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Aspen Terror Threat Averted; Obama's First 100 Days; Bill Replaces Hillary Theory; Interview with Michelle Obama; Anger at Bernie Madoff

Aired January 1, 2009 - 18:00   ET


SUZANNE MALVEAUX, CNN ANCHOR: Happening now: Barack Obama gets back to the business of jump-starting the economy -- new information about the president-elect's first moves once he lands in Washington.
Plus, thousands of secret wiretaps revealed. A mountain of evidence could slow down the corruption case against the Illinois governor.

And a popular resort city almost bombed, the threat of mass death in Aspen and how it was diffused.

Welcome to our viewers in the United States and around the world. Wolf Blitzer is off today. I'm Suzanne Malveaux. And you are in THE SITUATION ROOM.

This hour, the Obamas are leaving Hawaii and gearing up for their new lives here in Washington. The president-elect hopes to hit the ground running when he arrives here this weekend.

CNN has learned that president-elect Obama is set to meet with congressional leaders on Monday about his plans to jump-start the economy.

Here is our senior White House correspondent, Ed Henry -- Ed.


ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Suzanne, after a quiet New Year's here with friends and family in Hawaii, the president-elect is moving quickly to try and sell his plan to fix the economy.

(voice-over): While keeping one eye on the crisis in Gaza, president-elect Barack Obama is now returning to the mainland to focus on the issue that propelled him to office, the economy, which is why the transition team is kicking off the new year by sending Congress a recovery plan in the neighborhood of $775 billion.

SEN. JOSEPH BIDEN (D-DE), VICE PRESIDENT-ELECT: Economists rarely agree, but, on this score, there's overwhelming agreement that we need a robust and sustained economic recovery package. The greater threat to our economy lies in doing too little, rather than in not doing enough.

HENRY: Transition aides say the goal is to get the bill signed into law as quickly after the inaugural as possible to get the new president a quick victory, while also giving the economy a shot in the arm.

The emerging plan includes billions for backlogged transportation projects to beef up construction jobs and improve the nation's infrastructure, as well as modernizing crumbling public schools to create jobs, while also investing in education.

REP. BARNEY FRANK (D), MASSACHUSETTS: If we don't do this, it will cost us even more. This economy is now in the worst shape since the Great Depression. And if we do not respond in a very firm way, it gets worse and worse and feeds on itself.

HENRY: But Republicans are making noise about slowing the stimulus plan down because they're wary about the price tag, especially on top of a series of government bailouts.

REP. ERIC CANTOR (R), VIRGINIA: I think most American taxpayers now are sort of scratching their head, wondering when all this bailout stuff is going to end and probably thinking, you know, when is my bailout coming?

HENRY: To overcome opposition, aides say Mr. Obama is considering plans to travel the country to sell the economic plan quickly after being sworn into office.

(on camera): Mr. Obama is moving quickly to sell the plan because there is no time to waste. This will be the first real test of the new president's clout -- Suzanne.


MALVEAUX: Thank you, Ed.

New evidence that the corruption case against the Illinois case may be even more staggering and complicated than first thought. Prosecutor Patrick Fitzgerald is asking to extend his deadline for filing an indictment against Governor Blagojevich by 90 days. That is until April 7. Now, one reason, there reportedly are thousands of secret wiretaps of the governor.

CNN's Susan Roesgen is following this story in Chicago.

And, Suzanne, is this any indication that the prosecutor's case may be in trouble?

SUSAN ROESGEN, GENERAL ASSIGNMENT CORRESPONDENT: It could be. Certainly, for the Blagojevich defense attorneys, it might be a sign that the case is weaker than they thought.

But, Suzanne, after five years of this investigation and literally thousands of wiretapped phone calls, the U.S. attorney's office says it needs more time to come back with an indictment.


PATRICK FITZGERALD, STATE'S ATTORNEY FOR THE NORTHERN DISTRICT OF ILLINOIS: There's a lot to be said for exposing this to the satellite.

ROESGEN (voice-over): When U.S. attorney Patrick Fitzgerald first announced the criminal complaint on December 9, he said he wanted to get the case out in the open right away. Based on wiretapped conversations, Fitzgerald said he was afraid Illinois Governor Rod Blagojevich might take a bribe any minute to make that Senate appointment. And Fitzgerald said he just couldn't let that happen.

FITZGERALD: I was not going to wait until March or April or May to get it all nice and tidy, and then bring charges, and then say, "By the way, all this bad stuff happened because no one was aware of it back in December." I think that would be irresponsible.

ROESGEN: Now the U.S. attorney wants three more months to make his case, and the Blagojevich defense team could say that shows the case is weaker than prosecutors made it out to be.

But a former Florida U.S. attorney, Kendall Coffey, thinks it's a sign the case is getting stronger.

KENDALL COFFEY, FORMER FEDERAL PROSECUTOR: What happens when a public corruption scandal breaks, sometimes a dam breaks, is witnesses come forward. All victims of extortion lying low before because of fear of retaliation, now they step up, because the public figure is going down.

ROESGEN: Still, he says, to make the case stick, U.S. Attorney Patrick Fitzgerald will have to prove what's on tape isn't just talk.

COFFEY: The best thing he could get would be somebody who steps forward and says, yes, I delivered the cash, I delivered the payoff, either directly to the governor or one of his emissaries. It was a done deal, not a lot of the trash talk inside the governor's bunker.

ROESGEN: Will the prosecutors be able to get that smoking gun? At least one former prosecutor says there might be a lot of smoking guns and more than one nervous politician.

COFFEY: But there have got to be a lot of people connected closely with Blagojevich who are having a lot of trouble sleeping in Illinois right now.


ROESGEN: And, in fact, Suzanne, the prosecutors say that they may have multiple defendants in this case, not just the governor and his former chief of staff, the two that they arrested back on December 9. So, it will be very interesting to see who else might be charged in the case.

MALVEAUX: OK. Thank you, Susan.

This could have been happened in the middle of Aspen, Colorado's New Year's Eve festivities. An elderly man's threats of mass deaths led police to clear the downtown area before finding out that a suspicious package was very real.

Let's go lie to CNN's Thelma Gutierrez.

And what are you learning today?

THELMA GUTIERREZ, CNN CORRESPONDENT: Suzanne, bomb experts say the bombs were made from plastic bladders filled with five gallons of gasoline. Cell phones were also attached to the devices to remotely set them off.

Now, police also say that the suspect demanded $60,000 in used $100 bills, but neither of the banks handed over a penny of it.


GUTIERREZ (voice-over): This is 72-year-old James Blanning, captured on a bank surveillance camera just as he is about to deliver a plastic tub with two packages wrapped in Christmas paper to a Wells Fargo bank.

BILL LINN, ASPEN ASSISTANT POLICE CHIEF: Those packages contain notes threatening detonation of devices contained in those tubs and -- quote -- "mass death if his demands were not met."

GUTIERREZ: And this chilling warning: "You had better be a very cool individual and not start a panic, or many in Aspen will pay a horrible price in blood."

The bank employee immediately calls Aspen police. Then, 12 minutes later, they receive a second call, this time from the Vectra Bank, which also received identical notes.

LINN: He claimed the devices each contained what he called a big firecracker made of unique chemicals and electronics. The notes, which are exactly the same at both banks, seem to indicate that four banks in Aspen were targeted. The notes also indicated the author had a problem with the Bush administration and wars in the Middle East, and he declared this to be -- quote -- "a suicide mission."

GUTIERREZ: By late afternoon, just as New Year's preparations are getting under way, downtown Aspen is evacuated. The bomb squad and federal officials move in.

In the evening, the bomb squad detonates a device at Vectra Bank. It explodes in a fireball. On the steps of "The Aspen Times," this handwritten note is found by an employee, indicating Blanning is planning on taking his own life.

Then, in the pre-dawn hours New Year's Day, James Blanning is finally found inside his car dead from what police say was a self- inflicted gunshot wound.


GUTIERREZ: When the surveillance photograph of Blanning was developed, the sheriff immediately recognized him from an incident back in the '90s, when Blanning threatened to hang himself at the courthouse over issues he had with the way in which Aspen was growing.

Now, police he say that Blanning had served time in prison in the '90s for fraudulent land sales -- Suzanne.

MALVEAUX: Thank you, Thelma.

In these dangerous and very serious times, Barack and Michelle Obama are trying to keep a sense of humor and their humility. I recently sat down with the future first lady. And she didn't hesitate to point out one of her husband's idiosyncrasies. Listen to her talk about his wardrobe and his sense of style in excerpts from my interview airing today for the first time.


MICHELLE OBAMA, WIFE OF SENATOR BARACK OBAMA: I think that was more his style, you know, shirts and pants...


M. OBAMA: Very simple.

But that's really Barack today, you know? I mean, Barack still has the same pants and shirts that he had when we got married, which is why I crack up when people say he's one of the best-dressed men. I think maybe that means he looks good in his clothes, because he's tall and thin. But, trust me, if you look up close, those pants have a hole in the back, and his shoes...


M. OBAMA: I was looking at his shoes the other day. I was like, you need new shoes.


MALVEAUX: But you're the fashion icon in the family now.

M. OBAMA: Yes, but, you know, his stuff is old.


MALVEAUX: Stand by for much more of my one-on-one interview with Mrs. Obama on her early days with the next president and their life together.

CNN's Nic Robertson in southern Israel when the rocket warning sounded.


NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: The siren has just gone off. Everyone is getting out of their cars and getting down in the road, waiting to see what happens.

(END VIDEO CLIP) MALVEAUX: We will have a live report from front lines, as Israeli troops prepare for a possible ground assault on Gaza.

Plus, will Hillary Clinton be able to stay on the same page as president-elect Obama when it comes to Middle East war and peace?

And will the next U.S. senator from New York also be a Clinton? The new buzz about whether Mrs. Clinton's seat will be filled by her husband.


MALVEAUX: As the Israeli offensive in Gaza approaches a seventh day, Israeli is temporarily closing its border with the West Bank.

CNN senior international correspondent Nic Robertson is in Israel.

And I want you to take a look at what happened when the rocket warning sirens rang out earlier today.


NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: That is a strange feeling when the sirens go off. I was in the middle of a telephone call. And as soon as you hear the sirens, stop the car, get out, lie down. Everything around you just suddenly stops in those few seconds.

(INAUDIBLE) getting down behind the car again. The cars are stopping at the moment. I did hear a boom. It came from that direction over there. That seems to be the all-clear.

Pretty much within a few seconds, it is all over. The -- the bus is moving off now as well. They have got the all-clear. People are moving around. It just happens very quickly here. The sirens, get out of the car, get under cover, and within a few seconds, 30 seconds, back to normal.


MALVEAUX: Nic is in the southern city of Ashkelon and he joins us now.

Nic, obviously very glad to see that you are safe and you're OK. Tell us what happened. How many sirens were going off? What kind of situation were you facing?

ROBERTSON: Well, you know, in the space of about three hours driving around here, we heard five different instances of sirens going off.

And, at one time, there was just about half-an-hour between the two sirens going off. It is what everyone here is going through. It's what the Israelis say that they have been going through with the Hamas rockets coming from Gaza. It stops everyone in their tracks. You have to get out of your car. You have to take cover. There are some shelters around the town, but most people just hit the deck and wait for a few -- 30 seconds, wait until they hear the impact or realize that everyone else is getting on with their lives, get up, and carry on.

We were very close to Gaza when a missile came over our head just after hearing the siren. You think, oh, the siren goes off, don't worry about it, but this missile whizzed over our heads and crashed in the ground a few hundred yards away. You just can't take them for granted. And that is the life that everyone here around us is living at the moment -- Suzanne.

MALVEAUX: And, Nic, I understand that there was a major strike against a Hamas leader today. What can you tell us about that?

ROBERTSON: Well, he is one of Hamas' top 10 leaders, one of their top 10 leaders, Nizar Rayan. He is, according to Israeli Defense Forces, believed to have been behind a suicide bombing attack not far from here in the town of Ashdod in 2004 that killed 10 Israelis, according to the Israeli Defense Forces.

His son was a suicide bomber in a suicide bombing in 2001, and according to Israeli newspaper reporters, they say that he, Rayan, was one of the principal voices within Hamas calling for Hamas to restart suicide attacks, because if you remember over the past sort of year or so, Hamas have stood back from these suicide attacks.

He was pushing for it. And they have been on Hamas' television station yesterday saying that they were going to win the fight, that they would beat the Israelis, that they would kill their men, and imprison their men. So, this is the man that the Israeli forces targeted, and he is dead now.

MALVEAUX: OK. Nic Robertson in Israel, please be safe. Thank you so much, Nic.

There are growing fears that the Gaza unrest will jeopardize the Middle East peace process already hanging by a thread. Israel could pose an especially difficult problem for Barack Obama and his choice for Secretary of State Hillary Clinton, especially if they don't see eye to eye.

Well, let's go to CNN's Brian Todd -- Brian.

BRIAN TODD, CNN CORRESPONDENT: There is not a lot of daylight between them, Suzanne, but, still, the Israelis and Palestinians have openly wondered just what they are getting from this new White House security team. That's because the president-elect and his designated secretary of state have, to put it diplomatically, shown evolving positions on the problem.


TODD (voice-over): They're about to become instant partners in trying to cure what's been called the 100-year headache, the effort to find some kind of lasting peace between Israel and the Palestinians. This week, that headache may have turned migraine. Whether Barack Obama and Hillary Clinton can easily approach the two sides with one voice is still unclear.

JON ALTERMAN, MIDDLE EAST PROGRAM DIRECTOR, CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES: I think the Israelis look at president- elect Obama, and they're a little uncertain. It's not that they don't think they have a strong supporter, but they're not as sure of where this is going to go.

TODD: Mr. Obama has been seen alternately as sympathizing with the plight of the Palestinians, earlier in 2008 saying -- quote -- "Nobody is suffering more than the Palestinian people," and expressing airtight solidarity with Israel.

SEN. BARACK OBAMA (D-IL), PRESIDENT-ELECT: Jerusalem will remain the capital of Israel, and it must remain undivided.

TODD: A remark he backed away from the following day.

OBAMA: Well, obviously, it's going to be up to the parties to negotiate a range of these issues, and Jerusalem will be part of those negotiations.

TODD: But we have also seen two Hillary Clintons, one who embraced Yasser Arafat's wife a decade ago and voiced early support for a Palestinian state, but who also since she first ran for senator in New York has become one of the most unwavering hawks in defense of Israel.

During the campaign, they split on Iran, a key player in the Israeli-Palestinian dynamic. Separate interviews on ABC highlighted that, first when Clinton talked about how the U.S. might respond to an Iranian attack on Israel.

SEN. HILLARY RODHAM CLINTON (D-NY), SECRETARY OF STATE NOMINEE: We would be able to totally obliterate them.

OBAMA: Using words like obliterate doesn't actually produce good results.

TODD: Mr. Obama has said he's willing to meet with Iran's president without preconditions. Senator Clinton has favored engaging the regime, but not meeting directly with its leader.


TODD: Still, when he announced his security team a month ago, Mr. Obama made it clear that he and Hillary Clinton will work together on the Israeli-Palestinian dispute. And a transition team official says whatever debates may take place in the formulation of policy, they will speak with one voice in the end -- Suzanne.

MALVEAUX: Thanks, Brian.

A series of deadly explosions -- India comes to grips with terror on another front, as a militant group takes on the government.

Barack Obama's first 100 days -- after the economic stimulus plan, what is next on the president-elect's to-do list?

And Hillary Clinton's plans to give up her Senate seat for greener pastures at the State Department, well, you're not going to believe the latest speculation about who might replace her.



MALVEAUX: A new year for speculation about who will replace Hillary Clinton in the Senate. Might her husband step in to fill the void? The buzz about Bill Clinton as a senator.

Plus, seething anger at the man authorities say is behind one of Wall Street's biggest frauds ever -- why people are so mad at Bernard Madoff.

And Michelle Obama says she did not even see it coming -- why she just might be friends with the lawyer named Barack. Stand by for my portions of my one-on-one interview airing for the first time today.



Happening now: She went from the White House to the Senate. Well, now he could, too -- the growing buzz about Bill Clinton as caretaker for Hillary Clinton's Senate seat.

Also, it is the number-one priority on Barack Obama's agenda. But what are the rest? What can we expect in the next president- elect's first 100 days in office?

Plus, never before seen, my one-on-one interview with Michelle Obama. She shares the story of their courtship and how their marriage works.

Wolf Blitzer is off today. I'm Suzanne Malveaux. And you are in THE SITUATION ROOM.

Senator Hillary Clinton is preparing to give up her day job to become secretary of state. And now the speculation about who will replace her is taking some fascinating new turns. After the buzz of Caroline Kennedy, well, there is new and a very familiar name on many people's lips now.

Here is CNN's Deborah Feyerick.

DEBORAH FEYERICK, CNN CORRESPONDENT: Suzanne, imagine it, Senator Bill Clinton. Why not? So many qualified people want to be appointed to the Senate seat Hillary Clinton will leave when she is likely confirmed secretary of state, the question becomes, why not put in a placeholder, a seat-warmer, someone with the political clout, let's say, of Bill Clinton? This way, the public can vote in two years who should hold the seat for the long run.


FEYERICK (voice-over): They are big-name New Yorkers, Caroline Kennedy, Andrew Cuomo, Carolyn Maloney, and others, all jockeying to fill the state's soon-to-be-empty Senate seat. And the stakes are high.

STUART ROTHENBERG, EDITOR AND PUBLISHER, "THE ROTHENBERG POLITICAL REPORT": There usually isn't a lot of turnover. Yes, particularly in New York, where there are so many visible personalities, so much media coverage, I don't think it's a surprise.

FEYERICK: Which could be why Democratic Party advisers cited by the Associated Press suggest New York's governor, David Paterson, may consider a seat-warmer, someone to level the playing field among so many qualified people, and instead fill the Senate seat for two years, while the others face each other in a special election.

In Delaware, the governor made just that choice, appointing a longtime Joe Biden adviser.

GOV. RUTH ANN MINNER (D), DELAWARE: In 2010, it should be the voters of the state, without impact from anyone, who decides who Delaware's U.S. senator will be.

FEYERICK: In New York, names bandied about as possible seat- warmers include former President Bill Clinton, who has said categorically he's not interested, or former New York Governor Mario Cuomo, whose son, State Attorney General Andrew Cuomo, is a contender.

Governor Paterson today denied he's considering an interim Senator.

GOV. DAVID PATERSON (D), NEW YORK: I'm actually opposed to that. It would cause New York to lose seniority. And in the United States Senate, the most effective senators are the ones who have seniority.

FEYERICK: Political observer Charlton McIlwain says any pick the governor makes is likely to be controversial.

PROF. CHARLTON MCILWAIN, NEW YORK UNIVERSITY: The idea is if these people could get in there and make a good start in two years, run again and if they're re-elected, could really build on something that they've already started, rather than simply having someone to sit there and just sort of fill time for two years.


FEYERICK: Don't forget, anyone not appointed to the Senate could run for governor against Paterson -- something he has to consider.

As for Delaware, some political insiders suggest the two year placeholder will enable Joe Biden's son, Bo Biden, to run for the Senate after he returns from duty in Iraq next September -- Suzanne.

MALVEAUX: Thank you, Deborah.

Well, joining us to talk about a possible caretaker senator and more, CNN political contributor Stephen Hayes of "The Weekly Standard;" Carrie Budoff Brown of; and Perry Bacon of "The Washington Post."

I can't believe we're actually talking about the possibility here of Bill Clinton replacing Hillary Clinton in her seat.

Is this a good idea, a bad idea?

What should Paterson be thinking about now?

STEPHEN HAYES, SENIOR WRITER AT "THE WEEKLY STANDARD": Well, I mean, Bill Clinton is going to keep rearing his head, I think, for the next several years. As long as Hillary Clinton is in public office, we're going to be hearing about Bill Clinton.

To me, this is one of these stories where I really don't understand the controversy. I don't understand why David Paterson would hesitate for a moment to name Caroline Kennedy to the seat. She's somebody who's close to the Obama team. She would have immediate access to the president. She helped pick the vice president. She's got friends and allies in the Democratic Party up and down New York State, across the country.

It seems like a no-brainer. I think what we're seeing happening is a lot of speculation from people who would also like to be included in the discussions about the seat.

MALVEAUX: Carrie, is there merit here that the case will let Caroline Kennedy and some of these other people earn the position in 2010 and simply put somebody as a placeholder like Bill Clinton?

CARRIE BUDOFF BROWN, POLITICO: Well, I think the fact that David Paterson came out today and said he was opposed to a caretaker -- I think that kind of changes the game.

I think the focus is back on Caroline Kennedy. You saw the assembly speaker in New York today soften his opposition to Caroline Kennedy. That was good for her. You have the A.P. Quoting sources close to the governor saying that he is moving in her direction.

And she went from sort of dim to much brighter prospects, I think, in the last like day or so.

MALVEAUX: So what is this?

Is it kind of just a trial balloon here?

I mean a lot of buzz about Bill Clinton -- is it just people just can't let him go?

PERRY BACON, "WASHINGTON POST": People are excited about this pick no matter who it is. But I think, to some extent, most Democrats really want to see Paterson pick someone who can get prepared to run in two years. You have to run for the seat not only in 2010, but also run again in 2012, as well, for re-election for the seat from Hillary Clinton. So I think they would want to put someone in place who can make sure to win her election. And Kennedy would be a obvious choice for that.

MALVEAUX: Steven the longer this controversy goes on, how does it help or hurt the Democrats?

HAYES: Well, I don't think, you know, really this is more of a media driven -- I think, story than it is something that's happening on the ground...

MALVEAUX: Oh, you think we're pushing this now?

HAYES: Democratic politics.


MALVEAUX: How -- no, no, come on.

HAYES: Well, we've got to talk about it. It's interesting. Any time Bill Clinton is in the news, it's good. People want to talk about him.

But I think in terms of how it affects day to day practical politicking in New York, there's been some discussion that, you know, Governor Paterson can't pay more attention to these other things that are going on and the economic problems. I don't buy it. I mean he's going to make a pick. I think he probably has a good idea of what he wants to do and we'll move on.

MALVEAUX: Carrie, a lot of people are thinking about New Year's resolutions. And Happy New Year for you guys working on the holiday. But Barack Obama -- what does he need to resolve in the first 100 days, aside from this huge economic stimulus package that he's going to introduce in January?

BUDOFF BROWN: Well, Obama and his advisers discourage the 100-day marker. He has already been talking about 1,000 days. He would prefer to be judged by a much longer calendar.

And that's a reflection of the magnitude of all the problems he faces. He's talked about tackling energy independence and health care reform. And these are huge problems that are not going to get resolved in the first 100 days.

But you're going to see movement on those issues. You're going to see him look at executive orders. You're going to see him talking about Iraq. You're going to see smaller items -- maybe repealing -- stem cell research -- establishing federal funding for stem cell research again.

So I think you're going to see a broad spectrum of things. But he -- him and his advisers are going to discourage the 100-day calendar.

MALVEAUX: And, Perry, what about the goodwill with Republicans? Do we see Barack Obama reaching out to them and do you think that Republicans are going to be receptive?

BACON: We are seeing some of that. Senator Biden has been calling some of the sort of moderate members of the Senate already to get them behind -- the moderate Republican members of the Senate -- trying to get them behind the stimulus bill. There's a lot of outreach going on with the House members, as well, to try to get them to sign onto the stimulus bill.

Republicans so far are sort of looking a little wary at this. Some of them are coming out and saying the stimulus bill -- $800 billion is too much money to spend on this kind of project and they're objecting to it already. But there is sort of a wait and see attitude so far, it looks like, from the Republicans to this outreach from Obama.

MALVEAUX: Is there any campaign promise that you guys think that Barack Obama is just not going to be able to fulfill?

BACON: I'd say one. He's talked about immigration reform a lot in the campaign.

I'm pretty sure that such a big lift -- I don't see it happening. He's sort of talked about it less since he's won. I don't see that happening any time in the next couple of years.

MALVEAUX: Real quick, either one of you?

BUDOFF BROWN: I think the Employee Free Choice Act -- the union card check -- he's going to have to do that. But in terms of doing it as quickly as the unions want him to do it, that's going to be a challenge.

MALVEAUX: One sentence, Steven.

HAYES: His many promises are going to be much more complicated than he -- than he campaigned on.

MALVEAUX: All right. Thanks.

Happy New Year to all you guys.

BUDOFF BROWN: Thank you.

BACON: Thank you.

MALVEAUX: Thanks again.

Michelle Obama and her first date with the man who would become her husband and the president.


MICHELLE OBAMA, BARACK OBAMA'S WIFE: He was sort of pulling out all the stops. And then we wound up having a drink on the 99th floor of the John Hancock Building. And that gives you a beautiful view of the city. And probably by the end of that date, it was -- it was over.

MALVEAUX: You were sold? M. OBAMA: I was sold.


MALVEAUX: So how did he propose?

My one-on-one interview with the next first lady -- never seen before.

Plus, anger at the man accused of running a massive Ponzi scheme is boiling over -- on the streets, on the Web -- even in his house.


MALVEAUX: In just 19 days, Michelle Obama becomes the nation's next first lady. In an interview first airing today, she opens up to me about how she first met Barack Obama and why some of her preconceptions about him were completely wrong.

Take a listen.


MALVEAUX: Tell me about the first time you met Barack.

What was your impression?

M. OBAMA: I was a first year associate at Sibley and Austin. And I had just graduated from -- from law school. I had spent my first summer as a -- year as an intern. And there was all this buzz about this hot shot, young, first year law student from Harvard.

And everyone -- I mean from the head of the firm on down -- had talked about how brilliant this guy was. And it was rare that a firm as big as ours hired first year students. So he was going to come in as a summer associate.

And they decided that I should be his adviser, probably because we both went to same law school. We were both minority students.

So I remember getting his bio. And I probably did what a lot of people do when they hear about Barack Obama.

First, I thought what kind of name is Barack Obama?

And I found out that he grew up in Hawaii. And I found that strange, as a girl who grew up on the South Side of Chicago. I had never met anybody who lived in Hawaii. That was always where you vacationed. It wasn't where you were from.


M. OBAMA: And I found out he was biracial. So my assumption was this guy has got to be kind of weird, right? Probably a little nerdy. I had already sort of created an image of this very intellectual nerd. And I was prepared to be polite and all that. And then he walked into my office on that first day and he was cuter than I thought he'd be.

So that was a first positive impression. But I had to take him out to lunch on that first day. And we got to -- we had to talk. And he told me more about his background and he fleshed it out a bit more.

I found out that his father was from Kenya, his mother was a white woman from Kansas and that he had spent part of his life in Indonesia. And I just found him intriguing in every -- in every way that you can imagine. He was funny. He was self-deprecating. He didn't take himself too seriously. He could laugh at himself. I mean we were -- we clicked right away. He was very down to earth, despite having come from this very exotic background compared to mine.

MALVEAUX: And yet you didn't date him. You'd pass him off to your friends.


M. OBAMA: You know, that was sort of part of where I was in my life, because I was taking my job as an adviser -- I was his adviser -- very seriously. And it was my first responsibility as an -- as an associate. So -- and my mind wasn't focused on dating. I thought that this guy is going to be a good friend of mine. I liked him. We hung out. But I just didn't see that. I didn't see a relationship coming out of that.

MALVEAUX: So tell me about the first date, because he wanted to go out with you and something must have changed. Tell me about that first date.

M. OBAMA: You know, well, we had...

MALVEAUX: What did you do?

M. OBAMA: We had spent a month in the firm together and we were developing a really good friendship. And he lived near me in Hyde Park. I lived in South Shore. I still lived with my parents.

So I just -- I liked him. But he insisted that we should go out on a date. And I thought no, that wouldn't be -- be the right thing to do.

And he said who cares?

So I said OK, we'll go on this one date, but we won't call it a date. I'll spend the day with you.

So we wound up spending the day. We went to the Art Institute in Chicago. And he impressed me with his knowledge of art. And we went to lunch in one of the outdoor cafes at the Art Institute, where they were playing jazz. So that was really sweet. And then we walked up Michigan Avenue. It was on a -- on a really beautiful summer day. We just walked and we talked and we talked. And we wound up going to see a movie. And our first movie was "Do the Right Thing" by Spike Lee.


M. OBAMA: It had just come out. So that was sort of his cultural side, too. So he was -- he was sort of pulling out all the stops.

And then we wound up having a drink on the 99th floor of the John Hancock Building. And that -- that gives you a beautiful view of the city. And probably by the end of that date, it was -- it was over.

MALVEAUX: You were sold?

M. OBAMA: I was sold.


MALVEAUX: The next first lady reveals why her marriage is so strong.


M. OBAMA: Barack Obama wouldn't want much to change at all in his life -- not in me, not in his kids, not in himself. So I respect that in him.


MALVEAUX: But there is one thing that she thinks needs to change. More of my interview with Michelle Obama.

Plus, he is the man almost everyone loves to hate in a very public way -- Bernie Madoff, accused of bilking investors out of billions -- gets a taste of his own medicine.


MALVEAUX: More now of my interview with Michelle Obama, airing today for the first time. She tells me what made Barack Obama different from any other guy that she'd ever met and why she was the last one in her family to know that he was going to propose.


MALVEAUX: How was Barack different than -- than other guys who you had known?

And what did he look like at that time?

Can you describe him?

M. OBAMA: You know, Barack hasn't changed much physically over the years. He's got a few more gray hairs, but, you know, he looks exactly the same -- the same, you know, physique, the same mannerisms.

MALVEAUX: Can you give us a sense of his style?

Is he flip-flops and jeans?

M. OBAMA: You know, he was a guy...

MALVEAUX: Was he a little different than other folks or?

M. OBAMA: know, he, as I said, he came out of a community organizing background, right? So that wasn't, you know, Wall Street, button down, wearing suits kind of -- you know, you were working in communities and you were, you know, working with single parent mothers and grandparents raising grandchildren.

So that was the world he had come out of. So I think that was more his style -- you know, shirts and pants, very simple.

But that's really Barack today, you know?

I mean Barack still has the same pants and shirts that he had when we got married, which is why I crack up when people say he's one of the best dressed men. I think maybe that means he looks good in his clothes, because he's tall and thin. But trust me, if you look up close, those pants have a hole in the back and the shoes...


M. OBAMA: I was looking at his shoes the other day. I was like you need new shoes. So (INAUDIBLE)...

MALVEAUX: Well, you're the fashion icon in the family now.

M. OBAMA: Yes, but, you know, his stuff is old.


M. OBAMA: I'm not talking about style, I'm just talking about get some new shoes.

MALVEAUX: He needs to update?

M. OBAMA: He needs to update...

MALVEAUX: Upgrade.

M. OBAMA: ...a little bit. So -- but that's very much who he was then. And I like that about him, because he didn't really care about what other people thought and how he looked. He wasn't into fashion. He was very much into issues. He cared more about the work that he was doing in the community than how he looked.

I mean his apartment was no frills. He was subletting from a friend, sleeping on a futon. You know, he was -- he always has and always will be a kind of no frills guy. To the extent that he does anything that is upgraded, it's because I coax him into buying a new suit. It's like you can do this. You can get a new suit.

MALVEAUX: Is there anything else that you're encouraging him to -- to upgrade or change?

M. OBAMA: No. No. I mean that's the one thing that, you know, Barack and I -- that's why our relationship is so strong, because we appreciate each other as we are. I mean Barack wouldn't want much to change at all in his life -- not me, not in his kids, not in himself. So I respect that in him.

MALVEAUX: Did he fit in -- into the -- with your friends on the South Side?

Did he fit in or did he stand out in some way?

What was that like...

M. OBAMA: Yes, no, he very much...

MALVEAUX: To meet your friends?

M. OBAMA: Yes, he very much fit in. You know, Barack is one of those people who is comfortable in his own skin. So he's comfortable in every space that he's in. So he was comfortable with my family -- that is very diverse and -- you know, in opinions, in perspectives. But he was also very comfortable at Sidley and Austin in a very upper crust firm. But he was also comfortable in that church basement that he took me to where he talked about the concept of how you make the world as it is and the world as it should be one and the same.

And that's what I liked about Barack -- that he could very much be himself but connect with people all over the place.

And then as I got to meet his friends and saw the diversity of his -- not just his family, but his friendships -- the folks in college and the kids -- the folks that he grew up with in Hawaii -- all very different people, but all basically the same.

MALVEAUX: How did you come to the point where the two of you decided that you would get married?

How did he propose?

I understand there was kind of a little bit of back and forth discussion over -- over marriage.

M. OBAMA: You know, Barack -- you know, through the couple of years that we dated we -- you know, Barack was very clear that he was very serious. And, you know, he was -- he believed that I was the one for him. So we got very serious very quickly.

But it wasn't until after he finished law school -- because he was still in law school and I was working at a firm -- that we started talking about marriage. And Barack would always -- sometimes, I shouldn't say always -- he would sometimes say well, you know, if you love -- two people love each other, you know, what is marriage? And I would say marriage is everything.

MALVEAUX: I want that ring.

M. OBAMA: Right. It's like, you know, marriage means a great deal. So we'd sort of go back and forth with that. But I think in his mind he -- he had always intended to propose because, apparently, he had talked to my father, talked to my family before he bought the ring. I think everybody knew but me. So he was just sort of goading me on. But...

MALVEAUX: And how did he propose?

M. OBAMA: We were at one of our favorite restaurants and we were there under the guise of celebrating the fact he had just finished the bar, because he had taken the bar exam. So he said let's go out and celebrate.

So I thought we were there celebrating the fact that he was done with the bar, which as any person that's gone to law school knows, that that's a cause to celebrate.

So we were, you know, having our typical dinner and going back and forth and talking about life and all that. And then dessert comes. And the waiter brings out a tray, sits it in front of me, uncovers the little silver dish and there's a ring. And he asked me to marry him. And I said yes.


MALVEAUX: You can see more of my interview with Michelle Obama and the president-elect this weekend in a CNN special report, "The Obamas." It airs this Saturday and Sunday at 8:00 p.m. Eastern.

Well, how do you get back at a man accused of scamming people out of billions?

Some thieves think they know. Bernard Madoff gets paid back in a Moost Unusual way.

And kissing the ground he walks on -- or in this case, jumped from. The picture tells the story, still ahead in our Hot Shots.


MALVEAUX: Here's a look at the Hot Shots coming in from our friends at the Associated Press -- pictures likely to be in your newspaper tomorrow.

In Chicago, enthused hockey fans get ready for a match between the Detroit Red Wings and the Chicago Black Hawks.

In Switzerland, swimmers drink champagne and celebrate the new year in chilly Lake Geneva.

In Germany, an Austrian ski jumper kisses the snow after his final jump.

And in Hawaii, President-Elect Barack Obama greets well wishers outside a fitness center.

That's this hour's Hot Shots -- pictures worth a thousand words.

And a taste of his own medicine. -- that's what some anonymous thieves are giving Bernard Madoff, the man accused to ripping off investors to the tune of billions.

CNN's Jeanne Moos gives us a look at the Moost Unusual payback.


JEANNE MOOS, CNN CORRESPONDENT (voice-over): Sure, you can rant at the accused swindler...


UNIDENTIFIED MALE: You'll get yours, Bernie Madoff.


MOOS: Or you can educate him -- educate him by first stealing this $10,000 statue of two life guards from Madoff's Florida estate, then returning it -- leaving it in some hedges near his home with this note addressed to "Bernie the swindler." "Lesson: return stolen property to rightful owners," signed by the educators -- apparently a reference to a 2004 German film about an anti-capitalist gang that broke into rich people's houses and rearranged the furniture.





UNIDENTIFIED MALE: Stereo's in the fridge.


MOOS: They stole nothing -- just left a note saying: "Your days of plenty are numbered."

Some folks sound like they wish Bernie Madoff's days were numbered.


UNIDENTIFIED MALE: I want there to be a hell so that people like this Madoff character can go to it.



UNIDENTIFIED MALE: I can't believe that you're walking the Earth, you piece of garbage.


MOOS: The tractors on YouTube have transformed him into the devil.


MOOS: Depicted him struck by lightning.


MOOS: When he got shoved by a photographer as the press swarmed him...

UNIDENTIFIED FEMALE: What do you have to say to the public -- to your investors?


MOOS: The video went into reruns on the Web.


MOOS: "Don't push me," Madoff said. But commentators weren't feeling much pity.


UNIDENTIFIED MALE: It's almost like somebody throwing the shoe at Bush.


MOOS (on camera): But folks aren't just mad at Bernie Madoff. They're also mad at the people whose money he allegedly made off with.


UNIDENTIFIED MALE: Yes, Bernard made off with all the cash from every millionaire, their greed got them swindled now they're crying "it's not fair."


MOOS: All's fair when it comes to late night comedy takeoffs on Madoff.


UNIDENTIFIED MALE: That's why Bernie would like to give anyone who wants one a personal hand-inscribed apology. Simply send a check for $59.95 to Bernie Madoff, apology request. (END VIDEO CLIP)

MOOS: Go ahead and vent.




MOOS: Darn tooting they're mad.


MOOS: Jeanne Moos, CNN...


MOOS: ...New York.


MALVEAUX: We want you to check out our political pod cast. To get the best political team to go, subscribe at

I'm Suzanne Malveaux in THE SITUATION ROOM.