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Campbell Brown
Obama Reacts to al Qaeda Message; President-elect Backs Treasury Nominee
Aired January 14, 2009 - 20:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAMPBELL BROWN, CNN ANCHOR: Hi there, everybody.
Breaking news tonight: The president-elect reacts to a new taped threat apparently from Osama bin Laden.
Bullet point number one; Al Qaeda's leader speaks out for the first time in months. In that audio message, bin Laden called for a jihad against Israel and vows to open new fronts against the U.S.
In an interview just aired on CBS, president-elect Obama says killing bin Laden is one way, but not the only way, to stop him.
(BEGIN VIDEO CLIP, CBS NEWS)
BARACK OBAMA (D-IL), PRESIDENT-ELECT: If we have so tightened the noose that he's in a cave somewhere and can't even communicate with his operatives, then we will meet our goal of protecting America.
(END VIDEO CLIP)
BROWN: The president-elect says U.S. forces need to concentrate on the border regions between Afghanistan and Pakistan. But, tonight, he is being warned of a new bloody chapter to come in Afghanistan.
Bullet point number two tonight: Obama stands by his treasury nominee, who is still trying to explain why he failed to pay part of his taxes for four years. Confirmation hearings for Tim Geithner have been pushed back until after Inauguration Day now. Obama says he is not concerned about the man he's counting on to lead his economic team.
And bullet point number three tonight: grounded. The financial adviser who tried to fake his death when he crashed his own airplane and then we learned he ran off and disappeared. Today, he gets his wings clipped. Tonight, Marcus Schrenker has been charged with faking a mayday call just before parachuting out over south Alabama. We're going to tell you why his wife says the two were already having a turbulent time.
First, though, we are, as always, "Cutting Through The Bull."
It was one of the best-known lines President Bush ever uttered, just a few months after the September 11 attacks. Who can forget what he said about catching Osama bin Laden?
Listen. (BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I don't care, dead or alive, either way. I mean, I -- it doesn't matter to me.
(END VIDEO CLIP)
BROWN: That was Bush the cowboy with a pledge to the American people. At the time, it felt as though, frankly, there was no bigger priority. But it is now eight years later. Listen to President Bush talk about bin Laden now at end of his presidency, a chastened cowboy at best.
(BEGIN VIDEO CLIP, "LARRY KING LIVE")
LARRY KING, HOST, "LARRY KING LIVE": Are we ever, ever going to find bin Laden?
BUSH: Yes, of course, absolutely.
KING: You're confident based on?
BUSH: Because we have got a lot of people looking for him, a lot of assets out there. And you can't run forever, just like the people who are allegedly involved in the East African bombings. A couple of them were brought to justice recently.
(CROSSTALK)
KING: Did we ever come close?
BUSH: I don't know. I can't answer that.
KING: You don't know or you...
BUSH: I really don't know. No, I'm not trying to hide anything.
(END VIDEO CLIP)
BROWN: Now, you would think that, of all people, he would be able to answer that question.
So, looking ahead, well, frankly, the view seems pretty grim at this hour. Vice president-elect Joe Biden and Republican Senator Lindsey Graham are just back from a Middle East tour, including visits to Iraq and Afghanistan. They're giving president-elect Obama a dire warning: The fight in Afghanistan is about to get ugly, this as Osama bin Laden's first recording in eight months promises new terror, no matter the changes in the White House.
All very important stuff. We're trying to understand the issues here. So, we want to bring in now CNN national security analyst Peter Bergen, who is also the author of the book "The Osama bin Laden I Know," and our chief international correspondent, Christiane Amanpour, here with me in New York.
Welcome, everybody.
Peter, let me start with you. It's been seven years since the president vowed to catch bin Laden dead or alive. Are we any closer today than we were back then?
PETER BERGEN, CNN TERRORISM ANALYST: The short answer is no.
Right now, the U.S. government has informed hypotheses about where bin Laden is. But that's very different from having real-time intelligence. The general consensus, he's in the Northwest Frontier Province of Pakistan. That's like saying somebody is in Virginia. It's 40,000 square miles. It's a very large area and obviously a very hard area to get into.
And there could be two Obama administrations and bin Laden could still be out there. He's only 51 right now. He doesn't have life- threatening illnesses. There's really no indications to suggest that a new Obama administration will change the strategy in such a dramatic way that you get bin Laden, because, after all, we're not going to do a ground invasion of Pakistan.
The Pakistanis have made it very clear that any kind of U.S. special forces on the ground, as the United States did back in September, is basically something they won't tolerate. They will tolerate the kinds of missile strikes that we have seen increasingly. We have had 30 missile strikes in the last year. We had four the year before. So, those have gone up rather dramatically.
But unless there is some particularly good intelligence allied to a missile strike, it's unlikely that he will be killed or captured.
BROWN: Are you surprised, though? I mean, a $25 million bounty on his head, the full force of the U.S. military, the intelligence community, and President Bush leaving office, and he's still a free man?
CHRISTIANE AMANPOUR, CNN CHIEF INTERNATIONAL CORRESPONDENT: Surprised and not surprised.
At Tora Bora, he was cornered and all the analysis and all the military who was there say basically we took our eye off the ball, there weren't enough boots on the ground, and we let him go.
(CROSSTALK)
BROWN: Were you shocked? Let me just say...
(CROSSTALK)
AMANPOUR: Yes, I was shocked
BROWN: President Bush, when he said -- when Larry asked him, did you get -- were we ever close, and he said, I don't know -- how could he not know?
(CROSSTALK) AMANPOUR: No, I was shocked.
I think what's really important is that he's still out there, and he's still making his speeches. And what he's trying to do, you can see right now, is constantly try to, A, create divisions amongst the -- in the Muslim world, B, try to, yet again, grab hold of the Palestinian issue, to try to rally that kind of support and that grievance to himself, and, C, try to, as he did in his last statement, rupture any notion that a President Obama would have rapprochement with the Muslims of the world.
He's already trying to bad-mouth President Obama. So, he's really clinging for his own justification and survival.
BROWN: Peter, we just heard a moment ago what Barack Obama told Katie Couric. He also said he intends to take a slightly new strategy with bin Laden compared to Bush. Listen to what else he had to say.
(BEGIN VIDEO CLIP, CBS NEWS)
OBAMA: I think that we have to so weaken his infrastructure that, whether he is technically alive or not, he is so pinned down that he cannot function. My preference obviously would be to capture or kill him.
(END VIDEO CLIP)
BROWN: So, Peter, is that possible, to make him ineffectual without actually killing him?
BERGEN: Well, I think that is the decision the Bush administration made in the summer of last year, four missile strikes in 2007, nine in October of the past year. So, the number of missile strikes has gone up exponentially.
Those missile strikes have killed a number of al Qaeda leaders. In fact, President Bush mentioned that in his interview with Larry King last night. So, clearly, that is putting some pressure on the al Qaeda infrastructure, which president-elect Obama referred to.
And I think one of the reasons that we didn't hear from bin Laden for nine months, which is a rather unusually long time, is the fact that he is under so much pressure. We expected that he would produce a videotape or audiotape in the run-up to the presidential elections, as he had done four years previously. He did not produce such a tape.
The Gaza incursion I think is something that he felt very strongly about, and felt he had to, as Christiane was saying, sort of comment on this issue, because it's something that kind of allows him to still be relevant. But that pressure has already been applied.
BROWN: Christiane, just more generally, before we run out of time, let me ask you about Afghanistan. Vice president-elect Biden just back from a trip there, and he briefed Obama and said basically things are going to get a lot tougher there before they get better.
Of course, 156 American troops died in 2008, the highest number since the war began. I mean, how bad is it going to get?
AMANPOUR: It's probably going to get uglier, not just ugly, because it already is ugly, but really serious things need to be done there, not just military might and a surge, but also the soft power things of keeping on trying to build up an infrastructure, which the United States promised after 9/11, build up the infrastructure there.
Those kind of soft power things were abandoned. The nation- building there was abandoned. And that's what's going to have to be done in concert with a surge of military forces, in addition, try to do something to eradicate poppies and give the Afghan farmers something to replace that they can have a livelihood with, again, keep building up the military and police forces.
But that's been going on for seven years. They have got to keep trying to do that very, very seriously and really start trying to win the hearts-and-mind battle, because right now it's airstrikes. And airstrikes are having a collateral effect. They are killing civilians. And that's having a very bad effect in making people be against the U.S. and again having them open to being preyed on by the Taliban.
BROWN: All right, Christiane Amanpour for us tonight, as well as Peter Bergen, appreciate it, guys. Thanks very much.
When we come back, the president-elect stands by his man, his nominee for treasury secretary. Listen.
(BEGIN VIDEO CLIP)
OBAMA: Is this an embarrassment for him? Yes. He said so himself. But it was an innocent mistake.
(END VIDEO CLIP)
BROWN: Is it much ado about nothing, as they're saying in Washington tonight, or should the man who would also happen to be in charge of the IRS understand when he's supposed to pay his taxes?
And speaking of money, so many smart people say they lost their fortunes to Bernie Madoff. So, how can you tell if your star investment manager is honest or a crook? Our guide coming up in a minute.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
QUESTION: Mr. Geithner, how concerned are you that your nomination is in trouble?
(END VIDEO CLIP)
BROWN: No answers up on Capitol Hill today when reporters caught up with suddenly embattled treasury secretary nominee Tim Geithner, after he met with members of the Senate Finance Committee. Geithner's confirmation hearings have been postponed because of the news that he underpaid his taxes for four years and hired a housekeeper who later had immigration problems.
Speaking to reporters this afternoon, president-elect Obama defended his nominee. And he predicted he will in fact, be confirmed. Take a listen.
(BEGIN VIDEO CLIP)
OBAMA: Is this an embarrassment for him? Yes. He said so himself. But it was an innocent mistake. It is a mistake that is commonly made for people who are working internationally or for international institutions. It has been corrected. He paid penalties.
And as I have said before, if my criteria, whether it was for Cabinet secretary or vice presidents or presidents or reporters was that you'd never made a mistake in your life, none of us would be employed.
So my expectation is that Tim Geithner will be confirmed. And my expectation is, is that he is going to do an outstanding job on part -- on part of the -- on behalf of the American people.
(END VIDEO CLIP)
BROWN: Now, this isn't the only problem the president-elect faces on Capitol Hill. The pushback from Congress on his economic rescue plan is getting stronger by the day.
National political correspondent Jessica Yellin has been following that story for us all day today.
And, Jessica, Obama and Geithner have both been fighting hard to save this nomination. But are Republicans I guess still raising concerns?
JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Yes, they are.
For example, today, I spoke to Senator DeMint, who says he had been leaning in favor of supporting Geithner and says he's now leaning against. And, look, the Republicans blocked his confirmation hearing from going forward this Friday. They say, some of them, they just want to take a closer look.
So, behind this, Campbell, it's not just the tax issue. It's that some conservatives have been unhappy with the Geithner pick all along because he was one of the top regulators of the financial industry during the meltdown and they worried he missed the signs and they think he is too close to Wall Street.
But a lot of this is political, to drag out the distraction for Obama and tarnish the golden image his economic team came in with. Still, the bottom line here is, provided there are no other tax revelations, he is likely to get confirmed. It's just the opposition might be painful along the way. BROWN: Yes, still a major distraction. You know, Obama also wanted to have the stimulus bill passed, his treasury secretary confirmed by the time he took office. It looks like, timing-wise, neither of those things are going to happen.
YELLIN: Right. Well, it has become a rocky road to the White House.
Look, Republicans are souring on releasing the remaining money from that financial bailout. Liberals are resisting parts of the stimulus package. Democrats are showing they won't roll over for Obama. Now, part of the problem here is he didn't include them in writing the stimulus.
One senator said to me, look, if you want us in on the landing, you better get us in on the takeoff. So, there are going to be growing pains in this relationship with Congress, but none of it is dire. It will get done. Obama is frankly too popular with the American public for Congress to buck him, at least at first. But it will be a steep learning curve ahead.
BROWN: Jessica Yellin for us tonight -- Jessica, thanks a lot. Appreciate it.
President-elect Obama has been trying hard to keep Democrats and Republicans from playing gotcha, as you just heard there. Well, will Tim Geithner's problems break the truce? We will ask some of the smartest political observers around.
And then later the pilot who faked his death and then tried to kill himself, new information today, including what the man's wife said after authorities found him.
Also ahead, President Bush's brand-new official portrait, already a complaint has forced a change.
(COMMERCIAL BREAK)
BROWN: Last night, under the cover of darkness, an extraordinary meeting took place just outside the nation's capital.
Check out these pictures. This is president-elect Obama walking into a dinner party with some of the most prominent conservative columnists in the country. Here's a better shot of his not-so-grand entrance. We would love to bring you more scoop, but the whole soiree was rather hush-hush, we're told, everyone sworn to secrecy.
Today, Obama did meet with liberal columnists as well, all of this part of his vow to usher in this post-partisan era.
But, with Tim Geithner's tax troubles, new Republican rumblings about the Wall Street bailout, is this partisan truce going to stand?
We want to put that question now to some of the smartest political observers around, our team, chief national correspondent John King, our CNN senior political analyst, Gloria Borger, "New York Daily News" columnist Errol Louis.
Welcome, guys.
GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Hi.
BROWN: Gloria, let me start with you.
Obama, of course, not the only one reaching out to conservatives. Timothy Geithner's been calling senators apparently one by one to apologize, explain the mistake. He is a key player in the new administration's economic plans. Has this episode set back Obama's plans to turn things around in the economy as quickly as possible?
BORGER: I think so, Campbell, probably just temporarily. Everyone assumes that in the end Tim Geithner's going to get confirmed. But he's calling these Republican senators to apologize about his faulty income taxes, rather than lobby them on the economic stimulus plan or the financial bailout plan.
So, sure, you know, this is a -- this is a problem for Obama. And, of course, these stories sometimes get worse. You know, the Finance Committee has postponed its confirmation. Obama's going to become president without a treasury secretary in place. That's a little bit of a problem for him. They think they can get over it. But Geithner's got to get confirmed first.
BROWN: The problem, though, Errol, that you keep hearing people sort of not able to get their arms around is, this is the guy who's going to be in charge of the IRS, and he can't figure out his own taxes.
(LAUGHTER)
ERROL LOUIS, CNN CONTRIBUTOR: Yes, well, it's a significant setback I think in the short term.
I think, though, you know, in the political context of the situation, I don't know if the Republicans are going to be so eager to be the ones to pull away the punch bowl, just as the celebration is starting of this transition from the least popular president to a very popular one, a generational change, the history of the first black president. I don't know if -- and you saw some of this in the Hillary Clinton hearings.
The Republicans were kind of bending over backwards to be gracious, as is normally the custom at this kind of a transition point. So, I don't know who's going to break the spell. It may not be it may not be as soon as some think.
BROWN: And, John, Errol has a point. They don't -- Republicans don't seem to have much of an appetite for challenging Obama's appointments. We saw Senator Lindsey Graham today say that with the economy the way it is, this is not time for gotcha politics. How long is this detente going to last?
JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Well, it's a dual track, Campbell. You do have detente when it comes to the appointments, for the most part. There will be some Republican opposition to the treasury secretary designee, without a doubt, but most Republicans are on board.
But you are hearing more emerging Republican disagreements on policy. Jessica Yellin, Dana Bash, throughout the day, have been talking about Republican opposition on the Hill to the second installment of the bailout plan. So, they are beginning to challenge Obama more on policy.
So, what do you do when you have a speed bump like this? The Geithner nomination districted them a little bit. You put your best car on the track, which is why Barack Obama is going to go out in the country and campaign, essentially, even though he's the president- elect, in Ohio, and then in Pennsylvania on Friday, talking about the economy. If his nominees or his team is a bit off message, he's going to try to get the new administration back on it.
(CROSSTALK)
BROWN: Well, Gloria, he's not only hitting the road, but I have got to ask you about this, too. He's doing outreach in an unusual way, I thought, with this dinner last night with a number of conservative columnists. What did you make of that?
BORGER: Yes. I think it's smart. I think Barack Obama -- you know the old adage, you keep your friends close and your enemies closer?
Barack Obama believes, I think, in many ways, that it's good for him to talk to these columnists. And I think he's smart to do that at the outset. He also met today with some liberal columnists and commentators.
But I think this is part of Obama's outreach. I think there's a sense, and it may be overdrawn, that he can convince people of the righteousness of what he believes by just talking to them. That's probably not going to be the case, but there's absolutely no harm and a lot of good in reaching out.
(CROSSTALK)
BROWN: But, John, are Republicans feeding any pressure from the base? You know, the leadership may be giving him a bit of a free ride here, but there's got to be some grumbling on the right that the senator -- Republican senators are not being a little more aggressive with some of these appointees.
KING: At the grassroots level, Campbell, there without a doubt is. They're calling essentially their own leadership and many of the rank and file Republicans cowards and wimps, and they're saying they're afraid to stand up to this new president because of his popularity.
I was an e-mail exchange today with Tony Perkins of the Family Research Council. And he says that he thinks his work, the grassroots activists, the people who are in touch with Christian conservatives and economic conservatives, is going to be a lot harder, especially in the short term, because many of the elected Republicans are not quite sure this is the moment to stand up to Barack Obama.
One of the issues, though, for Republicans, is, who is their leader right now? John McCain is back in the Senate. Mitch McConnell is the Senate Republican leader. They have leaders in the House of Representatives. But they don't have one leader. They don't have a clear leader. And that is always very hard and very frustrating for the party out of power.
(CROSSTALK)
BORGER: And he's also so personally popular, Campbell.
BROWN: Right.
BORGER: This is -- you know, it's hard to oppose him.
BROWN: And, quickly, Errol, you get the last word.
LOUIS: Well, yes, I think that's absolutely right.
This is the beginning of a process. To the extent that the Republicans can find somebody who can put together a coherent strategy, make it stick, appeal to the base, then you will have a real strong candidate. But they didn't have one during this last presidential campaign and they don't have one now.
BROWN: All right, guys, Gloria, Errol, John, many thanks. Got to end it there. Appreciate it.
A quick programming reminder. CNN is devoting even more time to politics, starting this weekend, of course. John was just here. Be sure to tune in for this Sunday's premiere of John's brand-new program, "STATE OF THE UNION." It goes from 9:00 a.m. Eastern through 1:00 p.m., four hours of news and politics.
Washington of course gearing up for what could be the biggest celebration in American history, and it all begins Saturday when Barack Obama and Joe Biden embark on an extraordinary whistle-stop train trip to the nation's capital, the journey fraught with symbolism and presents a monumental security challenge as well. Our Tom Foreman is going to give us a special inside look at what to expect.
Also ahead, some startling bipartisan noise from the Senate, no, not shouting, but, honestly, it's almost worse.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALES (singing): Miss the earth so much. I miss my wife.
(END VIDEO CLIP)
BROWN: What up with that? You're going to find out in just a little bit.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
ANGELA MENDOZA, JOHNNIE L. COCHRAN SCHOOL: Dear president-elect Obama, hi. I am Angela Mendoza from Los Angeles, California. I am 11 years old. And I would like to be the first Latina woman to become president.
You're a great man. And I hope that you will still change our families and other people's lives, too. I told my mom that, today, November 4, was when I actually was in history. I knew that you will -- I know that you will be a great president.
Sincerely, Angela Mendoza from Ms. Shulman's (ph) and Ms. Hessen's (ph) class.
(END VIDEO CLIP)
BROWN: And every night, of course, we have a letter for you to the president.
Tonight, we have another letter for you, not to the president, but from him. It appears in the Sunday edition of "Parade" magazine, and begins: "Dear Malia and Sasha, these are the things I want for you," Barack Obama says to his daughters, "to grow up in a world with no limits on your dreams and no achievements beyond your reach, and to grow into compassionate, committed women who will help build that world. And I want every child to have the same chances to learn and dream and grow and thrive that you girls have. That's why I have taken our family on this great adventure. Love, dad."
Which brings us to tonight's "Political Daily Briefing," provided now by Erica Hill.
The "PDB" begins with the swearing-in of the Illinois legislature by the governor who has been, well, sworn at these days.
But that's not all, right, Erica?
(LAUGHTER)
ERICA HILL, CNN CORRESPONDENT: No. In Illinois, it turns out, blood really is thicker than water, Campbell.
A second vote to impeach embattled Governor Rod Blagojevich held today in the Illinois House. It was the second because the first one had to be thrown out, because, you see, some new representatives were sworn in today. So, the final tally here, 117-1. The lone representative to vote against the impeachment is Blagojevich's sister-in-law, who was sworn in today, not quite blood, but close enough, blood by marriage.
BROWN: So, not wanting to make for an awkward family reunion, I suppose. HILL: I think it could make things a little tough for the holidays. That's true.
BROWN: Yes.
HILL: The other thing that had to be a little bit awkward, though, is Blagojevich was there today to swear in the state senators.
Now, of course, these are the same senators who will preside over his pending impeachment trial. So, I'm sure that was quite a moment.
BROWN: One of those moments.
(LAUGHTER)
HILL: Yes, it happens when you're governor.
BROWN: So, he also, speaking of Obama, made his way to the Supreme Court today. Tell us what that was about.
BROWN: Obama did get to the Supreme Court.
And this is not necessarily something that is out of the ordinary for a president-elect to do a meet-and-greet with the justices. But the twist this time around is that the chief justice actually called the president-elect first. You can see them there in the Supreme Court.
In a letter obtained by CNN, Chief Justice John Roberts invited the president-elect up to the court, promising -- quote -- "You will receive a warm welcome from the members of the court."
Now, of course, keep in mind here, this is the same man whose nomination both Obama and his V.P., Joe Biden, voted against in 2005. But, Campbell, apparently, no hard feelings.
BROWN: Yes. And also apparently, there was a rumor at least floating, he was up there to check out the facilities as well.
HILL: Well, there's a little talk about that because, you know, there's something that's lacking at the White House -- a basketball court. That's right, it's a puny one.
It's outside. It isn't even half regulation size. The Supreme Court apparently, it's hardwood.
BROWN: Who knew? Who knew? OK.
Speaking of the White House, a bit of controversy over the inscription on President Bush's newly unveiled portrait.
HILL: Right. His portrait that has gone up, well, when it was first unveiled, the inscription read in part - I'm quoting here -- "The attacks on September 11th, 2001, led to the wars in Afghanistan and Iraq." Independent Senator Bernie Sanders of Vermont, though, objected saying a link was being made in that sentence. A link was being made between the attacks on 9/11 and the Iraq war. And so he called on the National Portrait Gallery to change the inscription. The gallery posted a new inscription, removing the words "led to" and adding a semicolon, Campbell.
BROWN: OK. And finally, my favorite uncomfortable video of the day to watch. Some bets probably not worth making.
HILL: No, and I think they may rethink this the next time around. Of course, depends on how you feel about making that wager if you lose.
This is something you really don't see every day, especially in Washington. One senator serenading another with his rendition of Elton John's "Rocket Man." Oh, yes, take a look.
(BEGIN VIDEO CLIP)
SEN. TOM COBURN (R), OKLAHOMA: On such a time.
SEN. BILL NELSON ((D), FLORIDA: On such a time.
NELSON: Wait until we get to the refrain.
(END VIDEO CLIP)
HILL: Good times, though. Those are, of course, actually seeing together which is nice, Senators Bill Nelson of Florida and Tom Coburn of Oklahoma. They had placed a friendly wager on the college football championship game last week between the Florida Gators and the Oklahoma Sooners. Now, the loser had to serenade the other senator's constituents.
Well, Coburn's team did lose. In the spirit of unity, both senators decided to sing. And in case you're wondering why it wasn't say, a fight song, the other option, had he been the loser would have been to sing Oklahoma from the Broadway musical.
BROWN: Those two hitting the high notes, quite (ph) painful.
HILL: Or not hitting, you must be kidding.
BROWN: Or not kidding.
Thank you. Erica Hill for us tonight. Erica, thanks.
Still to come tonight, we're getting closer to solving the mystery of the pilot who seems to have faked his own death. The alleged investment scamster has finally turned up. You're going to want to hear that entire story when we come back.
Also, another accused swindler remaining cozy at home. That's right. Bernie Madoff avoiding jail time again today. What's going on? Our legal eagle, Jeff Tobin, will explain it all. (COMMERCIAL BREAK)
BROWN: It's the kind of story you really only expect to see in the movies. A handsome businessman disappears after a plane crash leaving a trail of unhappy investors in his wake. Well, there is news in this true crime story.
Tonight, Marcus Schrenker is charged with faking a distress call from the air and deliberately crashing his plane. He is in a Florida hospital after he apparently slit his wrists while on the run.
Drew Griffin of our special investigations unit team has been following the story. He is in Tallahassee, Florida, tonight. Drew, give us the very latest.
DREW GRIFFIN, CNN SPECIAL INVESTIGATIVE UNIT CORRESPONDENT: Yes, but for the ending, Campbell, this is a Hollywood movie but a sad ending. He is recovering in the hospital behind me after authorities say he really did try to kill himself. He took off on that motorcycle headed to who knows where, but ended up at a campground not too far from here in Tallahassee, Florida, where he actually was just going to camp it out, according to the person who rented him the campsite. Take a listen.
(BEGIN VIDEO CLIP)
CAROLINE HASTINGS, CAMPGROUND MANAGER: He said he was riding cross country with some buddies and they didn't want to stop. He got some water and some beer and actually chit-chatted and very friendly. Paid for one night.
(END VIDEO CLIP)
GRIFFIN: A nice guy, he started a roaring fire. The campground, Campbell, had Internet service and that is what eventually got him caught because Schrenker went inside his tent and started e-mailing people. The U.S. marshals started to track him down. They narrowed him down to that campsite, identified him through the manager as yes, that's him, surrounded his tent and rushed in to find this man literally bleeding to death.
He had taken some Ultracet and some aspirin, which are painkillers and also help thin the blood. They think he was trying to bleed himself out. And they literally found him, they say, within an hour of his death.
(BEGIN VIDEO CLIP)
LT. JIM CORDER, GADSDEN COUNTY, SHERIFF'S DEPT.: It looks like he'd been bleeding for some time. There was a large amount of blood on his sleeping bag and inside the tent.
(END VIDEO CLIP)
GRIFFIN: They airflighted him to this hospital where now he is recovering. He is going to survive, but only to face a myriad of charges in this bizarre case -- Campbell.
BROWN: So walk us through some of those charges. I know he -- as you said -- expected to make a full recovery is what we're hearing. But what are his legal issues?
GRIFFIN: Yes, and they just got bigger. Later this afternoon, federal authorities charged him with two counts here in Florida. They deal with sending that false distress signal to the Coast Guard which launched fighter jets looking for him and also deal with deliberately ditching that aircraft into that Florida swamp. Very near some neighbor in Florida. He has two federal counts there.
He has two criminal counts back in Hamilton County, Indiana, dealing with defrauding investors. And then he was already -- kind of what kicked these off, facing these eight civil counts involving his sales of insurance products falsely and ripping off investors, according to investors.
Add to that, his marital problems, Campbell. His wife releasing a statement today saying she filed for divorce against this guy on December 30th after finding out he was having an affair. And then if I can read from the statement that Michelle Schrenker said, she said about the financial investigation. This is from her attorney.
"Michelle first learned of the allegations against him," her husband, "when, on December 31st, the day after she filed for divorce, the police and investigators came to her door to search her home." "Clearly," says the attorney, "Michelle and her three young children are the victims of this man's deceitfulness as well."
That man in this Florida hospital now not only facing all these criminal charges and civil charges, but his family falling apart.
BROWN: All right. Wow, amazing story really. Drew Griffin for us tonight, Drew, thanks.
"LARRY KING LIVE" is going to have a lot more on the story at the top of the hour. And Larry talks to the man that Marcus Schrenker e- mailed while he was on the run.
He is obviously small potatoes compared to Bernie Madoff, the guy accused of running the mother of all Ponzi schemes. So how do these guys allegedly get away with this stuff? We're going to tell you why so many investors trusted them and how you can avoid the same fate.
And then later, Macintosh mogul Steve Jobs takes a break because of his health. What will it do to the maker of iPod and the iPhone? A question with no easy answers.
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BROWN: Disgraced financier Bernie Madoff went to court today and dodged yet another bullet. A federal judge said he can stay under house arrest in his luxury penthouse while he awaits trial. Prosecutors wanted Madoff jailed after he was caught mailing more than $1 million worth of jewelry to family and friends, violating the terms of his bail agreement.
Madoff's alleged $50 billion Ponzi scheme is certainly the biggest case of its kind. But with the economy in the tank, more and more cases of alleged fraud are coming to light. And case in point, of course, Marcus Schrenker, who we just talked about. We told you how the Indiana businessman who tried to fake his own death in a plane crash was facing a securities fraud investigation.
Again and again, we hear investors say the same thing. They trusted these guys. But why? And is there any sure-fire way for investors to spot a crook?
We want to bring in CNN senior legal analyst Jeffrey Toobin, "Fortune" magazine managing editor Andy Serwer to talk about that.
Jeff, start us off and first, update us on Madoff. You know, here's a guy a lot of people are wondering he's accused of this massive crime, still living in his luxury apartment in Manhattan. Why isn't he behind bars?
JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: Well, I'll give you what the judge says. Personally, I am flabbergasted, astonished, shocked, that the judge, two judges now, have approved this bail deal but this is what they said.
There are two questions that you always ask about bail. Is this person a risk of flight? Now, here it's clear that Madoff is wearing an ankle bracelet, he's not a risk of flight. He's not going anywhere.
But the other question is, are they a danger to the community? And in this case, you have a guy who is trying to dispose of assets, sending $1 million worth of jewels to his friends and relatives, has $173 million worth of checks, they're found in his desk, trying to dispose of assets. That's why the U.S. attorney's office said no, lock him up, so he can't do this stuff. But both judges said no, there are sufficient controls in place that he's no longer a danger to the community. I don't get it, but that's what the judges say.
BROWN: A lot of people don't get it. You know, Andy, Madoff may be the most outrageous example, but I know you think there are a lot of these Wall Street scam artists out there. I mean, how widespread is the kind of fraud that -- I mean, on a smaller scale, I guess, that we saw with him?
ANDY SERWER, "FORTUNE" MAGAZINE: Well, I don't think we're going to see anyone, you know, of his size, scope or nature anytime soon. I mean, this is outrageously huge, $50 billion, Campbell.
There are people out there, you know as you suggest. You know, the runaway pilot is yet another one. And what happens is, in a bull market, you know, these people come out because they prey on people's sense of greed. Someone else is doing really well, so they're able to play on that.
BROWN: Right. SERWER: And when you turn into a bear market when things start to fall apart, that's when they get caught. And that's what's happened here that they're unable to get new investors. The Ponzi scheme runs out of steam and get caught up.
BROWN: People want to pull their money out.
SERWER: That's it.
BROWN: And you're busted.
SERWER: Yes.
BROWN: Jeff, you know, the Bernie Madoffs of the world I guess seem to be hiding in plain sight, I mean, operating for years, you know, in a bull market, as Andy pointed out, without anybody really picking up on it. Are there enough checks and balances out there or enough checks within the system on fraud to prevent this from continuing to happen?
TOOBIN: Well, there are many disappointing aspects of the Bernie Madoff story. But perhaps the most disturbing is the fact that the SEC was specifically told that this guy was running a Ponzi scheme and then investigated him and still didn't find him. What's so worrisome about the Madoff case is that it shows that at least the SEC in this case is incapable of finding a crime right under its nose. So the real question looking forward is how do we make sure that our investigators can uncover these crimes? That's what's so scary about this case.
BROWN: And, Andy, not just investigators, though. I mean, a lot of smart people got scammed here. How do you know? How do you identify the guys who are the scam artists?
SERWER: Well, first of all, you know, with what's Jeff is talking about, no matter what the SEC and the government does, they will never be able to stop all the scammers. I mean, it's just human nature. So you have to protect yourself and there's some questions that you can ask yourself or ask someone who approaches you to really prevent this from happening I would say 99 percent of the time.
I mean, you know, some of the real common sense stuff like, is this person telling you something that's too good to be true? Are they preying on the fact that you're part of a group, say, a religious group or a bowling club or something like that...
BROWN: Right.
SERWER: ... so everyone's doing it? Have you heard of the firm? OK. What's the name of the firm? Is this a reputable company?
And then finally, you know, the other thing is, can you understand what this investor has your money in? I mean, in the case of Bernie Madoff, he had the money supposedly in something called a split-strike conversion strategy.
BROWN: Oh, my God.
SERWER: Now, there are only a few hundred people in the world who even know what that means.
BROWN: I know. Who would have a clue?
SERWER: And right, who have any idea. So, you know, you want to run, not walk away from these people. But there's another rule that --
BROWN: Quickly, Jeff, go ahead.
SERWER: -- if your financial adviser jumps out of an airplane faking his death, you probably want a different financial adviser.
BROWN: OK.
TOOBIN: Very good, Jeff. Very good.
BROWN: We'll keep that in mind for the future. Jeff Toobin, Andy Serwer, thanks, guys, appreciate it. And of course, "Fortune" magazine, the cover, "Sending Wall Street to Jail," you should check that out. Andy's magazine, yes.
And coming up, the Paul McCartney nobody knows. You're going to want to hear what the former Beatle said in a very revealing new TV interview.
And later, Barack Obama's railroad to the White House, a historic trip following Abraham Lincoln's path to the nation's capital. We'll tell you what to watch for along the way. Details pretty fascinating.
(COMMERCIAL BREAK)
BROWN: Lots going on tonight. Let's go to our very own Joe Johns. He has "The Briefing" -- Joe.
JOE JOHNS, CNN SENIOR CORRESPONDENT: Campbell, the man behind Apple computers and the iPod is stepping aside for now. Apple CEO Steve Jobs announced in an e-mail today that he's taking a leave of absence until the end of June due to health related issues that he calls more complex than he originally thought. Jobs is a cancer survivor. Last week, he blamed his recent weight loss on a treatable hormone imbalance.
A former Bay Area Rapid Transit policeman who shot a suspect in the back is now charged with murder. Johannes Mehserle is accused in the New Year's day killing of a man who was being held down by other police officers. Mehserle was arrested yesterday. Authorities won't say how they tracked him down near Lake Tahoe.
The shooting has sparked outrage and even violence. A protest last week in downtown Oakland led to 100 arrests. This evening, a large crowd of those demonstrators gathered at Oakland's city hall to protest the shooting, the first demonstration since last week's violence. Oscar-winner Jennifer Hudson will sing "The Star Spangled Banner" at next month's Super Bowl. It will be her first public performance since her mother, brother and nephew were murdered in October.
And it turns out there really are two Paul McCartneys. The former Beatle told ABC's "The View" today that there's the famous Paul we all know and there's the real Paul who goes home and watches TV.
I wonder if that's the same guy?
BROWN: Yes. Exciting guy. Joe Johns, thanks Joe, appreciate it.
This Saturday, Barack Obama does something a president-elect hasn't done in years. He's climbing aboard a train for a whistle stop trip to Washington. A nice throwback to days gone by.
But in this age of terrorism, in all seriousness, security is a real nightmare. We're going to take a special look when we come back.
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(BEGIN VIDEO CLIP)
BARACK OBAMA (D), PRESIDENT-ELECT: You've probably heard the reports that unprecedented numbers of Americans are planning to join us in Washington. That will mean long lines, a tough time getting around. And most of all, a lot of walking on what could be a very cold winter day.
(END VIDEO CLIP)
BROWN: In other words, everyone's welcome to show up, but let's be honest, your couch, a lot more comfortable, right? And let's not even start to talk about the bathroom situation.
That seems to be the subliminal message in a new video from Barack Obama. Needless to say, he actually has to make the trip, along with a huge security detail.
In tonight's "Welcome to the White House," Tom Foreman shows us how that journey is going to go. How it will honor, also, the memory of one of our greatest presidents.
TOM FOREMAN, CNN CORRESPONDENT: Obama will launch his inaugural weekend with a 137-mile train trip to D.C. from the historic city of Philadelphia, home to Independence Hall, the Liberty Bell and so much more, but most importantly, the place from which Abraham Lincoln took the final leg of his inaugural journey to D.C. Security will be extraordinary all along the route and with good reason.
This is video of exactly what you see traveling by train on this path. There are loads of bushes and trees and overpasses and buildings. Plenty of places for people to possibly get close to Mr. Obama and Mr. Biden as they travel fast. So police from 40 different jurisdictions in Pennsylvania, Delaware, Maryland and D.C. will be added to the Secret Service detail to guard every inch of the ground along the tracks while overhead, there will be air protection, keeping an eye on everything that's going on down below. And even out in the water, the Coast Guard is going to be in place to make sure that all boats stay at least 500 yards away from this train.
Then, along the tracks, security analysts say we should expect that censors will be placed to detect any chemical, biological or radiological threat that might be up ahead. All together, this is going to create a virtual security tunnel around this train that will move with it all the way down to Washington and not just for Mr. Obama, but also for his vice president, Mr. Biden.
They're going to pick him up as the train passes through Wilmington, Delaware. As that state's senator, Mr. Biden has ridden the train from Washington to Wilmington many, many times for more than 30 years. And among the guests invited along on this historic ride will be the conductor who carried him back and forth.
Minutes on into Baltimore for one more stop, once again the Spirit of Lincoln will be hovering. When Lincoln made this trip, remember, civil war was in the offing and this was his first big stop south of the Mason-Dixon Line. So he had to sneak through in the dark of night.
Won't be that way for Biden and Obama. They're going to have a big rally here. We don't know how many people will gather along the tracks all the way, but some estimates think as many as a million people. That could make this the biggest event of this inauguration.
Then finally, it's on down to Washington, D.C. and the very shadow of the Capitol building, which you see right over here. They will arrive at Union Station, which was also built by a famous Chicagoan, a noted architect back around 1900. And in the glory days of rail travel, kings, queens and many presidents arrived in the nation's capital through this very station, a fitting start to a very big weekend.
BROWN: Tom Foreman for us tonight.
Again, our inauguration coverage starts this Saturday morning. You're not going to want to miss it.
Seriously, you need to stay tuned right now because we have got, when we come back, Capitol Hill cat, the speaker of the House, and a British pop singer, all in the same story. You're not going to want to miss it.
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BROWN: Tonight's "Bull's-Eye" goes to something that our staff has been buzzing about all day. They've even been singing along. And Erica Hill is here to explain what is up.
HILL: That's right. The song stuck in everybody's head so we're going to do it to you at home too just because we like to share. It's actually -- this is something that's really tough to explain without you seeing it first. So first, I want you to take a look at this video that House Speaker Nancy Pelosi released today of her cats.
And there we go. Here's the thing. This is called getting "Rick-rolled." Oh, yes, "Never Going to Let You Go," Rick Astley, '87. Those were the days.
Here's what happened because apparently this --
BROWN: It's all coming back now.
HILL: It is. All the kids are talking about this. So Rick Astley and that classic from '87, including the hair, will pop up just at some random point during a video while you're watching it online and that's called getting "Rick-rolled" which happened to Nancy Pelosi's cat. It also happened very famously to Barack Obama.
Check this one out. In fact it may be -- those are the cats again. But the Barack Obama one could be the most famous one. I think we have it.
BROWN: Oh, come on.
(BEGIN VIDEO CLIP)
BARACK OBAMA (D), PRESIDENT-ELECT: We're no strangers to love.
You know the rules and so do I.
(END VIDEO CLIP)
HILL: But that one they, you know, they kind of put it to music. Five and a half million views of that one so far.
BROWN: Unbelievable.
HILL: "Rick-rolling."
BROWN: I mean, how did this start? Like who comes up with the idea?
HILL: It's an excellent question. From everything I've seen, they really don't know who started it but it's become a really big thing. When I first heard about it, I thought "Rick-rolling" involved Rick Sanchez. But no. No twittering involved.
BROWN: OK. That does it for us. Who knew? Erica Hill, always bringing in something fascinating. We're ending it there.
"LARRY KING LIVE" starts right now. We'll see you tomorrow night.
