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ANDERSON COOPER 360 DEGREES

Who's Keeping America Safe?; Defending The KKK; Small Town, Big Change; Fighting FEMA; Peterson - Murder For Hire?; First Lady Power

Aired May 22, 2009 - 23:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


(COMMERCIAL BREAK)

ANDERSON COOPER, CNN ANCHOR: Good evening, everyone.

Tonight, President Obama gets ready to name a Supreme Court pick. We've got new word about when it might happen and who the leading candidates are.

Also tonight, a courthouse bombshell in the Drew Peterson murder case. Suspected of killing his fourth wife, charged with killing his third, accused today of hiring a hit man to do it.

And a Philly first, the town of Philadelphia, Mississippi, electing its first African-American Mayor, that's Philadelphia, Mississippi Burning Infamy where three civil rights workers were murdered; 45 years of hatred, suspicion and shame, but also, as you'll see, 45 years of healing and progress.

We begin with late word out of Washington that President Obama may be close to naming his first pick for the Supreme Court, ready to announce a successor to retiring Supreme Court Justice David Souter. Few presidential decisions carry as much long-term impact and many spark political firestorms.

This one is already generating heat because of what Mr. Obama says he's seeking in a nominee, namely a measure of empathy.

Ed Henry broke the story this evening. And he joins us now with the latest -- Ed.

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Well Anderson, CNN has learned that a top aide to Senate Judiciary Chairman Patrick Leahy told fellow Democrats this afternoon to be ready as early as Tuesday for President Obama's Supreme Court pick, this according to an email obtained by CNN.

And three top Obama administration officials are confirming to us tonight that this pick could come as early as Tuesday. Though, it could slip to later in the week, maybe Thursday or Friday because the president's traveling to Nevada and California in the middle of the week. So anywhere from Tuesday through Friday, but again, as early as Tuesday.

The other key is these top aides are telling us the President has not quite made up his mind. He's narrowed it down to sort of a short list. Here are some of the people that are on the list including Sonia Sotomayor, she's a judge in New York on the U.S. Court of Appeals, someone who's Hispanic, as you know, Hispanic groups have been very vocal about saying they want to see the first Hispanic Justice.

Elena Kagan, she's the current Solicitor General for this administration, a very popular within the White House. She's in her late 40s. So if the President were to pick her, she could be on the court for a long time.

And finally, Judge Diane Wood; she's on the U.S. Court of Appeals in Chicago. We've confirmed that a few days ago the President did have a one-on-one meeting with her. She also teaches part time at the University of Chicago. Interesting connection, the President, of course, used to teach constitutional law at the University of Chicago as well.

But there are other potential picks as well off that short list, someone like Michigan Governor Jennifer Granholm, we're told, still very much in the mix, Anderson.

COOPER: So Ed, from what you're hearing, the president himself has not really yet really made a decision?

HENRY: That's right. And what's really interesting is top aides are saying he's in what they call the mulling stage, still reading a lot of memos, a lot of court decisions. He's been very personally involved in this search, we're told.

And he's actually been going back to his staff and saying, I want more information even after they give him a pile of paper. And officials are saying that this weekend could be pivotal.

He's going to Camp David for the Memorial Day weekend with his family. Very conducive to thinking, it's in a remote location outside the Washington D.C. area but also very conducive to having secret one-on- one meetings if he wants to have a final meeting with one of these potential candidates.

The media has no access to Camp David. That's interesting.

And I think the other final point is that timing is key. The reason why they're really at urgency to next week is the fact that he's expected to do it before he leaves June 3rd for Egypt, that foreign trip everyone's expecting, the speech to the Muslim world.

He wants to get the confirmation hearings in the Senate going in July. The Senate's out of session in August. If there's any sort of delay here, it will get pushed back to September. What does he want to do in September? He wants to do health care reform. He doesn't want to be dealing with this -- Anderson.

COOPER: All right, Ed Henry at the White House. Ed thanks very much.

On now to President Obama, firing back at critics, namely Vice President Cheney who accused him of putting legal niceties first when dealing with suspected terrorist at the expense, they say, of America's safety.

The President, firing back with help today from a surprising ally, former Homeland Security Chief Tom Ridge, Republican Tom Ridge.

First, the President today in Annapolis, addressing the graduating class of the naval academy.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We uphold our fundamental principles and values not just because we choose to but because we swear to. Not because they feel good, but because they help keep us safe and keep us true to who we are. Because when America strays from our values, it not only undermines the rule of law, it alienates us from our allies. It energizes our adversaries, and it endangers our national security and the lives of our troops.

(END VIDEO CLIP)

COOPER: Well, the president's say on why water-boarding and other so- called enhanced interrogation techniques are wrong. Now, Republican Tom Ridge.

(BEGIN VIDEO CLIP)

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: You had the intelligence. You served in a very sensitive position in those days after 9/11.

TOM RIDGE, FORMER HOMELAND SECURITY SECRETARY: Yes.

KING: Do you believe we are less safe today because of steps taken by President Obama?

RIDGE: I do not.

KING: You disagree with Dick Cheney, then?

RIDGE: Yes, I disagree with Dick Cheney. And I also disagree with the approach both men are taking.

(END VIDEO CLIP)

COOPER: Let's "Dig Deeper" now with CNN contributors Democrat James Carville and Republican Bill Bennett.

Bill, we just heard Tom Ridge say that Dick Cheney is wrong when it comes to the country being less safe now than it was during the Bush/Cheney administration, that his approach -- that this approach has to go beyond politics. Do you agree?

WILLIAM BENNETT, CNN CONTRIBUTOR: Well, I don't know if we're less safe or not. I don't think it's a good idea for the Speaker of the House to call the CIA people liars. I don't think that helps their confidence which in the long run can hurt our intelligence-gathering abilities and make us less safe. But if we are not less safe, I think it is probably the case because ironically this President is continuing almost all of the policies of the Bush administration: rendition, military commissions, non-release of the photos, surveillance, the patriot act, all the things which people, you know, objected to in the Bush administration are remaining very largely in place despite the noises to the left, the noises that sound like ACLU. Barack Obama is very consistent with George Bush.

COOPER: Well, James, if that's true, why is Dick Cheney speaking out? I mean, is he then...

BENNETT: I know why.

COOPER: I mean, is he, then, defending himself and his legacy, or is he really concerned about national security?

JAMES CARVILLE, DEMOCRATIC STRATEGIST: Well, first off, the Secretary says he knows why. I'm sure that he feels like he needs to defend himself. I mean, I have no idea.

BENNETT: That's right.

CARVILLE: But it wasn't just Secretary Ridge, it was Senator McCain, or Senator McConnell said that he didn't even watch the speech. But, you know, look. He's the former Vice President of the United States. And if he wants to go out there and give speeches, that's his business.

He has certainly the right to do that under the constitution. I don't really -- go ahead, I'm sorry.

COOPER: But Bill, I mean, it's interesting here what Dick Cheney is saying because he's basically arguing about stuff and talking about things which, as you just pointed out, the Bush administration themselves moved away from, over the last several years of their administration.

BENNETT: Yes, well, I mean, I'll explain what Dick Cheney was doing. Well, he was saying to Barack Obama is get off our backs. Stop kicking us around. We actually did keep the country safe for eight years. And by the way, while you're on your high horse, you might notice that you're traveling in the same direction we are.

So, you know, stop all this phony baloney about how you're radically ranging course when you're not radically changing course. Your most radical position to date which is Guantanamo, even your own party doesn't support you. So, you know, stop, stop saying things that aren't true.

CARVILLE: Yes, I'd point out that we've changed the policy in Iran. We've changed the policy in the Israeli/Palestinian conflict. We've changed the policy in Afghanistan -- we've changed the policy in Afghanistan. We're closing Gitmo; we're doing all of these things.

And you know, there's a lot of changes that you can bring about in four months. And there's a pretty good bit amount of change here. Let's let him continue to go through it. And by the way, some of these things may be worth keeping.

COOPER: James, do you think Dick Cheney speaking out is hurting the Republican Party?

BENNETT: No.

CARVILLE: I don't know -- I don't know if they can be hurt any more than they are. It's something like 22 percent of them left in the country. They can't go much lower.

And look, you know, they have a lot of different people that are speaking on a lot of different topics right now. And that's what happens when you're out of power. My sense is that they're going to get better -- because well, they just have to get better. And they'll get it down a little better than they've got it now.

But again, as a Democrat or as an American, A, you can't stop anybody from speaking out. And in this instance, I don't think that we want to stop anybody from speaking out even if we could.

COOPER: Bill Bennett, James Carville, thank you.

Well, we showed you a portion of John King's interview with Tom Ridge a moment ago. You can see it all on "State of the Union" CNN Sunday morning at 9:00 Eastern time.

And because we believe in bringing you all the angles, be sure to check out my interview with Liz Cheney. Just go to AC360.com and look for the link there.

While you're there, be sure to check out the live chat that's happening right now. Log in, and let us know what do you think and talk to other viewers who are watching the program right now.

Up next, the first black mayor of a majority white town, that made a name for itself battling and even murdering anyone who dared speak out for civil rights.

Plus Drew Peterson and new allegations about how prosecutors say he tried to get rid of his third wife.

Also tonight, it's not just our first lady. We'll look at first ladies around the world and why their clout is growing.

(COMMERCIAL BREAK)

COOPER: Something extraordinary happened this week in Mississippi in a town remembered for one of the ugliest chapters of the civil rights movement.

For the first time in history, Philadelphia, Mississippi, elected an African-American Mayor his name is James Young, and you're going to hear his amazing story in just a moment.

For many just the mention of the town's name brings back memories of three young men, James Chaney, Andrew Goodman and Michael Schwermer. In 1964 the three civil rights workers were ambushed and murdered; they were buried in a shallow grave. It took decades but a former Ku Klux Klan member was finally convicted for masterminding the killings. Now, for Philadelphia, as for Mississippi, much has changed since then but perhaps not everything.

Back in 2005 I spoke to Harlan Majure; he was once the Mayor of Philadelphia. And as you'll see, he believed even then that the Ku Klux Klan did a lot of good. Here's some of my interview. Take a look.

(BEGIN VIDEO CLIP)

COOPER: Why do you believe that Ku Klux Klan at any time in their history was a peaceful organization and did a lot of good?

HARLAN MAJURE, FMR. MAYOR OF PHILADELPHIA, MISS.: Because if there was anybody in the community or the neighbors, that would not take care of their family, too sorry to work or waste their money and not take care of their wife and their children, the Klan would pay them a visit.

If there was somebody in the neighborhood that was messing around with somebody's house or somebody else's wife, the Klan would pay them a visit.

And they visited more white people, and they whipped more white people than they did black people. And this was, like I said, in the '30s.

COOPER: Are you kidding? You are a twice-elected official. Don't you have responsibility to be aware of the history not only of your town but the country we live in? I mean, if you're going to make comments about the Ku Klux Klan, shouldn't you have read some history books about it?

MAJURE: Well, I didn't plan to be making any comments about it. I was summoned to be up there. I didn't believe, even the three people were killed, I thought it was a publicity stunt until later on while they were looking for them, the FBI and whoever else was having those search parties. It was then I realized that it did had actually happened. But I didn't believe it before that.

COOPER: So you thought at the time that James Chaney, Andrew Goodman, and Michael Schwermer, that it was a publicity stunt by...

MAJURE: Exactly. You're right. And it should not have happened. We were never in favor of that type of an operation. We weren't in favor of what they did, came down here, but certainly not killing anybody.

COOPER: You're saying -- they should not have been killed but they shouldn't have come down there?

MAJURE: Well, I'm saying that the people that were responsible for their deaths were the people that organized them, whatever towns they were in. I think one, two of them was from New York City.

COOPER: I really try to be respectful of all my guests, and I respect you and your position. But you just said that these three men who were murdered in the dead of night and buried in an unmarked grave and just abandoned and, you know, bull-dozered over, you said that the people who were responsible for their deaths or the people who sent them there to do voter registration, not the actual people who pulled the triggers?

MAJURE: I'll say they were responsible for them without schooling them, without proper training them, without giving them proper protection when they come down here because they should have known they were coming into a hostile environment.

It would have happened in any city and any state. Where are you? Where am I talking to you?

COOPER: New York City.

MAJURE: All right, if I recruited a group of young people, and I have two granddaughters that would be the right age for that right now, to go in and say, we're going to clean up the drugs, the prostitution, the money laundering, the gang wars and stuff like in the City of New York, we're just going to move in and take over, because that stuff is illegal.

And it was when I was up there in the military. Do you think we'd see the sun rise the next morning if we went in there forcibly changing that?

COOPER: Sir, it's just sad that in this day and age you're comparing people who came down to try to help African-Americans who were living in your community and had been there for hundreds of years, people who had the right to vote and couldn't vote and weren't being allowed to vote and weren't being allowed to sit at lunch counters, you're comparing people who came down to help those people to someone, like, trying to root out drug dealers and killers and rapists?

MAJURE: No, I'm comparing the situation. They were uninvited. They should -- we were making progress down here. It was slow and it wasn't at the speed that the federal government and it wasn't at the speed with whoever these were that organized this wanted to.

COOPER: Two of them were New York. But you know what? James Chaney was from Meridian, Mississippi. And that's where my grandmother was from and that's where my dad was born in Quinton, Mississippi, and not too far from where you are right now.

And I've got to tell you, you know, what's wrong with someone from Meridian, Mississippi, an African-American, saying I want to be able to vote?

MAJURE: Not anything wrong with it as far as I'm concerned. The timing was bad and we were more or less invaded.

COOPER: When was the right timing to give African-Americans the vote?

MAJURE: I don't have the answer to that question. There's no way I could. COOPER: Well, sir, I appreciate you coming on the program and giving us your perspective and we do appreciate it. Mayor Harlan Majure, I appreciate it very much, sir.

MAJURE: All right. Thank you.

(END VIDEO CLIP)

COOPER: Twice an elected official in the town of Philadelphia. Again, that was four years ago, about.

We caught up with Harlan Majure today. He did not back away from his belief that the Ku Klux Klan did some good work. And as he said, some bad things too, Majure also said, Philadelphia is doing great and invited us to stop by any time. I have a family reunion in the area this summer, and I'm hoping to do just that.

As we told you, the town is also making history with its first African-American Mayor.

Ed Lavandera tonight "Uncovering America."

(BEGIN VIDEOTAPE)

ED LAVANDERA, CNN CORRESPONDENT (voice-over): There is a dark past here. For decades, Philadelphia, Mississippi, was the white-hot center of a stain left by the Ku Klux Klan. So many never thought they'd ever live to see a day like this.

JAMES YOUNG, PHILADELPHIA, MISS. MAYOR: Look out, man. We did it.

UNIDENTIFIED MALE: Congratulations.

YOUNG: Thank you, man.

LAVANDERA: Born and raised here, James Young was just elected the city's first black mayor.

(on camera): Why do you think you're so emotional?

YOUNG: Well, when you've been treated the way we've been treated -- excuse me -- I guess maybe that's what's been boiling up, and it finally come to the surface.

LAVANDERA (on camera): An angry boil that infamously began 45 years ago. Jim Prince runs the local newspaper.

JIM PRINCE, PUBLISHER, NESHOBA DEMOCRAT: Philadelphia, I am resolved, will always be connected to what happened here in 1964.

LAVANDERA: That year three civil rights workers were murdered driving down a country road. The savage attacks were a defining moment of the civil rights era and immortalized in the movie "Mississippi Burning." Prince says the scab from that wound is finally falling off.

PRINCE: This city's 55 percent white. So the fact that Philadelphia, Mississippi, with its notorious past could elect a black man as a mayor, it might be time to quit picking on Philadelphia, Mississippi.

YOUNG: I can't believe it. Who would have thought a little country boy like me would be Mayor of Philadelphia, Mississippi, in '09? I couldn't even have wrote that in a fairy tale. How you doing?

LAVANDERA: As for James Young, he says he won by shaking hands and knocking on doors. But he only beat the white incumbent candidate by 46 votes. Young knows that for every hug he gets, some still look the other way.

YOUNG: We have some very small pocket that will never change. That's what we've got to deal with.

LAVANDERA (on camera): Some of James Young's earliest memories of growing up in this house here on Ivy Street are of fearful nights listening to the Ku Klux Klan roam through these neighborhood streets in the middle of the night; his father sleeping on the sofa in the living room with a gun on his lap.

(voice-over): But the new Mayor of Philadelphia hasn't left that very far behind. He lives now just across the street.

Young was 9 years old when the civil rights workers were killed. He was one of the first black students to integrate white schools here. He worked as a hospital housekeeper until a white boss recommended he become a paramedic.

Young worked his way up to become the city's EMT Director. That catapulted him to his first elected job. And now he's the most important public official in Philadelphia.

YOUNG: It's just beginning to sink in. The places that we were locked out -- I'm going to have the key; the places that we couldn't go -- I've got the key.

How are you all doing?

UNIDENTIFIED FEMALE: We're so happy.

YOUNG: I know it.

LAVANDERA: It took 45 years. Some might say at last justice has truly been served for all the people who live here.

Ed Lavandera, CNN, Philadelphia, Mississippi.

(END VIDEOTAPE)

COOPER: Well, changes have come.

Coming up tonight, President Obama signed it today, Democrats, Republicans voted overwhelmingly to pass it. We'll tell you what the new credit card reform bill means to your bottom line.

Also, years after Katrina's new misery surrounding FEMA and trailers; why the Feds are trying to take away the only homes that thousands of people still have. We're "Keeping them Honest."

And cops have their eyes on a new possible suspect in the disappearance of Maddy McCann, just 4 years old when she vanished while on vacation with her family in Portugal.

The latest on that and more when we continue.

(COMMERCIAL BREAK)

COOPER: Another bombshell in the Drew Peterson murder case. What prosecutors revealed today that made a lot of people, well, actually gasp. That is just ahead.

But first Erica Hill has a "360 News and Business Bulletin" -- Erica.

ERICA HILL, CNN CORRESPONDENT: Anderson, President Obama signed new credit card restrictions into law today. And those rules take effect in February. They make it tougher for credit card companies to raise fees and interest rates. The bill also includes an unrelated measure allowing people to carry guns in to national parks.

Iranian-American Journalist Roxana Saberi returned to the United States today after spending 100 days in an Iranian jail. The 32-year- old woman was convicted last month on espionage charges and sentenced to eight years in jail. A judge changed her sentence during an appeal hearing. Today she told reporters she was feeling very good and thanked those who campaigned for her release.

At a Mexican prison, more than 50 dangerous inmates escaped but not with much of a struggle. Look at this, they just walk out the door. Some of them actually took stolen guns. Now, at first the guards kind of stepped aside, didn't really make a move to stop them.

Then you as you can see when everybody's pretty much gone, they come out with their guns going after the escapees only to find they have fled in a convoy of cars. All of this, as you might imagine, captured on that security tape last weekend.

And a remarkable tribute, the son of a New York City assistant principal who died on Sunday of swine flu-related illness pitched a no-hitter just a day after his father was buried. 18-year-old Jordan Wiener was wearing a cap with his dad's initials on it. He struck out 14 batters on Thursday. The high school senior says he felt his father giving him the power to win.

COOPER: Wow, that's a great story and very sad. Amazing he was able to play so soon after his death.

HILL: I know.

COOPER: Unbelievable.

Coming up next on 360, they lost their homes to hurricane Katrina. But will thousands who fled the storm be homeless yet again? Tonight, FEMA's ultimatum over the trailers that gave to families now wants to take back from those families. We're "Keeping them Honest." Also tonight, building a case against Drew Peterson. Did he try to hire a hit man to kill his third wife? We have new details about today's court hearing.

And from teacher and student to husband and wife, Mary Kay Letourneau and her much younger beau are hosting a "Hot for Teacher Night" at a bar. You heard me. We'll have details ahead.

(COMMERCIAL BREAK)

COOPER: Well, they lost nearly everything during hurricane Katrina. Tonight thousands of survivors of the storm are facing new fears, the imminent threat of eviction. As you'll see, the orders to get out are coming from the very government agency that took a lot of heat in the wake of the storm.

Sean Callebs tonight "Keeping them Honest."

(BEGIN VIDEOTAPE)

SEAN CALLEBS, CNN CORRESPONDENT (voice-over): It's been nearly four years since Katrina laid waste to New Orleans. Who could have ever guessed that today, exactly 44 months later, thousands of families would still be living in temporary housing trailers provided by FEMA?

And now FEMA wants them out by the end of this month. That's right. This is about FEMA, the government agency that has been blistered for botching so much post-Katrina aid. Yet this isn't a story you might suspect.

PATSY ROBIN, FEMA TRAILER RESIDENT: You have to know we're there because we have no choice.

CALLEBS (on camera): FEMA says it wants Patsy Robin and her daughter out of the trailer in a matter of days, along with everyone else. So why isn't she out already?

Well, like so many people in this area, she has spent an endless amount of time battling insurance companies, cutting through government red tape. And she says contractors did shoddy work on her house and then disappeared with the $45,000 she did have.

ROBIN: Everyone wants a home. Everyone -- FEMA trailer is not a home. It's a temporary fix that's lasted for almost four years.

CALLEBS (voice-over): So Patsy says she's trying and that she and her daughter, Carly, need just a couple more months in the 200 square foot trailer before work on her renovated house is done. For them, free or not, a trailer has not been easy. Carly has lost a lot.

CARLY ROBIN, FEMA TRAILER RESIDENT: Some, like, dances, homecoming dances, I've gotten ready in a trailer and it was not fun. I don't like to really invite friends over because it's so small.

CALLEBS (on camera): FEMA points out it was only supposed to provide temporary housing for 18 months. But because of the sheer size of the disaster, they offered extensions.

At one point the state was kind of like a giant trailer park with 92,000 FEMA trailers here. That number has been whittled down to 2,500. And everyone says, look, they're an eyesore. They're a health hazard.

And now there is a growing course of critics including Councilwoman Cynthia Hedge Morrell who says, enough already.

CYNTHIA HEDGE MORRELL, NEW ORLEANS COUNCIL MEMBER: It's four years after Katrina. And I really don't want to be like Florida after Andrew where you had ten years after their Andrew, and they still had to be living in trailers. I don't want that for New Orleans.

CALLEBS: Michael Monteleone has lived in this trailer more than three years. He says FEMA has told him to be out by the end of the month, but he thinks he'll get an extension.

(on camera): Is it FEMA's fault that you don't have a place to live 44 months after the storm?

MICHAEL MONTELEONE, FEMA TRAILER RESIDENT: I can't say it's FEMA's fault. No, that would be kind of putting the blame on them. I mean, but, like, everybody individual has their own situation.

CALLEBS: His story? He got an insurance payoff to rebuild his home. Instead he used it to get out of debt. So this is his house today. For income, he does yard work. Good money in the summer but nothing in the winter. So once again, Monteleone will ask FEMA for more time, but perhaps his time has run out.

MORRELL: I don't want FEMA to be the bad guy in this one because I don't think they really are the bad guy.

CALLEBS: FEMA and taxpayers have been patient. After all, it's been nearly four years of temporary trailers.

Sean Callebs, CNN, New Orleans.

(END VIDEOTAPE)

COOPER: Tonight, new allegations of government-sanctioned shakedowns in Texas. Now, we brought you several reports out of one town where cops and the former D.A. are accused of taking cash and possessions from motorists. They deny any wrongdoing. But if you think those charges are shocking, wait until you see Gary Tuchman's report from another Texas community. Watch.

(BEGIN VIDEOTAPE)

GARY TUCHMAN, CNN CORRESPONDENT (voice-over): This man was pulled over by police for a license plate violation near the town of Alice, Texas. Javier Gonzalez had $10,000 in cash with him. He says it was for buying a headstone for a dying aunt, but police were suspicious. They brought out a canine dog and arrested him for money laundering. Ultimately Gonzalez sued for wrongful arrest and got more than $110,000 in a lawsuit settlement.

This woman was also stopped by cops and charged with money laundering after she admitted she had $8,500. Dewania Mitchell (ph) took legal action and got her money back.

Police in Jim Wells County and Brooks County, Texas, say these cases are rare, that most police stops where drivers end up forfeiting valuables are done by the book. But what about how the forfeited money is spent?

Did you give tens of thousands of dollars to your assistants each year?

JOE FRANK GARZA, FORMER DISTRICT ATTORNEY, JIM WELLS COUNTY, TEXAS: Oh, yes.

TUCHMAN: Joe Frank Garza was the district attorney here for 16 years. He was supposed to use this forfeiture money for official purposes. But he says spending hundreds of thousands each year so his three favorite secretaries could get what he calls stipends isn't official purpose.

GARZA: I saw nothing wrong with it.

(END VIDEOTAPE)

TUCHMAN: The fact is if these secretaries did not get this money, and it might be as much as $2 million, there would have been more cash to pay for police cars, bulletproof vests, better courtrooms or more computers. As you might expect, many people are angry about what the former D.A. told us, particularly the new D.A. who just beat him in this past election day. But what can be done? The answer may surprise you -- Anderson.

COOPER: Gary, the guy who talked to you, why did he agree to go on camera?

TUCHMAN: First he said he wouldn't. And then I told him, listen. I'm used to people running away from me when I want to talk about controversial issues. It never looks good. He made the decision then -- and I give him credit for it -- to talk to me to give what he feels is an honest answer to my questions.

And I will tell you that he defends what he says. He defends giving this hundreds of thousands of dollars to his three trusted secretaries.

COOPER: All right. Gary's going to have full answers in his full report which airs next week. Gary, look forward to that. Thanks, Gary.

A quick reminder' let us know what you think. Join the live chat happening now at ac360.com about that or any story you're watching tonight. You can also talk to other viewers there.

Coming up next, some damning new allegations against that guy: what prosecutors say Drew Peterson said about his third wife and how he'd be better off with her dead? That and what a judge said about his request for lower bail.

Also coming up, new information in the disappearance of Madeleine McCann: authorities may have a fresh person of interest in the case.

And later, whether it's Michelle Obama or Carla Bruni, why today's new crop of first ladies is second to none; tonight, when 360 continues.

(COMMERCIAL BREAK)

COOPER: Well, Drew Peterson is the guy who always seems to have a smile no matter what. No matter how many wives he's suspected of killing; always with a joke no matter how high the bail. We see him clowning with reporters and jailers alike.

Today in court charged with murdering his third wife, two things to wipe the smile off his face. The request to lower his $20 million bond denied in part because of shocking new allegations from prosecutors.

Erica Hill has more in tonight's "Crime & Punishment" report.

(BEGIN VIDEOTAPE)

ERICA HILL, CNN CORRESPONDENT (voice-over): It's a bombshell that's likely the first of many. Drew Peterson tried to hire a hit man to kill his third wife, Kathleen Savio, for $25,000; that allegation coming today from the prosecution. Laying the groundwork for the state's murder case against the retired police officer.

SUSAN DOMAN, KATHLEEN SAVIO'S SISTER: This is the first time that we ever heard something like that. And it was a shock to us. And it brought tears to our eyes, but we had to control ourselves.

HILL: The AP reports the state also claims Peterson told another officer he'd be better off if Kathleen Savio were dead because he'd be financially ruined by a pending divorce settlement. Peterson's attorney quickly brushed off the latest allegations.

JOEL BRODSKY, DREW PETERSON'S ATTORNEY: So much of these quote, unquote, "new facts" come supposedly come to light shortly in the last six months, let's say. People seem to be having an amazing memory.

HILL: Kathleen Savio was found dead in a dry bathtub in March 2004, a gash in the back of her head. Initially ruled a drowning, her body was exhumed, and a second autopsy performed in 2007 after Peterson's fourth wife, Stacy, went missing. Kathleen's death was later reclassified as a homicide.

Drew Peterson has pleaded not guilty to her murder. But he will remain in jail on $20 million bond. The judge's rejection of his request for a lower bail is a blow to the defendant but welcome news to the families of his third and fourth wives.

PAM BOSCO, SPOKESWOMAN FOR STACY PETERSON'S FAMILY: He thought all this was a joke, in the very beginning. He probably thought he would never come to see this day. And now that he sees the seriousness of it, he's no longer laughing.

DOMAN: All you Drew Peterson fans, sorry to disappoint you, but it's Kathleen Savio's day. It's about time.

HILL: Erica Hill, CNN, New York.

(END VIDEOTAPE)

COOPER: Joining us now, law professor and former prosecutor, Wendy Murphy, author of "And Justice for Some." Wendy, thanks for being with us.

We just heard in Erica's report prosecutors saying they have evidence that Peterson tried to hire a hit man to kill Kathleen Savio. If that is true, and they have the evidence, I mean, that's -- that's devastating.

WENDY MURPHY, FORMER PROSECUTOR: Oh, yes. And here's why, Anderson. Remember, the weakness in the prosecution's case is that they have disparate autopsies. One said it was an accident, the other calls it homicide. What you need when you have that problem is proof that he intended to kill her, which is the opposite of accident. And that's what the hit man offers.

You know, I imagine they've actually got the guy. He's going to be there live to testify. That's usually what happens in these sort of cases. Some people think hit men aren't great witnesses because they're thuggish. But they actually are great witnesses and often perceived as highly credible because it's, you know, not in most people's best interests to take the stand and say, "Oh, yes, he was looking for me as the guy he wanted to off his wife."

So it's such a statement against personal interest that tends to come across as credible to the jury.

COOPER: You know, recently a female body was found near Peterson's home. It's going to be a couple weeks before examiners identify the remains correctly. If Drew Peterson is indicted for Stacy's murder as well, how does that affect the case against him on the third wife's death?

MURPHY: I'm not sure it will affect it much. Certainly Kathleen's case gets to go first because it was filed first. There's no question it will affect the jurors. We'll all hear lots of that evidence. And they'll have to be careful in jury selection.

Some people are saying the cases will be joined. And certainly that would be more efficient for the prosecution, but, you know, Anderson, I don't think they should be joined. You know, I'm as angry as anybody at Drew Peterson. I want to wring his neck. But I think it would be terribly unfair to try these two cases together because the jurors are going to say the same thing we're all saying. Third and fourth wives? Both dead? Are you kidding me? It's just too coincidental. I think the guy's creepy, guilty. You can't convict somebody because he's creepy and has these weird coincidences with his wives. So I think the cases should be tried separately. But I bet a judge will have to rule on that issue.

COOPER: There's been a big debate about whether prosecutors can use Kathleen Savio's own words during the trial. She apparently told friends and relatives that she was afraid Drew Peterson would kill her. Peterson's lawyers are saying, look, this is hearsay and shouldn't be admitted.

MURPHY: Yes. And there's a good constitutional question, you know, defendants have a right to confront the witnesses. Hearsay is the opposite of a witness live in court that you can confront and cross- examine. So there are important constitutional questions.

But there's a really big exception. It's called forfeiture by wrongdoing. And what it means, Anderson, is if you kill a witness to make them unavailable to testify against you, you forfeit your constitutional rights. You can't have it both ways. Get rid of the witnesses and then complain that they're not around for you to cross- examine.

I think it's a tough question. I can see it going either direction. You have to prove that he intended to kill the witness for the purpose of making her unavailable for trial as opposed to killing her because he didn't want to pay a bunch of money in a divorce case, which is another important part of the evidence in this case.

I don't know exactly what the court will do, but they have a good argument -- the prosecution does -- that the statements from Kathleen Savio to her sister, for example, saying if I end up dead, he killed me, you know, that's also very strong evidence. And that's a reason the judge might just let it in.

COOPER: It's also interesting because the defense is basically saying this is a weak circumstantial case, and their alibi is Drew Peterson's son who says that he was with his father during the time of the murder. How does that usually play on the stand? You talked about how a hit man plays. How does a son, a young man, a young boy, talking about his dad? How does that play?

MURPHY: You know, it's an interesting question. And it's unfortunate that the child might be literally put in between his parents. He's already lost his mother. You can bet he does not want to lose his father to a life behind bars.

But, you know, jurors aren't stupid. They know this boy loves his dad. If they see him take the stand and say, he was with me the whole time, therefore I'm the perfect witness, I'm that rock-solid alibi. He was with me and therefore he couldn't have killed my mom, the jury's going to say he loves his dad. He'd do anything for his dad. He would even lie for his dad.

COOPER: All right, we're going to leave it there. Wendy Murphy, appreciate it. Thanks.

MURPHY: You bet.

Up next tonight, first lady Michelle Obama. Why her influence and power to shape the agenda in Washington only seems to be growing.

(COMMERCIAL BREAK)

COOPER: President Obama's had a rough week, getting pushed back from the Senate on his plans to close Guantanamo Bay and a public smack down from former vice President Dick Cheney.

Michelle Obama has had a much easier job as first lady this week. Four months after moving to the White House, her approval ratings are through the roof. Mrs. Obama has secured her place in an exclusive club while reinventing the job of presidential power spouse.

Tom Foreman tonight takes us "Up Close."

(BEGIN VIDEOTAPE)

TOM FOREMAN, CNN CORRESPONDENT (voice-over): This may be President Obama's year, but summer is shaping up as the season of the spouse. The cover of the new "Time" magazine features first lady Michelle, a testament to her growing popularity and star power.

MICHELLE OBAMA, FIRST LADY OF THE UNITED STATES: I know a little something about the power of hope. My husband knows a little something about the power of hope.

FOREMAN: Whether through speaking at a college or promoting funding for the arts or starting a women's arms race in gyms coast to coast, the first lady has already surpassed her husband in popularity polls and maybe that's no surprise.

HILLARY CLINTON, SECRETARY OF STATE: Thank you.

FOREMAN: For decades, media fascination with first ladies has been expanding their political possibilities according to a man who wrote about the secret lives of the first ladies, Cormack O'Brien.

CORMACK O'BRIEN, AUTHOR, "SECRET LIVES OF FIRST LADIES": They have to either look the part of a homemaker or an activist or a politician or policymaker. A hundred years ago, because there wasn't this intense media focus 24 hours a day, you could, if you chose, decide to be nothing more than the woman who sleeps with the President.

FOREMAN: Spouse power is rising elsewhere, too. French first lady Carla Bruni Sarkozy has grabbed plenty of headlines, most recently by saying the Pope's comments against condoms are hurting efforts of stopping the spread of AIDS in Africa. And in Argentina, first lady Cristina Fernandez De Kirchner took her role in policy-making even farther, running for and winning the presidency herself as her husband left office in 2007. And she's still in charge.

(on camera): Political analysts say in some ways spouses have it easier than Presidents because they can focus on a hand-picked issue and pursue it doggedly while the President must address every crisis that comes along.

(voice-over): Still, whatever the reason, spouse power is clearly rising fast, and that may be the real meaning of Michelle.

Tom Foreman, CNN, Washington.

(END VIDEOTAPE)

COOPER: Well, as Tom said, Michelle Obama's on the cover of the current issue of "Time" magazine. We posted the article on our website. To read it, go to 360.com, ac360.com.

Coming up next, are police getting closer to finding Madeleine McCann? There's a new person of interest in the case, a convicted sex offender who was living not far from the resort where she disappeared. We have the details on that.

(COMMERCIAL BREAK)

COOPER: Up next, a melt-down at a car dealership. That is tonight's "Shot." But first, Erica Hill has the "360 Bulletin" -- Erica.

HILL: Anderson, some wild photos. Take a look and see if you think these men look alike. Wait until we get the pictures there for you -- there you go. According to British media, that is Raymond Hewlett on the left who's a convicted sex offender. On the right is the first composite sketch of a possible suspect in the disappearance of 4-year- old Madeleine McCann in Portugal.

Several British newspapers are reporting Hewlett actually lived near the resort where Madeleine vanished from two years ago while there on vacation with her family. A McCann family spokesman says Hewlett is a person of interest; one of many. Hewlett says he is innocent. He's actually now in a German hospital where he's battling cancer.

More than 32 million Americans are expected to travel at least 50 miles over the holiday weekend, that's up a tick from last year -- 1.5 percent. Most of them will go by car. And gas prices are jumping in just the last month, now the average $2.26 a gallon nationwide compared to $4.11 though last July -- so still better than that last year.

To stay on top of the latest traffic and weather update this Memorial Day weekend, you can find all that at our Web site ac360.com.

Passengers of U.S. Airways Flight 1549 which made the emergency landing in the Hudson River now getting what they left behind there four months ago; their luggage. In fact, the airline is hand delivering the bags to those who did the right thing and left them on board. Those have been cleaned.

And tomorrow night, a Seattle bar is holding "Hot for Teacher Night" hosted by none other than Mary Kay Letourneau. She, of course is a former teacher who pled guilty and did prison time for raping Vili Fualaau, one of her elementary school students. They are now husband and wife with two children. He will be deejaying the event and apparently it's the third time they've done it. They just kept the other two a little bit more quiet.

COOPER: I see, yes. Now they're branching out. Maybe taking it nationwide.

HILL: Great.

COOPER: Yes. Hmm. We should move on, shall we?

HILL: I think we should.

COOPER: I think so.

HILL: They've had enough time on air.

COOPER: Time now for our "Beat 360" winners; our daily challenge to viewers to come up with a caption better than the one we can come up with for a photo that we put on the blog everyday. So tonight's picture, President Obama reacting to seeing speech writer Cody Keenan dressed up as a pirate outside the Oval Office. Our staff winner is Jay Kernis, managing editor of CNN; there he is right there.

Now before we show you his caption, we want to point out that we have been doing "Beat 360" for about a year and a half now. And for just about all of that time, Jay has been bar none our most prolific player every single day without fail.

HILL: Everyday and can I say, Jay, I love you dearly but you know what, half the time I have no idea what you mean. Today I get it.

COOPER: You get it. He's never won before tonight, but he's never given up. Jay tonight is your night.

HILL: Yes.

There's the party.

COOPER: That's the party we had earlier.

HILL: A fitting party for a fine caption.

COOPER: That's right. Without further ado -- we turned down the sound for some reason the party because we thought it was just too loud.

So here's jay's caption: "President Obama congratulates his newly- appointed ambassador to Somalia," because there's pirates in Somalia. It's a good one. It was the best one we had today. Jay, congratulations. I know he's watching.

HILL: Jay Kernis, nice work.

COOPER: We are all proud. Our viewer winner is Sandy from Pennsylvania with the caption: "The White House staff is ready for another Dick Cheney attack."

That's funny, too. Your "BEAT 360" T-shirt is on the way. And tonight in honor of Jay's big win and tireless dedication to "Beat 360" we're going to break out the own rules and give him a T-shirt, as well.

HILL: How about that?

COOPER: That's right, Jay Kernis, CNN employee gets a "Beat 360" T- shirt.

HILL: Talk about a real win tonight. Hey, you should take Monday off, Jay.

COOPER: Yes, take it off, why not. And the whole weekend, too.

Still ahead, caught on tape -- all right, that music; there was a lot of that music. I think that was the most we have ever heard of that.

HILL: It's going to be with you the entire weekend.

COOPER: Yes.

Caught on tape, a Shanghai car showroom takes the hard sell to a whole new level. This woman was not leaving without new wheels but he wasn't in a buying mood. You won't believe what she did to seal the deal.

(COMMERCIAL BREAK)

COOPER: Erica, tonight's "Shot" is an online video that generated nearly 2 million hits since it was posted some four months ago on a Chinese Web site. It shows a woman going hysterical, I guess you would say, after her male companion refuses to buy her a car.

It's in Mandarin. Erica and I will say their lines in English as it plays. Take a look.

(BEGIN VIDEO CLIP)

COOPER: The car doesn't suit you.

HILL: It does suit me.

COOPER: It's like this each time we go shopping. I'm not buying this car for you.

HILL: She doesn't say this, but watch me. Here I go.

COOPER: Stop. Stop. I'll buy it. I'll buy it.

(END VIDEOTAPE)

HILL: All right, Anderson Cooper.

COOPER: There you go.

HILL: It's kind of funny, but actually, people are upset about it. COOPER: Yes, there's a lot of heated comments. Some people don't like the stereotypical image that it portrays. You know, I guess there's -- yes.

HILL: Some issues as to whether or not women may be a little too demanding and they think this is a bad stereotype...

COOPER: I think the tone of the way this video is set up, yes, makes it -- that's what, I guess, people who set up the video are saying. We just found it amusing that her technique actually worked driving the car out.

HILL: I think I might use that next time we go shopping, Anderson, because I'm sick of you not buying me anything.

COOPER: I actually rely on you to buy me things.

HILL: Yes, that's only because your birthday is...

COOPER: Also another "Shot" tonight, we were visited this week by several sailors from the "USS Iwo Jima." We were happy to host them and just want to give a shout-out to all the folks who were here for Fleet Week. Thank you for your service on this Memorial Day weekend and every day, of course. And we hope you have a great time in New York.

A couple of them are from the south said they weren't too sure about New York. One of them flat out said he didn't like New York at all. But we hope they have changed their minds after being here for a couple days.

HILL: Especially after the hospitality at CNN New York, how could they not?

COOPER: I tried to give them tips on like where to go out to eat. I can't remember the last time I went out to eat at night because we all work at night.

HILL: I love that when people ask you what to do. I just say I don't know. I don't get out very much.

COOPER: I say Daisy Mae's Barbecue which is where I get barbecue take-in. They're all from the south. They're, like, we get barbecue all the time.

That does it for 360. Thanks for watching. Have a great weekend and a great Memorial Day holiday.

"LARRY KING" starts right now.