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ANDERSON COOPER 360 DEGREES
New Airstrikes in Gaza; The Obamas Head to Washington
Aired January 1, 2009 - 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: Good evening, tonight, corporate fat cats living easy, not even paying their own taxes while millions lose their jobs. Tonight, we're "Keeping them Honest."
Also, the growing talk of another Senator Clinton from New York; Bill Clinton, could he really be picked to replace his wife.
First though, we have breaking news out of the Middle East: new air strikes right now hitting Gaza less than a day after Israeli warplanes pulled off a big one, killing a founder of Hamas.
That's not all. Israeli media reporting that military commanders are recommending a brief but major ground invasion of Gaza. Hamas rockets still flying, still causing terror and destruction in Southern Israel. In all, four Israelis and now 400 Palestinians have died in the last six days.
More on all of it from Nic Robertson joining us now from southern Israel -- Nic.
NIC ROBERTSON, CNN INTERNATIONAL CORRESPONDENT: In the last hour there's been at least five huge explosions from Israeli missiles hitting the northern end of the Gaza strip. Those explosions ricocheting around the villages close to Gaza and most of the attacks today have been aimed at Hamas leaders, government infrastructure and an important Hamas leader killed in one of those strikes.
ROBERTSON: A huge crater where only minutes earlier, the house of top Hamas leader Nizar Rayyan once stood. Like the house, Rayyan is gone. The first upper echelon Hamas leader confirmed killed in the past six days the Israeli attacks.
Less than 24 hours earlier it's been on the Hamas TV channel telling Palestinians they will win the fight against Israel and kill and imprison their men.
According to Israel's defense forces, Rayyan's house used to store weapons. According to Hamas, some of Rayyan's family also killed.
Hours later, another Hamas leader the target, unclear if he survived. Gaza's parliament also hit. And in the city's hospitals, children rushed in for urgent treatment caught in the strikes Israel says target Hamas leader's infrastructure and re-supply tunnels in the battle to stop them firing missiles into Israel. Israeli officials won't specify how effective their attacks are.
HAIM RAMON, ISRAELI VICE PRIME MINISTER: Now we are hurting severely Hamas on all those fields.
ROBERTSON: How much of their infrastructure has been destroyed? How many of those tunnels have been destroyed?
RAMON: Substantially, I'm not going into details. But substantially --
ROBERTSON: Driving around Ashkelon in Israel six miles from Gaza, we are learning firsthand Hamas is far from defeated.
The siren's just gone off. Everyone is getting out of their cars and getting down the road waiting to see what happens. That was the explosion. We just heard one explosion going off. We think it came from that direction over there.
A few minutes later, another rocket is detected.
Well there is another siren going off. There's another siren just going off, we're getting down behind the car again. All cars are stopping at the moment; I did hear a boom that came from that direction over there.
Outside of Israel, international pressure is mounting that both sides to reach a cease-fire and end the suffering. In Paris, Israel's Foreign minister Tzipi Livni met the French President, discussed what it would take.
TZIPI LIVNI, ISRAELI FOREIGN MINISTER: That in order to stop completely there's the ability and willingness, or the ability and the understanding of Hamas that enough is enough.
ROBERTSON: But neither side seems to have had enough yet. With dusk, more missiles on Gaza.
UNIDENTIFIED MALE: And we're right by those.
ROBERTSON: And in Ashkelon, yet more rockets.
There's the siren going off again. I'm beginning to lose count of how many times I've heard the sirens going off. Ok the siren's stopped now. And you just wait, maybe 20 seconds or so.
But having just come from where we've been a few miles away where a missile went over our heads and landed close by, ok there was the bang. There's the bang; it's down there. I'm just very weary that's all.
COOPER: Nic Robertson now joins us. Nic, I mean how often does that happen in these border towns in Israel, Nic, these sirens, the rockets landing? ROBERTSON: Often, in the space of about three hours, there were five different sirens going off there; it's five different attacks. So it's happening very often.
COOPER: Do you feel on the ground that things are ratcheting up?
ROBERTSON: Yes. And I particularly feel it right now. I mean, we just had those huge blasts not far away in the north end of the Gaza strip. And right now, I can hear the surveillance drones are circling overhead. And it sounds and just feels more intense than what we were hearing in the last couple of days of being in the same locations.
COOPER: What is the latest thinking on the idea of an Israeli ground assault, whether it's full scale or strikes? What are people saying?
ROBERTSON: I think there's a lot of concern that if they go in full scale, then you commit a lot of troops or an urban fight which is very, very difficult. Hamas is threatening to blow up the roads indicating that they perhaps have got some of the roads mined that the troops would have to go over.
But the weather has played against a ground invasion over the last few days because it's been raining. Now, there's been a day of drier weather. So the ground is drying out. The tanks won't get bogged down as they go in across the field. The skies are getting clearer. Which is why, there's perhaps more air strike because they can see down the way what's happening on the ground and what the targets are.
So there is a real sense here that this ground invasion could come soon. But it could all just be a big psychological feint against Hamas right now. The air strikes may be enough for the next few days. It's just not clear but there is a sense that the tension's increasing.
COOPER: All right Nic, we're going to check in with you throughout the hour as warranted. We also got a live picture of Gaza that we will go to whenever necessary.
Staying in the Middle East, a major milestone to tell you about in Iraq; pomp and ceremony as Iraq formally takes over responsibility for the chunk of downtown Baghdad known as the Green Zone.
Iraq's Prime Minister saying he'll ask lawmakers to declare January 1st a national holiday.
On now, to the New Year's resolution the country is counting on; President-elect's Obama's plan for the economy. He and his family this afternoon leaving Hawaii, heading first to Chicago then on Sunday to Washington to the Hay-Adams Hotel not far from the White House.
Sasha and Malia, getting ready for school, that's why they have to move there early. Their father polishing a stimulus plan that many economy watchers fear will not be big enough. But Republican lawmakers are calling a budget buster.
Details from Ed Henry.
ED HENRY, CNN WHITE HOUSE CORRESPONDENT: While keeping one eye on the crisis in Gaza, President-elect Barack Obama is now returning to the mainland to focus on the issue that propelled him to office, the economy.
Which is why, the transition team is kicking off the New Year by sending Congress a recovery plan in the neighborhood of $775 billion.
JOE BIDEN, (D) VICE PRESIDENT-ELECT OF THE UNITED STATES: Economists rarely agree but on this score there is overwhelming agreement that we need a robust and sustained economic recovery package. The greater threat to our economy lies in doing too little rather than in not doing enough.
HENRY: Transition aides say the goal is to get the bill signed into law as quickly after the inaugural as possible to get the new President a quick victory while also giving the economy a shot in the arm.
The emerging plan includes billions for backlogged transportation projects to beef up construction jobs and improve the nation's infrastructure as well as modernizing crumbling public schools, to create jobs while also investing in education.
REP. BARNEY FRANK, (D) MASSACHUSETTS: If we don't do this, it will cost us even more. This economy is now in the worst shape since the Great Depression. And if we do not respond in a very firm way, it gets worse and worse and feeds on itself.
HENRY: But Republicans are making noise about slowing the stimulus plan down because they are wary about the price tag, especially on top of a series of government bailouts.
REP. ERIC CANTOR, (R) VIRGINIA: I think most American taxpayers now are sort of scratching their head and wondering when all this bailout stuff is going to end. And probably thinking when is my bailout coming?
HENRY: To overcome the opposition, aides say Mr. Obama is considering plans to travel the country, to sell the economic plan quickly after being sworn into Office.
Mr. Obama needs to move quickly to sell his plan because there's no time to wait. This the first real test of the new President's clout.
Ed Henry, CNN, Honolulu.
COOPER: Let's dig deeper now CNN contributor and columnist, for the "New York Daily News," Errol Louis; also Ben Smith, senior political reporter for Politico.com.
Ben, how likely, I mean Democrats had wanted the stimulus basically passed by Inauguration Day. That's looking less and less likely.
BEN SMITH, SR. POLITICAL REPORTER, POLITICO.COM: Yes, the Republican leader in the Senate is really the one Republican with any power to slow this thing down has started making noise that he wants to know the details. The details aren't out yet; even Democrats on the Hill are starting to say, "Where are the details of this plan? We're not going to be able to turn it around instantly if we can't start soon."
COOPER: So do you think Errol, do you think that's what it's going to take, Obama going on a tour basically selling this to the country?
ERROL LOUIS, CNN CONTRIBUTOR: Yes, I think he's going to sell it and in particular through the governors -- because it's those so- called shovel-ready infrastructure plans that I think have already been vetted at some level by state legislatures, by state governors including Republicans.
I think that's where he's going to get the clout to really move this thing past the recalcitrant members of Congress, whether they are Democrats or a Republican.
COOPER: There is concern though, about those shovel-ready projects. I mean, if -- if the money they gave, there wasn't much oversight for the money that has been given so far to the bailout. There's got to be some real questions about, how much oversight there's been so far --
LOUIS: Presumably the people of Indiana or Virginia or New York, have given some thought to whether or not a few billion for a new airport or a new sewer system or a new set of schools makes any sense.
If you can't move fast and also in a detailed way account for a trillion dollars in advance I mean, you've got to I think sort of trust the judgment of the local government.
COOPER: All right, stick around we're going to you guys. More coming up with Ben Smith and Errol Louis.
We're going to look into the possibility that former President Bill Clinton might actually be named to fill Hillary Clinton's senate seat. Is that a real possibility or just talk?
Also there is another name being dropped: Mario Cuomo, we'll talk about that.
Also a night of terror in Aspen as a deranged would-be bomber rigs the town to blow unless his demands are met.
And later, surviving the avalanche at a terrible cost -- this young man's haunting decision to walk-off a mountain leaving his buddies behind.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: We heard the crack again. We said, "Sorry, James, we've got to run." And as we were running away from James, he was saying, "Don't leave me here, don't leave me here."
(END VIDEO CLIP)
COOPER: Bill and Hillary Clinton last night in Times Square, the former president and future Secretary of State, dancing in the New Year. The buzz growing about who's going to be named to replace her in the senate. And just when you thought Caroline Kennedy was the biggest of big names to be mentioned, primarily Mario Cuomo on for size or even Bill Clinton himself; both being talked about as so- called caretakers until the 2010 election.
A Clinton's spokesman says the former president is not interested. No comment from ex-Governor Cuomo.
Raw politics and raw material for our panel: joining me again, Errol Louis and Ben Smith.
Errol, any chance, Bill Clinton?
LOUIS: I can't quite see it. It makes sense on a number of different levels, but for the Governor, David Paterson, whose choice is what really counts here, this is not what he's looking for. He's got a lot of political turmoil that's going on. This wouldn't necessarily quiet it. It would only defer the day of reckoning.
COOPER: So you don't he's looking for some --you don't buy this whole idea of him just looking for some sort of caretaker until 2010.
LOUIS: No, no I think he's got to make a decision. He doesn't need a lot of turmoil going on. He's got his own re-election to worry about. And that day is not far off either. That's coming up in 2012.
COOPER: Ben, do you agree with this?
B. SMITH: Yes, Paterson, pretty much today kind of put a lid on that. Said against the idea of a caretaker, which, as Errol said will just mean more chaos; every politician in New York fighting desperately with each other for the next few years.
COOPER: So what does this mean; does Caroline Kennedy still in the running? She gave a couple of interviews which was widely panned for her grammar among other things.
B. SMITH: Yes and there's not another large figure who's emerged that's kind of a big rival. And she's -- her -- her odds got a lot better today, because Shelly Silver, who is really the most -- probably the most powerful figure in the state, the assembly leader, kind of said didn't think he liked her any better, but said he thinks she's going to be picked, so then, thus, he supports her.
LOUIS: The field in this non-election I think is really coming down to Caroline Kennedy and Andrew Cuomo, the son of the former governor, who is the state attorney general, used to be the Secretary of HUD, competent administrator, very well known, well respected, has very high favorability ratings in New York.
So he's the kind of person who's got the name. He's got fundraising ability. I think the two of them are going to really be the ones that Paterson is going to have to decide between them.
COOPER: It's interesting though, that I mean Caroline Kennedy really has not -- she gave a couple of interviews but has not made much of an effort to reach out to people to kind of inform people about who she is and what she actually believes in.
I mean, she's given more interviews than she did early on. But -- and I know it doesn't matter what the people think. It's just what Paterson thinks. But wouldn't making some sort of a more public gesture make sense?
B. SMITH: She did a round of interviews that went poorly -- so I guess maybe the feeling is enough with that. I mean, people around her will say she doesn't want to seem presumptuous. But then I mean, of course, at the same time she wants to be Senator and there's some presumption on that.
COOPER: So do you think it's a done deal that she'll get it?
B. SMITH: Absolutely not, Paterson, you know he could pick you.
COOPER: I doubt, I doubt that.
Who -- and but no one else decides Andrew Cuomo on there?
LOUIS: Well, you know, anything is possible. But those are the ones that kind of make sense for him.
If you take any given person and who might be named to the senate seat and you ask what could they do for David Paterson, who's got a tough re-election campaign coming up and a Republican Party that's just waiting for a chance to either take this seat or go up against the governor, you have to look for people who have strong fundraising ability, good name recognition, political experience, political clout.
COOPER: It's a short list.
LOUIS: It's a pretty short list.
COOPER: Yes, Errol Louis we're got to leave it there. Ben Smith thanks a lot for coming in, I appreciate it.
Tell us what you think about Senator Bill Clinton. the Illinois mess or whatever is on your mind. Join the live chat happening now at AC360.com. Check out also Erica Hill's live web cast during the break. We're also continuing to follow development out of the Middle East. Live pictures there of Gaza and new Israeli air strikes in this past hour under way. We'll check back in shortly with Nic Robertson.
Up next though, terror in the Rockies: a ski town on edge. We'll tell you what a would-be bomber in Aspen was after and how the crisis ended.
Also, "Keeping them Honest" CEOs is making millions and not even writing a check for their taxes. Guess who is picking up the tax tab. We're "Keeping them Honest" tonight.
And a look inside the Obamas' first new home before they actually move in to the White House; they'll be moving to Washington this weekend so the kids can go to school. Tonight on "360."
COOPER: Close call -- close call in Aspen. Authorities detonating a bomb they believe was part of a New Years Eve extortion plot to rob several banks of more than $200,000.
The incident prompted a mass evacuation of Aspen's downtown last night. Police say the suspect -- this man a 72-year-old parolee and one-time resident of Aspen -- built the explosives and warned of mass deaths if his demands weren't met. And his body was found inside a Jeep earlier today, officials say he committed suicide.
The case is unique. But crimes against banks are actually becoming increasingly common. The number of holdups has skyrocketed in recent months. Some experts blame the violence on the reeling economy.
Deborah Feyerick has more.
DEBORAH FEYERICK, CNN CORRESPONDENT: Near New York City's famed Lincoln Center, a bank robbery takes place here in broad daylight. That same day on Busy City Street, this bank is also robbed. And so is this one, and this one, and this one.
New York City's top cop, Raymond Kelly calls Monday's robberies unrelated, admitting however, they're part of a growing trend targeting banks.
COMMISSIONER RAY KELLY, NEW YORK POLICE DEPARTMENT: They turn to it virtual cash machines.
FEYERICK: Bank robberies in the city are up 54 percent from last year with more that 430 committed since January 2008. The police commissioner says it's not clear yet whether the bad economy is fuelling the unusual spike.
KELLY: Banks don't look the way they did five years ago. They look different. And they look to some people very inviting as far as just going in. Handing a note to the teller and walking out with $3,000 in cash.
FEYERICK: But several former federal agents who investigated bank robberies tell CNN crime goes up when the economy is bad and desperate people may see banks as a quick fix, especially in light of recent corporate bailouts says this New Yorker.
UNIDENTIFIED MALE: If the banks have all of this bailout money. Probably that's one reason, they're thinking that they have money.
FEYERICK: Robberies are up across the country in places like San Diego, Houston, and Maryland.
Banks seem pretty secure.
MIKE SMITH, PRESIDENT & CEO, NY BANKERS ASSOC.: They are secure.
FEYERICK: The head of the New York Bankers Association is meeting with the NYPD to review bank security and see what more can be done to discourage robbers.
M. SMITH: Are there enhancements? Obviously. Criminals talk to each other. They know what's going on. But typically they are apprehended.
FEYERICK: The NYPD says about 80 percent of robbers just hand the teller a note. Of the 20 percent who say they have a gun, often they don't show it to the teller. Another factor in all of this, location; the banks recently hid where on the subway station making for an easy getaway.
Deborah Feyerick, CNN, New York.
COOPER: Well, we have breaking news again out of Israel: In Gaza -- we're watching closely more bombs falling right now. We're going to go back to Nic Robertson in just a few moments. That's a live picture of Gaza. You can't really see much activity.
But Nic has heard loud explosions within this past hour; a number of them, four or five alone in the last hour.
First, let's check in with Erica Hill for the "360 Bulletin" -- Erica.
ERICA HILL, CNN CORRESPONDENT: Anderson, at least 59 people killed, more than 200 injured and two Americans among them in a fire at a Bangkok night club. That blaze started less than an hour into 2009 near a stage where fireworks were part of a New Year's performance.
The Coast Guard now searching the waters off Florida for a carnival crew ship employee who was seen falling overboard just before 1:00 this morning. The man was off duty, the carnival call his fall clearly accidental. Prosecutors are now seeking a 90-day extension to return an indictment against Illinois Governor Rod Blagojevich. They wanted to extend the January 7th deadline out to April 7th saying they needed time to review thousands of intercepted phone calls and interview witnesses.
And Florida police say a statue worth more than $10,000 that was stolen from Bernard Madoff's Palm Beach estate has been found undamaged just blocks away with a note attached to it. That note reads, "Bernie the swindler left it. Return stole property to rightful owners." Madoff is under house arrest in Manhattan, he is charged with bilking investors out of $50 billion -- Anderson.
COOPER: That's one of the things that will probably be sold off to try to pay investors.
COOPER: And it's time for the "Beat 360" photos. Secretary of State designate, Hillary Clinton in Times Square last night to celebrate the beginning of 2009. Here's the caption from Gabe our staff winner, "A day later, a frozen Clinton awaits removal by city workers."
HILL: And it could happen, right?
COOPER: It was freezing there.
HILL: Base on how cold it was last night.
COOPER: Well, I think we all thought we could have frozen there. If you think you can do better? Go to AC360.com right now, send us your entry we'll announce the winner at the end of the program tonight.
Up next, again, the breaking news we're continuing to follow out of Gaza. New air strikes have begun. We'll check in with Nic Robertson for a live update.
Also ahead, economist Ben Stein on your money and why he believe, some people need to ramp up their spending to help all of us.
Then you've heard about the multimillion dollar golden parachutes for CEOs? But did you know it's your tax dollars that pay the tax bill for some of them. We're "Keeping them Honest."
And we'll show you the inside of the Obamas new Washington home. As we told you they left Hawaii today. They'll move to D.C. this weekend. The kids start school before they can get into the White House. So we'll show you, what their temporary headquarters in Washington will be like.
COOPER: You're looking there at live pictures of northern Gaza. Momentary lull it appears after a new string of explosions; Israeli air strikes by the look and sound of them. The sound of reconnaissance drones overhead according to Nic Robertson.
Also in the quieter interludes, you can hear the sound of roosters crowing. Also just beginning right now, morning calls to prayer. The strikes coming after day that saw Israeli warplanes dropping a 2,000-pound bomb killing a top Hamas military commander along with several members of his family.
Again, as we've said Nic Robertson is on the ground in southern Israel under fire all week and all day from the Palestinian rockets. We'll check back with him shortly.
Let's turn now to "Your Money, Your Future." The end of 2008 was not good to retailers -- we all know this -- despite a surge of last- minute discount shopping. Now it looks like retail sales over the holiday season took a record plunge with a lot of people cutting way back on spending.
The question is, does everyone who's cutting back actually need to cut back though. If you have a steady job with a good income, or a lot of money saved up, maybe it would be better if you're out there spending to help jump start the economy.
That's the view of Ben Stein; he's an economist and author of "How to Ruin the United States of America." He's also a lawyer and who dabbles in acting and other pursuits. He's a renaissance man. And he's here to talk about "Your Money, Your Future."
Ben, your advice this holiday season, for those who have the money is to spend and spend madly. Because you say, we're facing something called the paradox of thrift. What is that?
BEN STEIN, ECONOMIST: Right, if everybody saves, then everybody will become poorer. Well-to-do people or even middle class people are solidly set with a job, and a house, and a pension, and no crushing debt, should be out there buying. If there's something they need they should buy it today, and not wait a week. And they certainly shouldn't lay off any house hold help or cut back on their children's allowances.
The quickest way of stimulating the economy would be if people who need a car, go out and buy it right now; people who need a refrigerator, go out and buy it right now.
COOPER: But I mean, the individuals making those kind of choices can that really make more of a difference than like a stimulus plan?
STEIN: Absolutely, it's a -- they can make a huge difference. A very, very large percent of total consumer spending is done by the top 20 percent in terms of income. An enormously disproportionate amount, I think more than half.
So if those people at least close to -- so if those people would go out and spend as much as they can without endangering their financial future, it would make a big difference.
Public works take forever to get started. Government spending plans take forever to get started and are often very wasteful. The ordinary middle class, upper middle class, well-to-do person going out and buying would make a difference right now.
We should not be telling people, that if you're scared about spending, if they can afford to do it. Now is the time for them to spend.
COOPER: I also read something you wrote recently -- you said that business is a lot like sex; that both were better when the participants have confidence. It's frankly tough for anyone to have confidence in anything particularly the alleged expertise of our leaders and our businessmen. And I was interested to read that you were actually asked to invest with Bernie Madoff and you didn't? Why?
STEIN: Well, these nice people who are in a big investment bank came to my house. They have gone to school that we had a connection with and they said, "Oh, this guy gets solid returns in good years and bad years." And I said how he can possibly do that? And they told me his strategy. I said that's impossible strategy, it can't work. I checked with one of the smartest guys I know, Ray Lucia, a super smart investment guy, Phil deMuth, super-smart investment guys.
They said, no, can't be done. So I said, no, thanks. And mind you, I've managed to lose a great, great deal of my life's savings in the last year anyway, but I did not fall for that one. I fell for plenty, but not that one.
But you know this idea of spending, it really is an awfully good idea. Dwight Eisenhower during the recession of '58 was asked what people should do. He said go out and buy something. It was a good piece of advice.
COOPER: How do you -- what do you think of the Obama stimulus plan. I know you have not been a supporter of his.
STEIN: I hope he's the best president we've ever had. Now that he's elected, I'm a huge supporter. I hope he does great.
But I don't think public works are the way to go. Public works are a very slow, sluggish way of getting money into circulation. I think it would be much better if the government guaranteed bank loans.
Look, Secretary Paulson basically put a gun to the American economy's head and pulled the trigger when he let Lehman Brothers fail. He basically put a bullet in the brain of the American economy. They can't take that bullet out. But they can do some kind of life support for the patient by guaranteeing bank loans. And I think that's what they have to do. That will get the money pumping through the economy like yesterday.
COOPER: Ben, I enjoy your writings and we enjoy having you on the program. Thanks for being with us.
STEIN: I love being here. God bless you. Happy New Year.
COOPER: And to you, too. More on the economy and a hefty dose of outrage. For years, corporate fat cats have been taking advantage of golden parachutes when they got the axe. But those fat severance packages -- we're talking multimillion dollar packages in some cases. These packages that have cushioned the blow in their fall from the top may owe a lot to you, the American investor.
Many of you do not realize you've been footing the tax bill on knees big parting bonuses. Randi Kaye tonight is "Keeping Them Honest."
RANDI KAYE, CNN CORRESPONDENT: They're at the top of their game, rolling in dough. So why are some top executives getting their personal taxes paid for them?
CAROL BOWIE, RISKMETRICS GROUP: The feeling is these are the highest paid people at the company. Now they're getting a lot of extra perks and benefits and so on. They really ought to be able to pay their own taxes on it.
KAYE: But they're not. Carol Bowie and her team at RiskMetrics Group which advises shareholders, analyzed compensation from firms in the S&P 500, and found two-thirds of those companies willing to cover millions of dollars in taxes for top managers' severance packages.
Why? The tax reform act of 1984 impose a stiff penalty, an additional 20 percent tax on multimillion dollar golden parachutes for executives who were fired in a merger or takeover. The companies believed offering to pay the tax helps them attract top talent. But it's the shareholders who are left holding the bill for executives as they're being shown the door.
BOWIE: Instead of the executive paying the tax on these excessive parachute payments, the companies end up paying it and which means essentially that shareholders are paying it. So it's really become, in a way, a tax on shareholders.
KAYE: The penalty tax was designed to limit huge severance payments. But it backfired when companies started to cover the taxes so the executives didn't have to. The payment is called a tax gross- up.
BOWIE: Tax gross-ups definitely can exceed the amount of executive salaries. In our study according to the numbers that we saw, the average gross-up growth was over $13 million just for the gross-up alone.
KAYE: When Circuit City's CEO lost his job last year, the company agreed to pay $1.6 million in taxes on his $3.6 million severance package. So the CEO didn't have to pay any taxes at all. That cost investors a bundle.
Some shareholders are so fed up they petitioned companies to do away with the gross-up taxes. Keeping him honest, we want to know if any have phased them out. MetLife told us it decided to eliminate it. And Colgate has confirmed it has capped severance and done away with the gross-up provision, too. In fact, RiskMetrics says at least ten companies in the S&P 500 have revised their severance agreements.
But that means the great majority of companies you probably own in your 401(k) -- hundreds of companies -- still plan to play millions to executives when they're fired after a takeover.
But president-elect Barack Obama has been critical of golden parachutes and executive pay. In 2007, he introduced a bill that would allow shareholders to vote on CEO pay. With Obama in the White House, top executives may need to dust off their checkbooks.
Randi Kaye, CNN, New York.
COOPER: Randi Kaye, "Keeping Them Honest" tonight.
Coming up, what would you do if you're on a mountain? And avalanche is coming but your friend is trapped in the snow. Would you stay or go? That terror became a reality in Canada for one man. Listen.
(BEGIN VIDEO CLIP)
JEFF ADAMS, AVALANCHE SURVIVOR: We had to make the gut-wrenching decision to leave our eight friends and start walking off the mountain.
(END VIDEO CLIP)
COOPER: A survival story you will not soon forget.
Also tonight, Charles Barkley busted. New details on what he told police he was planning to do with the lady, not his wife, when he was pulled over on Christmas Eve for running a stop sign.
And we're updating our breaking news: New explosions in Gaza. We'll be heading back to Nic Robertson for a live update on the ground. With Israeli drones overhead and Hamas rockets landing nearby him throughout the day.
We'll be right back.
COOPER: Time to update our breaking news: A string of new explosions being heard in Gaza after airstrikes claimed a lot of lives including that of a top Hamas military commander. Let's check back in with Nic Robertson on the ground in southern Israel. Nic, I understand you just heard something recently also?
NIC ROBERTSON, CNN CORRESPONDENT: Anderson, yes, in about the last 15 minutes, we heard another explosion. It was not as loud as the ones we've been hearing in the past hour which probably means it was further south in the Gaza strip.
But again we're still hearing the aircraft flying overhead. Still hearing those surveillance drones as well moving to and fro over Gaza.
COOPER: What are the limitations in terms of actually reporting from Gaza, Nic?
ROBERTSON: Huge, massive, we're not allowed in. The Israeli government won't let us go in. I told the vice prime minister about that today. I said, "Look, why aren't you allowing journalists to go into Gaza?"
And he said, "Well, it's dangerous if we open the border crossings for you. People are getting shot at the border crossings."
And he said. "Why do you want to go in?" And I said, "Look, we're journalists. This is what we do. We need to report on the situation in there."
But he really didn't -- didn't really appear to have a lot of sympathy with that view of us wanting to get in there. And the other problem is, not only could we not get in to Gaza itself, but the government's keeping us back from the troops that are ringing around Gaza right now so we can't give away their positions and their strength at this very, very critical operation and critical time -- Anderson.
COOPER: There is also a risk from reporting in Gaza beyond the bombardments that are going on. Journalists have been kidnapped over the last couple of years there.
ROBERTSON: Yes, and in any situation like this, where perhaps there are other elements that are certainly under the control, let's say, of Hamas or other groups that are operating for their own reasons, as with the BBC journalist who was kidnapped earlier in the -- who was kidnapped last year. Anything could happen. So you have to bear that in mind, as well.
And the plight -- the humanitarian plight of people there right now is difficult.
But if you go in as a journalist, you have to recognize the fact that there were certain groups there who would profit not just financially but would profit from kidnapping you. And that is again something you really have to bear in mind in a situation as dynamic and fluid as this right now.
COOPER: Nic Robertson trying to get as close to the action as possible. Nic, appreciate the live report. Thanks.
Let's take a look now. The video comes to us from an iReport. It's an avalanche. You can't outrun these kind of avalanches; nowhere to hide. Avalanches have buried homes, even entire towns. They claim about 25 lives every year here in America. In recent weeks, snow slides have killed eight people in Utah and Colorado. Now, avalanches are sudden and catastrophic, like the one you just saw there. And tonight, one survivor is sharing his story in his own words. He escaped death just days ago on the slopes in Canada. He was very lucky. His friends, however, were not.
The story now from Gary Tuchman.
GARY TUCHMAN, CNN CORRESPONDENT: Jeff Adams will live with the choice for the rest of his life.
ADAMS: We had to make the gut-wrenching decision to leave our eight friends and start walking off the mountain.
TUCHMAN: Adams and two others did walk off the mountain, leaving behind eight buddies who perished in British Columbia, victims of a series of avalanches. It's a tragedy and, at the same time, an incredible survival story.
Last Sunday, undeterred by avalanche warnings, two groups, snowmobilers, 11 in all, ventured into the Canadian Rockies together; seven of them sitting ducks when disaster struck for the first time: a 15-foot wall of white slamming into them at speeds of 90 miles an hour.
Four other snowmobilers in the area arrived to help. The situation was bad. What came next proved devastating.
ADAMS: We heard a crack. That's when the second slide hit us, burying all 11 of us.
TUCHMAN: Choking under the weight of the snow, Adams says he gasped for breath and clawed to the surface.
ADAMS: Took a few breaths. After about five minutes of struggling, I got myself out, looked around, realized there wasn't anybody else. Didn't see any sleds, no gear. Nothing.
TUCHMAN: After digging themselves to the top, Adams and a friend desperately tried to free another man, James Drake. But they had to stop when the mountain rumbled for the third time.
ADAMS: We heard crack again. We said, "Sorry, James. We've got to run."
As we were running away from James, he was saying, "Don't leave me here. Don't leave me here."
TUCHMAN: They left but not for long. After the threat subsided, they returned to rescue James. The rest could not be saved.
ADAMS: After we walked for about ten minutes or so, contemplating whether to go back, we tried to look one more time. As I looked at the mountain, the whole center of the mountain come down.
Gary Tuchman, CNN, Atlanta.
COOPER: Hard to believe in that position.
Still ahead, Sir Charles Barkley arrested, accused of drunk driving. But that's only kind of half the story. We're going to tell you what he told police he was going do when he pulled over.
Plus, the Obamas moving to Washington this weekend. We'll have a sneak peek inside where the first family will be living before settling into the White House.
All that and more coming up.
COOPER: Charles Barkley, used to being in front of the cameras, probably didn't want to have this picture of him taken. It's a mug shot. The former basketball star and possible future governor candidate was busted yesterday in Arizona for driving under the influence.
His New Year's Eve encounter is getting a lot of attention, not only for what happened to him but for what he allegedly told police officers.
In "Crime & Punishment" tonight, here's Erica Hill.
ERICA HILL, CNN ANCHOR: Charles Barkley is known for his outspoken analysis on basketball.
CHARLES BARKLEY, FORMER BASKETBALL STAR: And these guys give up a wide open three. Are you kidding me?
HILL: And almost anything else.
BARKLEY: Every time I hear the word "conservative," it makes me sick to my stomach. Because they're really just fake Christians, as I call them.
HILL: When he was pulled over early Wednesday morning for running a stop sign, Sir Charles didn't hold back. According to the police report, the officers smelled alcohol on his breath. And when asked, Barkley admitted he'd been drinking. When asked how much, he was blunt: "A couple. I could give you a B.S. answer, but I didn't."
Barkley refused a breathalyzer test but later took a blood test. TMZ captured these photos of the former NBA star being processed. Officers say he cooperated fully.
LT. ERIC SHUHANDLE, GILBERT, ARIZONA, POLICE CHIEF: It was a very routine, typical DUI arrest. HILL: Barkley, who was a commentator for CNN's sister network TNT, issued this statement through Turner Sports: "I am disappointed that I put myself in that situation. The Scottsdale police were fantastic. I will not comment any further, as it is a legal matter."
There are plenty of others commenting, but not necessarily about the mug shot and the DUI charges. When he was pulled over, Barkley wasn't alone.
According to the police report, there was a woman in the car with him who was not his wife. When asked where he was going, police say Barkley responded: "You want the truth? I was going to drive around the corner and get oral sex," though he used a different term.
Barkley went on to tell the officer the same woman had performed the sexual act a week earlier, and it was "the best he'd ever had."
While he was being processed, the 45-year-old also joked, quote, "I'll tattoo your name on my [blank]," if it would get him out of the DUI.
The former NBA star lives in Arizona but has been talking of a move back to his home state of Alabama, where he recently told CNN's Campbell Brown he plans to run for governor.
CAMPBELL BROWN, CNN ANCHOR: So, you going to run for governor?
BARKLEY: I'm planning on it in 2014.
BROWN: You are?
BARKLEY: I am.
HILL: Barkley says his top priority as governor would be education. In Arizona, officers are hoping the aspiring politician's arrest would be a lesson of its own.
SHUHANDLE: This is another example. Please don't drink and drive. This is New Year's Eve. You have the choice. Whether or not you drink and drive, it is your choice. Please use this as an example to get a cab, get a designated driver, or get another ride home.
HILL: Now, Barkley had been in a local bar earlier in the night, where he was reportedly partying with Jaleel White, the actor you may know as Urkel from the '90s sit-com "Family Matters," among others.
COOPER: Are you serious? Really?
COOPER: That is the one detail on the story I have not heard before.
HILL: That's why I'm here for you. COOPER: Really? Urkel?
HILL: I think he just goes by Jaleel these days.
COOPER: OK. You're right. As he should.
HILL: And I'm not sure he still wears suspenders.
COOPER: I'm sure he doesn't. And we should give him the respect that...
COOPER: Erica, appreciate that. Thank you for that little detail. Really put a fine point on the story.
Up next, the Obamas heading to Washington this weekend but they cannot move into the White House yet. We're going to take you inside the exclusive hotel they will call home until the inauguration.
Also ahead, how we spent our New Year's Eve. We've got the good, the bad, and the -- well, not the really, really ugly for tonight's show.
COOPER: We're saving that. But the strangeness. We'll be right back.
COOPER: After 12 days in picture-perfect Hawaii, President-elect Obama and his family are flying home to Chicago tonight and back into the bitter cold. Over the next couple of days, the Obamas will say good-bye to their friends, their neighbors and their private lives and fly to Washington over the weekend.
Their daughters Sasha and Malia start their new school on Monday. Samantha Hayes now has more on their next stop on the way to 1600 Pennsylvania Avenue.
SAMANTHA HAYES, CNN CORRESPONDENT: He won the most exclusive address in the country, but first, President-elect Barack Obama will be staying across the street in a hotel that claims to be the most prestigious.
GARRETT GRAFF, EDITOR-AT-LARGE, "WASHINGTONIAN": Hay-Adams's motto is actually, "The only thing overlooked here is the White House."
HAYES: And it's where other presidents have looked for top-notch accommodations. President Bill Clinton stayed at the Hay-Adams, which also happened to be conveniently located near one of his favorite restaurants. The hotel also has a storied past. It was named for John Hay, assistant to President Lincoln and later secretary of state, and Henry Adams, an acclaimed author and descendant of presidents John Adams and John Quincy Adams.
The hotel is thought to be haunted by Henry Adams's wife, Clover.
GRAFF: And it's said that Henry Adams's wife, Clover, who committed suicide in 1885, still haunts the hotel grounds today, especially -- and I don't know why this is -- in the month of December.
HAYES: The Obamas' first choice was the official White House guest quarters, called the Blair House. But President Bush says it's booked until the 15th.
GRAFF: There certainly was a lot of whispers when that came out, that it was a little bit rude to tell the president-elect he couldn't move into the Blair House early. But on the other hand, there are legitimate needs for that space for the outgoing administration.
HAYES: So for now, the new president will enjoy the spectacular views of the White House from the Hay-Adams, as he prepares to see things from a different angle, on the inside.
If the Obamas stay at one of the suites at the Hay-Adams, the price could range from $2,900 to $5,000 a night.
And who's staying at the Blair House? No one is saying for sure. But the house is also booked for receptions and parties by outgoing administration officials and VIPs.
Samantha Hayes, CNN, Washington.
COOPER: All right.
Time now for our "Beat 360" winners. Tonight's picture, President-elect Obama's former rival, Hillary Clinton in AN exuberant moment last night in Times Square. She helped ring in the New Year with all of us.
Our staff winner was Gabe, who quipped, "A day later, a frozen Clinton awaited removal by city workers."
A couple of laughs there.
Our viewer winner is Jonathan, who didn't tell us where he was from. His caption: "See, Barack, you could never have pulled off a rally this big."
Jonathan, your "Beat 360" T-shirt is on the way. Congratulations.
"The Shot of the Day" is next. Play along tomorrow at AC360.com. "Shot of the Day," we could show you highlights from last year's New Year's Eve show with Kathy Griffin. But that wouldn't be any fun.
Instead, we've got some of the moments that made me cringe, and I'm not talking about the part we had to edit out of the West Coast replay. There were others as well.
COOPER: On our blog, a couple of folks were wondering who Steve Urkel is. When you're watching -- we were doing the story with Erica about Charles Barkley. This was Steve Urkel, the character. His real name is Jaleel White.
And I was concerned that we were, you know, kind of showing his old work, his character, Urkel, which is really what brought his...
HILL: Which is what this is.
COOPER: ... his fame.
HILL: Yes. But this is not all that he's done.
COOPER: He has done work since then, Erica Wikipedia'd it. He graduated from UCLA. He had small parts in "Dreamgirls," "Boston Legal."
COOPER: And, in fact, David our intern, knew that he had been in "Dreamgirls".
HILL: That's right. David remembered him from "Dreamgirls". David, I don't know what that says, but I bet you that...
COOPER: No, I think that says that it's memorable.
HILL: ... Jaleel White is appreciative.
COOPER: There you go.
So we hope you were watching CNN's coverage last night as the big ball dropped in Times Square. Kathy Griffin and I hosted the celebration for the network. Erica Hill was deeply involved, working the crowd. Don Lemon was there, as well. We had company, both the welcome and the unwanted kinds.
To be sure, there were a lot of funny moments, a lot of highlights, but frankly, who wants to see those?
We decided instead to focus on some of the things that didn't go quite as planned. Not the highlights but the low lights, if you will. It's our "Shot" tonight.
COOPER: Welcome, everyone, to New Year's Eve in Times Square.
Doing New Year's Eve with Kathy Griffin is anything but boring.
KATHY GRIFFIN, COMEDIAN: You want to do, like, five minutes on the Lohans? Let's throw something to the Jonas Brothers. You're a fraud.
COOPER: You can't do that. You just threw something at the Jonas Brothers.
GRIFFIN: Yes, I did. I'm going to throw a rock at them if I can. That's how I roll, Andy.
COOPER: They're going to remove you from the stage. You cannot throw stuff.
Kathy aside, things got off of to kind of a rough start for us.
Don, how's the crowd going?
GRIFFIN: Don got canned?
SEAN CALLEBS, CNN CORRESPONDENT: (UNINTELLIGIBLE)
COOPER: They finally fixed the audio for Sean Callebs, but when we talked to him on Bourbon Street in New Orleans, things didn't get much better.
CALLEBS: And they've got these guys brought these -- knuckleheads behind me. And the cops are coming to haul him away pretty soon. This is New Year's Eve here in the quarter, you know.
COOPER: We quickly learned New Year's Eve is a little less than raging in Las Vegas.
You're live. Brooke, how's the scene there?
BROOKE ANDERSON, CNN CORRESPONDENT: The scene is great, Anderson.
COOPER: Brooke, what's the scene there?
ANDERSON: You know, we're about two hours away from midnight.
COOPER: We should have accounted for that pesky time difference. At least it was midnight in New York.
Three, two, one -- happy new year!
GRIFFIN: Happy new year?
COOPER: And hey, what better way to ring in the new year than with some family-friendly acts?
Here's Hinder playing "Use Me."
COOPER: Lil Wayne in Atlanta tonight.
COOPER: No, that wasn't Kathy Griffin on the pole.
COOPER: Those were some of the backup dancers for Lil Wayne.
GRIFFIN: That Lil Wayne, my niece Claire wants to hook her up with him. And I'm all for it.
COOPER: You know it's a problem when you want to show a musical act on television, and yet you can't actually show the musical act.
That meant going back to Las Vegas for some real entertainment.
ANDERSON: I want to take you to a new concept. It's called "Dinner in the Sky." Let's take a look really quickly. Twenty-two people can get in at one time; take you up 180 feet in the air.
COOPER: I was confused by the...
GRIFFIN: But how many times can you...
COOPER: ... dinner in the sky. And then it was like a shot of some woman, like...
GRIFFIN: It looked like Gina (ph) from "Real Housewives of Orange County" but it wasn't.
COOPER: Yes, it absolutely looked like one of the real housewives.
We got through the rough patches.
Got to be so careful (ph).
GRIFFIN: Yes, that's right.
COOPER: And by the end of the night, everyone still had their sense of humor.
CALLEBS: Oh, come on. Just think of what I've had to endure tonight. You've seen this out there.
GRIFFIN: You know what, buddy? You suck, too. I loved the New York fans.
COOPER: It's getting ugly here. Take a short break. We'll go to Bourbon Street.
GRIFFIN: Shut up! You know what? Screw you! I'm working.
COOPER: We'll be right back.
GRIFFIN: Why don't you get a job, buddy?
COOPER: It didn't end there, but we're not going to show you that.
Kathy wanted one last dance, but unfortunately, we were out of time.
GRIFFIN: Are we never going to go back to Lil Wayne and the pole dancers?
COOPER: No. We're done with Lil Wayne, I think.
GRIFFIN: All right. I was just wondering. I was just wondering.
COOPER: I think we're done.
COOPER: We were so done.
HILL: Good times had by all. Good times.
COOPER: She was a great sport. We appreciate her doing it with us again this year.
That's it for "360;" thanks for watching.
"LARRY KING" starts right now.