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President Obama To Sign Tax Deal; Congress Still Has Unfinished Business; Assange Speaks Freely; Massachusetts Jury Ordered Tobacco Company To Pay Estate Of Woman Who Died Of Smoking; North Korea Threatens Seoul Over Drills; FDA Rejects Avastin For Breast Cancer; Tea Party/CNN To Host GOP Debate; What Should You Invest In Next; Tiger Through His Brother's Eyes; Protecting Your Privacy Online; Pakistan Drone Attacks

Aired December 17, 2010 - 13:00   ET

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

ALI VELSHI, CNN ANCHOR: All right. I'm going to start off this hour with some good news, then. You have a fantastic afternoon. Good to see you, my friend, Don.

And we do have good news. You're looking at a picture of the Statue of Liberty on the tip of southern Manhattan. It's a little overcast today but it is a very happy day for many people in New York who didn't think they'd see this.

We start this hour with breaking news right now $7.2 billion worth of breaking news. You cannot buy justice, but it will buy a lot of peace of minds for thousands of innocent investors who were fleeced by Bernie Madoff.

I don't know if the press conference is still going on. It was moments ago when I came in here. I understand, from my producer, it just wrapped up. But there was a press conference announcing the largest civil forfeiture in US history. It represents the proceeds of a Bernie Madoff investor who wasn't fleeced. He was one of the successful ones and he became a target of the Madoff victims' trustee. Here is the word from the chief federal prosecutor from New York.

(BEGIN VIDEO CLIP)

PREET BHARARA, US ATTORNEY: Just a few minutes ago, a Manhattan federal judge approved a settlement agreement between my office and the estate of Jeffry Picower, represented by his widow, Barbara Picower. The agreement resolved a complaint we filed this morning seeking to recover the profits that the Picowers received over the course of 35 years from Bernard Madoff, monies we now know were the proceeds of the largest Ponzi scheme in all of history.

(END VIDEO CLIP)

VELSHI: Seven point two billion dollars from one person's estate. Jeffry Picower, he died October 25, 2009, just over a year ago. He was found dead in his pool by his wife. The coroner said it was a heart attack. His contribution means that Madoff victims now have recovered more than a third of the $20 billion they lost. You may have heard bigger numbers, but the actual cash that was invested, that was lost, was about $20 billion, or about $65 billion if you count what investors thought that they earned. But Picowers was one of those guys, who over decades, had taken money out and he took out $7.2 billion more than he invested.

Cynthia and Richard Friedman lost $3 million. They join me now, on the phone, from New Jersey. You two were victims of Bernie Madoff. What does this do for you? Two years and a couple of days after you first got the news that you had been fleeced of money that you had invested with him for years. How do you feel today?

RICHARD FRIEDMAN, MADOFF VICTIM (via telephone): Well, good afternoon. We're gratified that the trustee is - had the settlement, suing up to $80 billion, but what doesn't give - what the press does not cover is the fact that there are hundreds of innocent parties who are old, impoverished, can't afford lawyers and are terrified and presently getting sued by the trustee, and this is not fair.

The fact of the matter is that the trustee now has now recovered, or will shortly, about $9 billion from various parties and the allowed claims are only $6 billion. So, what's happening to the other $3 billion? Is it really necessary to sue people in this particular case who can't afford to pay any money in just because they're innocent victims and their own particular situations led to this?

VELSHI: And we should clarify this, for our viewers, there are those who withdrew less than they put in with Bernie Madoff and those that withdrew more than they put in with Bernie Madoff and the trustee is suing those who have received more. This is, of course, the biggest one.

So, when you add $7.2 billion to the $1.5 billion that's already been recovered, as you said, we're up to about $9 billion of the original $20 billion. They're going after about 400 of these investors who took out more than they put in.

CYNTHIA FRIEDMAN, MADOFF VICTIM (via telephone): Right. But these are old - their 70s, they're 80s and they're ill, they've lost their life savings. And he doesn't need their money any more since he has enough to cover the allowable claims. We've had people crying on the phone to us that they're talking about bankruptcy. People that live their lives responsibly and never even thought that word was in their consciousness and it's a shame. Leaving innocent, poor people - we didn't use - these people didn't use it as a piggy bank as the Chase's did. And Mrs. Picower should be commended for doing the right thing.

VELSHI: And, By the way, she was. The prosecutor, the US attorney and the trustee's office did say she should be commended for giving back every cent that they took out of this thing. How do you determine, how do you distinguish between the Picower's, who got $7.2 billion, and are giving all of that back and others who got money out, but weren't as wealthy as the Picower's? FRIEDMAN: Well, it's simple. The people that got back 90 percent returns or even 50 percent returns which were the Picower's, the Chase's, the innocent victim, in a good year, got 10 percent to 12 percent. We had no clue, no idea, and we lost our life savings two years ago.

It was a horror story and now they're repeating it again with 400 victims who cannot even protect themselves. They don't even know the first thing about going to a lawyer and they don't have the money for it with the $10,000 to $15,000 retainer. It's sad.

VELSHI: Cynthia, do you fall into that category? Are you net recipients, or are you going have - or are you being called upon to give money up?

FRIEDMAN: Our personal accounts we lost - we did not take out as much as we put in our personal accounts.

VELSHI: So, are you going to see any of this money?

FRIEDMAN: I don't know, because according us, in bankruptcy suits, it takes ten years or six years for the estate to be settled. So, none of this money, according to what we know, will be distributed for years to come, so it won't even help the victims in the near future.

VELSHI: OK, well, according to the US attorney, this money will be distributed in his words this morning, less than an hour ago, as fast as humanly possible. So, hopefully you will see a check and, hopefully, as more and more of this money is recovered, those who can at least afford to hand over more money will be spared that situation.

Thanks very much for joining us. We wish you continued luck in your search for the money.

FRIEDMAN: Thank you.

FRIEDMAN: Thank you.

VELSHI: Whatever else this new year has in store, we know that our income tax rates are likely not going to be going up, and our payroll tax will likely go down and millions of the long-term unemployed will have access to federal benefits.

In less than three hours, President Obama is due to sign a $900 billion compromise that sailed through the Senate on Wednesday, and almost died in the House yesterday before an astonishing comeback and landslide approval at midnight.

So, now Lame Duck lawmakers can head home for the holidays, right? No, not by a long shot. There's the repeal of Don't Ask, Don't Tell which the House passed Wednesday. And, for the second time, the Senate is expected to vote on tomorrow. The House can't vote on the updated nuclear arms treaty with Russia, the S.T.A.R.T. Treaty, but the Senate intends to.

On Wednesday, members voted to the cut off debate and proceed to a final vote, though it's not clear when. And, remember, that's a treaty. So, 67 votes are need to ratify it. Senate republicans had vowed not to vote on anything until the tax cuts passed, and the government was funded past tomorrow. None of the usual appropriation bills has passed, and the late of the stopgap spending runs out at midnight.

The House passed a bill to maintain current spending through the end of the fiscal year, but a trillion dollar Senate bill imploded when Republicans turned against him. A chief complaint was earmarks. Pork, you may know it as. Many of which were inserted, by the way, by republicans.

Today's SOUND EFFECT is from a man who feels he is being muzzled. Julian Assange, the founder and boss of WikiLeaks is out of a London prison, but not quite a free man. While he fights extradition to Sweden in a sex crimes case, he's confined to a supporter's estate and forced to check in with police every day.

There's also the matter of the six figure bail he had to post, so that today he could stand in the snow, under a blue sky, and declared solidarity with the person he says he's never met and that would be US Army private - the US Army private who is accused of trafficking in secret US documents.

(BEGIN VIDEO CLIP)

I never heard the name Bradley Manning until I saw it in the media and that is right because, in the end, that is the only way which sources can be guaranteed that they are protected, if even the journalists don't know who they are. But we do see that he is embroiled through these allegations. that he is somehow involved in this, but we don't know whether that's true or not. But we think we should do our part to help anyone who has been embroiled unfairly in our publishing activities.

(END VIDEO CLIP)

VELSHI: Assange says WikiLeaks has offered $50,000 to Manning's legal defense fund, but just last week the Bradley Manning support network complained that funds WikiLeaks had promised back in July still hadn't come through. It hasn't been proven that manning leaked anything to anybody.

Now there's some other developments we're following for you. A Massachusetts jury has ordered tobacco company Lorillard to pay $152 million in all to the estate to a woman who died from smoking. This was the first case to tackle the company's alleged marketing tactics of the 50s and 60s handing out free cigarettes to children outside housing projects. The jury found Lorillard did lure kids in that way and did cause Marie Evans to become addicted and die of lung cancer at the age of 54. Her son was emotional over the ruling.

(BEGIN VIDEO CLIP) MARIE EVANS SON: If I had my choice, I'd rather have my mom here. I would rather to have go back in time, and not have Lorillard give her free cigarettes when she was nine years old and get her addicted to cigarettes and ultimately cause her death.

(END VIDEO CLIP)

Lorillard says, it will definitely appeal the ruling.

North Korea upping its rhetoric against the government in Seoul, South Korea. Warning South Korea against staging live fire military drills in the next few days. Seoul says, it will hold the exercises near Yeongpyeong Island. The same area shelled by North Korea last month. The two Korea - the two South Korean troops and two civilians were killed in that attack. North Korea says if it drills - if the drills go ahead, it'll launch another military attack.

CNN's Wolf Blitzer is accompanying New Mexico Governor Bill Richardson on a diplomatic visit to Yeongpyeong. Much more from Wolf in the SITUATION ROOM starting at 5:00 eastern.

The FDA is taking steps to remove Avastin as treatment for breast cancer. The agency says, its use should be phased out. Though patients are using it as part of the chemo regiment, won't be affected immediately and it's still an approved therapy for lung, brain and colorectal cancers. But FDA says, Avastin is just not effective against metastatic or spreading breast cancer.

The tea party is planning an even more active role in the 2012 political race, especially for the race in the White House. We'll tell you about one event being put on the calendar today that could have an effect on who emerges as the republican nominee.

(COMMERCIAL BREAK)

CNN is your home for politics and we have something big to tell you about that could have a bearing on the 2012 presidential race. We all know the Tea Party movement has had a big effect on the political debate in this country and especially on the midterm elections. A short time ago, we announced that CNN will partner with the Tea Party Express for a key debate on GOP presidential hopefuls. CNN political producer Shannon Travis joins me now has more on the big event.

SHANNON TRAVIS, CNN POLITICAL PRODUCER: Well, Ali, some like to say the Republican presidential hopefuls are trying to cozy up to the tea party movement looking for support. This news, they just announced, may have them trying to endear themselves to the Tea Party movement even more.

Take a look at what's on the Ticker right now. As you mentioned, CNN will be teaming up with the Tea Party Express to host a first of its kind Tea Party debate. It will be the week of Labor Day in 2011, next year. It's going to be in Tampa. Tampa's important because Tampa is going to be where these - where the Republican National Convention will be, where the person emerges from our debate, and from the race itself, will actually be nominated.

So, this is making a lot of - a lot of news. A lot of people are talking about it. We've actually reached out to a number of tea party groups to inform them. We're, actually, inviting tea party activists to be a part of this debate. Send in questions, participate, tickets or what have you.

It's going to be talked about by a lot of people, much like our YouTube debate and other debates that we've had in the past, and we're happy to be partnering up with the Tea Party movement. You know that I've been covering the movement for a while now.

VELSHI: Yes.

TRAVIS: So, we're pretty excited about it.

VELSHI: All right. We don't have participants, yet. I mean, we don't know who they are but, by then, we will. And it's going to be a good debate. Shannon, thanks very much for that.

TRAVIS: No problem.

VELSHI: OK. You're probably getting those New Year's resolutions together. Going to the gym, calling your mother more often. Well, what about your money? You know I harp on this all the time. What should you invest in next year? We'll take a look in just a minute.

(COMMERCIAL BREAK)

VELSHI: To all of you, the end of the year means, you know, Christmas and holidays and things like that. To me it means checking your portfolio. With all this talk about the economy not doing so well, I need to show you how different types of stocks did this year. Bottom line, the stock market did very well in 2009 and it's doing very well now. What should you invest in?

Well, before I tell you, let's back up a second. Let me show you a chart of how the markets have done. I've gone back to 2007. Take a look there. October 9, 2007. That's when the Dow -- that's -- by the way, the reason there are three lines there is, that's the Dow, the S&P 500 and the Nasdaq. You'll notice they move the same way.

October 9, 2007, the Dow hit 14,000. That was its high. All through the end of 2007 and 2008 into 2009, that market was dropping. March 9, 2009, you can see there that the Dow hit -- where is the Dow, 6,547. That was the low of the market.

Now, look at that. Since then it's just been growing and growing and growing and right now the Dow, the S&P, the Nasdaq, which represent a lot of the stocks that you invest in, are as high as they've been since some point in 2008. They've done well.

So what does this mean to you? What are you supposed to do with all these charts? This is for me. What do you do with it? Well, I talked more about what to invest in with Ned Riley. He's a chief investment strategist on my weekend show "Your Money." Listen to what he told me.

(BEGIN VIDEO CLIP)

VELSHI: Let's take a look at some of the best performers over the last year in terms of industries. Not in terms of stocks, but in terms of industries. Thirty-four percent for industrial materials. Hardware up 30 percent. Consumer services up almost 30. Media, same thing. Software.

Take a look at the worst. Take a look at the worst. Even the worst didn't do all that badly. First of all, we had a massive run-up in 2008. Look at some of the worst. Utilities up 0.75 percent. Health care up 8 percent. These are some of the worst industries going out there. So what do I buy in this case, Ned? Do I buy the worst performers or do I buy the best performers because they're on a run? Tell me what my viewers should be thinking about.

NED RILEY, CHAIR & CHIEF INVESTMENT STRATEGIST, RILEY ASSET MGMT.: Well, some would philosophically say, buy the dogs of the Dow. The stocks that have been down the most in the last two years because they, inevitably, will go up. I'm still very hot on technology stocks. I've been advocating to people they buy these four Qs, which is the top 100 stocks in the Nasdaq index.

VELSHI: Right.

RILEY: And basically it just gives you a cross section of everything. It gives you healthcare. It gives you biotech. It gives you big technology companies. And that's the index actually in the last year and a half that's beaten the S&P and beaten the Dow. It's up almost 25 percent in the last 12 months and it's almost come close to the performance of gold. So this is a very diversified group of stocks. People will own 100 stocks. But the key is, they're buying growth. Growth.

Unit growth is going to be critical over the next two to three years because the market I think has already discounted some of this economic recovery. And we're going to be looking for those unit growers that clearly can capitalize on demographics, as well as global economics.

VELSHI: OK. And just for those of my viewers who are not spending a lot of time in the investment world, when you say growth, you mean value. Don't look for stocks that might be undervalued based on what the rest of the industry is doing, look for companies that are actually growing. They're going to get more revenue from their customers and they're going to translate more of that revenue into profit.

RILEY: And that is very true, Ali. And this is what's been going on already with the tech group. As a matter of fact, the unit growth. In other words, take Apple, for example, the iPod and the rest of these products they produce. They've produced revenue growth which translates into a very strong profit growth and the stock price, obviously, has done very well. The one critical element here, which is really exciting, is the fact that the profits overall of corporations have grown faster than stock prices. Meaning that the stocks are more inexpensive today than they were a year or two years ago.

(END VIDEO CLIP)

VELSHI: Now for more of that conversation and some details about how to invest, be sure to tune in to "Your Bottom Line" each Saturday morning at 9:30 a.m. Eastern. And "Your Money" airs Saturdays at 1:00 p.m. Eastern and Sundays 3:00.

Top stories now.

And the estate of one of Bernie Madoff's most successful investors has agreed to pay the government a whopping $7.2 billion. It's money paid by Madoff to Jeffrey Picower who died last year. His wife settled this paying back more than a third of all the money lost by other investors in Madoff's Ponzi scheme. The government says the money will be paid out to those swindled investors as soon as possible.

Two coalition service members were killed in attacks in Afghanistan today, but NATO hasn't released their nationalities yet. One was killed in an insurgent attack in eastern Afghanistan. The other, by a roadside bomb in the south.

NASA is in the middle of an important shuttle test right now. They're filling space shuttle Discovery's external fuel tank to find out why the structural supports cracked on the tank last month. Filling the 535,000 gallon tank takes most of the day. Then they still have to empty it again. Discovery is tentatively scheduled to launch on February the 3rd.

Well, Tiger Woods through the eyes of his brother. He talks exclusively to CNN about the pro golfer and their strained relationship and why he thinks Tiger may have lost his way. That's coming up next.

(COMMERCIAL BREAK)

VELSHI: More than a year after the scandal that tore down Tiger Woods' carefully crafted public image, the father of two is now divorced, struggling to get his golf game back and has recently launched a PR campaign to re-polish his image. But for the first time we're hearing from his older brother, Earl Woods, Jr. While he admits he hasn't spoken to Tiger since 2006, he sat down exclusively with CNN's T.J. Holmes to offer his perspective on Tiger's life after their affairs and after their father's death.

(BEGIN VIDEOTAPE)

T.J. HOLMES, CNN CORRESPONDENT (voice-over): Earl Woods, Jr., is the oldest of three children from his father's previous marriage.

EAR WOODS, JR., TIGER'S BROTHER: I had a conversation with Tiger when he was little and I said, we don't do anything half-assed. You're either all or you're not at all. And so he loved that.

HOLMES: But just as Tiger's career began to skyrocket, his older brother noticed a change.

WOODS: When he turned pro, it became more difficult to have time with him. And since then it's like, it's almost as though we don't measure up.

I haven't spoken to Tiger since 2006. We've sent him a couple of letters and I've tried to call a couple of times just to update him on, you know, what's going on with the family, because we are family, and I've gotten no response.

HOLMES (on camera): You haven't talked to your brother, your blood, since 2006.

WOODS: Uh-huh.

HOLMES: Now there has to be something else going on. Was there some tension of some kind? Why would he just cut the family off?

WOODS: There were reports that I had borrowed money from him and not paid him back. There was a family argument that split the family up. And none of that's true.

HOLMES (voice-over): In fact, the last time he says he saw his little brother was at their father's funeral.

WOODS: He was gracious enough to allow us to join him on the jet to take my dad to Kansas to bury his remains. And I remember we came off the jet, walked down the runway, hugged, hey, how you doing? He went that way with the entourage and we went this way. And that was the last I ever saw him.

HOLMES: Earl Woods, Jr., says their father's death had a major impact on Tiger.

WOODS: What I saw was that he lost a part of himself. I think that our father was a part of Tiger so much that when he passed, Tiger became lost. That he didn't know how to fill that void.

(END VIDEOTAPE)

VELSHI: That was T.J. Holmes reporting. We reached out to Tiger Woods' management company but no response to the comments made by his older brother, Earl Woods, Jr. Be sure to check out "Downfall: The Tiger Woods Scandal." It airs this Saturday night at 10:00 and Sunday night at 10:30 p.m. Eastern right here on CNN.

Two congressmen from different sides of the isles working together to protect your privacy online. Who they are and what they're doing when we come back.

(COMMERCIAL BREAK)

VELSHI: Breaking news. The estate of one of Bernie Madoff's most successful investor has agreed to pay the government a whopping $7.2 billion. It's money paid by Madoff to investor Jeffrey Picower who died last year. The government says it will pay the money as soon as possible to investors.

In about two hours, President Obama is expected to sign an $858 billion tax deal into law. The bill extends the Bush era tax cuts for two years and unemployment benefits for 13 months.

And four Republican senators who support a repeal of "don't ask, don't tell" will vote with Democrats to let the bill proceed as long as Congress passes a stopgap spending bill to keep funding the government first. Aids tell CNN, Susan Collins, Olympia Snowe, Lisa Murkowski and Scott Brown will vote tomorrow to end debate on the ban on openly gay and lesbian people in the military. The House voted to overturn the ban on Wednesday.

VELSHI: One Democrat, the other one is a Republican and both are teaming up to make sure Americans, especially kids, are not abused when they go online. Our Congressional correspondent Brianna Keilar has more on the unexpected partnership as part of our week-long series, "The End Of Privacy."

(BEGIN VIDEOTAPE)

BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT (voice-over): You know that catchy '80s song by Rockwell? Popular decades before Facebook, Twitter and Google were even around, and yet, the lyrics speak to the Internet age in which we now live when what we do on the web, everything we click on, is tracked by online advertisers.

On Capitol Hill, a bipartisan group of lawmakers is calling for privacy guarantees led by strange bedfellows, Ed Markey, a Massachusetts Democrat, and Joe Barton of Texas who is about as conservative a Republican as you'll find.

REP. JOE BARTON (R), TEXAS: You know, we are in an Internet age, but I still think the basic premise of the frontier where you have a door and a peephole and you don't let somebody in your farm or ranch unless you know who they are, unless you want them to come in your home, I think that simple concept should apply to the Internet.

KEILAR: Markey says the place to start is with kids and he's planning to introduce a bill in the new Congress that stops online tracking of children's activities.

(on camera): When you have constituents contact you, what kind of horror stories are they telling you?

REP. ED MARKEY (D), MASSACHUSETTS: Well, people are concerned that it's the Wild West with regard to children. That they don't fully understand what the impact will be on them later in life when all of this information can be gathered about them, what they did as kids, and used against them as adults. That's the real concern.

KEILAR (voice-over): He wants privacy guarantees for children that prevent companies from collecting certain information and a mechanism that will allow parents to delete information even after it's been collected. Internet companies concerned Congress will stifle their bottom line with a heavy hand are vying for a seat at the table. Dave Levinthal is with the government watchdog OpenSecrets.org.

(on camera): How much money are we talking about here that these Internet companies, these online marketers are spending here on Capitol Hill?

DAVE LEVINTHAL, OPENSECRETS.ORG: Computer companies, Internet- related companies over the past two years have spent around $120 million annually, and we fully expect that in 2010 that they're going to spend at least that much, if not more in terms of federal lobbying dollars.

(END VIDEOTAPE)

KEILAR: And since they're spending that much money, we wanted to talk to some of the stakeholders. We got in touch with Yahoo!, Microsoft, Google, Twitter, Facebook, all of them declined our request for interviews to talk about how they're lobbying Congress. A lot of them gave us written statements, Ali, saying that they're actually implementing some of their own do not track settings and that they're looking forward to working with Congress on this.

But here's the thing, there is a tension here, these are companies that make their money off of advertising. There's a lot of money in it. Information is a commodity and members of Congress are hearing from some pretty upset constituents. There's certainly an outreach factor here, Ali.

VELSHI: Yes. And is that outrage factor enough to put this on an agenda of things that actually have to get done in Congress? Because certainly, people are getting the impression that nothing gets done in Congress unless it's a gun to somebody's head and it's all -- everything is grossly partisan. Could this actually get done?

KEILAR: It could. Now, is it going to get done in January or February? I don't think anyone's saying that. We're looking at serious other big fish that Congress is looking to fry, be it dealing with the deficit or House Republicans who want to try to repeal health care reform.

But this is an issue that not only do you have that public outrage factor, I think this is an issue that's popular with a lot of Americans. But we talked about those strange bedfellows. You have a lot of Republicans and a lot of Democrats behind this and because of that, that may be a recipe for actually pushing something through Congress.

But it's going to be difficult, it's going to be pretty technical and it's going to take some time.

VELSHI: All right. Brianna, thanks very much for that. We'll continue to follow that in and amongst all of the other things that you're following at Congress. Hey, drone strikes in the tribal regions of Pakistan have killed more suspected militants. We'll go "Globe Trekking" to Islamabad for a live update after this.

(COMMERCIAL BREAK)

VELSHI: Time to go "Globe Trekking" now.

It's time -- it's going to be a tense weekend on the Korean peninsula. That's because North Korea has warned the South that it will launch a military strike if the South goes ahead with live-fire military drills near Yeonpyeong Island there over the next few days.

Yeonpyeong Island is where that attack took place last month. Tensions are already high over the North Korean shelling of the island, which is just off the coast of North Korea.

Now, New Mexico Governor Bill Richardson is in North Korea in an attempt to cool things off. Wolf Blitzer is the only U.S. television journalist traveling with him.

Is Wolf in that picture? Yes, there he is on the right.

There's a "New York Times" reporter as well. They spoke -- Wolf was -- is with Bill Richardson. He said the governor has already met with both sides to talk about key issues.

(BEGIN AUDIO CLIP)

WOLF BLITZER, HOST, "THE SITUATION ROOM" (via telephone): It sets the stage for a more important meeting tomorrow that Richardson will have with the chief nuclear negotiator of North Korea, the man who invited him, Richardson, here, Kim Kye-Gwan. They'll have a meeting tomorrow and there will be a big banquet in Richardson's honor tonight.

So I think they're pleased that the discussions have moved forward.

(END AUDIO CLIP)

VELSHI: You can see more of Wolf Blitzer's report on "THE SITUATION ROOM" starting at 5:00 Eastern today.

To Pakistan now, where three suspected drone attacks killed 21 suspected militants today. All three strikes occurred in the tribal region, that's the region that borders Afghanistan that you can see there in the orange.

CNN's Pentagon correspondent is in Islamabad, Chris Lawrence. He joins me live from there now.

Chris, what's the latest?

CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: Well, Ali, I think one thing that this shows is not only is the U.S. both increasing the frequency and the intensity of drone strikes, but they're now expanding into new areas of Pakistan in a very big way.

All three of these of these strikes follow another strike yesterday, all in the Khyber area of Pakistan. Two Pakistani intelligence officials confirm this to us. This is an area where you have not seen very many drone strikes, if any.

Most of the drone strikes have been confirmed to south and north Waziristan where they're hiding out and regrouping and then coming over into Afghanistan. But I am told that the drone strikes in those areas have been so relentless that a lot of the militants have started to fan out to other areas and the U.S. had been pressing to try to expand its reach in going to some of these other areas where the militant his gone.

So again, it's an area where we had not seen drone strikes and now you're talking four in less than 48 hours.

VELSHI: How does this go over in Pakistan? By our count at CNN, this is 106th drone strike in 2010. Some of them get suspected militants, some of them get people who the Pakistanis say were not suspected militants, and some of them get civilians agreed upon by all sides, people who were civilians.

LAWRENCE: Ali, the whole issue of drones is like the worst-kept secret in the world.

Here in Pakistan, publicly, the Pakistani officials called the drone strikes unhelpful because of the damage they can cause and especially, as you mentioned, when they hit innocent civilians, it causes a backlash.

The U.S. government won't even acknowledge them. Even when you talk to the sources on background, they just will not touch the drones. The U.S. officials will deny, deny, deny.

But as we saw from a recently released document from the WikiLeaks release just a few weeks ago where we read some of the diplomatic cables, it's a situation where publicly the Pakistani government will condemn, but privately they are giving their consent to some of the drone strikes.

And the U.S. will publicly come out and say we aren't doing it, but it's a known fact that the U.S. is the only entity with the capability to launch these missiles from unmanned planes in these areas, Ali.

VELSHI: And, of course, in a week when the president came out and talked about improving the necessity of improving relations and trust with Pakistan, I understand that a CIA spy to Pakistan, an American spy, has been recalled.

LAWRENCE: That's right. Again, going back to leaking of information, this bureau chief, his name was put out there and it started to circulate around. There were even some protests where you can see people with signs with his name on it. He started to receive death threats and so he was recalled back to the United States from the station here.

It just shows how this is a precarious situation in Pakistan. A lot of the Pakistani officials here that we've spoken to will tell you, although the U.S. will be focused on the border and the militants there, they say there are a lot of other militant groups in the heart of Pakistan that are not necessarily involved in going over the border to fight in Afghanistan, but they're directly targeting the Pakistani government in the state here.

VELSHI: All right, Chris, thanks very much.

Chris Lawrence, our Pentagon correspondent, in Islamabad, the capital of Pakistan.

To West Africa now. U.N. Secretary General Ban Ki-moon has called on the incumbent president of the Ivory Coast to step down following a disputed election that took place there last month. He said any other outcome would make a mockery out of democracy.

The country's independent electoral commission declared opposition leader Alassane Ouattara the winner over President Laurent Gbagbo, but it's the country's Constitutional Council that invalidated those results.

At least nine unarmed protestors were killed by security forces yesterday in Abidjan, the country's largest city. The U.S. and other countries have given Gbagbo a deadline to leave the country or face sanctions.

Moving new no-touch technology from the gaming world to your everyday life and it's in 3D. It's our "Big I" coming up next.

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VELSHI: Time now for the big I, ideas and innovations that could change your life. Who would have thought the latest touch screen technology might already be obsolete. That's why these wizards at MIT do stuff.

They've come up with an interactive screen. Check this out. The hand is not touching anything. It's just moving things around. We talked about this when we discussed the Microsoft Kinect, a new gaming technology that basically allows you to do things without touching the screen.

You just have to be near to control it. This is called by die. No touching needed. Imagine the applications that could stop the spread of germs in places like hospitals and clinics by eliminating contact with surfaces.

We've seen this in their Kinect video game, but instead of having cameras near the screen to measure your movements like the Microsoft device does. This one has sensors right on the screen itself staring you in the face. It also allows to work 3D images. Amazing stuff.

Joining me to talk about these applications for this MIT researcher, Ramesh Rascar in Brooklyn, Massachusetts. He's great at telling us regular folk who don't understand the science of this why this could be possibly useful. It's definitely neat, Ramesh no question about that. Tell me how this can be useful.

RAMESH RASKAR, NEC CAREER DEVELOPMENT PROFESSOR OF MEDIA ARTS AND SCIENCE: Certainly, we're familiar with touch screens now with our phones and devices.

VELSHI: Right.

RASKAR: But we need to be to get out of that, we need to change things whether it's for design or for advertising, for interacting with our information. It should be something like we're holding an object and playing with it.

VELSHI: And that's what this is designed to do, right? This is the first year where consumers have really started to see this interactivity. It's obvious that people are going to say to you many times kind of like the Kinect on the Microsoft Xbox. How is it kind of like that and how is it different?

RASKAR: So, with Kinect, which is an amazing technology or to stand off and use it because there's a camera on the top.

VELSHI: Right.

RASKAR: What is happening now is that these -- are becoming photo sensing, so the whole surface of your screen, whether with the computer screen or TV screen is becoming like sensing.

So it's sensing light the same time with emitting light. So what we are doing is converting it and doing a very clever design of hardware and mathematics so that we can capture 3d information of what's in front of this LCD screens.

VELSHI: Do you foresee this having specific applications or becoming ubiquitous where screens of the future will read you?

RASKAR: Certainly. I mean, if you think about the screens we know how important it has become to see the studio screens and previous screens and the same thing should happen for 3D interaction as well.

Right now we didn't even have touch a couple of years ago and now we have multi-touch and now we need to go into a 3D world.

VELSHI: When do you think we will start to see applications like the ones you guys have been working on?

RASKAR: I mean, no -- you can see a lot of technology as I said is already here and the fact that the pixels are becoming smaller and the fact that the frame rate is going up allows us to do clever things because what we are doing in the bi-directional screen. For every old frame we're showing the image and for every even frame we are capturing it.

VELSHI: I see.

TATAY: We're showing an image and capturing an image. In terms of technology, it's almost already there and our key mathematical insight allows us to capture information that was previously available in a two-dimensionsal format, but now in a three dimensional format.

VELSHI: That's fantastic. It's gotten past it that guys like me can imagine the possibilities. I'll leave it to you guys at the MIT labs. Ramesh, great to see you again. Come back with more of your fantastic inventions for us.

Professor Rushkar (ph), if you want more information on his work, I've linked it to my blog at CNN.com/ali.

OK, some stories we're following for you right now. The estate of one of Bernie Madoff's most successful investors has agreed to pay the government a whopping $7.2 billion. It's money paid by Madoff to Jeffrey Picower who died last year.

Now Picower's wife settled this, paying back a total value that amounts to more than a third of all of the money that was lost by other investors in Madoff's Ponzi scheme, about $20 billion in cash was lost.

You hear $65 billion a lot, but the actual cash investment was 20. This is 7.2. The government says the money will be paid out to those swindled investors as fast as humanly possible.

More Republican senators who support a repeal "Don't Ask Don't Tell" will vote with Democrats to let the bill process as long as Congress passes a stop-gap spending bill to keep the government funded first.

Aides tell CNN, Susan Collins, Olympia Snow, Lisa Murkowski and Scott Brown will vote tomorrow to end debate on the ban on openly gay and lesbian people in the military. The House voted to overturn the ban on Wednesday.

General Motors recalling about 100,000 new SUVs because of potential problems with the seatbelts. The model that's they're recalling are the Chevy Equinox, the GMC Terrain, the Cadillac SRX that's a compact crossover SUV.

In testing, a seatbelt anchor on the driver's side failed during secondary impact. GM is sending letters to owners to let them know what to do about the recall.

Big doings on Capitol Hill right now as Congress gets ready to end the year. We're going to take a look at the big issues that are still on the up date.

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VELSHI: Progress on the START Progress on the START Treaty tops are looking political headlines right now. CNN's chief political correspondent, Candy Crowley joins me now from Washington. Hi, Candy.

CANDY CROWELY, CNN CHIEF POLITICAL CORRESPONDENT: How are you, Ali? You know, getting out of town is a lot more difficult than it sounds like at least when you're Congress. The Senate has some things that a lot of folks would like to get done before they leave, and among them, the S.T.A.R.T. treaty.

The new treaty between the U.S. and Russia. They need Senate approval for that. They need 67 votes for that and it looks as though they may in fact start, if you'll pardon the pun. They may start S.T.A.R.T. here and get to some debate here.

Now the question is, there are the Republicans have said, listen, we'll talk about anything but the first thing we have to do is the tax cut bill. Check. They got that finished last night in the house. It is going to the president and some way to fund the government while they get the permanent bills.

They were supposed to have them October 1, at the beginning of the fiscal year. They don't have them yet. A sort of omnibus, a big old bill. A trillion dollars just went down in flames because Republican support fell off.

So now they had to do with Here's to keep the government working until we can get back to work January 15th or whenever they decide to do it. So those two, before Republicans do anything else, they want those two things taken care of. They're working on that spending bill. Some sort of stop-gap measure.

Then you have S.T.A.R.T. and John Kerry who heads the committee trying to spearhead this. Richard Lugar, a Republican, both of them think it stands a chance. There are Republican who's say why can't we -- this is too important. We need to have a lot of debate. There's not enough time left for debate. Let's put it off until January.

Nonetheless, I think the votes are there. The question is whether they can it to the floor in time to have the kind of debate that Republicans insist. They really need "Don't Ask, Don't tell. Not dead yet. That repeal that would allow lesbians and gays to serve openly in the military.

There is now what they call a stand-alone bill. That's all it would do. Repeal "Don't Ask, Don't Tell. It is already passed in the house. A vote is set for it on Saturday and there are enough Republicans who say I'm for it that could join with the Democrats to get it on the floor.

But they say, first we have to take care of business and do that spending bill. So everything is, one thing is attached to the other but they actually appear to be making some progress here and may in fact do some of this and get out of town. I think the really big question mark may be the S.T.A.R.T. treaty.

They're making progress like a snow ball make progress on a slight incline. Everything is so tied to everything he will. I don't know how you keep this all together.

Let me tell you, when people say it's so slow. Do you really want them to do this fast? In some ways, you know, we're talking trillions of dollars here, a missile treaty with the Russians. What's so bad about slow? But sometimes it is a little agonizing to watch.

VELSHI: I hear you. Good to see you. Your next political update is an hour away. This you have to see. A college marching band scores with a kicky halftime performance. You have to check this out not just because one of our team members went to the school we're talking about it. Odds and Ends coming up next.

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VELSHI: If you know me, you know that's my ring tone. I have the theme from Hawaii Five-0 and I'm never going to grow old of that. Time now for Odds and Ends, TGIF edition.

First off, some incredible footage from the football field. This is incredible. It's not your typical play of the day. In fact, our all-stars are the University of Hawaii marching band. The fight song is the theme from Hawaii Five-0. For decades, they've been blasting that theme during games.

But this season they went all out. Check out this marching band. Getting ready for that kick. You can't tell what they're doing but then this giant place kicker takes shape. Still blasting away with the instruments the whole time. The band moves this Christmas across the 50 yard line and has them boot a giant football past the goalpost. I think we all knew how this was going to end. It is very good though.

Now to one company they hope is good as gold. This morning, it installed the country's first good gold to go vending machine in a mall in Boca, Florida. The world's first was in Abu Dhabi. There are some across Europe now. Insert cash or plastic. Choose the weight and whether you want it in bar or coin form and then eureka, out pops your nicely boxed gift or investment.

Keep in mind with the price of gold just off record highs, you won't walk out with half of Fort Knox. At today's level, this ten gram piece would run you $450. Barely bigger than your camera's memory card. The next U.S. city where gold to go is going? Glitter - itself, Las Vegas that make senses. Take your winnings. Go buy some gold.