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ANDERSON COOPER 360 DEGREES

Lance Armstrong Facing New Drug Allegations; Jerry Sandusky Trial Continues; Should President Point to Economic Strides?; American Jailed in Nicaragua Speaks Out

Aired June 13, 2012 - 22:00   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, everyone. It's 10:00 here on the East Coast.

And begin tonight with breaking news: doping allegations, new allegations against champion cyclist Lance Armstrong. The U.S. Anti- Doping Agency is investigating Armstrong in what calls a vendetta against him. As he has all along, Armstrong is denying ever using performance-enhancing drugs and says he's passed more than 500 drug tests over the year and never failed even one.

But the investigation has already had consequences for his career now as an athlete. He's immediately banned from competing in triathlons, which Lance Armstrong has taken up after retiring from professional bicycling.

In a statement, Armstrong says -- and I quote -- "I have been notified that USADA, an organization largely funded by taxpayer dollars, but governed only by self-written rules intends to again dredge up discredited allegations dating back more than 16 years to prevent me from competing as a triathlete and try and strip me of the seven Tour de France victories I earned. These are the very same charges and the same witnesses that the Justice Department chose not to pursue after a two-year investigation. These charges are baseless, motivated by spite and advanced through testimony bought for and paid for by promises of anonymity and immediately."

Joining me now on the phone is "New York Times" sports reporter Juliet Macur.

Juliet, Lance Armstrong has never tested positive for performance- enhancing drugs before, but the doping agency said they collected blood samples in 2009 and 2010 that were -- quote -- "fully consistent with blood manipulation, including EPO use and/or blood transfusions."

What do you make of that?

JULIET MACUR, "THE NEW YORK TIMES": Well, first of all, I don't think saying that you have never tested positive as an athlete really means anything, because we have heard that with Marion Jones, the athlete, the five-time Gold Medalist or however many medals she won.

She constantly said she never tested positive and, as it turns out, she was part of a systematic doping scheme. So, that being said, I think that the United States Anti-Doping Agency is bringing charges that include more than just these weird blood levels that came up in 1999 or was it 2010 or something? It has more to do with a doping conspiracy on the past teams that he used to ride for, and I guess multiple witnesses on each team, including multiple riders that said Armstrong not only doped, but encouraged doping and administered doping at times.

So it's more than just that he had tested positive, which he didn't. It was more of sort of an analytical way of saying that he cheated.

COOPER: And they're saying this is a conspiracy that went on I think from 1996 all the way through his entire career some 14 or so years.

Now, talk a little bit about the U.S. Anti-Doping Agency, and its powers, what it can and cannot do, because it's different -- before, it was the Department of Justice which was bringing charges. They dropped all those charges and they're not pursuing it. But the bar is lower for this doping agency.

MACUR: Exactly.

It's much lower. It has nothing -- the U.S. Anti-Doping Agency is a quasi-governmental agency that gets money from the government, but has its own rules and could really bring charges against anyone it wants or sanction anyone it wants based on the evidence it collects.

The bar is much lower. As we know, the two-year long investigation of Armstrong didn't go anywhere. But all that information and all those people that stepped forward during that investigation I guess went right to USADA's door and now they have all this information that they're using against Armstrong and some of his former colleagues.

COOPER: In the recent past, in "Men's Journal" magazine, Armstrong recently said that basically he wouldn't fight the allegations. He said you can interpret -- he said: "I'm done. You can interpret that however you want. I'm finished. I'm done fighting. I have moved on."

Do you think he's going to fight this?

MACUR: Well, yes, I read that, too, in "Men's Journal" and I immediately thought, I'm not sure if that's going to happen.

We have seen Lance Armstrong deal with these doping allegations for more than a decade now. And each time, he's fought them until to the end. Each time, they have gone away and he's won. So, there's really no reason for him to back down now, considering even a federal investigation couldn't get him.

I don't see him backing down, although his lawyer did say today that they're going to look at the evidence that USADA has against him and determine whether it's going to be a fair fight. And I guess that might be a way of saying they might go forward with it or they might not. But my guess is that it will go forward and he will fight it to the end. But, you know, this could be a new Lance Armstrong.

COOPER: And if they find him guilty on this, this is not legal charges, but they could strip him of those Tour de France titles and also even the investigation prevents him from competing in triathlons, which we're seeing him pictures of him doing right now.

MACUR: Exactly. Yes, he will lose -- if the charges are upheld, he will lose his seven Tour titles and whatever titles he gained during that time.

It also -- the USADA case doesn't ban him from triathlon. It's actually triathlon's own rules that say any athlete who is under a doping investigation cannot compete. So that's not USADA's fault. That's triathlon's fault that he won't be able to compete in France later this month and also in the Ironman World Championship, if he had qualified. That's in October.

COOPER: What do you think the ramifications of this are for his cancer charity? He's so well-respected in that realm. If he is found guilty of this, what happens?

MACUR: Personally, I don't think anything will happen. If he can survive a federal investigation that lasted two years with accusations back and forth and teammates going on TV saying that he encouraged doping and he was sort of a ringleader of the doping on some of his teams, I guess his cancer foundation survived through that and people still look at him as an inspiration.

I don't think it changes anything. I think if he is an inspiration to someone now, he will be an inspiration to someone even if USADA does find him guilty of doping.

COOPER: And do we know the timetable for this, how long this might take?

MACUR: Well, officially, it should take 10 days before Armstrong's lawyers respond to USADA and then it could take three months for them to gather an arbitration panel and to have all the hearings.

But that's the best-case scenario. In some of these cases, like with Floyd Landis or Tyler Hamilton, two of Armstrong's former cycling teammates, I think it lasted almost two years. So I don't think this is going to end anytime soon.

COOPER: Yes.

Juliet Macur, I appreciate you calling in with this. Thank you very much, Juliet.

MACUR: Thank you.

COOPER: In "Crime & Punishment" tonight: day three in the Jerry Sandusky trial and again just incredibly disturbing allegations being leveled in court today.

Three more alleged victims took the stand. There's a disturbing portrait emerging in their stories of an alleged sexual predator who had the perfect setup to groom vulnerable young boys for abuse. Over and over, the same key details stand out. Underprivileged boys in Sandusky's Second Mile camps says they offered coveted tickets to football games.

Each alleged unwanted contact from the former Penn State assistant coach allegedly beginning with the touch of the leg on a car ride. The alleged victims say they were too ashamed to talk, but they also wanted to keep going to football games.

Today, one witness accused Sandusky of threatening his family if he ever spoke out. Sandusky says he's innocent, obviously, of the charges.

I want to go to Jason Carroll at the courthouse for more.

Jason, today, we're hearing for the first time new information that Sandusky may have actually threatened one of the victims.

JASON CARROLL, CNN CORRESPONDENT: And that's what we're hearing, Anderson, from the young man identified as victim number 10.

He says back in 1998, Jerry Sandusky sexually assaulted him in the Sandusky home in the basement. We have heard that before from some of the other accusers, saying that he forced him to perform oral sex on him, telling the court -- quote -- "He told me that if I told anybody, that I would never see my family again. He apologized for saying that. He said he didn't mean it and that he loved me."

Another reason why this particular young man is interesting is because, as you know, the defense has been saying a lot of these young men are coming forward and trying to cash in, in some way by hiring attorneys to pursue some sort of a civil case. This is one young man that has not hired a private attorney. He said he is coming forward because he said -- quote -- "It was at right thing to do."

COOPER: Perhaps the most emotional testimony today came from the man referred to as victim number five, who said that Sandusky sexually assaulted him in the shower.

What did we learn?

CARROLL: Right. He said this happened when he was about 12 or maybe 13 years old.

And it was one of the most emotional moments of the day without a question. He described it to the court this way. He said once he was in the shower, he actually tried to move away from Jerry Sandusky, but could not get away, telling the court -- quote -- "I crept forward a little more as he did. And I felt his body on my back. I kept lurching forward, but I didn't have anywhere to go and I felt his arm move forward and he touched my genitalia."

Now, I have to tell you as I was sitting there in the court, right to my left, just a few feet away, this young man, his mother and father were sitting next to me. And as he cried on the witness stand, they began crying as well. It was an incredibly emotional moment, an impactful moment on the courtroom as well.

COOPER: Jason, appreciate the update. I'm joined now by Thomas Kline, who is an attorney for the alleged victim number five, accuser number five.

Thomas, your client gave emotional testimony.

I'm told we're still going him miked up on camera. We have got to change locations between him and Jason. But, again as Jason said, this was some of the most emotional testimony coming today from alleged victim number five.

Thomas, are you there?

THOMAS KLINE, ATTORNEY: Yes, I can.

(CROSSTALK)

COOPER: Your client, as we have been talking about, gave very emotional testimony today.

First of all, how is he doing? How is he holding up after testifying?

KLINE: He was relieved and is looking forward to kissing his girlfriend Britney (ph) when he gets home. He's looking forward to going to work tomorrow.

My client is a remarkable young man and I saw in him today the face of a victim of sexual abuse and what it does and how it impacts on a young man even as he's an adult.

COOPER: I'm trying to imagine what it's like testifying in front of the person you're accusing, in this case Jerry Sandusky.

Did you watch Sandusky today? How did your client deal with being face to face with Sandusky?

KLINE: It was a remarkable exchange. I talked to my client just about an hour ago. And he told me how Sandusky stared at him.

Sandusky -- when they were having an early discussion in the testimony about the fact that my client comes from a Polish family and Sandusky spoke Polish and the Polish wasn't very good that Sandusky spoke, how Sandusky was looking at him as though, almost in an adoring and to my eyes odd fashion.

My client told me that he actually stared at him, Sandusky stared at him during the entire testimony, almost as though my client felt that he wanted to make him uncomfortable.

COOPER: And a number of the accusers have had some pretty tough cross-examination by the defense. That didn't happen from your client. Why do you think?

KLINE: I believe that my client's testimony was bulletproof.

There was nothing to cross-examine him on. The usual routine of Mr. Sandusky's defense counsel, which includes drugs and crime and the like, there's nothing here. I represent a young man who is a productive, solid citizen with a wonderful, loving family. His father and mother were in the second row center.

He gazed at his mother and father. His family, two brothers flew all the way in from California. He has a wonderful girlfriend. And there wasn't anything to pick at. The only issue that was raised was in the investigation, the investigators somehow got the date wrong, and he was asked a question or two about it.

But it is very clear that he was at Second Mile at a certain period of time and he saw Mr. Sandusky in 2001. I thought, Anderson, one of the most interesting things that came out of the back-to-back testimony here that we have seen is that Mike McQueary testified that in February of 2001, he saw this incident and looked into the face of Jerry Sandusky.

And here we have a similar incident in the shower some few months later from February to August. And I would say that that conduct is downright brazen.

COOPER: Do you think -- the defense has raised this idea that Jerry Sandusky has some sort of a disorder, a hysterical disorder. Do you buy that? Do you think this has any bearing on that?

KLINE: I believe that the conduct is classic predatory conduct.

As I have said in many interviews today, I have never seen a man who liked to shower with so many young boys. The fact of the matter is that the pattern here is classic predatory. He groomed the young men. He bought them gifts. He took them to games. He got them tickets. He took them away.

He got them in his car. And then what he did was he put his hand on each one's knee basically and found an opportunity wherever it existed, whether it be in the shower or in a -- or in the basement of his own home while his wife was present.

I don't believe that they will sell to this jury that he hasn't progressed beyond his teenage years and has some kind of disorder. I don't see it happening.

COOPER: I should have said it was a histrionic disorder, is what they called it, not hysteria.

Thomas Kline, I appreciate you joining us.

(CROSSTALK)

KLINE: I have heard...

COOPER: Sorry. Go ahead.

KLINE: Sure. My pleasure, Anderson.

COOPER: No, I'm sorry. Go ahead. You were saying you have heard?

KLINE: No. Oh, I'm sorry.

I have heard various incapacity defenses that have been vetted, both publicly and otherwise, and they include that he hasn't gone beyond his teenage years, that he has this impulsive disorder.

The fact of the matter is that you had a man who was running the defense for one of the most successful football teams in the country for decades. And he was a man who had premeditated, plotted conduct, not some kind of impulsive or hysterical disorder. That's my view of it.

COOPER: The other thing I don't get is, the defense has sort of alleged that this was part of a team culture and this is how Sandusky grew up, the generations he's from.

I was on a team. I have never heard of any coach showering with a player, let alone with a child. But, again, it's up to the jury.

Thomas Kline, I appreciate you being with us. Thank you.

Follow us on Facebook, on Twitter right now @AndersonCooper. Tweet us about this. What do you think? Do you think there's any chance Jerry Sandusky is not going to be convicted of these charges? Let us know what you think.

If you look at the animals being so well care for by the Montreal SPCA, you would think it's a charity in solid shape. Well, the charity says it's in serious debt to a direct mail company here in the U.S., a direct mail company with ties to other charities that we have been investigating. This is really just a story about charities and where does the money go?

We're "Keeping Them Honest" next.

(COMMERCIAL BREAK)

COOPER: Well, "Keeping Them Honest" now with yet another troubling case of a charity that is asking you to open your wallets for a good cause, but where the money actually, where it actually goes is a completely different story.

Now, over the past couple of weeks, if you have been watching, we have been taking a very hard look at some veterans charities, charities for disabled veterans in particular that have taken in tens of millions of dollars in donations, but used almost none of it to directly help those veterans.

CNN's Drew Griffin has been investigating one of those charities, the Disabled Veterans National Foundation, the DVNF, for years now. They have raised nearly $56 million in the past three years, $56 million. And not one dime that we have found has actually gone directly to help disabled veterans.

Now, you may remember Drew's attempts to talk to the president of that group. It's been met with resistance, to say the least. There, she just shut a door in his face. Drew's reporting on the DVNF has gotten a lot of attention. Many of you have been outraged. You have tweeted us about it. You have e- mailed us about this story. It's also gotten the attention of the Senate Finance Committee, which has launched an investigation into the DVNF.

Drew is going to join us shortly in just a couple minutes with an update on that investigation.

The million-dollar question is if the DVNF isn't spending your donations on directly helping veterans, where is all that money going?

(BEGIN VIDEO CLIP)

DREW GRIFFIN, CNN INVESTIGATIVE CORRESPONDENT: As far as we can tell, the 10th floor of this Manhattan office building to a company called Quadriga Arts, a company that specializes in fund-raising. And as far as we can tell, Quadriga Arts knows a lot about fund-raising for itself.

(END VIDEO CLIP)

COOPER: So, Quadriga Art, that is the name you need to remember. Quadriga Art is this company that essentially gets paid to build mailing lists for groups like the DVNF. And that's where the money trail took Drew.

Now, following the trail was one thing. Actually getting answers at the end of it, that was another thing entirely.

(BEGIN VIDEO CLIP)

GRIFFIN: Yes, it's Drew Griffin, G-R-I-F-F-I-N.

UNIDENTIFIED FEMALE: Yes. He is not here. (INAUDIBLE)

GRIFFIN: Oh, I'm trying to reach Mr. Schulhof.

UNIDENTIFIED FEMALE: (INAUDIBLE)

GRIFFIN: Oh, he's not in?

(END VIDEO CLIP)

COOPER: Well, in course of investigating the DVNF, Drew uncovered yet another veterans charity called the National Veterans Foundation that takes donations, but uses only a very small percentage to actually help veterans. The connection, you ask?

Well, both veterans charities use that same fund-raising company, Quadriga Art. And now tonight Drew has uncovered yet another charity, this time a group that's supposed to help animals that has a similar money-losing connection to, you guessed it, that same direct mail organization, Quadriga Art.

Here's Drew. (BEGIN VIDEOTAPE)

GRIFFIN (voice-over): In Montreal, like every big city, the needs at the local SPCA were great. Abandoned dogs and cats needed help and the money to help them was running out.

So, in 2005, what seemed like a great opportunity came knocking. A private fund-raising company called Quadriga Art proposed a major expansion. Montreal's SPCA would become the Canadian SPCA and Quadriga Art would send fund-raising mailers across all of Canada.

The deal was done, and the money started rolling in. But there was a big problem. Practically every dollar that came in, according to Montreal SPCA's new executive director, was going directly into the coffers of Quadriga art, the fund-raising bills so large that after three years, the Montreal SPCA, despite receiving about $13 million in donations, was in the hole more than $4.5 million.

(on camera): How do you get in debt to a fund-raiser?

NICHOLAS GILMAN, MONTREAL SPCA: By incurring expenses and not having a plan for getting out of it. It wasn't a smart decision on the SPCA's part. And we let Quadriga create strategy for us.

GRIFFIN (voice-over): The strategy was simple. Quadriga Art would send out pleas for money on behalf of this shelter, include tote bags and other gifts made by Quadriga Art's a Chinese factory. But the costs far exceeded the donations and the SPCA was locked into this contract for seven years.

(on camera): The fund-raising operation was so upside-down for the Montreal SPCA that they actually still owe Quadriga Art nearly $2 million. And Quadriga has even taken out a lien on this animal shelter.

That's a lot of money.

GILMAN: It's a lot less of money, but a lot less than the $4 million we owed them seven years ago.

GRIFFIN (voice-over): Quadriga Art and its president, Mark Schulhof, pictured here in ad for an unrelated charity, have repeatedly refused interview requests to explain its unique process of raising money.

A public relations firm explained that the cost of beginning and raising funds require long-term strategies to develop donor list, creating databases that would eventually pay off. A spokesman told us -- quote -- "This has been has been a proven model for 50 years, despite being criticized by some charity watch groups."

But at the Montreal SPCA, where the Quadriga Art, where the Quadriga Art contract has been running for nearly seven years now, the results have been a disaster.

(on camera): Will you sign with them again?

GILMAN: Probably not.

(voice-over): That is hardly the end of this story.

(on camera): Mr. Barnadi, my name is Drew Griffin. I'm with CNN.

(voice-over): Meet Pierre Barnadi (ph), fired by the Montreal SPCA Board, only to emerge as the founder of a new U.S.-based charity, SPCA International.

From his home in Montreal in a rarely staffed office in New York, Barnadi and Quadriga Art have designed a new charity to tug on the heartstrings with its signature program called Baghdad Pups. The stated goal? Reuniting vets and their war pets. But you're going to be stunned to find out just how this operation works.

(END VIDEOTAPE)

COOPER: This is so -- once we start scratching the surface of this thing, Drew, it just gets deeper and deeper and more shocking.

So many of these charities, Drew, that you have been investigating where hardly any of the money goes to charity, all of them seem to have this one private fund-raiser taking in all the money and that's Quadriga Art right here in New York. I had never heard about them.

GRIFFIN: Me neither. But they are huge, a private company that simply will not speak to us, Anderson, won't even return phone calls except through a public relations firm.

But it is this firm that's doing all the collecting and as far as we can tell collecting millions and millions of dollars in donated moneys that the actual donors intend to be going to in this case animals, in so many other cases, veterans and disabled veterans.

COOPER: You know what? If I ran a charity and somebody was doing a report that raised questions about where the money was going and I was doing everything on the up and up, I would open the books, I would do interviews just to get the word out that the charity is legitimate.

The fact that nobody would talk to you about this stuff I just find amazing. One of the charities you have been reporting on is this Disabled National Veterans Foundation, DVNF.

They just now filed their financial forms for last year. They raised we know $56 million in three years for disabled vets. Not a dime of that money that we found has actually directly to help vets. Has their new tax filings gotten any better?

GRIFFIN: No. According to the just-filed 2011 documents, DVNF took in $29 million. That's how much Americans sent to this group. As far as we can tell, most of that money again went to Quadriga Art and its affiliates.

In addition, the charity is telling us, Anderson, the charity is telling us, they're in debt now to Quadriga, $15.5 million. So things seem to be getting worse, not better. COOPER: And this is the group that the Senate Finance Committee has opened an investigation into?

GRIFFIN: Yes.

The Senate Finance Committee says the staffers are now going through the very documents that we have, also documents that were sent in by the DVNF. They're going to try to determine exactly what's going on here. They're just starting to look at this. We don't really have anything to report other than they're beginning their investigation.

COOPER: Drew, again, I just appreciate your reporting.

We're going to have another part of this coming up tomorrow. We're going to look into this other charity which is allegedly helping animals, pets and veterans, but again it doesn't seem to be. I don't understand how people sleep at night who are raising money allegedly for veterans or homeless animals and the money is not going to where they're raising the money. I just do not get that. We're going to continue on this, Drew. Great reporting. Thank you.

Coming up, is President Obama making a mistake by talking about the economy improving? James Carville says he is worried the president's message could be backfiring with voters. We will talk to Paul Begala coming up. That's "Raw Politics" next.

(COMMERCIAL BREAK)

COOPER: A possible turning point in the battle against the deadly wildfire burning now in Colorado. We'll tell you how much the blaze is contained ahead on the program.

(COMMERCIAL BREAK)

COOPER: Hey, welcome back. "Raw Politics" tonight. Is President Obama making a campaign mistake by talking about signs the economy is improving. One strong Democratic voice says yes.

On "Good Morning America" today, Democratic strategist James Carville said that voters want to be reassured that the president understands how bad things are for the middle class and that he has a plan to deal with it.

(BEGIN VIDEO CLIP)

JAMES CARVILLE, DEMOCRATIC STRATEGIST: I'm worried when the White House and the campaign talks about the progress being made, people take that as a signal that they think that things are fine, and people don't feel that or believe that.

(END VIDEO CLIP)

COOPER: Well, the latest polling shows Carville may have a point. According to a "Washington Post"/ABC poll out today, among independent voters, only 38 percent said they have a favorable view of the president's plans for the economy; 54 percent unfavorable. Mitt Romney's economic plans don't fare much better: 35 percent favorable, 47 percent unfavorable.

Want to talk about it now with CNN political contributor, Democratic strategist Paul Begala, and CNN chief political analyst, Gloria Borger.

So Paul, there's no denying the president's campaign had a tough stretch lately. What is your take on what James Carville had to say, that the message is off?

PAUL BEGALA, CNN POLITICAL CONTRIBUTOR: First off, of course, he's my best friend for almost 30 years now. And also, our viewers should know I advise the pro-Obama super PAC. So I have a dog in this hunt. I'm obviously biased and I'm trying to get the president reelected.

At the same time, I think James has a point. Elections are always about the future, not the past. It is very difficult for incumbents to understand that, because in most other jobs, when you're up for renewal, you say, "Hey, I did a good job. I sold this many widgets" or "I hit this many home runs. Hire me back."

For the presidency, it's always about the future. And when you're in a recession, by golly, they're just not interested in handing out gold stars. I mean, I know the president has actually stopped the Bush depression. I know he's created 4.3 million private sector jobs.

If you go out there and say that, though, to those 25 million Americans who are hurting and the 100 million Americans who are worried, you're not going to -- you're not going to be well received. So I do think the president has got to make this much more about the future and much more of a contrast between his vision for the middle class and what he, I think, will couch, describe and I would, as Mitt Romney's vision for an elitist economy.

COOPER: Gloria, it is interesting to hear Paul saying that, for an incumbent president, it's about the future, never about the past, about your record, even though that goes against, maybe, a president's instincts. What he's saying is don't tell people the economy is getting better; they won't believe you.

But if people don't think things are getting better, can the president be re-elected?

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: I think it's really hard for any president to get re-elected in a terrible economy. And I think the problem about trying to characterize the economy, Anderson, or talk about the economy is that the economy speaks for itself.

You know how you feel around the dinner table, in your household, what's happening in your savings account, what's happening in your bank account, and your children and how they're feeling. So you can't really characterize the economy for other people.

Now, what President Obama can do and what he's been trying to do is sort of say, "Look, here was the context in which I came to the presidency. We were in a ditch. I'm trying to get you out of it."

And the Democrats that I was talking to today are saying that's fine, but A, you can't sound like you're whining when you're president of the United States, because that's not what people expect from a leader. And B, at some point, you have to come up with a large plan, particularly if the economy is not doing well. People want to see some bold leadership from the president.

COOPER: Paul, talking about this future-past dynamic. I know you've done research on what-- what kind of ads work, about you know, attacking Mitt Romney on his past record. Do attacks on Romney's past work? Do attacks on President Obama's past work?

BEGALA: Well, yes, I have and again, I advise the PAC that's running ads attacking Romney. And here's why they're working. There's lots of data, not just ours.

There were ABC News focus groups that said they were working. Wal- Mart focus groups said they were working. Two national polls have said that -- show they're working. Here's why.

Mitt Romney is still largely a blank slate, oddly. He's known to information elites but for most voters they don't know who he is. They know he's rich. If you fill that in and say he got rich by laying people off -- by, in part, making very good business decisions but in part got rich by laying people off and taking away their pensions and their health care, boy, they don't like that.

And the president, attacks on him, the problem is that those are -- he is not a blank slate. He's a Jackson Pollack painting. OK. They can throw one more bucket of paint up there, but it's a pretty fully- formed portrait. People like me like him. About half the country doesn't. And that's kind of both his strength and his weakness.

Romney, though, the marginal relative utility of a dollar spent attacking Mitt Romney is much higher than the marginal relative utility of a dollar attacking Barack Obama.

BORGER: But Anderson, let me say when the -- when the president goes on the attack or when his PAC goes on the attack, the problem for the president is that people like him, and his likability is one of the things about him that people say, "OK, I'll vote for this guy, because I'm going to give him the benefit of the doubt and I like him a lot."

If you start going really negative, you can lose some of that. And Romney is not as likable as Barack Obama, at least according to the polls. So I think the president has a little bit of a problem there, because he doesn't want to give up his advantage on that front.

COOPER: OK. So Paul, for you, it's less about, for the president, the advice would be, even though you're not allowed to give advice, just hypothetically, it would be don't -- don't talk about the past or the bumps in the road. Talk about -- it's feel your pain. The president can feel your pain?

BEGALA: It is. This whole thing is about empathy. And I know he watches A 360, so this is legal. I'm allowed to do this. Mr. President, you need to tell folks that you understand their pain, because you've been there, too.

You know, he's the child of a single mom who had to struggle, even sometimes had to go on Food Stamps to make ends meet. But he got scholarships, he worked his rear end off, and look at him today.

"I've been where you've been," he should tell them, "and I can help you get to where you want to go."

The other guy, however, as even the Republicans said, looks like the guy who just laid your daddy off.

BORGER: You know, I think the problem for both of these campaigns is the American public views both of these candidates as elites in one way or the other. One may be a financial elite; the other may be an academic elite, right? But they're both not regarded as somebody who really feels your pain.

COOPER: Yes. Paul Begala, appreciate it. Gloria Borger, interesting. Thanks very much.

Coming up, a former Peace Corps volunteer and a successful realtor. Right now, this American man, Jason Puracal is locked up inside one of Nicaragua's most dangerous prisons. He was sentenced without really any evidence that we can find against him. How can this be? And what's being done to free him, if anything? We're going to interview Jason in prison next.

(COMMERCIAL BREAK)

COOPER: In "Crime & Punishment" tonight, a rare interview with an American stuck inside a Nicaraguan prison.

In 20120, police arrested an American man, Jason Puracal, accusing him of money laundering and drug trafficking. He was convicted, even though there was really no evidence to back up the charges.

Now, 43 members of Congress recently joined the fight to free Puracal by signing a letter urging Nicaragua's president, Danny Ortega, to release him. The group includes a Washington state congressman, Adam Smith, who says this qualifies as kidnapping.

Now, Puracal's family warned that time could be running out for him to get out of prison alive. Before my interview with Jason, which we're doing via (UNINTELLIGIBLE) I want you to take a look at how he landed in this situation.

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COOPER (voice-over): It's one of the most dangerous prisons in the world, Nicaragua's infamous La Modelo. And an American who just about everyone says is innocent has been here for 18 months, serving a sentence of 22 years. His name is Jason Puracal. He's living a nightmare.

UNIDENTIFIED FEMALE: You want to explain what this has been like for you?

JASON PURACAL, IMPRISONED IN NICARAGUA: It's hard to put into words. It's very tough.

COOPER: Puracal grew up in Washington state. He wanted to be a veterinarian and, after graduating from the University of Washington, he joined the Peace Corps, hoping to work with exotic animals around the world.

In 2002, he was stationed in Nicaragua. His sister, Janice, says he was immediately struck with the beauty of the country.

JANICE PURACAL, SISTER: He absolutely loved it. He just fell in love with the country and decided to stay there.

COOPER: After his two years with the Peace Corps, he met and fell in love with Scarleth, a local Nicaraguan. They later married a local and moved to the popular beach town of San Juan del Sur. They have a son named Jabu.

Puracal began working in a local ReMax office as a real-estate agent and eventually began running the office. In 2007, he was even featured on an episode of HGTV's "House Hunters International."

JASON PURACAL: The Complex Nicaraguan is approximately two hours from the capital, Managua.

COOPER: Life was good. He was raising his son in a community he says he loved and finding success with his company.

But everything changed on November 11, 2010. On that afternoon, according to his family, Nicaraguan police burst into Puracal's home and office. They confiscated his files and took Jason away.

JANICE PURACAL: I heard about the arrest from my mom. She had flown down there. She was at Jason's, was staying at the house. She called me on a Friday morning and said, "The police have taken your brother, and they won't tell us where he is or what's happened." And that's what set all of this off. It was panic on all accounts.

COOPER: He was accused of using his real-estate business as a money laundering front for an international drug-trafficking ring. He was arrested along with 10 other suspected drug traffickers. His family thought it was all a big mistake.

JANICE PURACAL: There's absolutely no evidence that Jason committed any of the crimes with which he is charged. I am an attorney, and I've read through the entire case file. And I've fought this case every single day for the last 18 months.

But more than that, I'm Jason's sister, and I know my brother. I know that he's absolutely 100 percent innocent.

COOPER: Puracal was hopeful that this would be resolved quickly. His lawyers say the Nicaraguan authorities weren't able to provide any evidence linking him to a drug-trafficking ring. They say no drugs were found at his home or office, no evidence of money laundering.

Former FBI agent Steve Moore has studied this case on his own and says that Jason Puracal could have been targeted by authorities because he's a wealthy American.

STEVE MOORE, FORMER FBI AGENT: They claimed he had all this money in bank accounts. OK, fine. But Jason called witnesses to show that "This is my money. I'm a witness. That's my money in an escrow account to buy this property." The judge declared that inadmissible.

COOPER: The prosecution was also unable to prove any money had changed hands between Puracal and the other 10 accused traffickers who told the judge they never even met Jason.

MOORE: All that's happening is the prosecutor and the investigators are saying, "There's money laundering going on here. This guy did it. You're going to have to take our word for it."

COOPER: But despite that lack of evidence, or any evidence, according to his lawyers, Jason Puracal was still found guilty and sentenced to 22 years.

JASON PURACAL: They're accusing me of international drug trafficking without any drugs. Money laundering without any money. Organized crime with the other 10 people that are charged in this case, and I don't know any of the other 10.

COOPER: He's filed an appeal, but that has gone nowhere. CNN has tried to contact Nicaragua authorities multiple times over the past few months. We've only been promised comments but so far have not been given any answers on the case.

Time is critical for Puracal, whose health is said to be deteriorating under the harsh conditions of the prison.

JANICE PURACAL: Jason will not survive 22 years in that prison. There's not enough food. There's no potable water. There's no medical care. The last time I visited Jason, he had lost nearly 40 pounds.

COOPER: Puracal just spent his 35th birthday sitting in prison. Despite everything he remains hopeful that his conviction will be overturned and that he can be reunited with his family as a free man.

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COOPER: Well, tonight, that freedom seems as elusive as ever. It's not easy to contact Puracal. We managed to reach him on the phone from inside the prison.

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COOPER: What is -- what is the prison like? We're showing videos of the prison where you are right now. What are the conditions like?

JASON PURACAL: It's basically a hell hole. There's concrete cells with -- that are overcrowded. I'm in a cell with anywhere from 9 to 12 people in 12-by-15 foot cell. It's hot, dirty, dusty. Lots of insects, including chiggers and ants.

(END VIDEO CLIP)

COOPER: More of my interview with Jason Puracal tomorrow on 360. We're running a little short on time tonight.

German police need your help tonight. They released a photo, this photo, of a boy, a teenager who showed up at the Berlin city hall, claiming to have lived in a forest for five years and doesn't know who he is. Police are just now releasing this picture to try and understand who this teenager is. More of the mystery, coming up.

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ISHA SESAY, CNNI ANCHOR: Anderson will be back in a moment. But first, a "360 Bulletin."

According to CNN affiliate KHOU, a Texas jury has convicted a man of murdering his neighbor in a fight over loud music. The jury rejected Raul Rodriguez's claim the shooting was justified under the state's "stand your ground" law. Rodriguez claimed the killing was in self- defense. He faces up to life in prison during sentencing.

Firefighters in Colorado say the massive wildfire outside Fort Collins is only about 10 percent contained. The flames have scorched more than 46,000 acres, killing one person and destroying at least 100 buildings.

Syrian government forces have regained control of the town of al-Hafa (ph). That's after eight days of intense fighting against opposition forces. Attacks continue elsewhere. An opposition group says at least 77 people were killed today in Syria, including 23 in Homs province.

And German police have released a photo of a 17-year-old boy who claims he lived for five years in the woods. They're hoping someone will I.D. him. The teenager, known only as Ray, turned up at Berlin's city hall last year. He claims his parents are dead.

Anderson is back with "The RidicuList" next.

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COOPER: Time for the "RidicuList." And tonight we're adding the Miss USA controversy. That's right. There's a new development, a new wrinkle, if you will, in the greatest scandal you forgot existed.

But first, for those of you who have not been following this story -- and may I say, shame on you -- let me remind you what we've got here. Miss Rhode Island won the Miss USA pageant, which was broadcast on NBC earlier this month.

The very next day, another contestant, Miss Pennsylvania, claimed yet another contestant told her that she'd seen a predetermined list of the names of the women who later went on to be finalists. Are you following this? Yes, me neither frankly. Anyway, that other contestant, Miss Florida, said she was just joking about the list. But Miss Pennsylvania, she's not buying it.

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SHEENA MONNIN, MISS PENNSYLVANIA: I have many years of psychological training. I know when someone is telling a joke. I know when someone is scared and when someone is serious. And in my opinion, her body language was very serious. And she looked a little bit scared, because she had just seen something that would potentially drastically change the reputation of the Miss Universe organization, and this is a big deal.

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COOPER: It's a big deal, a huge deal. And don't forget: She has years of psychological training.

Now, I know what you're thinking. How could a pageant owned by this man possibly be controversial? Pageant officials deny the allegations and say Miss Pennsylvania is just using this so-called list scandal to cover up her real problem with the pageant: the fact that it allows transgender contestants. By the way, she dodged that question on "The Today Show."

For his part, Donald Trump told "Good Morning America that Miss Pennsylvania is suffering from loser's remorse.

DONALD TRUMP, REAL-ESTATE/MEDIA MOGUL: I think her primary issue is that she lost and she's angry about losing. And frankly, in my opinion, I saw her for, you know, barely a second. She didn't deserve to be in the top 15.

COOPER: Trump and pageant officials say they're going to take legal action against Miss Pennsylvania.

Just to be clear, I, for one, am shocked, shocked that there is a controversy. I mean, the aftermath of beauty pageants is always so calm and so pleasant.

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CARRIE PREJEAN, MISS CALIFORNIA USA 2009: Larry, you're being inappropriate. You really are. So I'm not going to talk about...

LARRY KING, FORMER CNN HOST: What? I'm asking a question.

PREJEAN: It's confidential and you're being inappropriate.

KING: OK.

PREJEAN: OK?

KING: All right, "Inappropriate King Live" continues.

Did you hear the question, Carrie? Is she leaving because I asked what motivated the settlement? Did you hear the question?

PREJEAN: No, I can't hear you.

KING: You took the mike off. If you put the mike on, we can hear you.

PREJEAN: Yes, I think that you are being extremely inappropriate right now, and I'm about to leave your show.

(END VIDEO CLIP)

COOPER: Poor Larry, he did his best that night.

Now, back to the new development about Miss USA. A second contestant has reportedly told FOXNews.com a similar story about an alleged list of finalists but only on condition of anonymity.

So where does that leave us? I think we can all agree it's time for an independent council or, at the very least, a blood hound wearing a detective cap. That's how seriously I take this story. He's going to sniff out the truth and get back to us.

In the meantime, we'll keep holding onto the crown on the "RidicuList."

That's it for us. Thanks for watching. "ERIN BURNETT OUTFRONT" starts now.