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ANDERSON COOPER 360 DEGREES
FBI Investigating Bailed Out Companies; Bailout Beware; Your money, your vote; Meet and Greet; Palin's Road to Nowhere
Aired September 23, 2008 - 23:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANDERSON COOPER, CNN ANCHOR: Good evening, we begin with "Breaking News" about the crisis on Wall Street. We know it's bad, we know it's costly but is it criminal?
Just a short time ago we learned the FBI is investigating Fannie Mae and Freddie Mac, Lehman Brothers and AIG, not just the companies but also their executives; part of a broader look into possible mortgage fraud involving sub-prime lenders.
Joining me now John Fund of "The Wall street Journal," he's also the author of "Stealing Elections" and CNN's senior financial correspondent Ali Velshi.
Ali what do we know about this investigation?
ALI VELSHI, CNN SENIOR FINANCIAL CORRESPONDENT: There are now 26 companies under investigation starting with Countrywide --
VELSHI: 26 companies under FBI investigation and they're looking into these companies for possible fraud, misrepresentation. Did these companies know there was more wrong or more going on that was incorrect and didn't share that with the public or with shareholders?
Now the good thing, Anderson, is ever since the scandals of 2000 and 2001, it has now become very easy to detect if there was fraud. If the FBI is investigating this in association with the Securities and Exchange Commission; if there was wrongdoing and we don't know that there is and we don't know what specifically they're looking for, they will find it.
COOPER: John, how big a deal is it?
JOHN FUND, "THE WALL STREET JOURNAL": I think it's a very big deal because it may explain how we got largely into this mess.
COOPER: You think there's criminality?
FUND: Well, I've written on Fannie Mae and Freddie Mac which were government-charted corporations that made profits but dumped the risk on the public because they had an implicit government guarantee for 12 years now. I've heard over and over again from sources that Fannie Mae and Freddie Mac were covering up things. They were the public sector Enron so to speak.
FUND: Except that Enron went out of business in 2002 when the fraud was revealed. In 2004 and 2005, as Ali knows, we learned that Fannie Mae and Freddie Mac were cooking their accounting books. Instead they kept making more mortgages, so this is a question -- this is private companies partnering with these quasi-public companies and engaging in the financial scandal of the century.
COOPER: Wasn't there a federal agency whose sole job is to oversee Fannie Mae and Freddie Mac?
FUND: Yes, except that Fannie Mae and Freddie Mac where very clever. They distributed campaign contributions to 348 of the 435 of the House members and most of the Senate members.
FUND: They were very charitable. I mean you go to Washington and you need charity you probably got a donation from Fannie Mae and Freddie Mac. They were great corporate citizens, except they were bizarre form of corporate citizen. They made private profits and they paid huge private sector salaries and the people who were appointed effectively by government officials and the risks went to the taxpayer, you and I.
COOPER: As far as stopping this bleeding though, I mean where does the investigation stand? There's, yes, people want more investigation, but it's like it's going to slow down this bailout?
VELSHI: If they can go on parallel tracks the FBI can continue to investigate that as well, they should be. This does not affect the fact this package needs to move ahead in some form. It can be adjusted, things can happen.
But what I think the average person doesn't understand is while we're debating whether this is a Wall Street or Main Street bailout, the credit system in this country is coming to a halt.
It is next to impossible for companies to get money if they needed. And Anderson, you know where effects to Main Street, it's not just more expensive home loans and car loans and student loans, it's the fact that there are some companies that borrow money to make payroll in this country. If this continues, there could be major corporations that just have to grind to a halt because they can't raise money.
FUND: And we had a preview of this 20 years ago during the savings and loan crisis.
FUND: And the government raised the loan guarantees. The savings and loan deposits, the savings and loans, they invested in windmills before they were popular and bull semen farms and all kinds of marginal investments and then we got caught holding the bag of the bad investments. That's why this current Resolution Trust Corporation that they're trying to set up is very similar to what we set up with the savings and loan. The difference, as Ali mentions is, this is much bigger in scope and it's freezing up the credit markets.
COOPER: So an investigation like this though, how long can it take?
FUND: Well, this will take a couple years and people will go to prison.
COOPER: Do you think there's no doubt, people will go to prison?
FUND: I can almost guarantee it.
COOPER: Because CEOs and people involved in the companies?
FUND: Well, we know that people cooked the books of Fannie Mae and Freddie Mac and they were covering up, the extent to which they were taking undue risk. We also know that members of Congress were involved in making sure that nobody touched Fannie Mae and Freddie Mac because there was not proper oversight.
We know that some people in the private companies AIG and Lehman and others was probably in cahoots with Fannie Mae and Freddie Mac in expanding the mortgage pie, so everybody could make money.
COOPER: What are the changes the FBI might investigate members of Congress in this?
FUND: Oh I think it's inevitable. I'll pinpoint the day in which I thought this was really going bad.
In March 2005, Anderson, Fannie Mae and HUD, the Bush administration backed by Congress announced they were going to introduce something new in American life, the zero down payment mortgage.
This was a mistake, because people who can't afford even one penny for a down payment probably might not be eligible for a mortgage.
COOPER: A lot of people got loans they should not have. John Fund thanks very much. Ali, we're going talk to you in a moment.
The White House pressuring Congress for a bill by the end of this week if not sooner. In the senate hearings today if you watched, the lawmakers are pushing back hard, grilling Treasury Secretary Paulson about the unprecedented power it would give him. Paulson will face House lawmakers tomorrow.
A new CNN opinion research poll I want to tell you about shows that Americans are as worried about bailing out Wall Street as they are about not bailing it out.
Take a look; 79 percent said they are worried that the economy is going to get worse if the government doesn't take action, 21 percent are not worried. An almost equal number, 77 percent are worried that the people responsible for this whole mess will benefit from the bailout plan and 23 percent not worried.
John McCain and Barack Obama both have said the bailout plan needs to include help for struggling homeowners, more oversight and other protections for taxpayers who are going to foot the bill.
And here's what they said today, in rare news conferences.
(BEGIN VIDEO CLIP)
SEN. JOHN MCCAIN, (R) PRESIDENTIAL NOMINEE: My plan is about keeping American people in their homes and safeguarding the life savings of all Americans by protecting our financial system and capital markets.
SEN. BARACK OBAMA, (D) PRESIDENTIAL NOMINEE: After the economy recovers, we should institute a financial stability fee on the entire financial services industry to repay any losses to the American people and make sure we are never asked again to foot the bill for Wall Street's mistakes.
(END VIDEO CLIP)
COOPER: On the Senate Banking Committee today, the tone was just as tough. The lawmakers keenly aware it is tied to your money and your vote. Here is Tom Foreman.
TOM FOREMAN, CNN CORRESPONDENT: The Treasury printed more than $700 million this day, just like everyday, while at the capital, lawmakers put the head of the Treasury, Henry Paulson, squarely in their sites over the bail out that will cost a thousand times as much.
SEN. SHERROD BROWN, (D) OHIO: I don't think a single call to my office on this proposal has been positive.
SEN. CHRIS DODD, (D) CHAIRMAN, BANKING COMMITTEE: It is a financial socialism and it's un-American.
FOREMAN: Paulson nonetheless told senators the bail out money is need now and with few strings, to buy bad debts from companies in danger of collapsing and taking the whole economy with them.
HENRY PAULSON, SECRETARY, TREASURY DEPARTMENT: I am convinced that this bold approach will cost American families far less than the alternative, a continuing series of financial institution failures and frozen credit markets unable to fund everyday needs and economic expansion.
FOREMAN: That is the White House's position; fix the fundamental weakness of too many bad home loans first, get to the fine tuning later. REP. JOHN BOEHNER, (R) MINORITY LEADER: It's about saving our economy. It's about protecting the Americans' jobs, and protecting their retirement, their security, their savings, their college loans, and frankly, their way of life.
FOREMAN: But many Democrats fear if market reforms are not attached to the money, they may never come.
DODD: I understand speed is important. But I'm far more interested and whether or not we get this right.
FOREMAN: So Dems continue pressing for strict oversight of how the money is spent; shares in the companies that benefit, protection from homeowners facing default and a guarantee that CEOs won't walk away with fortunes funded by taxpayers.
REP. NANCY PELOSI, (D) HOUSE SPEAKER: The party is over for this. No regulation, no supervision, anything goes, so-called free market, which has taken us to this place.
FOREMAN: Some Republicans are joining the Dems and others are saying, hold on to the whole process.
REP. MIKE PENCE, (R) INDIANA: I must tell you there are those in the public debate who have said that we must act now. The last time I heard that, I was on a used car lot.
FOREMAN: Still, most lawmakers are predicting some kind of deal soon, even though the biggest question remains unanswered. Once all that money is spent to restart the economy, will it really run?
Tom Foreman, CNN, Washington.
COOPER: While a taxpayer funded bail out on Wall Street is a political time bomb by definition; with the presidential election just six weeks away, it is a ticking time bomb.
Just ahead our political panel weighs in.
Also blogging throughout the hour, join the conversation, I'm about to go online, ac360.com is the site. And check out Erica Hill's live program during some of our commercial breaks. Again, go to ac360.com and click on the link for that.
Also ahead tonight, what the massive rescue plan means for the candidates' promised tax cuts and all those other programs they've talked about. Will they even be able to deliver on any of them? All those campaign promises, we'll check out that.
And Sarah Palin's big day at the United Nations. Did she hold her own with world leaders, including Hamid Karzai and Henry Kissinger? Would we know because we couldn't hear any of it? Reporters are allowed in the room only for photo-ops.
This is "360." Stay tuned.
COOPER: $700 billion is not the kind of expense you want to wake up to overnight. That is pretty much what's happened with the bail out plan now before Congress. Whoever wins the White House in November is going to inherit all that debt.
Both candidates have made an awful a lot of promises to voters; health care improvement, cutting taxes. The obvious question now, how will they possibly be able to deliver on those promises in light of the bail out?
Here's what Barack Obama told to NBC's Matt Lauer.
(BEGIN VIDEO CLIP)
OBAMA: Does that mean that I can do everything that I've called for in this campaign?
MATT LAUER, NBC ANCHOR: Probably not.
OBAMA: Right away, probably not, I think we're going to have to phase it in. And a lot of it's going to depend on what our tax revenues look like.
(END VIDEO CLIP)
COOPER: As for John McCain he told "60 Minutes," he'd find the money to for his tax cuts by cutting the budget.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: But how do you cut the budget that much?
MCCAIN: If you are able to increase the budget and the size of government by 40 percent, don't you think you could cut some of it?
UNIDENTIFIED MALE: What are you going to cut?
MCCAIN: I think, frankly, you can eliminate so many agencies of government that are outmoded. Obviously, I would scrub defense spending. Obviously, we would look at every institution of government. I would stop these protectionist terrorists. I would stop subsidizing sugar.
UNIDENTIFIED MALE: Did I just hear you say you're going to cut the defense budget?
MCCAIN: I think there's areas in defense where we can save a lot of money in cost overruns.
(END VIDEO CLIP)
COOPER: As always, it's "Your Money, Your Vote;" it's our job to separate the facts from the spin. CNN senior business correspondent, Ali Velshi joins me again.
So how do Obama's and McCain's tax plans play out for people?
VELSHI: Well, let me show you the existing tax plan before these bail outs. The Tax Policy Center has broken it down by income category. So take a look at this starting from the bottom $38,000 to $66,000, all the way up to the $161,000 to $227,000 category.
Under Barack Obama, up until about $227,000 you're getting tax breaks all along the way. With John McCain, you're getting bigger tax breaks, and as you get above $227,000, you start paying taxes -- extra taxes under Barack Obama and you get bigger tax cuts under John McCain.
That was the before picture.
Take a look at the after picture now. Right now, we have a national debt that stands at about $10 trillion. OK, so look, under both of their plans, $12.1 trillion -- I'm sorry. $12.1 trillion and that's where we stand right now.
Add Barack Obama and John McCain's proposals right now, their campaign proposal, budget for those it takes the debt up to $15.6 trillion with Barack Obama and $17.1 trillion with John McCain.
And now, you add this unexpected bail out plan because it has to come from somewhere, our debt goes to $16.6 trillion under Barack Obama and $18.1 trillion under John McCain. And you know what happens when your debt goes up, your dollar goes down, your interest rates go up, your productivity of your economy goes down, your jobless rate goes up.
So you either keep that high debt or you cut -- you don't cut your taxes. So if you don't count your middle tax cut before it hatches at this point.
COOPER: And you know what any of these folks talking about the actual debt. What other plans may go away besides these tax cuts?
VELSHI: Well, the expensive ones are the health care proposals. They're looking at health care, they're looking at infrastructure changes, they're looking at alternative energy, building out of their nuclear plants in John McCain's case, or a green economy -- green energy economy as Barack Obama says. These are all things that are on the hook.
And we also talk about entitlements, but I have to tell you, total entitlements are about $20 billion, not even a drop in the bucket right now. So this is a big deal. They're going to have to find some big places to cut. And John McCain is talking about cutting defense, a little tough when you've got a war going.
COOPER: Yes, huge deficit. All right, Ali thanks.
Still ahead, the latest from the campaign trail, how both candidates are trying to be seen responding to the crisis and how all of it may play in the debates this coming Friday.
Sarah Palin in New York hoping to polish her foreign policy credentials today did not go as planned because the McCain campaign and the media had a meltdown. We'll take you inside at the confrontation that would have prevented anyone from seeing Sarah Palin.
Also, Palin's "road to nowhere" and Joe Biden, well, he'd likes to talk about Alaska's "bridge to nowhere." But he has his own record to account for. We're "Keeping them Honest" tonight.
(END VIDEO CLIP)
MCCAIN: There must be a path for taxpayers to recover the money that's put into this fund, the taxpayers dollars, $1 trillion is an unprecedented sum. And that money can't simply go into a black hole of bad debt with no means of recovering any of the funds.
OBAMA: We can ask taxpayers to make an investment in the stability of our economy but we cannot ask them to hand their money over to Wall Street without some expectation of being made whole.
(END VIDEO CLIP)
COOPER: And you see the "Breaking News" banner there, FBI now investigating well, a lot of folks, AIG, Lehman Brothers, Fannie and Freddie.
Senators Obama and McCain today, each demanding oversight accountability and transparency; both are still promising to cut taxes. But Ali just showed us, it's hard to see how we can have it all.
Let's talk strategy with CNN's senior political analyst, David Gergen and David Brancaccio, host of "NOW" on PBS and CNN's senior political correspondent, Candy Crowley.
David Gergen, let's start off with you, it seems likes the proposals for these bailouts, I mean the days of having all these policies that they have been promising that seems out the window. Have they recalibrated?
DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: They have not yet but they're going to be forced to. And the interesting question is when. Even before this Ali was showing the plans of the two candidates don't add up. They add more deficits to the national debt and the national debt, and we're learning this now, the unfunded liabilities for the government out way out ahead of us, at least $53 trillion and counting.
And in many ways, serious analysts now believe, Anderson, David Walker, for example who used to run the Government Accounting Office believes that what is happening in Washington is not unlike what's happening to the financial markets, we're getting way, way out over our heads in debt and that what happen -- we'll have a crisis in Washington one day in government if we don't clean it up.
So I think it's going to put a lot of pressure on the candidates to get much more serious. I think they're going to have to pare back and if not drop many of their major proposals. Or at least postpone the implementation. They're not going to be able to do it right off the bat.
The next president is going to be mired in this issue of debt and try to work our way out. And he's going to have to I think pay much more attention to that and probably postpone for a year or two the agenda that they're trying to get elected on.
COOPER: David Brancaccio, you've been down in Washington today, and talking to folks on the left and the right, I mean there -- everyone seems to agree they don't like this plan, increasingly we're hearing that from Capitol Hill but the clock is ticking.
DAVID BRANCACCIO, HOST, "NOW" ON PBS: Well, it's fascinating. On the far right, you have people that say, I don't think I'm so inclined to pass this thing. The people on the far left also do we really need this?
And there's even been some voices today, saying things seemed to have calmed down just a bit on the markets, do we really need this right now? And of course, you also have economists arguing, yes, because of the possibility of the big bail out.
That's fascinating, I was talking to voters in recent days, and it's beginning to sink in. I actually had somebody say to me, well, I'm less interested in Wall Street, I'm interested in global warming, or someone else said, I'm interested in health care reform.
I have to explain things just as David was saying here, which is all this has to do with all the big issues that we're going to have to pay for. We may not have money to invest quite as quickly into green energy.
COOPER: And it's like the world has changed in the last two weeks and we're not hearing that represented on the campaign trail.
Candy, both candidates announcing conditions that they want included in the bail out.
But would either really risk at this point voting against the bail out? If their terms -- I mean I saw John McCain's press conference, he was asked that point-blank and he basically kind of didn't answer it.
CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Absolutely. Barack Obama kicked it down the Street as well saying -- Obama in particular said, I go back to Secretary Paulson and say, let's work.
But neither one of them would say that they would flat out go ahead and support it even if it didn't have these principles which generally run along the same lines of limiting CEO buy-out pay, making sure that there's something in there for people whose mortgages, whose homes are being foreclosed, that kind of thing.
So they don't -- you know the problem here is it's just very hard to say here are my four principles but I'd go ahead and sign it anyway even if they weren't in there. So they're kind of stuck in a real political morass here because what they have with this economists are saying, this is serious you need to do something about this.
And on the other hand, they have Main Street saying, wait a second, what about my house? What about these gas prices? So they're really caught between what they may have to do and, really, the voters.
COOPER: It's interesting, David Gergen, I mean the push to have individuals compensated or bailed out is coming from politicians. You don't hear it as much from economists.
GERGEN: Well, that's right. I think look, Anderson, they're going to pass the bill in Congress. They have no choice, they know they're on the brink, they know that last Wednesday we came very close to going over the brink. And people on Wall Street will tell you that.
COOPER: Do you think it will happen this week?
GERGEN: I think it'll happen in a next few days. I'm not sure it'll be Friday, Saturday or early next week, but they're going to pass a bill in time.
Warren Buffet just came up with $5 billion today that he is investing in Goldman Sachs which is a really positive signal to a lot of people. And I think it's going to happen.
But what is interesting and David, you've got a good handle on this, is the rising anger one feels now and the public at large. At first, there was shock and fear but now people are really getting angry because they think they're getting pushed to bail out a lot of people that don't deserve it and why they can't pay their home mortgages or can't pay their bills.
And I don't know how that's going to be expressed in our politics because it's going to lash out.
COOPER: And both candidates are trying to harness that anger to some degree. I mean they're both pushing sort of populist positions saying that they feel our pain.
BRANCACCIO: Because they recognize that people, voters are beginning to do the math. I was in California just the other day talking to some struggling people who may have to in fact walk away from their homes because their mortgage is shooting up.
And they can do some basic math. $700 billion works out to be about $2,300 for every man, woman and child in America.
Now, I have three kids, five people in my family. $11,500 is kind of what my family -- what this would cost. I did some math. That's 55 gallons of gasoline per week at $4 a gallon. That's big, big money.
People are saying, why isn't the government using this kind of money perhaps to help me with my mortgage? There's going to have to be -- it looks like movement on helping regular families.
COOPER: It also makes people angry David, because suddenly they can come up with $700 billion for this, but for years they talked about health care, for years they talked about crumbling infrastructure and for years, they talk about at crisis in education but there's no money for it, but all of a sudden, there's $700 billion for something that we can't do without.
GERGEN: It seems for to a lot of people at grassroots level, this is $700 billion for rich people to bail them out for their mistakes and to help them through things.
In fact, these toxic assets are there in part because there was some misdeeds. But we've also got to be careful how we describe this. I think we have to not make this just about villains.
The truth is one of the reasons we got into this, is that incomes in this country have been going sideways and down and a lot of people couldn't afford houses. They couldn't afford the down payments on homes and so they were in trouble.
And the real issue is, how do you restore real jobs in this country, good jobs at the grassroots level so middle income Americans can in fact afford homing -- homes again.
That is as much the villain here as anything else. So I don't think it benefits us to say simply a bunch of scalawags or crooks who got us in this trouble. I think it's a much deeper, more pervasive problem than that.
COOPER: Candy, at this point, this debate on Friday, supposed to be on foreign policy. Is there any chance it's not going to be on foreign policy and there's going to talk about the economy? I mean it seems odd to be focusing on foreign policy when you're in the midst of this nightmare?
CROWLEY: There are many ways to get around to the state of the U.S. economy. If you're Barack Obama, don't you look at it and say, well, look how much we have paid for this war that has gone on for nearly six years and how we could be using this at home.
Look at what's happening in the global marketplace because of our problems here at home. I don't think there's any way -- because the world is so interconnected that you don't talk about that at some level.
COOPER: We're going to have to leave it there.
Candy Crowley, David Brancaccio great to have you in the program we're glad to have you on again, I'm a big fan and David Gergen, as always, I'm big fan of yours.
BRANCACCIO: As well.
COOPER: Ahead on "360," Governor Sarah Palin, speaking to foreign leaders today. Nothing quite worked out like the McCain campaign had hoped; their PR folks had hoped. Their battle with the media coming up.
And later, lifting a decades-long ban, today's major development involving offshore drilling. We'll be right back.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Are you going to support the bail out? You're thinking about supporting it?
(END VIDEO CLIP)
COOPER: Reporters yelling out to John McCain, that's about as close as they can get to asking questions of the candidate. Both candidates have been very careful on talking to reporters the last couple of weeks, though today both finally gave news conferences.
The candidate who has been virtually cut off from reporters and everyday citizens is of course is Sarah Palin. She's given two interviews and had one Town Hall meeting with John McCain.
Governor Palin is now in New York to meet with or perhaps as importantly to have her picture taken meeting within foreign leaders. The McCain camp is hoping the publicity around those leaders is going to boost her foreign policy credentials.
But as you'll see, the day did not go as planned for the McCain campaign as iron curtain between the candidate and media reached a new level.
Ed Henry has the "Raw Politics."
ED HENRY, CNN CORRESPONDENT: Sarah Palin seems to be enjoying her foreign policy studies, especially after a sit-down with Henry Kissinger where she sought his tutelage on last month's crisis in Georgia.
The carefully choreographed photo ops were largely a substance- free zone, including the one on one with Afghan President Hamid Karzai. The only drama, Palin tapping her heart as she learned about the president's relatively new baby boy.
PALIN: What is his name?
HENRY: Low risk for Palin, yet the McCain campaign had tried to make the meetings no risk. At first refusing to allow reporters to join cameras in the Karzai meeting; then, the five U.S. television networks, including CNN, said they would not air the video if a reporter could not be there. The McCain camp backed down.
PAUL BEGALA, DEMOCRATIC STRATEGIST: If your purpose is to show that Governor Palin can hold her own in a meeting with major international figures, then let her hold her own. Don't exclude the press, don't keep questions from being asked, don't coddle her.
HENRY: Republicans say Palin is coming across as poised and capable, not coddled.
KEVIN MADDEN, REPUBLICAN STRATEGIST: The enduring image that the McCain campaign wants left with voters is somebody who can close the stature gap, somebody who can stand with world leaders and essentially fill in that void in her resume.
HENRY: It will take more than a couple of days, however, to change her image on the late night talk shows.
DAVID LETTERMAN, CBS HOST: John McCain is introducing his running mate, Sarah Palin to the world leaders over at the U.N. It was nice. It looked like bring your daughter to work day.
HENRY: A reminder OF why Palin is meeting with heads of state in the first place, to prove she's ready for primetime.
COOPER: Ed Henry joins us now.
I find this remarkable. How common is this? How unusual is it to have reporters shut out to such an extent to a presidential candidate?
HENRY: I'll tell you when we're covering the White House overseas, President Bush oftentimes you have to face with the White House and push back. They want to let cameras in when he meets with foreign leaders and not allow an editorial presence.
Bottom line, we push back and we say we won't show the videos and they allow reporters in. The bottom line is most Americans probably couldn't care less if the media is going to get shut out. It would probably win Sarah Palin votes if they kept the media out because we're not very popular.
She's running for vice president and ultimately, she has to start answering questions. She hasn't had a full pledged press conference yet and neither has Joe Biden on the other side because both parties realize that at this late stage in the game, you don't want a lot of risk. You don't want to make some flub.
COOPER: But don't they risk making her -- it makes them look like they're afraid of her abilities that she's going to say something. If she's capable enough to meet with world leaders not all of whom are going to be as friendly, frankly, as a bunch of reporters are, doesn't it make her look bad?
Campbell Brown earlier tonight said she thought it was sexist for the McCain campaign to be treating her differently.
HENRY: The point is, is that in fairness, both sides are trying to shut out reporters and keeping them at arms length. But in the case of McCain camp, they're trying to out the same time roll out Sarah Palin and say she is ready for primetime. She does have the experience.
So if you want to roll her out, you're ultimately going to have to let her face that scrutiny because for example, in a couple weeks when she faces Joe Biden one-on-one in that debate, you're not going to have any safety nets. It will be her one-on-one.
So if you keep her in a cocoon that could be dangerous.
COOPER: Although they have now rigged the rules for the vice- presidential debate to make exchanges between them much more difficult, unlike the presidential debate. It appears as if they are trying to protect her from something which I don't quite understand because she appears very capable.
HENRY: Her allies say, look, let's get her out there because she looks strong, she looks poised right now. Conservatives are fired up to have her. They say why hold her back? Let her out there.
COOPER: It's interesting.
Ed Henry, thanks. Fascinating day.
Still ahead, remember the bridge to nowhere that Palin wants people to think she never supported? Well, tonight the story takes yet another turn on Alaska's "Road to Nowhere." We have a Special Investigation Report.
We'll also look at Joe Biden's record on the "bridge to nowhere." You might be surprised about how he voted on that.
But first, a school shooting in Finland that left 10 people dead. The killer -- you see him there -- made his own YouTube videos and now there's a bizarre twist to report about the suspected killer when "360" continues.
COOPER: All right, so by now, of course, you have all heard about that "bridge to nowhere," the whole "thanks but no thanks."
But the question is have you seen the "road to nowhere?" Talk about a pork project. Guess what, you paid for it.
We'll have that but first Erica Hill joins us for the "360 News and Business Bulletin" -- Miss Hill.
ERICA HILL, CNN CORRESPONDENT: Mr. Cooper.
We start off with a story that's really disturbing for a lot of people to wake up to this morning. A college student in Finland killed 10 people and then himself just one day after being questioned by police. The 22-year-old was interviewed after he posted videos on YouTube. One that showed him firing a pistol at a shooting range; another included the video tribute to the Columbine High School shooters.
The embattled ban on offshore drilling coming to an end after all, it turns out. After months of debates, House Democrats decided to allow that 25-year ban to expire at the end of the month.
And Google jumping into the mobile phone market, providing the power to a new teen mobile model; it's set to challenge Anderson's favorite device, the Apple iPhone. The new G1 runs on the Google's Android Operating System. It will make its debut next month, priced at $179; that's about $20 cheaper than the iPhone.
COOPER: Wow. I'm just wondering if it's easier to type on because that's my problem with the iPhone. I find it hard to type on.
HILL: I know I feel like the fingerprint tracks on the iPhone. But I know people who love it.
COOPER: People swear by it. I don't know. They say you get used to the thing.
HILL: Well, we're crackberry addicts, that's just the way it is.
COOPER: Exactly. I'm old school.
Here's tonight's "Beat 360" photo. Sarah Palin shaking hands with former Secretary of State Henry Kissinger after the meeting in New York today that we've been talking about.
Here's a caption from our staff winner, Alyssa: "Levitra? No, Mr. Kissinger, I said, nice to meet ya."
HILL: I love it.
COOPER: Get it? I thought it was funny.
HILL: I saw it come through the inbox today. I wasn't sure it would make it on the air.
COOPER: Levitra? No, I said nice to meet ya.
HILL: I'm really happy it did.
COOPER: If you think you can do better, go to ac360.com, click on the "Beat 360" link. Give it your best shot. We'll announce the winner at the end of the program and the winner gets a "Beat 360" T- shirt.
HILL: Coveted T-shirt.
COOPER: Coveted. Yes.
Up next, the politics of finger pointing. The "bridge to nowhere" was never built but the "road to nowhere" sure was. Look at that. It just ends; $26 million of federal earmarked money. You paid for it. The question is why.
And Joe Biden likes to call out his Republican counterparts for the "bridge to nowhere" on the campaign trail. But guess what? Biden has his own earmark trail in Washington, his own votes about the "bridge to nowhere" to answer for.
We're "Keeping Them Honest."
(BEGIN VIDEO CLIP)
PALIN: I champion reform to end the abuses of earmark spending by Congress. In fact, I told Congress thanks but no thanks on that "bridge to nowhere."
(END VIDEO CLIP)
COOPER: As far as we can tell, Sarah Palin has actually seemed to have stopped making that claim in her most recent stump speeches. We're going to watch it, though, as the weeks go on. After weeks of reporters pointing out that she actually said, "Yes, please," to the bridge before she said "thanks but no thanks" and even then she still took the earmark money.
In a moment we're going to look at why Obama and Biden actually voted to allow the "bridge to nowhere."
But first, we want to show you another project that Palin had no problem using paying taxpayer money for, the "road to nowhere."
Special Investigations Unit correspondent Abbie Boudreau, "Keeping Them Honest."
ABBIE BOUDREAU, SIU CORRESPONDENT: Take a look down there. That's the city of Ketchikan. Over there, across the Tonga's Narrows (ph), that's Gravina Island. And that's where the local airport sits.
To get there from Ketchikan, you have to take the ferry. It takes about ten minutes.
So that brings us first to the plans for the notorious expensive "bridge to nowhere." It would have crossed the narrows here. But to get to the airport, they needed a road.
But here's what happened. When the political outcry about the bridge got so loud and they killed it, well, it was too late. They already signed a contract for the road project. So they built it.
This is Gravina Island Highway. It runs about three miles long at $8 million per mile; paid for by your tax dollars. But there's no one on this road. Many locals call it the "road to nowhere." The Democratic mayor of Ketchikan calls it "Governor Palin's road to nowhere."
MAYOR BOB WEINSTEIN, (D) KETCHIKAN, ALASKA: She's been saying, "I told Congress thanks but no thanks." I stopped that bridge to nowhere project." In fact, she didn't tell Congress thanks but no thanks and spent $26 million out of a federal earmark for the Gravina access, a.k.a. "bridge to nowhere" project on this road that will not go to a bridge.
BOUDREAU: Weinstein says of course the road would have made sense if a bridge had been built considering how now locals and tourists have to take a ferry to the airport.
While we were on the road, we met PJ Murphy, who works on the Island.
PJ MURPHY, TOLL BOOTH COLLECTOR: Not many people are coming out yet.
BOUDREAU: No. Why did you come?
MURPHY: I'm the toll collector down there and I wanted to see where it went. What it looked like.
BOUDREAU: What do you think?
MURPHY: It's nice road. It's a lot better than the road I drive on to go home.
BOUDREAU: And what do you think about where it ends?
MURPHY: The "bridge to nowhere," I mean, come on.
BOUDREAU: Mayor Weinstein came with us to see the road, too. Who's using this road? Since we've been here we haven't seen --
WEINSTEIN: Well, currently, you and I are using the road.
BOUDREAU: He can joke about it now wearing a "Nowhere Alaska" T- shirt but he says that earmark money could have been used to fix roads and sidewalks in town that people actually use.
Simply put, what could Governor Palin have done? If she says she's against earmarks what could Governor Palin have done in this case?
WEINSTEIN: Governor Palin could have stopped construction of this road.
BOUDREAU: Back up in the helicopter, another reality check.
It curves around then it just stops. That's where the bridge was supposed to pick up right there.
We tried to find someone in town who supported the road. So we contacted Palin's former campaign coordinator, an avid Palin supporter. But even he had a hard time backing the project.
Do you think it's a waste of taxpayer money?
MIKE ELERDING, FORMER PALIN CAMPAIGN COORDINATOR: On the road?
ELERDING: Without the bridge, yes.
BOUDREAU: Meg Stapleton, a McCain-Palin spokesperson tells us the governor had no choice and that's why the project moved forward.
It's hard to imagine that the governor wouldn't think that that's a waste money, taxpayer money.
MEG STAPLETON, MCCAIN-PALIN SPOKESPERSON The governor could not change that earmark. That earmark was given; that earmark was dictated that that had to be spent on the Gravina road and nothing else. So the governor had no options.
BOUDREAU: Could she have stopped construction?
STAPLETON: My understanding is that -- I'd have to look into that for you. I don't know.
BOUDREAU: Stapleton did get back to us. And she says, under ordinary circumstances, Governor Palin would not have allowed the Gravina road project to move forward. But given the federal earmark and because the contract for the road was already signed before she got into office, the governor was left no viable alternative. So the road that no one seems to use to the non-existent bridge was built.
MURPHY: It would be nice to see them put something over here, now that they have the road; a park, picnic benches, something to get people out here. I mean, it's pretty here.
COOPER: Will there ever be a bridge that connects to this road?
BOUDREAU: Well, there are like eight or nine bridge options right now. But no one knows. There's been no final decision made on this so maybe but maybe not.
COOPER: Am I right in saying that woman is the toll collector on that road? Does she actually collect any tolls?
BOUDREAU: She collected our toll when we got off the ferry and went over to Gravina Island. Yes, she is the toll collector, probably one of the few toll collectors, but she was there and we met up with her.
COOPER: A lonely job no doubt.
Abbie Boudreau, thanks. Joe Biden has blasted Palin on the "bridge to nowhere." What he fails to mention is he actually voted to let Alaska have it. We'll explain that ahead. "Keeping Them Honest" tonight we examine Joe Biden's record on earmarks and some of bridges his own.
(COMMERCIAL BREAK) (BEGIN VIDEO CLIP)
SEN. JOE BIDEN, (D) VICE PRESIDENTIAL NOMINEE: That's what I call a "bridge to nowhere;" an absolute "bridge to nowhere." That is a "bridge too far."
(END VIDEO CLIP)
COOPER: So Senator Biden understandably likes to bring up Alaska's "bridge to nowhere" almost as much as his opponent Sarah Palin, though obviously for different reasons.
Biden has some other bridges of his own that he has to account for, however. Special Investigations Unit correspondent Drew Griffin is also "Keeping Them Honest" tonight.
DREW GRIFFIN, SIU CORRESPONDENT: Last week it became part of his stump speech. Do you believe Senator McCain and Governor Palin are good for American's road to recovery? Joe Biden says you better check their road map.
BIDEN: I got all also a bridge I got to sell you here. Guess what, it is in Alaska and it goes to nowhere.
GRIFFIN: Perhaps Biden believes the bridge to nowhere is the symbolic bridge to cross in to the White House.
BIDEN: John McCain's answers for the economy and we're in such desperate shape is the ultimate bridge to nowhere. It is nowhere. It takes you nowhere.
GRIFFIN: But hold on, Senator Biden. "Keeping Him Honest," we decided to check on 116 reasons in Delaware that one bridge to nowhere in Alaska may not be such a good Democratic talking point. Because 116 is the number of earmarks Senator Biden asked for this year alone; the total Bill to taxpayers, more than $342 million.
He told our "American morning" they're all justified.
BIDEN: Everyone's seen them. We have no Walter -- you know, we have no Lawrence Welk Museums. We have no bridges to nowhere in Delaware; it's all straight up.
GRIFFIN: Straight up? We went to Delaware to see for ourselves. True, there is no "Lawrence Welk Museum. But Biden does want $1 million for a children's museum. Another $1 million for opera house renovations. Hundreds of thousands for this tiny waterfront park. And believe it or not, there is also a bridge, maybe not to nowhere, but after the tourists have gone at this time of year, the Indian River inlet bridge can seem like a bridge between two nowheres.
CAROL EVERHART, REHOBOTH BEACH-DEWEY BEACH CHAMBER OF COMMERCE: We need a new bridge and we are so fortunate that this is finally at a place where it's going to happen.
GRIFFIN: Carol Everhart with the local Chamber of Commerce says the Indian River inlet bridge is a vital link in the tourist trade connecting the vacation towns of Dewey Beach and Bethany Beach. Without this bridge, she says 30,000 summer vacationers a day would have to drive an extra 35 minutes.
The bridge has some erosion problems and if it ever collapsed it would cause economic disaster here, Everhart says.
EVERHART: The bridge as it is, is currently safe.
GRIFFIN: So why is Senator Biden asking for $13 million for this bridge now? That's what Bill Allison of the watchdog group The Sunlight Foundation wants to know.
BILL ALLISON, SUNLIGHT FOUNDATION: Essentially what Senator Biden is doing is saying that well, my state's bridge gets the priority dollars even though it is not a priority project.
GRIFFIN: Now the real twist in this story. Senator Biden must really like bridges because not only does he want you to help pay to replace this bridge here in Delaware, despite what he's been saying on the campaign trail, he actually voted for Alaska's bridge to nowhere; twice.
That's right. He and Senator Barack Obama were among the 93 senators who voted for the massive 2005 Transportation Bill funding the Alaskan "bridge to nowhere" and thousands of other projects across the country. And when another senator tried to divert the bridge to nowhere money to fix a bridge to New Orleans damaged by Katrina, Senators Biden and Obama and 80 other senators present voted against the amendment.
ALLISON: Yes, they had a chance to vote specifically against the "bridge to nowhere" in Alaska to redirect the money and they chose not to.
GRIFFIN: John McCain who always opposed earmarks was not in the Senate that day and did not cast a vote. Sarah Palin wasn't even the governor yet.
COOPER: So what does Biden say about his votes on the "bridge to nowhere" and his earmarks to replace the safe bridge in Delaware?
GRIFFIN: Of course, Anderson, we wanted to ask him directly but as Ed Henry said these candidates are somewhat in hiding. The campaign just never got back to us on when or if we could sit down and talk with Senator Biden.
COOPER: We've always on this program -- and you've been the one who's driving this -- made a big distinction between those who try to hide their earmarks and those who at least are public and open about them. Has Senator Biden been open about the earmarks?
GRIFFIN: According to the Sunlight Foundation, this is the first year in his 36-year senate career that he's actually released his earmark requests in advance.
You remember, last year we asked everybody in Congress about their earmarks and whether they'd show them to us; our summer interns did. Senator Biden never got back to us then, either. So this is the first time we're actually seeing his earmark requests in advance.
COOPER: Drew Griffin, "Keeping Them Honest." Drew thanks.
Up next, homeowners on the brink facing foreclosure. What about a bailout for them? See what's "On the Radar" when "360" continues.
COOPER: "On the Radar," the $700 billion plan to bail out financial firms facing bad mortgages. The question we posed on our blog is what about you the homeowner? Should you get help, too?
Maureen in Newman, California writes, "Saving these homeowners will save us all. If we bail out Wall Street without helping the homeowners, we will have meltdown #2 several months down the line."
GF in Los Angeles say, "I firmly disagree with bailing out homeowners. Don't buy a house you can't afford and don't treat your house like an ATM machine. Let them fail so that those who saved responsibly can buy their houses at non-inflated prices."
Chuck in Shelton, Connecticut agrees. He says, "Bail out? No, not the answer, I say let the cards fall where they may."
Share your thoughts. Read the comments by going to ac360.com.
Time now for "Beat 360" our daily chance to come up with a caption better than the one we can come up with. There's the picture, Henry Kissinger and Sarah Palin. And we just have to keep scrolling through it. Keep going, let's go to the caption that our staff came up with.
HILL: Alyssa won it.
COOPER: Alyssa "Levitra? No, Mr. Kissinger, I said nice to meet ya."
Our viewer winner is Nancy from Apple Valley, Minnesota. Her caption, "Just remember, Sarah, the power is in the glasses."
Yes. Nancy, your "Beat 360" T-shirt is on the way.
That does it for this edition of 360. Thanks for watching.
"LARRY KING" starts right now. I'll see you tomorrow night.