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Harry Reid Under Fire For Racial Remarks; Rich Bonus Season on Wall Street

Aired January 11, 2010 - 16:00   ET


WOLF BLITZER, CNN ANCHOR: Happening now: the top Senate Democrat defending his record on race and dismissing calls for his resignation. This hour, the heated debate about Harry Reid's 2008 remark about President Obama's election and his skin color.

Plus, what Americans want and don't want to keep them safe from terrorists. Stand by for our first poll on security since the failed Christmas Day attack. There's one number in there that may set off alarm bells over at the White House.

And it's bonus season on Wall Street. We're getting some shocking new word right now about whopping payouts at big banks, including some up to eight figures. Many angry taxpayers are asking, is this what our bailout dollars brought?

I'm Wolf Blitzer in CNN's command center for breaking news, politics and extraordinary reports from around the world. You're in THE SITUATION ROOM.

Right now, many Democrats are circling the wagons around Senate Majority Leader Harry Reid. They insist he's not a racist, despite some 2008 remarks that some people of both parties find offensive. Republican critics say Reid should step down over remarks revealed in a new book, including racially charged references to President Obama's skin color and the way he speaks.

Reid has apologized, but that hasn't defused the controversy or the red-hot discussion about race, language, and politics here in the United States.

Let's begin our coverage with our senior congressional correspondent, Dana Bash.

Dana, lots of emotion on this issue.

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: That's right. And the immediate question was, will Senator Reid step down as majority leader?

Making calls -- first of all, he said he won't. And, in making calls to Democrats around town, especially in the Senate, it seems as though, right now, there's no movement for him to do that. But Reid, look, he's not a leader who is known as an orator. He's somebody who is a backroom dealer. And, for that reason, he has some support, a big reservoir of support, actually, among Senate Democrats. But his advisers are still very worried, they tell me, about the political fallout from this. That is why today he came out again for damage control.


BASH (voice-over): At home in Nevada, Harry Reid's clean-energy event turned into an attempt to clean up a political mess of his making.

SEN. HARRY REID (D-NV), MAJORITY LEADER: I have apologized to the president, I have apologized to everyone that -- within the sound of my voice that I could have used a better choice of words.

BASH: Those words reported in the new book "Game Change" saying then Senator Obama could get elected president because he's a "light- skinned African-American with no Negro dialect, unless he wanted to have one."

Reid tried to put his own explosive quotes in context, recounting his early private support for Obama.

REID: I can still remember the meeting that took place in my office with Senator Barack Obama, telling him that, "I think you can be elected president."

BASH: Reid's brief appearance was his first in public, but day three of an intense Reid strategy to save his job as majority leader, starting with a quick apology to the president Saturday, followed by a public Obama statement accepting, saying, "The book is closed."

Eric Holder, the African-American attorney general, now says he forgives Reid, too, telling CNN, "I don't think that there is a prejudiced bone in his body."

In fact, when news broke late Friday night, Reid started calling a slew of African-American leaders. So far, they're backing him, saying his support for civil rights issues outweighs a poor choice of words.

ELEANOR HOLMES NORTON (D), WASHINGTON, D.C. DELEGATE: We judge the source, and the source here is somebody who has been on our side for his entire political career. Why should we throw him overboard?


BASH: But Republicans are pounding Reid. They are demanding he step down as majority leader in the Senate. They call it a double standard, since the Republican leader, Trent Lott, was forced out back in 2002 after he made racially insensitive remarks.

Still, Democratic sources tell me that, at this point, again, as I mentioned, it looks like he has support among his fellow Democrats in the Senate, which, for now, when it comes to his job as majority leader, that's what matters. BLITZER: He's got another he has got to worry about. That's getting reelected in November, because some polls in Nevada right now not necessarily all that good for him.

BASH: Yes. And that really is, in talking to people who are close to Senator Reid, Democrats and some of his political advisers, this is where their biggest concern is, Wolf.

He -- as you said, he was already in a very tough reelection battle back in Nevada. And the problem that -- that they say, in terms of talking to these advisers, is that maybe they agree with some of these African-American leaders that they don't think he's somebody who is racist, but what they fear is that this feeds into a storyline, a narrative about Harry Reid that he's out of touch, that he's insensitive, and that he's prone to verbal blunders.

This is not the first time something like this has happened. And, look, his unfavorability rating is very high in Nevada. People really don't like him, and they know him well, and that this really feeds into that, and that they think is the biggest problem for his reelection at the end of this year.

BLITZER: Yes, lots of problems for him right now. All right, Dana, thanks very much.

The nation's first African-American president has always tread carefully when it comes to matter of race. Now supporters and adversaries are carefully watching his response to the uproar over Senator Reid's remarks.

Let's go to the White House. Our correspondent Suzanne Malveaux is standing by with more on this part of the story -- Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, you know, covering President Obama during the campaign, I asked him about slavery reparations. I asked him about Reverend Wright. He was always very reticent to talk about the issue of race, but he did accept Reid's apology over the weekend. He says the book is closed here.

I had a chance to talk to some of his closest supporters today, and they say they want more from this president. They want some leadership on this issue, because they acknowledge that race is still such a difficult issue to tackle.


MALVEAUX (voice-over): Some want the president to step into the controversy.

MICHAEL ERIC DYSON, PROFESSOR, GEORGETOWN UNIVERSITY: We can't have an open, honest, real discussion about race in this country. And I think this is, quite frankly, one of the failures of our new president. He's a remarkable man. He's an insightful man, but I think he's loathe to speak about race. MALVEAUX: He avoided the issue throughout the campaign, until he was forced to address it after his pastor made racial remarks. In July, as president, Mr. Obama tried to cool off a hot confrontation between a black professor and white police officer.

DONNA BRAZILE, CNN POLITICAL ANALYST: President Obama cannot clearly have a beer summit every time there's problems or the issue of race come but, as he did last year when -- the situation involving Professor Gates and Officer Crowley.

MALVEAUX: But this could this be another teachable moment?

DYSON: We don't expect Mr. Obama to speak to this issue of race because he's a black man. We expect him to speak to the issue of race because he's the president. We have a teachable moment here, but the professor will not come to the classroom.

MALVEAUX (on camera): Many believe that President Obama is uniquely suited to take on the issue of race, being biracial, a strong communicator, and having the bully pulpit of the presidency, but many Americans still struggle to have an open and honest dialogue about race.

(voice-over): Black leaders say, sure, Senator Reid's comments were offensive, to call Mr. Obama appealing for being light-skinned, with no Negro dialect, but they also say he's speaking the hard truth.

DYSON: Ninety-nine percent of people in this country who heard that probably readily understood what he meant. And the question is, how can we get beyond some of this vicious epithet and name-calling and get to some of the deeper issues?

MALVEAUX: Deeper issues, like the reality that light-skinned blacks are sometimes favored...

BRAZILE: I calm from a very large family. I am -- I'm darker. My skin is -- my tone, my complexion is much darker than some of my siblings. And, yet as a child, growing up in the segregated Deep South, we often talked about whether or not we could succeed, given the complexion of our skin.

MALVEAUX: ... and how one speaks.

DYSON: We know what Harry Reid meant. He doesn't have the typical intonations of African-American culture. But a lot of black people don't do that. They get accused of sounding white.

MALVEAUX: The problem, some believe, is, Americans still either cannot or do not want to talk about race.

BRAZILE: We don't have a common language to discuss issues, especially issues like racism, and the sensitivity around discussing race. And, because of that, people often, you know, trip over themselves.

DYSON: There is Mr. Obama Achilles' heel as well, and I think we need to call him on this.


MALVEAUX: And Wolf, just a side bit -- a tidbit here, a side note. It was the first lady, Michelle Obama, and close friends who gave the president a little bit of a nudge there leading up to that beer summit back in July to really address this forcefully.

People have yet to see that kind of heat when it comes to Senator Reid's comments, so we will see how all of this plays out in the next couple of days.

BLITZER: Suzanne, we're going to be speaking with Michael Eric Dyson in our next hour. And in our 6:00 p.m. Eastern hour, we're going to speak to Donna Brazile, who got that phone call from Senator Reid. So, we're going to have a lot more on this story.

Suzanne Malveaux is over at the White House.

We're also getting some new information right now about the suspect in that failed Christmas terror attack and his link to a radical Islamic cleric in Yemen. The cleric's father is now speaking out to CNN in an exclusive interview. Stand by.

Secretary of State Hillary Clinton sets the stage for new action against Iran over its latest show of nuclear defiance.

And the legendary baseball slugger Mark McGwire admits he broke the home run record with help from steroids.


BLITZER: Let's go right to Jack Cafferty for "The Cafferty File."

Jack, how you doing?

JACK CAFFERTY, CNN ANCHOR: I'm good, Wolf. Happy Monday.

His days in politics may in fact be numbered. Senate Majority Leader Harry Reid was already hugely unpopular in his home state of Nevada. That was before his latest screw-up. And now he's been skewered on the national stage for these comments that he made about then candidate Obama.

In the new book "Game Change," Reid is quoted as saying Barack Obama could succeed as a black candidate in part because of his light- skinned appearance and the fact that he speaks without a "Negro dialect" -- quoting here -- "unless he wants to have one."

Reid has since gone on an apology tour -- not surprisingly -- saying he's sorry to anybody who will listen: the president, several top African-American political figures, including members of Congress, the head of the NAACP, civil rights leaders, yadda, yadda, yadda.

President Obama accepted Reid's apology without question. Top Democrats are defending Reid. No doubt, they would like the whole thing to just go away, so the country can focus on other stuff, like health care reform, instead of the party's little embarrassment here.

Several Republicans want Reid to step down from his position as Senate majority leader. They're comparing Reid's comments to ones that cost former Republican Senator Trent Lott his leadership job in the Senate.

Meanwhile, Reid was already facing an uphill battle just to keep his job as senator before this happened. A new poll shows only a third of Nevada voters have a favorable opinion of Harry Reid. Fifty- two percent have a negative view of the four-term senator. And his reelection was very much in doubt anyway. That poll was taken before these comments surfaced.

Reid says he deeply regrets his poor choice of words, points to the work he's done for blacks. I don't think anybody really believes that Harry Reid is a racist. He hasn't -- there's nothing in his record to indicate that. And he insists that he has no plan to step down. However, the choice ultimately may not be his.

Here's the question: Is Senator Harry Reid's political career over?

Go to You can post a comment on my blog.

This is a well-intentioned guy who made a boo-boo, as opposed to some of the closet racists that run loose in Washington. And I don't think anybody expects that Harry Reid had anything racial in mind. He was one of the ones who urged Obama to run for the White House.

BLITZER: Yes. And you make a good point. You're from Nevada, Jack. Looking ahead to November, what are the folks there going to do?

CAFFERTY: Throw him out.

BLITZER: Well, you know that state.


CAFFERTY: Yes. I mean, he's only got the support of, what, 30 percent of the electorate?


CAFFERTY: In the polls, he's 10 points behind, I think, the Republican candidate, and in fourth place among the top four candidates out there. So, unless he pulls a rabbit out of his hat, I think it's a wrap.

BLITZER: Jack Cafferty, thank you.

He was born right now in the United States in New Mexico, but he's now a radical Muslim cleric linked to dangerous extremists, and he's preaching holy war against the United States. In an exclusive interview with CNN, Anwar al-Awlaki's father makes some stunning claims, insisting his son is simply being misunderstood.

Our CNN international security correspondent, Paula Newton, is in Sanaa, Yemen, for more.

You had a chance, Paula to speak with the father.


I mean, he refused to go on camera, but I had more than a two- hour conversation with him, Wolf. And, you know, this is a very anguished father. He says he is trying to contact his son, trying to convince him to surrender.

But he also says that his son is not a member of al Qaeda and that he should not be linked to that group. Wolf, it was a very interesting exchange. I will just give you some of the quotes.

He says: "I'm now afraid of what they will do to my son. He's not Osama bin Laden. They want to make something out of him that he is not."

But what is so interesting is the way he characterizes his son and his time in the United States and what he believes led to all of this right now. He says it's a complete misunderstanding, that you cannot take his son's preachings and link him to terrorist acts.

He say: "He has been wrongly accused. It's unbelievable. He lived his life in America. He's an all-American boy. My son would love to go back to America. He used to have a good life in America. Now he's hiding in the mountains. He doesn't even have safe water to drink."

You know, also, interesting, Wolf, is, he says he is hiding out in the mountains, that what else could he be expected to do with missiles basically raining down on the village where he was hiding out. He is getting shelter from the family's tribe in the south. The father admits that, but he says he's doing that in order to stay safe, Wolf, an extraordinary story, especially when you're hearing the complete polar opposite from American security officials.

Those with knowledge of the intelligence tell CNN that, look, we have got the facts on Anwar al-Awlaki. We believe he met with Abdulmutallab before the Christmas Day attack. And more than that, we know he is a top member of al Qaeda here in Yemen -- Wolf.

BLITZER: Paula, do you have any indication that authorities in Yemen, the Yemeni government, is trying to either capture or kill this radical cleric?

NEWTON: Well, the father calls his son the most wanted man in Yemen, that he's being cornered. There is an incredible manhunt -- a manhunt on the way for him right now. The problem, Wolf -- and, unfortunately, it mirrors a lot of problems of trying to find Osama bin Laden -- he is in these mountains. He is being protected by a local tribe. It will be very difficult to find them. As one top American officials told me, he said, I would hate to be the one in charge of this mission right now.

The Yemeni authorities are the ones who are supposed to be leading the operation, but it's very clear to everyone that it's a delicate balance trying to go over the heads of those tribes people, who really have control of that area of Yemen, so the government has a tough deal on its hands.

BLITZER: Paula Newton is on the scene for us in Yemen.

Paula, thank you.

And amid all this heightened awareness involving terror, CNN now has some brand-new poll numbers just out today. They're CNN's first since the plot to blow up an airplane on Christmas Day.

Let's bring in our senior political analyst, Gloria Borger.

What do Americans think about the way the president is dealing with these terror threats?

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Well, they actually think he's doing fine in dealing with it. Take a look at these numbers.

We asked people how President Obama responded to the attempt to blow up that airplane on Christmas Day. Fifty-seven percent approve -- 39 percent disapprove. And I can also tell you, Wolf, that we -- we asked in another question. About two-thirds of Americans say they have confidence in this administration's ability to deal with another act of terrorism. So they weren't particularly bothered by the fact that he was in Hawaii or that he took a few days to have a press availability, or that he did a top-to-bottom review and then came out with some suggestions.

In fact, they -- they seem to like. But our poll also shows that 60 percent of Americans believe that the terrorists are always going to find a way to launch an attack, no matter what we do.

BLITZER: That's pretty depressing, when you think about that.


BLITZER: Do Americans think that this suspect in the Detroit bomb plot should be tried in a civilian or a military trial?

BORGER: Well, here's where the political problem comes in for President Obama, because, when we asked that question, you see 42 percent said a civilian court. Fifty-seven percent said in a military court.

So, as the administration moves along with its plans, for example, to try Khalid Sheikh Mohammed in New York, this could prove to be a problem, as well as trying Abdulmutallab. This is not popular in this country.

BLITZER: Whether in New York or Detroit, not popular either place.

BORGER: Or Detroit.

BLITZER: All right, Gloria, don't go away.

Attention, all workers. Want a little extra bonus with your salary? How about a few million dollars? Stand by. We have new information on why some people on Wall Street will be reportedly getting -- get this -- eight-figure bonuses. And we're not including decimal points. And what, if anything, should the president and the Obama administration do about this?

And baseball's Mark McGwire says it's a secret he's kept, but it's time now to come clean. He admits using steroids, even when he broke baseball's home run record. How might this affect his record? How might it affect the game of baseball?


BLITZER: Betty Nguyen is monitoring some of the other top stories in THE SITUATION ROOM right now.

Betty, what's going on?


The Obama administration appears on the brink of sanctions against Iran. Secretary of State Hillary Clinton today said the administration has concluded that sanctions targeting Iran's ruling elite are the best way to get the country to come clean about its nuclear intentions. Clinton did not get specific, but she said targets would be top officials who make decisions on Iran's nuclear matters.

Well, the Supreme Court here says, for now, you can't watch a landmark trial on YouTube. A federal trial got under way in San Francisco today, and it involves a challenge to 2008's Proposition 8, which banned same-sex marriage in California. And just hours before the trial began, the court blocked video of the proceedings on YouTube. It says justices need more time to consider the issue. The hold is in place at least until Wednesday.

Jury selection has been delayed in the murder trial of a man charged with killing a doctor who performed late-term abortions. It was put off until Wednesday, after prosecutors filed motions against allowing the defense to build a case for voluntary manslaughter. Fifty-one-year-old Scott Roeder does not deny killing Wichita doctor George Tiller last year. His claim is that it was justified because he was trying to save the lives of unborn children. We will continue to follow that. And it is back to business for Italian Premier Silvio Berlusconi after a month-long recovery for a broken nose and two broken teeth. At a December 13 rally, a man hurled a statuette of Milan's cathedral at Mr. Berlusconi and struck him in the face. The 73-year-old Italian leader has been out of the public eye since the incident. He still faces two trials on tax fraud and corruption charges. Mr. Berlusconi denies wrongdoing -- Wolf.

BLITZER: Glad he's back in action, because he certainly is a colorful world leader, no doubt about that.


BLITZER: Glad he's OK as well.

NGUYEN: Very true.

BLITZER: Could have been a lot worse, as they say.

Betty, thanks very much.

This important programming note. We want to alert our viewers to remind them, next week, THE SITUATION ROOM will start at a new time. We will be on the air starting at 5:00 p.m. Eastern. Rick Sanchez and Rick's List will start at 3:00 p.m. Eastern, but continue through the 4:00 p.m. Eastern hour. Starting next Monday, we will be on from 5:00 to 8:00 p.m. Eastern. Once John King's new show is ready at 7:00 p.m. Eastern, we will be on 5:00 to 7:00, so just reminding you about that, all times Eastern.

We have told you about Muslim women who say they were targeted for airport screening because of their head scarves, then berated and humiliated.

Just ahead, the debate over racial profiling and national security.

Plus, a member of the ruling family in the United Arab Emirates is acquitted on charges of beating and torture, but the U.S. is casting serious doubt on this ruling.


BLITZER: To our viewers, you're in THE SITUATION ROOM.

Happening now: marked for closure, yet still in operation. The Guantanamo Naval Base marks eight years as a living limbo for suspected terrorists. We have images from inside and a look at the White House's ongoing dilemma about what to do about Gitmo.

Also, it led the charge against trans fat and demanded full disclosure of calories at its finest restaurants. Now New York City has declared war on salt.

I'm Wolf Blitzer. You're in THE SITUATION ROOM. Air travelers certainly know the routine. You're at the airport, removing your shoes, metal, and other items, going through screening like every passengers must. But what if you're Muslim with a distinctive look or way of dress?

With all the fears about planes being blown up, some Muslims say they're being singled out and subjected to full body frisking and other forms of enhanced screening. They say it's racial profiling and it's humiliating.

Let's talk about that with columnist David Frum of the American Enterprise Institute, former speechwriter for President Bush, and James Zogby, president of the Arab American Institute here in Washington.

Guys, thanks very much for coming in.


BLITZER: You wrote a letter last week to the leadership in the administration, Jim, the American-Arab Anti-Discrimination Committee, among other things, saying, this policy of asking these 14 countries for enhanced screening amounts to alienating 700 million people around the world. "This directive," you write, "targets individuals, including U.S. citizens, traveling from Muslim-majority or Middle Eastern countries with no regard to whether the passenger poses an individualized threat. Implementation of this policy will result in racial and ethnic profiling."

ZOGBY: It is racial and ethnic profiling. Bottom line, that's what it is.

BLITZER: But the administration denies it's profiling.

ZOGBY: You can deny it, but that's what it is. It is based on 14 countries. They are largely Muslim countries, although there's a significant number of Christians who will also be affected in Lebanon, Egypt, Iraq, et cetera.

The point here, Wolf, is that it is wasteful, it doesn't work, and it does alienate people. I mean, the fact is, is that I had a very good friend from Saudi Arabia, an elderly businessman. He was going to come this week to the country to see a film that's opening at the Smithsonian. He hasn't been here in eight years because, he said, "I don't want to deal with the harassment at the airport."

He was going to come. He was all excited a week ago. He canceled a few days ago because he said, "I can't do it. I just can't endure this at the age of 70."

BLITZER: Does Jim make a good point?

DAVID FRUM, CNN.COM COLUMNIST: He does make a good point, but I'm afraid we have to come to this with a little bit of remembrance of why we're in this situation. CNN's Fareed Zakaria had a great line in his column this morning. He said, "We were looking for needles in the haystack and we keep adding more hay."

But why? Because we're not allowed to do the things that would help us find the needles. For example, why have we shut down again and again trusted traveler programs? Civil liberties groups -- I don't know if yours is one of them -- but many have protested and shut down attempts to say, look, I can voluntary provide the government with the information so they know that I'm Omar Abdullah Mohammed, curator of Islamic antiquities at the Museum of Fine Art, not Omar Abdullah Mohammed, the unemployed Somali teenager.

ZOGBY: We're not opposed to that, incidentally. I think it would work. But the point here is that...

FRUM: But wait a minute.

BLITZER: Let him respond, Jim.

FRUM: But the no-fly lists don't contain people's birth dates, so we cannot know whether we're looking for an 80-year-old person. And every one of these deficiencies is a response to pressure from pressure groups.

ZOGBY: And the lists are silly. Basically, they're silly, they need to be scrubbed, and we need to actually make them work, because they're extremely large...

FRUM: They need more information.

ZOGBY: ... and there's no useful content in them.

The point here though is that the administration was in the same position as the Bush administration and the Clinton administration in the mid '90s. And they did the same thing.

They had to do something, and so they did anything. And the anything they did turned out to be the wrong thing. This program has failed twice before, produced nothing, and we're doing it one more time.

BLITZER: Is this racial profiling, this notion that these 14 countries should be singled out for extra screening for everyone coming in to American from those countries?

FRUM: No, it's not racial profiling. People from these countries...

BLITZER: Is this ethnic profiling?

FRUM: ... they can be of any ethnicity. But it's national profiling. And look, if we're going to profile Nigerians, I want o know, how are we going to sure that the underwear bomber's father gets into the country and he's kept out? What we need is more information. But we need to understand it's not an accident that we're not getting this information. There are a series of powerful pressure groups that have prevented us from getting the information.


ZOGBY: The bottom line here is that we're going to be screening hundreds of thousands of people from these countries every month, and none of them are going to be the problem. And if I'm al Qaeda and I'm sitting in a cave someplace trying to figure out what to do, I go to country number 15, is what I do, because that would be Richard Reid, or that would be the guys who come in from Hamburg, Germany, or that would be the guys who come from London with U.K. citizenship because they're coming over here to do us damage. The point, in other words, is that when you target entire countries, the field is too big and the intelligence is too small.

BLITZER: How do you deal with Muslim women who are wearing a scarf, for example, and they are sort of singled out for extra screening?

FRUM: If that's true -- and we don't know that that's what happened -- that would be kind of silly, because one of thing you would know is that the actual terrorist would go through training not to wear the hijab. Mohammed Atta and the others went through appearances to make themselves look more secular.

On the other hand, I also think if I were a person in this situation and went through it, I hope I would have the humor and the equanimity to say the country has got a problem, and it's not right that they're doing this to me, but I understand, I'm not going make a big deal about it, because everybody's being inconvenienced, including Congressional Medal of Honor winners and toddlers.

ZOGBY: And the point here is that -- you know, I hear this a lot, we have to give up some of our freedoms to be more secure. We really don't. We can be more secure and be smart.

I mean, the intelligence was there, we just didn't use it. The dots were there, we didn't connect them. And so what we've decided to do is punish people from 14 countries.

Here's the point about the hijab, and the Sikhs, for example, the Sikh community. A hundred percent secondary screening because they wear turbans. We have the intelligence, we have the technology.


ZOGBY: We have the technology to be able to do about this. Ceremonial, they're, like, about that big.

The fact is, is that we don't use what we ought to be using to be smart and safe. And what we're doing right now is a full-scale sweep of everybody to make it appear we are doing something. What we're going to do, waste manpower, waste resources, alienate entire countries of peoples who are going to be frustrated very, especially as they travel back and forth, and we're not going to find the people we want.

BLITZER: David, is he right?

FRUM: No. Look, there are 140 million people in Nigeria. We're not going to pat them all down. But what I would say is, instead of complaining about the dumb things the administration is doing, let us remove the obstacles to doing smarter things, because it is not just because we don't know how to do it better that we're not doing it better. There are effective political obstacles.

If James Zogby would lend his voice to blowing up -- I'm sorry, John Zogby (sic).

BLITZER: John Zogby is his brother.

FRUM: I'm sorry. James Zogby.

ZOGBY: But I'm sure John will do whatever you want.

FRUM: But lend his voice to blowing up those obstacles, that...

ZOGBY: That would be a bad word to use, please, right now. Let's not go there, my friend.

BLITZER: We'll leave it on that note.

FRUM: I'm so sorry.

BLITZER: James Zogby. His brother John Zogby is the well-known pollster.

ZOGBY: And neither of us do any blowing up.

BLITZER: No, but they're both really smart guys.

And David Frum.

Thanks very much for coming in.

The U.S. government is raising serious questions about a verdict. Did a member of that country's ruling family get justice or special treatment, the ruling in a videotaped beating that sparked outrage here in the United States; indeed, around the world?

And later, Mark McGwire's new confession about steroid use. What does it tell us about the use of performance-enhancing drugs in baseball, then and now?


BLITZER: The U.S. government is casting doubt today about whether a member of the ruling family in the United Arab Emirates deserves to be acquitted. The ruling came down yesterday in a case of beating and torture that was captured on videotape. The State Department says it's reviewing the verdict and whether the UAE rulers are treated equally under that country's laws.

CNN's Stan Grant has more from Abu Dhabi.


STAN GRANT, CNN CORRESPONDENT: This has always been a very complicated and murky story that goes to the very heart of the royal family here in Abu Dhabi. Now, Sheikh Issa bin Zayed al-Nahayan is a son of the founder of the UAE, Sheikh Zayed. His brothers include the crown prince and the president of UAE. Sheikh Issa had been charged with rape, endangering life, and causing bodily harm.

The charges arose from a videotape showing the sheikh torturing and beating an Afghan grain dealer.

Now, the grain dealer had allegedly overcharged the sheikh in a business deal. On the videotape, the sheikh is seen beating the grain dealer with a plank of wood with protruding nails. He strikes the grain dealer with an electric cattle prod at one point, sets fire to the man's genitals, drives over him repeatedly in a car and pours salt into his wounds.

The videotape had been released by a former business associate of the sheikh. Now, during the trial, the sheikh claimed that he was suffering the adverse effects of medication to give up smoking. Medical witnesses were called who testified that the medication caused aggressive behavior.

Five other co-defendants in this case have been found guilty of various charges. Sheikh Issa, though, is a freed man. He is being cleared of all charges.

Stan Grant, CNN, Abu Dhabi.


BLITZER: Attention corporate bosses. Can you spare a few million dollars? Some people on Wall Street will reportedly be getting eight-figure bonuses. What, if anything, should the Obama administration do about that?

And President Obama faces a serious dilemma and protest as his administration tries to close the terror detention center at Guantanamo Bay in Cuba. Might it all influence his plans?


BLITZER: Let's get to our "Strategy Session."

Joining us right now, our CNN political contributor, Paul Begala. He's a Democratic strategist. And Republican strategist Nancy Pfotenhauer, former campaign spokeswoman and adviser to the John McCain campaign. Guys, thanks very much for coming in.

I want to get to Sarah Palin, who just announced word she's going to be an analyst or contributor at another...


BLITZER: Not at this network.

BEGALA: Oh, good.

BLITZER: Another one. Stand by. We'll discuss that in a moment.

Let's talk about big bonuses right now. "The New York Times" saying maybe eight-figure bonuses some of these financial institutions are going to hand out. Do the math. Eight figures, that's $12 million, $15 million. That's a lot of money.

What, if anything, should the U.S. government, the Obama administration in particular, do about that?

NANCY PFOTENHAUER, REPUBLICAN STRATEGIST: Well, you know, it's a slippery slope, because for the companies that took government money, you then have an implied oversight rule here for government. So, for the companies who didn't take any bailout money, their shareholders are the ones who should hold them accountable.

BLITZER: So, a lot of these companies have returned the money that -- the TARP money that they received. Should they at all be restricted in how much they can give bonuses out?

PFOTENHAUER: Well, you know, that's a very interesting question. I still believe that there was a value to the moment that the taxpayer stepped in, if you will, to pay the bill. And I think the reason we haven't seen anything happen is not only is it a complicated matter, but, you know, 73 percent of the campaign contributions from the financial services industry, according to the Center for Responsive Politics, has gone to the Democrats this cycle. And so, you get a lot of talk about crackdowns, but what we end up living with are bailouts.

BLITZER: What do you think? What should the president of the United States do, if anything, about this?

BEGALA: You've got to listen to Nancy. I'll never say that again. Don't worry.

PFOTENHAUER: I know. This is a first.

BEGALA: It will ruin your credibility as a Republican.

It's a bipartisan scandal. The Bush administration bailed out Wall Street, and now, apparently, the Obama administration is going to protect their bonuses. In Britain, they're taxing these bonuses.

Just to put it into perspective, Wolf -- I did a little back-of- the-envelope math -- there are reports that the bonus pool on Wall Street this year is $150 billion. That's enough to pay for the whole war in Iraq for a whole year and have $30 billion left over. That's enough to pay for four years of in-state tuition for every college freshman in America.

It's enough to cover 31 million people for health care. Two- thirds of all the uninsured could be covered just for Wall Street bonuses.

It's obscene. It is obscene, and a decent society and a Democratic Congress, White House ought to do something about it.

BLITZER: You know, Nancy, John Reed, the Citigroup founder, was quoted in "The New York Times" as saying this: "There's nothing I've seen that gives me the slightest feeling that these people have learned anything from the crisis. They just don't get it. They are off in a different world."

PFOTENHAUER: Well, you know, it's interesting when you have one person speaking the truth in a room with folks just kind of saying what will advocate their own cause. And I think that this may be the case, in this instance, because it is just beyond the pale to me that taxpayers could have funneled this much money into propping up these institutions, and the idea that there's not even an interaction or some type of regulatory oversight.

Now, I want to say, the danger here is that once government gets in the business of doing this, it can be rather fun. And they enjoy manipulation, and their incompetence is legion. But the bottom line is they took taxpayer dollars.

BLITZER: Because Ken Feinberg, the pay czar, as they call him, he can determine how much money, salaries and bonuses should be made available to companies that still owe the taxpayers money. But once these companies return the loans, his responsibility goes away.

BEGALA: Right. To me it would be three steps.

If you're still on the hook for the taxpayers' money, then the pay czar can control your pay, and I think that's as it should be. If you've gotten it in the past, even if you've paid it back, I think there ought to be, for the near term, confiscatory tax rates on those bonuses. Not on everybody who makes a lot of money, but those Wall Street bonuses, because they did, after all, ruin the whole country and destroy the economy.

But over time, rather than taxing it, I think the better way is to empower shareholders. There has been some talk about laws that would be safe for pay to make shareholders -- give shareholders the right to vote on compensation.


BEGALA: All Congress is talking about is symbolic votes. I don't want symbolic votes. I want a real vote so shareholders say no, you cannot pay... (CROSSTALK)

BLITZER: A lot of those companies that repaid the federal government, as you know, they got money from AIG, indirectly from the federal government, gave hundreds of billions of dollars to AIG, which in turn paid off a lot of these companies the insurance money they supposedly needed. And so they're not repaying AIG for that.

PFOTENHAUER: No, no. And it's a very incestuous thing.

And remember, we've got -- you know, Tim Geithner helped the AIG bonuses get in that bill. You had Chris Dodd make sure to protect them and have them stay in there. And now you've got the House legislation that came forward.

I don't think a massive taxation is the way to go. I would approach it at the front end. But the Senate, instead of acting on that, they're hollowing it out and they're putting Mr. Reid's health care bill...

BLITZER: Let me make the turn to Sarah Palin. She's got the number one "New York Times" bestseller. She's out there on the speaking circuit. She's making a lot of money. Now she's going to be a Fox News contributor.

What does this say about her political future down the road, 2012, if anything?

BEGALA: I mean, let's first hope for Roger Ailes' sake, the CEO over at Fox News, that she doesn't quit that job the way she quit her job as being governor of Alaska. But look, as I a guy who's a cable pundit, it's indoor work, it's interesting, it's lucrative. I'm all for it. Congratulations for the former governor of Alaska.

But I do think maybe it suggests, sadly for Democrats, that she might not be running. Unfortunately, there's just going to be one more ignorant right-winger at Fox News. So that's sort of a redundancy. But I would rather she run, because I think Democrats are pretty confident they can defeat Sarah Palin. She's not going to beat Barack Obama.

BLITZER: Do you think she could get the Republican nomination if she ran?

BEGALA: Well, Nancy would know better, but I think...

BLITZER: You worked with her in the McCain campaign.

PFOTENHAUER: Yes. Well, you know, whether -- even if you don't like Sarah Palin, you have to admit that she's still an amazing crowd pleaser, and that from on the Republican side, even the center-right side, she pulls out bodies better than anybody else we've got.

And it wasn't until she was introduced into the presidential match that the McCain/Palin events had anything even close to the attendance that Barack Obama was able to muster. So she is an audience-getter. And I assume this is a business decision on the part of both Fox News and on Governor Palin's part. But I do agree with you, I think there's a slight indication that she may not run.

BLITZER: Well, she's certainly following Paul Begala's footsteps...

PFOTENHAUER: She is! She's following Paul!


BLITZER: ... as a paid political pundit.

She's going to look to you for some guidance and some advice.

BEGALA: Welcome to the club. It's a little (ph) step down, Governor, but I'm glad you're here.

I've been to Alaska. It's one of the most beautiful places on earth. I don't know why she would want to leave.

PFOTENHAUER: Hey, it's got to be better hours and better pay though. You know that.

BEGALA: Absolutely.

BLITZER: Guys, thanks very much.



BLITZER: Let's get right to Jack for "The Cafferty File" -- Jack.

CAFFERTY: The question this hour is: Is Harry Reid's political career over?

Brian writes from Las Vegas, "As a Nevaadan, I can tell you, the climate here is that Harry Reid's newly revealed poor choice of words is yet another issue in a long list of issues that will cost Harry Reid his Senate seat. While Nevadans were once proud that the senator worked his way up as the majority leader, he has since ignored his home state and, instead, entrenched himself in partisan politics instead of solutions. And that will be his ultimate demise."

Vince writes from Pennsylvania, "Harry Reid is a jackass for a lot of reasons, but this isn't one of them. In this case, he simply spoke the politically incorrect truth, and we're all aghast. Barack Obama would not have received as much of the white vote if he was darker, had blacker features or spoke with a 'negro accent.'"

"Unfortunately, if he was blacker, some white voters would have been turned off. That's the truth, ugly as it might be. Is it right? Hell no. But in our society it's true."

"Yes, it's politically incorrect. And God forbid if a politician speaks a non-PC truth."

Don in Alabama writes, "He seemed to be in trouble in his home state prior to the dustup over his comments about candidate Obama. The hypocritical, racist GOP conservative base smells blood in the water. They are, of course, using this incident to further their goal of regaining that seat for themselves."

"Why is anyone surprised? It's called politics."

Carol writes, "Why are you making such a big deal about this? What he said is true."

"I'm a light-skinned African-American. People tell me I sound like a white girl. People have been saying this to me since the 1980s. Who cares?"

And Bob in California says, "Mr. Reid made an unfortunate mistake. He's apologized. His apology has been accepted by the president."

"Having been in public service for 40 years, I know how hard it is to always say the right thing. And then when you blow it, you hope people can put it in context and forgive you."