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Facebook IPO Fiasco; Facebook Stock Flops On Wall Street; Scandal Exposes Secret Service Culture; Man Who Helped Find Bin Laden Convicted; King Rips White House Over Bin Laden Movie; Senators To Grill Secret Service; Jury Asks To See More Edwards Evidence; HP To Cut About 25,000 Workers; Fear Of Implanted Bomb Diverts Flight; First Free Elections In 5,000 Years; Iran Nukes Focus Of Baghdad Meeting; Houston To Decide Astrodome's Fate; Tall Ships Set Sail In Hudson River; "NATO 3": Anarchists or Victims?; Budget Office Warns of Another Recession; Female Drill Sergeant Claims Sexism
Aired May 23, 2012 - 10:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: Good morning to you. I'm Carol Costello.
Just ahead in the NEWSROOM new fallout from Facebook's IPO. Did a major bank give big time investment firms an unfair advantage over the average investor? Morgan Stanley is responding to the allegations while regulators launch an investigation.
The Secret Service or the Secret Circus -- that's the term reportedly used to describe the wild behavior by agents when they hit the road. One of those ingredients, agents hiring prostitutes.
That's the focus of a Senate committee hearing that started just moments ago. The director of the Secret Service is set to testify in that hearing room any minute now.
Casey Anthony's trial captivated the country, and now her ordeal will be turned into a made for TV movie. This morning, we know who will play the lead role.
But we begin this morning with the Facebook fiasco. It's getting ugly or should I say uglier. Here is the latest allegation. Some high profile investors may have gotten an insider's view of Facebook's future before the social network's stock went public.
That means Wall Street insiders got information about the value of Facebook's IPO. The rest of us did not get. Federal regulators are now investigating. Andy Serwer is the managing editor of "Fortune" magazine. He joins us now. Hi, Andy.
ANDY SERWER, MANAGING EDITOR, FORTUNE: Hi, Carol.
COSTELLO: OK, so I'm hoping you'll make us understand this story because it's tough. This sort of sounds like insider trading, is it?
SERWER: Well, you know, it's called the technical term for it, if the allegations are true, is selective disclosure. In other words, insiders telling one group of investors some information and not telling other investors.
Obviously, that would confer a huge advantage to the investors who were given that information. If that's what happened, it is against the law, but difficult to prove, very murky, as are the facts in the case right now.
COSTELLO: So it's likely even if Facebook's underwriters are guilty of this that absolutely nothing will happen?
SERWER: You know, we've seen this so many times on Wall Street. Because what happens is violating the letter of the law, proving violations of the letter of the law, is very, very difficult.
But to us, Carol, it's very clear that if this is true, it violates the spirit of the law. And I just wish that it was easier to prosecute these cases.
In other words, you ask the person who disseminated the information, how would you like it if you were buying the stock and you didn't have that information? What would you think? I mean, it's just common sense here.
COSTELLO: OK, so this is coming off to average Americans just like you say, as banks behaving badly yet again. Facebook's major underwriters, they have names we have all heard before, JPMorgan Chase, Goldman Sachs, and Morgan Stanley.
These guys are fighting more regulations, federal regulations. But how can they sit there and fight these regulations when this stuff is still allegedly happening?
SERWER: Well, you know, again, they are going to say, well, it's a rogue employee or this is one isolated thing. Again, if it's true, they are going to say it's not systemic.
But, you know, it just continues to create this environment where the average American distrusts, dislikes these institutions. They are behaving badly. They are not curbing their behavior. And this kind of stuff with the Facebook IPO, it's just greed.
I mean, they increased the size of the offering. They increased the price of the offering. At the same time, apparently, they were getting wind that the results of the company, the financial results, were a little weaker than anticipated.
The other question, Carol, is did Facebook tip off the investment banks and tell them that? I mean, there are all kinds of questions here and maybe all kinds of levels of guilt as well.
COSTELLO: OK, so just the brazenness of this. Facebook's IPO goes public, right? The media is paying attention. There's a lot of publicity surrounding this.
And then this stuff allegedly happens? I mean, what does it say about the culture on Wall Street that even if all eyes are on us, we can do what we want?
SERWER: Yes, I mean, you know, again, it's a great area. So they are going to suggest, well, we were just kind of having a little side conversation, Carol, you know, over a cup of coffee, or maybe something like that.
So there's that. The other thing is Silicon Valley and Facebook. You have to ask yourself, these people, you know, sort of held themselves as holier than thou. We don't really care about the money. We're building a social network, something for the greater good of humanity worldwide.
Well, actually, you might have been doing that, but you really did care about the money as well and I know that because you increased the price of the offering a couple of times and so not so much holier than the rest of us after all, right?
COSTELLO: Andy Serwer, thanks so much. Andy Serwer from "Fortune" magazine.
SERWER: Thanks, Carol.
COSTELLO: There are reports today that Morgan Stanley is being sued by investors. Morgan Stanley declined to comment, but earlier the company did push back on claims by regulators that it did anything wrong regarding Facebook stock.
Saying, quote, "Morgan Stanley followed the same procedures for the Facebook offering that it follows for all IPOs. These procedures are in compliance with all applicable regulations," end quote.
OK, here is an excuse worthy of any 12-year-old. Four of the Secret Service agents fired in the Colombia prostitution scandal say it's unfair because everybody's doing it.
According to "The Washington Post," the former agents want their dismissals overturned because the agency has long tolerated wild behavior on the road.
In fact, they say the unwritten code even has a name, the secret circus. That culture going to the microscope and actually any minute now, the Senate Homeland Security Committee will start a hearing.
And CNN's Kate Bolduan is on the Hill to cover that. Has it started yet, Kate?
KATE BOLDUAN, CNN CONGRESSIONAL CORRESPONDENT: It has not yet. It will be getting underway in the next half an hour, Carol. And as soon as it does, we can expect some tough questions to the Director of the Secret Service, Mark Sullivan.
I spoke to the chairman and the ranking member yesterday of the committee, Senator Joe Lieberman and Senator Susan Collins. Both expressed they have a lot of tough questions. This is going to be the first time they will be hearing publicly from the Secret Service director speaking about the scandal since it all kind of broke.
Senator Joe Lieberman saying he wants to know not only what the agency's investigation has found so far, but also getting to this question of is there a culture of this at the Secret Service when they leave the country. This is something that Senator Susan Collins has raised questions about since the beginning.
Senator Lieberman saying to me he wants to know if the Secret Service should have seen this coming, and Senator Susan Collins in her prepared opening remarks. She says from the facts she has seen it sure doesn't seem like this is a one-time incident. Listen here to Susan Collins.
(BEGIN VIDEO CLIP)
SENATOR SUSAN COLLINS, HOMELAND SECURITY COMMITTEE RANKING MEMBER: It raises concerns about whether there's some sort of cultural problem in the Secret Service, despite the fact that the vast majority of agents are ethical and incredibly courageous. That says to agents that somehow different rules apply when they are outside of the United States.
(END VIDEO CLIP)
BOLDUAN: And both lawmakers also want to know explicitly how the Secret Service -- what is the Secret Service will do to avoid this ever happening again.
From the prepared remarks from the Director Mark Sullivan, he is defending his agency, Carol, of course, while acknowledging that the incident happened.
He in his prepared remarks calls it an aberration, and points out that there is no aspect of operational security that was compromised because of it.
Of course, also saying that the actions of these nine individuals who have been -- who were found to be involved with serious misconduct, they do not represent the values of the Secret Service -- Carol.
COSTELLO: Kate Bolduan reporting live from Capitol Hill.
A Pakistani doctor accused of helping the CIA track down Osama Bin Laden has been sentenced to 33 years in prison. A tribal court in Pakistan convicted him of treason. He was also fined $3,500 for spying for the United States.
He helped the CIA collect DNA samples from the compound and helped verify Bin Laden's presence. Defense Secretary Leon Panetta says the doctor should be released.
And the Homeland Security chairman is ripping the Obama administration over the Osama Bin Laden raid. A new report shows that the White House offered filmmakers access to the top secret Navy SEAL team that carried out operation even after top defense officials told military personnel to stop talking about the raid.
These accusations have been out there for a while. Congressman Peter King, a Republican, has been pushing for an investigation since last summer. He thinks letting a filmmaker that close to classified information could be dangerous.
(BEGIN VIDEO CLIP)
REPRESENTATIVE PETER KING (R), CHAIRMAN, HOMELAND SECURITY COMMITTEE: The access that Hollywood producers and Democratic lobbyists were given to the CIA and to the Defense Department.
We are finding now that Kathryn Bigelow, that all of her meetings at the CIA were arranged by a Democratic lobbying group. I have never heard of lobbyists interceding to get people into the CIA.
She was taken to locations and sites that are not even mentioned. They are actually blacked out of the reports and e-mails because they are sensitive.
(END VIDEO CLIP)
COSTELLO: The White House disputes bid it says it does not discuss classified information. The movie from Director Kathryn Bigelow was supposed to come out at the end of the year. She also directed "The Hurt Locker." That was the movie about the Iraq war.
Right now, a parade of tall ships making their way up the Hudson River in New York, it's all part of Fleet Week. The parade commemorates the 200th anniversary of the war of 1812.
There will also be a military flyover. Fleet Week celebration gives citizens a chance to meet members of the U.S. Navy and the Coast Guard.
A passenger passes a note and fighter jets scramble into action. We'll have the latest on what exactly happened aboard this airliner.
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COSTELLO: It's 12 minutes past the hour. Checking our top stories now, today Secret Service officials will have to answer to Congress and a Senate hearing.
A committee is investigating the incident in Colombia last month where Secret Service agents hired prostitutes. The Secret Service director has said security was never compromised in the incident.
Still no verdict in John Edwards corruption trial. The jury asked to see more evidence again yesterday. Edwards is charged with using campaign contributions to hide his affair with Rielle Hunter. Neither he nor Hunter testified during the trial. Hewlett-Packard is expected to cut about 25,000 jobs later today, but we don't know where those layoffs will take place. It's the largest tech company in the United States and employees about 350,000 people worldwide. CEO Meg Whitman is trying to reorganize HP to make it leaner. Wall Street analysts predict HP profit is down 26 percent this quarter.
Now a stark reminder of the changing faces of terrorism and how seriously new threats need to be taken. At this time yesterday, not even the people aboard this flight knew they were the center of the latest terror scare.
A fellow passenger had quietly slipped a note that she had a device surgically implanted inside her. That's the very technique al Qaeda is now pursuing to kill Americans. Fighter jets scrambled and the flight diverted from its planned landing in North Carolina to a closer airport in Maine.
Lizzie O'Leary is our aviation and regulation correspondent. How did they determine that this woman didn't have a device implanted in her onboard that plane?
LIZZIE O'LEARY, CNN AVIATION AND REGULATION CORRESPONDENT: Well, Carol, one of the things that happened according to passengers we've talked to is the flight crew asked if there was a doctor onboard. A doctor went up and spent some time with this woman.
They took her into the back of the plane with the flight crew and took a look at her. They examined her. According to two lawmakers, there were no signs of any fresh scars. You know, we do talk about this question of a surgically implanted bomb.
It's worth noting that she said device, so there's a real wide range of options there. But essentially, they gave her a quick physical exam. And we should note, and certainly the lawmakers we have talked to have noted, this would be quite hard to do. It sounds very scary, but it's also quite hard to pull off.
COSTELLO: Well, it makes you wonder what if she had a device implanted in her body. These F-15s are on either side of this passenger plane. It's flying over land, over the United States. What would have happened? What's the protocol?
O'LEARY: Well, the protocol as we have certainly seen in the Richard Reid case, in the case of Abdul Mutallab is to get -- and those were real incidents, is to get the plane down and get it down as soon as possible.
One of the things we know here is that the flight crew sat with this woman for some time. So there was no indication they felt this was an immediate threat to the flight. We also know that the pilot was in communication with air traffic control.
In fact, there is an exchange where he says that the cockpit is secure. They confirmed that. So there is a sense that the flight crew, while they were sort of taking all precautionary measures, also was in real communication with air traffic control.
And authorities saying, we feel that we have this situation under control, and they did land. And they landed pretty quickly as well.
COSTELLO: Lizzie O'Leary reporting live from Washington.
A season of change. One year after the Arab spring toppled dictators, we'll look at a presidential election that could draw 50 million voters.
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COSTELLO: Now is your chance to talk back on one of the big stories of the day. The question for you this morning, do CEOs make good presidents?
The argument may sound new, but it's really not. For years, Americans have been captivated by business titans. Think Ross Perot, Donald Trump, Herman Cain.
In 2004, George W. Bush ran as America's CEO president touting his MBA. Mitt Romney is riding the same bus touting his experience at Bain Capital as proof he'd be a recession proof president. Voters seem to agree.
According to an NBC/"Wall Street Journal" poll, 59 percent called Romney's business experience an advantage in helping improve the economy if he's elected. Republicans are capitalizing on this and painting President Obama as the anti-CEO.
(BEGIN VIDEO CLIP)
SENATOR MITCH MCCONNELL (R), MINORITY LEADER: This is certainly the most anti-business administration since the Carter years, and at least you could say this for President Carter. He was largely incompetent. This administration has actually done a lot of damage to the country. We hope it can begin to clean up the mess and repair the damage after the election.
(END VIDEO CLIP)
COSTELLO: Democrats are trying to convince voters Republicans are wrong about that. Mr. Obama, they say, is pro business, but does not believe a CEO necessarily makes a good president.
(BEGIN VIDEO CLIP)
JOE BIDEN, VICE PRESIDENT OF THE UNITED STATES OF AMERICA: Your job as president is to promote the common good. That doesn't mean the private equity guys are bad guys. They're not, but that no more qualifies you to be president than being a plumber.
(END VIDEO CLIP)
COSTELLO: Consider this. Under George W. Bush, economic growth was sluggish, fuelled by the housing bubble, which as you well know burst. What about Ronald Reagan, the retired actor, or Bill Clinton, the career politician?
Both non-CEO presidents who helped pull the country out of economic malaise. So the talk back question for you this morning, do CEOs make good presidents? Facebook.com/carolcnn. I'll read some of your responses later on this hour.
Today, the so-called cradle of civilization writes a new chapter in its history. Right now, some 50 million Egyptians have begun voting in a landmark presidential election.
It's the latest ripple from Arab spring when outraged citizens rose up and toppled dictators and the thugs that kept them in power. This is Egypt's first presidential election since the revolution ousted Hosni Mubarak.
He is awaiting the verdict on charges that he killed protesters during that uprising. We want to head to Cairo now and history and Hala Gorani. Hala, how has voter turnout been?
HALA GORANI, CNN CORRESPONDENT: Well, Carol, we won't have those numbers for a number of days. You called this a ripple of the Arab spring. I think you can safely call it a wave at the very least.
This is an extremely significant event in the Arab world and certainly within the context of the Arab spring. This is the most populist Arab country in the world, Egypt.
And for the first time in its 5,000-year history you have ordinary Egyptians going to the polls, casting ballots in what they hope will be the first free and fair elections in this country's history.
So why is this a significant day? Of course, because if this president is elected and people consider him to have a mandate and legitimacy at the head of this country, then it will determine where politically this country goes.
Whether or not political Islam will be a big part of how the country is governed or whether it will be an ex-Mubarak regime member who is more secular. And the big issues here are security, the economy, very much like other western democracies, where elections are being held including France, where I just was.
Now people at the polling station today are telling me they feel it's their duty for the first time in their lives to cast a ballot. And you had the indelible ink there in which voters are asked to dip one of their fingers to prove that they voted and to cut down on voter fraud.
So that's the scene here in Cairo as we start day one of a two- day process -- Carol.
COSTELLO: So as far as the young revolutionaries, the people that brought about this change, are they happy today, completely happy?
GORANI: Completely happy, no. They are disillusioned and many of them frustrated. I'm sure viewers will remember in Tahrir Square in January and February of 2011, these young hipster secular revolutionaries.
Islamists weren't part of the picture in the beginning, you'll remember. Now some of them feel like this revolution was stolen from them by religious parties and by former regime members. Remember the four frontrunners.
Two of them served under Mubarak and two of them are Islamist. So those young secular revolutionaries, the internet savvy, the revolutionaries, the tweeters and the Facebookers, some of them today tell me they are disappointed.
But all of them almost without exception told me they will go out and vote -- Carol.
COSTELLO: Hala Gorani reporting live from Cairo, Egypt, this morning.
President Obama not exactly blowing out the primary competition. Yes, he did have some competition at least in some states. Is this something that the president needs to worry about? Our "Political Buzz" panel weighs in. That's coming up.
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COSTELLO: Just about 30 minutes past the hour. Checking our top stories now, a historic day in Egypt where 50 million people are expected to vote in the first presidential election since the ouster of Hosni Mubarak. About 12 candidates including one of Mubarak's former foreign ministers are taking part in this two-day election.
And a critical meeting in Baghdad today where Iranian officials will meet with six countries to discuss its nuclear program. It comes one day after the head of the International Atomic Energy Agency says he's close to a deal to unblock an investigation of that program.
It's been called the eighth wonder of the world, but a lack of use and millions of dollars in maintenance fees means Houston's Astrodome could be torn down. It's reportedly just one of the options being unveiled today by county officials who hired consultants to assess the future of the ballpark.
And right now, a parade of tall ships making their way up the Hudson River in New York. These are live pictures of Fleet Week. The parade commemorates the 200th anniversary of the war of 1812. There are also be a military fly over. Fleet Week celebration gives citizens a chance to meet members of the U.S. Navy and the Coast Guard.
"Political Buzz," your look at the best political topics of the day. Three questions, 30 seconds on the clock. Playing today, CNN contributor, Maria Cardona representing the left and from the right, conservative radio show host, Lenny McAllister. He is also a senior contributor at politic365.com. Welcome to both of you.
MARIA CARDONA, CNN CONTRIBUTOR: Thanks, Carol. Good morning.
LENNY MCALLISTER, SENIOR CONTRIBUTOR, POLITIC365.COM: Morning.
COSTELLO: First question, President Obama's re-election bid. Let's start with Jimmy Fallon's take.
(BEGIN VIDEO CLIP)
JIMMY FALLON, HOST, NBC'S "LATE NIGHT WITH JIMMY FALLON": Here's some political news. While attending meetings in Chicago this week, President Obama stayed in a hotel instead of his own house.
It's true. It was annoying, though, when he asked for a wake-up call, they just showed him his latest poll numbers, boy.
(END VIDEO CLIP)
COSTELLO: Last night, President Obama only got 60 percent of the primary vote in Arkansas and 58 percent in Kentucky. At least he wasn't losing votes to a convicted felon like he did in West Virginia. But the question is, should Mr. Obama be worried about his support among Democrats? Maria?
CARDONA: No, Carol. He shouldn't be. Look, Arkansas and Kentucky have never been hotbeds of the Democratic Party. There's no real infrastructure there. There's no organization by the Obama campaign there.
In the swing states, and in the solidly blue Democratic states, Obama is doing quite well, and that's really where it matters. That's where the decision of this election is going to be made.
And frankly, in the polls that we've seen recently, the Democratic intensity for voters and the enthusiasm among Democrats is beating the enthusiasm and intensity among GOP voters. So I think those are the numbers that really matter.
COSTELLO: Lenny?
MCALLISTER: No, the numbers that really matter are what you're seeing in Arkansas, Kentucky and West Virginia, only because these are the working class voters that are going to be the swing voters in states such as Ohio and Pennsylvania.
And as long as there's apathy there for President Obama, and as long as people are jumping out of the workforce first at the weight of their -- at the part clip that they are jumping out of the workforce, President Obama has to worry about people jumping off of the Obama train as well.
It's not so much people voting for Romney. But if it's people staying home and not voting for him, he's in trouble in November. COSTELLO: Ok second question. Mitt Romney's campaign and the RNC, the Republican National Committee, are keeping a close eye on Joe Biden hoping he'll say something boneheaded and then use it to slam the President. One GOP source tells Politico that Biden is a ticking time bomb. Good strategy? Lenny?
MCALLISTER: No, it's not a good strategy. It's a good strategy as a secondary strategy or a tertiary strategy to be ready to pounce. But this pundit pouncing is not the way to win the White House. People want to see leadership. You don't usually lose the incumbency, you don't usually lose the White House. Somebody wins it for you.
And that's what Governor Romney is going to have to do to beat President Obama. He's going to have to make sure he takes advantage of these opportunities but he has a better plan, has a better vision and people buy into that and are reminded of what they got over the last four years with this President.
COSTELLO: Maria?
CARDONA: Yes, it's a great strategy, Carol, and I hope that the Romney campaign continues to focus on it. Never mind that it won't work. Never mind that it's dumb as Lenny focused on. Never mind that Mitt Romney's greatest hits reel is so much larger than Biden's gaffes. Never mind that other GOP strategists have said is that a -- it is a dumb strategy and they shouldn't focus on it.
And never mind that frankly Biden does connect with those middle class, working class voters that Mitt Romney doesn't have a prayer in the world of connecting with at the moment because he doesn't understand them.
COSTELLO: Ok. Time for your "Buzzer Beater" 20 seconds. Mitt Romney says he's reading -- Mitt Romney says reading sci-fi is his guilty pleasure. You know, he is trying to make himself more human, right? And he wants people to like him.
So which sci-fi book or movie would you recommend to him to make him more likeable -- Maria?
CARDONA: Let's see he's reading books about aliens to make himself seem more human. I don't know about that, Carol. But the books that came to mind are the themes where "The Time Machine" or "Back to the Future" because frankly what Mitt Romney is proposing in terms of embracing the same exact policies, failed Republican economic policies that got us here in the first place will take us back to frankly what will be a horror movie, never mind a sci-fi movie for the American public.
COSTELLO: You are a Democratic strategist. Lenny?
MCALLISTER: Well, I think that that Mitt Romney needs to actually look at two movies that are going to be cautionary tales as to what he's going to face in this election coming up. Either if he wants to go old school with "Return of the Jedi" because the master politician from 2008, President Obama, is going to be doing all of his magical works in 2012 to get people to vote for him.
But if he wants to go new school, I would suggest something that's coming out this weekend, "Men in Black 3" because he has to beware of a black man with big ears trying to make people forget about the last four years.
COSTELLO: Oh geez, Lenny, Maria, thanks for playing today.
CARDONA: Thank you Carol.
MCALLISTER: Thanks Carol.
COSTELLO: Police are calling these three men anarchists, saying they plotted to hit President Obama's campaign headquarters in Chicago. But defense attorneys say these men were setup by overzealous cops. We'll talk with the member of the group representing the suspects. That's next.
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COSTELLO: Supporters have dubbed them the NATO 3 and insist they've been set up and entrapped by police and are now being subjected to cruel and unusual punishment.
I'm talking about the three suspected anarchists who were arrested on terrorism charges during the NATO summit in Chicago. Brian Church, Bret Betterly and Jared Chase appeared briefly in court but their attorney had a lot to say.
(BEGIN VIDEO CLIP)
MICHAEL DEUTSH, ATTORNEY FOR ARRESTED NATO PROTESTERS: You know we -- we don't know all the evidence. But from what our clients have told us and from what our investigation tells us, this is a setup by the Chicago police and whoever else is working this case.
(END VIDEO CLIP)
COSTELLO: Chicago police insist the men are Black Bloc anarchists like the protesters you see in these pictures. You can see they cover their faces and are supposedly aggressive in their tactics.
Police say the men planned to attack Chicago Police Stations, destroy squad cars with Molotov cocktails and planned to hit President Obama's Chicago campaign headquarters, but defense attorneys say it's a setup carried out by overzealous undercover operatives.
With me now Kris Hermes with the Chicago Chapter of the National Lawyers Guild. Attorneys with that organization represents the NATO 3. Welcome.
KRIS HERMES, SPOKESMAN, NATIONAL LAWYERS GUILD: Thank you.
COSTELLO: So you allege these three young men are being treated cruelly while in jail. How so? HERMES: Well, we -- we understand that they have been kept in solitary confinement without an ability to interact with other people for 24 hours a day, ever since they were detained. And we're just trying to remedy that situation at this point.
COSTELLO: Is that standard procedure for someone who's accused of a terrorist act?
HERMES: I mean I don't think that they necessarily need to be placed in solitary confinement just because they are accused of terrorism-related crimes, no.
COSTELLO: You say these men were set up, but police say they had -- they had built four crude bombs. Those bombs were confiscated. If the guys weren't serious about violent action, why would they build these Molotov cocktails?
HERMES: Well, unfortunately the state's attorney has not provided us with any information or evidence about criminal activity. They have not even provided the search warrant that was used to raid the house from which they extracted or supposedly extracted -- extracted these items.
So we -- we have not seen any evidence. And what we do know is that there were a couple of infiltrators, police informants, that were used and there are suspicious activities that they were engaging in, possibly provocation, possibly manufactured crimes.
So we're carrying out our investigation to get -- to get further information.
COSTELLO: And so are you accusing these undercover police officers or operatives of convincing these three men to carry out these violent acts?
HERMES: Well, there has been historical precedent to that fact. And we just don't know at this point. As I said, we're -- we're trying to get more information. We're getting no help from the city or the state's attorney's office. And we'll see -- we'll see what happens as more information unfolds.
COSTELLO: Well, I think that most people would believe if there's even a hint of violent action being carried out by so-called anarchy groups that action should be taken and that maybe operatives should go in and ferret out these people before they can do harm.
HERMES: Well, keep in mind if it is true that these particular undercover officers are responsible for this operation, they have been part of the Occupy Chicago Movement for weeks now, ingratiating themselves within these political activist circles. And they preyed upon people who were coming to Chicago from out of town to protest against NATO. And there's no clear evidence that these three folks intended to engage in violence when they came here.
COSTELLO: We'll continue to follow the case. Mr. Hermes, thank you for being with us this morning. HERMES: Thank you.
A female drill sergeant says the army suspended her unfairly just because she's a woman. She just got her job back, but she says that's not enough.
(COMMERCIAL BREAK)
COOPER: A dire forecast on the economy. A government watch dog says the United States will probably fall into another recession if certain tax hikes and spending cuts kick in next year.
Alison Kosik is at the New York Stock Exchange to explain. Hi, Alison.
ALISON KOSIK, CNN CORRESPONDENT: Hey Carol. So everybody likes to call this a fiscal cliff. And what essentially that is, is when all of these legislative measures kind of kick in all at the same time. In this case, it would be higher taxes and spending cuts and this would take effect in January of next year.
What it essentially means is that $500 billion would literally be pulled out of the economy next year. In fact, the Congressional Budget Office says it's going to be so bad, we could go back into a recession.
Now, let me run through what could happen all at once. For one, those payroll tax cuts we've been having lately, they expire next year. So do extended unemployment benefits, the Bush tax cuts would expire. $1 trillion in spending cuts will also kick in.
Now all of this is going to happen automatically unless Congress does something. But at the same time, critics say, you know what? Congress just can't extend everything until eternity because that could add up to $7 trillion to our debt over the next decade, hurting the economy in the long run.
Here is the real kicker for you, Carol. Lawmakers aren't expected to take up all of this until after the election. So literally only weeks before all of this stuff kicks in -- Carol.
COSTELLO: So at least you didn't use the term "kicking the can down the road" because frankly I'm sick of that one.
KOSIK: We'll use that one, too, don't worry.
COSTELLO: I know. How is all of this affecting the market?
KOSIK: Well, part of it is affecting the market. You know, the CBO, the Congressional Budget Office warning, it is worrisome. That's weighing on the market. Part of the reason why you're seeing the Dow down 160 points right now.
But a lot of other things are going on too. Greece's former prime minister told the Dow Jones reporting that Greece is thinking about preparing to leave the Euro Zone. Also the World Bank says growth in the Asia Pacific region is expected to slow. Yesterday yet another group said that growth in Europe is going to slow to a crawl. What you see here happening is that the global economy is not looking good. And you see investors running for the exits today -- Carol.
COSTELLO: Alison Kosik live at the New York Stock Exchange.
Checking our top stories now, today Secret Service officials are answering to Congress at a senate hearing. A committee is investigating the incident in Colombia last month where Secret Service agents hired prostitutes. The Secret Service director has said security was never compromised.
Former first lady Nancy Reagan is following doctor's orders not to attend big events until she gets better. She backed out of a big event last night at the Reagan Presidential Library that featured House Budget Committee Chairman, Paul Ryan. Mrs. Reagan fell and broke some of her ribs back in March. She has been slow to recover.
This just in to CNN. These are live pictures out of Miami. As you can see, it's pretty nasty there. Heavy rains have caused some serious flooding in Miami Dade County. The Miami area has been pounded with nasty weather since yesterday. They have seen record amounts of rain, about 5 1/2 inches, something that has not happened since 1901.
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COSTELLO: I mean, you'd think the mirror ball trophy was a Super Bowl trophy. They're cute, though, aren't they?
Green Bay Packers fans went absolutely nuts the moment wide receiver Donald Driver was crowned king of "Dancing with the Stars".
"SHOWBIZ TONIGHT's" A.J. Hammer is here to fill us in. He has another trophy to add to his collection.
A.J. HAMMER, HLN HOST: And Carol, it is something he is very, very proud of. Well, Packers fans certainly went nuts as we saw with Driver's big win last night on "Dancing with the Stars". He made it very clear to us that getting this trophy was a big, big deal to him.
"SHOWBIZ TONIGHT" was right there with him backstage, and he told us just how big a win this really was. Let's watch.
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DONALD DRIVER, WINNER, "DANCING WITH THE STARS": I feel the same way as when I won the Vince Lombardi trophy. You just have a numb feeling, and it's going to soak in probably tomorrow. I think tomorrow is when it's really going to soak in that we are "Dancing with the Stars" champions. Wow.
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HAMMER: Wow is right. And he says he already has a spot reserved for that mirror ball trophy right next to his Super Bowl trophy. That's how important it is to him.
Driver is the third NFL star to win "Dancing with the Stars". Interestingly enough, Carol, all of them have won Super Bowls as well. I'm not sure, however, they would agree with Driver's comparison.
COSTELLO: Maybe not. I loved his celebratory dance, though.
Onto another story. The Casey Anthony saga, made for TV movie, and now we get to know who will play Casey Anthony.
HAMMER: Yes. Although you may not know her name, she is a Canadian actress. Holly Devo is her name; she'll reportedly play Casey Anthony in the upcoming Lifetime movie. She is relatively unknown, has a few small screen credits on her resume. So this really could actually be a big break for her.
The movie "Prosecuting Casey Anthony" is based on a book all about the trial called "Imperfect Justice". She's going to be starring however opposite a well-known guy, the great Rob Lowe. He's already been cast to play the prosecutor. I actually think Carol, it does make sense that they cast a relative unknown in the part of Casey Anthony so people don't have any kind of familiar baggage or anything to take along as they watch.
COSTELLO: Totally get that. A.J. Hammer, thank you.
HAMMER: You got it.
Looking for your fix of breaking entertainment news? A.J.'s got it. Watch "SHOWBIZ TONIGHT" at 11:00 p.m. Eastern on HLN.
In today's "Daily Dose", if you're thinking about getting a genetic test to see if you're likely to get colon cancer, diabetes, or Alzheimer's, hold off at least right now. That is the advice from the American College of Obstetricians and Gynecologists. The group says those tests are not ready for primetime and need more work to be accurate. It does recommend genetic testing for other things like breast cancer and cystic fibrosis.
A female sergeant at a top notch army (inaudible) was suspended from her job after complaints that she was too tough. But she says the real reason she was suspended was because she's a woman.
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COSTELLO: The first woman commandant of an elite drill sergeant school says she was suspended from her position just because she's female. And it turns out she might have been right. Here's Jason Carroll.
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JASON CARROLL, CNN CORRESPONDENT (voice-over): We first met Command Sergeant Major Teresa King three years ago at Fort Jackson, Columbia, South Carolina.
(on camera): What are you looking for? I mean -- because it all pretty much looks like everyone is exercising to me.
COMMAND SGT. MAJ. TERESA KING, U.S. ARMY: I'm looking for attention to detail.
CARROLL (voice-over): the first woman to lead the army's elite drill sergeant school, a symbol of physical and emotional strength. That was then.
KING: When I'm going through this devastating situation, it's important for me to set the example. And that's where I'm at.
CARROLL: Now king faces the toughest battle of her 32-year military career. She filed a formal complaint against the Army charging her superiors mistreated her because she's a woman.
KING: I'm not in a position where I can say what should happen to my superiors. But I will say they need to be held accountable.
CARROLL: King was suspended following complaints of micromanaging and toxic leadership -- factors she says would not have been questioned if she were a man. Some rank and file questioning her lack of combat experience, but as a woman, King can't go to the frontlines. King, who had earned top scores for physical fitness, says she was punished for rejecting unfit candidates.
KING: I think drill sergeants should be some of the highest standard bearers in the Army. And that's the only way we can make soldiers.
CARROLL: King submitted a 19-page rebuttal, describing his accusers as disgruntled because they face disciplinary action. Two of her superiors Command Sgt. Major John Calpena (ph) and Maj. Gen. Richard Longo oversaw a six-month investigation. During that period, King was not allowed to have any contact with students or staff, cut off, she says, from her military family.
KING: I think I lost touch of consciousness because it was so painful.
CARROLL: King sought help from attorney and state legislature James Smith, also one of her former soldiers. Smith says he believed in her then and now.
JAMES SMITH, TERESA KING'S ATTORNEY: Her suspension is and was unwarranted. Now the point is, and what we're asking, is for a review of how and why all this took place.
CARROLL: Earlier this month, the army found king's suspension was not warranted, informing her "Your suspension is lifted." Smith says not good enough.
An army spokeswoman saying neither Calpena nor Longo could comment. King's reinstatement came just in time for the change of responsibility ceremony, a commandant's final act -- the official transfer of power.
KING: There were some days I didn't feel like I wanted to live. But I believe in hope against all hope.
CARROLL: Supporters surrounded King who says despite everything, she'd serve the army again.
KING: I want to make sure that this does not happen to another person.
CARROLL: Jason Carroll, CNN, Columbia, South Carolina.
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COSTELLO: We asked you to "Talk Back" on one of the big story of the day. The question, "Do CEOs make good presidents?"
This from Jason, "The President needs to be a little bit of everything. More of an educator or a counselor. He is more running a school of over-zealous children, Congress, than a business."
This from Sheila. "I believe CEOs can make good presidents but their focus has to be on the well-being of all people versus a survival of the fittest mentality that is seen I many of today's CEOs.
And this from Stephi, "Most CEOs aren't even good CEO's."
Keep the conversation going, facebook.com/carolcnn. Thanks as always for your comments and thanks for joining me today. I am Carol Costello.
"CNN NEWSROOM" continues right now with Kyra Phillips.
