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Eric Holder - Obama's Pick for Attorney General; Bailout Battle for the Auto Makers; Firestarter in California

Aired November 18, 2008 - 23:00   ET


ANDERSON COOPER, CNN ANCHOR: Tonight, we've got "Breaking News" coming and going. Two new choices for the Obama administration on the way in, a Budget Director and the first African-American pick for Attorney General; and one convicted felon Senator, the longest serving Republican ever apparently on the way out.
Late word tonight, from Alaska that Ted Stevens who turned 85 today, appears to have lost his race against Anchorage Mayor, Mark Begich. The Associated Press reporting it, citing a 3,724 vote Begich lead with just 2,500 overseas ballots yet to be counted.

Just moments ago the Begich force has proclaimed victory but a recount is likely. Now, if it goes against Ted Stevens, it would put the Democrats just two votes away from an effective super majority, 60 members with two Senate races is still undecided.

CNN's Jessica Yellin has more on the "Breaking News." Jessica.


Well, it seems there is one more vote for Barack Obama's agenda in the Senate. These are unofficial returns but they do look promising for Mark Begich; he is poised to go to Washington D.C. to bring the 58th vote for the Democratic Senate. As you say just two votes away from that all important 60 vote filibuster proof majority which would allow Democrats to round their agenda through the Senate against the will of Republicans leaving them almost powerless to object to anything that they won't sign on with.

Mark Begich does not have a certified vote yet, this is yet to be certified by the Secretary of State there in Alaska. But if they do certify this, it could come in the next week or so. And his opponent, Ted Stevens has only five days from then to contest it, so a recount could happen in as little as two weeks.

Right now, it does look like the numbers are on Mark Begich's side and he is going to Washington, most likely, to support Barack Obama's agenda, another sign of the power shift in Washington.

COOPER: Let's talk about the Attorney General; CNN is reporting that Obama has made his choice.

YELLIN: Yes, that's right. Eric Holder is a man that Barack Obama has come to know quite well over the last year. He helped vet the vice-presidential candidate and helped choose Joe Biden. Barack Obama trusts him implicitly, we're told. He likes him because he is, first of all, the first African- American Attorney General, it would be an historic choice for a man who wants a diverse cabinet. He is also a man who made his career fighting for public integrity within the Justice Department, overseeing political corruption cases so he could help Democrats restore what they think is the tarnished image of the Department of Justice.

And finally, he's expected to sail through the Senate, he's widely liked, importantly, he was Attorney General Janet Reno's number two for many years. So he is well-known in Washington.

The downside to that is, he's well-known in Washington. He has made some mistakes most notably not objecting when President Bill Clinton pardoned fugitive financier, Marc Rich, and he is a Clintonite.

So for a man Barack Obama who promised change you can believe in, this is just the latest example of going back to the Clinton years to find talent. He says, look, let's take talent where we can get it but to borrow from John McCain, some are asking, is this change or more of the same -- Anderson.

COOPER: All right, Jessica thanks.

More now on the "Raw Politics," the Attorney General pick and in the largest sense, the retread factor between John Podesta, Rahm Emmanuel, Holder and possibly Hillary Clinton an awful a lot of ex- Clintonites running around these days. Is it wise? Is Eric Holder a good choice in any case?

Jeffrey Toobin joins us, in addition to being CNN's senior legal analyst, he's also a former U.S. attorney; also with us CNN senior political analyst and former presidential adviser, David Gergen and Marcus Mabry, international business editor at the "New York Times."

So Jeff, let's talk about Eric Holder; sources tell CNN he was offered, accepted the nomination. You know him. What's he like? What kind of Attorney General he'll be?

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: In temperament, he's actually a lot like Barack Obama, he's an easy going person, he's a no drama person.

But politically, he could not be more different from John Ashcroft and Alberto Gonzales. He is someone who has attacked the administration repeatedly on Guantanamo, on the rule of law, on wiretapping. So it's a big difference politically from the last eight years.

COOPER: David, how do you think this confirmation process will go?

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: It's likely to go very well. There is this as Jessica reported this question about a Marc Rich pardon and he was peripheral to that. And given the Democratic strength now in the senate, I imagine it'll be fairly straightforward and he'll be confirmed.

But I do think to echo Jeffrey that he brings a high-class professionalism to this. He will try to restore the position of U.S. attorney to the kind of luster that it has had traditionally and he will be strong on the issues of torture in Guantanamo on the international arena.

I do think, Anderson, it suggests that it's more likely than not that Hillary Clinton has become Barack Obama's first choice and will be at State.

COOPER: Well, you say that, based on?

GERGEN: Well, here is the thing. This is a jigsaw puzzle to put together a cabinet, there are four top positions in the cabinet: the state, defense, justice, treasury, those have traditionally been the top four.

Barack Obama is going to want a woman in one of those four. And now that he's got a man in one of them and in the defense and treasury, all the leading candidates are men. That suggests heavily to me that the woman is going to be at the state department.

COOPER: Marcus, do you agree with that?

MARCUS MABRY, "THE NEW YORK TIMES" INTERNATIONAL BUSINESS EDITOR: Yes, that makes good sense. One of the challenges, somewhat ironically one might think, of coming after George W. Bush was that President Bush had actually have one of the most diverse cabinets and actually I think the most diverse cabinet in the history of American politics.

So ironically, this first African-American President, coming after President Bush is going to have a challenge to be as diverse as President Bush. I think David's reasoning is actually right there, I think he -- this does mean Hillary is more likely to be Secretary of State.

I wonder -- I just wonder if it does not mean also though, Tim Geithner, the head of the New York Fed, is more likely to be at Treasury rather than Larry Summers just because Geithner is a young man in his 40s like Obama who could actually not be the same all kind of Clinton.

COOPER: I want to talk about Ted Stevens in a moment.

But Jeff, you have some of the back story on Holder and his relationship with Rahm Emanuel when they were under Janet Reno.

TOOBIN: In this respect, the appointment is very different from the Clinton administration because Janet Reno and Bill Clinton couldn't stand each other and didn't talk for years at a time.

COOPER: Well, Janet Reno didn't talk for years at a time with Bill Clinton? TOOBIN: Absolutely not. They could not stand each other. And the relationship got so bad, that each side had to designate people to speak to each other.

And Janet Reno designated her deputy, Eric Holder and Bill Clinton designated Rahm Emanuel, so Emanuel and Holder have a very close and long relationship that probably stood Holder in very good state in getting this job.

Obama has clearly decided he wants to have a real relationship with the Attorney General, unlike Clinton with Reno so in that respect it's not a retread situation.

COOPER: Let's talk about Ted Stevens. David Gergen, how big a deal is this?

GERGEN: This is big. He has been one of the lions of the Senate. I'm sure he feels this is very unfair, he thinks he has a strong case for appealing his convictions. His lawyers think he has a strong case and yet those convictions sank him in this election.

But from the Democrats' point of view, they were three away from getting the 60. There were three races outstanding, there was Alaska, Minnesota, Georgia; Alaska has now come into the Democrats, and Minnesota could well come their way and possibly they could turn things around in Georgia and win that special election there. And that would put them at 60.

And also, they embraced Joe Lieberman today. That was important, too, Anderson to try to bring peace in the family to try to unify the Democrats. And it gives President-elect Obama great muscularity going into the New Year.

MABRY: I think it is still a long way to go to get to that 60 because I'm not sure that that Democrats are going to pull out Georgia. I think that's still a long shot.

But I think the good news here, is that we don't have Ted Stevens going to Washington now is a convicted felon and kind of become the first like white Marion Berry.

COOPER: He's the longest serving Republican, Jeff. He still is going to get his pension though; he's still going to get all those cushy benefits that even convicted felons in the Congress get amazingly.

TOOBIN: Well, they actually changed the law but only to apply to Senators who are elected after they changed the law.

COOPER: Of course. Why would they do something that might affect them?

TOOBIN: But actually one of the losers here is Sarah Palin. Because if Stevens had won and was thrown out of the Senate, there would have been a special election which Palin very clearly said that she might enter. So Palin now has to wait for six years to run for the Senate.

COOPER: Which gives more time to devote to her $7 million book.

MABRY: And she gets to stay an outsider right now.

TOOBIN: She is definitely an outsider, yes.

COOPER: And may work out to her favor in the end. David Gergen and Jeffrey Toobin and Marcus Mabry, thanks.


COOPER: Let us know what you thing of how the Obama administration is shaping up and weigh in at; or what you think about Stevens getting -- well, losing.

And as always, check out Erica Hill's live web cast also during the break tonight.

Up next, Detroit CEOs on the hot seat, big time lawmakers wanting to know why you should cough up billions of dollars to bail them out. It's not a bad question. We're running the numbers and "Keeping them Honest."

And an eight-year-old boy apparently confesses to murder.


UNIDENTIFIED MALE: I think I shot my dad because he was suffering, I think. I might have shot him.


COOPER: Cops say he admitted to shooting two men including his dad. But is that confession for real? And why was he there without a lawyer or a parent?

That and more when "360" continues.



CHRIS DODD, (D) CONNECTICUT: They're discomfort in coming to the Congress with hat in hand is only exceeded by the fact they're seeking treatment for wounds that I believe to a large extent were self- inflicted. No one can say that they didn't see this coming; their companies that have been struggling for years.


COOPER: That is certainly true; no one can say they didn't see this coming. Today, the top men in Detroit, the big three auto-makers went before lawmakers, promised each to do their jobs for a dollar a year. That's the good news. The bad news, they still want $25 billion or so of your money.

And now, if they don't get it they warned a pain like this economy has never seen.

But believe or not, it wasn't the only piece of meltdown unfolding today. There was the mortgage mess as well.

CNN's Chief Financial Correspondent, Ali Velshi is here.

So Ali, Paulson and other economic power players grilled on Capitol Hill today. What's the latest?

ALI VELSHI, CNN SENIOR FINANCIAL CORRESPONDENT: All right, this is, honestly, your eyes can glaze over, when you hear about these Capitol Hill hearings. But today, it was full of action that's going to be interesting to you out there.

First of all, Hank Paulson, Treasury Secretary, Ben Bernanke and Fed Chief and FDIC Chair Sheila Bair all before Congress today. And they were -- there was a bit of heat and it wasn't just between the Congressman and Paulson, it was actually between Paulson and Sheila Bair at one point. Because Henry Paulson after spending $250 billion of the $700 billion bailout plan is still resisting the idea of money going directly to help people who are in troubled mortgages.

Something that Sheila Bair has advocated. Let's listen to what they both had to say.


HENRY PAULSON, U.S. TREASURY SECRETARY: Some on the committee know, I have reservations about spending TARP resources to directly subsidize foreclosure mitigation because this is different in the original investment intent.

SHEILA BAIR, FDIC CHAIRMAN: As foreclosures escalate, we're clearly falling behind the curve. Much more aggressive intervention is needed if we are to curve the damage to our neighborhoods and to the broader economy.


VELSHI: So Anderson, you can see that tension developing and you could see that'll probably play itself out. Where does the rest of the money go? Paulson said he's not going to spend that part of the $700 billion that hasn't been spent so far. He's going to wait until the Obama administration in Office, expectedly with their own Treasury Secretary.

You're going to talk to Andy about that in a few minutes and they'll decide what to do with the rest of it. The other thing is Paulson was grilled by some people about his about face. You remember this $700 billion bailout is called TARP, Troubled Asset Relief Program.

Well, they're not buying any of these troubled assets anymore; they're not buying those toxic mortgages. They're recapitalizing the banks. And Congress asked Henry Paulson why he decided he would do a complete about face after such a hard won victory to get that bailout package.

Here's what he said.


PAULSON: When the facts change and the circumstances change, we changed the strategy. We didn't implement a flawed strategy; we implemented a strategy that worked.


VELSHI: And that again, will continue to be a discussion. What happened to the rest of this money and he said, a strategy that worked, we're yet to see whether it's fully worked. We know that interest rates have come down for those inter-bank loans that were part of the credit freeze -- Anderson.

COOPER: So what happened to the big three auto maker CEOs on Capitol Hill today?

VELSHI: They were out there, talking about the $25 billion bailout that they want to get. It's different from a $25 billion bailout that was authorized in September that was connected to the auto makers becoming more fuel efficient.

This is a loan, a line of credit that they're asking for. We know General Motors has suggested that it could be in serious problem if it doesn't get it.

Before those auto makers went to Washington to give their testimony, I spoke to Alan Mulally, he's the CEO of Ford; I spoke to him in Detroit this morning before he flew out to D.C. And I asked him what would happen if in fact this bailout didn't happen, if there was a chance of bankruptcy for even one of the U.S. automakers.

And this is what he told me.


ALLAN MULALLY, CEO-FORD MOTOR COMPANY: If anyone of the automobile companies would get in trouble or go into bankruptcy, that the supply base would be distressed immediately, that the dealer network would be distressed and you could go into a collapse of the entire auto industry.


VELSHI: And that collapse Anderson, the problem with that is that they share suppliers, so Mulally was suggesting that if one of the supplier goes under, that could put stress on the rest of the auto industry.

He did say one thing. He said Ford is not expected to tap that line of credit if it's passed but he does want it available for the rest of the automakers -- Anderson.

COOPER: All right, thanks very much Ali Velshi.

Let's "Dig Deeper" now with "Fortune" magazine managing editor, Andy Serwer.

Let's talk about Paulson. He's opposed to the bailout in the form that the Democrats want. Why?

ANDY SERWER, MANAGING EDITOR, FORTUNE: Well, it's actually really interesting. I mean, he showed that he is the master and commander of our economy and the bailout, but it's a bit of a contradiction isn't it. He says, that it's against the intent of the TARP to go directly to homeowners and yet he can redirect the TARP when he wants to. But not --

COOPER: The TARP stands for?

SERWER: The Troubled Asset Relief Program, the bailout essentially, that $700 billion. So he says, that he can redirect it but to his ends, and not to where Congress wants go.

He's philosophically opposed, think he's can get more impact by aiding financial companies and banks by leverage. And also he thinks that there's not enough federal funds to actually bail out homeowners.

Sheila Bair, as Ali says, wants to get that money directly to homeowners right away though.

COOPER: It's scary though, when there is a story now, that Barack Obama will get $350 billion, that's what's will be left by the time he goes into Office for the $700 billion bailout. So they already spent or will have spent $350 billion, it doesn't seem to have helped much.

SERWER: You could argue that it hasn't and of course, you could always argue that it would be worse if he hadn't.

COOPER: I mean, do we know?

SERWER: We don't really know and that's sort of one of this sort of philosophical debates as well.

COOPER: Where has the money gone though?

SERWER: The money has gone to these financial companies in terms of investing into them, buying preferred stock and also investing into some troubled assets as well.

But it doesn't seem that it's actually stabilized the market. But behind the scenes, it actually has. Because some of these credit markets, such as commercial paper, which is very important and sort of the lifeblood of our system actually has eased up a bit.

So behind the scenes, things have gotten better. On the other hand, we see foreclosures and job losses of course have accelerated and gotten worse.

COOPER: At this point, does Obama have any real power over this stuff, no?

SERWER: See this is really interesting. I think the answer is no as you say. I mean, right now, he hasn't appointed a Treasury Secretary yet or designated one that he wants to get confirmed.

He can start negotiations and discussions with the President and also with Treasury Secretary Paulson. But he really doesn't have any leverage over the direction of this. Of course, you have to remember, that Paulson, Bush and Obama all want the same thing. They want to make sure the country doesn't go down the tubes, so they're not really working at cross-purposes but they do have different ways of getting there and those differences, we're starting to see them in sharp relief, I think.

COOPER: Other than a bailout of the big auto makers, what's the option, I mean for the big three?

SERWER: Well, I think that we could let them go bankrupt, especially GM. It doesn't appear first of all that Ford, as Ali suggested is not going to go bankrupt right now. GM is saying that they're running out of cash very quickly unless they get money and they may in fact be able to tap that $25 billion that Congress designated in September to use for green cars.

That may be sort of the way out here. It's interesting, right now, Democrats are pushing Secretary Paulson and saying that he should move the money to homeowners. Republicans are pushing against giving money to Detroit.

So you're seeing both sides of the aisle kind of resisting in different ways. I think though that there may be a middle ground and that some of that $25 billion if not all may be earmarked for the automakers.

Again, President Bush doesn't want to see the car companies go bankrupt on his watch either.

COOPER: All right. We've watching Andy thanks. Andy Serwer of "Fortune" magazine.

SERWER: Thanks Anderson.

COOPER: Just ahead tonight, find out the punishment of Senator Joe Lieberman got from the Senate Democrats for campaigning against Barack Obama and for John McCain. You might be surprised when he learned the price he didn't pay and why.

And later, "Crime and Punishment" two killing with an eight-year- old alleged shooter on tape at the center of it all.


COOPER: That videotape shows a murder suspect being questioned. You can't tell from the tapes because his face is covered but he is just eight-years-old. Police say the child confessed to killing his dad and another man. There was no defense attorney though or family member in the room when the alleged confession was made.

It is a disturbing case to say the least, no matter how you look at it. We'll have all the details coming up.

But first, Erica Hill has a "360" Bulletin -- Erica.

ERICA HILL, CNN CORRESPONDENT: Anderson, authorities now say that massive wildfire in Santa Barbara wasn't a case of arson after all. It was sparked by a bonfire over the weekend. The fire was the first of three blazes that erupted in southern California in just the last week. That fire is now fully contained after destroying more than 200 homes and injuring more than two dozen people.

The Senate Democratic caucus will allow Senator Joe Lieberman to keep his high profile Homeland Security Chairmanship. The vote followed a heated debate over what if any price the Democrat turned Independent should pay for his vocal support of John McCain's presidential bid.

And for the second straight year some military airspace will be temporarily open to commercial flights for the holiday travel season to accommodate heavy air traffic. The White House calls the extra corridors the Thanksgiving express lanes -- Anderson.

COOPER: All right, time now for our beat "360" winner, it's our daily challenge to our viewers to come up with a caption for a photo that is better than one we could think of.

All right, so let's take a look at the photo. Traders at work today on floor of the New York Stock Exchange, kind of holding their noses there. Our staff winner tonight is Alyssa, her caption, "Something stinks in here and it's not just the economy... Mark?

You might not be able to see the screen but the guy on the right is Mark, according to the name on his trading jacket. Our viewer winner is Alicia, from Mountain View, California. And her caption, "Smell that? It's Calvin Klein's "Recession."

HILL: Clever.

COOPER: Well be sure your beat "360" T-shirt is on the way. You could check out all the entries on our blog and play along tomorrow at

So should the auto industry be bailed out? It is the $25 billion question. Some say why reward car makers for their own mistakes? So what happens if they're not rescued?

We'll "Keeping them Honest" next.


(BEGIN VIDEO CLIP) RICK WAGONER, CEO GENERAL MOTORS: This is all about a lot more than just Detroit. It's about saving the U.S. economy from a catastrophic collapse. In short, helping the auto industry bridge the current financial crisis will not only prevent massive economic dislocation now, it will produce enormous benefits for our country later.


COOPER: General Motors CEO, Rick Wagoner today on Capitol Hill. GM, Chrysler and Ford are pleading for a $25 billion bailout and big three says the money, life line, maybe the last measure to save them from financial ruin.

But is that really so? What would happen if they don't get the cash?

"360's" Tom Foreman tonight, is "Keeping them Honest.

TOM FOREMAN, CNN CORRESPONDENT: Anderson, Detroit's arguments for the bailout all swirl around a theme, too many jobs, too much income, too much tax revenue will be lost if the big three auto makers fold.

But "Keeping them Honest" there appears to be little agreement on exactly how many jobs are really at stake.


FOREMAN: Let's start with the biggest number you may have heard. General Motors have a video online which says a whopping one out of every 10 jobs in the United States relies on the U.S. auto industry, the comes from the Center for Automotive Research, a respected non- profit group.

In a 2003 study, the center added up all jobs substantially related to all car production in the U.S., whether domestic or foreign made, including jobs of manufacturers, dealers, car washes, taxi stands, and came up with about 13 million.

So why does Chrysler have a video that says the number of jobs at risk is 4.5 million.

UNIDENTIFIED FEMALE: That's how many jobs are tied directly and indirectly to U.S. automakers. If those jobs go away, it would be equivalent to putting the entire populations of South Carolina, Kentucky or Louisiana out of work.

FOREMAN: Chrysler is relying on the Center for Automotive Research, too, but looking at 2005 study, which was as you might guessed, much narrower in focus.

So if the big three collapses what does the Center for Automotive Research really think the job loss would be right now in 2008? About three million jobs. It points out that many of those jobs included in the 2003 survey, like taxi driving, aren't going away. And what's more, the center predicts about half of the lost jobs would probably come back anyway as new investors bought up the failed operations.


FOREMAN: The center points out that these are still pretty hefty numbers and that in fact the economy and the nation's tax base would suffer.

They suggest that's a pretty good argument for the bailout. But bottom line, three million jobs lost is a lot less than the 13 million that some in the auto industry are trying to claim -- Anderson.

COOPER: Still ahead a town terrorized by fires, while the man who set them eluded police for months. How they finally caught him and why this criminal was driven to put so many lives at risk. Hear from the arsonist himself when "360" continues.


COOPER: In southern California tonight, investigators now say the massive fire that was believed to be a case of arson was actually an accident caused bonfire. The initial reports of arson reminded of a similar investigation that was in full swing not long ago in Washington State.

An arsonist was terrorizing a town outside Spokane and managing to stay one step ahead of the law. You're going to hear from the arsonist in this report and you'll also see just how hard it was to catch him.

Here's CNN's Ted Rowlands.


TED ROWLANDS, CNN CORRESPONDENT: Four years ago, the tranquility in this arid farming community vanished. It was replaced by fear.

UNIDENTIFIED FEMALE: I couldn't sleep last night.

ROWLANDS: An arsonist, most likely someone from the area was starting fires at a furious pace, just outside the town of Ellensberg.

SHERIFF GENE DANA, KITTITAS COUNTY SHERIFF'S DEPARTMENT: The public was stressed out, we have people not wanting to leave their homes; the fire departments were getting exhausted and frustrated.

ROWLANDS: With more and more fires erupting in some cases two in one day, local sheriff Gene Dana formed a task force. Fire Gary Margheim and Detective Jerry Shuart were part of the team.

Their first suspects, other fire and police officials but that went nowhere and the fires kept coming. Fear gripped the community.

DANA: We actually had rumors of people on hilltops with rifles in the afternoon watching for people who might be trying to light fires and so we had like a vigilante thing going on here two.

ROWLANDS: So how to catch a fire starter who's only getting bolder and bolder; two fires on June 29th, another on July 1st, two more July 20th and one on July 23rd. Investigators were desperate.

Then on July 25th another fire, this one burned two cabins to the ground, but it also provides the first major break in the case. From the ashes of that fire, investigators would find a critical piece of evidence.

OFFICER GARY MARGHEIM, WASHINGTON DEPARTMENT OF NATURAL RESOURCES: I got out my magnifying glass and took a better look at it with that. And I realized I had a cigarette, several matches being held with a rubber band.

ROWLANDS: It's hard to see in this crime scene photo. Look closely. These are the matches, this is rubber band. The slow burning cigarette acted as a delay, allowing the arsonist to flee before a fire even started. It was a clue. And when the team went back to the location of a previous fire, they found the same starting device. Then, three days later, another fire and another device.

MARGHEIM: On this case, you can see three matches on the sides of the cigarette ash.

ROWLANDS: And then, two days later, the largest and most destructive fire yet; two homes incinerated, more than a hundred others threatened and investigators again found another cigarette device but no suspect.

DANA: It's getting a lot more serious. We haven't lost any lives yet but the possibility exists.

ROWLANDS: Then, 11 days later, the arsonist goes on a rampage, starting three fires in one afternoon along different stretches of the roadway.

DET. JERRY SHUART, KITTITAS COUNTY, SHERIFF'S DEPARTMENT: It really heightened our anxiety. Myself personally, I felt that perhaps maybe this individual was taunting us.

ROWLANDS: With the three new fires, they find three more devices. Investigators worry the arsonist is now out of control.

MARGHEIM: Everybody is on edge because we don't know what's going to happen. The day is coming. We could have more than three. What's he going to target now? Where is he going to go?

ROWLANDS: And then a turning point; the next day, another fire is spotted. Instead of heading directly to the scene, Detective Shuart hangs back a bit and spots a man in a Ford Explorer stopped in the road.

SHUART: He had a reflective vest on. When we made eye contact, he put it in gear and drove off. I was looking at the vehicle and license plate and everything in my head was going bing bing bing. ROWLANDS: The vehicle was registered to 37-year-old Wade Kirkwood, a local who worked on a highway construction flag crew. He also was a convicted felon. Kirkwood became the prime suspect.

Investigators decided to tail him using airplanes to avoid detection. A week later, Detective Shuart was in the plane watching when Kirkwood made an awkward turn.

SHUART: That's where my heart beat started getting faster.

ROWLANDS: He watched Kirkwood pull to the side of this intersection, stop and then start a fire.

What did you think when you first saw the smoke?

SHUART: When I first saw the smoke, my first thought was that's it, he did it.


COOPER: They got their man but one big question remained, why did he set so many fires and put so many people at risk. What was the payoff? You'll hear his answer in his own words next on "360."


COOPER: We're picking up where we left off before the break; on the trail of an arsonist. It took investigators outside Spokane, Washington months to finally track down the man who terrorized their town. A crucial clue in the ashes at one of the crime scenes helped crack the case.

Now you're about to hear from the arsonist himself, his confession and what drove him to set so many fires.

Once again, CNN's Ted Rowlands.


ROWLANDS: After two months of fires, investigators were certain Wade Kirkwood was their serial arsonist. So they brought him in.

MARGHEIM: We had the whole task force in here watching or waiting to see whether or not we were going to be able to get him to confess.

SHUART: Including the prosecutor.

WADE KIRKWOOD, ARSONIST: I had the whole way to make a device. I made a device and threw it out the passenger window.

SHUART: What type of device was it?

KIRKWOOD: Cigarette and matches.

SHUART: He confessed on tape, he built the device on tape. He took us to the locations and in the end, he pled guilty.

ROWLANDS: As satisfying as that was, it left one vital question unanswered. Why? Why did Kirkwood do it and then keep on doing it again and again.

KIRKWOOD: You take it up at a young age. Most young teenagers have the urge to do something like that, set fires. It stuck with me for a lot longer. I thought about it at work, at home, it was just going through my mind all the time, when I was going to do another one. Where?

ROWLANDS: What was the best-case scenario?

KIRKWOOD: The biggest one I could get.

ROWLANDS: You were going for a huge fire?


ROWLANDS: And inferno.


ROWLANDS: He said although he had the impulse to set fires since he a teenager, a troubled marriage and problems at work put him over the edge.

KIRKWOOD: I felt like I needed to just do something as destructive as I could. I didn't care if I hurt innocent people or not. I cared if I hurt them but I didn't care what I was doing. I wanted everybody to feel my pain.

ROWLANDS: How can you say you didn't want anyone to get hurt?

KIRKWOOD: Deep down, I didn't want anyone to get hurt. But I took that chance when I set the fires knowing that somebody could get hurt or killed.

ROWLANDS: It was risk you were willing to take.

KIRKWOOD: At that time and point, yes.

ROWLANDS: For your gratification?


I think it was more like a rush, like getting high or something. When I see it on the -- fire on the news or something like that, it still interests me, I'm not going to lie to you about that. But I don't feel the urge to go out and start another one.

ROWLANDS: With good behavior, Wade Kirkwood will be out of prison in about two and a half years.

ROWLANDS: Are you worried that you might do it again? KIRKWOOD: No. I'm pretty much getting the help that I need now, that I'm getting that I should have gotten. I think it's something that I'll have under control by the time I leave here.

ROWLANDS: Ted Rowlands, CNN, Spokane, Washington.


COOPER: Let's hope so.

Still ahead, "Crime and Punishment," what appears to be a chilling confession.


UNIDENTIFIED FEMALE: What are you thinking right now.

UNIDENTIFIED MALE: That I'm going to go to juvie.


COOPER: Going to juvy because he claims he shot his dad and another man. But is that eight-year-old really a killer? Hear the rest of the tape and decide for yourself when "360" continues.



UNIDENTIFIED MALE: I think I shot my dad because he was suffering, I think. So I might have shot him.


COOPER: In "Crime and Punishment," new videotape of the interrogation of an eight-year-old child. The boy is accused of murdering his father and another man.

What you're seeing is his alleged confession. But is it really? There was no defense attorney there; no family member present. Authorities have released this portion of the tape.

Jeffrey Toobin joins us in a moment to talk about the disturbing case. But first, the interview.


COOPER: The murder suspect sinks is in a sofa chair, his voice is low and he speaks softly. He's only 8 years old.

UNIDENTIFIED FEMALE: It's real important you tell us what happened.

UNIDENTIFIED MALE: I don't know if the gun went off by accident.

COOPER: Police interviewed the boy alone with no lawyer or family member present a day after Arizona authorities claim he shot and killed his own father and another man who'd rented a room in their home.

Initially and repeatedly the third grader told the two female officers questioning him that he found their bodies after coming home from school.

UNIDENTIFIED FEMALE: You walked around and then what did you do?

UNIDENTIFIED MALE: I started walking around the street to my house and I saw the door open and I saw right there. And I ran and I said dad, dad, and then I ran upstairs and then I saw him.

UNIDENTIFIED FEMALE: You saw him? And then what?

UNIDENTIFIED MALE: There was blood all over his face.

COOPER: But an hour later, a second tape shows the detectives pressed the boy again and again to tell the truth, saying we think you're not being honest and claiming they knew that he did it.

UNIDENTIFIED FEMALE: What happened to your dad?


UNIDENTIFIED FEMALE: Come on, tell us the truth.

UNIDENTIFIED MALE: I'm not -- I'm not lying.

UNIDENTIFIED FEMALE: How about if we have someone who told us you might have shot him.

COOPER: Then, finally, the boy changes his story.

UNIDENTIFIED FEMALE: How many times do you think you fired the gun?


UNIDENTIFIED FEMALE: You think twice. Do you think it could have been more than twice?

UNIDENTIFIED MALE: I thought it was twice.

UNIDENTIFIED FEMALE: You shot your dad twice?


UNIDENTIFIED FEMALE: And how many times did that gun shoot?


COOPER: Why would he do it? The boy said he did it because his father and the other man were suffering, although he never says how.

UNIDENTIFIED MALE: I think I shot my dad because he was suffering, I think. He was suffering. I might have shot him because I didn't want him to suffer.

UNIDENTIFIED FEMALE: I don't blame you.

UNIDENTIFIED MALE: And then I went and then I went outside and saw, but at first and I saw and then I think the gun went off at that time, because he was shaking and I think that time, it went off. Then I went upstairs, and I saw my dad. I think I shot him because he was suffering.

COOPER: The suspect is being charged as a juvenile and held at a jail for minors. He's not entered a plea. Under a gag order, few details have come out but police say they have probable cause to justify the murder charges and have cast doubt on reports the father may have abused his son.

UNIDENTIFIED FEMALE: This is the way that we talk to people and we make a promise to each other that we're only going to tell the truth. Okay?


COOPER: The boy's lawyer say it is interrogation was improper because the eight-year-old was never told his rights and a family member or legal representative was not with him during the questioning.

"They became very accusing early on in the interview. Two officers with guns at their side, it's very scary for anybody, for sure, an eight-year-old kid."

So why was the video released? The prosecutor said the judge modified a gag order allowing the release a public record. The prosecutor would not explain why a controversial confession in an ongoing juvenile investigation is made public.

So was the confession coerced? Was it appropriate for police to be talking to the boy like that? Should an eight-year-old boy stand trial for murder?


COOPER: A lot of questions to talk about tonight; we're joined by CNN senior legal analyst, Jeffrey Toobin. So this tape is part of a four-hour interrogation in which the child's story changes after police repeatedly pressure him to tell the truth. Is this thing going to hold up?

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: Boy, it seems unlikely. This whole case, Anderson, seems to me a situation where the criminal law is just inadequate to deal with a situation like this. How do you prosecute an eight-year-old? How do you investigate an eight-year-old boy?

In certain respects, you're sympathetic with the police because you've got two dead people and you've got to find out who did it. But, you know, to interrogate a child, a third grader, which is what he is, without a family member present, without a lawyer, I think is just outrageous and then to release it, that's even crazy.

COOPER: I don't get it though because anyone who watches a police show knows the law and knows you're supposed to at least read the Miranda Rights which apparently they didn't do to this kid and not to talk to somebody unless they have a parent or guardian present. I just don't get how police do this.

TOOBIN: Well, you can interview someone if they make a knowing waiver; if they waive the right to an attorney. But what does it mean to ask an eight-year-old whether he wants an attorney? How could an eight-year-old possibly know what an attorney is or what an interrogation is or what Miranda Rights are? It is unconscionable and probably unlawful to interrogate an eight-year-old without a family member present who can make those sorts of judgments about whether the interrogation should continue and whether a lawyer should be present.

COOPER: Also, I seem to remember from I guess it was the Nick Martin preschool case where all those kids made all those allegations that basically got thrown out as far as I remember. But basically it seemed like the interrogators led the kids; kids are susceptible to suggestion.

TOOBIN: Very susceptible and even in what we've seen of this interrogation, you have very much a changing story. From a complete denial to sort of an acknowledgment of having shot the two men and then an acknowledgment that he did it. So it is very hard to imagine that a jury would take this confession very seriously given all of the pressure that was put on him.

Now, maybe there's other evidence that implicates, the kid, I don't know. But certainly a case based solely on the confession, even if a judge allowed a jury to see it would be very hard to hold up.

COOPER: There's another piece from this tape that we haven't seen. Let's take a look at it.


UNIDENTIFIED FEMALE: Do you think you might have shot at him accidentally that night?

UNIDENTIFIED MALE: Because I already saw him bleeding and I thought I saw him shaking. I think I was holding the gun. And I think it might have gone off or I don't know.

UNIDENTIFIED FEMALE: OK, so you saw Tim shaking and you had the gun at that time.

OK. Now, let's talk about your dad. How, what happened with your dad.


UNIDENTIFIED FEMALE: Come on, tell us the truth.

UNIDENTIFIED MALE: I know, I know I'm not lying. UNIDENTIFIED FEMALE: You didn't shoot your dad?


UNIDENTIFIED FEMALE: How about if we had somebody that told us that you might shot him.




COOPER: According to the FBI, between '76 and 2005, there are only two cases where a seven or eight-year-old child actually killed a parent. Does the legal system -- how does the legal system deal with something like this?

TOOBIN: Arizona does allow criminal charges to be brought against someone eight years or older. States vary in that. But as far as I can tell, no one has been prosecuted in Arizona who's under 12 or 13 years old at least in modern times.

Basically, if these people are prosecuted, they're put in juvenile facilities until they're 18. But sometimes when they're older, they're charged as adults but certainly someone who's eight couldn't be charged as an adult.

But fortunately we live in a world where this is an extremely rare situation. And as I say, the legal system just doesn't do this very well.

COOPER: Yes. We'll continue to follow it. Jeff thanks. Jeff Toobin.

Up next, meet one of CNN's top ten heroes; a champion for children. See how one woman is saving hundreds of starving kids from a trash dump in Cambodia. And we'll tell you how to vote for CNN's Hero of the Year when "360" continues.


COOPER: Tonight, we continue to introduce you to our CNN's top ten heroes. In a moment, we'll tell you how to vote for the one that you think should be the Hero of the Year.

Here's one of the top ten, Phymean Noun, offers hundreds of Cambodian children who work in a massive trash dump a way out. Here's her incredible story.


PHYMEAN NOUN, FINALIST, CNN HERO OF THE YEAR: We're standing on the big dump site. Scavengers are collecting cans, plastic bags and other things that can be sold to buy rice.

There are a lot of children here. They work here for about ten to 12 hours a day. And they make about $1.30. Sometimes they don't make any money at all.

One day at lunch, I was eating chicken. And when I threw it away, ten children ran straight to the trash to collect the bones. I wanted to do something to help them.

My name is Phymean Noun. I recruit children from the dump to attend school at my organization. I want them to have an opportunity to learn.

How are you?

Some kids in my school collect trash until late at night. And they fall asleep in the classroom. If they don't have an education, some kids will collect trash until the day they die.

These children are our next generation. And our country depends on them.


COOPER: We should point out you only have a couple more days left to vote; the web site again, Join me on thanksgiving night here on CNN when all the heroes will honored in an all-star tribute.

That does it for this edition of "360." Thanks for watching.

"LARRY KING" starts right now. I'll see you tomorrow night.