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Romney Releases Tax Returns; How Voters View Romney's Finances; Romney in Attack Mode; Preview of Obama's State of the Union, State of the Union, One Year Later; Supreme Court Rules on GPS Surveillance; Rescuers Find 16th Body on Ship; Romney's Taxes; Wake Tech Community College Locked Down; Santorum's Money Man; 49ers' Williams Receives Death Threats
Aired January 24, 2012 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: Soledad, he's just getting started. You know you have to tame Roland.
SOLEDAD O'BRIEN, CNN HOST, "STARTING POINT": Save me.
PHILLIPS: He is out of control.
O'BRIEN: Save me. Save me.
PHILLIPS: Yes.
(CROSSTALK)
PHILLIPS: I'd like to see his tax returns.
Bye, guys.
Well, after intense pressure as you just heard to release his tax returns, we now know exactly how much Mitt Romney pays the taxman. He released his tax returns forms just about 30 minutes ago. And it's no surprise. Mitt's a rich guy. Here's a look, though, at just how rich. He made more than $21 million in 2010. Almost all of it came from investments, not wages. He paid $3 million in taxes that year or 13.9 percent.
Christine Romans is digging deeper into the 1040s.
Let's go ahead and start with his offshore funds, Christine. We had talked a little bit about that this week, and now we're actually seeing it in this -- what is it, 200 and something pages I've got on the table here.
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: I know. Here, let me show you. I know. I've got it, too.
PHILLIPS: Yes.
ROMANS: This is from 2010. This is from 2011. It says Willard M. and Ann D. Romney. And they've helpfully blocked out their Social Security numbers just in case you're wondering. OK, so it's actually Brad Malt who handles all of their blind trusts, as they're called, and handles all their investments. He's on the phone right now talking to reporters. And he's actually saying to call these overseas accounts is not right. These are -- these are funds. He's got all kinds of foreign stocks, American stocks, foreign bonds, American bonds. But he has accounts that are third-party funds he calls them, organized in the Cayman Islands. Also Bermuda.
We know as well in here that there was at one point -- I think in 2010 -- a Swiss bank account that has since been closed. But you know people are looking at these, especially people who are opponents, people who like to talk about income inequality. And they're looking at all these, looking for any of those signs that somehow, you know, he's getting -- you know, he's getting an upper hand in the American economy.
But what the campaign is saying and what these -- what these documents so far are showing is that he is by the book to the letter following the law. The question is, what is the tax law? The tax code, it's very big, very complicated. So that's where they stand on these -- on these foreign funds in particular.
PHILLIPS: OK. Are we going to go to some sound there or no?
ROMANS: Well, yes, let's -- let's go to the sound.
PHILLIPS: OK.
ROMANS: Because earlier David Cay Johnston was -- he's got a Pulitzer Prize. He (INAUDIBLE) some comments. Very well known on tax issues. He was pointing out something -- he noted that there was money, you know, no gift tax, money that Mitt Romney was able to give with no tax basically to a family trust and that had raised some eyebrows and raised some hackles from people. But -- but it's all fair. It's all -- well, if it's fair, it's one thing. It's legal. This is what David Cay Johnston said.
(BEGIN VIDEO CLIP)
DAVID CAY JOHNSTON, AUTHOR, "PERFECTLY LEGAL": It's absolutely legal. The scandal here is not the Romneys who complied with the law in every way, it is the law that requires you and me to be taxed differently and much more heavily than a very small group of people, those who run funds of the kind that Mr. Romney did.
(END VIDEO CLIP)
ROMANS: So what he's talking about, he's talking about people who are the very top of the top of the 1 percent who make money with money. I mean Mitt Romney is not getting earnings from his work, he's getting earnings from his money. And that's taxed at a lower rate than if you go out and you actually work.
And that's part of the issue here, that people at the very top end, the money they're making from their money, they're being taxed at a much lower rate on it. PHILLIPS: Now if you look at all the 1040s, you know, there -- yes, there's a lot of -- quite a difference here if you were to take Obama, Gingrich, and Romney. Quite a difference but really no surprise.
ROMANS: That's right. I think you're right. And let's just look at that difference. Because you can see that the Romneys, their total income in 2010 was like $21 million. They paid $3 million in taxes. Almost 14 percent for a tax rate. You look at the Gingrichs, for example, they paid -- they earned about $3 million. They paid almost $1 million in taxes. Their tax rate, effective tax rate is higher, about 31 percent. And look at the Obamas, $1.7 million, total taxes, you know, less than half a million dollars and a 26 percent tax rate.
All of these people, by the way, are way better off than the average American. I mean the average family income is something like $49,000 a year, median income, rather, and has been slowly declining. So there's a whole discussion here about who runs for office, I mean whether you have $1 million a year, $21 million a year seriously is an awful lot of money. That's -- I mean that's a lot of money that they made last year, the Romneys.
It certainly puts them in the very top echelons of earners in this country. But certainly puts all of the players in politics way out of the reach of the average American.
PHILLIPS: Christine Romans breaking it down for us. Thanks so much.
All right. Now we know about the 1040s. What does this mean for 2012?
National political correspondent Jim Acosta in Tampa.
Jim, you know, Romney makes tens of millions of dollars without drawing a salary.
JIM ACOSTA, CNN NATIONAL POLITICAL CORRESPONDENT: Right.
PHILLIPS: He's got these offshore funds. How do you think this is going to play with voters?
ACOSTA: Well, that's going to be up to voters. Obviously in the Republican primary process this doesn't hurt him very much. I mean Republicans like to see their presidential candidates doing quite well. And I would imagine that this doesn't really change that very much. Even Newt Gingrich said last night during the debate that he doesn't begrudge how much Mitt Romney pays in taxes, he wants everybody else to pay roughly what Mitt Romney pays. And that's why he's touting what he calls this Romney flat tax.
Now getting to the timing of all of this. I mean one thing that doesn't work so well for the Romney campaign is that they're releasing this information on the same day as the president's State of the Union address in which the president is going to be talking about tax fairness and making the argument that the rich should pay more in taxes in this country.
And, you know, as Christine was saying a few moments ago, the former Massachusetts governor is really just paying taxes on investment income and dividend income. He hasn't really had a job outside of running for president over the last several years and so, you know, much of this money is coming in the form of investments and dividends.
And I would imagine that the president and the Democrats will say there's the money we should go after. And it's going to be an interesting argument to make. You know, politically speaking it is good that Governor Romney is getting this out of the way. You know you could arguably make the case, Kyra, they probably should have done this over the weekend. Doing it the same day of the president's State of the Union address, probably not the best timing.
PHILLIPS: Interesting. All right. We're going to talk about that more with John Avlon, Jim. He's joining me on the phone from New York.
John, what do you think about the timing?
JOHN AVLON, CNN CONTRIBUTOR: I think Jim Acosta makes a good point which is that this becomes a proof point for the president's State of the Union address. And in the bigger picture the politics needs to be seen with a sense of perspective. So Romney had an income -- passive income of $6.2 million all off investments.
The average family of four in America makes $50,000. So the larger point is that it would take the average family of four in America 125 years to make the kind of salary that Mitt Romney did in one year off passive income, off invested income.
That's a tough sell. We're not talking about the 1 percent here, we're talking about the zero -- .001 percent. And so the fact that there's an effective tax rate of 14 percent on that income I think will start a debate. If it's cap gains, it's one thing. If it turns out to be carried interest, it might move the debate in a whole another direction. But getting it out is always good. He probably should have done it sooner and probably should have done over a weekend.
PHILLIPS: So, all right, there's the politics. Do you think Americans are sitting back looking at this and thinking, wow, Romney would be fantastic as my financial advisor?
(LAUGHTER)
PHILLIPS: Hey, it's a bad economy. They're out of work. They're getting hosed. They're losing all their money. Romney could probably give them some pretty good advice.
AVLON: Yes, well, Mitt Romney running for CPA instead of CEO of the nation? Maybe. Look, I think that -- you know, Americans don't begrudge people's success, especially if it's money they've earned on their own and this is money that Mitt Romney has earned on his own, you know, starting Bain Capital and other things.
So I don't think this taps into -- you know, Republicans are going to try to throw a class warfare label on any conversation about tax reform that discusses loopholes that exist for the super rich. And that's what we're discussing again is the growing gap between the super rich and even the working wealthy.
That's an important distinction that I think taps into people's sense of frustration. That's what this is about. And that's the way this could resonate politically. It's people paying less than 15 percent on $6.2 million of annual income all derived from investments in the past not earned day-to-day working.
PHILLIPS: John Avlon, thanks so much for calling in, John.
And obviously this is the story of the morning, as just about 30 minutes ago Mitt Romney released his tax forms. Well, let's not forget there was a debate last night as well. Let me tell you, Mitt Romney was definitely on the offensive last night going after Newt Gingrich.
Here's a look.
(BEGIN VIDEO CLIP)
MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: And the speaker was given an opportunity to be the leader of our party in 1994 and at the end of four years he had to resign in disgrace. In the 15 years after he left the speakership the speaker has been working as an influence peddler in Washington.
I don't think we could possibly retake the White House if the person who's leading our party is the person who was working for the chief lobbyist of Freddie Mac. Freddie Mac was paying Speaker Gingrich $1.6 million at the same time Freddie Mac was costing the people of Florida millions upon millions of dollars.
NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: He just said at least four things that are false. I don't want to waste the time. I think the American public deserve a discussion about how to beat Barack Obama. The American public deserves the discussion on what we would do about the economy. And I think this is the worst kind of trivial politics. I'm prepared to describe my 15 percent of flat tax as the Mitt Romney flat tax.
ROMNEY: Mr. Speaker, is the tax on capital gains also 15 percent or is it zero?
GINGRICH: Zero.
ROMNEY: Well, under that -- under that plan I'd of paid no taxes in the last two years. I learned something from that last contest in South Carolina, and that was I had incoming from all directions, was overwhelmed with a lot of the attacks. And I'm not going to sit back and get attacked day in and day out without returning fire.
(END VIDEO CLIP)
PHILLIPS: There's going to be a lot more fire.
Check out our debate. Thursday night, just days before the Florida primary. CNN and the Republican Party in Florida are going to team up to host our next presidential debate in Jacksonville. That's Thursday night, 8:00 Eastern, right here on CNN.
Twelve hours from now millions of Americans will invite President Obama into their living rooms. He's going deliver his annual State of the Union speech, but as history shows, it's also the ultimate bully pulpit for a president seeking re-election.
Brianna Keilar is at the White House.
So, Brianna, will we be hearing more from President Obama or Candidate Obama?
BRIANNA KEILAR, CNN WHITE HOUSE CORRESPONDENT: Kyra, I think you can safely bet that we'll be hearing a little bit of both. It's going to be political, it's also a presidential address.
We'll hear President Obama proposing some real policy prescriptions. Some that we've heard before, for instance, infrastructures spending, one of his jobs provision and also giving money to states to retain firefighters and teachers and the like. He'll also be calling for tax reform that would see wealthier Americans being taxed and also we would expect an expiration of the Bush tax cuts that are for the wealthy that are set to expire in their entirety for the end of the year.
So certainly some policy prescriptions. You can imagine Republicans not on board with most of those. But a lot of this is going to be political. This is the State of the Union -- or the State of the Union that a president is giving in a re-election year. It's always political. Of course, Republicans are hammering President Obama on this and the White House. Many officials are sort of resistant to this label because it kind of puts a chink in that presidential armor that sort of works to the advantage of an incumbent president.
But all you really have to do is look at where the president is going to be traveling to sell his State of the Union. He'll be going to Iowa, Nevada, Arizona, Colorado and Michigan. Many of these states that play very big in his re-election campaign if, say, Kyra, the president is unable to hold on to Ohio, those are states that he would need to win and that would be the expectation of his campaign.
PHILLIPS: Brianna Keilar at the White House. Brianna, thanks so much.
And it was one year ago tomorrow that President Obama delivered his last State of the Union address. And within that speech a lot of promises. Did he keep them?
CNN's Tom Foreman takes a look. TOM FOREMAN, CNN CORRESPONDENT: Over eight years after invading Iraq, thousands of U.S. lives lost and an enormous sacrifice on the part of our military and their families, President Obama told the American people that are our troops were coming home.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: This year our civilians will forge a lasting partnership with the Iraqi people. When we finish the job of bringing our troops out of Iraq.
(END VIDEO CLIP)
FOREMAN: By the end of the year the president had kept his word. The last U.S. troops crossed the Iraq border in December marking the end of military combat operations in Iraq. So in this case, promise kept.
PHILLIPS: And you can watch tonight for CNN's special coverage of President Obama's State of the Union address. It begins at 8:00 Eastern live from Washington.
The Supreme Court rules against police in a GPS tracking case but justices stopped short of an overall decision on searches in the digital age. We're talking about your privacy next.
And buried alive. After being caught in an avalanche. The rescue, all caught on tape. You'll see it right after the break.
(COMMERCIAL BREAK)
PHILLIPS: Checking news cross-country.
Washington could soon become the seventh state to allow same-sex marriage. State Senator Mary Margaret Haugen says that she's in favor of the bill and it's her vote that will tip the scales. Opponents of the bill say they'll fight that legislation.
Storm cleanup begins in Arkansas and Alabama after tornadoes touched down yesterday. Two people were killed. At least 100 others were injured. And close 500 homes were either destroyed or damaged.
Check out this incredible video from Washington state as a snowmobiler gets caught in an avalanche. A helmet cam captured it all in an area known as Stampede Pass. You can see the snow barreling down behind the snowmobiler quickly burying him. Fortunately, two friends who were right there were able to rush in and dig him out.
Well, the Supreme Court has struck down GPS surveillance without a search warrant. The case involved D.C. police placing a GPS device on a suspected drug trafficker's car.
Our Ashleigh Banfield is here to talk about the decision.
You say this is a pretty interesting ruling for a couple of reasons. The justices all agreed on the issue of the GPS being illegal in the case, right. But they were split on how they arrived at that decision?
ASHLEIGH BANFIELD, CNN ANCHOR, "EARLY START": I know. It's rare we can say, they all agreed. But then, of course, we get that decision, 5-4.
But here's where the decision was cool. It wasn't that it was a mistake. They all agreed it was a mistake. You can't stick a tracking device on someone and let the police find them that way without a warrant. That's where they agree.
Where they disagreed was that five of the justices went further and said we have a reasonable expectation of privacy as American citizens. And that's where this infraction really is.
Not just that they were outside the window of the warrant. It's that we have to kind of get a grip on what we know to be our private lives in this new and digital age where we all kind of have a piece of gear.
So, it's not just about the Constitution. It's about the bigger parts of the Constitution and what they mean today.
PHILLIPS: Now, we're very gadget dependent and as we know, there's a lot of gray areas in the electronic age. So, what's the bottom line here?
BANFIELD: Well, the bottom line is this, even though it sort of defies reason. I mean, look, we have these things like GPS units. And why can't we pop -- if we're within a warrant, if we get the warrant, why can't we pop the darn GPS on and follow the bad guy, and get the gear and put him in court, and put him away?
Well, you can and you can't. What they're trying to suggest is that we need to understand where do we have privacy? We know we have it in our homes, right? And you can think you might have it in your car, too, while you're inside your car.
But when you're on a public road, does it extend to that. And can you have some big brother 10 miles away for three weeks day in, day out monitoring your every move? That's where this starts to get a little ticklish and freakish.
And that's where the justices were sort of coming down on this, that we need to sort of understand what these digital devices now allow us to do and whether we really want them to do these sorts of things in an age where, by the way, Kyra, when everybody gets upset about this, remember, the reason behind the Fourth Amendment is so we don't have anybody coming to our door and putting black hoods on us and taking us off to the gulag, like some nations seem to think is OK.
PHILLIPS: Ashleigh, you always seem to wrap it up with the one little zinger at the end. You make your point.
Ashleigh Banfield --
BANFIELD: It was all that time I spent in Iraq.
PHILLIPS: Exactly. Thanks, Ashleigh.
Well, coming to a Starbucks near you, we're going to tell you how your neighborhood barista could soon be slinging drinks at the iconic coffee shops.
(COMMERCIAL BREAK)
PHILLIPS: Search crews find another body on the doomed cruise liner off the coast of Italy. Sixteen people now confirmed dead. And plans to remove the ship's fuel have been on hold once again.
Zain Verjee is in London.
So, Zain, we're talking about 2,400 tons of fuel, right? When are crews going to be able to start offloading this?
ZAIN VERJEE, CNN INTERNATIONAL ANCHOR : Well, they're saying that the earliest they could do it, Kyra, would be Saturday or sometime over the weekend. They have made a definitive decision today, though, not to start siphoning off the fuel just yet. When they actually start doing it the whole process, Kyra, they say is going to take something like 28 days or so. And as they remove the fuel, they're going to have to replace the fuel with water.
The reason that they're going to do that is because they want to maintain the balance of the ship itself.
Now, officials on the ground have said that they're also going to continue the salvage operation and at the same time still look and see if there's any remote possibility there could be any survivors on board or still try and find at least the victims that are still missing.
Kyra, I want you to take a look at this video also. It's pretty dramatic stuff we got in from one of our Miami affiliates. It's a couple whose names are David and Denise Saba. And they shot this video. It's on the ship itself as the evacuation was happening.
Just take a look at this. You can see some of the chaos going on on the ship itself. And this is the video that they shot themselves, and you can see people all crammed in together just trying to figure out a way to get out. Just listen to what they had to say about their experience.
(BEGIN VIDEO CLIPS)
UNIDENTIFIED MALE: Life boats. Oh, (EXPLETIVE DELETED)
DAVID SABA: Very violently.
DENISE SABA: Free fall into the water.
DAVID SABA: We thought we were going to roll over and get into the water upside down.
(END VIDEO CLIPS)
VERJEE: They were talking about the life boat they were on that just came whacking down straight onto the surface of the water. And they were terrified that it would overturn. Kyra, there's still about 16 people missing.
PHILLIPS: Zain, we will continue to follow the investigation obviously and the search with you, all angles there off the coast of Italy.
All right. Felicia Taylor is at the New York Stock Exchange monitoring the rally on Wall Street. The S&P 500 has risen for the past five days.
So how are things looking today, Felicia?
FELICIA TAYLOR, CNN BUSINESS CORRESPONDENT: I think investors are taking a little bit of a pause. Right now, Dow futures are down 50 points.
We had a slew of earnings already before the opening bell. But that just isn't giving investors a reason to buy because all eyes are still really looking at Europe and whether or not we're going to get some sort of voluntary agreement out of Greece.
McDonald's, however, fourth quarter earnings were literally off the charts. Its revenue beat forecasts. And I'll tell you -- just, you know, take a look. I walked into McDonald's this morning.
There was a line of about 30 people. I mean, it's clear that this is a choice for most people in the United States, especially when it comes to breakfast.
Verizon, though, swung to a lost. And Travelers' earnings also fell 30 percent, missing estimates. We've still, like I said, got anxiety about the debt crisis in Europe. And that's investors are really going to be looking for direction today ahead of the results for the Fed meeting tomorrow.
PHILLIPS: So, what's up with Starbucks? Going to start slinging drinks?
TAYLOR: Yes.
(LAUGHTER)
TAYLOR: You wouldn't really think about it, right? Put a little schnapps in your coffee. But now, some Starbucks --
PHILLIPS: Not a bad idea.
TAYLOR: People have been known to do that. Not in the morning. I don't advise it in the morning.
Anyway, Starbucks in Atlanta, southern California, Chicago are going to start serving alcohol by the end of the year. It has been testing this in the Northwest for the past couple of years. It's been pretty successful. So, clearly, they've decided to go ahead with it.
These locations are also going to have small plates and hot flat breads. It's part of a big push throughout the fast food industry. They want to be a little more full service to be able to boost their bottom lines.
For instance, I didn't even realize this, Burger King sells beer in some locations. And as I mentioned before, McDonald's is doing really well with breakfast. Dunkin Donuts and Subway also now offer breakfast.
And this is the way a lot of these fast food companies have been able to make it through the recession, by offering more options to the public. And, clearly, it's a plan that works.
PHILLIPS: You can hit the drive thru in New Orleans and get your frozen daiquiri. They've been doing that for years. So, you know, everyone's got to just following the trend.
Those New Orleaneans, they know how to do it.
TAYLOR: It's the sign of the times.
PHILLIPS: Yes, exactly, no kidding. Thanks, Felicia.
Well, Mitt Romney's total income in 2010, more than $21 million big ones. And he made it without going into work every day. So how does that resonate with everyday Americans in a tough economy?
And the nominees have just been announced for the 84th Annual Academy Awards. A.J. Hammer here with all the scoop.
(COMMERCIAL BREAK)
PHILLIPS: Checking top stories now.
Explosions from five separate attacks kill at least nine people in Iraq. Another 72 are injured. Four car bombs exploded in busy areas of Baghdad, including close to an elementary school where 18 children were hurt.
And new video this morning from inside the Costa Concordia just moments after it ran aground off Italy. A passenger from Florida documented the scene as he and others evacuated. A body found this morning brings the total to 16 recovered so far. Another 16 people are still missing.
President Obama will address the nation tonight at 9:00 Eastern in his last State of the Union address before the 2012 election. The president is expected to focus on jobs, energy, and education.
CNN special live coverage begins at 8:00 Eastern.
Florida's primary just seven days away now and three of the GOP presidential candidates are hitting the state hard. Newt Gingrich now at a rally at Tick Tock Restaurant in St. Petersburg, Florida. One of several stops today of the winner of South Carolina's primary.
And someone else is there, too. Shannon Travis waiting to listen -- actually, has he hit the stage yet?
SHANNON TRAVIS, CNN POLITICAL REPORTER: He hasn't hit the stage yet. We're actually waiting for him. And a lot of people out here are waiting as well. They're standing in line.
It's a good thing that the weather is cooperating, Kyra. I'm going to have my cameraman just pan and just show you how many people are waiting in line because inside, Kyra, it's packed. It's like standing room only already. One of the organizers told me that they had 150 reservations.
So, I don't think for the Tick Tock diner that they have that many reservations normally. But Newt Gingrich is showing up here. So, a lot of people are obviously interested.
The campaign told me last night that Newt Gingrich is going to focus on local issues. He's going to talk about the space program. Obviously Florida is home to the Kennedy Space Center; Social Security, a lot of retirees here; medical research; as well as Israeli/U.S. relations.
So, he's going to focus on local issues, but you can best believe that the Gingrich campaign is also going to be looking at Mitt Romney's tax returns. I spoke with R.C. Hammond, Newt Gingrich's spokesman last night, also about that. And he said, you know what, we're waiting like everyone else to see what's in it -- Kyra.
PHILLIPS: All right. You let us know when Gingrich takes the stage and monitor what he says. We'll continue to check in on that live event and with you, Shannon. Great. Thanks so much.
And later this evening, Newt Gingrich is going to talk about the upcoming Florida debate and the primary with John King. Be being sure to watch "JOHN KING, USA" tonight, 6:00 Eastern, right here on CNN.
Now, as Shannon mentioned, after so much pressure from his competition, Mitt Romney releases his tax forms. It's no surprise, Mitt's a rich guy.
Here's how rich. He made over $21 million a year, or actually made $21 million in 2010. And almost all of that came from investments, not wages. He paid $3 million in taxes that year or 13.9 percent. He also has or had offshore funds in Switzerland, the Cayman Islands and Bermuda.
Let's talk more about this with Clyde Anderson. He's a finance expert and author.
Let's just start with the simple optics of this, OK?
CLYDE ANDERSON, FINANCE EXPERT: Yes.
PHILLIPS: It's a bad economy. People are out of work. This doesn't look so good from the average American's standpoint.
ANDERSON: It doesn't look good at all. You think about the average American is who's voting. You know, with things like the Occupy movement going on, this is the percentage of people that are worried about this type of thing. And then you see something like this where a man's paying less taxes than my elderly aunt. It's rough.
PHILLIPS: All right. We talked about the Cayman Islands, Bermuda, Switzerland. Now, we think of offshore accounts and we think, oh, my gosh, they don't want to pay taxes.
ANDERSON: Right.
PHILLIPS: However, he did nothing illegal here.
ANDERSON: Right. It's not illegal, but the question is, is it fair? That goes back to the optics question, the appearance. Appearance means a lot.
So when you look at this and people hear this, the general voting public is going to have a problem with it.
PHILLIPS: Now, he still hasn't made public the returns from the Bain years.
ANDERSON: Right. I don't think he will. That would be very crucial.
I don't think he will. I think it's very crucial because that's where the money was made. You think about it, it's not wages that he's paying these taxes on, it's investments. And the question becomes, did he make the money off the backs of the American people?
PHILLIPS: So, why with all of this pressure to release his tax forms, it seems like that's really at the essence of the debate here.
ANDERSON: Yes. Yes, it is. It is at the essence of the debate.
So, he had the pressure to do and he probably should have done it a lot sooner as a lot of people have said. But now that he's done it, the question becomes is he really this all-American guy and can he relate to the general public that's struggling right now? People are hurting.
So, when you see things like this and people maneuvering with savvy investments, you know, is this guy that we want running the country?
PHILLIPS: Savvy investments. And looking at the details of these returns, carried interest. Explain to me why this was something that caught your attention. It caught our attention too. I mean, I had to do a little research here.
I'm not a financial person, but I found this interesting.
ANDERSON: Well, it's obvious that he had a very savvy tax guy. You know, he had someone -- again, he's wealthy so when he's carrying interest over, this is the interest. He's made things done that really help him to have a better tax position, to be in that percentage of 13.9 percent. So, he's carrying interest over.
And so, when you see this, and that's what he's paying interest over off this investment income and the not wage rates. And that's crucial.
And another piece that people aren't pointing out as much is that he gave his children $100 million. They paid no taxes on it. That's huge. Most people will pay 35 percent in taxes.
You know, when you just really look at it, the average American that makes $65,000 if they're single, they pay about 15 percent in taxes, married is 25 percent. So, that just kind of puts it in perspective for you. There were some savvy things going on. But again, it's not illegal, but is it fair?
PHILLIPS: So, do we want a savvy I guess financial advisor running this country or maybe it's his tax guy that should be giving us all some advice on what to do.
ANDERSON: There did you.
PHILLIPS: Interestingly -- thanks for breaking it down, Clyde.
ANDERSON: My pleasure.
PHILLIPS: We'll see how it impacts voters.
ANDERSON: It will be interesting.
PHILLIPS: Yes, we'll watch it. Thanks.
Well, the nominations are in for this year's Academy Awards. They were announced just a short time ago. See which movie got the most Oscar nods. Plus, if your favorite actor is among the top contenders.
Let's take a look at the big boards, shall we? The opening bell 10 minutes ago. Dow Industrial is down right now about 71 points.
(COMMERCIAL BREAK)
PHILLIPS: It's Hollywood's biggest night, the Oscars. And now we know the nominees.
"Showbiz Tonight" host A.J. Hammer has all the top contenders for us.
Hey, A.J.
A.J. HAMMER, "SHOWBIZ TONIGHT' HOST: Hey, Kyra. Yes, very exciting morning of course.
Let me run through the best picture nominees right now. We have nine of them this year and here they are.
Nominated for best picture, we have "The Help", "The Tree of Life", "The Descendants", "Moneyball", "Tinker Tailor Soldier Spy", "The Artist", "Extremely Loud and Incredibly Close", "War Horse", and "Midnight in Paris." Pretty tough category to choose from.
I personally was really pleased to see "Extremely Loud and Incredibly Close" on this list. It hasn't gotten any attention this award season so far, probably because of its late release and some really tough subject matter obviously, dealing with September 11th. It is a terrific film. I've been encouraging people to see that.
"The Help" was the biggest hit at the box office among all of the nominees. But a lot of people were saying this category will really come down to a race between "The Descendants" and "The Artist" -- the two pictures who won at the Golden Globes.
"Artist" is also movie not a lot of people have seen, of course. It's a silent film. It doesn't have a major star. It's made 12 million bucks at the box office so far. But it did get 10 nominations in all, second only to "Hugo," which got 11 noms.
Another movie on this list with a tiny box office is "The Tree of Life." Brad Pitt starring in this film, along with Sean Penn. Brad actually helped get the film made and he's really pleased to see Terrence Malick's work getting some love this morning.
And while Pitt could take home an Oscar as a producer on that film, he also got a nomination as best actor for his role in "Moneyball." I was really happy to see that.
In fact, Pitt was just on the "Today" show. And he was over the moon about his nomination, very excited to be up against his pal George Clooney who was nominated as best actor for "The Descendants" and as a screenwriter for "The Ides of March." I think George really has a shot at the best actor category this year at the Oscar race.
As for snubs, everybody asks me about that. I think you can make a case for Leonardo DiCaprio getting snubbed for "J. Edgar".
And while "Bridesmaids" didn't get a best picture nom, Kyra, I have to say, I was happy to see it get two other nods, including Melissa McCarthy getting an Oscar nomination for that incredible role as best supporting actress. Also, "Hugo" not nominated in the best picture category. I was surprised by that.
PHILLIPS: Well, "Bridesmaids", that's one of those -- I don't think I've laughed that hard to tears in a really long time. It was -- do you have a favorite?
HAMMER: I just think about it and laugh.
PHILLIPS: Yes, exactly. The contenders, do you have a favorite? You were pushing for the Tom Hanks movie? Is there something you've really enjoyed?
HAMMER: You know what? I really enjoyed that I was disappointed not it see on the list for best picture was "50-50," which was an incredible film that starred Seth Rogan and Josh Gordon Lovett, and I was disappointed not to see that on the list. I have a feeling "The Descendants" is going to have a good year, but I think "The Artist" is probably the one to beat in a lot of categories, like the Golden Globes.
PHILLIPS: I got a long list of movies to catch up on. That's for sure. A.J., thank you so much.
And A.J. will be back with us next hour. He's got the latest scoop on Seal and Heidi, and their big breakup. Seal is speaking out for the first time since the split. We've got it.
And he's the man behind the money for presidential candidate Rick Santorum.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: How much?
FOSTER FRIESS, RICK SANTORUM DONOR: Well, I -- it's like I've got to keep that from my wife. She could kill me if she really found out.
(END VIDEO CLIP)
PHILLIPS: His name is Foster Friess. And he's already given millions of dollars to Santorum's super PAC. We're going to talk to him next.
(COMMERCIAL BREAK)
PHILLIPS: I've got some breaking news for you out of Raleigh, North Carolina. One of our local affiliates there, WRAL, is reporting that a gunman has been spotted on the campus of Wake Tech Community College. We're told the school is now in lockdown. No one can either enter or leave the campus. Drivers are being routed away from the area at this point. Local police on the scene there investigating a call that came in.
We're going to have more as information develops. Once again, Wake Technical Community College on lockdown in Raleigh, North Carolina. Reports that a gunman has been spotted on campus there. We're following the story for you.
Well, he is the man behind the money when it comes to Rick Santorum's Super PAC. Philanthropist and Born Again Christian, Foster Friess dug deep into his pockets and pulled out a Hail Mary for what was once a struggling campaign.
Our Drew Griffin talked with him about why he stepped in to so -- to show rather so much support for Santorum.
(BEGIN VIDEOTAPE)
DREW GRIFFIN, CNN SPECIAL INVESTIGATIONS UNIT CORRESPONDENT (voice-over): When Foster Friess saw his friend Rick Santorum stuck way on the outside of the debate podium last summer in Iowa.
RICK SANTORUM (R), PRESIDENTIAL CANDIDATE: You have the chance to say -- you have the next question, Senator, I promise.
GRIFFIN: He knew he had to do something. Santorum wasn't getting his message across and trying to wave his hand in front of the media wasn't working. So this Born Again Christian and major philanthropist opened his checkbook and began to write down numbers, big numbers that he would send not to Santorum but to Santorum's Super PAC.
(on camera): Did you save Santorum?
FRIESS: No. Did I what?
GRIFFIN: Did you save him? You're keeping him alive right now it seems.
FRIESS: Well, I think I -- David Cost did an article. "Meet Foster Friess, the man who -- the billionaire who bought Iowa for Santorum". So people just got, he went to 341 stops, town hall meetings.
GRIFFIN (voice-over): He is still giving. Gave in South Carolina, sending more to Florida.
(on camera): How much?
FRIESS: Well, I -- it's like I've got to keep that from my wife. She could kill me if she really found out. I think I want to keep that under the radar. It'll be reported eventually. But I just wanted -- I just believe in Santorum. I believe in what he can do for the country.
GRIFFIN (voice-over): Right now it's what this former investment manager can do for Santorum that counts. Friess has money, and lots of it. Out of his Jackson Hole, Wyoming based foundation he likes to give it away, millions to Haiti relief efforts, millions to victims of the Indonesian tsunami. And like it or not, during the 2012 election cycle, millions to the Super PAC supporting his pick for president.
(on camera): Do you think there's something inherently wrong with all of that money? Whether it's left or right?
FRIESS: Well, the reality is that it would be a lot better if people give directly to a campaign. If Drew, you're running for something, everybody else send money directly to you, then you're in control of it. You don't have to play all these games and it's honest, it's up front, it's forward, fully disclosed. That's really the way it should be.
GRIFFIN (voice-over): Friess has pushed the rules on Super PACs by appearing at campaign stops. By law he's not supposed to talk to Santorum about campaign strategy or what the Red, White, and Blue fund is doing to help the campaign. Friess admits it's made his long term friendships with Santorum, well, a little more formal.
(on camera): Are you able to communicate with Rick Santorum?
FRIESS: It's just very, very touchy. I have to be very, very careful what I say. And I -- if I have a question I want to ask I call up the lawyer and I say, can I discuss this? And they say, yes, it's ok. But it's just annoying to have to be on such egg shells knowing that you could unwittingly violate a law.
GRIFFIN: And while he won't say exactly how much he has given, he is openly saying he will give at least half a million more if sportsmen around the country will match his donation.
(END VIDEOTAPE);
PHILLIPS: He's quite an interesting fellow, isn't he?
GRIFFIN: Really interesting guy. A nice, you know a really a nice guy, him and his wife Lynn, terrific people, give away a lot of money to charitable causes, tsunami, Haiti, all kinds of things, so also politics.
PHILLIPS: And when you think about the fairness of Super PACs, right, is this one of these guys, and I have a feeling I know what you're going to say, that thinks that he has an advantage over the little guy?
GRIFFIN: You know it's interesting. Because I did ask him the fairness question, do you have more say in this just because your money has more say? And like a lot of Christian conservatives he says look the deck is stacked against us.
We're battling against what he feels is the liberal media, the liberal press, liberal Hollywood, liberal government unions all taking part in this election. He feels like now, maybe, there will be a fair fight because he can put all his money, if he wants, into a Super PAC.
PHILLIPS: So what's he think about negative ads?
GRIFFIN: He doesn't like them -- he doesn't like them at all. And he actually in that interview he kind of --
PHILLIPS: To putting that money at that --
GRIFFIN: And you know said, look, if Santorum's PAC starts running negative ads, the Foster Friess money comes -- comes out or stops.
PHILLIPS: Really?
GRIFFIN: He doesn't like them. He thinks the marketplace should control them, though. If voters don't like them, if Super PACs go negative, then Super PAC funders should pull their money out if they don't like it. He looks for market-based solutions for everything, like many conservative causes.
PHILLIPS: Interesting profile. Thanks Drew.
GRIFFIN: You bet.
PHILLIPS: Well fans send death threats to a 49ers player and the angry tweets blame Kyle Williams for blowing the NFC title game. More from sports straight ahead.
(COMMERCIAL BREAK)
PHILLIPS: Let's "Fast Forward", take a look at some stories happening later in the CNN NEWSROOM.
At 11:30 Eastern in L.A. a 24-year-old German national is arraigned. Harry Burkhart is accused of setting more than 50 arson fires on New Year's weekend. Prosecutors say he was ticked off after police arrested his mother on an international warrant.
Then at 1:00, mourners paying their respects to Penn State's former beloved coach Joe Paterno, there will be a public viewing on campus. Paterno died Sunday at the age of 85.
And tonight at 9:00, President Obama delivering his third State of the Union Address, he's expected to present several proposals including his plan to boost the economy.
All right, we're following lots of developments in the next hour of the CNN NEWSROOM. Let's check in first with our Jim Acosta -- hey, Jim.
JIM ACOSTA, CNN POLITICAL CORRESPONDENT: Kyra, Mitt Romney releases his tax returns on the same day that he offers a rebuttal to this President's State of the Union Address. It might be a mixed message there. I'll have a live report coming in just a few moments.
PAUL STEINHAUSER, CNN POLITICAL EDITOR: Well, I'm Paul Steinhauser at the CNN political desk. Call it role reversal, Romney on the offense, Newt Gingrich playing defense. I'll break down last night's presidential debate.
ROB MARCIANO, AMS METEOROLOGIST: And I'm Rob Marciano in the CNN Severe Weather Center. Solar flare Sunday night, a strong one with a lot of radiation; strongest one in seven years. That stuff arrived last night, but now, the plasma that creates the light show we know as the Northern Lights arrives right now, but it could pose people in danger. We'll have an update in the next hour.
PHILLIPS: Thanks guys. Also ahead, "Big Hits and Broken Dreams".
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: My brother is not moving. He needs help breathing. I mean, I just lost it.
(END VIDEO CLIP)
PHILLIPS: Ahead in our next hour, Dr. Sanjay Gupta taking a closer look at the devastating effects of football and concussions. It's not just the pros taking the hard hits on game day.
(COMMERCIAL BREAK)
PHILLIPS: All right. Jeff, really. Some fans of the 49ers need to get a life.
JEFF FISCHEL, HLN HOST: We love that sports fans are passionate. I mean that's not the question, right? The question is, is sometimes that passion like gets twisted, right?
Take the reaction to 49ers punt returner Kyle Williams, he had two costly turnovers in Sunday's NFC title game with the Giants. One fumble led to the Giants' game-winning field goal. Some fans vented their anger and tweets to Williams, really out of line stuff, suggestions he should jump off the Golden Gate Bridge, for instance, or run into a bullet.
Williams' dad Chicago White Sox Kenny Williams says he questions the culture of sports. The 49ers, the team, rallied behind Williams saying we win as a team and we lose as a team.
NFL Hall of Famer Deion Sanders showing support. He tweeted. "Man I'm proud of the great year you've had don't allow yesterday's moment to become a monument. Keep your head up. God bless." He needs a lot of support right now.
You know, I think the best team in the NBA, right now, the Oklahoma City Thunder flying under the radar. There's Russell Westbrook. He just signed a big $80 million contract extension. I would say he's a happy man.
UCLA star also sharing -- look at this sweet pass over to Kevin Durant. These guys are the best one/two punch in the NBA right now I would argue. The Thunder wins beating Detroit by 20.
Durant and Westbrook could give lessons in team work to these two British soccer players. They're arguing over who gets to take the penalty kick, "No I want it.
PHILLIPS: No me, no you.
FISCHEL: And look at it. The teammates are trying to break it up. The captain wins out. Isn't that always the way, when I fight authority, authority always wins. He did make the shot though and led the team to a 3-1 win. Thankfully he made it or else it really would have gotten ugly at the locker room, no doubt.
PHILLIPS: You just got a line from our theme song. Thank you, Jeff.
FISCHEL: All right.
