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Lou Dobbs Tonight
Obama's Path to Power; Auto Bailout Battle; China Spies; Rampant Corruption; Obama and NAFTA
Aired November 21, 2008 - 19:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KITTY PILGRIM, GUEST HOST: Thanks, Wolf. Tonight, the stock market rallies amid feverish speculation about President-elect Obama's possible cabinet picks. We'll have complete coverage.
Also, congressional Democrats tell the big three automakers what they must do to receive a government bailout. We'll have a live report from Capitol Hill.
And startling new revelations about the extent of drug cartel corruption at the very top of the Mexican government. We'll have a special report, all of that, all the day's news and much more straight ahead here tonight.
ANNOUNCER: This is LOU DOBBS TONIGHT: news, debate, and opinion for Friday, November 21st. Live from New York, sitting in for Lou Dobbs, Kitty Pilgrim.
PILGRIM: Good evening everybody. Tonight, President-elect Obama moves closer to filling top cabinet positions to deal with the huge foreign and economic challenges facing this country. Now reports are swirling that Senator Hillary Clinton is about to accept the offer to be secretary of state. And President-elect Obama is expected to nominate New York Federal Reserve President Tim Geithner to be Treasury secretary.
Now those reports helped the Dow industrials soar by nearly 500 points today. Ed Henry reports from the president-elect's headquarters in Chicago.
(BEGIN VIDEOTAPE)
ED HENRY, CNN WHITE HOUSE CORRESPONDENT (voice-over): A power player on the world stage. A retired four-star general and maybe President Bush's defense secretary too, even a former aide to Donald Rumsfeld is impressed with the national security team that President- elect Barack Obama seems to be putting together.
RAY DUBOIS, CTR. FOR STRATEGIC & INTL STUDIES: You would have to conclude these are as credible and competent a set of individuals as you will get.
HENRY: Three transition aides tell CNN Senator Hillary Clinton who supported the war in Iraq, is in line to be nominated as secretary of state. Two sources close to the transition reveal retired Marine General Jim Jones (ph) who also backed the war, is the leading choice to be national security adviser. Picking a military man could have the fingerprints of Brink Skillkroft (ph), a retired general himself who is national security adviser in a Republican White House and is now providing counsel to Obama. Skillkroft (ph) is close to current Defense Secretary Robert Gates, fuelling speculation the man implementing President Bush's Iraq policy may stay onboard. The talk of so many hawks in senior roles is starting to alarm antiwar Democrats, who nonetheless say they have faith the president-elect himself will drive the policy.
TOM ANDREWS, WIN WITHOUT WAR: He's a very skilled guy and I think he'll make the right decision, but for us again the bottom line is putting in people in place that are going to actually fulfill the mission, step one. Get us out of Iraq within 16 months.
HENRY: There's also the question of whether a so-called team of rivals can get combustible. Remember the first years of the Bush administration?
UNIDENTIFIED MALE: These are individuals not lacking an ego and it will be important that President Obama be able to manage those egos in a way that not only does the policy that he espouses get appropriately (INAUDIBLE) formulated and articulated, but most importantly, implemented.
(END VIDEOTAPE)
HENRY: Now senior Obama aides say the president-elect is confident he can keep all of these high powered personalities together and cohesive. Otherwise, he wouldn't be picking them and as for liberals concerns about the war, these top aides insist that his position on Iraq has not changed and will not change. He's still planning to bring all combat troops home within 16 months -- Kitty.
PILGRIM: Ed, what about Bill Richardson? Now, he was (INAUDIBLE) discussion as potential secretary of state, correct?
HENRY: Well he had been in the running, it's now looking instead, according to our sources close to the transition, he's in serious contention to be commerce secretary instead, not quite a high, elevated position like the State Department, which he really desperately wanted. But the Commerce Department still will be among the president's economic advisers, with the economy issue number one, the financial crisis at the top of the agenda. He still may have an important seat at the table -- Kitty.
PILGRIM: And Ed you pointed out, none of this is absolutely set in stone. The vetting process is very intense, isn't it? How do you see that playing out?
HENRY: It absolutely has been. That's why we've seen some names drop out of contention. But I can tell you the names that we've been laying out, like Tom Daschle for health secretary, like Hillary Clinton for secretary of state, Tim Geithner you mentioned for Treasury, top Obama officials say all of these are quote, unquote, "on track", but you're right. There's always the possibility that in the vetting process of these final few days before they're officially announced that something could come up, but right now, they're quote, unquote, "on track", Kitty.
PILGRIM: All right, thanks very much, Ed Henry. Thanks, Ed.
Now reports of a new Treasury secretary in waiting sent stocks sharply higher in the final hour of trading. Shares of Citigroup, however, continued their freefall, down another 20 percent on concerns about the bank's ability to survive. The stock lost 60 percent of its value this week.
Now the Dow today climbed back above 8000. It was a gain of 494 points. Despite today's rally, the Dow was down five percent this week.
The political battle over the future of the big three automakers continues tonight. Congressional Democrats today laid out their conditions for a government bailout and lawmakers do not believe the automakers have made a convincing case for assistance. Kate Bolduan reports from Capitol Hill -- Kate.
KATE BOLDUAN, CNN CORRESPONDENT: Hi there Kitty. Well following up on their call for a detail business plan, House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid are sending this letter to auto executives, asking, demanding some of the answers that they're looking for, pretty much laying them out.
And here are some of those. They're asking them how much money the company has and how much money they need to continue operations. Also, how will a loan ensure long term viability. They're also asking the companies to provide specific measures to safeguard taxpayer money and also offer a plan of how they will address health care and pension obligations for their workers. Here's a little bit from House Speaker Nancy Pelosi today.
(BEGIN VIDEO CLIP)
REP. NANCY PELOSI (D-CA), HOUSE SPEAKER: I hope that our friends in Detroit and in auto country will consider this good news because it is. It's another opportunity for them to say to the American people, give us your money because we will put it to good use.
(END VIDEO CLIP)
BOLDUAN: But even if Democratic leaders decide that the automakers deserve this money, there is no agreement on where the money would come from and no sign that the partisan divide on this is going away. Here's Republican -- Senate Republican Leader Mitch McConnell.
(BEGIN VIDEO CLIP)
SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: All of these other versions are not going to be signed by the current president, so the majority's going to have to decide whether it wants to actually accomplish something before the current president leaves office or not.
(END VIDEO CLIP)
BOLDUAN: See McConnell maintains his support for using an existing auto loan program in order to fund this bailout, where Democratic leaders are stuck and dug in. They think that money, that loan program, should remain for its intended purpose. Helping automakers produce more fuel efficient vehicles, so you can see there's a long way to go still, Kitty.
PILGRIM: There certainly is. Thanks very much, Kate Bolduan.
Well the White House today blasted Democrats for the way they are handling the crisis in the auto industry. The White House press secretary, Dana Perino, said, "It is appalling that Congress decided to leave town without addressing a problem that they themselves said needed to be addressed."
And we should point out that the White House strongly opposed the Democrats original plan to help the auto industry with money intended for Wall Street. General Motors, Ford and Chrysler face a storm of criticism for flying their executives to Capitol Hill this week on corporate jets.
And today General Motors announced it is returning two of its five corporate jets to a leasing company. The company said the decision has nothing to do with the barrage of criticism from lawmakers earlier this week.
(BEGIN VIDEO CLIP)
REP. BRAD SHERMAN (D), CALIFORNIA: I'm going to ask the three executives here to raise their hand if they flew here commercial. Let the record show, no hands went up. Second, going to ask you to raise your hand if you're planning to sell your jet in place now and fly back commercial. Let the record show, no hands went up.
UNIDENTIFIED MALE: You're talking to people that are schlepping back and forth, going through all the drama in the airports every day along with the American public.
UNIDENTIFIED MALE: ... and Chrysler will be able to continue to pay at its current levels.
UNIDENTIFIED MALE: (INAUDIBLE)
(END VIDEO CLIP)
PILGRIM: GM said it made the decision before this week's hearing on Capitol Hill and also said it is returning the jets because of a sharp cutback in executive travel. There's no word tonight from Ford and Chrysler on their plans.
Some good news for drivers today as Thanksgiving approaches. The national average price of gasoline dropped below $2 a gallon. Now AAA saying the average price fell three cents in the past 24 hours to $1.99. Now average prices are now more than $2 lower than the peak back in July. President Bush today signed an extension to unemployment benefits. Unemployed people will be entitled to up to 13 additional weeks of benefit checks. And those checks average about $300 a week.
A top member of President Bush's cabinet, Attorney General Michael Mukasey today returned to work after collapsing during a speech last night. Mukasey became ill when he was addressing the Federalist Society Dinner in Washington. The Department of Justice said doctors gave Mukasey a clean bill of health after he spent the night in a hospital.
(BEGIN VIDEO CLIP)
GINA TALAMONA, JUSTICE DEPT. SPOKESWOMAN: The doctors are describing him as very fit. All of the tests have been reassuring. There's no indication that he suffered a stroke or any heart related incident. It really appears to be a fainting spell.
(END VIDEO CLIP)
PILGRIM: Mukasey left the hospital around noon. He told reporters he felt excellent.
Anti-American protestors in Iraq today burned an effigy of President Bush. Now the protesters are opposed to a new security agreement that calls for the withdrawal of U.S. troops from Iraq by the end of 2011. The protestors want our troops to leave Iraq immediately.
New details today on the terrible problem of piracy. Kenya's foreign minister said pirates around the Horn of Africa (ph) have been paid more than $150 million in ransoms over the past 12 months. Pirates are still holding a giant tanker off the coast of Somalia. They are demanding a ransom of $25 million for the ship and its crews.
Much more on the president-elect's possible cabinet picks later in the broadcast.
Also, how Wall Street's greed left millions of homeowners abandoned and unwanted by their mortgage companies. We'll have that story.
And also rampant corruption is hampering the Mexican government's ability to fight the war against drug cartels, a war that is spilling into this country.
And disturbing new evidence that communist China is engaged in all-out cyber warfare against this country. We'll have all that and more next.
(COMMERCIAL BREAK)
PILGRIM: A new warning tonight about the international challenges facing this country in the next two decades. Challenges that are likely to develop during the Obama administration. Now the National Intelligence Council says U.S. strength relative to other countries is likely to decline by the year 2025. The report says Iran, Turkey and Indonesia are likely to gain influence and communist China and India will become even more powerful and compete with the United States around the entire world.
A disturbing new report today confirms that communist China is engaged in an intensive espionage campaign against this country. The report from the U.S. China Economic and Security Review Commission says China's cyber warfare is now so sophisticated the U.S. may not be able to counteract or even detect intrusions. Lisa Sylvester has our report.
(BEGIN VIDEOTAPE)
LISA SYLVESTER, CNN CORRESPONDENT (voice-over): The commission concludes that China has been on a stealth mission, attacking U.S. government, commercial and military computers, accessing sensitive data. In the event of a conflict, that information could be used to cripple the U.S. electricity grid, handicap military communications and disrupt other communication systems, effectively paralyzing the United States. According to the report by the U.S. China Economic and Security Review Commission, the Chinese now have the intent and capability to launch cyber attacks anywhere in the world at any time.
LARRY WORTZEL, U.S. CHINA ECON. & SECURITY REVIEW: Computer intrusions would provide China a comparatively easy, low cost and difficult to detect access to America's secrets while possibly enabling China to shutdown critical defense, command and intelligence networks.
SYLVESTER: In 2005, Chinese hackers accessed files from NASA and stole aviation mission planning software from the Army Aviation and Missile Command at Redstone (ph) Arsenal in Alabama. In 2002, the Chinese downloaded 10 to 20 terabytes of non classified data from U.S. military and government computer systems. To put that in context, that's twice the amount of print information stored at the Library of Congress.
MICHAEL VATIS, FMR. FBI SECURITY EXPERT: We see it across government agencies. We see it across private companies. And it's really something that despite the best efforts of the government and private industry to get their arms around is only getting worse.
SYLVESTER: The Chinese government has repeatedly denied engaging in cyber attacks. It's always been a challenge identifying exactly who in China is behind the attacks.
JAMES LEWIS, CTR. FOR STRATEGIC & INTL STUDIES: When you see these attacks, it could be criminals. It could be corporations. It could be the government. It could be just private hackers. And we know there's a big hacker community in China, so a lot of times we can say it's China. But we don't know exactly who it is and that's one of our problems in responding to this kind of -- this kind of threat.
(END VIDEOTAPE)
SYLVESTER: Five million U.S. computers were the targets of more than 43,000 incidents in 2007. That's a rise of almost a third from the previous year. The commission recommends that Congress provide additional funding to the agencies that are tasked with protecting networks and recommends that Congress order a review of the supply chain for computer equipment being used by the U.S. government and its contractors, particularly those used by the Department of Defense -- Kitty.
PILGRIM: That makes absolutely perfect sense. Thanks very much, Lisa Sylvester.
Well security experts now believe China has created an army of hackers to gain access to American military, government and private sector computer networks. The Pentagon reports three million cyber attacks on Defense Department computer networks each and every day.
It's not only online attacks that have security experts concerned; the Pentagon has banned the use of all portable storage devices. This includes flash drives, CDs and memory cards. Those devices have been banned because they can carry viruses. The Pentagon experts believe a flash drive is responsible for introducing a worm virus that is currently spreading through the Defense Department networks around the world. The Pentagon refused to discuss any specifics.
Another country presenting a threat to our nation's security is Mexico. Violence by Mexico's drug cartels is increasing on this side of the border. Now the fight against the cartels has been compromised by corrupt officials in the Mexican government. Mexico's former drug czar is now accused of working for the cartels and taking hundreds of thousands of dollars a month in bribes. Casey Wian has our report.
(BEGIN VIDEOTAPE)
CASEY WIAN, CNN CORRESPONDENT (voice-over): LOU DOBBS TONIGHT reported in August that Roe Ramirez (ph), Mexico's drug czar had resigned abruptly after 20 months on the job. Apparently now, we know why. Ramirez (ph) was arrested Thursday night by the Mexican government on suspicion that he was on the payroll of Mexican drug cartels. Accepting bribes of nearly $500,000 a month while running SIEDO, Mexico's anti organized crime unit.
EDUARDO MEDINA MORA, MEXICO'S ATTORNEY GENERAL (through translator): After he assumed office as the drug czar he was sought out by a member of a specific cartel from whom he received a payment of 450,000 U.S. dollars in exchange for providing information about investigations and operations designed to fight the cartel.
WIAN: Earlier this year, Ramirez (ph) traveled to Arizona and promised to cooperate with the United States to fight drug trafficking and other crimes on the border.
ROE RAMIREZ, FMR. MEXICAN DRUG CZAR (through translator): We believe that together, as a united front, we can bring together all of our assets and resources to cause a real positive impact of these problems. WIAN: Instead, Mexican authorities allege he was working for drug traffickers. Earlier this week the head of Mexico's Interpol office was also arrested. Since July, at least 30 Mexican government officials have been held in connection with an ongoing investigation called Operation Limpieza or clean-up.
PRES. FELIPE CALDERON, MEXICO (through translator): This force of reparation and cleaning corresponds precisely to our purpose and our unwillingness to compromise on keeping our offices of justice and police investigation unrelentingly clean.
WIAN: Drug trafficking is estimated to be a 20 to $50 billion a year industry in Mexico. It's likely a greater source of foreign money than either oil, tourism or remittances from Mexicans living in the United States.
(END VIDEOTAPE)
WIAN: The United States has agreed to spend $350 million on military equipment and law enforcement training to help Mexico fight drug cartels. Most experts expect it will have little immediate impact on the drug war because corruption is so deeply embedded in Mexico's government and law enforcement agencies -- Kitty.
PILGRIM: And that's right Casey. That's something that money alone cannot fix. Thanks very much, Casey Wian.
Well that brings us to tonight's poll. Should the U.S. suspend all aid to the Mexican government until Mexico proves that the money is not being diverted to drug cartels? Yes or no. Cast your vote at loudobbs.com and we'll bring you the results a little bit later in the broadcast.
The crew of the Coast Guard Cutter Narwhal (ph) is celebrating a victory over Mexico's drug cartels. They intercepted a suspicious boat Monday night about 100 miles southwest of San Diego. The boat fled but dumped its cargo overboard and the crew of the Narwhal (ph) recovered the cargo, 137 bales of marijuana. Five tons of it, the value, $32 million. The drug smugglers escaped to Mexican waters.
Just ahead Senator Clinton to take too? Will the senator soon have a job in the Obama administration? Four of the nation's top political minds will join me with their thoughts on that and much more.
Also, the North American Union is a plan by political and cooperate elites that could threaten our sovereignty. We'll find out where President-elect Obama stands on this issue, next. Stay with us.
(COMMERCIAL BREAK)
PILGRIM: President Bush is in Peru tonight. The president flew to Lima for a meeting of the 21-nation Asia Pacific Economic Cooperation Forum. With just sixty days left in office this could be the president's final overseas trip as president. The president hopes to convince world leaders to sign on to an economic agreement reached at an international finance summit in Washington last week.
President-elect Obama is on the record saying the North American Free Trade Agreement, NAFTA, should be renegotiated, but the president-elect may be hedging on that promise and that raises concerns among those who fear that NAFTA is just a preamble to the North American Union, which is an integration of Mexico, the Unites States, and Canada pushed by business and political elites with no congressional oversight. Bill Tucker reports.
(BEGIN VIDEOTAPE)
BILL TUCKER, CNN CORRESPONDENT (voice-over): Will President- elect Obama keep his campaign trail promise regarding the North American Free Trade Agreement? He spoke about NAFTA in February.
UNIDENTIFIED MALE: Simple question, will you as president say to Canada and Mexico, this has not worked for us, we are out.
SEN. BARACK OBAMA (D-IL), PRESIDENT-ELECT OF THE UNITED STATES: I will make sure that we renegotiate.
TUCKER: It's become a promise that the president-elect has since tried to distance himself from. But in Canada, non- government groups and labor unions this week called on Obama to keep that promise.
MAUDE BARLOWE, COUNCIL OF CANADIANS: I think Obama would look very bad if he were to turn around and not fulfill this part of the promise. And I can tell you there are people in Mexico and lots of us in Canada who would welcome a chance to reopen NAFTA and get it better.
TUCKER: Groups in the United States and Mexico agree. They say NAFTA and the resulting talks to deepen economic cooperation known as the Security and Prosperity Partnership do not work, except for elite multinational corporations.
LAURA CARLSEN, CTR. FOR INTERNATIONAL POLICY: NAFTA was created as a series of rules to make it very easy and profitable to do business if you're a transnational corporation jumping border. What happens to people on the ground is a whole different story. There, you have the displacement of the Mexican farmers. People out of work in the United States. Problems with energy and investor guarantees that supersede domestic law.
TUCKER: Leaders of Mexico and Canada have already made it clear they do not want NAFTA reopened. Last week, Mexico's President Calderon publicly expressed his concern that the United States is on the verge of returning to protectionism.
(END VIDEOTAPE)
TUCKER: But the issue is not likely to go away. A Rasmussen survey in June found 56 percent of Americans surveyed say they want NAFTA renegotiated. They see these so-called free trade agreement as bad for working Americans, Kitty. PILGRIM: I just have to ask you, Bill, why is this North American Union dead if President Bush is leaving office?
TUCKER: Well it would be nice if it were that simple, but what Bush set up was a process outside of the legislative process. This has always been and this is the criticism. There are not any elected officials involved. These are corporate elites, on their own track, doing their own thing in their own time, answerable to nobody.
PILGRIM: Yeah. Thanks very much, Bill Tucker.
Well we do have time now for some of your thoughts. Lynn in New Jersey wrote to us, "Hi Lou, I want to know why the Big Three automakers have to do a song and dance for a bailout when Wall Street just held out their hands. Ridiculous!"
And Jim in Indiana wrote to us, "I'm wondering where all the assurances were when Congress decided to bail out the banks and savings and loans. The auto industry is a major part of our economy."
Michael in New York, "How come Congress is requiring the Big Three to show a complete restructuring program before they give them the money when they practically threw money at the banking industry with no questions asked? Makes one wonder doesn't it?"
We will have more of your e-mails a little bit later in the broadcast, and each of you whose e-mail is read here receives a copy of Lou's new book, "Independents Day: Awakening the American Spirit". It's now available in paperback.
Coming up, greedy mortgage companies, Wall Street banks are abandoning middle class families in danger of losing their homes. We'll have a special report on that.
Also President-elect Obama appears close to announcing his economic and national security team. Four top political analysts will give us their assessment and we'll also tell you about an astonishing security breach involving one of the president-elect's cell phones. We'll have all that and more next.
(COMMERCIAL BREAK)
ANNOUNCER: This is LOU DOBBS TONIGHT -- news, debate and opinion, an independent view. Here again Kitty Pilgrim.
PILGRIM: Amid this week's stock market plunge and continued economic turmoil, President-elect Obama has been noticeably silent. And today, reporters had the chance to ask him about the current state of affairs, plus, as Jessica Yellin reports, the president-elect didn't have much to say.
(BEGIN VIDEOTAPE)
JESSICA YELLIN, CNN NEWS CORRESPONDENT (voice-over): On the campaign trail, Barack Obama built up expectations.
BARACK OBAMA (D), UNITED STATES PRESIDENT-ELECT: We are two days away from changing America.
We are less than one day away from bringing about change in America.
YELLIN: But change appears to be on hold until he takes office. While the stock market dives and as Congress deadlocks over a middle class stimulus package and auto bailout, Barack Obama is home in Chicago working on his transition, here, taking a break. Most days, he is hidden behind tinted glass.
DAVID GERGEN, CNN SR POLITICAL ANALYST: The bottom feels like it's falling out for many and they sense a total lack of leadership in Washington that the White House is silent, the Treasury secretary has been battered and the president-elect is silent in Chicago. Somebody has to speak up soon.
YELLIN: But Obama's leaving that role to the current White House occupants.
He has publically backed aid to the auto industry and repeated supported a stimulus plan.
OBAMA: I want to see a stimulus package sooner rather than later. If it does not get done in the lame duck session, it will be the first thing I get done as president of the United States.
YELLIN: The president-elect's aids point out he no longer has a vote in the Senate and he does not yet have the authority of the Oval Office. Right now, they say the president-elect is focused on building a government. And it would seem, carefully avoiding questions on economic policy.
QUESTION: How do you feel about the auto industry.
OBAMA: I got the corned beef.
UNIDENTIFIED MALE: That wasn't the question.
YELLIN (on camera): For Barack Obama, there is an advantage in keeping his fingerprints off the bailout plans in case they don't work, but the question is, does he risk inheriting a bigger problem because he didn't speak up when he had the chance.
Jessica Yellin, CNN, Chicago.
(END VIDEOTAPE)
PILGRIM: There's word tonight of a major security breach with President-elect Obama's cell phone. Now, a number of Verizon employees apparently accessed private information from President-elect Obama cell phone. Brian Todd has more on what the employees may have learned and how the company is handling the security breach.
(BEGIN VIDEOTAPE)
BRIAN TODD, CNN NEWS CORRESPONDENT (voice-over): CNN is told by a source at Verizon Wireless, employees there have been terminated as a result of some getting unauthorized accessed to records from a cell phone used by Barack Obama. The source did not say how many were fired, but said the company now considers this matter closed. The Verizon source tells us these were people employed to take care of customers and were only authorized to get into accounts if customers asked them to.
CNN and independent privacy expert, Ari Schwartz, asked other questions that Verizon says it can't answer now.
ARI SCHWARTZ, CTR FOR DEMOCRACY & TECHNOLOGY: (INAUDIBLE) how they're going to stop it from happening in the future. Because it sounds as though they need to take extra step.
TODD: Verizon says the account's been inactive for several months. This was just a simple flip phone and Verizon says the employees could not have accessed voice mail content or any text messages if Obama sent or received them.
SCHWARTZ: This is probably the type of information that they had access to.
TODD: Schwartz says those Verizon employees could likely see when Obama spoke on the phone, for how long, and the numbers, so they could have looked up how he'd spoken to. The Verizon source did not say how this breach occurred. Schwartz's biggest privacy concern now?
SCHWARTZ: What happens to, not just to celebrities' in formation, but to the employee that's accessing about their neighbor or their spouse? And how do we stop that from happening?
TODD (on camera): And Schwartz has a broader privacy concern way beyond Verizon, he says this was a case that Verizon caught, but what happens at all these other companies, he says, where things like this happen every day that we don't know about. Not just telecom firms, but credit card companies and others that store a lot of personal data -- Kitty.
(END VIDEOTAPE)
PILGRIM: Brian Todd reporting from Washington. Thanks, Brian.
Joining me now for the latest on Obama's path to power are four of our nation's best political minds. We're joined by James Freeman of the OpinionJernal.co; CNN contributor and Pulitzer Prize winning columnist for the "New York Daily News," Michael Goodwin; CNN contributor, Democratic strategist and Democratic national committeeman, Robert Zimmerman and joining me from Washington is senior editor at "Politico," Beth Frerking.
And thank you all for being here. We have to start with the cabinet discussion. And you know, nothing's official yet , but an awful lot is being discussed for an unofficial roster. We'll start with secretary of state, Hillary Clinton, reportedly, that is in the works and about to be completed. Robert, thoughts on this? ROBERT ZIMMERMAN, DEMOCRATIC STRATEGIST: Well, the operative phrase it the discussions are on track and clearly, we're getting an impression that both sides are feeling very enthusiastic and optimistic about the discussions -- the process is going.
The more important point to me, though, is if you look at the whole range of options that Barack Obama is looking at, he's recognizing that the problems we're facing in America, have to also be addressed in an international environment. And the people he's putting together truly do speak to the fact that he's reaching out to individuals and not necessarily part of the old buddy system, but individuals who represent the best type of approach, whether it's Hillary Clinton, who of course ran against him, or perhaps a man who's very close to John McCain, General Jim Jones, a very respected military leader, who's being talked about for national security adviser.
PILGRIM: That's right. Well, you know, certainly in an international profile, Hillary Clinton is well recognized and well- known around the world and would be a very good and logic choice for secretary of state. Beth, thoughts on this appointment?
FRERKING: Well, you know, I think one of her most effective times during the campaign, if you'll remember, was the 3:00 a.m. ad, you know, would he be ready for crisis around the world. And that was something that got her a lot of support in places early on, during the primaries. I think it is a place that she has strength and I think the other thing that we have to think about is the old adage of keep your friends close and your rivals even closer. There are some people saying that the drama that might happen here would be not good for him, but I think, as Robert said, he's pulling people in that he might not see eye to eye with on everything and she does have a lot of respect in terms of her international experience.
PILGRIM: Michael, where does this put her in terms of her political aspirations, though if she takes this?
MICHAEL GOODWIN, NEW YORK DAILY NEWS: Well, I think they're probably dead, at least for eight years, but before we even get there, I think the issue of Bill Clinton still isn't resolved. And, you know, this is something Obama raised on the campaign trail, Bill Clinton's disclosure of the contributors to his presidential library and to his foundation and to the paid speeches that he gives around the world.
I mean, Bill Clinton has raised $500 million. We generally do not know where that money has come from. Now, Obama's people supposedly are vetting this, but if Obama's people are just going to become part of the secret, I don't think that reassures the public. So, whatever they find out and whatever deals they make with Bill Clinton about avoiding conflicts of interest going forward, I think the public has to be in on the secret now, too.
PILGRIM: Right. This has gone so far though, it's going to be very hard to turn this around. Isn't it, James?
(CROSSTALK)
JAMES FREEMAN, OPINIONJOURNAL.COM: Honestly, I don't see the upside for either Obama or Hillary. She doesn't get to be her own boss anymore and he hired someone who likes to be her own boss. The Bill Clinton baggage comes with her. I really, I don't see how it's a winner for either one.
ZIMMERMAN: I think the reason it's a winner, not just regarding Senator Hillary Clinton, but the other names that are being discussed for prominent positions of the administration...
FREEMAN: A lot of Clinton administration names. People are saying I voted for change, if I wanted the Clintons I would have voted her.
ZIMMERMAN: And Eric Holder represents tremendous change from John Ashcroft and Hillary Clinton represents a dramatic change from Condoleezza Rice. If you're looking for change on policy comes, that comes from the president and having a team around him that have the leadership and the stature to implement that policy is really what it's all about.
GOODWIN: But Robert mentioned Eric Holder, now there's a classic example of Clinton baggage. Eric Holder was deputy attorney general, really acting attorney general toward the end of the Clinton years, and approved the pardon of Marc Rich. Mark rich was a fugitive from justice.
PILGRIM: Right.
GOODWIN: That was the most disgraceful episode, I believe, more so than Monica Lewinsky, in terms of substance, because Marc Rich was a fugitive from justice and everybody...
PILGRIM: It was President Clinton who pardoned him.
GOODWIN: Yes, but Eric Holder passed on it and said it's OK.
PILGRIM: Beth, go ahead.
FRERKING: I think that will come up during the confirmation hearings. I do think that that's going to be an issue that will be questioned by a lot of the senators. But back with Senator Hillary Clinton, I think what's interesting here is you know, he is, as someone said earlier, this is about leadership and I think, if it works and he is able to contain her somewhat, that really says something about his leadership. You know, maybe some people would call it a Hail Mary pass. I don't think you can say that because she has experience, but the fact is, is he's taking a risk and if it works, then he wins bigger.
PILGRIM: James.
FREEMAN: Well, I think that's right, I mean, you don't want to be hoping that it works out. You'd like someone you have confidence, that they're going to be working for you and not for themselves and I think that's the big question with the Clinton's. But, Eric Holder, another Clinton administration refugee, a veteran, whatever we want to call him, it's not just the Marc Rich issue. He started this series of memos that -- very controversial, basically trying to strip away the rights of defendants if they happen to work at a corporation. I know this is something that got Lou pretty angry during those years when these powers were being exercised and it's going to be interesting to see how that plays as well in the confirmation process.
PILGRIM: I'll let you respond, but we really need to take a quick break, we'll come back and we will stay on this. OK? We'll have more with our panel in a moment. And also later, our struggling middleclass may have one more reason to be concerned about the mortgage issue. We'll have a special report when we return. Stay with us.
(COMMERCIAL BREAK)
PILGRIM: We're back now with our panel, James Freeman, Michael Goodwin, Robert Zimmerman and Beth Frerking. Let's -- we were right in the middle of the big discussion about potential cabinet appointments and we should really talk about in the context of the economy, we have a potential Treasury secretary appointment, Tim Geithner, president of the New York Federal Reserve. A very credible, very solid appointment. Thought on this -- Robert.
ZIMMERMAN: Well, I think what we can expect, I'm being told from friends and associates involved in the process, that we could expect next week, announcements from the transition team regarding Treasury appointments and the economic team being appointed next week and then after Thanksgiving, the foreign policy team. And I think that does speak to the Obama strategy of trying provide some message regarding the economy. Clearly we can't have two presidents, we can't have conflicting messages, but I think by the appointments he made by Tim Geithner, had the jump the stock market got, here's a person who's credentials go back to Ronald Reagan, even Jim's going to have a hard time opposing someone of that -- those standards, I mean...
FREEMAN: Actually another Clinton era appointee...
ZIMMERMAN: All roads lead back, right Jim?
FREEMAN: It is kind of bizarre, but look, I think it's great...
PILGRIM: But, you cannot quibble with his pedigree.
FREEMAN: Well, I'd day this, I'm really glad the market rallied on this choice. I think this is the time where certainly, there's something to be said for stability continuity, but this is a guy who likes interventions, so if you liked the Bear Stearns bailout in March, if you liked AIG, if you liked the whole series and want more federal intervention in the banking sector, this year, then this is your guy.
GOODWIN: And speaking of this, I mean, the conformation, this, as James said, I mean, he was very much involved in all these decisions. He, of course, being in New York, that is the most important fed spot under the chairman and so he was clearly involved in all of Ben Bernanke's big decisions, the fed chairman. So, I think that there are going to be a lot of issues.
I also thought it was actually -- it was remarkable the way the really in the stock market took off after his name came out, went straight up for the last half hour. But I think, it's kind of pathetic, too, It's right now, Barack Obama says, you know, we only have one president at a time. In fact, we don't seem to have a president at all right now. I mean, we've a real vacuum of leadership in this country. So, I think it was kind of telling that the market was kind of grabbing at anything for good news.
PILGRIM: Well, or the magnitude of problems exceed even two potential presidents. Beth, thoughts on this?
FRERKING: Well, you know, I think that as with the markets going up, I know our reporter who looked into this, talked to a lot of people on Wall Street today who were very happy with the choice of Geithner and he doesn't come with some of the political baggage that Larry Summers comes with. So, you know, I think that it's a solid choice from what it sounds like. As somebody said earlier, he is an interventionist and clearly that's going to be something that we're going to see.
But, I think it's right that we're not going to really hear plans from the Obama people until we hear who's in place for their Treasury team. And then we may start hearing more about what they're going to do. It would have been putting the cart before the horse.
PILGRIM: You know, I have to say, critical appointment, but the whole, the fact is that the entire economy is in flux right now and emblematic of it was the auto executives sitting on Capitol Hill this week, actually scrambling for their $25 million, not getting it, going back to do their homework, have to make another appeal. This is a painful, painful thing to watch. Let's listen to what House Speaker Nancy Pelosi had to say today, about it.
(BEGIN VIDEO CLIP)
REP NANCY PELOSI (D), HOUSE SPEAKER: Well, the corporate jet issue is anecdotal, it's interesting, it resonates with the American people. I'm more concerned about the lack of innovation and willing to compete in a way that will prevail. That's really the issue. But CEOs getting off a corporate jet rattling a tin cup is not a good image.
(END VIDEO CLIP)
PILGRIM: Not a good image. It's not a good situation. There are millions and millions of jobs at stake. Are we in a crisis over this -- Robert.
ZIMMERMAN: Well, I think we're in a crisis of confidence on every level. We're seeing the American people have a complete lack confidence in the present administration, in the secretary of the Treasury and, of course, in our corporate leadership. I mean, when Congressman Gary Ackerman made reference them coming off their private jets and suggesting that perhaps they should even jet pool or perhaps lower themselves to fly first class, he was resonating with the American people, but what concerned me much more is that these auto executives have the temerity to approach Congress, ask for $25 billion without a bailout plan, without a business plan for themselves, a strategy as to how they deserve the money.
PILGRIM: You wouldn't even go to a bank to even ask for a loan like that. Michael.
GOODWIN: Robert left out the thing about people having no confidence and that's in Congress, too. And that's part of the problem. I think Congress set these hearings up basically in a way that almost without gaunlging the public's issue. And I think it became very clear that Detroit didn't deserve a bailout, that there is no real plan to make them viable. My concern now is that Congress's definition of viable is you make the kinds of cars we want you to make. You know? And so they're going to be deciding what kind of cars Detroit produces. I think that is not the way to restructure Detroit.
PILGRIM: Well fair point. We must leave it there. Thank you so much for being with us. Robert Zimmerman, Michael Goodwin, James Freeman and Beth Frerking, thank you.
Coming up at the top of the hour, Campbell Brown, NO BIAS, NO BULL.
Campbell, what are you working on?
CAMPBELL BROWN, NO BIAS, NO BULL: Hey there, Kitty. Well in a few minutes, we've got updates for you on all the breaking news you've been talking about, the big names on track to join the Obama cabinet from the ones you know, like Hillary Clinton, to the one that you need to learn real quick, like Tim geithner. Also, our Tom Forman brings back the "No Bull Test." Find out how much auto executives really make and how it compares to other CEOs.
Plus, an eye opening look at what goes on when teenagers are behind closed doors and zoned out on the Internet. It lead to a suicide in Missouri. And a court case in California that could affect what you do online -- Kitty.
PILGRIM: Thanks very much, Campbell.
Coming up, "Heroes," and tonight we have the story of an Army sergeant in Iraq who almost lost his life saving a comrade. And who owns your mortgage? We'll have the story of one homeowner who didn't know the answer and lost her home as a result. A special report, when we return.
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PILGRIM: The economic crisis is forcing millions of working class Americans into foreclosure. Many other homeowners are unknowingly being caught up in a complex web of buying and selling mortgages. Now, it's a common industry practice that left one Florida woman locked out of her house and her possessions seized. Ines Ferre has our report.
(BEGIN VIDEOTAPE)
INES FERRE, CNN NEWS CORRESPONDENT (voice-over): Natalie Fuentes wants to save her Tampa home. After divorcing, moving out and trying to sell this house, she started a loan modification process with Washington Mutual, but to her surprise a month later, she was locked out and in foreclosure.
NATALIE FUENTES, HOMEOWNER: I was so furious. I didn't know -- I didn't know how they got into the house since I was the only one with the set of keys to the house.
FERRE: Washington Mutual told Fuentes it had no idea who locked the doors. It turns out Fuentes' loan was serviced by WAMU, but owned by Freddie Mac. And while the bank was working on the modification, Freddie Mac was working on foreclosure.
FUENTES: I never knew of anything. I just knew that Washington Mutual is who I wrote the check to.
FERRE: Fuentes not alone. Many homeowners don't know who really owns their mortgage and often it's more than one party. Millions of mortgages issued in the past few years, subprime and traditional, have been packaged and sold to investors, a practice known as securitization.
ERIC HALPERIN, CTR FOR RESPONSIBLE LENDING: Because of the securitization of these loans and the fact that many investors may own one loan often the system just breaks down and the homeowner is the one that suffers.
FERRE: Fuentes has the keys to her house for now and is renting an apartment while she waits for permission to move back in after the loan in modified.
FUENTES: Frustrated, furious, angry. You name it.
(END VIDEOTAPE)
FERRE: And WAMU says it's continuing to work with Fuentes and Freddie Mac to see what options may be available. Freddie Mac said "we stand ready to reverse the foreclosure if our servicer can achieve a viable workout with Miss Fuentes and that would be a win-win for all of us." And Kitty, of course, we will be following this case to see what happens.
PILGRIM: Thanks very much. Ines Ferre.
Still ahead, "Heroes." Tonight, the story of one incredible Purple Heart recipient. Stay with us.
(COMMERCIAL BREAK)
PILGRIM: Tonight in "Heroes," we honor Sergeant Redus Thomas. Bill Tucker has his story.
(BEGIN VIDEOTAPE)
LT COL REGINALD TRUSS U.S. ARMY: First day we met, I was in uniform and I gave him a military teddy bear as an 8-year-old. And now tonight, in uniform, the next thing I'll be giving him is a Purple Heart and I think that is just awesome.
BILL TUCKER, CNN NEWS CORRESPONDENT (voice-over): Lieutenant Colonel Truss met Redus Thomas in a Big Brother/Big Sister program over 20 years ago.
SGT REDUS THOMAS, U.S. ARMY: I didn't have that father figure in my life. So, by meeting it actually gave me the influence to actually do stuff the right way.
TUCKER: When it came time for Thomas to decide on a career path he wanted to be just like his Big Brother, an Army reservist. He trained as an engineer and was one of the first soldiers deployed to Iraq.
TRUSS: I felt guilty because he was going before me. I just wanted to be there before him, so I could come back and mentor him before he got called up.
TUCKER: Sergeant Thomas returned from his first tour of duty to learn that his Big Brother was off to fight the war in Afghanistan, the mentee became the mentor.
THOMAS: He was always giving me tips and stuff as I was growing up and then, he's calling me like oh man, I'm going to Afghanistan, what do I got to do, how do I -- what do I got to bring with me? So, it was kind of a -- you know a role reversal.
TUCKER: With his mentor off fighting in Afghanistan, Sergeant Thomas returned to Iraq and on October 19, 2005, his truck hit an improvised explosive device.
THOMAS: I was blown through the door and my gunner was shot up in the air like a bottle rocket.
TUCKER: despite his injuries...
THOMAS: I ran my gunner down the street to where another truck was pulling back up from, put him in there, then ran back to the truck, we got my platoon sergeant out, he was on fire. And then we went back and tried to get the last guy out, but the bomb had went off right under where he was sitting, so we couldn't get to him.
TUCKER: Sergeant Thomas is now back home currently serving as an Army recruiter. His big brother couldn't be more proud.
TRUSS: Well, my first initial thought is I always thought I had the "S" my chest and I was his role model, but that kid has been through so much, I transfer that "S" off my chest, he now wears it and I look up to him, big time. TUCKER: Bill tucker, CNN.
(END VIDEOTAPE)
PILGRIM: We wish him the best of luck.
Tonight poll results, 98 percent of you think the U.S. should suspend all aid to the Mexican government until Mexico proves the money is not being diverted to drug cartels.
Thanks for being with us, tonight. Campbell Brown, NO BIAS, NO BULL, starts right now.
