Jackson apparently indicated that he wanted this to be the first release from his next project. So there you go. You know, his wish came through with that but this is just the first of many, many songs to come. As we mentioned, this new album is out but Kyra, we're going to be getting new music from Michael Jackson. There is stuff in the vault that's going to last us years and years to come.

PHILLIPS: Yes. No doubt.

All right. Let's switch topics because I heard a story and have to know if it's true. A certain political powerhouse making a cameo in the film "Hangover 2"?

HAMMER: Yes. And I presumed we're talking about the same guy here. Our friends at "People" magazine did confirm that Bill Clinton will make a cameo appearance in the sequel to "Hangover." (INAUDIBLE). There are actually some paparazzi photos showing the ex-president with cast members from the film in Bangkok.

Now, apparently Mr. Clinton was over there to deliver a speech about clean energy and during his downtime, he shot a scene or two from the cast of "Hangover 2." The producers have done a really great job getting started cameos for the film, with one exception of course. Now the first film had Mike Tyson, and now you got Bill Clinton. Of course, you remember their ill-fated idea to have Mel Gibson show up in this sequel.

Kyra, I'm sure there are more names coming. But I am looking for -

HAMMER: I enjoyed the first one, so I'm looking forward to seeing Bill Clinton, of all people in the "Hangover 2." Who knows what that's going to be above.

PHILLIPS: It was a pretty funny movie. When I first heard about that, and then, of course, I saw it on the airplane and laughed hysterically. All right. A.J., we'll come back together and we'll give our critic's reviews. Good to see you, A.J.

HAMMER: You too.

PHILLIPS: All right. Well, what information, everything breaking entertainment world, if you want it, A.J.'s got it, every night "Showbiz Tonight" 5:00 p.m., 11:00 p.m. on HLN. Airport security and passenger frustration go hand in hand for a lot of people but one man's rally cry against a TSA pat down is dominating water cooler talk this morning.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: And if you would like private screening, we can make that available for you also.

UNIDENTIFIED MALE: We can do that out here, but if you touch my junk, I'm going to have you arrested.

(END VIDEO CLIP)

PHILLIPS: Now, we're taking a closer look at the tape and what's next for the man whose message has hit home for frustrated travelers.

(COMMERCIAL BREAK)

PHILLIPS: The fees you pay to check your bags on a plane. Yes, they're bags of gold for the airlines. They've raked in more than $1.6 billion in baggage fees during the first two quarters of this year. Delta leads the way on that front but more than $470 million, all thanks to you and all your stuff.

Airline security checkpoints are getting tense across the country. A lot of people are mad as hell about those full-body scanners, and some people are taking a stand.

Check out this confrontation between a California man and a TSA officials in San Diego. It has actually gone viral. 31-year-old software engineer John Tyner was going on a hunting trip with his father-in-law Saturday. He refused a full-body scan and then he turned on his cell phone video camera and pressed record.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Come on over here.

UNIDENTIFIED MALE: All right

UNIDENTIFIED MALE: Do you have anything in your pockets?

UNIDENTIFIED MALE: I don't think so. They had me take it all out.

UNIDENTIFIED MALE: No belt? No nothing.

UNIDENTIFIED MALE: We are going to be doing a standard pat down the other day, using my hand and going like this.

UNIDENTIFIED MALE: All right.

UNIDENTIFIED MALE: Also, we're going to be doing groin check that means I'm going to place my hand on your hip, hand on your inner thigh. Slowly go up and slide down.

UNIDENTIFIED MALE: OK.

UNIDENTIFIED MALE: Two times in the front and two times at the back.

UNIDENTIFIED MALE: All right.

UNIDENTIFIED MALE: I will be doing a standard pat down using my hands along your body. We will be doing a groin check with my hand on your hip, other hand on your inner thigh, slowly go up and down. Two times in the front and back in.

UNIDENTIFIED MALE: All right.

UNIDENTIFIED MALE: If you want a private screening, we can do that, also.

UNIDENTIFIED MALE: We do that out here, but if you touch my junk, I'm going to have you arrested.

UNIDENTIFIED MALE: Actually, we're going to have a supervisor here because of your statement.

(END VIDEO CLIP)

PHILLIPS: Well, at one point in the tape, a TSA agent tells Tyner "upon buying the ticket you gave up a lot of your rights." Tyner disagrees.

(BEGIN VIDEO CLIP)

JOHN TYNER, TAPED TSA ENCOUNTER: I don't think that that needs to be a condition for people to fly. I mean, that level, giving up that level of privacy is not something I'm prepared to do.

(END VIDEO CLIP)

PHILLIPS: Well, Tyner never made it on that plane. Supervisors were called in and he says he's now facing a $10,000 fine and a possible civil suit. Meanwhile Homeland Security adviser chief Janet Napolitano is stepping the fray. She has written a piece in "USA Today," saying "each and every one of the security measures we implement serves an important goal and she is asking for passengers to be more patient.

That brings us to today's blog question. We asked you, are you planning to opt out from using the body scanners during your holiday travel? Are you a frequent traveler who doesn't like to do that? Let's see what you're saying. Donna writes, "We all know the new rules, if you don't want to abide by them, then stay out of line. You'll cost us money or delays due to your personal issues and stay off the plane. Sadly, it will only take one down flight for everything on this issue to go away.

Fred says, "I'll not allow my wife and daughters' naked bodies to be viewed. I will not allow under any circumstances a stranger to grope my wife and my young daughters. We've already cancelled our flights for the holidays because of this until the changes will drive." Sporty writes "I'd rather have the scan. It seems the lesser of two evils. However, my first choice is to take the bus, a lot less headaches.

Remember, we always want to hear from you, just log on to CNN.com/kyra, share your comments with me. I sure appreciate it.

A big political donor rubs elbows with the who's who of Washington. But police say he's a con man, a fugitive and he's wanted for scamming millions of dollars through a veterans charity. We'll tell you about him and how you can help track him down.

(COMMERCIAL BREAK) PHILLIPS: The stock market opening bell rang just about an hour ago. Right now, Dow industrials up 44 points, just hovering over 11,000.

Well, the proceedings will go forward. It looks like Charlie Rangel will not get his way today. The ethics committee will continue its trial based on a two-year investigation and 13 allegations of corruption. It's a rapidly developing story.

CNN congressional correspondent, Brianna Keilar, joining us once again from Capitol Hill. All right. We'll be talking to her in just a few minutes. We will bring her back.

Meanwhile, Congress convenes for a lame duck session but there's nothing lame about what that may mean for your bottom line. Lawmakers may extend the Bush tax cuts for some or extend them for everyone or they may just let them expire. So, what does it all mean for you and your bottom line? That's why we bring in Carol Costello. She's been working on that all morning.

Hey, Carol.

CAROL COSTELLO, CNN CORRESPONDENT: It's an interesting question, Kyra. I mean, those tax cuts, should they expire for everyone? Should they expire for everyone, should they expire just for the rich? I mean, is that fair?

Actually, it all depends on your perspective. It's how you look at things. So we prepared some numbers for you to show you exactly how the Bush tax cuts, if they're allowed to expire would affect your bottom line.

Let's start here. This as assumes you're married with two kids and you make $70,000 per year. Right now you pay $2,300 in taxes, and if the Bush tax cuts expire, you will pay $4,900 that's $2,600 more per year. Break it down this way, that's 7 bucks a day. But another way, that's roughly three gallons of gas.

Now, let's go on to the next scenario. If you're married with two kids and you make $325,000 a year, you now pay $63,000 in taxes. If the tax cuts expire, you'll pay $71,000, $7,400 extra or let's break it down this, Kyra. That's 20 bucks a day, which would be what? Two movie tickets and a small popcorn, no chump change, though.

But this is the fun one, if you make $5 million a year, Kyra, you pay $1.3 million in taxes, and if they expire, you pay about $1.6 million, $276,000 more or $757 a day, that would be a 32-gig iPad with Wifi.

But if you think somebody, Kyra, making $5 million a year, per week after taxes, they take home $70,000, $10,000 a day, so when you think about that $757 a day, is it that much? It's all in how you look at it.

PHILLIPS: All right, but some Democrats say raising taxes is the fastest, most efficient way of reducing the deficit?

COSTELLO: It is, because let's say you do it by cutting some government program that takes a while, right, because everybody likes their own pet government program.

So it's going to take a while to go through Congress and then it goes to the president. It's going to take a long time, but if you let those Bush tax cuts expire on the wealthiest Americans, that is the fastest way to cut the deficit right now.

The problem with that, as you know, Kyra, taxes are not a logical issue. In voters' minds, they're emotional. I mean, everybody wants to reduce the deficit, right, but not with my tax money.

PHILLIPS: Taxes is like that lingering evil in everybody's mind. Carol, thanks.

COSTELLO: Sure.

PHILLIPS: We want to take you back to the Rangel proceedings, which will go forward. It looks like Charlie Rangel is not going to get his way today.

The Ethics Committee will continue its trial based on a two-year of investigation and 13 allegations of corruption. It is rapidly developing shall we say.

CNN's congressional correspondent Brianna Keilar, now we got her there on Capitol Hill. A lot of things going back and forth so he started. He stood up. He asked to excuse himself. He went into executive session and now it looks like it will go forward, Brianna.

BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: Yes, essentially what happened is Congressman Rangel walked out. He said with all due respect, I'm going to have to excuse myself saying that he didn't think the hearing should proceed because he didn't feel like he was having the right to an attorney.

He said that he spent $2 million on attorney's fees and then at about the time that his trial was set, he informed or her was talking to his attorneys and they said it could cost $1 million more, and he couldn't guarantee he could pay it and they said they were through.

This committee went behind closed doors, came back out and Kyra, I think it's kind of what we expected that this was going to continue. But I think what is also really interesting as right now, the attorneys for the prosecution for the ethics committee right now begin to lay their ground work.

What he heard from the chair of this committee right there, Zoe Lofgren who is a Democrat. She said in her statement, even though she said it's a shame really that these lawyers have withdrawn, according to Rangel.

She also detailed several dates where she said Mr. Rangel was given informal advice from this committee on how to pay legal fees with respect to contributions or what to do so they could help him sort this out.

And we just heard this man right here. This is the chief counsel that you saw just a moment ago, Blake Chisholm for the Ethics Committee. He said that there were several dates where Rangel was handed over all of the information, the exhibits and witnesses and all of the information detailing exactly these alleged violations.

That he was given a chance to respond and he didn't. So you also see the Ethics Committee painting this picture here of Charlie Rangel not doing his utmost to speed things along as Rangel has alleged that he did, Kyra, in fact, saying that he's been begging and screaming for this to move quickly.

PHILLIPS: We will definitely follow the proceedings today. Brianna Keilar there on the Hill. Thank you so much.

He raised $100 million in the name of our needy veterans and then just disappeared. Now this fugitive fundraiser is missing, and so is most of the cash he allegedly scammed from donors.

Take a good look at this man. He goes by the name of Bobby Thompson, and he's the focus of a national man hunt for the better part of a decade. Thompson has been running a charity called the U.S. Navy Veterans Association.

Ohio's attorney general says the problem is most of the money raised didn't even go to our vets. In fact, tens of millions of dollars can't even be accounted for, and it gets even shadier.

Federal election records appear to show Thompson contributing $200,000 to big name politicians. Politicians like George W. Bush, Senator John McCain and John Boehner. They all received money from this accused scammer. And as you can see, Thompson had no problem getting close to some of the biggest names in Washington.

Ohio's Attorney General Richard Cordray is joining us now live. There's a nationwide warrant for this man's arrest, but what do we actually know about him at this point? Did he ever serve in the military? Is he married? Does he have children? What do we know about this guy?

RICHARD CORDRAY, OHIO ATTORNEY GENERAL: What we know mostly is what he did wrong. That is, he set up a sham charity to take advantage of people who wanted to give money to veterans' causes. We are aware that now that over the last eight years, he pulled about $2 million or more out of Ohio. He operated in about 30 states. This was a U.S. Navy Veterans Association, and it appears the entire thing was an elaborate hoax.

We have no idea if he ever served in the military because he has been going under an alias that is not his real name. We are learning more about him day by day, and we have arrested one of his close confederates, Blanca Contreras. She's in custody, and we continue to tighten the circle around this man who did so much wrong to so many people.

PHILLIPS: And Richard, how did he get such great access?

CORDRAY: Well, I think when you can come up with money from nowhere, and you come up with a lot of money, that gives you access. We see pictures of him with the former president, President Bush, with Karl Rove, with Senator McCain and other big shots.

He obviously enjoyed being a big shot himself. This is a man who lacked a conscience was taking money from people who thought they were giving to veterans causes.

The money was going to veterans' causes instead it was going for his own personal needs and also so that he could gain influence in Washington and in some of the state capitals around the country.

PHILLIPS: And Richard, just looking at this list, and we mentioned George W. Bush, John McCain, Lindsey Graham, Elizabeth Dole, Lisa Murkowski. I mean, this list is endless.

I've got pages in front of me. Did any of these individuals know who he was a basically clear him before they accepted money from him or is that just not standing operating procedure?

CORDRAY: You know, I can't speak to what the candidate committees new or what the candidates knew. My guess is many of them did not know he was a fraud. Some of them may have suspected over time.

What you find is not only are there many contributions in his name and in the name of (inaudible) the political action committee he set up that appeared to only receive money from him and his Navy veteran supposedly sham charity.

But also we now have found that there were other money order contributions, but in the names of fictitious individuals, some of them ascribed to the same UPS boxes he was using for his charity.

Others may have been totally fictitious addresses. We don't think we've nearly gotten to the bottom of this yet, but we already know that it was hundreds of thousands of dollars in contributions perhaps millions and it remains to be seen what the entire reckoning is.

PHILLIPS: This definitely doesn't mean that we shouldn't give to our vets' organizations. We always encourage people to do that. You've just got to do your homework and find out if they're legitimate. Just real quickly, Richard, anything we can do to help track this guy down?

CORDRAY: I think that publicizing the fact that we are searching for him, getting that information out as you're doing, is helpful to us. We also want people to know that one of the worst harms here is that there were people who gave her hard-earned money thinking they were giving to veterans' causes, and, in fact, he was funneling it to his own purposes.

This doesn't mean you shouldn't give to veterans' causes. We know there are many, many legitimate veterans' causes, American Legion, VFW, Vietnam Veterans of America, those are the groups that should be getting your money.

And something like this obviously should not have been operating at all and, we're glad that we've shut them down in the state of Ohio.

PHILLIPS: Richard Cordray, Ohio attorney general. We also noticed investigation is going on in nine other states as well. We sure hope you catch this guy. Anything we can do to help. Richard, thanks so much.

CORDRAY: Thank you.

PHILLIPS: Surviving an earthquake now and later. Dr. Sanjay Gupta is actually sharing with us the lessons that he learned in Kobe, Japan for you and your city.

(COMMERCIAL BREAK)

PHILLIPS: Today's "Daily Dose," how to survive a powerful earthquake both now and later. Preparation is key, as chief medical correspondent Dr. Sanjay Gupta is finding out this week in Kobe, Japan.

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Kyra, there's something known as urbanization. It's this idea that more than half the world's population lives in cities and that number is expected to go up.

They are particularly vulnerable to all sorts of things, including the consequences of natural disasters. The World Health Organization is having this forum here in Kobe believing that there are lessons to be learned right here about how to prevent some of these disasters and also how to reconstruct after they occur. Here's what we found.

(BEGIN VIDEOTAPE)

GUPTA: Would you know what to do if you found yourself in the middle of that? What we're experiencing here is a 6.9 magnitude earthquake.

Go into the corner of room, stay away from glass, cover your hands and face, get under the table if you have to, just something to protect yourself. Of course, all of this is just a simulation, and that's what you need to do as an individual.

Given that so many people live in urban centers all across the world, how do you recover and rebuild after something like that? That's exactly the question they were asking themselves in Kobe, Japan in 1995, a 6.9 magnitude earthquake just like that one, 20 seconds in length, 200,000 buildings gone, 5,000 lives lost and a lot of work to do to try and rebuild this place.

Kobe did it in less than 10 years, and now they serve as a model for the rest of the world. A lot of lessons have been learned. For example, don't put all your disaster resources in one particular area. Also, try and engage the survivors of an earthquake as much as possible in the rebuilding process.

And finally, hospitals, they have to be able to stay open and functioning even after an earthquake. Of course, there are the buildings. The awful images like this one. Remember 200,000 went down. This is one of them. We'll take a look at what it looks like now.

This is the same building, rebuilt quickly after the earthquake. What do they do specifically? They use materials here to try to isolate this building from the ground and the shaking that accompanies an earthquake. They also use metal plates to allow the building to move as well as materials that sort of allow this building to sway if the ground is shaking.

It is by no means perfect, and if you ask Kobe officials they'll say about 80 percent of the city is now rebuilt. There are some problems still. Narrow thorough fairs like this would be tough to navigate in the middle of an earthquake and these buildings could come down in the streets making rescues that much more difficult.

But the balance is always there, trying to maintain what Japan has been for hundreds of years in the middle of all this reconstruction.

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GUPTA: Kyra, I'll tell you. It is human nature to wait until something has occurred, a disaster has occurred before you do anything about it.

I've seen it in so many places around the world, Haiti, Pakistan, New Orleans. Here it's all about lessons learned, trying to prevent the worst consequences of these disasters like you just saw here in Kobe. Back to you.

PHILLIPS: Thanks again. Dr. Sanjay Gupta reporting there. He's in Japan for this week's symposium on the growing threat of urbanization on public health.

Two new senators now waiting until January to get down to work. We will tell you what Joe Manchin and Chris Coons are being sworn in today.

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UNIDENTIFIED MALE: So everything's good with you guys?

UNIDENTIFIED MALE: I mean, it's all good now because you know we had problems and that we solved those problems.

UNIDENTIFIED MALE: Yes, absolutely. Absolutely, I love Conway. I do.

UNIDENTIFIED MALE: Kanye and W., best of friends reunited by forgiveness. Don't recognize haters.

UNIDENTIFIED MALE: That's right, haters, recognize me.

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PHILLIPS: Two of my non-haters. Look at this, we got a tag team Political Ticker today. What's the special event Mark Preston and Paul Steinhauser?

PAUL STEINHAUSER, CNN DEPUTY POLITICAL DIRECTOR: Kyra, it's all about you. We're here for you. You're right. Most of the lawmakers who were just elected last two weeks ago, they have to wait until January, but two get sworn in today by Vice President Joe Biden.

Let's start with Joe Manchin, the governor of West Virginia. He's getting sworn in as the senator from West Virginia a little later today.

Manchin won a special election two weeks ago to replace or succeed the late Senator Robert Byrd who held the seat since 1959, and Chris Coons in Delaware. He's going to succeed basically Joe Biden himself. That was Biden's seat for 36 years. So they get sworn in this afternoon. Mark, what do you got?

MARK PRESTON, CNN POLITICAL EDITOR: There is a lot going on Capitol Hill with the Charlie Rangel trial. All these new members of Congress were being sworn in. Of course, all the House members, the new members of the new Congress are coming in this week to try to find out how to operate and understand Capitol Hill.

There's a lot of legislating to do, and cnnmoney.com has this great scorecard up on their web site and what it does. It has 17 issues, economic-related issues that Congress has to address. Among them, of course, is whether Congress will ban earmarks, which has been a big drum beat from Republicans and, of course, President Obama is behind that as well.

What will happen to the Bush tax cuts and among many other things? So unemployment benefits as well, which could expire at the end of the month, and will Congress extend those for the 2 million people who are currently receiving them. So if you go to cnnmoney.com, Kyra, you can check this stuff out. It's a great scorecard to find out what Congress is doing and what they're not doing. PHILLIPS: So did the election results change people's opinions of the two political parties, you guys?

STEINHAUSER: Well, this new poll suggests not. Check it out. We made a little graphic up for you. Look at that, the view of the Democratic Party before the election 44 percent favorable, after the election 43 percent favorable. Not much of a change.

The Republican Party got bumped up one point from 44 to 45. It was a different story four years ago, Kyra, so maybe not.

PHILLIPS: All right, guys. Thanks so much. I'll see you again. Hopefully -- do I get you both tomorrow, too? This is like a special treat.

STEINHAUSER: Well, if you're good to us maybe.

PHILLIPS: Well, that's going to be up in the air. All right, gentlemen, see you later.

All right, this just came into CNN out of California. You're actually going to see a 13-year-old boy here. Cody Alicia. He's on his way to school, but this trip is a bit different as you can see.

About 500 riders, many of them vets, some from out of state, escorted him just a short time ago to school. Why? Well, last week, an official with the school actually told him to leave his bike at home because it was decorated with American flags and this school official said it offended other students.

That's been a huge controversy and the school superintendent has apologized, taken responsibility, promised that something like this would not happen again. There's supposed to be a rally at the school too, but the story probably won't end here.

The school district is facing a lawsuit now from a civil liberties group over this, and Cody is one popular dude at school right now as he rolled in with all these bikers. You got to love it.

All right, you have to wonder what Microsoft, Google and Yahoo are thinking right now. When Facebook starts up an e-mail service. It could have 500 million customers before they could even say Mark Zuckerberg. We're taking a closer look in just a few minutes.

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PHILLIPS: All right, just when you thought Facebook couldn't get any bigger, it might be cooking up an e-mail service. Huge announcement today.

Basically, you could have@facebook.com for your e-mail address and use it to send Facebookers and non-Facebookers alike. Josh Levs, one of CNN's premier Facebookers. Didn't you start that movement?

JOSH LEVS, CNN CORRESPONDENT: I think I was pretty early with it.

PHILLIPS: I think you were. All right, so explain how this would all work.

LEVS: All right, I will talk you through this. This could be huge. I mean, what we're talking about here really could shake up the entire world of e-mail. This is a site we point to sometimes, techcrunch.com.

They're reporting that it's called Project Tighten and that internally at Facebook. Some are calling it the G-mail killer. I want people to understand it can be big. So think about it this way.

More than half a million people are on Facebook and right now you can only use the inbox messaging feature to write to other people on Facebook. If Facebook enters e-mail today, as is expected, then all of a sudden all of those people inside Facebook can have their e- mail within Facebook so then the question is why would they ever go anywhere else?

Now I will say, internet users are choosy, and if Facebook launches e-mail and it's not up to par. It doesn't compete that well. People are going to stick with the others.

But let me show here who the competition is. This is the breakdown inside the United States web-based e-mail here, and this big chunk over here, 44 percent of the web-based e-mail market right now is Yahoo. So Yahoo has a big chunk of it.

Hot Mail is 30 percent right there, and 15 percent for G-mail and 11 percent others. So got Yahoo that has got almost half the market there, Hot Mail had almost a third of it and Google at 15 percent.

So the question now is what are the companies doing? What are they thinking about? What are they planning on? And here's something else is interesting, in advance of this announcement, AOL did this, made a big change to here e-mail system called Project Phoenix.

They are revolutionizing their e-mail system all to try to compete. So, Kyra, short version here, the battle is on. The expected announcement today at 1:00 p.m. Eastern, we are going to be following it for you.

And here's where you can follow it with us. You have my Facebook and Twitter pages right up there, joshlevscnn. Also follow on Twitter @cnntech. We have someone inside the announcement. We will be following it for you. Kyra, you can expect repercussions from this announcement for quite a long time to come.

PHILLIPS: I can just imagine. All right, Josh. Thanks. We'll take a quick break. More of the CNN NEWSROOM straight ahead.

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