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ISSUES WITH JANE VELEZ-MITCHELL

Hudson Tragedy; Hookergate; Sex Ad Crackdown; Legalizing Prostitution; Obama Meets with Economic Advisors; Protestors Demonstrate Against Prop 8; New York Considers Bag Tax

Aired November 7, 2008 - 19:00:00   ET

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


(BEGIN VIDEOTAPE)
JANE VELEZ MITCHELL, HOST (voice-over): Fresh off the most grueling presidential race in history, Obama the iron man, now racing a triathlon of economic trouble. One point two million jobs lost. Car makers crashing. American homeowners thrown out on the streets. Tonight, we ask this question: how is he going to pull this off?

Also, a day after Eliot Spitzer gets the all-clear in Hooker-gate, we`ll hear what one of the little people who got the raw end of the deal has to say.

Speaking of Spitzer, is it true prostitution be legalized? I`ll talk to a former Hollywood madam.

These issues and more, tonight.

(END VIDEOTAPE)

VELEZ MITCHELL: Former New York governor Eliot Spitzer, or client number 9, won`t be charged for soliciting high-priced call girls. But the woman who answered the phone, she may go to jail. Sounds like a double standard to me. A famous former madam will weigh in.

And we`ll have an update on the murder of Oscar-winner Jennifer Hudson`s family. The prime suspect in the triple murders could walk out of jail as early as Monday. You will not believe the story.

But first I want to talk about the topic on everybody`s mind: the economy. Today, Barack Obama plunged into the eye of that storm, holding his first news conference as president-elect.

Just minutes earlier, we learned that this year, the U.S. Lost 1,200,000 jobs, pushing the unemployment rate to its highest level in 14 years. We also learned Detroit is in the middle of a meltdown. New numbers just in. GM lost $4.2 billion, just in the third quarter! And Ford lost $3 billion. And the bad news just keeps on coming and coming.

So earlier today, the president-elect met with 17 economic advisers, including billionaire Warren Buffett, and after that, he held historic first news conference.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENT-ELECT: Immediately after I become president, I`m going to confront this economic crisis head on by taking all necessary steps to ease the credit crisis, help hard-working families, and restore growth and prosperity.

(END VIDEO CLIP)

VELEZ MITCHELL: I sure hope President-elect Obama turns this economy around. But here is my issue tonight.

In chaos, there is opportunity. This is a chance to make the changes we needed to make so long ago but didn`t.

Take Detroit for example. They`re hat in hand, begging for another bailout to the tune of $25 billion or even more. If they get America`s hard-earned tax dollars, it must be on the condition that they completely retool their factories and start manufacturing hybrids and electric vehicles, period, end of story. Of course, had they done that a long time ago, they wouldn`t be begging right now, and we Americans wouldn`t be foregoing lunch to fill up our gas tanks.

The same concept applies to other ailing industries, and don`t tell me it can`t be done. No, no, no, no, no, no, no. If we can wage two wars half a world away and spend a trillion dollars on that, certainly we can figure out a way here in America to start making fuel-efficient and even zero-emission vehicles, right here in the U.S. of A.

Joining me now to discuss the economy and other political stories of the day, my fabulous guest, John Avlon, former Giuliani advisor and author of "Independent Nation"; and Leslie Sanchez, CNN political contributor and Republican strategist.

John, President-elect Obama was in a tricky spot today: not yet president, but with the whole world clamoring for answers. How would you rate his news conference? You think he handled it well?

JOHN AVLON, AUTHOR, "INDEPENDENT NATION": I`d give him an "A." You know, these first presidential-elect press conferences can be very pivotal. Bill Clinton had a rough one going out and really set a tone for the first term of his administration.

Obama was confident. He was focused on the economy like a laser beam, and he knew when to engage and when to focus on continuity of government that President Bush is present today. So he clearly is listening to economic advisers behind him that represent some of the best, most diverse minds in business. And he understands the challenges.

We are in a hole right now. But I got to say this: Ronald Reagan had the recent highest unemployment at 10 percent in the early 1980s, and he, three years later, won re-election with 49 states. So with disciplined approach, you can turn around an economy in one term.

VELEZ MITCHELL: Well, Leslie Sanchez, I want to ask you this, because actually, I feel that Barack Obama was sort of like a great reporter. He laid out all the problems very efficiently, but he didn`t give us anything new.

Now I know he doesn`t want to pull an Al Haig and say, "I`m in charge here" when he`s not, but do you think he could have given us a little more specificity?

LESLIE SANCHEZ, REPUBLICAN STRATEGIST: He probably could have, but he`s being incredibly cautious. He has to ensure consumer confidence. I think the markets are very concerned right now about this transformation. Any time there`s a change of government, you`re going to see some fluidity there.

But I think, in talking about history, look back at Jimmy Carter. He came in, you know, there was basically -- the economy was recovering from a recession. He said he was going to come in here and really, you know, strengthen the economy. And a few years later it was double-digit inflation. It was worse in terms of almost 8 million people unemployed. So -- and he lost reelection.

There`s a lot that I`m sure he`s paying attention to. And presidents, in the short time, only have a certain amount that they can do to impact the economy. This is a global crisis, so he`s got to be very cautious in what he`s presenting.

VELEZ MITCHELL: You know, we want to get back to the Obama administration in just a moment, but we have this tape just in. You have to hear it. Sarah Palin defending herself against charges from the McCain campaign. Sources that she didn`t know which countries made up NAFTA or that Africa was a continent. Listen to this.

(BEGIN VIDEO CLIP)

GOV. SARAH PALIN (R-AK), VICE-PRESIDENTIAL NOMINEE: That`s cruel. It`s mean-spirited. It`s immature. It`s unprofessional. And those guys are jerks if they came away with it, taking things out of context, and then tried to spread something on national news. It`s not fair and not right.

(END VIDEO CLIP)

VELEZ MITCHELL: Yes. You know, it`s gotten very mean, John Avlon. And I think that one of the reasons it has is because the McCain camp is bitter. They`re the ones leaking this. It`s not the Democrats. They`re the ones saying this, which to me is quite astounding that they would -- they would sort of drag themselves further down at this juncture.

AVLON: It`s unbelievable if we hadn`t seen it so many times before. When losing campaigns hit the ground, it turns into a circular firing squad, everyone trying to take each other out in the media.

What`s unusual is it`s being directed at a vice-presidential candidate. And what`s doubly unusual is, even in that -- in that comment about these very specific allegations, she put them in context in a debate prep but didn`t deny them. So it`s a whole bunch of ugliness in the aftermath of an unsuccessful campaign.

VELEZ MITCHELL: You know, Leslie Sanchez, though, after that Canadian comedy team called her up and they had that fake conversation where she thought she was talking to the president of France, the problem with that is that you`re liable to believe anything anybody says about Sarah Palin after that.

SANCHEZ: Well, you know, I think there`s a series of mishaps in terms of managing this candidate: her introduction to the media; putting her, you know, in some of these heavy-hitting interviews before she was out there even talking to conservative radio, getting her feet wet, kind of getting used to the national stage. And that`s the thing (ph).

The governor herself has to look out for her career. What does she want to do? She could be a front contender if she wanted to come forward on the national scene four years from now. We know that just historically.

But -- but these attacks are just -- they`re just ridiculous, below the belt, inside Washington banter. And sour grapes among people who led a poor campaign.

VELEZ MITCHELL: And they`re vicious. I mean, one of them, the McCain sources, said it was a bunch of Wasilla hillbillies raiding Neiman Marcus. I mean, that`s just -- that`s downright nasty.

AVLON: And uncommonly ugly.

SANCHEZ: The worst part about it is it`s coming from Washington insiders, people that have a certain elitist attitude about what it is they expect from candidates.

The reason that Governor Palin energized people is she has this common sense approach. She`s past all that. She wants to come in and reform Washington. I think she has...

AVLON: It`s not a leadership...

(CROSSTALK)

VELEZ MITCHELL: ... Sarah Palin, at least for this election cycle, so I don`t want to debate her. But I`m debating really this treatment of her. I mean, you don`t kick somebody when they`re down. You don`t do this to a woman. I just find it unbelievable that the McCain campaign is the source of it!

AVLON: It`s unbelievable, but it`s sadly typical of Washington. The only thing I`d say is I think we`ve got into a debate about -- the word "elite" gets thrown around a lot now, and populist appeals are very popular. But it`s not elite to expect a certain base competence from a candidate for not...

VELEZ MITCHELL: I hear you. Here`s another -- here`s -- I`ve got to move on to this next one, because we want to get both sides here, be fair.

Barack Obama named Rahm Emanuel as his chief of staff. Critics are saying that he sat on the board of directors at Freddie Mac at the time of the brewing scandal. He wasn`t named in the complaint, but he was on a board that was accused of not following up.

This is the firm that had to be taken over by the U.S. government. Many feel its shenanigans precipitated the foreclosure mess. Is this a smart pick, John?

AVLON: You know, I do think it`s a smart pick, but there`s a vulnerability here with Freddie Mac that could explode down the road. You know, Rahm Emanuel, some people are saying he`s far too partisan. Every good cop needs a bad cop, and I think he can play that.

And if you look at the candidates he picked in `06 and `08 from the Democratic Party, they were centrists like Tester (ph) or Casey in Pennsylvania, who was a pro-life Democrat. So I think he understands the larger game, but there`s no question Barack Obama has picked a bad cop to help him run his shop.

SANCHEZ: He`s a bare-knuckles, you know, sharp elbows type of legislator who came out of Chicago politics, you know, the tough political Chicago machine. On one hand, he knows President-elect Obama better than most people. He`s also a pipeline for that Chicago political machine. I think that`s what people are worried about, what kind of influence is there. And people are going to look with a jaundiced eye.

VELEZ MITCHELL: I don`t think anybody wants the dirty politics. We want bipartisanship. We want -- we want peace. That`s what we want. Not just in terms of war, which we do also, but we want peace in terms of how we conduct ourselves. We want to be evolved.

SANCHEZ: Jane, I would say this much. I would say on the positive side, he is a very strong legislator. He knows how to get things done. He raised a tremendous amount of money, very effective in terms of leading his coalition, you know, of the Democrats. And I think there`s some positives there in terms of working with the Republicans, and Republicans should be open minded to that proposal.

AVLON: I think the pick shows that Obama needs to show we need to balance idealism with realism.

VELEZ MITCHELL: OK. Well, I hope you`re right, and we`ll see what happens.

Peace-in. Supporters of gay marriage took to the streets outside a Mormon temple in Los Angeles, protesting the estimated 20 million dollars the church spent to push through California`s Proposition 8 against same- sex marriage. And the fallout is just starting.

Also, the sole suspect in the Jennifer Hudson family murders could be set free by police first thing Monday morning? What? The terrifying details on William Balfour`s future are ahead.

(COMMERCIAL BREAK)

VELEZ MITCHELL: This just in. The only suspect in the Hudson family murders could be set free on Monday morning. Full details on the fate of William Balfour coming right up.

But first, it`s been three days since election day, and still the outrage continues to grow in California following the passage of Proposition 8, the ban on gay marriage.

The focus now, the Mormon church. More than 1,000 gay rights advocates protested outside the Mormon temple in Los Angeles yesterday, incensed over the role the Mormon Church played in getting the gay marriage ban passed. Opponents estimate members of the church gave more than $20 million to ensure Prop 8 passed. Some are saying that is blurring the line between church and state. And you know what? I agree.

R.J. Mulligan, incoming co-president of the Lesbian and Gay Lawyers Association of Los Angeles; and Carol Leifer, well-known comedian and comedy writer, with us tonight. Glad to have you both. Both, I will say, full disclosure, very good friends.

R.J., I want to start with you, because you were one of the protestors outside the Mormon Church. Describe the mood for me.

R.J. MULLIGAN, CO-PRESIDENT, LESBIAN AND GAY LAWYERS ASSOCIATION OF LOS ANGELES: Jane, there was a lot of anger and, underneath all that anger, a lot of pain. People were in disbelief. And, you know, it just remains baffling to us that this actually passed.

VELEZ MITCHELL: Now, Carol, I want to ask you about the whole role of the Mormon church, because they say they`re trying to preserve the sanctity of marriage and, of course, what immediately occurred to me is, if you`re trying to preserve the sanctity of marriage, why not deal with another problem that`s more in your backyard, metaphorically and literally, which is the whole polygamy issue.

They haven`t really spoken out. But during the whole polygamy case in Texas, they did say this. This is a quote from one of the elders. He said, "People have a right to worship as they choose, and we are not interested in attacking somebody else`s beliefs."

Now, that`s what he said in connection to polygamy.

CAROL LEIFER, COMEDIAN: Right.

VELEZ MITCHELL: Isn`t that astounding?

LEIFER: Yes, it is astounding. But that`s what really, you know, gets me so incensed about all this stuff about people being against gay marriage, you know, with the sanctity of marriage, when marriage has a 50 percent divorce rate. I mean, come on. It`s not really bragging rights when half of marriages in the straight world are failing.

VELEZ MITCHELL: Now, I want to talk a little bit about lost tourism, because supposedly, according to a study done at UCLA, the whole marriage trend in California after gay marriage was initially approved by the Supreme Court this past spring, was estimated to bring in something like $65 million in tax revenue alone. Not to mention all the business it would bring in from all the marriages, the florists, the gowns, the tuxedos, the whole 9 yards. Now that`s all going away.

What do you think is going to happen, R.J.? I mean, there are all these events out there, you know, the diner (ph) in Palm Springs, where all the lesbians gather. Then there`s the white party for the men in Palm Springs, where everybody wears white. Do you think that`s going to leave California?

MULLIGAN: Oh, no. That`s a tradition. That`s something that we celebrate. You know, our fight is just beginning, apparently. All over again.

So, you know, just to, you know, get back to the issue of marriage, you know, there is a sanctity in marriage, and that`s why we value it as a fundamental right, that when you`re married, you say, you know, all the things, the mundane things, and the good things and the bad things matter to me, and your life will not go unnoticed. I will notice. And your life will not go unwitnessed. I will be your witness.

So we`ve lost a very fundamental right, and it`s a very, very sad day in California.

VELEZ MITCHELL: Oh, I hear you. Carol Leifer, you know, I wonder about the psychological aspect of this. Remember the Reverend Ted Haggard, and he was running a huge evangelical organization that represented like 30 million evangelical Christians. And he was leading the fight in Colorado against gay marriage there.

But he was caught in a scandal of his own when a man said he was having gay sex with the Reverend Haggard, and he was forced to resign.

LEIFER: Yes. I know.

VELEZ MITCHELL: And then he said he was guilty of sexual immorality, and they sent him somewhere to try to undo that tendency that he has.

LEIFER: Yes. It`s complete hypocrisy. Isn`t it? And look, we gays, we`re mad as hell, and we`re not going to take it anymore. I mean, this was really a very crushing defeat, and we just might have to secede.

And let me tell you, straight people, you will not like the world without the gays. That would be a pretty bad world. Look at this. You`d have no fashion, no WNBA, no Broadway, and you`d have none of that.

So we`re only going to make marriage better. I mean, really, we`ll get rid of that lame hokey-pokey dance at weddings. We`ll throw that out. Women will actually want to keep their bridesmaid dresses. You need the gays in marriage. You need it.

VELEZ MITCHELL: All right. We are going to have to leave it right there. Thank you both, ladies. Great talking to you. See you again.

All right, your answer to the question, paper or plastic, could start costing you money. Is a plastic bag worth a nickel? But an even better question: is your convenience worth destroying the entire planet for? More on New York`s mayor, Michael Bloomberg`s proposed bag tax.

And the lone suspect in the Hudson family triple murder could be out on the streets Monday morning. How is that possible? We`re going to discuss that next.

(NEWSBREAK)

(COMMERCIAL BREAK)

VELEZ MITCHELL: Some people who live in the Big Apple are fit to be tied, because when they bag an apple with a plastic bag, it will cost them. New York City Major Michael Bloomberg is proposing a five-cent tax for every plastic bag you take from the checkout stand.

As far as I`m concerned, bravo, Mayor Bloomberg. Let`s take this nationwide. We are destroying our planet, and it`s clear we cannot wait for people to do the responsible thing on their own.

Joining me now is Keith Christman, the senior director of packaging for the American Chemistry Council.

Keith, thanks for joining and agreeing to a little debate. I think this is a fantastic idea. Why don`t you?

KEITH CHRISTMAN, SENIOR DIRECTOR OF PACKAGING, AMERICAN CHEMISTRY COUNCIL: Well, with our economy the way it is today, we don`t -- families don`t need a tax on -- on grocery bags and on their food bill.

What we need is a recycling program that went into place in New York just three months ago. This new recycling program is a great opportunity for New Yorkers, gave people an opportunity to recycle their plastic bags but also a whole bunch of other plastic wraps that they get at home: wraps around newspapers, dry cleaning and other things. And it`s to recycle those.

VELEZ MITCHELL: I hear you but I don`t hear you, because only five percent of plastic bags are recycled. That is according to government statistics. And take a look at what it creates.

I mean, it is an obscenity out there, and I want to show you a very simple, simple solution, if you can come back to me on camera for a second. This right here, I walk around with this, OK? It wraps up into nothing and then it opens up like this. I take it wherever I go. I have two or three of these in my purse. They are better. They`re more convenient. They carry a lot of stuff. Is this brain surgery? Why is it that Americans cannot do this?

You know, Keith, I sat in front of a supermarket in Santa Monica for 45 minutes waiting for a friend. And that`s the most liberal area of the United States. And I said to myself, I want to see how long it takes for one American citizen to come out with one of these, or any reusable bag. Forty-five minutes, not one person.

CHRISTMAN: Well, Jane, we think reusable bags are a great choice, too. But people need a choice, and they don`t need to be taxed on their grocery bill today.

And we think the opportunities, there are a lot of opportunities to reduce bag use, proper bagging techniques, reusing grocery bags. People right now, 92 percent of people reuse their grocery bag around their house, for taking their lunch to work, for bringing home their swimsuit, bringing home their gym work or picking up after their pet. So when they reuse their bag -- and then recycling -- recycling is the other approach. And this brand-new law in New York City needs to be given an opportunity to work. It`s just been in place for three months.

VELEZ MITCHELL: Right. But I`m saying nationally, you know, it`s not working. People don`t recycle these plastic bags.

Now, let me just show you one other things, because a lot of dog walkers -- and I have two dogs. They say hey, you know, we use these for picking up the poop. Well, guess what? Here we go, biodegradable. You can buy these and you don`t need to get a plastic bag to pick up poop. I mean, there are simple solutions.

I understand what you`re saying. It seems like a hassle, it seems like unfair right now. But when you look at the planet, and for our children and our grandchildren, saving the planet, we have to do something. You know, this is not a great American tradition. It only started in 1977, these plastic bags.

I`ll give you the last word.

CHRISTMAS: Well, Jane, buying a new bag for the poop instead of using a bag that you got at the store and giving it a new life, that`s obviously better for the environment. In addition to reusing them, recycling them is a much better approach.

VELEZ MITCHELL: I appreciate you agreeing to debate here. And come back and debate us again. Thank you so much.

Former New York governor Eliot Spitzer did the crime. He won`t do the time. We`re going to debate. Prostitution, should it be legal? Next.

(COMMERCIAL BREAK)

VELEZ-MITCHELL: As if the murders surrounding Jennifer Hudson weren`t tragic enough, here is a chilling update. William Balfour, the suspect in the murders of Hudson`s mother, brother and seven-year-old nephew, could be -- get this, are you sitting down -- set free as early as Monday morning when he`s scheduled to appear before the Parole Board.

TMZ, the first with the shocking news. Joining me with more is TMZ`s assignment manager, Mike Walters.

Mike, I would think people would be outraged and scared, especially in that neighborhood, if he`s just set free. What the heck is going on here?

MIKE WALTERS, TMZ ASSIGNMENT MANAGER: I agree. Yes, 9:00 a.m. Monday morning, William Balfour will go in front of the review board, to see if they violated him on his parole, which obviously would keep him in custody for sentencing and hearing.

But, like you said, if they do not violate him on Monday, he can get out of custody. Which means the person of interest in the Hudson murder case will be on the streets.

And let me tell you something, Jane, remember, we talked about this before, if in fact William Balfour does get released or if in fact this does remember, you have to go back and look at the fact that they didn`t violate him on the drug bust in 2006.

So if you look at history, they`re not going to violate him.

VELEZ-MITCHELL: Well, isn`t he a flight risk?

WALTERS: Of course. I mean, well, flight risk meaning that he might leave the area. I don`t think he`s a flight risk like you and me know of leaving the country. But I definitely think that if he gets out and he`s the only person of interest, then he might be dangerous. I mean, that`s the bottom line of this.

VELEZ-MITCHELL: Let me ask you this question. Why hasn`t this man been charged? Because he is the person of interest/suspect I`ve heard it both ways from the authorities.

WALTERS: Right.

VELEZ-MITCHELL: And it appears his alibi doesn`t add up, his girlfriend contradicted it. Or do they not have enough to file charges obviously?

WALTERS: Yes, I think so. I think at this point, they told us they were looking at two people, possibly involved in this murder, slayings, et cetera. But yes, I mean at this point they might not have it all. They might not have the tests lined up. They might not have all the evidence they need to charge him.

And remember, this is a triple murder. This isn`t a DUI. They have to have all of it deadlocked, plus it`s a public case.

VELEZ-MITCHELL: But they found the gun, they found the gun. What about the test for the prints and yada-yada, what about the forensics?

WALTERS: I`ll tell you what, all that I do know and from what we`ve learned at TMZ is this, if the prints were on the gun and the ballistics matched, he would be charged. So now that`s the bottom line.

VELEZ-MITCHELL: Right.

WALTERS: So he hasn`t been charged, so we`ll see.

VELEZ-MITCHELL: In this modern day world, I`m so amazed. I mean, you`re talking about three murders that occurred in two different locations and it`s astounding that they don`t have more forensics than they do at this point.

WALTERS: Right.

And like we talked about before again, William Balfour came out of the Chicago PD`s mouth (ph) instantly when we were working on this story. They said, William Balfour, domestic, we`re looking for him.

So if they knew right then that fact, how could this not be the person that they`re looking for? How could it not have matched, I don`t know. And I don`t want to convict him, all I know is they haven`t charged him, so they must not have everything on him.

VELEZ-MITCHELL: Yes, so he has not been charged. We want to emphasize that.

WALTERS: Right.

VELEZ-MITCHELL: Thank you, Mike. Great job as always, come back soon with another development.

Now more astonishing developments in the Eliot Spitzer sex scandal. There is angry backlash to yesterday`s stunning news that the former governor of New York will not face any criminal charges in relation to his prostitution scandal.

The U.S. attorney explained it this way. It`s just not their policy to prosecute Johns. Well, here is my response to that. Why not? And how can we change your, quote, "policy?"

It`s just not fair that a man who puts lots of people away, busting prostitution rings back when he was New York`s Attorney General, gets off scot-free when he uses a prostitute while governor.

While he waltzes away, four people who ran the ring, including one of the rings booking agent, Tanya Hollander, they`re all facing jail-time.

Hollander`s lawyer is blasting the decision not to prosecute Spitzer and he joins me right now. Michael Farkas, thanks for joining us. Tell us why you are so upset over this decision to let Spitzer waltz away?

MICHAEL FARKAS, ATTORNEY FOR TANYA HOLLANDER: Well, with all policies there`s always some kind of unfairness behind it. And in this one, there is a true fundamental unfairness when you have minor players in this enterprise, especially my client, who also have fully accepted responsibility, offered their full cooperation and, again, had a very minor role to much of the lesser extent than I believe Mr. Spitzer did, who are still facing jail, whereas he is not.

Now, I`m not saying I don`t understand the U.S. Attorney`s policy, I do. However --

VELEZ-MITCHELL: Well, wait, wait, you do? I don`t. Because they`re saying that, you know, he -- there was a lack of evidence and he accepted responsibility.

You know what? He only accepted responsibility because he was caught. That`s why he accepted responsibility. He held a news conference and said yes, I did it and I`m a bad boy. Is that accepting responsibility? I think not.

FARKAS: Well, there`s a difference between accepting responsibility for one reason or another, isn`t there? I mean, obviously he would not have accepted it if he wasn`t caught.

And I`m certainly not defending the former governor. I think his actions were egregious they could possibly be, especially for a public figure; someone like him who has stood up against prostitution rings in particular.

But the Feds do not prosecute Johns and they generally do not prosecute hookers. We know that, it`s always been that way, it`s not a surprise.

But this isn`t just a John who is being let go, while nothing really happens to anybody else. There are players in this "conspiracy," quote unquote, who contributed to the extent that I believe is far less than him and they`re facing jail. And that`s just not right.

VELEZ-MITCHELL: That`s what I`m saying. A law is a law. And I don`t understand this whole concept of, we have a law but it`s our policy not to prosecute it.

Let`s talk about the Man Act. That is a federal law that says you are not supposed to transport women or girls across state lines for the purposes of prostitution.

The young lady you`re looking at right there got on a train from New York to Washington, D.C. to meet Spitzer to have sex with him; that strikes me as crossing state lines. She did it for him. He arranged it, he paid for it. So why is not he charged?

FARKAS: Well, it`s actually worse than that. He did it on several occasions and he paid a whole a lot of money to make it happen.

So again, I`m not in a position nor is it my job to defend Mr. Spitzer or the U.S. Attorney`s position, I`m Miss Hollander`s attorney.

VELEZ-MITCHELL: You`re perfectly free to agree with me.

FARKAS: Well, what I believe is most important is that my client`s fundamental right to fairness is in question here and the good news is, is that the disposition of a co-conspirator such as Mr. Spitzer is relevant to the judge`s decision --

VELEZ-MITCHELL: In plain English, what are you saying though? You`re saying when you take your clients to court, you`re going to say, judge, he walked so I want my client to walk?

FARKAS: That is one of my arguments, yes. And now I can make that argument on her behalf.

VELEZ-MITCHELL: Now, Ashley Dupree, the young lady that we saw there a moment ago, has also walked. She apparently decided to sing, as they say and I`m not talking about her dubious singing career. She decided to sing, so they gave her immunity. What`s the point of giving this woman immunity if they`re not going to prosecute Spitzer?

FARKAS: Well, looking back in retrospect, you`re absolutely right, what was the point?

But in the beginning, if you`ll look at it from their prospective they`ve gained a lot of information; they were conducting a vigorous investigation. And as a matter of course, they generally don`t prosecute hookers in the first place. So --

VELEZ-MITCHELL: And just to distinguish, we`re talking about the Feds, because obviously state and local government prosecute hookers. It`s not just on TV where we see them in a long line of chain with handcuffs. I mean, it`s the local authorities generally that go after the hookers, and not the Feds is what you`re saying?

FARKAS: You`re absolutely right and what`s interesting is that the District Attorney of New York County, Robin Morganfield had a comment on this when asked today about whether he was now going to prosecute Spitzer. And his answer surprised me, I thought his answer would be it`s inappropriate in this case, the Federal Government has conducted its investigation.

That wasn`t his answer. The answer that I read in the paper any way, was why kick a man when he`s down? He`s already resigned from the governorship.

VELEZ-MITCHELL: Oh, boy, it seems to me if you`re super rich, super powerful, super famous or super hot, you can get away with just about anything. What do you think, Mike?

FARKAS: Well, I don`t want to be baited into that one.

VELEZ-MITCHELL: Well, ok. I`m going to say it for you and I`ll say it again. If you`re super hot, super rich, super powerful, and super famous, you can pretty much get away with anything. I mean, let`s face it, it`s even hard to prosecute famous defendants when it comes to murder cases and we`ve seen that time and time again.

Well, listen, I hope you have good luck with your client when you go before the judge. Ten seconds, just take a guess, do you think she`s going to do jail time, in the wake of this yes or no?

FARKAS: I would be very surprised and very saddened if she did. So I want to hold that hope out. I don`t want to jinx it. I`m very hopeful that she will not serve jail time.

VELEZ-MITCHELL: All right, thanks for joining us, Michael.

FARKAS: Thank you.

VELEZ-MITCHELL: All right, this whole Spitzer scandal is raising fresh questions about whether to legalize prostitution. Now, San Francisco just said no to decriminalizing prostitution. Was Prop K really an indecent proposal? And isn`t it about time we legalized these ladies of the night? We`re going to debate this with, of all people, a former Hollywood Madam, next.

(COMMERCIAL BREAK)

VELEZ-MITCHELL: The popular Internet site Craig`s List has agreed to crack down on its sex ads placed by prostitutes to drum up customers. As part of the deal with authorities, anyone who posts an erotic services ad on Craig`s List will now need to provide a working phone number and must pay for the ad with a valid credit card.

So what you say? Well, the idea is to help authorities crack down on illegal prostitution while leaving the door open to legal escort services; whatever they are.

Well, let`s get real here. In Rhode Island, prostitution is legal as long as it`s indoors. That`s a good thing. In parts of Nevada, prostitution is also legal. So what`s the problem with legalizing it in the rest of the country?

I`m joined now by Jody "Babydol" Gibson, the very famous former Hollywood Madam and author of "Secrets of a Hollywood Super Madam." -- great to see you there, BabyDol -- and Wendy Murphy, a former prosecutor and professor at New England School of Law.

You know, I have to ask both of you, because this is something that is so emotionally triggered. It`s almost hard to have a rational conversation about it.

But Babydol, what happened with Eliot Spitzer, it happens all the time. Aren`t at least half or even more of the clients upstanding guys who, to the rest of the world, are faithful husbands, good fathers and they seem to be totally law abiding but they`ve got this toxic secret that they`re hiding; this need to see a prostitute.

JODY "BABYDOL"GIBSON, FORMER HOLLYWOOD MADAM: Absolutely, and also, Jane, you`re absolutely right. And it seems that the men that work within the law feel that they`re impenetrable and they`re above the law. And you know what`s interesting about Eliot Spitzer`s case, the coup de grace here is that his seeing call girls paled in comparison to all the other malfeasance and abuses of power that they really had on him.

VELEZ-MITCHELL: Well, we don`t want to go there. We`ve got to say focused on this subject tonight.

Wendy Murphy, we`re talking about whether or not we should legalize prostitution. We`re good friends but I believe it should be legalized. I mean, in a sense, I`m a libertarian when it comes to these social issues like pot and prostitution.

You`re never going to stop it. The mind has a low defense against the biological urges. This is the oldest profession and it will continue. So why not do what many European countries have done, what Nevada and other areas have done, which is say, hey, do it the right way.

And according to Nevada state law, you have to have registered prostitutes, they`re checked weekly for STDS, monthly for HIV. The condoms are mandatory.

WENDY MURPHY, FORMER PROSECUTOR: Look, Jane, reasonable people debate this all the time. We had a conference on this at my law school a couple of years ago. And I disagree with you for a lot of reasons, including that just because people do something bad doesn`t mean we should regulate it. We could go into that discussion.

Look, the vast majority of prostituted women are not Julia Roberts in the movie. They are girls who left home at age 12 or 13, got into the "business" so to speak to avoid abuse at home. They`re not earning a living, they are paying for a dope habit and they`re not --

GIBSON: Wrong.

MURPHY: And they`re not free to come and go once they become financially dependent on that. They are being exploited and let me be real -- a reference here -- I think it`s an awful tight line to draw between the sale of the intimate self and slavery. It`s damn close to slavery.

I understand the argument against it --

VELEZ-MITCHELL: Well, they have a choice, though. I mean, any kind of slaves, and there are slaves today around the world, and white slavery is a problem as well and child abduction for the purposes of prostitution is a huge problem.

But I mean, hypothetically, and I want to get your response on this, Babydol, women have a choice. They can do this or they cannot do this.

GIBSON: Absolutely. A little FYI, the women always takes the man to bed. These women are running rings -- you`re giving the men a little bit too much credit. The women are running rings around these men. It should not be a decision of the state. It`s up to the woman.

VELEZ-MITCHELL: Yes, but I do agree with Wendy that a lot of these women come from very troubled backgrounds. And they have a tendency to be --

GIBSON: A great majority do not, Jane. A great majority do not.

VELEZ-MITCHELL: No but that`s not true.

GIBSON: Let me give you an example. How about all the girls that are with sugar daddies that are getting $5,000 a month to see a guy once or twice a week because he`s married. They`re not exploiting themselves or they`re not coming from broken homes.

MURPHY: Look at -- one could argue that a trophy wife is a kind of prostitute if the only reason a husband marries is --

GIBSON: Absolutely, that`s right. So exactly, so where do we draw the line?

MURPHY: We may not be able to stop this, but when the government gets in the business of legitimizing it, it is bad for humanity. Just because somebody is desperate and wants to be exploited doesn`t mean we should celebrate and set up a market. This is a commoditization of a human being in the most intimate way and to call it a business is to really degrade the value of women`s lives.

VELEZ-MITCHELL: Let me ask you this question.

In European countries where this happens -- there are certain European countries where this happens, it is regulated, and in fact, it means that the girls don`t have to go to organized crime to participate in this, because one of the big problems with prostitution are the pimps beating up on these girls and coercing them and exploiting them in myriad ways.

If it`s regulated as an industry, Babydol, do you feel that they are exploited less in a sense that they`ve got other people, including the government, watching out for them?

GIBSON: Absolutely. The girls are not being exploited. If you look at the Internet, they`re acting of their own accord, so there`s no middleman anymore.

MURPHY: That`s a silly argument to say.

GIBSON: It`s not a silly argument.

MURPHY: This is a terribly silly argument because it is exploitation, even if you want to be exploited because you desperately need money. It`s still exploitation. We don`t sell children, even though lots of very nice people would like to buy the children who are unwanted by their parents.

GIBSON: Ok.

MURPHY: You don`t do it, if it`s degrading to humanity. This is degrading to women.

And let me say one thing about the health issue though. You`re right that when it`s regulated I think the health problems go down. But let`s be honest we`re not trying to protect the women; we`re trying to protect the guys like Eliot Spitzer from getting an STD.

VELEZ-MITCHELL: Wait a second, I would like to jump in here because I think that -- but wait a second, Eliot Spitzer was described, and this is in published reports obviously I have no idea how true this is but publish reports say he was a difficult customer and they interpreted that to me and he didn`t want to wear condoms.

MURPHY: Shame on him.

VELEZ-MITCHELL: So he`s endangering his family by going to a prostitute and not getting protection.

MURPHY: Absolutely.

VELEZ-MITCHELL: When it`s regulated the law of states that condoms are mandatory for all oral sex and for sexual intercourse.

GIBSON: And again, Jane, let me share a different demographic with you. There may be a small percentage of women that are out there walking the streets, and what have you, and you have to feel for them. But there is a very large majority of women that are simply dating very wealthy men that are sugar daddies. Where do you draw the line?

MURPHY: Then you don`t need to make it look it. If you`re talking about rich people doing things behind closed doors, you don`t need the government to approve it; it`s going to happen behind closed doors, anyway. Who cares?

GIBSON: That`s right and the states should not --

MURPHY: When you legitimize it, you degrade women.

Let me ask you a question.

VELEZ-MITCHELL: Ladies, I`m going to ask you to hold the question for one second. We`re going to come right back. This is a fascinating discussion.

Jody "Babydol" Gibson, Wendy Murphy, keep those thoughts in your heads. We`re going to continue this debate in just seconds.

(COMMERCIAL BREAK)

VELEZ-MITCHELL: We`re back with former Hollywood madam, Jody "Babydol" Gibson and Wendy Murphy, author of "And Justice for Some."

Wendy, we were talking about the health issue and I made the argument that there are health regulations when this is legalized that certainly not followed as rigorously when it`s illegal, because there`s nobody is watching.

MURPHY: Absolutely. No question, Jane. That is a benefit. But it pales in comparison to the down side of treating human beings like a commodity, women in particular. Remember, we`re talking about women, not all people are vulnerable. It`s poor, and it`s women that we`re talking about; poor people and women.

And by the way in the Netherlands, in Holland --

GIBSON: Poor people?

MURPHY: In Holland in particular -- look, whenever you set up the exploitation of a human being for money, you`re going to take advantage of poor people more than rich people, okay? That doesn`t mean a small percentage --

VELEZ-MITCHELL: Guess what, poor people are taken advantage of more than rich people across the board.

MURPHY: In Holland -- let me just make a point about Holland. Prostitution has been legal there for a long time. It has been a colossal failure. Their society is in the hopper. It has not worked to the benefit of the women at all.

VELEZ-MITCHELL: Jody.

GIBSON: That`s not true, Wendy. That`s not true. The trafficking of women is almost nil now there compared to the thousands and thousands and thousands they have in Finland, right next door in the Netherlands. That`s not true, that statistics.

VELEZ-MITCHELL: Now I just want to say this. In Nevada, since 1986, when mandatory testing began in the brothels, there has not been a single positive HIV test.

MURPHY: That`s not the issue. That is not the issue, Jane. The question is, how do we best protect health? Fine. You win.

That`s not the issue. It is -- are we degrading and subjugating women as a class, forcing them into this kind of slavery. Forget the health for a minute.

VELEZ-MITCHELL: All right, Jody. Let`s let Babydol respond to that.

GIBSON: The woman that wants to date the wealthy man and have an ongoing relationship with him, which will classify according to Merriam-Webster`s as a sugar daddy, that`s okay, but the girl who goes out for an evening and doesn`t want the ongoing relationship, that`s illegal. I`m a little confused.

MURPHY: No, don`t be confused. Private behavior doesn`t have to be legitimized by the government even if it`s exploited. We don`t have to legitimize it and celebrate.

GIBSON: It should not be a decision of the state. You are right, Wendy.

VELEZ-MITCHELL: We are out of time. Obviously, Wendy Murphy doesn`t want to legalize prostitution, and Jody "BabyDol" Gibson does.

We`re probably going to debate this again. This issue isn`t going anywhere, it`s the oldest profession, and it`s still with us, bigger than ever before. What does that say about human nature? Some things don`t change.

All right, thanks, ladies.

There are lots of people talking about TV. Too few of them are saying anything that really helps you make sense of the world. I`m trying to change that by keeping it real.

I`m Jane Velez-Mitchell. See you Monday night at 7:00. We have got more "ISSUES" for you then.

END

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