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Lou Dobbs Tonight
Geithner under Fire; Populist Revolt; Road to Rescue; America for Sale; Border Agents Free
Aired March 20, 2009 - 19:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LISA SYLVESTER, CNN CORRESPONDENT: Hi there. Thanks, wolf.
Tonight new questions about treasury secretary Timothy Geithner's role in the AIG bonus scandal as Americans suffer from increasing bailout fatigue.
And tonight lawmakers are already trying to impose taxes of 90 percent on Wall Street bonuses. How much further will the Congress go? The chairman or the powerful House Financial Services Committee Congressman Barney Frank will join me.
And tonight former Border Patrol agents Ignacio Ramos and Jose Compean are finally free after a long campaign by this broadcast.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: I broke down. I started crying. I got on my knees and prayed.
(END VIDEO CLIP)
SYLVESTER: We'll have an exclusive interview with both Ignacio Ramos and Jose Compean and you won't want to miss it -- 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, March 20th. Live from New York, sitting in for Lou Dobbs, Lisa Sylvester.
SYLVESTER: Good evening, everybody. President Obama today strongly defended his economic agenda amid rising criticism of his tax, borrow and spend policies, and skyrocketing budget deficits. The president saying he will not tolerate waste and abuse.
This as the Obama administration faces a firestorm of protests over the taxpayer funded bonuses for AIG executives. Treasury secretary Timothy Geithner is at the center of that firestorm, in part because he helped design the original bailout of AIG, Geithner also facing questions about his competence and judgment as he dithers over plans to restore confidence in our banking system, all that prompting President Obama to again declare that Geithner is doing what he called an outstanding job -- Louise Schiavone reports.
(BEGIN VIDEOTAPE)
LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): The question that has brought down many an official before him now haunts Treasury Secretary Timothy Geithner. What did he know and when did he know it.
TIMOTHY GEITHNER, TREASURY SECRETARY: I was informed by my staff of the full scale of these specific things on Tuesday, March 10th.
SYLVESTER: The Treasury secretary tells CNN that's when he learned about AIG's multimillion dollar bonus bonanza. Although there is this evidence that on Capitol Hill a full week before that, Geithner was specifically informed of the bonuses.
REP. JOSEPH CROWLEY (D), NEW YORK: Further bonus payments totaling approximately 230 million are due to 407 participants at AIG's Financial Products Division in March 2010. This makes no sense to my constituents.
SCHIAVONE: But it seemed at some level to make contractual sense to the Obama economic team who Geithner tells CNN worried about the legal fallout of stopping the bonuses.
GEITHNER: What we did is just express concern about the vulnerability of a specific part of this provision to legal challenge as you would expect us to do.
SYLVESTER: President Obama suggested on "The Tonight Show" that focusing on the legal was misguided.
BARACK OBAMA (D-IL), PRESIDENT OF THE UNITED STATES: There's a moral and ethical aspect to this as well. And I think that's what has gotten everybody so fired up.
SCHIAVONE: Analysts say it's not easy to apologize your way out of this situation.
UNIDENTIFIED MALE: This awakening of a sleeping populous giant is a nightmare for Geithner. This is the last thing he needs.
SCHIAVONE: And while Geithner still has his defenders...
REP. ELIJAH CUMMINGS (D), MARYLAND: We've got a secretary again who is working long hours, giving it the best he can. The last thing he needs is for us to be throwing spitballs from the sidelines.
SCHIAVONE: Calls have begun for Geithner's resignation, this today from senior Republican Darrell Issa. Quote, "There's a contradiction in the president expressing outrage while simultaneously standing by his treasury secretary who is responsible for ignoring warnings and mismanaging the situation."
(END VIDEOTAPE)
SCHIAVONE: So Lisa, how secure is Secretary Geithner's job? Analysts believe he's on thinner ice today than he has been in recent weeks. Protecting him, though, is the fact that the Treasury Department is still running on a skeleton crew. Background checks for White House jobs could take as long as two months. And there's little enthusiasm among key figures in the financial world to enter the political fray. Lisa? SYLVESTER: Louise, I want to make sure that I'm perfectly clear in my understanding of this. Are you saying that Geithner, even though he said I just found out about this was actually asked a question weeks ago about these bonuses?
SCHIAVONE: He was specifically asked about it on March 3rd. He said that he was specifically briefed about it on March 10th, which doesn't seem to jive. In the meantime, AIG says that all along since December, they were informing key players in this episode.
SYLVESTER: So it sounds like somebody somewhere in the chain is lying.
SCHIAVONE: There are a lot of blanks to fill in here, Lisa, and that's the challenge that Geithner has constructed for himself at this juncture.
SYLVESTER: OK, Louise, thanks for that great reporting. We appreciate it.
Well the White House today insisted that President Obama has not lost control of the message he's trying to send the American people. White House press secretary Robert Gibbs saying the president remains focused on the economy and not what his critics are saying.
(BEGIN VIDEO CLIP)
ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: The president is, as you've heard him say before, and you've certainly heard me say before, less interested in the day-to-day score keeping which has always counted him down and counted him out -- we've been called idiots before. We understand that.
(END VIDEO CLIP)
SYLVESTER: But critics of the president are maintaining their offensive against the White House. Influential "Wall Street Journal" columnist Peggy Noonan (ph) today declaring the president should spend less time talking and more time leading.
Well the White House today also dismissed new evidence that President Obama's big government agenda will lead to much larger federal budget deficits than the administration is acknowledging. The Congressional Budget Office says the budget deficit this year will exceed $1.8 trillion. That's up to $100 billion more than the White House forecasted. The CBO is also predicting deficits averaging almost $1 trillion each -- every year over the next decade.
Well the latest CNN polls say almost half of all Americans disapprove of the way President Obama is handling the budget deficit. This as the White House faces a growing populous revolt against some of the president's economic policies. Bill Schneider has the report.
(BEGIN VIDEOTAPE)
WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST (voice-over): Most Americans continue to support President Obama's stimulus plan. But support has been slipping. There's a wave of populist anger out there.
REP. MIKE PENCE (R), HOUSE GOP CONF. CHAIRMAN: No more bailouts. No more executive bonuses. No more handing out of federal tax dollars to foreign corporations. The American people have had it.
SCHNEIDER: While President Obama remains popular, most Americans give him a negative rating on handling the banks. Financial institutions are abusing taxpayer money, so the public is becoming more critical of government spending. Ask people if they approve of President Obama's overall economic plan, and 65 percent say they do.
Mention the price tag, and support drops by more than 10 points. What do people want to do about failing banks? There are three choices. Option one, let them go bankrupt.
SEN. JOHN MCCAIN (R), ARIZONA: I don't think they've made the tough decisions. Some of these banks have to fail.
SCHNEIDER: Forty-one percent of Americans agree. Option two, let the government take over those banks temporarily. That was suggested last month by no less a personage than former Federal Reserve Chairman Alan Greenspan who said, "It may be necessary to temporarily nationalize some banks in order to facilitate a swift and orderly restructuring. I understand that once in a hundred years this is what you do." Nearly 40 percent say that's a good idea. The least popular option -- give them more money.
BARACK OBAMA (D-IL), PRESIDENT OF THE UNITED STATES: The Treasury Department will begin purchasing up to $15 billion of SBA loans through the Troubled Asset Relief Program or TARP.
SCHNEIDER: Only 18 percent favor more government bailout money. Look what they do with it.
(END VIDEOTAPE)
SCHNEIDER: The AIG scandal is threatening to turn that wave of populist anger into a tsunami. And it's threatening to deluge the administration's spending plans. Lisa?
SYLVESTER: Now Bill, it almost seems that President Obama is trying to go back into campaign mode to try to rally the public around his policies.
SCHNEIDER: Well that's exactly what they are doing in the administration. They call it Obama 2.0, the campaign was Obama 1.0. It really is the permanent campaign in action. I mean he went on "The Tonight Show" with Jay Leno, which is a very popular show. He had town halls in California.
Tomorrow an organization of his grass roots supporters is going to be knocking on doors, canvassing people all over the country. And he's having a primetime news conference on Tuesday night. Well this looks and sounds very much like a continued presidential campaign. SYLVESTER: Yeah, we'll see if that actually has an effect. All right, thank you very much, Bill Schneider, for your reporting.
SCHNEIDER: Sure.
SYLVESTER: Well President Obama is apologizing for what the White House says was a thoughtless joke about athletes with disabilities. Speaking on "The Tonight Show" with Jay Leno, the president compared his bowling abilities with the skills of athletes at the Special Olympics.
(BEGIN VIDEO CLIP)
OBAMA: I've been practicing bowling...
UNIDENTIFIED MALE: Really? Really?
OBAMA: I bowled a 129.
(LAUGHTER)
(APPLAUSE)
UNIDENTIFIED MALE: Oh, no, that's very good. Yes. Oh, that's very good, Mr. President.
(CROSSTALK)
OBAMA: It was like Special Olympics...
(CROSSTALK)
UNIDENTIFIED MALE: Oh, that, that -- no, that's very good.
OBAMA: Yeah. No, no, listen. I'm making progress on the bowling.
UNIDENTIFIED MALE: Yeah.
(END VIDEO CLIP)
SYLVESTER: The president made his apology even before the Jay Leno show aired. The president speaking with the Special Olympics chairman, Tim Shriver (ph) -- Shriver (ph) said the president apologized in a moving way. But Shriver (ph) pointed out that words do matter.
Well President Obama is also finding time to send a video message to Iran at the start of the Iranian New Year. The president offering Iran the promise of a new beginning after three decades of mistrust and hostility, and rising concerns about Iran's nuclear program.
(BEGIN VIDEO CLIP)
OBAMA: The United States wants the Islamic Republic of Iran to take its rightful place in the community of nations. You have that right, but it comes with real responsibilities and that place cannot be reached through terror or arms, but rather through peaceful actions that demonstrate the true greatness of the Iranian people and civilization.
(END VIDEO CLIP)
SYLVESTER: Iran gave a cool response to President Obama's message. A spokesman for the Iranian president saying the United States must take action to demonstrate its good faith.
South of Iran two U.S. Navy vessels, one of them a nuclear submarine, collided today in the Strait of Hormuz injuring 15 of our sailors. The amphibious ship, the USS New Orleans was hit by the submerged submarine, the USS Hartford (ph), damaging both vessels. All the injuries were on the submarine. The Navy says there was no damage to the submarine's nuclear propulsion system, and both vessels continued to operate on their own power.
Well still to come, an exclusive interview with former Border Patrol agents Ramos and Compean who are finally free tonight.
Also how American companies are being shut out of the bidding for lucrative solar power projects in this country.
And we'll tell you what happened when suspected drug dealers threw thousands of dollars of cash onto a busy freeway in San Diego. You're not going to want to miss that video. Stay with us.
(COMMERCIAL BREAK)
SYLVESTER: The United States Postal Service today announced it is slashing thousands of jobs and closing several offices across the country. The agency is closing six district offices eliminating 15 percent of its administrative staff and cutting more than 1,400 positions. The Postal Service is also offering early retirement to a staggering 150,000 employees. The agency says the cuts will save $100 million a year.
Well there are a few bright spots tonight in the economy. Two American companies, Dow Corning and Hemlock Semi Conductor (ph) are joining forces to expand and build solar plants. These projects will create thousands of new jobs for American workers. Bill Tucker reports from Clarksville, Tennessee, in our special series "Road to Rescue".
(BEGIN VIDEOTAPE)
BILL TUCKER, CNN CORRESPONDENT (voice-over): The first official shovels of dirt turned all in the name of clean energy. Now these rolling fields outside of the northern Tennessee town of Clarksville have to be flat before construction can begin. The machines are already at the task. It's part of a massive investment by Dow Corning and its partner Hemlock Semiconductor.
TERRY STRANGE, HEMLOCK SEMICONDUCTOR GROUP: We've got 2,400 acres as far as a total site. Initially we're developing 400 acres of that with our first two phases of this project which we hope eventually will be four phases.
TUCKER: Phase four would mean roughly $4 billion in capital investment in Tennessee. The investment, though, is not solely in Tennessee. Hemlock Semiconductor is also dramatically expanding its headquarters in Saginaw County (ph), Michigan.
(on camera): This activity represents a $2.5 billion investment over a four-year period. It's created 1,800 construction jobs, and when it's done, it will mean an additional 1,000 jobs here at this plant in Michigan.
(voice-over): In Tennessee, there will be approximately 1,000 construction jobs with another five to 600 jobs at the plant initially.
(on camera): The immediate impact on the communities in Tennessee and Michigan in terms of jobs created is obvious. The impact in terms of opportunity is profound.
UNIDENTIFIED MALE: Hemlock Semiconductor when this plant gets operating will need 80 graduates a year for a program that we are pursuing right now, the development of a chemical engineering tech program.
UNIDENTIFIED FEMALE: It's a fantastic opportunity job wise.
UNIDENTIFIED MALE: Whether it's a chemical processing position of 40 to $50,000 a year, or positions that are paying $70,000 or $80,000 or above, it certainly provides a wealth of opportunity.
TUCKER (voice-over): Hemlock is able to create that opportunity because it's exploiting an opportunity of its own, growth in solar energy. This is the product Hemlock makes, poly silicon, the raw material that becomes the film for solar panels converting sunlight into energy.
UNIDENTIFIED MALE: Our goal really is to help solar energy become cost competitive with fossil fuels and in doing so, to become a sustainable energy option long term. Certainly there are many people looking for employment and we're happy to put you know as many of those to work as we possibly can.
TUCKER: Why would they move forward in these times, because despite the global recession, the demand for solar power is still on the rise.
Bill Tucker, CNN, Clarksville, Tennessee.
(END VIDEOTAPE)
SYLVESTER: As Bill Tucker just reported, the demand for solar power is on the rise in this country. But many of the leading solar and power industry companies are not American. They're often subsidiaries of foreign-owned companies. And as Ines Ferre reports, American companies are often competing with foreign companies that receive subsidies. (BEGIN VIDEOTAPE)
INES FERRE, CNN CORRESPONDENT (voice-over): For more than a decade, the Long Island Power Authority known as LIPA has been the area's primary electric service provider. It recently accepted bids to build New York's largest solar energy project. The primary site will be the Brookhaven National Lab owned by the Department of Energy. Twenty-eight companies applied for the project. The four selected are all foreign owned.
KEVIN LAW, LONG ISLAND POWER AUTHORITY: We're obligated and required to have an open, competitive process. We are legally not allowed to prevent a company from doing business with us solely because their parent company is European based.
FERRE: American Capital Energy was one of the U.S. bidders. It recently built an eight-acre solar field to power Atlantic City's convention center. Its CEO was shocked when not one American company was selected for the LIPA project.
TOM HUNTON, AMERICAN CAPITAL ENERGY: We know that there are U.S. companies. And it's not just about American Capital Energy, it's about America. It's about American jobs. Rather than relying on foreign oil this type of decision puts us in a position where we're having to rely on foreign manufacturing and technology.
FERRE: Like the auto industry, solar energy technology was largely developed in the U.S. but now the market leaders are European and Asian.
UNIDENTIFIED MALE: Countries like Germany and China and Japan provide much greater incentive.
FERRE: The U.S. share of world solar equipment production dropped from 40 percent in 1997 to eight percent in 2007. The U.S. is now playing catch-up. The stimulus bill includes a 30 percent tax credit for companies, foreign or home-grown, to set up manufacturing plants.
RHONE RESCH, SOLAR ENERGY INDUSTRIES ASSN.: We still have an international battle going on right now as to where the next set of manufacturing plants are going to be for the solar industry. But we're working hard to make sure those plants are built here in the U.S.
(END VIDEOTAPE)
FERRE: And the U.S. solar energy market is expected to soar to $12 billion by the year 2012. The good news is that means more jobs here in the U.S. accompanying that growth. The question, though, Lisa, is whether the leaders in the field will be foreign or U.S. owned.
SYLVESTER: Yeah. As you mentioned in your piece, the United States has been playing catch-up. I mean it seems like the United States, somewhere there needs to be a policy shift here. FERRE: Right. And all of these other countries have had policy shifts on a country level right here in the U.S. It's more based in the state level. U.S. is fourth. I mean it's behind Germany, Spain, Japan.
SYLVESTER: OK. Thank you very much, Ines, for that report.
Well coming up, a court decides jail or bail for admitted swindler Bernie Madoff. And former Border Patrol agents Ramos and Compean are free tonight and thankful for the support of hundreds of thousands of Americans.
(BEGIN VIDEO CLIP)
IGNACIO RAMOS, FORMER BORDER PATROL AGENT: It felt so good to know that people didn't give up on us and that people constantly believed in us.
(END VIDEO CLIP)
SYLVESTER: And we will have that exclusive interview with the freed agents coming up.
(COMMERCIAL BREAK)
SYLVESTER: Important new developments tonight in the rising controversy over the left wing activist group ACORN. House Judiciary Committee Chairman John Conyers (ph), a Democrat is reportedly calling for hearings into ACORN's activities after scathing criticism of ACORN during testimony on Capitol Hill. GOP attorney Heather Hildolbot (ph) accused ACORN of crimes ranging from voter fraud to mob style intimidation. Congressman Conyers (ph) did not respond to our request for a comment.
Turning to the case of convicted swindler Bernard Madoff, an appeals court has ruled Madoff must remain in jail until he is sentenced in one of the largest financial frauds in history. Madoff was sent to jail last week after he admitted to cheating nearly 5,000 clients in a $65 billion Ponzi scheme. Until his plea, Madoff had been under house arrest in his Manhattan penthouse. The court today said Madoff was a flight risk because he owns a home overseas and may have offshore cash accounts.
Overseas pirates have struck again off the coast of Somalia. Greek officials say pirates captured the Greek cargo ship Titan (ph) last night. Nearly 100 ships were attacked by pirates last year, most of them off the coast of Somalia, and most of the seizures are carried out by former Somali fishermen who have found piracy a bit more lucrative. An international effort to curb piracy is underway, but with limited success.
Well crime of a very different kind in California, two drug suspects are under arrest in San Diego tonight after leading police on a wild chase while tossing cash out of their truck. You don't want to miss this video. Take a look at this amazing video. Here you see it there -- cash being thrown out. The suspects flung mostly 20 and $100 bills while driving on a busy highway at the height of rush hour last night.
There you see drivers, they slammed on their brakes and what do you think they did? They scrambled to pick up the cash. The suspects all told they tossed more than $17,000 before surrendering to police. And police say the men are suspects in a major drug cache, a lot of people pocketing that money and running.
Well time now for some of your thoughts. "If Mexico wants tariffs on our exports, let's return the favor; a tamale tax, a tequila tax and best of all, a taco tax. That might ring their bell."
"Lou, with lawmakers outraged by the AIG bonuses, why don't they give back their campaign contributions from AIG? We voted in the Dems for change. When will it start?"
"Too big to fail is like saying too small to secede. It does not sound right to me."
We love hearing from you. To send us your thoughts go to loudobbs.com and a reminder to join Lou on the radio Monday through Friday for "The Lou Dobbs Show". Go to loudobbsradio.com to find local listings for "The Lou Dobbs Show" on the radio.
Well coming up, outrage over hefty bonuses for AIG executives turns into a populist revolt against Wall Street. Powerful Congressman Barney Frank will join me next.
And former Border Patrol agents Ramos and Compean are finally free and they're going to share their story with us. We'll have an interview that you will not see anywhere else.
(COMMERCIAL BREAK)
SYLVESTER: Former Border Patrol agents Ignacio Ramos and Jose Compean are free men tonight. The commutation of their long prison sentences became effective today. Now this broadcast has reported extensively on the miscarriage of justice against these two men from the very beginning. We want to take you back and review the history.
It was on February 17th, 2005 the two agents shot and wounded an illegal alien drug smuggler they were pursuing. The smuggler, Osvaldo Aldrete Davila (ph) fled back across the Mexican border, abandoning his van that was loaded with marijuana. Incredibly, though, the U.S. attorney for southwest Texas, Johnnie Sutton (ph), granted Davila immunity from prosecution and then turned around and charged the two agents with 12 felony counts.
That trial began on February 21st, 2006. And the agents -- the two agents were convicted on October 19th of that year. Ramos was sentenced to 11 years; Compean to 12 years. They have appealed the convictions and those appeals are still pending. The men reported to prison on January 17th, 2007.
This broadcast and many, many lawmakers called for the pardon of the two former agents. And hundreds of thousands of Americans joined the call for justice for Ramos and Compean. Davila, meanwhile, continued to smuggle drugs into this country while under immunity by the U.S. attorney. He eventually pleaded guilty to drug charges and he was sentenced to nine years.
Now keep in mind that is less than the terms of Ramos and Compean. On January 19th of this year, in the waning hours of his presidency, George W. Bush ordered their sentences commuted. But their convictions still stand. On February 17th, four years to the day after the original incident occurred, Ramos and Compean were released into home confinement.
And tonight they are finally free and they are speaking out for the very first time. Our Casey Wian has been reporting on this miscarriage of justice really longer than anyone and today he spoke with the two former agents in El Paso, Texas.
(BEGIN VIDEOTAPE)
CASEY WIAN, CNN CORRESPONDENT (voice-over): Former Border Patrol agents Ignacio Ramos and Jose Compean have been out of prison for a month. They have been confined to their homes, reconnecting with their wives and children, but still restricted from reentering society. Early Friday morning their ankle monitors came off and Ramos and Compean tasted real freedom for the first time in more than two years.
RAMOS: Get out all day long. I'm not coming home for a while. Go have lunch with some friends.
WIAN: The Ramos family's first trip out was to Nachos' favorite Mexican restaurant. Earlier we spoke about his prison experiences and the day he found out President Bush commuted his 11-year prison term.
(on camera): How surprised were you when you found out that your sentences were commuted?
RAMOS: I was very surprised. I wasn't expecting it the day it happened. I broke down. I started crying and I got on my knees and prayed.
WIAN: Sum up your prison experience for me. What was it like?
RAMOS: Hard. Long. Lonely. You know, just wondering everything that I was missing with my family. Knowing I was missing so much.
WIAN: Do you miss being a border patrol agent?
RAMOS: Yes, I do.
WIAN: What do you miss about it?
RAMOS: The work, being out in the field. The camaraderie of some of the agents I worked with. And, you know, I believed in the job. I believed in the work I did.
WIAN (voice-over): As a felon, whose conviction has not been overturned, he'll never have the job again unless his ongoing appeals are successful. If that happens, Ramos says he would still take the job.
While in prison, he received tens of thousands of letters from supporters throughout the United States, even from American troops fighting overseas.
RAMOS: I can't thank them enough from the bottom of my heart. It's what kept us going -- or what kept me going in prison, aside from my family.
WIAN (on camera): Tell me about your family. How did they do while you were gone?
RAMOS: It broke up the, you know, this family circle we had. And it was very hard on them all. You know, it affected each one of them in their own different way. But they were all very resilient. They all hung in there.
WIAN (voice-over): For Jose Compean, prison also kept him from his wife and three children. His youngest son was born just before he went away.
COMPEAN: I think that's been the hardest, when I turned myself in, he was only four months old. The first day when I got home, they were still at school and I got -- once they got home I was already home. I opened the front door and both of them, the two youngest just stared at me and they didn't know how to react.
WIAN: Compean never expected the reaction he and Ramos received after he went to prison.
COMPEAN: I didn't expect it. I expected people to really forget all about us once we turned ourselves in and so all the support we received was really unexpected, and it was a very pleasant surprise.
WIAN: For now, he's content just to be home.
COMPEAN: There's really nothing specific that I want to do. The only thing I've been really looking forward to is actually getting out of the house and going out to dinner with her and the kids, or taking the kids to the park, and then just being out together as a family.
WIAN: Both former agents are in remarkably good spirits. Compean even wanted to thank the staff at the prison where he spent more than two years in solitary confinement.
COMPEAN: I'd like to thank the entire staff at FCI Elkton, especially the shooker (ph) down there. Everybody was very professional down there and I want to thank them.
RAMOS: In spite the situation we found ourselves in, you still have to count your blessings. And the people that have come into our lives, we've seen many miracles. You know, there are more important things than the people that have done this to us or what we've gone through. You know, I'm not going to sit here and dwell on that. You know, we're looking ahead and like I said, we're optimistic for a very good future.
(END VIDEOTAPE)
WIAN: The agents continue to pursue legal appeals in hopes of obtaining a new trial. For now, they remain on probation for three years. Ramos plans to begin work helping out in his father's insurance business. Compean is going to help his father-in-law recover from an automobile accident. I should say that Ramos' father- in-law's insurance business. For both, it's too early to talk about long term employment prospects, long term career prospects, as we said, for now they're just happy to be home -- Lisa.
SYLVESTER: Yeah, they were away from their families for two years and now they're just trying to reconnect again with their families. Just truly an amazing story.
Now, I noticed, Casey, that you didn't talk about the day's events. What actually happened with the day with Davila? Why is that?
WIAN: Well, it's because there is -- those appeals are continuing. Both agents, former agents' attorneys requested that they not speak about the particular events of that day. You know, it happened over three years ago, there's concern that it could be used against them if they've said something that in some way conflicted in a minor way with what they testified to at the original trial, they just didn't want to jeopardize any future appeals by having them try to recall events that happened so many years ago -- Lisa.
SYLVESTER: Yeah, and so even though they are out and free, they still want to clear their names, right? I mean, what's the status right now of the appeals?
WIAN: Well, absolutely. Both of them, you can tell that this status of being a convicted felon really is upsetting. It's something they'd like to get rid of. The two agents can't even see each other. They can't appear together, because the terms of their probation mean they can't associate with other convicted felons.
We're expecting to hear a decision from the Supreme Court anytime now as to whether they're going to order the Fifth Circuit Court of Appeals to relook at this case. If the Supreme Court does not agree to that, their attorneys plan to seek an entirely new trial.
As we reported, some of the counts against them were overturned by the Appellate Court and their attorneys think they have a good case to get a new trial on all these charges -- Lisa.
SYLVESTER: All right, and I know you will be tracking and monitoring this story. Thank you very much, Casey, for your reporting.
Well, we'd like to know what you think. Here's tonight's poll question: Do you think the Supreme Court should overturn the convictions of former border patrol agents Ignacio Ramos and Jose Compean? Yes or no, cast your vote at loudobbs.com we'll bring you the results later in the broadcast.
Coming up, Treasury Secretary Geithner at the center of the AIG outrage. There are new calls for his resignation. Three top economic thinkers join us. And powerful chairman of the Financial Services Committee outraged by executive bonuses paid for by, yes, you, the taxpayer, Congressman Barney Frank is here, next.
(COMMERCIAL BREAK)
SYLVESTER: House Financial Services Committee chairman, Barney Frank, today came out strongly against retention bonuses paid to executives at Fannie Mae and Freddie Mac. This latest outrage comes just days after Congressman Frank said it might be time to fire executives at AIG over their bonuses. Chairman Frank joins me now.
And first, let me ask you, Treasury Secretary Geithner, he has certainly come under fire. You have members of, Republican members who are now calling for his resignation, although President Obama is still standing by him. Do you think that Geithner should resign?
REP BARNEY FRANK (D), FINANCIAL SERVICES CHMN: No, not at all. I think that's very unfair. Look, he's been secretary of the Treasury for two months, literally two months. He came in with an enormous number of problems. On one he's made great progress. The foreclosure reduction plan he put forward was very creative and included a significant amount of help for millions of people who are facing foreclosure, which is important.
Because as you know, we've had people say, why am I bailing out people who made a bad decision? And he stepped in a way that's going to make it possible for a number of people who were able to pay their mortgages, still to get a refinancing and a reduction in their payments without costing taxpayers.
So, I think he's done a good job there. He's now working on this second problem of the TARP. You know, the world didn't begin on January 20, 2009. The decision to give money to AIG, to lend money to AIG without any restrictions whatsoever came in the Bush administration under Mr. Bernanke and Mr. Paulson.
SYLVESTER: But Secretary Geithner was part of that, as you well know.
FRANK: Well, he was working as an -- he was a subordinate position, but he wasn't the key decision maker. And in fact, under Secretary Geithner, let me make this point, there is the larger amount of money that's gone out under the program that we voted. He has toughened up the rules with our help, and with Senator Dodd's help, and as a matter of fact, we are now in a position where we had an article in the "New York Times" a week ago and the "Washington Post" two days ago in a the business section saying we're too tough on the banks. And we have banks now saying they're going to give the money back. So, there's a real -- now that Geithner is, himself, in control we've seen toughness.
SYLVESTER: I want to play some sound for your really quickly in which we have Secretary Geithner, from yesterday, in which he was asked the question by CNN's own Ali Velshi, when did he find out about the AIG bonuses. Let's take a listen.
(BEGIN VIDEO CLIP)
TIMOTHY GEITHNER, TREASURY SECRETARY: I was informed by my staff of the full scale of these specific things on Tuesday, March 10. And as soon as I heard about the full scale of these things, we moved very actively to exploring every possible avenue, legal avenue to address this problem.
(END VIDEO CLIP)
SYLVESTER: OK. However, we have some sound that basically Secretary Geithner being asked about these bonuses a full week before he said he supposedly knew about it. So, let's take a listen. We have him on tape.
(BEGIN VIDEO CLIP)
REP JOSEPH CROWLEY (D), WAYS & MEANS CMTE: Just last month, AIG paid 343 employees of AIG FP, their financial products division, created the financial hole that AIG is in, and in turn a multibillion dollar bill for American taxpayers of $56 million in bonuses, and has slated to pay an additional $162 million in bonuses to 393 participants in the coming weeks.
GEITHNER: It's very important that we make sure that we are providing exceptional assistance to these firms, that that assistance is going to, again, achieve the objectives of these programs, not to reward the kind of executives that got us in this mess.
(END VIDEO CLIP)
SYLVESTER: So, let me paint this out, I want to make sure people are perfectly clear. The last bit of sound that we heard was a conversation between Congressman Joe Crowley, where he is point blank asking Treasury Secretary Geithner about these bonuses. Except that happened on March 3. Now, Geithner is saying, but I didn't know about the bonuses until March 10, so somewhere something doesn't give. I mean...
FRANK: Well, what I would say this -- and I can't explain that. I would say this, though, unfortunately if he had known on March 3 or March 10, it wouldn't have made any difference because these decisions had already made and we would still have the job that we have of trying to undoing them.
And can I stress one point about these bonuses because people have said well, you think bonuses are always wrong? What I find particularly offensive is that these are retention bonuses which is a nice word, it turns out, for extortion.
SYLVESTER: Fannie Mae and Freddie Mac, do you want to get rid of their bonuses, as well? Because there's a lot of outrage over there. FRANK: Well, I'm trying to explain it. It's retention bonuses that bothers me, in particular. For people at the kind of working level, they've had a situation where you got a fairly small salary and bonus. That's not automatically bad if the bonus calculation is a reasonable one, and merely rewards you for what you do right, but not for what you do wrong.
But a retention bonus is people working -- and this is what Mr. Liddy said at AIG -- these are people who worked at the company, they were doing complicated things, and in effect they threatened to quit. Kind of like, they were going to leave with the formula for the safe and they had to be bribed into not quitting the company. That retention bonus situation is extortion.
For people working for a company being well paid to say, OK, I know all these things, and I'm going to quit unless you give me this bonus, those retention bonuses, yes, I am opposed to them and I told the people of Fannie Mae and Freddie Mac that I'm opposed to them. Again, if it's a -- people are getting a small salary and some kind of incentive bonus, and it's a legitimate incentive bonus, that's not a problem, but retention bonuses where people say, bribe me or I'm going to quit the company and hurt, you should not allowed.
SYLVESTER: All right, Representative Barney Frank, we're out of time. Thank you very much for joining us. We appreciate your joining us.
Well, coming up, Senator Chris Dodd and Treasury Secretary Geithner, AIG bonuses, we'll continue these conversations with three of the country's three leading economic minds, next.
(COMMERCIAL BREAK)
SYLVESTER: Joining us in our special series, "Road to Rescue," three of the country's leading economic thinkers, in our D.C. bureau, Professor Peter Morici, from the university of Maryland. And Pat Choate, author of "Dangerous Business," and in Westchester, Pennsylvania, Mark Zandi, chief economist at MoodysEconomy.com.
Thank you gentlemen very much for joining us.
Peter, I'll start with you. What do you make of Geithner? I mean, did he or did he not know about this? I mean, we have him on tape basically saying I didn't find out about this until the 10th, but he was asked a question about it a full week before.
PROF PETER MORICI, UNIVERSITY OF MARYLAND: Not only that, but Geithner appears totally clueless. We've had week after week in the "Wall Street Journal" and other financial papers, revelations of large bonuses being paid in companies that have received TARP money. Why should we be surprised if such deals were made at AIG?
They refinanced AIG four times. Four bailouts. They never thought to ask about the salary structure and bonuses. The man's been absent without leave for some time now. This is why folks are calling for his resignation. It's not just a matter of whether he knew, it's why didn't he ask?
SYLVESTER: You know, Congress, I think, shares some of the blame, here. Because if this was in the stimulus package, didn't anybody read the package? Didn't anybody read the stimulus legislation -- Pat.
PAT CHOATE, AUTHOR, "DANGEROUS BUSINESS": No, they didn't. Like sheep, they were told to vote for it, they voted for it. It was all very clear that they were voting for this. Part of the sense of outrage is these people are trying to distance themselves from a bad decision. More important is the things that they're not talking about this bailout.
AIG is a porthole for the Treasury Department to ship money to many, many people. I call it "crony socialism." And basically what is happening when they do this, they've been shipping money to the largest bank in France, and one of the largest banks in Germany.
Now, we have -- I understand, an implicit agreement, that the Europeans will take care of their banks, we'll take care of our banks. We should demand the money that went to the European banks through AIG back, every penny of it back. The Europeans should be taking care of theirs. American taxpayers should not be bailing out German and French banks.
SYLVESTER: Yeah, what AIG, some $13 billion in debt, that they paid to Goldman Sachs and to some of these foreign banks, you're saying that this money should be returned. What do you think -- Mark.
MARK ZANDI, MOODYSECONOMY.COM: No, I don't think so. You know, I think the system is under tremendous pressure as it is. If you tried something like that, it would just push it under and the result would be -- I think it would be catastrophic. The financial system would shut down and the economy would be taken with it. So, no, I think that would be counterproductive at this point.
SYLVESTER: OK, I want to turn to the news today of the projected deficit. It's significantly higher than we thought, $9 trillion in deficits over the next decade, that's $2.3 trillion higher than the Obama administration projected, the official numbers coming from the CBO. Peter, your thoughts on this?
MORICI: Well, the Obama administration and Nancy Pelosi seem to feel they can spend money on whatever they please and not really add up the sums. What's becoming quite apparent is the Obama administration really isn't in control. It doesn't really understand what the various programs and proposals it's putting out there are going to cost. And the sad thing is, all this spending is not going to get us out of the recession, because so much of the money is so poorly spent.
SYLVESTER: Yeah, Pat, right now the administration is saying that we need to spend this money in order to grow ourselves and to stimulate the economy to get out of the recession. I don't know how you do that, though, with these kind of deficit numbers. I mean, do you think this is going to put President Obama's agenda, I mean, health care, energy, education, do you think it's going to put it in jeopardy?
CHOATE: Oh, I think it's going to put everything in jeopardy. George Bush doubled the national debt in his eight years. Barack Obama is going to double it in four years at the path we're going. It should really be first things first in this program.
And first thing is you bring solidity to your financial system. We're not doing that. We're dealing piecemeal. We don't really have a plan to do that. Then the second thing that we do is we deal with the trade deficit. We've taken trade off the table. We've got to deal with trade. And I disagree about the repayment by Germany and France. Germany and France are very rich countries. It's just a matter of principle. Those governments should return our money.
SYLVESTER: Mark, a response?
ZANDI: Well, in terms of the deficits, I do think in the very near term this year and next, we have to run large deficits. I think consumers are pulling back, businesses aren't investing, they're not hiring, they're laying off workers, and really telling government that has the resources to fill that void, and that's by cutting taxes, and increasing spending temporarily, and that's going to mean larger deficits in the near term. So, I think that's exactly what we need to do.
Now, having said that, I agree in the longer run, once we get by the crisis in the economy has found its footing, we have to work hard to reduce the size of those future deficits. And there we haven't done enough work yet. I don't think the president's come forward with a plan.
SYLVESTER: OK, but here's the real question. Does that mean we're going to have future tax increases? Because you can't have this kind of spending, unlimited spending, without somebody paying it at some point in the future.
ZANDI: Yeah, and we will. In the long run, I think it's fair to say that the taxes are going to rise and they're going to have to be spending cuts to the entitlement programs. Now, we can mitigate some of that if we can figure out a way to reform health care and bring down the growth in health care costs and if we can figure out ways to reduce our energy dependence. Then we won't have to raise taxes quite as much and cut spending quite as much, but I think that's something we'll have to do eventually, yes.
SYLVESTER: OK, Peter, you get the last word, we got about 20 seconds here.
MORICI: Health care, we spend 50 percent more than France and Germany. We have 45 million people uncovered, they have everyone covered. We should be able to pay for health care reform with the money we're spending already. Mr. Obama doesn't need another nickel.
SYLVESTER: OK, thank you very much, gentlemen for joining us. Peter Morici, Pat Choate, Mark Zandi, always a pleasure. Thank you very much, gentlemen. Well, still ahead, "Heroes."
(COMMERCIAL BREAK)
SYLVESTER: Now "Heroes," our tribute to the men and women who serve this country in uniform. Tonight we introduce you to Lance Corporal Douglas Cianchetta. This brave Marine is fighting a personal battle after being seriously wounded. Philippa Holland has the story.
(BEGIN VIDEOTAPE)
PHILIPPA HOLLAND, CNN NEWS CORRESPONDENT (voice-over): For Lance Corporal Douglas Cianchetta, serving in the Marines runs in the family. His great uncle served in World War II.
LANCE CORPORAL LANCE CIANCHETTA, US MARINE CORPS: He said the biggest factor was the brotherhood and the camaraderie that you can't find anywhere else.
HOLLAND: Cianchetta developed leadership skills while in Iraq, then in Afghanistan.
CIANCHETTA: The only truly thing I was truly nervous about is something happening to one of my guys in my team.
HOLLAND: He was awarded a Navy and Marine Corp Achievement Medal with Valor for repeatedly putting himself in the line of enemy fire, providing cover for his squad when they came under attack. But his personal battle started on a routine patrol.
CIANCHETTA: There was a bag laying in the road, I approached it, I carefully observed it. There was a powdery substance. I put my rifle in the powder, skimmed around the edges and I heard a click. And once I heard the click, a big puff of smoke came. I walked out of it and all of a sudden my rifle dropped from my hand.
HOLLAND: The powder contained battery acid, a chemical bomb.
CIANCHETTA: I was burned 40 percent of my body from my fingertips to my elbows and from my ankle line to above the knee line on both legs, third-degree, full thickness.
HOLLAND: Cianchetta was flown to Brooke Army Medical Center in San Antonio, Texas. His parents joined him there.
CIANCHETTA: With my mom's background of being a trauma nurse, and my father being a fireman for over 37 years, with them two being here for me, it made it very easy to start the healing process a lot quicker than most people would get. And there's nothing better than looking on one side and you have your senior Marines and then looking on the other and you have your family. It's both families, but it means a lot when you're lying in bed.
HOLLAND: Cianchetta received a Purple Heart for his wounds. He says he has no regrets. CIANCHETTA: If I didn't go and check that bag, somebody else would have and I would never put anybody else in danger before my own life.
Philippa Holland, CNN.
(END VIDEOTAPE)
SYLVESTER: Lance Corporal Cianchetta plans to say in the Marine Corps and hopes to become a combat instructor in infantry school. And we certainly wish him well.
Well, tonight's poll results: 97 percent of you think the Supreme Court should overturn the convictions of former border patrol agents Ignacio Ramos and Jose Compean.
Thanks for being with us tonight. For all of us here, thanks for watching, and have a great weekend. Goodnight from New York. CAMPBELL BROWN: NO BIAS, NO BULL starts right now -- Campbell.
