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Illinois Lawmakers Move to Impeach Governor; Government Admits Failure in $50 Billion Wall Street Fraud Case

Aired December 17, 2008 - 18:00   ET


WOLF BLITZER, CNN ANCHOR: Plus, an historic meeting now in the works. A CNN exclusive on the president-elect's plan to get face-to- face advice from four of his predecessors.
And Hollywood A-Listers are paying for red carpet treatment at the Obama inauguration. You're going to find out what kind of perks $50,000 can buy. All that and the best political team on television

We want to welcome our viewers in the United States and around world.

I'm Wolf Blitzer. You are in THE SITUATION ROOM.

ANNOUNCER: This is CNN breaking news.

BLITZER: But we want to begin with urgent breaking news regarding two of the world's largest automakers.

Very soon, Chrysler will temporarily shut down all of its manufacturing plants and may very soon completely run out of cash it needs to operate. Ford is also reportedly taking emergency measures right now shutting down some of its assembly plants. And this could be just the beginning of the end of these two automakers and the beginning of a nightmare for American workers.

Let's go straight to CNN's Brian Todd. He has got the shocking details.

What is going on, Brian?

BRIAN TODD, CNN CORRESPONDENT: Wolf, what we have is at least the Chrysler version of what is going on here. Chrysler saying as you mentioned, it will close all of its manufacturing plants for a month starting this Friday.

The Associated Press says that means about 30 plants total. The company says it essentially needs to conserve cash because of slowing command. Chrysler says tighter credit markets are keeping would-be buyers way from showrooms. Dealers are unable to close sales.

Chrysler estimates 20 to 25 percent of its volume has been lost due to credit crunch and that it will have trouble paying its bills after the 1st of the year. Now, a legislative plan to provide billions of dollars in stopgap loans died in the Senate last week. We have been reporting it for days now. The Bush administration they it might use is authority to give automakers their bailout from the funding set aside for that $700 billion overall financial bailout, but that deal is not done yet. Wolf, you will remember, when you interviewed Chrysler CEO Robert Nardelli earlier this month, you specifically asked him what would happen if they didn't get their share of the proposed bailout, his prediction very dire.


BLITZER: If Chrysler doesn't get the $7 billion, what happens to Chrysler?

ROBERT NARDELLI, CEO, CHRYSLER: Well, I think it would be a tremendous, tremendous impact on this economy. I think it would be a terrible...

BLITZER: Well, what about specifically Chrysler? Walk us through what would happen to Chrysler, if Congress refuses?

NARDELLI: Well, I think if Chrysler doesn't give us the money, the probability is we won't be able to get DIP financing; the debtor in possession financing.

I don't think we would be able to go into bankruptcy. It could force us right into liquidation. What that means for Chrysler specifically, is there's about a million people depending on Chrysler's success, so you'd end up with tremendous unemployment. You would end up in tremendous systemic impact on the financial institutions of the people have invested in Chrysler. You'd have 30 million Chrysler car owners whose value would be depressed, their ability to get maintenance and service.

You'd have literally 3,300 dealers, about 140,000 men and women who work at those dealerships. You'd have over 1,000 suppliers impacted. You'd have all of the accounts payable, the health care costs, the pension funds. This would be a huge, huge impact on this economy.


TODD: And we had been reporting last week and in recent days about the ripple effect if any one of the Big Three automakers goes down. It is now a reality for at least a month, with Chrysler at least closing its manufacturing plants. Chrysler says operations at all the manufacturing plants will be idled at the end of the shift this Friday, December 19, and impacted employees won't return to work until January 19, possibly later -- Wolf.

BLITZER: What about these workers' paychecks? Will they continue to receive pay?

TODD: From what we understand, Wolf, the union workers will still get compensated. This is really to save production costs. Chrysler, which is also the maker of Jeep and Dodge vehicles, considered to be maybe the hardest hit of the Big Three automakers in this financial crisis, it is clearly a disaster right now.

BLITZER: All right. We will stay on top of this story. Thank you.

I want to bring in Ali Velshi, our senior business correspondent.

Ali, you're working this story right now.

Chrysler and GM and Ford, Chrysler and GM the most seriously impacted right now. Ford has got some major problems as well, but what are we hearing about these other companies and their possibility of possibly closing some of their over manufacturing plants?

ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Wolf, I'm in a car right now on my way back to CNN. I have spent part of the afternoon with the CEO of Ford, Alan Mulally.

Ford is the healthiest of the three Detroit automakers. But he made one very clear point to me, which I think you ran earlier in the show, while I was in flight. And that was that if one of the other two major automakers were to go bankrupt, 70 percent of the cost of a car in the United States of these American automakers is from parts and supplies and there is a very big shared base of suppliers.

Now, many of those suppliers are working on razor-thin margins and like the auto industry, they have been affected very negatively. In the event that Chrysler is shutting down these 30 plants, what that means is that cars are not being produced, new parts are not being bought.

If those parts suppliers run out of money, they are the same parts suppliers that in many cases supply General Motors and Ford. That means that that stops cash flow to those companies. All of these three companies are dependent on cash flow, on moving vehicles right now.

While they are trying to conserve cash on some level, that means they are not getting new cash in. So this is a very, very serious development. Chrysler says it has enough money to make it through the first quarter of the year, their first three months. General Motors says it doesn't have enough money to get past the end of this year.

Ford is the healthiest of the three. It started the year as a profitable company, but it has dropped off because of the credit crisis, people's inability to get credit to buys cars, like Brian was just saying, and the fact that people are being laid off.

The ultimate effect -- Chrysler has about 53,000 employees, but as Bob Nardelli had told you, that means about a million people connected to it through its parts and its retirees. When you add all three together, if there was a critical failure and all three were to fail, we are talking about three million jobs or more lost on top of the two million that we have already lost this year.

So, this is a very, very grave and serious development in the auto industry. And I just want to underscore that Alan Mulally, the CEO of Ford, told me that they could probably have made it through 2009, but if one of the two other car companies were to go bankrupt, that could trigger a bankruptcy at Ford as well, because it will trigger bankruptcies at the parts suppliers who then can't supply parts to Ford that Ford needs to keep its cars assembled.

Ford is also announcing today that it is extending its holiday shutdown at all 10 of its car assembly plants in the United States. It is going to go -- they were supposed to shut down until January 5. All but two will now be shut down until January 12. So, this is a very, very serious and grave development in the auto industry right now, Wolf.

BLITZER: Enormous, enormous developments and enormous pressure now on President Bush to make a decision about providing the so-called bridge loan to these auto companies. Ali, thank you. We are going to continue to stay on top of the breaking news here this hour in THE SITUATION ROOM.

But let's move on to the presidential transition right now.

The Obama and Bush teams are taking their contacts to an extraordinary new level. And they are getting former presidents involved as well.

Our senior correspondent, Ed Henry, broke this story here in THE SITUATION ROOM.

I want you to tell our viewers what we are learning, because it is pretty unprecedented right now, Ed.


And just in the last few moments we have gotten some new information confirming. The White House is confirming out exclusive, saying that now they have a date. January 7, President Bush is going to be hosting an extraordinary lunch, really a remarkable example of the cooperation, the contact we're seeing from both parties in this transfer of power.


HENRY (voice-over): CNN has learned cooperation between President-elect Barack Obama and President Bush has grown so deep, the two men have privately agreed to try and come together again shortly before the inauguration next month.

But this time they're expected to be joined by the three living former presidents for an historic White House meeting. Two sources familiar with the plan say the five commanders in chief will trade advice with Obama but also help back up the current president's effort to make sure the first handoff after 9/11 goes smoothly.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The struggle against terror will be a generational conflict, one that will continue long beyond my presidency. CNN has also learned Obama's incoming chief of staff, Rahm Emanuel, quietly had breakfast at the White House this month with 13 of his Democratic and Republican predecessors. The meeting was called by current chief of staff Josh Bolten to give Emanuel bipartisan counsel. The high-powered group included Vice President Cheney and former Defense Secretary Donald Rumsfeld, who each served as White House chief of staff to Gerald Ford.

Sources familiar with the meeting said Rumsfeld told Emanuel, Don't think you're indispensable. And since it's a backbreaking job, identify your successor earlier.

Rumsfeld's successor as chief of staff was Cheney. The sources said Cheney joked to Emanuel, The best thing you can do is keep the vice president under control.

But there's no joking about the specific contingency plans the Bush administration has prepared to help the incoming president deal with a potential national security crisis. Confirming a story first reported by The New York Times, transition officials say the White House has put together specific plans on how to deal with anything ranging from a terror strike on U.S. assets overseas to a nuclear blowup in North Korea.

BUSH: As my administration leaves office next month, we will leave behind the institutions and tools our country needs to prevail in the long struggle ahead.


HENRY: Now, in another sign of bipartisanship, we have also confirmed just in the last little while that Barack Obama, the president-elect, is now planning to unveil his new transportation secretary. It is going to be a Republican, retiring Congressman Ray LaHood of Illinois. He is somebody that Barack Obama has been close to before.

And, as you know, the president-elect has talked about having Republicans in his Cabinet. Now in addition to the defense secretary, Robert Gates, staying on, you are going to have Ray LaHood as transportation secretary.


BLITZER: And he did confirm -- he did vote for the impeachment as a Republican in the House of Representatives, the impeachment of Bill Clinton.


HENRY: All four articles of impeachment, Ray LaHood did vote for back in 1998.

But we should also note he was somebody who was seen as kind of a bipartisan figure during that, because he was presiding over the House floor debate, because the speaker of the House felt like he was somebody who was fair and would let both sides be heard, Wolf.

BLITZER: Thanks very much, Ed, for that -- Ed Henry, our senior White House correspondent.

President-elect Obama formally tapped two more members of his Cabinet today. He nominated the former Iowa Governor Vilsack as agriculture secretary and the Colorado Senator Ken Salazar as interior secretary.


SEN. BARACK OBAMA (D-IL), PRESIDENT-ELECT: It is time for a new kind of leadership in Washington that's committed to using our lands in a responsible way to benefit all of our families.

That means ensuring that even as we are promoting development where it makes sense, we are also fulfilling our obligation to protect our natural resources.

It means ensuring that we are using our farmlands not only to strengthen our agricultural economy, but to grow advanced biofuels that will help make the United States energy independent.


BLITZER: Some environmentalists say they are skeptical about Obama's choice of Salazar as interior secretary. We're going to have a full report on that coming up later this hour.

Meanwhile, the president-elect is venting his frustration today about the Illinois corruption scandal. He was asked again why he has not released the results of an internal investigation into whether anyone on his staff talked to the governor, Rod Blagojevich. Obama still can't escape questions about the allegations that the governor tried to sell his former Senate seat.


OBAMA: It's a little bit frustrating. There's been a lot of speculation in the press that I would love to correct immediately.

We are abiding by the request of the U.S. attorney's office. But it's not going to be that long. By next week, you guys will have the answers to all of your questions.


BLITZER: In Illinois today, the state's Supreme Court refused to hear a motion to declare Blagojevich unfit to serve. State lawmakers are moving ahead to try to impeach him.

Let's go to Chicago. CNN's Susan Roesgen is working this story for us.

We did see and hear the embattled governor, at least a little bit, today, Susie. SUSAN ROESGEN, GENERAL ASSIGNMENT CORRESPONDENT: It's true, Wolf. And he doesn't seemed to be phased by anything. It's as if when the going gets tough, the tough go jogging.


GOV. ROD BLAGOJEVICH (D), ILLINOIS: OK. I'm going to put this in the car. Then I'm going to run.

ROESGEN (voice-over): This is the most we've seen of Illinois Governor Rod Blagojevich since before his arrest last week on federal corruption charges. Smiling and chipper, the governor said he was dying to talk.

BLAGOJEVICH: I can't wait to begin to tell my side of the story and to address you guys and, most importantly, the people of Illinois. That's who I'm dying to talk to.

ROESGEN: What the governor wants to tell and when he'll tell it, he wouldn't say. But for a guy who's facing federal charges that could mean years in prison, he was remarkably upbeat, even if he did not jog all the way to Springfield, Illinois, where the state legislature is talking about impeachment.

UNIDENTIFIED MALE: All evidence will be made part of the record.

ROESGEN: State representatives are reviewing their legal options to see if there's enough evidence to start this unprecedented attempt to get the governor out of office.

Meanwhile, the U.S. Senate seat left vacant by President-elect Obama is still up for grabs. Illinois Congressman Jesse Jackson Jr. wanted the seat, and he's not charged with any wrongdoing. But is he one of the candidates listed in the federal probe. And Jackson's office admits that he has helped the feds check up on Blagojevich in the past.

Still, Jackson was furious to learn that CNN called him an informant, and his office released a statement saying, It is absolutely inaccurate to describe the congressman as an informant.

For Illinois voters fed up with the whole thing, the governor's actions speak louder than words.

UNIDENTIFIED MALE: The state's going to hell. And he shouldn't be jogging. He should be working and addressing the issues.

UNIDENTIFIED FEMALE: Well, in a way, I'm not surprised because I consider him immoral. Not even immoral, amoral. So I really hope he's impeached and is out of office.

UNIDENTIFIED MALE: He's on the run.

ROESGEN: And soon, he may be running out of options.

(END VIDEOTAPE) ROESGEN: For the moment, however, Wolf, his defense lawyer, really tough Chicago criminal defense lawyer Genson, he spoke before the impeachment sort of hearings today in front of the legislature.

And he was really tough. He said there is just nothing in the case so far that he has heard that proves that his client is guilty of anything. He says it is just a bunch of people jabbering on those wiretaps, so he could put up a really strong fight, even if the governor himself, Wolf, never does go to Springfield.

BLITZER: Susan Roesgen watching the story in Chicago -- thank you, Susie, for that.

Let's go to Jack. He's got "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: The Iraqi journalist who threw his shoes at President Bush during a news conference in Baghdad was hauled before a judge last night in Iraq. A source at the Iraqi Central Criminal Court told CNN that the man will be likely charged with assaulting a foreign head of state.

According to wire reports, Iraqi law says he could face seven years in prison. And whether you agree with the war in Iraq or not, it probably saved this man's life. If he had thrown those shoes while Saddam was in power, he probably would have been executed on the spot. Instead, he was arrested, put in jail.

Thousands of Iraqis are calling him a hero and are rallying for his release. When asked by CNN's Candy Crowley yesterday what should happen to the man, President Bush said the authorities should not overreact. He called the incident an interesting form of expression. He added it is part of the free emerging society in Iraq.

The man will stand trial, perhaps as early as next week, and reportedly be represented by a lawyer who said that he's going to file a request to have his client released on bail.

So, here is the question: What is the appropriate punishment for the man who threw his shoes at President Bush? Go to You can post a comment on my blog -- Wolf.

BLITZER: Lots of strong opinions on this one, Jack. Get ready. Thank you.

Some millionaires are now virtually penniless, and one agency that polices Wall Street suggests it is partly to blame, that coming in from the chairman of the Securities and Exchange Commission. You are going to find out what he wants to happen right now.

And he is one of Barack Obama's newest Cabinet picks, but he is also earning some swift criticism. You will find out why.

And if you are out of work or soon to be, your state may not be able to provide you benefits. Well, what are some 30 states trying to do? We will explain right here in THE SITUATION ROOM.


BLITZER: A key lawmaker says Congress will investigate the alleged $50 billion Ponzi scheme run by the Wall Street icon Bernard Madoff. The chairman of the House Financial Services Committee says he will launch the inquiry early next month.

The Securities and Exchange Commission also is investigating what appears to be one of the worst financial frauds ever.

Our senior correspondent, Allan Chernoff, is working this story for us. Allan, you have been speaking to some of those investors. And it gets more and more shocking as we learn more and more of these details.

ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT: Wolf a lot of those investors tell me that they felt lucky to have money invested with Bernie Madoff. Now they are furious not only with Madoff, but also with the Securities and Exchange Commission.


CHERNOFF (voice-over): Bob Chew of Montrose, Colorado, had his entire retirement nest egg invested with Bernard Madoff, $1. 2 million, which he fears is all gone.

BOB CHEW, MADOFF INVESTOR: It's kind of like -- it's a financial murder. And the feeling that you get is that you're hopeless. Your life is forever changed, and you just don't even know where to start to pick up the pieces.

CHERNOFF: Chew and other Madoff investors laid part of the blame on the Securities and Exchange Commission, which failed to uncover fraud at Madoff's firm.

LARRY LEIF, MADOFF INVESTOR: It's a disaster. I just don't -- it's criminal, really. And I'm not exactly sure how something like this could happen.

UNIDENTIFIED MALE: I hold the U.S. government accountable for what happened.

CHERNOFF: Even the chairman of the SEC, Christopher Cox, says his own commission failed.

CHRISTOPHER COX, SEC CHAIRMAN: I was very concerned to learn this week that credible allegations about Mr. Madoff had been made over nearly a decade, and yet never referred to the commission for action.

CHERNOFF: Cox says there's no evidence of wrongdoing yet by SEC staff, but he's asked his SEC inspector general, David Kotz to investigate. Cox tells CNN among the issues he'll examine is the relationship between Eric Swanson, a former SEC inspector, and Bernard Madoff's niece, who Swanson married last year. A spokesman for Mr. Swanson says he did not participate in any examination of Madoff investment securities while involved with Madoff's niece. JOHN COFFEE, COLUMBIA UNIVERSITY: The SEC is supposed to be the tough cop on Wall Street. They look more like a lapdog here that was deferring to a prominent figure, not investigating him carefully, and that fits charges that others have made before.

CHERNOFF: Madoff arrived at his Manhattan apartment this afternoon, where he'll be under home detention with electronic monitoring. He's currently out on $10 million bail.


CHERNOFF: Madoff faces a single charge of securities fraud, which carries a maximum prison sentence of 20 years in prison. His lead attorney tells CNN, this is a tragedy. We are cooperating fully with the government investigation to minimize losses -- Wolf.

BLITZER: Allan, thank you for that. We will stay on top of this story for our viewers.

Barack Obama announces his choice for interior secretary, but some are already questioning just how committed he is to going green and whether he is too friendly with big oil.

And Condoleezza Rice talks to our own Zain Verjee about eight years in the Bush administration, but did she actually cast a vote for Barack Obama? Zain asks her. You will get the answer right here in THE SITUATION ROOM.


ANNOUNCER: This is CNN breaking news.

BLITZER: Let's get back to the breaking news we are following, huge news, Chrysler announcing it's going to be shutting down all of its manufacturing plants, 30 of them, starting at the end of this week for a month, because they have an overabundance of vehicles that are simply not being sold.

We want to get reaction to what is going on from Ron Gettelfinger. He is the president of the United Auto Workers. He is joining us on the phone right now.

Mr. Gettelfinger, what does this mean for the men and women of the United Auto Workers, who are basically not going to be basically working for a month at these 30 Chrysler plants?

RON GETTELFINGER, PRESIDENT, UNITED AUTO WORKERS: Well, obviously, Wolf, it is a disappointing news to us, because, again, the credit market is so tight out there, the dealers are claiming that they could sell 20 to 25 percent more vehicles.

But this is an announcement that is balancing the inventory to demand, and then the people's going to be on layoff during this period of time. And, again, this shows the stress that the industry is facing and the requirement that the government step in as quickly as possible to ease some of these concerns. BLITZER: I have heard some suggestion that the workers, the UAW workers, the union workers will get paid for this month, even though they won't be working, although others are now telling me they might not get full pay. What can you tell us?

GETTELFINGER: Well, what we have in our contract is we have a supplemental unemployment benefit pay, and it is based on take-home pay when you put it in with the unemployment insurance.

But obviously, as we know, some states are really being pressed on the unemployment. So, from the standpoint of workers, our sub pay will help supplement them and get them through, but there again, Wolf, this is additional pressures on monies that have been set aside for that, and it really just shows how stressed the industry is. So, it is a real problem for us.

BLITZER: Are you hearing there's any movement on the part of President Bush to go ahead and authorize a bridge loan as it is called over the next few days to try to get at least GM and Chrysler over this immediate crisis?

GETTELFINGER: Well, what we are hearing is that the administration has been working with the companies. They have required a lot of data to be sent in. And I can understand them being extra precautious now, with the things that have happened in the past.

But, again, we are just appealing to the administration to take action as quickly as possible to relieve the fears that exist out there. And then we have got to get the credit market loosened up to where consumers can take advantage of credit and buy some vehicles or other big-ticket items.

BLITZER: As you know, Republicans in the Senate want you, the leader of the United Auto Workers, to provide a date certain when your workers will have the same pay as non-union workers working at those Toyota plants, those Honda plants in the Southern part of the country right now.

Has the Bush administration in these past few days asked you to make that same commitment?

GETTELFINGER: No, they have not.

We have had no discussions in regards to any types of negotiations with the administration. On one occasion, we were asked for some fact-finding data, but it was just in general. It had nothing to do with contract-specific requests from the administration.

BLITZER: All right.

Well, we are going to continue this story, obviously, the breaking news.

Ron Gettelfinger is the president of the United Auto Workers. God knows he has got a lot on his plate right now.

Good luck to all of the men and women of the UAW. Good luck to everyone involved in this story. Mr. Gettelfinger, thanks very much.

GETTELFINGER: Well, thank you, Wolf. And good luck to you.

BLITZER: Thank you.

And, to our viewers, you are in THE SITUATION ROOM.

Happening now: questions about Barack Obama's choice for interior secretary, why some don't think the man who would be guardian of the environment is green enough.

Also, with the huge demand for inauguration access, there are plenty of people willing to pay for it. What a $50,000 package will get you.

And does a lack of leaks during the Obama campaign mean the president-elect will be subscribing to what has been called the Bush model of communications discipline? All of this coming up, plus the best political team on television.

I'm Wolf Blitzer. You are in THE SITUATION ROOM.

President-elect Barack Obama has mostly received praise for the cabinet choices that he's made. But today's announcement that Senator Ken Salazar of Colorado will be the Interior secretary is raising some eyebrows.

Let's go to our national political correspondent, Jessica Yellin.

She's working the story for us -- Jessica, what's the concern over Senator Salazar?

JESSICA YELLIN, CNN NATIONAL POLITICAL CORRESPONDENT: Well, Wolf, some environmental activists think that Ken Salazar does not have enough of a record defending the environment to be the shepherd and the steward of this Department of Interior, which has seen enormous accusations of corruption and political interference.


YELLIN (voice-over): Ken Salazar, the one-time farmer turned senator, came dressed for his new role as defender of the environment.

OBAMA: I want a more proactive Interior Department. There have been too many problems and too much -- too much emphasis on big-time lobbyists in Washington and not enough emphasis on what's good for the American people.

YELLIN: His central goal -- to make America green.

SEN. KEN SALAZAR (D-CO), INTERIOR SECRETARY NOMINEE: I will do all I can to help reduce America's dependence on foreign oil.

YELLIN: But some environmentalists think he's too friendly to energy interests. Salazar has backed offshore oil drilling, supported tax breaks for big oil and has a mixed record on increasing fuel efficiency standards.

JEFF RUCH, PUBLIC EMPLOYEES FOR ENVIRONMENTAL RESPONSIBILITY: The nomination has been warmly embraced by livestock, mining and agriculture interests in a way that raises concern.

YELLIN: He's even winning the praise of the oil industry. The American Petroleum Institute says Salazar "...Recognizes the importance of oil and natural gas to America's economy."

But other activists say he's a centrist and a pragmatist who will balance environmental protection with the nation's energy needs, including this influential supporter...

ROBERT REDFORD, ACTOR/ENVIRONMENTALIST: I'm pretty encouraged by Salazar. It may be controversial in some but -- but not for me. I think very highly of him.


YELLIN: And, Wolf, Ken Salazar was praised as a choice by a number of environmental groups. As heard of the Interior Department, he is expected to review a number of Bush administration decisions there, on endangered species, drilling on public lands and the use of Western lands -- Wolf.

BLITZER: And I just want to get -- find out what they're saying about this Associated Press report, Jessica, that the president-elect is considering an economic stimulus package when he arrives in Washington that could actually go to a whopping $1 trillion.

Is that what they -- is that right?

YELLIN: Well, you know, there's been that report out there. And after his economic team met here in Chicago for four hours, a transition official tells me no, it is not a trillion dollars. The stimulus they are working on is less than a trillion dollars.

There have consultations with outside economists giving their opinions. Some of those people think it should be a trillion dollars. But I'm told they do not plan to introduce -- at least the current plan is not anything close to that at this point. It also won't be introduced this week. It's got some work to go, still, before that is made public -- Wolf.

BLITZER: We know it will be a big number, though. Obviously, not $60 billion, maybe not even $600 billion...

YELLIN: Right.

BLITZER: But it will be a big -- a bigger number than that.

YELLIN: Hundreds of billions.

BLITZER: We'll watch and we'll see.

YELLIN: Yes. BLITZER: All right, Jessica.

Thanks very much.

The best political team on television will weigh in on all of this, including the choice of Ken Salazar to be the next Interior secretary.

Plus $50,000 for exclusive access to the Obamas -- the list is out. You're going to find out who's paying big money for what amounts to an all access inaugural pass.

And Caroline Kennedy finally talks about it in public. You're going to hear what she's saying today about that New York Senate seat in her own words.

That's coming up right here in THE SITUATION ROOM.


CAROLINE KENNEDY, DAUGHTER OF JOHN F. KENNEDY: I told Governor Paterson that I'd be honored to be considered for the position of the United States senator. I wanted to come upstate and meet with Mayor Driscoll and others to tell them about my experience and also to learn more about how Washington could help these communities.


BLITZER: Well, there she is -- Caroline Kennedy making it clear she would like to succeed Hillary Clinton as the next senator from New York.

Let's talk about this and more with Karen Tumulty of our sister publication, "Time" magazine; along with our CNN political contributors Dana Milbank of "The Washington Post" and Steve Hayes of "The Weekly Standard".

Well, you know, she's got to go to Syracuse. She's going to have to go to Buffalo. She's going to have to go all over the place to make it clear that she's worthy of being a United States senator.

KAREN TUMULTY, "TIME" MAGAZINE: I've got to tell you, though, I was really struck by that footage of her encountering a traditionally abrasive New York press corps scrum. And she'd better get used to that if she's planning on being a United States senator from that state.

BLITZER: Because she's spent her whole life, basically, trying to avoid the press.

DANA MILBANK, CNN CONTRIBUTOR "WASHINGTON POST": True enough. And it's -- it would be rough in New York. It's not going to be pretty, you know, when we chase them into the Senate subway around here, either. You cannot escape the press when you're going for a vote in the Senate, so.

BLITZER: Yes. And you've got to get used to that if you want to be a politician -- especially in New York. They've got a pretty lively, shall we say, news media in New York State.

STEPHEN HAYES, SENIOR WRITER AT "THE WEEKLY STANDARD": Yes, to say the least. Some of the headlines that might come from the "Daily News" or the "Post" about her selection would be -- could be pretty funny.

She's used to this, though. I mean she -- she didn't like it. She's avoided it for ages. But if anybody is familiar with the kind of scrutiny that is visited upon public officials, I would say it's Caroline Kennedy.

MILBANK: If she can make it in Buffalo, she can make it anywhere.

BLITZER: Yes. If you can make it in Buffalo, you can make it anywhere, right?

TUMULTY: Well, it will be interesting to see what her nickname is from "The New York Post," though. Everybody gets one.

BLITZER: Well, yes, that's true. Well, we'll see what she does. And she used to be called Caroline Kennedy Schlossberg, right?

Whatever happened to the Schlossberg part?

TUMULTY: I think a few years back she -- she sort of dropped it and went back to her Caroline Kennedy.

BLITZER: But she's still married to Mr. Schlossberg?

TUMULTY: She is. She is.


TUMULTY: But when she started writing books, you know, I think the -- I think the Caroline Kennedy name probably sells a few more books.

BLITZER: Yes, than Schlossberg.

OK. All right. That's a beautiful name, Schlossberg. But she's not using it anymore.

Let's talk a little bit about the Obama cabinet.

Ken Salazar -- he's causing a little heartburn for some on the left who don't think he's green enough.

MILBANK: Yes. I'm a little surprised by that. I mean, it's not like he nominated James Watt or something. And it seems that, you know, there's always going to be somebody complaining. They're even -- some on the left are complaining about Rick Warren giving the invocation at the inaugural address.

But it seems, by and large, he's taken very safe, down the middle choices. Yes, it will antagonize some of his supporters on the left. But it shows that Obama is serious about getting stuff done.

BLITZER: He picked Ray LaHood, according to our sources, to be the Transportation secretary, a Republican from Illinois who voted for counts against Bill Clinton on impeachment.

ST. HAYES: Yes. This is -- Transportation secretary is becoming sort of the bipartisan job. I think the Ken Salazar thing is a little bit overblown. I think you would expect, I think, some outcry from environmentalists. But I was reading a "Denver Post" piece back in 2003, when he was attorney general. And it described him as an environmentalist and it described him as a conservationist. So I think this is sort of much ado about nothing.

TUMULTY: Well, I think they just haven't found him as consistent a vote on their side as would make them comfortable. And, you know, there were some other names, if President-Elect Obama was going to pick a Westerner, they would have rather seen maybe Raul Grijalva, the congressman from Arizona, who is -- sort of more consistently votes on the environmentalist side.

BLITZER: The bottom line is you can't get everything. What -- no matter if you're on the left or the right, you're going to be disappointed with some of these selections.

MILBANK: Sure enough. They don't like it that he supported some measure of offshore drilling. Well, guess what, so does the president- elect in certain circumstances.

TUMULTY: And most Americans.

BLITZER: Yes. And he's...


BLITZER: And as -- Steve, as you were saying, already a little grief coming in because Rick Warren -- Pastor Rick Warren will deliver the invocation at the inauguration on January 20th. And some in the gay and lesbian community aren't happy about that.

ST. HAYES: Yes. And I think pro-choice activists are also not happy about it. Look, as Dana says, I mean, you're going to get grief no matter what you do, to a certain extent. Politically, though, if we take a step back and look at what this does for Barack Obama, I think it's not unhelpful for him to get some grief from the left as he heads into January 20th and starts his first 100 days. It's probably a good thing politically for him to have some sniping from the left.

What are we learning about the way he will deal with the press -- the news media -- once he becomes president of the United States, based on what we're seeing during the transition and what we saw during the campaign?

TUMULTY: You know, shortly before he won the nomination, I was talking to Betsy Myers, his chief operating officer of the campaign. She said the campaign whose efficiency he admired the most was Bush campaign in 2000. He wanted his campaign to be that efficient. And I think that certainly applies to their dealing with the media. They have been very buttoned up.

That's going to be a lot harder to do once they're dealing with Congress.

BLITZER: And once they've got all these strangers coming in who didn't necessarily -- we're not necessarily part of that campaign.

What do you think?

MILBANK: Well, I mean, Democrats are traditionally allergic to discipline. It's not necessarily such a bad thing to have a disciplined press operation. But it is a bit alarming to hear, in some of these responses to the Blagojevich scandal, almost word for word the same sort of responses that come out of President Bush's mouth when he's in a similar situation.

So maybe it's smart politics, but it's not for a guy who said he's going to do things differently.

ST. HAYES: Well, and for a guy who said he's going to have the most transparent administration in history and who's talked about getting beyond blue America and red America, I think the best way he can do that is really to give an interview with a magazine writer from a conservative magazine who would likely challenge him. You know, somebody like me, for instance -- I had my troubles -- trouble getting my phone calls returned during the campaign. I'd be eager to talk to them any time now.

BLITZER: All right.

MILBANK: Can we get his phone number on the screen?

BLITZER: Yes. We'll put it up on the little crawl at the bottom.


BLITZER: All right, guys. Thanks very much. See you tomorrow.

Our question this hour -- what's the appropriate punishment for the man who threw his shoes at President Bush?

That's Jack's question. He has your e-mail coming up.

And celebrities witnessing history from a front row sweat -- you're going to find out which Hollywood stars will be on hand for Barack Obama's inauguration.

Stay with us.



BLITZER: Let's check in with Lou to see what's coming up right at the top of the hour.

What are you working on -- Lou?


We're examining tonight reports the president-elect's chief of staff has been caught on tape talking with Governor Blagojevich about just who should take over Obama's vacated seat in the Senate. We'll have complete coverage for you from Chicago. Three political analysts joining us here tonight.

Also, outrage in Congress after the Bush administration says it supports a plan to sell U.S. nuclear technology to an Arab state with close ties to Iran. We'll have that story and we'll examine the risk of a nuclear arms race in the Middle East now.

And the left-winged advocacy group, ACORN, at the center of a voter registration scandal in a dozen states, may be on the verge of collapse. We'll have that special report and all the day's news. Please join us for all of that at the top of the hour, and a great deal more, with an Independent perspective -- Wolf, back to you.

BLITZER: Thanks, Lou.

Thanks very much.

She's only the second African-American to be the nation's secretary of State and Condoleezza Rice has spoken openly of how moved she was at the election of the country's first African-American president.

But did she actually vote for Barack Obama or did she vote for John McCain?

She talked about that and more in a one-on-one interview she had over at the State Department today with Zain.

So you asked her the question.


BLITZER: What happened?

VERJEE: Well, we talked about a range of things over 30 minutes or so. She spoke about her the high points, her low points, the invasion of Iraq. And, yes, we asked her who she voted for.


VERJEE: Did you vote for Barack Obama?

CONDOLEEZZA RICE, SECRETARY OF STATE: I'm going to continue to say that I'm secretary of State...

VERJEE: We're dying to know.

RICE: I know you're dying to know.

VERJEE: Just -- just spill the beans on that.

RICE: I know you're dying to know. But the fact is that I didn't get involved in partisan politics. I think I've made clear that I thought that both Senator McCain -- John McCain and Barack Obama, the now president-elect, conducted themselves in a way that made the country proud. It's why people, I think, abroad were so focused on this election. That's true.

VERJEE: Do you ever let loose?

RICE: Of course. I do. And -- yes, there are -- I've never been somebody who was so disciplined as to not have fun in life.

VERJEE: I mean, come on. Really?

RICE: Really.

VERJEE: People would be surprised to hear that...

RICE: People would be surprised.

VERJEE: ...because they think you're so disciplined...

RICE: I'm...

VERJEE: ...which is a good thing, but (INAUDIBLE)...

RICE: Well, I'm disciplined. But I'm sure you're disciplined, too, because anybody who is successful in life...

VERJEE: I don't get up at 4:30.

RICE: Well, no, that's because you probably don't have to be at work at 6:30 like I do.


RICE: But...


RICE: But, of course, anyone who's successful has to have discipline. But I also have a lot of fun in life. I care about things other than just working -- friends and family and taking care of yourself and a chance to enjoy your avocation. And for me, I'm a person of faith. And I have to have my time with my faith. And that makes a well-rounded person. And I think I'm a well-rounded person.


VERJEE: Secretary Rice says she doesn't really like all the scrutiny that came with the territory. She also said that she's not really going to miss Washington, D.C. and that she's really looking forward to going back to California.

BLITZER: I assume she is. I know she goes to church every Sunday. She loves sports. She loves the NFL.

VERJEE: Baseball.

BLITZER: She loves baseball and basketball and all of that. She does have a life.


BLITZER: And she gets up very early every morning and exercises.

VERJEE: She does. She says she wants to write a book, as well, about her parents.

BLITZER: Well, we'll be anxious to read it.


BLITZER: Thanks very much, Zain.

VERJEE: Thank you.

BLITZER: Doing good work -- as she always does. And she is very disciplined.

Barack Obama's inauguration is set to be one of the largest gatherings of people the nation has ever seen and perhaps the most star-studded, perhaps, as well.

CNN's Samantha Hayes has been looking into who's among the so- called A-List attendees -- Sam, what can you tell us?

SAMANTHA HAYES, CNN CORRESPONDENT: Well, Wolf, celebrities who endorsed Obama during the campaign will be coming to Washington. They're on a long list of donors and fundraisers who are paying tens of thousands of dollars and in exchange will enjoy first class access.


SA. HAYES (voice-over): For the presidential inauguration. The spotlight is off of Hollywood and on the Hill -- Capitol Hill.

GARRETT GRAFF, EDITOR-AT-LARGE, "WASHINGTONIAN": What we've certainly seen in this inauguration, I think, is just unprecedented levels of entertainment industry interest and Hollywood interest. Like we've never seen this before, especially coming off eight years of President Bush where there just hasn't been that much interest in Hollywood in Washington and the Bush administration.

SA. HAYES: Take a look at the list of donors contributing the maximum allowed to the inauguration committee, $50,000. It reads like a red carpet guest list -- Halle Berry, Jamie Lee Curtis, Jamie Foxx, Sharon Stone, Samuel Jackson. And that doesn't even include stars hosting their own events.

GRAFF: When you've got Sting hosting one inaugural ball, you've got Dionne Warwick hosting another inaugural ball, you've got Tom Hanks coming here and saying, you know, I'll watch the inauguration even if I have to stand on the steps of the Lincoln Memorial, you know, two miles away from the Capitol Building. You've got Beyonce, you know all but pleading to sing at the inauguration. I mean you've got Oprah coming to Washington for the week to tape her shows and host all sorts of parties.

SA. HAYES: For those who forked over big bucks to the committee, up close access. They have tickets to the inauguration, the balls and other official events. And that may seem like a lot of money, but Linda Douglass, who is heading up the inauguration committee, tells CNN that: "We have placed stringent restrictions on fundraising -- no funds from lobbyists, corporations, unions or PACs and a $50,000 limit on individual donations -- far below some limits in the past."

And those privately raised funds will also pay for JumboTrons and sound systems so people without tickets can see and hear what's happening.


SA. HAYES: We're also finding out more about the program on Inauguration Day. The invocation will be delivered by Pastor Rick Warren and Aretha Franklin will sing -- Wolf.

BLITZER: I love Aretha Franklin.

All right, thanks very much for that, Sam.

We'll be covering it all day, January 20th. If you're not going to be in Washington, you know where you're going to be -- you're going to be watching us on CNN covering all of this. It's going to be historic.

The Iraqi journalist who threw his shoes at President Bush -- just what should his punishment be?

You weighed in. Jack Cafferty is standing by with your answers.

And getting to the meat of the matter -- a new cologne does just that. This sizzling scent smells like a hamburger.

Why you ask? So did we.

And Jeanne Moos has a "Moost Unusual" answer.


BLITZER: Let's go to Jack and "The Cafferty File" -- Jack.

CAFFERTY: The question is, what's the appropriate punishment for the guy who threw his shoes at President Bush?

David says: "If he's musical talent, he ought to be signed as the opening act of the Dixie Chicks.

Trisha said: "Regardless of how you feel about the president of the United States when he's outside the United States he's representing us. As such he ought to face jail time for what he did."

Earl in Woodstock, Vermont: "Chop off his feet and have them bronzed for Bush."

Charles in Lansing, Michigan: "Sainthood isn't good enough."

Nancy, also in Michigan: "What would happen to a shoe thrower in this country? He ought to be punished. It bothers me more he was able to throw two shoes. Where was the Secret Service? All they did was hit Dana Perino in the eye with a microphone."

STR writes: "I think he ought to be free on bail and perhaps have to do community service speaking to journalism students about how to control urges to do stupid things."

And Paula writes from New Mexico: "He ought to receive the highest decorations of the sovereign nation of Iraq. Have a statue erected in his honor. A broad and well-traveled boulevard should be named for him, as well as the premier hospital facility in Baghdad. A school or two should bear his name and his likeness should adorn the Iraqi postage stamps. He is a man of courage."

If you didn't see your e-mail here, you can go to my blog at and look for yours there among hundreds of others. We got a lot of e-mail today -- Wolf.

BLITZER: And check out this, your home state of Nevada, Jack -- snow. It's snowing in Las Vegas, of all places. Look at this.


BLITZER: They -- I think they've closed the airport.

Does it ever snow in Vegas?

CAFFERTY: Not much in Vegas. It snows a lot up in Reno, in the northern end of the state. But it's unusual to see snow like that in Las Vegas. It's different.

BLITZER: Maybe no global warming after all. We'll see.

CAFFERTY: Not there. Not now.

BLITZER: Now in Vegas today.

All right, Jack, see you tomorrow.


BLITZER: Thanks very much.

It's a new cologne and it's a whopper of a scent.

CNN's Jeanne Moss has a "Moost Unusual" look.

(BEGIN VIDEOTAPE) JEANNE MOOS, CNN CORRESPONDENT (voice-over): We've all heard of...


MOOS: And maybe even...


MOOS: But now...

(on camera): This is Flame. Flame. Flame from Burger King.


UNIDENTIFIED MALE: Come on baby. Give it a spray.

UNIDENTIFIED FEMALE: Flame the scent of seduction with a hint of flame broiled meat.

UNIDENTIFIED MALE: I don't think smelling like a burger is too cool.

MOOS (voice-over): On the other hand, what other men's cologne costs $3.99 -- less than the price of a Whopper Value Meal?

Burger King's flame is sold at, where you also meet the Burger King king creepily beckoning you to his bear rug. But let's see if Flame passes the smell test.

(on camera): Will you smell Ian here?


MOOS (voice-over): We drenched CNN associate producer Ian Orophus (ph) in Flame.

(on camera): Smell Ian, if you would.

(voice-over): And though Flame got OK reviews.


MOOS: The hint of flame broiled meat seemed lost on folks.

(on camera): Does Ian smell like this?


UNIDENTIFIED FEMALE: All right. It doesn't smell like that.

MOOS: Does it smell like this?


MOOS (voice-over): Only a few people detected anything remotely resembling a charbroiled scent.

UNIDENTIFIED FEMALE: Oh my god, a little.



UNIDENTIFIED FEMALE: Almost like a gasoliney edge, which probably makes it smell like the charcoal broiled.

MOOS (on camera): A little gasoline edge.


MOOS: That's always sexy.

UNIDENTIFIED FEMALE: That smell has less calories.

MOOS (voice-over): Frankly, Flame seems to be a whopper of an advertising gimmick. McDonald's jokes about the same concept in a Super Bowl ad featuring a distracted husband reaching for one of those drier fresheners and popping in a McDonald's wrapper by mistake.


MOOS: The result?


MOOS: But seriously, folks...

(on camera): Would you want your man to smell like a burger?



MOOS: He does?

(voice-over): Maybe the only one who would want to smell like a burger would be, say, the dogcatcher.


MOOS: Misunderstood Flame's purpose.

UNIDENTIFIED MALE: Could they try this on the burgers?

MOOS: Not if you expect to survive eating them. That wouldn't be Flame. That would be...


MOOS: Jeanne Moos, CNN, New York.

(END VIDEOTAPE) BLITZER: She's amazing. You don't see reports like that anywhere else, right here on CNN.

Thank you, Jeanne.

That's it for us.

Thanks very much for joining us.

I'm Wolf Blitzer in THE SITUATION ROOM.

We'll be back tomorrow.

Up next, "LOU DOBBS TONIGHT" -- Lou.