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Nancy Grace

Drew Peterson Says He`s Mentally Prepared to Be Put on Trial

Aired February 28, 2008 - 20:00   ET


NANCY GRACE, HOST: Tonight, breaking developments in the case of missing 23-year-old mom Stacy Peterson, vanishing from upscale Chicago suburbs, husband/cop Drew Peterson the prime suspect in his fourth wife`s disappearance.
Tonight: Peterson breaks his silence on national TV as the defense gears up, claiming the new autopsy is suspicious and trying their best to blame multiple bruising, abrasions, contusions to her body, her hair matted in blood from a head laceration all on a heart problem.

Another bombshell tonight: Police show up at Peterson`s doorstep to hand deliver subpoenas to Petersons` teenage children. And tonight, in a stunning blow, the state puts the kibosh on Peterson`s chance to maintain his vast gun collection.


UNIDENTIFIED FEMALE: (INAUDIBLE) Peterson is speaking out. He says he`s shocked by the new autopsy concluding Kathleen Savio`s death was murder. And as far as the Stacy Peterson investigation, the former cop stands behind his theory his 23-year-old wife and devoted mom left on her own with another man, while reports reveal brand-new subpoenas by a secret grand jury who want answers from Kathleen Savio and Drew Peterson`s teenage sons. And after months of battle over evidence seized from his home, a judge orders police to return 11 guns, computers and cars. But now that his firearms license has been revoked, will Peterson actually get his guns back?


GRACE: And tonight: Music icon Michael Jackson`s multi-million-dollar estate, Neverland, heading to the legal auction block, $24 million in debt and still spending wildly, Neverland Jackson`s 2,900-acre playground packed with millions in furniture, art, collectibles all slipping away.


UNIDENTIFIED MALE: Will Michael Jackson`s Neverland ranch be taken away? The self-proclaimed king of pop facing foreclosure on his world- famous property. But a Jackson insider tells CNN Jackson`s trying to avoid foreclosure with a new loan. Jackson may even lose the rides and furnishings inside the compound if it`s foreclosed on, Jackson reportedly over $24 million in debt on Neverland.


GRACE: And tonight: EMTs race to a California home to find a 13- month-old baby boy in the family pool. Where`s mommy? Oh, she`s safe inside, drunk, after a full day of drinking, her 13-month-old face down in the pool outdoors, her 4-year-old brother fending for himself inside.


UNIDENTIFIED MALE: A frantic 911 call, a child drowning. But could this tragedy have been prevented? Police say 34-year-old mom Page Looney (ph) was drunk inside her home while her 13-month-old son Eric (ph) drowned in the family pool, beer cans and liquor bottles scattered throughout the home, Looney`s two other two kids placed in protective custody, now with relatives, as police also investigate the death of her 2-year-old son in 2005, Looney behind bars, facing life in prison.


GRACE: Good evening, I`m Nancy Grace. I want to thank you for being with us. His fourth wife missing for months, his third wife`s suspicious bathtub drowning officially ruled homicide, Drew Peterson breaks his silence as brand-new grand jury subpoenas hand-served on his two teenagers, the children of his third wife found dead in a dry bathtub.


UNIDENTIFIED FEMALE: Former cop and suspect in his fourth wife`s disappearance, Drew Peterson, takes to the airwaves, speaking out. Peterson says he`s prepared for anything, even going to prison, but goes on the defense about the bombshell autopsy now ruling his third wife`s death a homicide. Since 2004, Kathleen Savio`s suspicious bathtub drowning ruled an accident, but the disappearance of Stacy Peterson led investigators to reopen the case. Drew Peterson still telling his two young children with Stacy their mommy is on vacation, while his other two teenage kids with Savio reportedly set to testify before a secret grand jury. A judge orders investigators to return Peterson`s property, including 11 guns seized as evidence. But in a strategic move, the state`s attorney requests Peterson`s gun license be revoked, a request granted by state police.


GRACE: In the face of his fourth wife`s mysterious disappearance -- she`s been gone for months now, leaving her children behind -- and a new ruling that his third wife was murdered -- that`s right, a homicide -- drowning to death in a dry bathtub, what does Drew Peterson do? Does he go light a candle? Does he say a novena? No. He goes on national TV. Take a listen.


MATT LAUER, CO-HOST, "TODAY": Do you still feel that you will not be arrested in connection...


LAUER: How about you?

JOEL BRODSKY, PETERSON`S ATTORNEY: I still do not see any credible evidence...

LAUER: But are you as confident that he will not be arrested?

BRODSKY: Yes, I am.

LAUER: Are you prepared to be arrested?


LAUER: Are you prepared that there`s a chance you could spend the rest of your life in jail?

PETERSON: I`m prepared for anything that could come up. Once I found out -- my main concern about anything is my children. And once all my ducks are in line for their well-being, I`m OK.


GRACE: That`s video of Peterson and his attorney, Joel Brodsky. They were on the "Today" show talking about the possibility of prison. Now, I can only speak for myself, but if you believed you were innocent, would you be prepared and willing to go to jail? I don`t think so.

And that`s not all. Take a listen to this.


PETERSON: It was kind of shocking. We believed for the last four years that her death was accidental. And then all of a sudden -- that was with a fresh autopsy. Now all of a sudden, there`s a new autopsy with the full body, let`s say, and it`s been ruled a homicide. I`m kind of suspicious of it.

LAUER: You don`t think that the coroner`s report is accurate?

PETERSON: I`m not sure. I think it needs to be scrutinized and looked at a little closer.


GRACE: Oh, we`ve looked at it. That`s Peterson again on NBC`s "Today" show, seemingly emotionless, talking about the new coroner`s finding, his third wife, Kathleen Savio`s, death now ruled a homicide.

Now, let me get this straight, Michelle Sigona -- Michelle joining us from "America`s Most Wanted." Drew Peterson has a third wife found dead by him...


GRACE: ... drowned to death with multiple bruises and lacerations to the body in a dry bathtub. The fourth wife goes missing mysteriously. He`s the last one to see her. They`re having an argument. And she leaves the children behind. And he`s suspicious of the autopsy? He`s suspicious of the medical examiner?

SIGONA: That`s exactly -- that`s what he`s claiming again for his third national appearance here, Nancy.

GRACE: OK, Michelle. Bring me up to date.

SIGONA: Well, basically, what has gone on right now is that there`s a grand jury meeting about Drew Peterson. They meet once a week, usually on Thursdays. But for some reason, they didn`t meet today, Nancy. And that is actually on the docket for four months, with a possible extension of six months.

Make a long story short, at this particular grand jury meeting, what they are trying to determine is if Drew Peterson is, in fact, linked to Kathleen Savio`s death and trying to find him responsible for, obviously, the disappearance of Stacy Peterson and the possible homicide of Stacy Peterson. Unfortunately, there`s not a body at this point.

And then that brings us up to today, where he appeared on the "Today" show earlier, talking about his family, talking about, as you mentioned, being prepared to go to jail and wanting nothing but the best for his children. And also, the judge has ruled that he can have his personal items back, iPod, computer, cars, guns, things like that. But the only thing is, is that if it does go to trial on any of these cases, he has to be able to admit to these -- that these things are his. In other words, he can`t say, That`s not my iPod, that`s my son`s iPod, or whatever the case may be.

In addition, his gun license has been revoked, which -- you know, obviously, I think the state police thinks is a good thing, at this point. So he may get those guns back. But he says it`s not really important to him.

GRACE: How many guns does he have?

SIGONA: Eleven.

GRACE: What types, do we know?

SIGONA: I don`t know what type.

GRACE: Let`s go out to the lines. Michael in Florida. Hi, Michael.

UNIDENTIFIED MALE: Hi, Nancy. Love your show.

GRACE: Thank you, dear. What`s your question?

UNIDENTIFIED FEMALE: I`m wondering, did Drew Peterson really think that going on national TV would get suspicion off of him? I mean, what was he trying to succeed from going on national TV?

GRACE: Let`s unleash the lawyers. Joining us, Susan Moss, Carmen St. George and Joey Jackson. To you, Susan Moss. When you`re under suspicion and you are a target, it`s never a good thing to blab. What`s he thinking?

SUSAN MOSS, FAMILY LAW ATTORNEY: He`s not thinking at all. And I like the fact that he wants his guns back. Is that because he`s planning to propose to wife number five? This guy has done everything wrong, including, I believe, kill his two wives.

GRACE: Well, it`s just not a good look to be fighting tooth and nail to get back a gun collection when you`ve got one dead wife and one wife missing. What about it, Joey Jackson? Why go on national TV? And I noticed this morning that when Lauer would throw him questions, he would just look over at his lawyer. I mean, why bother to get all dressed up and rear back on a sofa and then be afraid to answer anything?

JOEY JACKSON, DEFENSE ATTORNEY: You know what, Nancy? It`s not the fact that he goes on national TV, it`s what he says when he gets there. Now, with regard to him going on national TV, I see the lawyer`s point. What he`s essentially doing, Nancy, is pre-addressing a jury. Now, I know he`s not a defendant yet in this case, but one of the things we struggle with as defense lawyers all the time is humanizing our client, making them know and making jurors know that they live, they breathe, they laugh, they care for families. And so essentially, I think that`s a strategy. Unfortunately, based upon how he`s presenting himself, it`s a strategy that`s not being executed as it should be.

GRACE: Carmen St. George, I agree with Joey Jackson and also Susan Moss, but here`s the fly in the ointment. You go on national TV to go ahead and start conditioning a future jury, make them start empathizing with you. But then, when you sit there -- let`s just put it out there. He looked like a whore in church. He`s sitting there, ready to answer questions, totally out of place, but when he gets a question, he looks around and he won`t say anything. He`s afraid (INAUDIBLE) saying, How can I answer that? I can`t respond to that. He didn`t answer the questions.

CARMEN ST. GEORGE, DEFENSE ATTORNEY: Right. Nancy, I mean, it`s a cameo appearance, and I guess that`s the importance of choosing the right lawyers and heeding advice. And he`s getting the advice that this is supportive and this is something that he should be doing. I`ve said since day one that Drew Peterson should not be on camera, should not be saying anything. And in fact, he got on the "Today" show and made comments that he`s actually controlling his family and he thinks that more Americans should be in control of their families. Statement like that are not going to help him. And I would have advised him to keep quiet.

GRACE: Well, controlling the family -- let`s go out to Mike Brooks, former fed with the FBI and also on the terrorism task force. Controlling your family -- does that possibly involve double revolvers, 9-millimeter semi-automatics, some bolt-action rifles, a couple of shotguns and one AR- 15? What`s he doing with an AR-15? Explain what that is. It`s an assault rifle.

MIKE BROOKS, FORMER D.C. POLICE, CNN LAW ENFORCEMENT ANALYST: It`s a rifle, Nancy. It`s, basically, the civilian version of...

GRACE: Oh, what`s the A for? What`s the A for, Brooks?

BROOKS: That`s just -- it`s a semi-automatic rifle. It fires as quick as you can pull the trigger. It`s basically the civilian model of the M-16 which we see all the time being used in Iraq.

But you know, Nancy, talking about controlling your family -- let`s go back to wife number three, Kathleen Savio, now her death ruled a homicide. The police were called to his house, I guess, while he was controlling his family then, in the last two years 18 times. And we`ve heard from one of his friends before, Nancy, that one time when Stacy Peterson happened to be in the car with him, his next wife, that he got into an argument with Kathleen Savio, threw her down on the ground and handcuffed her. I guess that`s controlling your family. I don`t know about that.

GRACE: Another issue. This whole controlling your family statement, I guarantee you if it ever goes to trial is going to come back to haunt him...

BROOKS: Absolutely.

GRACE: ... because when Stacy Peterson went missing -- remember, she, according to him, had been at the home, they had been arguing, and then somehow she just disappears without any of her stuff? How is that controlling your family?

BROOKS: Yes. Good question. I mean, the way he seems to control his family, I tell you what, you know -- then a protection order also from wife number three, and the other wife said, too, he was very controlling.

GRACE: Out to the lines. Diane in Florida. Hi, Diane.

UNIDENTIFIED FEMALE: Hi. I love your show.

GRACE: Thank you, dear.

UNIDENTIFIED FEMALE: My question is, is what about his first and second husband -- or wife?

GRACE: You know, you must be psychic. I was just thinking about that. To Kathy Cheney with "The Chicago Defender." What about wives one and two?

KATHY CHENEY, "CHICAGO DEFENDER": Well, the first wife says that there was no type of abuse whatsoever and everything ended on a good note. The second wife didn`t say the same thing. She said that she was harassed at some point when she wanted to get a divorce, and after she did, that he harassed her. So she came out with some similar claims that Kathleen Savio and Stacy Peterson did, but not wife number one.

GRACE: Kathy, harassed in what manner?

CHENEY: Harassed that he would pull her over for no reason at all while she was on the street, saying she had bald tires, just minor traffic infractions that he would just pull her over just to harass her.

GRACE: You mean, while he was a cop, he would pull her over?


GRACE: How long did he stay on the force after those claims were made, I wonder?

CHENEY: He was still on the force until he retired.

GRACE: OK. There you have it.

Out to the lines. Adriana in Nevada. Hi. Adriana.


GRACE: Hi, dear.

UNIDENTIFIED FEMALE: Love your show, as well.

GRACE: Thank you. What`s your question?

UNIDENTIFIED FEMALE: Well, actually, I have a comment. It was funny they just showed him talking about how the autopsy report needs to be scrutinized better. Dr. Baden is renowned for his work. He has been on very famous cases.

GRACE: You know, he has. He is very well known.

To Michelle Sigona. Baden, Dr. Michael Baden, was called in, it`s my understanding, by Savio`s family. Has there been another autopsy, as well?

SIGONA: Yes, there has been another autopsy that has been performed after Dr. Baden. Now, this was, remember, Nancy, after her body was exhumed. So you had the first autopsy when Kathleen`s body was found dead. Then you had Dr. Baden, and then you had the third one. So you have two more recent ones. And you have to think, this case is about four years old. March the 1st, as a matter of fact, was the date that in 2004 that Kathleen`s body was found. And so we`re four years later, but they were still able to conclusively link and to say that, yes, this death is definitely a homicide.

GRACE: You know, I was taking a long, hard look at the original autopsy back in 2004. We`re talking about Peterson`s wife number three, Kathleen Savio. And I don`t know how anyone could look at all the blows to the body -- eight separate descriptions of blows and lacerations to the body -- the hair matted in blood and say this was a drowning. It just -- how can you fall once in a bathtub and hurt yourself that many times?

Out to the lines. Steve in Michigan. Hi, Steve.

UNIDENTIFIED MALE: How`re you doing, Nancy?

GRACE: I`m good, dear. What`s your question?

UNIDENTIFIED MALE: Even though I completely believe Drew is a scumbag and...

GRACE: OK. Have I lost Steve, Rosey? OK. Steve, we`re going to try to get you back in the loop. I think that he was likely about to say -- and I`m going to throw this to Bethany Marshall -- that while he thinks he`s a bad guy, is there proof of murder? What about behavioral evidence, Bethany?

BETHANY MARSHALL, PSYCHOTHERAPIST: There is so much behavioral evidence. When you see the Matt Lauer interview this morning, even though Drew Peterson only speaks a few times, he convicts himself at every turn. Case in point, when he says about the children that he`s only concerned about their welfare and getting his ducks in a row, you`re right, an innocent man does not talk like that. An innocent man says, Our family is so devastated. They`ve lost their mother, and now they`re potentially facing the loss of their father. I`m going to do everything to fight for myself so I can be with my children. We`re all being wronged. That`s how an innocent man speaks.

I think he went on the Matt Lauer show so he could look meek, mild and humble. But that nature, it just slips through the cracks every time he opens his mouth. So I think Steve`s right about the scumbag part.


UNIDENTIFIED MALE: Basically, Kathleen Savio -- again, her death was originally ruled an accident. Now, after another autopsy, it`s been ruled a homicide. And she had told people, told her sister, who testified before the coroner`s report, basically saying just that, He could kill me, then make it look like an accident. Lo and behold, that`s kind of what we got.




UNIDENTIFIED MALE: The Drew Peterson story. He`s a suspect in his wife, Stacy`s, disappearance, and just recently, his third wife`s death was ruled a homicide, not an accident, as we thought originally. (INAUDIBLE) still defiant, again appearing on the "Today" show for the third time. One reason I don`t trust him and a lot of others don`t is his second, third, fourth wives all said he was controlling, abusive, feared for their lives...


GRACE: Joining me right now is a very special guest. It is Stacy Peterson`s stepsister, Kerry Simmons. Kerry, thank you for being with us. What`s your reaction to Peterson on the "Today" show?

KERRY SIMMONS, STACY`S STEPSISTER: Hi, Nancy. You know, I think the thing that hit me the most was the fact that he actually had said that he was in control of his family. And people aren`t in control of their families. You discipline your children and you work together with your spouse as a family. And just the fact that he said he was in control meant he had to have everything his way when he needed it a certain way. And we know that he was very controlling of Stacy, the way he followed her and tracked her phone calls, and you know, basically went everywhere she went.

GRACE: Kerry, what do you believe has happened to Stacy?

SIMMONS: You know, I believe Drew lost control, and I think that upset him very much. And we don`t think Stacy ever left the house that day. You know, she was getting ready to leave, and you know, I think that was what ended everything and that`s why she`s not here with us.


UNIDENTIFIED FEMALE: (INAUDIBLE) Illinois State Police two to three times a week, and I never get the feeling that it`s stalled. If anything, I always leave, you know, hopeful and with the understanding this case is still going full force ahead.



UNIDENTIFIED FEMALE: Anything -- all of these appearances he`s making on these national media outlets, there are transcripts that result from this, all of these statements he`s making to the news media in their case and chief, if, in fact, he`s ever charged with the murder of Stacy.


GRACE: Out to the lines. Steve in Michigan. Hi, Steve. Let`s try it again.

UNIDENTIFIED MALE: All right. Hi, Nancy.

GRACE: Hi, dear.

UNIDENTIFIED MALE: We love you. My question is...

GRACE: What`s your question?

UNIDENTIFIED MALE: My question is, even though he`s not been proven guilty yet, how can they take his guns? How can they take his gun permit?

GRACE: Oh, OK. Kathy Cheney, what about the gun permit?

CHENEY: The gun permit? It has been revoked. He can no longer carry a firearm.

GRACE: But why? Why?

CHENEY: The state`s attorney`s office wants to do that. They don`t want him to get his guns back, and that...

GRACE: Michelle Sigona...

CHENEY: ... is a clever way...

GRACE: ... did they give a reason as to why they revoked the permit?

SIGONA: You know, they didn`t give a reason, but I would imagine, since he is the primary suspect in Stacy`s disappearance and possible homicide, that they have a pretty good reason to be able to take his guns permit away.

GRACE: To medical examiner Dr. Zhongxue Hua. Dr. Hua, some concern over the autopsy of an old body, says Drew Peterson on the "Today" show. Exhumations and autopsies are commonly -- well, they`re not commonly done, but they`re often done, yes?

DR. ZHONGXUE HUA, MEDICAL EXAMINER: Yes, it`s commonly done. And second autopsy certainly would present some more problems (INAUDIBLE) you need more knowledge to do the autopsy. However, any injuries suffered previously were certainly still there. (INAUDIBLE) very conclusive.

GRACE: Everyone, when we come back, music icon Michael Jackson maintains an extravagant lifestyle while his nearly 3,000-acre estate, Neverland, and millions of furnishings head to the legal auction block.



UNIDENTIFIED FEMALE: Michael Jackson going to avoid foreclosure on his Neverland ranch, but just barely. Documents show the ranch has been set for public auction on March 19th. A Jackson source tells us it won`t happen, saying that Jackson is affected by the poor real estate market like many other Americans. Unlike many others, though, banks appear willing to work with the pop star. He owes more than $24 million. He hasn`t lived there since his 2005 acquittal on child molestation charges. Neverland comes with 2700 acres, an amusement park and a zoo.


GRACE: An amusement park and a zoo.

OK. Out to Jane Velez Mitchell, investigative reporter.

Jane, all the while he`s about to lose a 3,000 acre estate packed with furnishings, antiques, memorabilia. He still has an extravagant spending lifestyle.

JANE VELEZ MITCHELL, INVESTIGATIVE REPORTER, AUTHOR OF "SECRETS CAN BE MURDER": He has never stopped spending for one second, Nancy. And his extravagant ways continue in Las Vegas where he`s often seen on sprees to this day. But it all could end. I mean they could put this up for public auction.

Imagine how humiliating that would be for him, because they would auction the items inside the home as well. People literally kicking the tires, seeing what they like. Kind of a bad flash back to the infamous raids that authorities conducted on Neverland where they tore everything up and even, you know, sliced open his mattress.

So this is something he wants to avoid at all costs and the word is he is planning a big fat re-fi. We`ll see if he makes it on time.

GRACE: Jane, what I don`t understand is in face of financial disaster how he can continue to spend the way he spends. You said spending sprees like what?

MITCHELL: Well, he goes everywhere with his children and just spends. But he`s always done that and for years. People have said, oh, he`s just about to hit the gutter, he`s just about to run out of money, and he never quite does.

Remember, he still has an ever dwindling stake in that Sony Beatles catalog that has been keeping him afloat for years. He keeps using it as collateral to refinance other debt that has been said to be in the neighborhood of $300 million. So as long as the value of that catalog keeps rising at a greater rate than his spending, he can somehow manage to squeak by and he always seems to do it.

GRACE: Out to Michael Yo with E! Radio on XM and Sirius.

Michael, it sounds like a house of cards.

MICHAEL YO, HOST, E! RADIO ON XM AND SIRIUS: Yes. It`s a thing where Michael Jackson is a very confused person right now. We know that. But as far as his spending, he has the money. He sold half of his Beatle collection, his catalog, for $365 million. He still has the other half of it. This man has money.

Here`s the thing. He doesn`t want the Neverland ranch. After he got acquitted on the charges, which he shouldn`t have got acquitted on, but after he did get acquitted on the charges, he went to Bahrain. He lived out there and he said he never wanted to come back to Neverland ranch.

I don`t know about the refinancing. He has the money. If he wants the money, he has the money. He has another $365 million in the Beatles collection if he really wanted that house.

GRACE: To Jackson family attorney and law professor, Brian Oxman.

Brian, if he`s got -- welcome. If he`s got the money, why doesn`t he get Neverland out of hock?

BRIAN OXMAN, JACKSON FAMILY ATTORNEY, LAW PROFESSOR, IRVINE UNIVERSITY: Nancy, there is a refinance which took place on the Sony/ATV catalog, which should have provided the money on this problem with Neverland ranch. We`re not sure what`s happened there. It is a terribly confusing and a commotional situation where we just don`t know. The money was gone. It should have been paid.

GRACE: Wait, wait. Did you just say a commotional -- did you say commotional situation?

OXMAN: Commotional. Hysterical.

GRACE: Is that a word?

OXMAN: You name the word, Nancy. We can`t figure it out. The refinancing should have paid this debt.

GRACE: What is your man spending all his money on? Why does he keep going on one spending free after the next? What`s his deal? Does he really need a whole mansion full of antiques he buys in Vegas?

OXMAN: We love Michael because Michael is an extraordinary man. He has his own lifestyle and there is no one who can change that. He is a unique human being. What has.

GRACE: Well, that -- with that I can agree. Unique, yes.

Hey, Oxman, take a listen. Does this sound familiar?


OXMAN: He is not going to be selling Neverland. It`s not in any problem. We are just thrilled that Michael has gone through this really trial by fire and seen his way to land on his feet. He is just an amazing man. And I`ve got to admire him more now than really before because he saw his way through to solve all of his financial problems.


GRACE: Hurts, doesn`t it? Ouch.

OXMAN: Same story here. And what`s happened now, we can`t figure it out. The Neverland ranch should have been paid out of the refinancing which took place 60 days ago. It hasn`t happened yet. We`re wondering why. It should be taking place now and we`re waiting for it to happen.

GRACE: Out to the lines. Kim in Indiana. Hi, Kim.

KIM, FROM INDIANA: Hi, Nancy. Love your show and you are the best.

GRACE: Thank you. Thank you very much. What`s your question, dear?

KIM: Regarding the refinancing, which bank in their right mind would even consider refinancing for Michael? And my other part of the question is, have they done a recent credit check on him lately?

GRACE: What about it, Brian Oxman?

OXMAN: There is a consortium of bank that have been very eager to refinance the Sony/ATV catalog. It`s an extraordinary asset. It`s appreciating at anywhere from 8 percent, plus almost 12 percent a year. It just generates money. It is an extraordinary asset. A lot of people are interested in it.

GRACE: To Kristen in New York. Hi, Kristen.

KRISTEN, FROM NEW YORK: Hi, Nancy. First of all I want to tell you your babies are beautiful. Lots of luck with them.

GRACE: Thank you. Thank you.


As far as Michael Jackson, I recall in the past this coming up as him being bankrupt and in so much debt. And what`s different about it this time?

GRACE: What is different about it, Jane Velez Mitchell?

MITCHELL: That it involves Neverland actually having a public auction date. And, yes, he`s been in numerous financial crunches, but as other guests have pointed out he seems to squeak by because of the Sony/ATV catalog.

The question is, has he maxed that out? Because that`s the key question. Yes, it`s worth a lot but he`s given off several stakes to get money and he`s used it as collateral to get loans, and he keeps borrowing more and more off it. So at a certain point, no matter what asset you have, you can get maxed out. And that is the big question.

Also, we`re in the middle of a mortgage melt down in America right now. So it`s not as easy to get refinancing. And that could be a factor holding up the big re-fi that he`s racing to get before this auction.

GRACE: Out to Virginia in Virginia. Hi, Virginia. Hi, dear. I think I`ve got Virginia. OK. Hold on. We`ll wait to get Virginia back on the line. I could hear her but she couldn`t hear me.

To Bethany Marshall, why the extravagant spending going on? We`ll ask (INAUDIBLE) what`s different this time. There`s an auction date for Neverland. Why the continued spending sprees?

BETHANY MARSHALL, PSYCHOANALYST, AUTHOR, "DEALBREAKERS": Well, you could think of it several ways. You could think simply of addiction transfers. If he has a compulsion to be around children, he can`t indulge out for whatever reason, he puts the addiction into spending. But I think more likely he seems to be preoccupied with childhood, the things of childhood and of being a child himself.

And given that he could be quite regressed, how are children? They want whatever they want whenever they want it, right? Children don`t pay bills. The world takes care of them. There`s a reversal where they don`t give back to society, mommy always gives to them. So it could be this childlike attitude that he`s indulging when he goes from store to store to store being taken care of rather than giving back to society and paying his debts.

GRACE: OK. Let`s try Virginia again. Hi, dear.

VIRGINIA, FROM VIRGINIA: Hi, Nancy. You`re the best.

GRACE: Bless you. What`s your question, dear?

VIRGINIA: My question is, I always wonder with celebrities that have so much money, especially as much as Michael has, why don`t they pay cash for their homes?

GRACE: You know, Brian Oxman, he`s been through this so many times as -- to the drink and then he somehow gets pulled back from the brink. Why doesn`t he just pay for it and be done with it or sell it?

OXMAN: I think that he has a very special attachment to Neverland. I mean this place is his haven. It is something which he cannot part with because he loves it. And I think all of us have something in our lives of that nature, we should be so lucky. It is an extraordinary, beautiful place. He doesn`t want to part with it and, Nancy, he always lands on his feet. I don`t know how many times I`ve said that and he`ll do it again.

GRACE: Agree or disagree, Michael Yo.

YO: I absolutely disagree. How can he love a place with that stigma involved in it? You know you had -- you had the big court case. You had all the kids testifying against him. You cannot love a place with that kind of stigma.

And let`s be honest. The reason why Michael Jackson is spending lots of money is because he can, because people offer him tons of money to actually -- actually to perform still. They offer him $1 million a show. He`s turning down -- he turned down 30 dates to perform for $1 million a show for the 25th anniversary of "Thriller."

So he has the money if he needs it. That`s why he can spend.

GRACE: When we come back, a 13-month-old baby boy found lifeless in the family pool. Where is mommy? She`s having another drink all cozy inside their California home.

And tonight, APB, all points bulletin for special moms and dads. If you know one who`s an inspiration to others get that camcorder, go to and click on i-Report, enter that parent in the "Extraordinary Parent Contest."




UNIDENTIFIED FEMALE: Two children in protective custody, a baby dead, a mother behind bars. Tonight, a criminal investigation takes a new turn. Thirty-four-year-old Paige Looney was arrested after her 1-year-old was found at the bottom of a pool. Looney attempted CPR. Scattered throughout the home, detectives found several bottles of alcohol.

In 2005 Looney lost another child in this same home, a 2-year-old with a heart condition. The death appeared to be due to natural causes, the exact cause never determined. The case is now being reopened.


GRACE: All the while mom inside having another drink. Her 13-month-old baby boy face down in the family pool, the 4-year-old brother left to fend for himself inside.

Out to a reporter with KFWB News 980, Jennifer Bowman, what happened?

JENNIFER BOWMAN, REPORTER, KFWB NEWS 980: Well, I`ll tell you what happened. According to prosecutors, anyway, Paige Looney was just so drunk last week that she let her 13-month-old son wander out of an open sliding glass door, fall into the family pool, drowned and then stayed there for hours until her 12-year-old daughter came home from school and dialed 911.

GRACE: Jennifer, that was a fact that I didn`t know.


GRACE: The baby stayed in the pool for hours? She didn`t notice that he was gone? I mean, I thought this whole thing happened within, like, 30 minutes.

BOWMAN: I tell you what. They`re trying to put a gag order on the details so investigators are not releasing a lot of information. But they do a test on the body temperature of the child, a test on the temperature of the water, and I don`t think things look good. That child wasn`t just tumbling in moments before. He was in there a long time.

GRACE: Out to medical examiner, Dr. Zhongxue Hua, how long would the child have had to have been in the water for the body temperature to be the same as the water? Assuming the child had come out of a home fully heated.

DR. ZHONGXUE HUA, MEDICAL EXAMINER, UNION COUNTY, NJ: It varies. You really have to do some more scientific evaluation. Based on (INAUDIBLE) it`s very hard to put an exact number in terms of hours in this particular case.

GRACE: But more than a few moments?

HUA: Oh, yes. That`s for sure.

GRACE: What would be the minimum amount of time you would suspect, doctor?

HUA: When you -- if the body was in the room temperature in the air environment, you usually lose one to two degrees during every hour. In the water, usually much quicker, so four to five degrees an hour.

GRACE: Let`s go out to the lines, Jim in Pennsylvania. Hi, Jim.

JIM, FROM PENNSYLVANIA: Hi. How are you doing?

GRACE: I`m good, dear. What`s your question?

JIM: Here`s my question. OK. Obviously she got -- she got drunk having too much fun. Unfortunately her child died. Not the first parent or second. Now we`re going to, I`m so sorry, I got drunk, here`s a little sob story, let`s just take you to rehab and let you go or, hey, you don`t deserve nothing, stay there until you rot.

GRACE: So those are the alternatives.

Let`s go to the lawyers, Susan Moss, Carmen St. George, Joey Jackson.

Obviously there`s not going to be a lot of sympathy for her, Susan Moss.

SUSAN MOSS, CHILD ADVOCATE, FAMILY LAW ATTORNEY: Absolutely not. Apparently she took the song "24 Bottles of Beer on the Wall" a little too seriously.

This is absolutely outrageous. This woman was drunk. And I`ll tell you something more. If her husband, the father of this child, knew that she had this type of drinking problem and left her alone with this young baby, he`s liable, too.

GRACE: What about it, Michelle Sigona? What do we know about the husband?

MICHELLE SIGONA, CORRESPONDENT, AMERICA`S MOST WANTED: This is a very awkward situation, Nancy, because she has -- well, she actually gave birth to four children, total. Two from one brother, two from another. Now it`s to my understanding that the two children that died -- because in 2005, she.

GRACE: You know what, Michelle? I`m not even going to go there about the brothers.


GRACE: In my mind, irrelevant to the death of this child.

SIGONA: Absolutely.

GRACE: OK. Back on track. What were you saying?

SIGONA: But she has two children that died from one father. So one father is experiencing the loss of not one child today but now two.

GRACE: Well, where is he?

SIGONA: At this point he apparently was living at the home part time. That`s what we know. Now the current man that she is married to, she has two other children with this other brother. And now those children are in protective custody and he`s trying to get custody of those children.

GRACE: Out to the lines, Mary Kay in Pennsylvania. Hi, Mary Kay.


GRACE: I`m good, dear. What`s your question?

MARY KAY: I was just wondering where the father and why he would even leave her alone with these kids like this?

GRACE: What about it, Jennifer Bowman?

BOWMAN: Well, it is complicated as the lawyers started to explain there. But my understanding is, one of the brothers was the father of three of the children because the surviving 4-year-old boy is a twin to the little boy that died a couple years ago from the heart ailment. But as I understand it he was only there part time. I saw a gentleman show up who appeared to be the father of the younger children. He was crying and being comforted by another woman, but to be honest with you, I didn`t get to speak to him directly.

Apparently his family, though, has put in multiple complaints to child services here in Orange County to try to get them to do something about the living situation.

GRACE: What about it, Mike Brooks? Once again, calling DFCS, Department of Children and Family Services, and getting nowhere.

MIKE BROOKS, FMR. DC POLICE DETECTIVE, SERVED ON FBI TERRORISM TASK FORCE: Nancy, this whole family, the two brothers, her, his parents, they`re a total train wreck. This guy Steve who is now the father, or who she`s married to, he got locked up and pled guilty in May of hitting Paige Looney. So I mean we`re talking about a total train wreck here, Nancy.

GRACE: Joining me right now, a very special guest, the district attorney there in Orange County. We were happy to have with us, Tony Rackauckas.

Sir, thank you for being with us. What condition was the mom in when police arrived?

TONY RACKAUCKAS, ORANGE COUNTY DISTRICT ATTORNEY: She was highly intoxicated. You know, she was -- like I say, she was drunk, she was holding the baby, and of course, she gave the paramedics the baby and they took her off and she was arrested and her blood alcohol was taken a while later. I think that was another hour and a half or so later and she was well above a 2.0 at that time.

GRACE: Whoa, 2.0. Are you guys a .08 jurisdiction?

RACKAUCKAS: Yes, we are. And when I said that she was well above 2.0 and that was several hours after the incident.


UNIDENTIFIED MALE: Police say 34-year-old mom Paige Looney was drunk inside her home while her 13-month-old son, Eric, drown in the family pool.



GRACE: To "HEADLINE PRIME`S" Glenn Beck. Hi, friend.

GLENN BECK, HOST, "GLENN BECK": Both (INAUDIBLE) troubled spending addiction. Sounds like a great idea on a national level. Too bad it`s only going to be tried in New Jersey. The governor is going to join me in just a bit. I`m going to talk to him about his new economic spending program and cuts. He`s not a popular guy in New Jersey right now. He`s popular with me, should be with you.

Then the government spent a little pocket change, about $80 million on a new virtual fence along our southern border. Gosh, too bad it doesn`t work.

Details on that and so much, coming up next.

GRACE: We at NANCY GRACE on the hunt for parents who inspire. And now, tonight`s extraordinary parent.


UNIDENTIFIED MALE: During the past 38 years my parents have raised three biological children, they have adopted three children with special needs, and they have been foster parents to 29 foster children, many with special circumstances and needs.

UNIDENTIFIED FEMALE: Pete and Snny Biolo always knew they wanted a big family. After having three boys of their own, the couple decided to open their home to foster children.

PETE BIOLO, FOSTER PARENT TO 30 KIDS, EXTRAORDINARY PARENT FINALIST: If we were going to do this thing called fostering, that we would take these children in and treat them just like they were our own children, love and care and consistency are important.

UNIDENTIFIED FEMALE: It has been nearly 40 years, and the couple has been foster parents to nearly 30 children.

SUNNY BIOLO, FOSTER PARENT TO 30 KIDS, EXTRAORDINARY PARENT FINALIST: We don`t know when we`re going to stop doing this. I think four babies ago Pete said, now, this will be our last baby, don`t you think? Then the phone rings and I have another baby in the home.

UNIDENTIFIED MALE: They taught us that family is the most important thing in the world and that raising children is a gift from God. They`re living their dream which is doing God`s work in taking care of children.


GRACE: Let`s stop and remember Army Staff Sergeant Sean Gaul, 29, Reno, Nevada, killed, Iraq. Dedicated to country on a fifth tour, served in Afghanistan, loved martial arts, outdoors, scuba, triathlon, fly fishing. Leaves behind parents Joseph and Tina, four sisters, widow Jessica and daughter Shaun.

There he is, tonight`s American hero.

Thank you to all of our guests, but especially to you for being with us. Until tomorrow night, good night, friends.