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ANDERSON COOPER 360 DEGREES
Sole Attacker; Big Names, Big Ripoff; The Blagojevich Scandal; Caroline Kennedy for Senator?
Aired December 15, 2008 - 23:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANDERSON COOPER, CNN ANCHOR: Tonight, the shoe heard around the world, new developments on the Iraqi man who threw his shoes at President Bush. Why he did it, why the Secret Service couldn't stop him, and why Iraqis today have turned him into a folk hero.
Also tonight, what may be the biggest fraud ever committed on Wall Street; the massive, multibillion dollar rip-off that has hit Steven Spielberg, a U.S. senator, and many big banks completely by surprise. New information about how Bernie Madoff allegedly stole their money and why regulators apparently were asleep at the switch.
And later, Caroline Kennedy wants Hillary Clinton's old senate seat. Today she began campaigning hard, but does she have any qualifications other than her name? Tonight we look at the facts and let you decide.
We begin with perhaps the strangest moment of George Bush's Presidency. A story that sounds funny but is in fact deadly serious for what it says about presidential security and America's standing in Iraq and the Middle East; new developments tonight. We'll talk about it with Michael Ware in Baghdad and CNN security analyst, Mike Brooks.
First though, the story itself and the amazing video from Tom Foreman.
TOM FOREMAN, CNN CORRESPONDENT: The President's surprise visit to Iraq came with a surprise for him.
At a news conference with the Prime Minister, an Iraqi TV reporter hurled one of his shoes at Mr. Bush and then the other fast behind. Secret Service agents swarmed, the reporter went down, the President laughed it off.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: It's a size ten shoe that he threw.
FOREMAN: Later he took his comments a step further.
BUSH: It's a way for people to draw attention. I don't know what the guy's cause is, but one thing is for certain, he caused you to ask me a question about it. I didn't feel the least bit threatened by it.
FOREMAN: The assault lasted less than three seconds and in a secure room where everyone had been searched, security analysts say the response was appropriate. Watch the President wave off his own guards. But the response of some Iraqis is another surprise.
OCTAVIA NASR, SENIOR EDITOR, ARAB AFFAIRS: More people are hailing him as a hero, as a national hero; someone who dared to pick up his shoe and throw it at the U.S. President.
FOREMAN: Throwing an unclean shoe in Muslim culture is an insult. Remember those people pounding that statue of Saddam Hussein with their shoes. Add to that what the attacker yelled -- "This is a gift from the Iraqis, this is a farewell kiss, you dog."
That journalist is generally described as calm and polite and he's locked up right now. But parts of the country are certainly not calm, with protesters demanding his immediate release with or without his shoes -- Anderson.
COOPER: The shoe attack does raise serious questions about the President's safety. The Secret Service has been reviewing the incident and now so are we.
Let's be joined by CNN's security analyst, Mike Brooks. Mike, I want to look at this tape in slow motion because some have been critical of the timing of the response. This guy is able to throw a shoe, bend down, pick up another shoe, and throw it before anyone reacts.
MIKE BROOKS, CNN SECURITY ANALYST: Right. Well, you see him, he bends down, picked up the other one, and then you see the detail leader, right here, coming to the President's side. And then you see other agents in the back coming out to assist also.
Where that agent was sitting, that's the detail leader, Anderson. And where he was sitting, you can't stand right up in front of the President all the time.
So he was just off to the side, in what he thought was a position where he could get to him fairly quickly.
COOPER: It's amazing to me, though that, I mean, it's another Iraqi journalist who actually stands up and breaks the line of sight between the shoe attacker and the President.
You would think that there would be some Secret -- I mean, I would have thought there would be some Secret Service agent at least in the front row, sitting there.
BROOKS: Well, normally, and you know this from many times, Anderson, there's usually a Secret Service agent assigned back to the press pool area. And you have around the other room where -- around the room where you can't see them out of sight are other post standers.
So but again, you had the advance agent there. And what they did, they decided that there was no imminent threat and then you see the detail leader go up here and the President basically waves him off, but then the detail leader does stay there with the President, Anderson, while they subdue the subject and take him to the ground.
COOPER: And no guns, that we can see, are drawn. I assume they all have guns, though?
BROOKS: Oh, yes, absolutely. Secret Service, especially operating in an area like this, I mean, this is in the palace, in the green zone, a very secure area. It's basically like the briefing room at the White House, if you will.
COOPER: Do you think they will change anything in the way they position in a foreign country from now on? I mean, given the fact that this guy was able to get two shoes off and no one really was able to stop him.
BROOKS: Well, whenever you have an incident like this, Anderson, the Secret Service always goes back -- I mean right now I can guarantee you that they were talking about this morning at the training center in Beltsville and also at the Secret Service Headquarters in Washington.
And to take a look, OK, could anything have been done better? Could the reaction time have been done better, have been better? But it's one of these things, Monday morning quarterback, but you're always are concerned for the life of the President.
COOPER: No doubt about it, Mike Brooks, I appreciate it, thanks Mike.
BROOKS: Thank you, bud.
COOPER: The other important part of this story is the reaction in Baghdad and what happened to the reporter turned assailant. Michael Ware joins us now live in Baghdad.
Michael, the reporter was arrested. What's going to happen to him?
MICHAEL WARE, CNN CORRESPONDENT: Well, that's what we're all waiting to see. In many ways, Anderson, this is going to be a litmus test of the Iraqi democracy that President Bush tried to highlight after this shoe-throwing assault.
The irony is that perhaps reflecting Iraqi opinion, according to the Iraqi prime minister's office, police are investigating this 28- year-old journalist, but not for an assault on President Bush, but for an assault on the Prime Minister.
They're not pursuing him for throwing his shoe at President Bush; they're pursuing him for throwing them in the general vicinity of Prime Minister Nouri Al Maliki.
We'll have to wait and see if they think there's any evidence and whether he gets a hot poker in an uncomfortable place for that -- Anderson.
COOPER: The brother of the reporter had pretty strong words to defend his brother's actions. I want to listen to what he told ABC.
(BEGIN VIDEO CLIP)
MAYTHAM AL-ZAIDI, BROTHER OF MUNTATHAR AL-ZAIDI (through translator): Americans have been disrespecting and killing Iraqis for five years, he said. It's time we pay them back.
(END VIDEO CLIP)
COOPER: Is that the reaction of a lot of Iraqis? I mean, there was a big demonstration, I think Muqtada al Sadr's people were out demonstrating today.
WARE: Yes, Anderson, that is a sentiment shared by an enormous section of the Iraqi community. We spoke to many people in the streets and beyond since this incident and it was a common refrain to hear people saying, President Bush deserves this kind of insult.
However, there's also an equal portion of the community -- it's fairly divided down the middle -- that says, well, we can condemn what the journalist did, because it's such an embarrassment to our Prime Minister.
But even those who condemn the journalist all agree that they can relate to the sentiment. They don't approve of his methods, but they certainly approve of his message. And we saw the furious anti- American demonstrations in Sadr city, where people were calling for his immediate release, condemning President Bush and burning the American flag.
This is resonating across the country, where he's now being treated in many quarters as a national folk hero. Anderson?
COOPER: President Bush did try to put, sort of, a positive spin on the whole thing. Let's play that.
(BEGIN VIDEO CLIP)
BUSH: This doesn't represent the Iraqi people, but that's what happens in free societies, where people try to draw attention to themselves. And so I guess he was effective.
(END VIDEO CLIP)
COOPER: I mean, had this guy thrown a shoe at Saddam Hussein or a post Iraqi leader, the reaction obviously would have been very different.
WARE: Yes. I mean, as my Iraqi mates are telling me, if this happened under Saddam Hussein, this would not have happened under Saddam Hussein. The guy would have been lucky to make it out of the room alive, and I dare say, he wouldn't be breathing by this point 24 hours later. But I mean, this is just a sign, not just of the ability of free speech and we're waiting still to see just how free that speech will be, but really it's just, this guy has struck a cord. Not just in Iraq, but across the region. We even saw the most prominent Arab newspaper that's published out of London, influential across the world, applauding the guy and decrying President Bush as a war criminal.
In many ways, I hate to say it, but after all these years of this war, the reflection of the esteem with which the Arab world holds President Bush, his administration, and perhaps a sense of American power -- Anderson.
COOPER: All right, Michael Ware from Baghdad. Michael, thanks.
Let us know what you think of this incident with President Bush.
Also, the story we're going to be talking about tonight, Caroline Kennedy moving on Senator Clinton's senate seat.
Join the live chat happening now at ac360.com and also check out Randi Kaye's live web cast during the break. She's just about to start that.
Also ahead in this hour, new details in the alleged scam that may be the biggest financial rip-off in history. Big-name victims including Steven Spielberg, you see him there. That's in our "Crime and Punishment" report.
And later, Caroline Kennedy is campaigning hard today, for Clinton's senate seat. Tonight, we've got her fans, and the critics, and the facts to help you decide if she is in fact qualified for the job.
Plus, new moves to oust Illinois Governor Rod Blagojevich, late reaction from his attorney and President-elect Obama talking today about his dealings with the Governor, what he said, and why critics say Obama's not said enough.
COOPER: In "Crime and Punishment" tonight, Steven Spielberg's real-life drama; the filmmaker is reportedly one of several famous Americans allegedly victimized in a $50 billion swindle, perhaps the largest fraud ever committed on Wall Street. And it's not just the famous that may have been fooled.
A trusted financial giant is accused of scamming big-money clients and charities into thinking they were getting rich when in reality investigators say he was stealing their money. Authorities call the scheme stunning and far reaching.
With new developments tonight, here's Joe Johns.
(BEGIN VIDEO CLIP)
JOE JOHNS, CNN CORRESPONDENT: The role call of investors who may have lost millions in the Bernie Madoff's scandal, reads like an American society A-list: movie director Steven Spielberg's charity; billionaire publisher, Mort Zuckerman; Fred Wilpon, the owner of the New York Mets; New Jersey Senator Frank Lautenberg's family foundation; Nobel Peace Prize winner Elie Wiesel's foundation for humanity.
And it's not like all the charities and foundations affected were throwing money at Madoff to get quick returns. The Jeht Foundation of New York technically had nothing to do with him at all. The problem was that the Levy-Church family that gave up to $30 million a year to the foundation used Madoff for their investment.
After Madoff crashed, the foundation which supports justice issues and election reform decided over the weekend to shut down by the end of next month.
ROBERT CRANE, JEHT FOUNDATION CEO: I do view it as a tragedy. I think it's a tragedy, obviously, for the people that we support, the issues we care about, and for the personal lives of everyone who's going to lose a job.
JOHNS: But it wasn't all about the high rollers. Today on "Good Morning America", Joan and Arnold Sinkin, who had saved close to $1 million from his job as a carpet salesmen, gave it to Madoff and may have lost everything.
(BEGIN VIDEO CLIP)
JOAN SINKIN, MADOFF INVESTOR: You can get in with Bernie Madoff, wow, you're lucky. And it's just gone in one telephone call.
ARNOLD SINKIN, MADOFF INVESTOR: This is what they refer to as the golden years. When you retire and you try and enjoy life and then you get wiped out in 48 hours.
(END VIDEO CLIP)
JOHNS: Another sign of the impact, over the weekend, four multimillion dollar condos owned by Madoff investors in this Florida complex went up for sale when Madoff went down.
Late Monday, a federal judge issued an order that may help investors get some of their money back through a fund that replaces missing stocks and securities. The total cost of the alleged fraud, in the billions of dollars.
Joe Johns, CNN, Washington.
COOPER: More in a moment on how this happened. Why the watchdogs were sleeping, and how so many savvy people allegedly get conned. We're going to "Dig Deeper" with Ali Velshi and Jeffrey Toobin, coming up.
And later, Caroline Kennedy she has a law degree, she never practiced, and she's raised a lot of money but do her accomplishments actually qualify her to be a U.S. Senator? That's up to you. We're going to give you what you need to decide.
And reaction from the man they mocked on "Saturday Night Live." the legally blind governor of New York. It's a sketch a lot of people are talking about, arguing about. Did "Saturday Night Live" go too far? Well, you can be the judge ahead on "360."
COOPER: In a very bad year on Wall Street, this man's story may go down as the worst of them all. Bernie Madoff, Bernard Madoff is accused of scheming investors out of fortunes. The total take, about $50 billion.
Investigators say he used a Ponzi scheme, paying off clients with money from other clients until the bitter end. Now, the question is what happens now.
Let's "Dig Deeper" with chief business correspondent, Ali Velshi and CNN senior legal analyst, Jeffrey Toobin.
So Ali, if the allegations of this epic scam are true, how exactly could this guy have bilked some extremely savvy investors out of billions? How did it work?
ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: It may not be the only Ponzi scheme out there. Ponzi schemes tend to collapse when things go bad and people want their money back. But while times are good, Bernie Madoff was offering investors a good return.
So here's how it worked. Here's Madoff and he have investors. Let's say five and he was offering them between 10 and 12 percent a year. But he may not have actually been doing anything to generate that return. The way you pay those people their interest every year is you go to another investor, who will provide money so that you pay it off.
Basically, that's a Ponzi scheme. You're using new investors to pay off the returns of old investors. Well, what happens then is now he's got more investors, because that one that he got the money from is now one of his investors, so he has to go and get more people.
This continues to work, because what tends to happen is people get a consistent return on their money, so they don't take it out after they get their 12 or 15 percent, they put it back in, they keep on going.
It comes apart and again, you see how this grows. And he's got more people, this is how it was growing. What happens then is that times turned tough. People this year needed their money. They would call up and say, I need to redeem my money.
A Ponzi scheme only works if somebody is continually putting revenue into the system. And that's when it breaks down; when it doesn't. So it's a confidence game. That's why it worked. That's why he was able to pull it off. People thought they were lucky, as you just heard in Joe's piece, to be invited to invest with Bernie Madoff -- Anderson.
COOPER: Yes, there was like millions of dollars just to be able to buy in with the guy. Jeff, what are the chances people are going to get their money back?
JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: There's this wonderful American assumption that well, if there's $50 billion out there they'll just get the money back. It'll never happen. The iron rule of these sorts of scams is that the money is basically all gone.
If these investors get pennies on the dollar, and I'm talking less than ten cents, they'll be lucky because the money generally just drifts away.
COOPER: There is a fund, though, to repay investors up to a certain amount, isn't there?
TOOBIN: Very small.
COOPER: It's very small.
VELSHI: And what Jeff's talking about is the fact that even in a public company where the records are clear and you knew what was going on, investors in a bankruptcy get pennies on the dollar because it's such a long process and the lawyers get that money.
In this case, they still have to figure out where this money is.
COOPER: Go ahead.
TOOBIN: According to the complaint, he says he has maybe $300 million left. Undoubtedly, that's an overstatement, but $50 billion compared to $300 million gives you some idea of what we're talking about.
COOPER: But which he allegedly wanted to try to give away in bonuses as quickly as possible to his employees --
COOPER: -- before he was turned in by his own two sons.
VELSHI: But that's it, the Ponzi scheme means it's gone, so there's no point in --
COOPER: What about the SEC? I mean, didn't they audit this guy a couple years ago?
TOOBIN: Twice. VELSHI: Yes, the problem with the SEC is that it's never been a very toothy organization. We'd learn this in the scandal --
COOPER: It seems positively gummy.
COOPER: I mean, like they don't have any teeth.
VELSHI: Well, they generally have to respond to a complaint. And there were complaints, but they have to respond specifically to a complaint. They don't sort of proactively to go out there and see what's going on.
So remember, when things are good, and while a Ponzi scheme exists, things are good, when things are good, nobody complains about what's going on. People are now saying, they were suspicious as to how in a market that goes up and down, this guy was able to return 10 to 12 percent every year. But suspicion doesn't necessarily mean you do anything about it.
COOPER: And he always said, "It's my secret formula. I don't want to talk about it."
TOOBIN: And the other thing is, he had his own bank, essentially, is that he did his own transactions, he said. Usually in a hedge fund, they will hire a Goldman Sachs or a Morgan Stanley to do their transactions, so there is some actual record from a big company.
VELSHI: A paper trail and possibility of conspiracy, if you have got something going. But this -- he claims he did a lot of this on his own.
COOPER: But, I mean, Mort Zuckerman was saying he didn't even know he had invested money. And he had invested -- given the money to another guy...
COOPER: ... to invest for his charity, and that guy had given the money to Madoff.
VELSHI: I heard that from a former colleague of ours from CNN, who had $30,000 invested in...
TOOBIN: I was going to say, a former colleague of ours had enough money to invest...
But, you know, a modest investment in another firm that had given their money to this firm to invest.
That's -- and you see these connections. This is what's happening. Not everybody thought they were investing with Bernie Madoff. Some people thought they were investing with someone else, who was giving their money to Bernie Madoff.
COOPER: It's amazing how this thing, everything is just unraveling.
COOPER: I mean, just all these -- these schemes are coming up. There's this other attorney who has stolen, allegedly, hundreds of millions of dollars. I mean, there's going to be more of this kind of stuff.
VELSHI: This is what happens. As the economy slows down, people want their money back. That's when you see...
TOOBIN: That's when...
COOPER: He's going to do jail time, no doubt about it?
TOOBIN: Oh, big, big jail time. But, in terms of restitution, no one should get their hopes up.
All right, Jeff Toobin, Ali Velshi, thank you. Unbelievable story.
Still ahead, breaking news: Governor Blagojevich's attorney tonight saying he will not quit -- this as state legislators begin steps to try to kick him out of office.
Also ahead, potential new evidence uncovered today in the Caylee Anthony murder case, dozens of bones found -- details on that when 360 continues.
COOPER: Just ahead, should Caroline Kennedy get to be a Senator? Is she even qualified? We'll check her record.
But first Randi Kaye joins us with the "360 Bulletin" -- Randi.
RANDI KAYE, CNN CORRESPONDENT: Anderson, more potential evidence in the case of Caylee Anthony, the 2-year-old girl from Orlando, Florida, who has been missing now since June.
Today, police found more bones in an area where skeletal remains of a toddler were found last Thursday. It may take the FBI until next week to identify those remains. Casey Anthony, the girl's mother, already faces first-degree murder charges in the disappearance of her daughter.
A judge today sentenced Hollywood private eye Anthony Pellicano to 15 years in prison for running a wiretapping ring that spied on the rich and famous. Pellicano illegally listened in on stars such as Sylvester Stallone and bribed police to find dirt that his clients could then use in legal disputes. And a costly divorce for Madonna, confirmation today that the Material Girl will hand over $75 million to film director and soon to be ex-hubby Guy Ritchie as part of the separation agreement. The divorce should be final in about three weeks. $75 million.
COOPER: All right, time for our "Beat 360" winners; our daily challenge to viewers to come up with a caption for a photo better than the one that well, anyone around here could come up with.
So let's take a look at the photo. It shows President Bush listening to President Hamid Karzai at a news conference during a farewell tour of Afghanistan. Gabe (INAUDIBLE) our staff winner and his caption, "Interpreter, my foot. You've been blasting Kanye West out of that headset for hours."
Our viewer winner is Sean B, from El Segundo, California. And his caption, "No, Mr. President, I said 'nice duck,' not 'lame duck.'"
KAYE: Well, that's good.
COOPER: Sean, your "Beat 360" t-shirt is on the way. You can check out all the entries and play along tomorrow at ac360.com.
All right, up next tonight, the new effort to oust the Governor of Illinois. And new details about his wife's alleged efforts to make some big bucks as well.
Plus, Barack Obama speaking out today, but saying little and where, if at all, the sleazy developer, Tony Rezko, fits into all of this.
Plus, your chance to size up Caroline Kennedy's accomplishments and decide whether she's got what it takes to be Senator from the New York.
All that and more on "360."
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT-ELECT OF THE UNITED STATES: We are prepared to release the findings of the review that had been done, which are thorough and comprehensive. The U.S. Attorney's office asked us to hold off releasing those for a week, so I would ask for your patience, because I do not want to interfere with an ongoing investigation.
(END VIDEO CLIP)
COOPER: The president-elect this evening saying the inquiry reveals no improprieties in his or his staff's dealings with the governor of Illinois over who would get Mr. Obama's old Senate seat.
Meantime some breaking news, Governor Blagojevich's attorney tonight saying his client is not stepping down. Take a look.
(BEGIN VIDEO CLIP)
ED GENSON, ATTORNEY TO GOV. BLAGOJEVICH: He's not stepping aside, he hasn't done anything wrong. We're going to fight this case.
(END VIDEO CLIP)
COOPER: Which is exactly the response Illinois lawmakers were expecting today when they began taking the first steps to make their governor the ex-governor.
Gary Tuchman has the "Raw Politics."
GARY TUCHMAN, CNN CORRESPONDENT: Even though it's the season, Rod Blagojevich's state capital office in gift wrap seemed a bit too cute considering what was going on down the hall.
UNIDENTIFIED MALE: We ask our guests in the gallery to stand and join us for the invocation and the --
TUCHMAN: Legislators, beginning the process of trying to kick the governor out of office, mostly, though, behind closed doors.
MIKE MADIGAN, (D) ILLINOIS HOUSE SPEAKER: I'm forming a committee of inquiry for the impeachment of Governor Blagojevich.
TUCHMAN: Illinois house speaker Mike Madigan is one of the most powerful people in the state legislature and a Democrat like Blagojevich, but wants him gone, fast. First the house has to impeach him and then the senate has to hold a trial and convict him. And it doesn't need to prove criminal intent to do so.
Do you think the house will impeach him, to go that far?
MADIGAN: I do.
TUCHMAN: And do you think the senate will convict him and remove him from office?
MADIGAN: I expect that the senate will convict.
TUCHMAN: So you think that within a matter of a several weeks, he will be the governor of the state?
MADIGAN: We should have a new governor of Illinois in due order.
TUCHMAN: Blagojevich is still playing coy.
The longer you say nothing, the longer people wonder you have something to hide, governor.
GOV. ROD BLAGOJEVICH, (D) ILLINOIS: There will be an appropriate time to talk about this, but let me just wish everyone happy holidays and things will work out just fine.
TUCHMAN: The rumor is you intend to resign. Is that true or false?
BLAGOJEVICH: I think that you should all have a great holiday season. I'll see you.
TUCHMAN: Lawmakers were also planning to discuss possible legislation to ban Blagojevich from being able to pick a senate replacement for Barack Obama, but there's not much appetite among the Democratic majority to have a special election instead, because it could result in a Republican senator.
The attorney representing Blagojevich says he's ready to fight.
GENSON: The case that I've seen so far is significantly exaggerated. It's not what people think it is. And we'll have time to talk about it.
TUCHMAN: But time is greatly limited when it comes to what's going on at the state capitol. The house leader says the governor could be impeached by the end of this week. Conviction and removal from office could occur as early as next month. All moot points, though, if he quits first.
COOPER: From the lawyer, it doesn't sound like he's planning on quitting. Any other signs that he may?
TUCHMAN: That's what his lawyer says. But I think we owe it to the viewers, Anderson, to look at this logically. Inside the state capitol building, Republicans are mad and angry at the governor, but so are his fellow Democrats. He has no bloc of support whatsoever.
You talk to legislators inside this building, say a vote was held today on the impeachment or the conviction, it would be a wipeout. It wouldn't even be close. You need a two-thirds majority in the senate to convict. A lot of people here think it would be close to three- thirds. So would a good, smart lawyer allow his client to be dragged through the mud for weeks, knowing he would lose?
That's why a lot of people think they're going to cut the best deal they can and a lot of legislators here, Anderson, don't think they'll ever see a senate conviction trial.
COOPER: Gary Tuchman. Thanks so much, Gary.
We're also learning new information tonight about the governor's wife, Patti. She hasn't been charged with a crime, but in a complaint against the governor, she allegedly pushed to profit from his bribery. And tonight more details emerge especially about her relationship with a real estate client of hers and friend of the Obamas, Tony Rezko.
Drew Griffin has the latest.
DREW GRIFFIN, CNN SPECIAL INVESTIGATIONS UNIT: Patti Blagojevich looked like she was leaving town, or at least home this morning; spotted with her husband in tow, carrying a large, red suitcase. The governor's wife, allegedly heard swearing on court-approved government wiretaps may be feeling the heat as well.
Earlier this year, the "Chicago Tribune" reported she too may be a target of U.S. prosecutors. Mrs. Blagojevich is a real estate agent who has earned hundreds of thousands of dollars in commissions, often selling properties owned by her husband's political supporters, fund- raisers, or state contractors.
She has not been charged with any offense, but former assistant U.S. attorney Joel Bertocchi says there seems to be a never-ending list of possible targets in Chicago where the U.S. attorney's office is fighting a well-entrenched political machine.
JOEL BERTOCCHI, FORMER ASSISTANT U.S. ATTORNEY: I've been referring to this investigation for the last several years as operation everything because it crosses all kinds of lines and all kinds of people.
GRIFFIN: The investigation dubbed "Operation Board Games" by the federal prosecutor, Patrick Fitzgerald, systemically has been chipping away at the pay-to-play politics as usual in Illinois. Governor Blagojevich and his chief of staff, John Harris, are the 14th and 15th persons charged in the ever-expanding case.
The biggest conviction to date has been Tony Rezko, the real estate dealer and fund-raiser who helped President-elect Obama purchase property in Chicago. Rezko also had a long working relationship with the governor's wife. The governor and his wife have said nothing publicly about the charges against him since his arrest.
BLAGOJEVICH: I will at the appropriate time. GRIFFIN: Defense attorney conferring with Blagojevich says only prosecutors should expect a battle.
GENSON: If I'm trying this case, it's going to be a fight.
GRIFFIN: Expected, says Joel Bertocchi, who says U.S. attorney Patrick Fitzgerald has methodically tackled the Chicago machine and so far is winning.
BERTOCCHI: As a matter of strategy, Pat Fitzgerald is very conscious of the fact, the old saying, if you're going to shoot at the king, you better kill him.
GRIFFIN: Blagojevich is charged with two counts of solicitation of bribery and fraud. But it's expected much more will be added to the case when prosecutors seek an indictment.
Drew Griffin, CNN, Chicago.
(END VIDEOTAPE) COOPER: Still ahead, she came out for Obama and against Hillary Clinton in the primary race and now Caroline Kennedy wants Clinton's senate seat. Is she qualified? We'll give you the facts and you can decide for yourself, tonight.
Also ahead, the man who will appoint the next senator from New York was the subject of a "Saturday Night Live" skit this weekend but the governor is not laughing. Did "Saturday Night Live" go too far? You can watch the skit and decide for yourself. Coming up.
(BEGIN VIDEO CLIP)
FRAN DRESCHER, ACTRESS: If we're going to be judged on our families, I think she's got it hands down. But my dad was working two jobs when I was growing up; one for sears and roebuck and one for the U.S. Post Office.
LARRY KING, CNN HOST: But you're not a Kennedy.
DRESCHER: No, I'm not. I'm a Drescher.
(END VIDEO CLIP)
COOPER: Fran Drescher, the star of "The Nanny," just one of many who would like to be the next senator from New York. The seat opens up as soon as Hillary Clinton becomes secretary of state. New York's governor has to appoint a successor and today Caroline Kennedy made it clear that she is interested. But the question is, is she qualified?
Randi Kaye takes a look.
RANDI KAYE, CNN CORRESPONDENT: Yes, she's the daughter of John F. Kennedy and a member of the Kennedy dynasty, but does that make Caroline Kennedy qualified to be senator?
HANK SHEINKOPF, DEMOCRATIC STRATEGIST: Does she have name recognition? So does Jennifer Lopez.
KAYE: Hank Sheinkopf, who worked for Bill Clinton's re-election campaign, says the New York senate seat is not about name recognition.
SHEINKOPF: A senate seat is not a legacy place. We haven't had a Kennedy elected to office from New York State since 1964 and a lot of people would like to keep it that way.
KAYE: Caroline Kennedy's uncle, Robert Kennedy, served in the New York senate until he was assassinated.
SHEINKOPF: The issue here isn't about white-collar people, it's about blue-collar people in places like western New York and Long Island who are looking for economic relief and someone who will fight for them. Thus far, Caroline Kennedy doesn't have a record of fighting for anyone.
KAYE: The 51-year-old lawyer has co-authored books on the bill of Rights and has been a champion of education reform and public schools. Her leadership roles are limited mainly to the arts. She hosts the Kennedy Center honors in Washington and served as honorary chairwoman of the American Ballet. Her supporters have not been as outspoken as her detractors, but there are many.
MAYOR MICHAEL BLOOMBERG, NEW YORK CITY: She certainly has a lot of experience. Her whole family has been dedicated to public service.
LARRY SABATO, UNIVERSITY OF VIRGINIA: She is clearly a very intelligent, capable, interesting woman. The minus is, that she doesn't have any political experience in the traditional sense. She's not served in the House of Representatives or the state legislature, but she has been involved, at least on the periphery.
KAYE: Is the periphery enough when other high-profile candidates are under consideration? Like Kennedy's ex-cousin-in-law, New York attorney general, Andrew Cuomo. Kerry Kennedy is Caroline's cousin and Cuomo's ex-wife.
KERRY KENNEDY, CAROLINE'S COUSIN: She doesn't care about fame. She doesn't care about money. She doesn't care about power. What she really cares about is public service.
KAYE: Kennedy has yet to say publicly she wants the job. She's never enjoyed the spotlight, but threw herself into it when she endorsed Barack Obama.
CAROLINE KENNEDY, POSSIBLE SENATE CANDIDATE: Senator Obama offers the change we need.
KAYE: One thing that may play in Caroline Kennedy's favor, her ability to raise cash and lots of it. All that charity fund-raising may pay off. She would have to run in 2010 for the last two years of the term and then again in 2012 for a new term. She would need about $40 million for that.
If Kennedy does become New York's next senator, it will be a major political event.
SABATO: Look, it's the return of Camelot. You can see it already. We've already been talking about Obamalot and now we would have Camelot joined with Obamalot.
KAYE: And that's a lot.
Randi Kaye, CNN, New York.
COOPER: So is Caroline Kennedy qualified? Let us know what you think at ac360.com on the live chat.
And we'll chat about it with CNN's Jessica Yellin, Joe Johns and Time Magazines Mark Halperin who'll join us after the break.
Also ahead, the new "Saturday Night Live" skit poking fun at New York's legally blind governor. We'll show you a clip and the governor's response. He's not happy. It's our "Shot of the Day" coming up.
COOPER: President-elect Barack Obama today announcing his green team, as he called it. Among the picks, Steven Chu as secretary of energy, Nobel Prize winner in physics and Lisa Jackson, former head of New Jersey's Environmental Agency is Obama's choice for the Environmental Protection Agency.
And another appointment is in the works. Tonight, transition officials tell CNN officials that Barack Obama will nominate Ken Salazar of Colorado as the next secretary of the interior.
Today's hot topic though is still the scandal engulfing Obama's now vacant senate seat in Illinois and speculation about another open senate seat, this one in New York and Caroline Kennedy's interest in it.
Let's talk strategy with CNN's Jessica Yellin and Joe Johns. Also with us, "Time" magazine's Mark Halperin.
Mark, Caroline Kennedy never really held a 9:00 to 5:00 job. She's an attorney. She has a license in New York and Washington but never actually practiced law. Is she qualified to be a senator?
MARK HALPERIN, TIME MAGAZINE: Being senator of a big state in particular is not a 9:00 to 5:00 job. It's a job that involves knowing how to wield power, knowing how to raise a lot of money, and knowing how to represent the constituents across the state. Some of her background, I think, makes her supremely qualified.
COOPER: She's raised a lot of money for different organizations.
HALPERIN: That's right and she's had a life of public service. She understands big issues, and she cares a lot about Americans from all walks of life. The question is, on the campaigning side is she really willing to go out and campaign and raise money in small increments? And on the governing side, can she really do the job as senator when, as you point out, she's never had any job, anything like this including doing the public part of the job. She's one of the most private, famous people in America. Does she want really to turn all that over upside down and now go campaigning in places like Utica and Syracuse?
COOPER: Jessica, what are the politics behind all this? Who wants her, who doesn't? I assume the Clintons, she came out very much in favor of Barack Obama. I can't imagine Hillary Clinton is all that thrilled.
JESSICA YELLIN, CNN NATIONAL POLITICAL CORRESPONDENT: You know, I -- JOE JOHNS, CNN CORRESPONDENT: That's the kind of thing --
COOPER: Joe, go ahead.
The bottom line is look, you're right. She did come out for Obama. Is that that big a deal? What is Hillary Clinton going to say about Caroline Kennedy? If Hillary Clinton is going to say, she's a brand name, that's the only reason she's getting it. People look at Hillary Clinton and say, you're a brand name, Hillary Clinton.
Say, what about experience? No experience. A lot of people will say Hillary Clinton had no experience when she was running first for the senate. So is that the kind of battle you want to fight up against Camelot? I don't know. But Hillary Clinton also realizes that she has a lot of negatives out there too and it might just drive those up.
COOPER: Jessica, what kind of pressure is the New York governor under? Caroline Kennedy has a lot of powerful and rich friends.
YELLIN: This is about as overwhelming as it gets. He's under enormous pressure. Her political supporters are doing everything they can. Not just to pressure him by demonstrating that she has the power and the muscle to raise money throughout New York, but also to try to rally support within the senate, even perhaps encourage Chuck Schumer to get in a position where he would have to recommend her as a big nudge to him to say, make it Caroline Kennedy's seat.
And they're all reminding the governor that, first of all, there has been a Kennedy in the senate for 50 years and Teddy does know that his time may be up in the senate at some future date; and also that this was Bobby's seat and so in a way it is a Kennedy seat.
So, he's under enormous pressure and as one political operative close to Kennedys tells CNN, Caroline Kennedy wouldn't go this far with it if she didn't want it badly and think she can get it.
COOPER: But I mean, there is, Mark, going to be some resistance, and already you can hear some resistance online and elsewhere from people saying, you know what? This is -- people were uncomfortable with the idea of a Clinton dynasty or a Bush dynasty. I mean, if her name were not -- if her last name was not Kennedy, there was no way she'd even be in the running for this.
HALPERIN: Well, if her name were Caroline Jones, you're saying, she wouldn't have as good a chance.
Look, I think Joe's right. The Clintons will not go after her directly. But if there's anything that can stop this freight train that's developed very quickly from heading down the tracks, I think it's allies of the Clintons. You've seen some pretty prominent ones in the last week raise the very question you raised about whether she's qualified, whether it is just based on her name.
But I think, based on what's happened just today, just since she started to express this interest, she has now put herself in a very strong position. And someone or some group is going to have to step out and find another candidate to stop her. There's -- one of the big advantages she has here, for Governor Paterson's point of view, is there is no other obvious candidate, another heavyweight candidate. I think that's part of why he seems attracted to her.
COOPER: She's already making calls -- on Politico, I think, they said that she has hired some big-name guy.
JOHNS: Josh Isay.
HALPERIN: Well, she's hired Josh Isay. He's very close to Mayor Bloomberg, very close to Chuck Schumer and has a lot of contacts in the labor community.
She's going about this right way, but remember, this is a -- this is an electorate of one person, the governor. And the governor, while he certainly is open to her candidacy, may in the end decide to go a different way. But she's doing a lot of the right things.
It's also been reported now that she plans to go campaign in upstate New York, a place where she doesn't have much of a track record. She's well known here in Manhattan, but when she goes upstate and campaigns, she may not like it and she may not be that good at it.
COOPER: Joe, let's talking about what's going on in Chicago with Blagojevich and President-elect Obama. Is Obama essentially immune from criticism over the next week, given the fact that the U.S. attorney asked him to hold off releasing his team's investigation for this time?
JOHNS: Well, he gets a pass for a while because he's going to be appointing the chief law enforcement officer, which we presume to be Eric Holder if he gets through confirmation. So he doesn't want to be seen as a guy who is now standing up to a prosecutor who's in the middle of an active investigation and saying, "I'm going to do things my way."
But, sure. Right now this thing is, it's a nuisance to him, it's a distraction. They've got a lot of other things on their plate. And they'd just as soon, you know, get this thing over with. But they have to do it the right way.
COOPER: And the breaking news is that the governor's attorney has said that he is not going to resign.
Jessica, I mean, I guess, someone argued that it may benefit Obama to release his internal review right before the Christmas holiday when, really, no one's going to be paying much attention to it.
YELLIN: Americans will be distracted. Barack Obama himself will be on vacation in Hawaii and not talking. So you could imagine this coming out, let's say, next Monday, next Tuesday, when everyone's away and out of town. And it sort of dies a slow death.
Already, I heard reporters today asking, when the press conference comes tomorrow morning, there's another press conference, is there even a justification for asking a Blagojevich question?
So it does seem that this is sort of fading quickly. And I've talked to a number of Obama people today who say in essence, they think they let the air out of the balloon today by saying the inquiry showed no wrongdoing. It will come out next week. They're breathing a sigh of relief.
COOPER: Mark, do you think the air's out of the balloon?
HALPERIN: I don't think it's quite out yet. I think there's still two -- a couple of pending issues. One is, they've gotten a clean bill of health, in effect, from the prosecutor, from the U.S. attorney. He's worried, though, about anything that's illegal, potentially illegal. There still may be some political embarrassment here, although I don't think it will be -- rise to the level that will really dent the popularity he's already built up.
I think the other issue, though, is he still has to talk about transparency and ethics in government in a way that makes people comfortable. Why didn't he denounce Blagojevich? Why did he support him for reelection when there was already an ethical cloud over his head?
And how does he plan to balance what all presidents the post- Watergate era have had to balance, which is revealing facts and information when there is a criminal investigation going on. I don't think he's really explained to us what his philosophy about that is. And this is going to come up again. This is not the last ethical scandal where politics and law intersect that he'll face in the White House.
COOPER: Finally, the shoe-throwing incident against President Bush. We're going to show the tape again.
Were you -- I mean, obviously...
HALPERIN: Please show it in super slow motion.
COOPER: Of course, we will. We've been showing -- that's how we've been doing it.
HALPERIN: Frame by frame. Like the Zapruder (ph) film.
COOPER: We'll show it many times. No doubt about it. What do you make of it? I mean, obviously, everybody is surprised by it.
HALPERIN: You know, my reaction to it is, without taking sides between the shoe thrower and the man he threw the shoe at, I think the president should be a little bit more sensitive to what this man was protesting, which was in effect, the death of innocent civilians in Iraq. And to make jokes about it I think may not have been the best reaction.
COOPER: All right. We're going to leave it there. Mark Halperin, thank you very much. Jessica Yellin, Joe Johns, thanks, as well. Next on the program, did "Saturday Night Live" go too far? See the sketch on the governor of New York, hear his reaction and decide if the show crossed the line. It's our "Shot of the Day."
COOPER: All right, Randi. Tonight's "Shot," a new "Saturday Night Live" skit provoking some controversy. In case you missed it, over the weekend "Saturday Night Live" cast member Fred Armisen did an impression of New York Governor David Paterson. Paterson, of course, is legally blind and has admitted to drug use in the past. He was not amused.
Here's a clip of the skit.
(BEGIN VIDEO CLIP)
FRED ARMISEN, CAST MEMBER, NBC'S "SATURDAY NIGHT LIVE": ... influence. I want to choose a senator, not from the glitzy coke parties of Manhattan, but rather from the shabbier coke circles of upstate New York.
I'm tired of all these fancy two-eyed smart alecks from the big city running the show. It's time we get someone from Utica, Syracuse, or Schenectady, towns where people have a little something off about them. I mean, they don't have to be blind. I need someone with, like, a gamey army or maybe the giant gums with the tiny teeth.
(END VIDEO CLIP)
COOPER: Well, the audience laughed. The governor, however, did not. Here's what he told WABC.
(BEGIN VIDEO CLIP)
GOV. DAVID PATERSON (D), NEW YORK: I can take a joke, and I dish them out enough, and I can certainly take them.
But you know, in the lower frequencies of societies, I don't know if the people know, but the unemployment rate in the disabled community is 63 percent. And I'm afraid that the kind of the third- grade depictions of individuals and the way they look and the way they move add to that negative environment.
(END VIDEO CLIP)
COOPER: The National Federation of the Blind also slammed it as absolutely wrong.
And I'm not taking a position on this particular skit. But I will say I think Fred Armisen is, like, so funny this year. He's -- I think he's pretty funny.
KAYE: Just not in that skit.
COOPER: I'm not taking a position on the skit. It's not my job. But I do think -- I ran -- I met him recently, and I think he's very, very talented and a political comedian guy who I think is this funniest thing ever. But that I would like to see him do more often.
All right. You can see -- you can see all the most recent "Shots" on our web site, ac360.com.
That does it for "360." Thanks for watching.
"LARRY KING" starts right now.
I'll see you tomorrow night.